EXHIBIT 4.1
ACE SECURITIES CORP.
Depositor
OCWEN FEDERAL BANK FSB
a Servicer
OPTION ONE MORTGAGE CORPORATION
a Servicer
SELECT PORTFOLIO SERVICING, INC.
a Servicer
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
HSBC BANK USA, NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2005
ACE Securities Corp. Home Equity Loan Trust, Series 2005-SD1
Asset Backed Pass-Through Certificates
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 4
SECTION 1.01. Defined Terms..............................................................................4
Accepted Master Servicing Practices.........................................................................4
Accepted Servicing Practices................................................................................4
Account.....................................................................................................4
Accrued Certificate Interest................................................................................4
Adjustable Rate Mortgage Loan...............................................................................4
Adjustment Date.............................................................................................5
Administration Fees.........................................................................................5
Administration Fee Rate.....................................................................................5
Advance Facility............................................................................................5
Advance Financing Person....................................................................................5
Advance Reimbursement Amounts...............................................................................5
Affiliate...................................................................................................5
Aggregate Loss Severity Percentage..........................................................................5
Agreement...................................................................................................5
Amounts Held for Future Distribution........................................................................5
Arrearages..................................................................................................5
Assignment..................................................................................................6
Available Distribution Amount...............................................................................6
Balloon Mortgage Loan.......................................................................................6
Balloon Payment.............................................................................................6
Bankruptcy Code.............................................................................................6
Book-Entry Certificate......................................................................................7
Book-Entry Custodian........................................................................................7
Business Day................................................................................................7
Cap Contract................................................................................................7
Cash-Out Refinancing........................................................................................7
Certificate.................................................................................................7
Certificate Factor..........................................................................................7
Certificate Margin..........................................................................................7
Certificateholder...........................................................................................8
Certificate Owner...........................................................................................8
Certificate Principal Balance...............................................................................8
Certificate Register........................................................................................9
Class.......................................................................................................9
Class A-1 Certificate.......................................................................................9
Class A-1 Principal Distribution Amount.....................................................................9
Class CE Certificate........................................................................................9
Class M Certificates........................................................................................9
Class M-1 Certificate.......................................................................................9
Class M-1 Principal Distribution Amount.....................................................................9
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Class M-2 Certificate.......................................................................................9
Class M-2 Principal Distribution Amount.....................................................................9
Class M-3 Certificate......................................................................................10
Class M-3 Principal Distribution Amount....................................................................10
Class M-4 Certificate......................................................................................10
Class M-4 Principal Distribution Amount....................................................................10
Class P Certificate........................................................................................11
Class R Certificates.......................................................................................11
Class R-I Interest.........................................................................................11
Class R-II Interest........................................................................................11
Closing Date...............................................................................................11
Code.......................................................................................................11
Collection Account.........................................................................................11
Commission.................................................................................................11
Corporate Trust Office.....................................................................................11
Corresponding Certificate..................................................................................12
Credit Enhancement Percentage..............................................................................12
Credit Risk Management Agreements..........................................................................12
Credit Risk Management Fee.................................................................................12
Credit Risk Management Fee Rate............................................................................12
Credit Risk Manager........................................................................................12
Custodial Agreement........................................................................................12
Custodian..................................................................................................13
Cut-off Date...............................................................................................13
Debt Service Reduction.....................................................................................13
Deficient Valuation........................................................................................13
Definitive Certificates....................................................................................13
Deleted Mortgage Loan......................................................................................13
Delinquency Percentage.....................................................................................13
Depositor..................................................................................................13
Depository.................................................................................................13
Depository Institution.....................................................................................13
Depository Participant.....................................................................................14
Determination Date.........................................................................................14
Directly Operate...........................................................................................14
Disqualified Organization..................................................................................14
Distribution Account.......................................................................................14
Distribution Date..........................................................................................15
Due Date...................................................................................................15
Due Period.................................................................................................15
Eligible Account...........................................................................................15
ERISA......................................................................................................15
Estate in Real Property....................................................................................15
Excess Liquidation Proceeds................................................................................15
Extraordinary Trust Fund Expense...........................................................................15
Extra Principal Distribution Amount........................................................................16
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Xxxxxx Mae.................................................................................................16
FDIC.......................................................................................................16
Final Maturity Date........................................................................................16
Final Recovery Determination...............................................................................16
Fitch......................................................................................................16
Foreclosure Restricted Mortgage Loan.......................................................................16
Xxxxxxx Mac................................................................................................16
Gross Margin...............................................................................................16
Independent................................................................................................16
Independent Contractor.....................................................................................17
Index......................................................................................................17
Insurance Proceeds.........................................................................................17
Interest Accrual Period....................................................................................17
Interest Carry Forward Amount..............................................................................17
Interest Determination Date................................................................................17
Interest Distribution Amount...............................................................................18
Interest Remittance Amount.................................................................................18
Last Scheduled Distribution Date...........................................................................18
Late Collections...........................................................................................18
Liquidation Event..........................................................................................18
Liquidation Proceeds.......................................................................................18
Loan-to-Value Ratio........................................................................................19
London Business Day........................................................................................19
Loss Severity Percentage...................................................................................19
Marker Rate................................................................................................19
Master Servicer............................................................................................19
Master Servicer Certification..............................................................................19
Master Servicer Event of Default...........................................................................20
Master Servicer Fee Rate...................................................................................20
Master Servicing Fee.......................................................................................20
Maximum I-LTZZ Uncertificated Interest Deferral Amount.....................................................20
Maximum Mortgage Rate......................................................................................20
MERS.......................................................................................................20
MERS(R) System...............................................................................................20
Mezzanine Certificate......................................................................................20
MIN........................................................................................................20
Minimum Mortgage Rate......................................................................................20
MOM Loan...................................................................................................20
Monthly Payment............................................................................................21
Xxxxx'x....................................................................................................21
Mortgage...................................................................................................21
Mortgage File..............................................................................................21
Mortgage Loan..............................................................................................21
Mortgage Loan Documents....................................................................................21
Mortgage Loan Purchase Agreement...........................................................................21
Mortgage Loan Schedule.....................................................................................21
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Mortgage Note..............................................................................................24
Mortgage Rate..............................................................................................24
Mortgaged Property.........................................................................................24
Mortgagor..................................................................................................24
Net Monthly Excess Cashflow................................................................................24
Net Mortgage Rate..........................................................................................25
Net WAC Pass-Through Rate..................................................................................25
Net WAC Rate Carryover Amount..............................................................................25
New Lease..................................................................................................25
Nonrecoverable P&I Advance.................................................................................25
Nonrecoverable Servicing Advance...........................................................................26
Non-United States Person...................................................................................26
Notional Amount............................................................................................26
Offered Certificates.......................................................................................26
Officer's Certificate......................................................................................26
One-Month LIBOR............................................................................................26
One-Month LIBOR Pass-Through Rate..........................................................................27
Opinion of Counsel.........................................................................................27
Optional Termination Date..................................................................................27
Overcollateralization Amount...............................................................................27
Overcollateralization Increase Amount......................................................................28
Overcollateralization Reduction Amount.....................................................................28
Ownership Xxxxxxxx.........................................................................................00
X&X Advance................................................................................................28
Pass-Through Rate..........................................................................................28
Percentage Interest........................................................................................29
Periodic Rate Cap..........................................................................................29
Permitted Investments......................................................................................29
Permitted Transferee.......................................................................................31
Person.....................................................................................................31
Plan.......................................................................................................31
Prepayment Assumption......................................................................................31
Prepayment Charge..........................................................................................31
Prepayment Charge Schedule.................................................................................31
Prepayment Interest Excess.................................................................................32
Prepayment Interest Shortfall..............................................................................32
Prepayment Period..........................................................................................32
Principal Prepayment.......................................................................................33
Principal Distribution Amount..............................................................................33
Principal Remittance Amount................................................................................34
Purchase Price.............................................................................................33
Qualified Substitute Mortgage Loan.........................................................................34
Rate/Term Refinancing......................................................................................34
Rating Agency or Rating Agencies...........................................................................35
Realized Loss..............................................................................................35
Record Date................................................................................................36
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Reference Banks............................................................................................36
Refinanced Mortgage Loan...................................................................................36
Regular Certificate........................................................................................36
Regular Interest...........................................................................................36
Relief Act.................................................................................................36
Relief Act Interest Shortfall..............................................................................37
REMIC......................................................................................................37
REMIC I....................................................................................................37
REMIC I Interest Loss Allocation Amount....................................................................37
REMIC I Overcollateralization Amount.......................................................................37
REMIC I Principal Loss Allocation Amount...................................................................37
REMIC I Regular Interest...................................................................................38
REMIC I Regular Interest I-LTAA............................................................................38
REMIC I Regular Interest I-LTA1............................................................................38
REMIC I Regular Interest I-LTM1............................................................................38
REMIC I Regular Interest I-LTM2............................................................................38
REMIC I Regular Interest I-LTM3............................................................................38
REMIC I Regular Interest I-LTM4............................................................................38
REMIC I Regular Interest I-LTP.............................................................................39
REMIC I Regular Interest I-LTZZ............................................................................39
REMIC I Remittance Rate....................................................................................39
REMIC I Required Overcollateralization Amount..............................................................39
REMIC II...................................................................................................39
REMIC II Certificate.......................................................................................39
REMIC II Certificateholder.................................................................................39
REMIC Provisions...........................................................................................39
Remittance Report..........................................................................................39
Rents from Real Property...................................................................................39
REO Account................................................................................................40
REO Disposition............................................................................................40
REO Imputed Interest.......................................................................................40
REO Principal Amortization.................................................................................40
REO Property...............................................................................................40
Required Overcollateralization Amount......................................................................40
Reserve Fund...............................................................................................40
Reserve Interest Rate......................................................................................40
Residential Dwelling.......................................................................................41
Residual Certificate.......................................................................................41
Residual Interest..........................................................................................41
Responsible Officer........................................................................................41
S&P........................................................................................................41
Scheduled Principal Balance................................................................................41
Securities Act.............................................................................................42
Securities Administrator...................................................................................42
Seller.....................................................................................................42
Senior Interest Distribution Amount........................................................................42
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Servicer...................................................................................................42
Servicer Event of Default..................................................................................42
Servicer Remittance Date...................................................................................42
Servicer Report............................................................................................42
Servicing Advances.........................................................................................42
Servicing Fee..............................................................................................43
Servicing Fee Rate.........................................................................................43
Servicing Officer..........................................................................................43
Single Certificate.........................................................................................43
Startup Day................................................................................................44
Stepdown Date..............................................................................................44
Subordinate Certificates...................................................................................44
Subsequent Recoveries......................................................................................44
Sub-Servicer...............................................................................................44
Sub-Servicing Agreement....................................................................................44
Substitution Shortfall Amount..............................................................................44
Tax Returns................................................................................................44
Telerate Page 3750.........................................................................................44
Termination Price..........................................................................................44
Terminator.................................................................................................44
Transfer...................................................................................................45
Transferee.................................................................................................45
Transferor.................................................................................................45
Trigger Event..............................................................................................45
Trust......................................................................................................45
Trust Fund.................................................................................................45
Trust REMIC................................................................................................45
Trustee....................................................................................................45
Uncertificated Balance.....................................................................................45
Uncertificated Interest....................................................................................46
Uninsured Cause............................................................................................46
United States Person.......................................................................................46
Value......................................................................................................46
Voting Rights..............................................................................................47
Xxxxx Fargo................................................................................................47
SECTION 1.02. Allocation of Certain Interest Shortfalls.................................................47
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES 49
SECTION 2.01. Conveyance of the Mortgage Loans..........................................................49
SECTION 2.02. Acceptance of REMIC I by Trustee..........................................................50
SECTION 2.03. Repurchase or Substitution of Mortgage Loans..............................................50
SECTION 2.04. Representations and Warranties of the Master Servicer.....................................53
SECTION 2.05. Representations, Warranties and Covenants of the Servicer.................................54
SECTION 2.06. Issuance of the REMIC I Regular Interests and the Class R-I Interest......................60
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SECTION 2.07. Conveyance of the REMIC I Regular Interests; Acceptance of REMIC I by the Trustee.........60
SECTION 2.08. Issuance of Class R Certificates..........................................................60
SECTION 2.09. Establishment of the Trust................................................................61
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS 62
SECTION 3.01. The Servicer to Act as a Servicer.........................................................62
SECTION 3.02. Sub-Servicing Agreements Between the Servicer and Sub-Servicers...........................64
SECTION 3.03. Successor Sub-Servicers...................................................................65
SECTION 3.04. No Contractual Relationship Between Sub-Servicer, Trustee or the Certificateholders.......65
SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement by Successor Servicer................65
SECTION 3.06. Collection of Certain Mortgage Loan Payments..............................................66
SECTION 3.07. Collection of Taxes, Assessments and Similar Items; Servicing Accounts....................66
SECTION 3.08. Collection Account and Distribution Account...............................................67
SECTION 3.09. Withdrawals from the Collection Account and Distribution Account..........................70
SECTION 3.10. Investment of Funds in the Investment Accounts............................................72
SECTION 3.11. Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and
Primary Mortgage Insurance................................................................74
SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption Agreements.................................76
SECTION 3.13. Realization Upon Defaulted Mortgage Loans.................................................77
SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files...........................................79
SECTION 3.15. Servicing Compensation....................................................................80
SECTION 3.16. Collection Account Statements.............................................................81
SECTION 3.17. Statement as to Compliance................................................................81
SECTION 3.18. Independent Public Accountants' Servicing Report..........................................82
SECTION 3.19. Annual Certification......................................................................82
SECTION 3.20. Access to Certain Documentation...........................................................83
SECTION 3.21. Title, Management and Disposition of REO Property.........................................83
SECTION 3.22. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls; Relief Act
Interest Shortfalls.......................................................................86
SECTION 3.23. Obligations of the Servicer in Respect of Mortgage Rates and Monthly Payments............87
SECTION 3.24. Reserve Fund..............................................................................87
SECTION 3.25. Advance Facility..........................................................................89
SECTION 3.26. The Servicer Indemnification..............................................................91
ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER 92
SECTION 4.01. Master Servicer...........................................................................92
SECTION 4.02. REMIC-Related Covenants...................................................................93
SECTION 4.03. Monitoring of Servicer....................................................................93
SECTION 4.04. Fidelity Bond.............................................................................94
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SECTION 4.05. Power to Act; Procedures..................................................................94
SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements................................................95
SECTION 4.07. Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee......95
SECTION 4.08. Standard Hazard Insurance and Flood Insurance Policies....................................96
SECTION 4.09. Presentment of Claims and Collection of Proceeds..........................................96
SECTION 4.10. Maintenance of Primary Mortgage Insurance Policies........................................96
SECTION 4.11. Trustee to Retain Possession of Certain Insurance Policies and Documents..................97
SECTION 4.12. Realization Upon Defaulted Mortgage Loans.................................................97
SECTION 4.13. Compensation for the Master Servicer......................................................97
SECTION 4.14. REO Property..............................................................................98
SECTION 4.15. Annual Officer's Certificate as to Compliance.............................................98
SECTION 4.16. Annual Independent Accountant's Servicing Report..........................................99
SECTION 4.17. UCC.......................................................................................99
SECTION 4.18. Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls............99
SECTION 4.19. Prepayment Penalty Verification..........................................................100
ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS 101
SECTION 5.01. Distributions............................................................................101
SECTION 5.02. Statements to Certificateholders.........................................................107
SECTION 5.03. Servicer Reports; P&I Advances...........................................................111
SECTION 5.04. Allocation of Realized Losses............................................................113
SECTION 5.05. Compliance with Withholding Requirements.................................................115
SECTION 5.06. Reports Filed with Securities and Exchange Commission....................................115
ARTICLE VI THE CERTIFICATES 117
SECTION 6.01. The Certificates.........................................................................117
SECTION 6.02. Registration of Transfer and Exchange of Certificates....................................119
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates........................................123
SECTION 6.04. Persons Deemed Owners....................................................................124
SECTION 6.05. Certain Available Information............................................................124
ARTICLE VII THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER 125
SECTION 7.01. Liability of the Depositor, the Servicer and the Master Servicer.........................125
SECTION 7.02. Merger or Consolidation of the Depositor, the Servicer or the Master Servicer............125
SECTION 7.03. Limitation on Liability of the Depositor, the Servicer, the Master Servicer and
Others...................................................................................125
SECTION 7.04. Limitation on Resignation of the Servicer................................................126
SECTION 7.05. Limitation on Resignation of the Master Servicer.........................................128
SECTION 7.06. Assignment of Master Servicing...........................................................128
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SECTION 7.07. Rights of the Depositor in Respect of the Servicer and the Master Servicer...............128
SECTION 7.08. Duties of the Credit Risk Manager........................................................129
SECTION 7.09. Limitation Upon Liability of the Credit Risk Manager.....................................130
SECTION 7.10. Removal of the Credit Risk Manager.......................................................130
ARTICLE VIII DEFAULT 131
SECTION 8.01. Servicer Events of Default...............................................................131
SECTION 8.02. Master Servicer to Act; Appointment of Successor.........................................135
SECTION 8.03. Notification to Certificateholders.......................................................137
SECTION 8.04. Waiver of Servicer Events of Default.....................................................137
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR 138
SECTION 9.01. Duties of Trustee and Securities Administrator...........................................138
SECTION 9.02. Certain Matters Affecting Trustee and Securities Administrator...........................139
SECTION 9.03. Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans.......141
SECTION 9.04. Trustee and Securities Administrator May Own Certificates................................141
SECTION 9.05. Fees and Expenses of Trustee and Securities Administrator................................142
SECTION 9.06. Eligibility Requirements for Trustee and Securities Administrator........................142
SECTION 9.07. Resignation and Removal of Trustee and Securities Administrator..........................143
SECTION 9.08. Successor Trustee or Securities Administrator............................................144
SECTION 9.09. Merger or Consolidation of Trustee or Securities Administrator...........................145
SECTION 9.10. Appointment of Co-Trustee or Separate Trustee............................................145
SECTION 9.11. Appointment of Office or Agency..........................................................146
SECTION 9.12. Representations and Warranties...........................................................146
ARTICLE X TERMINATION 148
XXXXXXX 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx or Liquidation of All Mortgage Loans.........................148
SECTION 10.02. Additional Termination Requirements......................................................150
ARTICLE XI REMIC PROVISIONS 151
SECTION 11.01. REMIC Administration.....................................................................151
SECTION 11.02. Prohibited Transactions and Activities...................................................153
SECTION 11.03. Indemnification..........................................................................154
ARTICLE XII MISCELLANEOUS PROVISIONS 155
SECTION 12.01. Amendment................................................................................155
SECTION 12.02. Recordation of Agreement; Counterparts...................................................156
SECTION 12.03. Limitation on Rights of Certificateholders...............................................156
SECTION 12.04. Governing Law............................................................................157
SECTION 12.05. Notices..................................................................................157
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SECTION 12.06. Severability of Provisions...............................................................158
SECTION 12.07. Notice to Rating Agencies................................................................158
SECTION 12.08. Article and Section References...........................................................159
SECTION 12.09. Grant of Security Interest...............................................................159
SECTION 12.10. Survival of Indemnification..............................................................160
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class M Certificate
Exhibit A-3 Form of Class CE Certificate
Exhibit A-4 Form of Class P Certificate
Exhibit A-5 Form of Class R Certificate
Exhibit B-1 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Class P Certificates, Class CE Certificates and
Residual Certificates Pursuant to Rule 144A Under the 1933 Act
Exhibit B-2 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Class P Certificates, Class CE Certificates and
Residual Certificates Pursuant to Rule 501 (a) Under the 1933
Act
Exhibit B-3 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of Residual
Certificates
Exhibit C Form of Servicer Certification
Exhibit D Form of Power of Attorney
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
Schedule 3 Standard File Layout - Delinquency Reporting
Schedule 4 Standard File Layout - Scheduled/Scheduled
Schedule 5 Schedule of Servicing Advances made prior to the Cut-off Date
- x -
This Pooling and Servicing Agreement, is dated and effective
as of January 1, 2005, among ACE SECURITIES CORP., as Depositor, OCWEN FEDERAL
BANK FSB, as a Servicer, OPTION ONE MORTGAGE CORPORATION, as a Servicer, SELECT
PORTFOLIO SERVICING, INC., as a Servicer, XXXXX FARGO BANK, N.A., as Master
Servicer and Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest of the Trust Fund created hereunder. The
Trust Fund will consist of a segregated pool of assets comprised of the Mortgage
Loans and certain other related assets subject to this Agreement.
REMIC I
-------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (other than the Cap Contract and the
Reserve Fund) as a REMIC for federal income tax purposes, and such segregated
pool of assets will be designated as "REMIC I". The Class R-I Interest will be
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the REMIC I Remittance Rate, the initial Uncertificated Balance
and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii),
the "latest possible maturity date" for each of the REMIC I Regular Interests
(as defined herein). None of the REMIC I Regular Interests will be certificated.
REMIC I INITIAL LATEST POSSIBLE
DESIGNATION REMITTANCE RATE UNCERTIFICATED BALANCE MATURITY DATE (1)
----------- --------------- ---------------------- -----------------
I-LTAA Variable(2) $146,060,747.18 November 25, 2050
I-LTA1 Variable(2) $1,123,940.00 November 25, 2050
I-LTM1 Variable(2) $152,790.00 November 25, 2050
I-LTM2 Variable(2) $78,260.00 November 25, 2050
I-LTM3 Variable(2) $70,810.00 November 25, 2050
I-LTM4 Variable(2) $18,630.00 November 25, 2050
I-LTZZ Variable(2) $1,536,401.58 November 25, 0000
X-XXX Variable(2) $100.00 November 25, 2050
-----------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC I
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance
Rate" herein.
REMIC II
--------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.
2
Initial Aggregate
Certificate Principal Latest Possible
Designation Pass-Through Rate Balance Maturity Date (1)
----------- ----------------- ------- -----------------
Class A-1 Variable(2) $112,394,000 November 25, 2050
Class M-1 Variable(2) $15,279,000 November 25, 2050
Class M-2 Variable(2) $7,826,000 November 25, 2050
Class M-3 Variable(2) $7,081,000 November 25, 2050
Class M-4 Variable(2) $1,863,000 November 25, 2050
Class P N/A(3) $ 100.00 November 25, 2050
Class CE N/A(4) $4,598,579 November 25, 2050
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein. (3) The Class P Certificates will not accrue interest.
(4) The Class CE Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE Certificates
outstanding from time to time which shall equal the Uncertificated
Balance of the REMIC I Regular Interests (other than REMIC I Regular
Interest I-LTP). The Class CE Certificates will not accrue interest on
their Certificate Principal Balance.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $149,041,678.76.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicers, the Master Servicer, the Securities Administrator and
the Trustee agree as follows:
3
ARTICLE I
DEFINITIONS
Section 1.01. DEFINED TERMS.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accepted Master Servicing Practices": With respect to any
Mortgage Loan, as applicable, either (x) those customary mortgage master
servicing practices of prudent mortgage servicing institutions that master
service mortgage loans of the same type and quality as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, to the extent
applicable to the Master Servicer (except in its capacity as successor to the
Servicer), or (y) as provided in Section 3.01 hereof, but in no event below the
standard set forth in clause (x).
"Accepted Servicing Practices": As defined in Section 3.01.
"Account": The Collection Account and the Distribution Account
as the context may require.
"Accrued Certificate Interest": With respect to any Class A-1
Certificate, Mezzanine Certificate or Class CE Certificate and each Distribution
Date, interest accrued during the related Interest Accrual Period at the
Pass-Through Rate for such Certificate for such Distribution Date on the
Certificate Principal Balance, in the case of the Class A-1 Certificates and the
Mezzanine Certificates, or on the Notional Amount in the case of the Class CE
Certificates, of such Certificate immediately prior to such Distribution Date.
The Class P Certificates are not entitled to distributions in respect of
interest and, accordingly, will not accrue interest. All distributions of
interest on the Class A-1 Certificates and the Mezzanine Certificates will be
calculated on the basis of a 360-day year and the actual number of days in the
applicable Interest Accrual Period. All distributions of interest on the Class
CE Certificates will be based on a 360-day year consisting of twelve 30-day
months. Accrued Certificate Interest with respect to each Distribution Date, as
to any Class A-1 Certificate, Mezzanine Certificate or Class CE Certificate
shall be reduced by an amount equal to the portion allocable to such Certificate
pursuant to Section 1.02 hereof, if any, of the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 3.22 or Section 4.18 of this
Agreement and (b) the aggregate amount of any Relief Act Interest Shortfall, if
any, for such Distribution Date. In addition, Accrued Certificate Interest with
respect to each Distribution Date, as to any Class CE Certificate, shall be
reduced by an amount equal to the portion allocable to such Class CE Certificate
of Realized Losses, if any, pursuant to Section 1.02 and Section 5.04 hereof.
"Adjustable Rate Mortgage Loan": Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.
4
"Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, the first day of the month in which the Mortgage Rate of an
Adjustable Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each Adjustable Rate
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Administration Fees": The sum of (i) the Servicing Fee, (ii)
the Master Servicing Fee, and (iii) the Credit Risk Management Fee.
"Administration Fee Rate": The sum of (i) the Servicing Fee
Rate, (ii) the Master Servicer Fee Rate, and (iii) the Credit Risk Management
Fee Rate.
"Advance Facility": As defined in Section 3.25(a).
"Advance Financing Person": As defined in Section 3.25(a).
"Advance Reimbursement Amount": As defined in Section 3.25(b).
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Loss Severity 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 on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.
"Agreement": This Pooling and Servicing Agreement, including
all exhibits and schedules hereto and all amendments hereof and supplements
hereto.
"Allocated Realized Loss Amount": With respect to any Class of
Mezzanine Certificates and any Distribution Date, an amount equal to the sum of
any Realized Loss allocated to that Class of Certificates on the Distribution
Date pursuant to Section 5.04 and any Allocated Realized Loss Amount for that
Class remaining unpaid from the previous Distribution Date.
"Amounts Held for Future Distribution": As to any Distribution
Date, the aggregate amount held in the related Collection Account at the close
of business on the immediately preceding Determination Date on account of (i)
all Monthly Payments or portions thereof received in respect of the related
Mortgage Loans due after the related Due Period and (ii) Principal Prepayments
and Liquidation Proceeds received in respect of such Mortgage Loans after the
last day of the related Prepayment Period.
"Arrearages": With respect to each Mortgage Loan, the amount,
if any, equal to the interest portion of the payments due on such Mortgage Loan
on or prior to the Cut-off Date
5
but not yet received by the related Servicer by such date, as shown on the
Mortgage Loan Schedule.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county,
if permitted by law.
"Authorized Officers": A managing director of the whole loan
trading desk and a managing director in global markets.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in each Collection Account and Distribution Account as of the
close of business on the related Servicer Remittance Date, (b) the aggregate of
any amounts deposited in the Distribution Account by the Servicers or the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 3.22 or Section 4.18 of this Agreement, (c) the aggregate of
any P&I Advances for such Distribution Date made by the Servicer pursuant to
Section 5.03 of this Agreement and (d) the aggregate of any P&I Advances made by
a successor Servicer (including the Master Servicer) for such Distribution Date
pursuant to Section 8.02, reduced (to an amount not less than zero) by (2) the
portion of the amount described in clause (1)(a) above that represents (i)
Amounts Held for Future Distribution, (ii) Principal Prepayments on the Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the end of the calendar
month preceding such Distribution Date, (iv) amounts reimbursable or payable to
the Depositor, the Servicers, the Trustee, the Master Servicer, the Securities
Administrator, the Custodian or the Credit Risk Manager pursuant to Section 3.09
or 9.05 of this Agreement or otherwise payable in respect of Extraordinary Trust
Fund Expenses, (v) the Credit Risk Management Fee, (vi) amounts deposited in any
Collection Account or the Distribution Account in error, (vii) the amount of any
Prepayment Charges collected by the Servicers in connection with the Principal
Prepayment of any of the Mortgage Loans and (viii) amounts reimbursable to a
successor Servicer (including the Master Servicer) pursuant to Section 8.02.
"Balloon Mortgage Loan": A Mortgage Loan that provides for
the payment of the unamortized principal balance of such Mortgage Loan in a
single payment, that is substantially greater than the preceding monthly payment
at the maturity of such Mortgage Loan.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment, that is substantially greater
than the preceding Monthly Payment at the maturity of such Mortgage Loan.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
6
"Book-Entry Certificates": The Offered Certificates for so
long as the Certificates of such Class shall be registered in the name of the
Depository or its nominee.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 6.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the States of New York,
New Jersey, Florida, Pennsylvania, California, Utah, Maryland, Minnesota or in
the city in which the Corporate Trust Office of the Trustee is located, are
authorized or obligated by law or executive order to be closed.
"Cap Contract": Shall mean the Cap Contract between the
Trustee and the counterparty named thereunder, for the benefit of the Holders of
the Class A-1, the Mezzanine and the Class CE Certificates.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage plus any subordinate mortgage on the
related Mortgaged Property and related closing costs.
"Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2005-SD1, Class A-1, Class M-1, Class M-2,
Class M-3, Class M-4, Class P, Class CE and Class R issued under this Agreement.
"Certificate Factor": With respect to any Class of
Certificates (other than the Residual Certificates) as of any Distribution Date,
a fraction, expressed as a decimal carried to six places, the numerator of which
is the aggregate Certificate Principal Balance (or Notional Amount, in the case
of the Class CE Certificates) of such Class of Certificates on such Distribution
Date (after giving effect to any distributions of principal and allocations of
Realized Losses resulting in reduction of the Certificate Principal Balance (or
Notional Amount, in the case of the Class CE Certificates) of such Class of
Certificates to be made on such Distribution Date), and the denominator of which
is the initial aggregate Certificate Principal Balance (or Notional Amount, in
the case of the Class CE Certificates) of such Class of Certificates as of the
Closing Date.
"Certificate Margin": With respect to the Class A-1
Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1 0.400% in the case of each Distribution Date through and
including the Optional Termination Date and 0.800% in the case of each
Distribution Date thereafter.
With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, 0.750% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.125% in the case of each Distribution Date thereafter.
With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 1.250% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.875% in the case of each Distribution Date thereafter.
7
With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, 3.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.250% in the case of each Distribution Date thereafter.
With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, 3.000% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.500% in the case of each Distribution Date thereafter.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof, and solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of or beneficially owned by the Depositor, the Seller, a Servicer, the
Master Servicer, the Securities Administrator, the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01. The Trustee and the
Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or a
Servicer in determining whether a Certificate is held by an Affiliate thereof.
All references herein to "Holders" or "Certificateholders" shall reflect the
rights of Certificate Owners as they may indirectly exercise such rights through
the Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Securities Administrator
shall be required to recognize as a "Holder" or "Certificateholder" only the
Person in whose name a Certificate is registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to each Class
A-1 Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination plus any
Subsequent Recoveries added to the Certificate Principal Balance of such
Certificate pursuant to Section 5.04, minus all distributions allocable to
principal made thereon and Realized Losses allocated thereto, if any, on such
immediately prior Distribution Date (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A-1 Certificates, the Mezzanine
Certificates and the Class P Certificates then outstanding. The aggregate
initial Certificate Principal Balance of each Class of Regular Certificates is
set forth in the Preliminary Statement hereto.
8
"Certificate Register": The register maintained pursuant to
Section 6.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A-1 Certificate": Any one of the Class A-1
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-1 and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.
"Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A-1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 45.50% and (ii) the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the
last day of the related Due Period minus the product of (i) 0.50% and (ii) the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
"Class CE Certificate": Any one of the Class CE Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date) and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
66.00% and (ii) the aggregate Scheduled Principal Balance of the Mortgage Loans
as of the last day of the related Due Period and (B) the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date),
9
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 76.50% and (ii) the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Scheduled Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus the product of (i) 0.50% and
(ii) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 86.00% and (ii)
the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last
day of the related Due Period and (B) the aggregate Scheduled Principal Balance
of the Mortgage Loans as of the last day of the related Due Period minus the
product of (i) 0.50% and (ii) the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date) and (v)
the Certificate Principal Balance of the Class M-4 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
88.50% and (ii) the aggregate Scheduled Principal Balance of the Mortgage Loans
as of the last day of the related Due Period and (B) the aggregate
10
Scheduled Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
"Class P Certificate": Any one of the Class P Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-4 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class R Certificates": Any one of the Class R Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-5, and evidencing
the Class R-I Interest and the Class R-II Interest.
"Class R-I Interest": The uncertificated residual interest in
REMIC I.
"Class R-II Interest": The uncertificated residual interest in
REMIC II.
"Closing Date": January 14, 2005.
"Code": The Internal Revenue Code of 1986 as amended from time
to time.
"Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by each Servicer pursuant to
Section 3.08(a), which shall be entitled (i) with respect to the Ocwen Mortgage
Loans, "Ocwen Federal Bank FSB, as Servicer for HSBC Bank USA, National
Association as Trustee, in trust for the registered holders of ACE Securities
Corp., Home Equity Loan Trust, Series 2005-SD1, Asset Backed Pass-Through
Certificates", (ii) with respect to the Option One Mortgage Loans, "Option One
Mortgage Corporation, as Servicer for HSBC Bank USA, National Association as
Trustee, in trust for registered holders of ACE Securities Corp., Home Equity
Loan Trust, Series 2005-SD1, Asset Backed Pass-Through Certificates" and (iii)
with respect to the SPS Mortgage Loans, "Select Portfolio Servicing, Inc., as
Servicer for HSBC Bank USA, National Association, as Trustee, in trust for the
registered holders of ACE Securities Corp., Home Equity Loan Trust, Series
2005-SD1, Asset Backed Pass-Through Certificates. Each Collection Account must
be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": The principal corporate trust office
of the Trustee which office at the date of the execution of this instrument is
located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ACE Securities
Corp., 2005-SD1, or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicer. The office of the Securities
Administrator, which for purposes of Certificate transfers and surrender is
located at Xxxxx Fargo Bank, N.A., Sixth and Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, Attention: Corporate Trust (ACE 2005-SD1), and for all other
purposes is located at Xxxxx Xxxxx Xxxx, X.X., X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust (ACE 2005-SD1) (or for
11
overnight deliveries, at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust (ACE 2005-SD1)).
"Corresponding Certificate": With respect to each REMIC I
Regular Interest, as follows:
REMIC I Regular Interest Class
------------------------ -----
REMIC I Regular Interest I-LTA1 A-1
REMIC I Regular Interest I-LTM1 M-1
REMIC I Regular Interest I-LTM2 M-2
REMIC I Regular Interest I-LTM3 M-3
REMIC I Regular Interest I-LTM4 M-4
REMIC I Regular Interest I-LTP P
"Credit Enhancement Percentage": For any Distribution Date and
any Class of Offered Certificates will be the percentage obtained by dividing
(x) the sum of (i) the aggregate Certificate Principal Balance of the
Subordinate Certificates and (ii) the Overcollateralization Amount by (y) the
aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day
of the Due Period, calculated after taking into account scheduled payments of
principal due during the related Due Period to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred on the Mortgage Loans
during the related Prepayment Period, and distribution of the Principal
Distribution Amount to the Certificates then entitled to distributions of
principal on such Distribution Date.
"Credit Risk Management Agreements": The agreement between the
Credit Risk Manager and each Servicer, and the agreement between the Credit Risk
Manager and the Master Servicer, each regarding the loss mitigation and advisory
services to be provided by the Credit Risk Manager.
"Credit Risk Management Fee": The amount payable to the Credit
Risk Manager on each Distribution Date as compensation for all services rendered
by it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under the Credit Risk Management Agreements, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Scheduled Principal Balance of the Mortgage Loans
and any related REO Properties as of the first day of the related Due Period.
"Credit Risk Management Fee Rate": 0.02% per annum.
"Credit Risk Manager": Risk Management Group, LLC, a New York
limited liability company, and its successors and assigns.
"Custodial Agreement": The Custodial Agreement dated as of
January 1, 2005, among the Trustee, the Custodian and the Servicers as such
agreement may be amended or supplemented from time to time, or any other
custodial agreement entered into after the date hereof with respect to any
Mortgage Loan subject to this Agreement.
12
"Custodian": Xxxxx Fargo or any other custodian appointed
under any custodial agreement entered into after the date of this Agreement.
"Cut-off Date": With respect to each Mortgage Loan, the close
of business on November 30, 2004. With respect to all Qualified Substitute
Mortgage Loans, their respective dates of substitution. References herein to the
"Cut-off Date," when used with respect to more than one Mortgage Loan, shall be
to the respective Cut-off Dates for such Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 6.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Scheduled Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, provided that in the case of (i) Mortgage Loans that are
the subject of forebearance plans and (ii) Mortgage Loans with respect to which
the related Mortgagor is the subject of bankruptcy proceedings, delinquency
shall be deemed to mean delinquency of the Monthly Payment due under the related
forebearance plan or bankruptcy plan, as applicable, and the denominator of
which is the aggregate Scheduled Principal Balance of the Mortgage Loans and REO
Properties as of the last day of the previous calendar month.
"Depositor": ACE Securities Corp., a Delaware corporation, or
its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations
13
(or, in the case of a depository institution that is the principal subsidiary of
a holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1+ by S&P, F-1+
by Fitch and P-1 by Xxxxx'x (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).
"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 15th day of the calendar month in which such Distribution Date occurs, or if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the related Servicer,
on behalf of the Trustee, shall not be considered to Directly Operate an REO
Property solely because the related Servicer establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to such REO
Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Xxxxxxx Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any Trust REMIC or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Securities Administrator pursuant to Section 3.08(c) in
the name of the Securities Administrator for the benefit of the
Certificateholders and designated "Xxxxx Fargo Bank, N.A., in trust for
registered holders of ACE Securities Corp. Home Equity Loan Trust, Series
2005-SD1". Funds in the Distribution Account shall be held in trust for the
Certificateholders for the
14
uses and purposes set forth in this Agreement. The Distribution Account must be
an Eligible Account.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in January 2005.
"Due Date": With respect to each Distribution Date, the day of
the month on which the Monthly Payment is due on a Mortgage Loan during the
related Due Period, exclusive of any days of grace.
"Due Period": With respect to the Distribution Date in January
2005, the period commencing on December 1, 2004 and ending on January 1, 2005,
and with respect to any Distribution Date thereafter, the period commencing on
the second day of the month immediately preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal depository institution or state chartered
depository institution acting in its fiduciary capacity. Eligible Accounts may
bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Cap Payment": With respect to any Distribution Date,
the excess, if any, of (1) the cap payments made by the counterparty under the
Cap Contract with respect to the Class A-1 Certificates and Mezzanine
Certificates, over (2) the amount of the Net WAC Rate Carryover Amounts
distributable to the Class A-1 Certificates and Mezzanine Certificates for such
Distribution Date.
"Excess Liquidation Proceeds": To the extent that such amount
is not required by law to be paid to the related Mortgagor, the amount, if any,
by which Liquidation Proceeds with respect to a liquidated Mortgage Loan exceed
the sum of (i) the outstanding principal balance of such Mortgage Loan and
accrued but unpaid interest at the related Net Mortgage Rate through the last
day of the month in which the related Liquidation Event occurs, plus (ii)
related liquidation expenses or other amounts to which the related Servicer is
entitled to be reimbursed from Liquidation Proceeds with respect to such
liquidated Mortgage Loan pursuant to Section 3.09 of this Agreement.
"Extraordinary Trust Fund Expense": Any amounts payable or
reimbursable to the Trustee, the Master Servicer, the Securities Administrator,
the Custodian, the Credit Risk Manager or any director, officer, employee or
agent of any such Person from the Trust Fund pursuant to the terms of this
Agreement and any amounts payable from the Distribution Account in respect of
taxes pursuant to Section 11.01(g)(v).
15
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the Net Monthly Excess Cashflow for such
Distribution Date and (ii) the Overcollateralization Increase Amount for such
Distribution Date.
"Xxxxxx Xxx": Xxxxxx Xxx, formerly known as the Federal
National Mortgage Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Maturity Date": The Distribution Date occurring in
November 2050.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Terminator pursuant to or as contemplated by
Section 2.03, 3.13(c) or Section 10.01), a determination made by the related
Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the related Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered,
which determination shall be evidenced by a certificate of a Servicing Officer
of the related Servicer delivered to the Master Servicer and maintained in its
records.
"Fitch": Fitch Ratings or any successor in interest.
"Foreclosure Restricted Mortgage Loans" : A Mortgage Loan that
was 90 or more days delinquent as of the Closing Date and which was not current
under a repayment plan and identified as such on the Mortgage Loan Schedule.
"Xxxxxxx Mac": Xxxxxxx Mac, formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Adjustable Rate
Mortgage Loan.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Securities Administrator, the Servicers, the Seller and their
respective Affiliates, (b) does not have any direct financial interest in or any
material indirect financial interest in the Depositor, the Master Servicer, the
Securities Administrator, the Servicers, the Seller or any Affiliate thereof,
and (c) is not connected with the Depositor, the Master Servicer, the Securities
Administrator, the Servicers, the Seller or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Depositor, the Master Servicer, the Securities Administrator,
the Servicers, the Seller or any Affiliate thereof merely because such Person is
the beneficial owner of 1% or less of any class of securities issued by the
Depositor, the Master Servicer, the Securities Administrator, the Servicers, the
Seller or any Affiliate thereof, as the case may be.
16
"Independent Contractor": Either (i) any Person (other than a
Servicer) that would be an "independent contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including any Servicer) if the Trustee has received an Opinion of Counsel to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": As of any Adjustment Date, the index applicable to
the determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan
will generally be the average of the interbank offered rates for six-month
United States dollar deposits in the London market as published in THE WALL
STREET JOURNAL and as most recently available either (a) as of the first
Business Day 45 days prior to such Adjustment Date or (b) as of the first
Business Day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan or the related
Mortgaged Property, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor or a
senior lienholder in accordance with Accepted Servicing Practices, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Class A-1 Certificates and the Mezzanine Certificates, the period
commencing on the Distribution Date of the month immediately preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, commencing on the Closing Date) and ending on the day
preceding such Distribution Date. With respect to any Distribution Date and the
Class CE Certificates and the REMIC I Regular Interests, the one-month period
ending on the last day of the calendar month immediately preceding the month in
which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and any Class A-1 Certificate or Mezzanine Certificate, the
sum of (i) the amount, if any, by which (a) the Interest Distribution Amount for
such Class as of the immediately preceding Distribution Date exceeded (b) the
actual amount distributed on such Class in respect of interest on such
immediately preceding Distribution Date and (ii) the amount of any Interest
Carry Forward Amount for such Class remaining unpaid from the previous
Distribution Date, plus accrued interest on such sum calculated at the related
Pass-Through Rate for the most recently ended Interest Accrual Period.
"Interest Determination Date": With respect to the Class A-1
Certificates, the Mezzanine Certificates, REMIC I Regular Interest I-LTA1, REMIC
I Regular Interest I-LTM1,
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REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3 and REMIC I
Regular Interest I-LTM4 and any Interest Accrual Period therefor, the second
London Business Day preceding the commencement of such Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class A-1 Certificates, any Mezzanine Certificates and
any Class CE Certificates, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.
"Interest Remittance Amount": With respect to any Distribution
Date, the portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Mortgage Loans (other
than any Simple Interest Excess, if applicable, and net of the Administration
Fees, Arrearages collected by the Servicers and any Prepayment Charges and after
taking into account amounts payable or reimbursable to the Trustee, the
Custodian, the Securities Administrator, the Master Servicer, the Credit Risk
Manager or the Servicers pursuant to this Agreement or the Custodial Agreement),
plus any amounts withdrawn from the Simple Interest Excess Sub-Account.
"Last Scheduled Distribution Date": The Distribution Date in
November, 2050, which is the Distribution Date immediately following the
maturity date for the Mortgage Loan with the latest maturity date.
"Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period with respect to such Mortgage Loan,
whether as late payments of Monthly Payments or as Insurance 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.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.13(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 10.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds, amounts received in respect of the rental of any REO Property prior to
REO Disposition, or required to be released to a Mortgagor or a senior
lienholder in accordance with applicable law or the terms of the related
Mortgage Loan Documents) received by the related Servicer in connection with (i)
the taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation (other than amounts required to be released to
the Mortgagor or a senior lienholder), (ii) the liquidation of a defaulted
Mortgage Loan through a trustee's sale, foreclosure sale or otherwise, (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.13(c), Section 3.21 or Section
10.01 of this Agreement or (iv) any Subsequent Recoveries.
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"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the Cities of
London and New York are open and conducting transactions in United States
dollars.
"Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
amount of Realized Losses incurred on a Mortgage Loan and the denominator of
which is the principal balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
"Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for each of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular
Interest I-LTZZ, with the rate on each such REMIC I Regular Interest (other than
REMIC I Regular Interest I-LTZZ) subject to a cap equal to the lesser of (i) the
related One-Month LIBOR Pass-Through Rate and (ii) the related Net WAC
Pass-Through Rate for the Corresponding Certificates for the purpose of this
calculation for such Distribution Date and with the rate on REMIC I Regular
Interest I-LTZZ subject to a cap of zero for the purpose of this calculation;
provided however, each such cap for each REMIC I Regular Interest shall be
multiplied by a fraction the numerator of which is the actual number of days in
the related Interest Accrual Period and the denominator of which is 30.
"Master Servicer": As of the Closing Date, Xxxxx Fargo Bank,
N.A. and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Master Servicer and the Securities
Administrator shall at all times be the same Person.
"Master Servicer Certification": A written certification
covering servicing of the Mortgage Loans by a Servicer and signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superseded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
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"Master Servicer Event of Default": One or more of the events
described in Section 8.01(b).
"Master Servicer Fee Rate": 0.0525% per annum.
"Master Servicing Fee": With respect to each Mortgage Loan and
for any calendar month, an amount equal to one twelfth of the product of the
Master Servicer Fee Rate multiplied by the Scheduled Principal Balance of the
Mortgage Loans as of the Due Date in the preceding calendar month.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest
I-LTM4 for such Distribution Date, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate for the
Corresponding Certificates for the purpose of this calculation for such
Distribution Date; provided however, each such cap for each REMIC I Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"MERS": Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS(R) System": The system of recording transfers of
mortgages electronically maintained by MERS.
"Mezzanine Certificate": Any Class M-1, Class M-2, Class M-3
or Class M-4 Certificate.
"MIN": The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
"Minimum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof.
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"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, a bankruptcy or a forebearance plan determined: (a) after giving effect to
(i) any Deficient Valuation and/or Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in the amount of interest collectible from
the related Mortgagor pursuant to the Relief Act or similar state laws; (b)
without giving effect to any extension granted or agreed to by the related
Servicer pursuant to Section 3.01 of this Agreement; and (c) on the assumption
that all other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. or any successor
interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The Mortgage Loan Documents pertaining to a
particular Mortgage Loan.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and the Mortgage Loan Documents for which have been delivered to
the Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
Custodial Agreement, as held from time to time as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Documents": The documents evidencing or
relating to each Mortgage Loan delivered to the Custodian under the Custodial
Agreement on behalf of the Trustee.
"Mortgage Loan Purchase Agreement": Shall mean the Mortgage
Loan Purchase Agreement dated as of January 14, 2005, between the Depositor and
the Seller.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date attached hereto as Schedule 1. The
Depositor shall deliver or cause the delivery of the initial Mortgage Loan
Schedule to the related Servicer, the Master Servicer, the Custodian and the
Trustee on the Closing Date. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including
the state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
21
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the original date of the Mortgage Loan and the remaining
months to maturity from the Cut-off Date, based on the original
amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment (including as set
forth in a forebearence plan or in connection with a bankruptcy
proceeding) as of the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Scheduled Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Scheduled Principal Balance of the Mortgage Loan as
of the close of business on the Cut-off Date;
(xvii) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date;
(xviii) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin;
(xix) a code indicating the purpose of the loan (i.e.,
purchase financing, rate/term refinancing, cash-out refinancing);
(xx) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Rate under the terms of the Mortgage Note;
(xxi) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Rate under the terms of the Mortgage Note;
(xxii) the Mortgage Rate at origination;
22
(xxiii) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Rate Cap;
(xxiv) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date immediately following the Cut-off Date;
(xxv) with respect to each Adjustable Rate Mortgage Loan, the
Index;
(xxvi) the date on which the first Monthly Payment was due on
the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date;
(xxvii) a code indicating whether the Mortgage Loan is an
Adjustable Rate Mortgage Loan or a fixed rate Mortgage Loan;
(xxviii) a code indicating the documentation style (i.e.,
full, stated or limited);
(xxix) a code indicating if the Mortgage Loan is subject to a
primary insurance policy or lender paid mortgage insurance policy and
the name of the insurer;
(xxx) the Appraised Value of the Mortgaged Property;
(xxxi) the sale price of the Mortgaged Property, if
applicable;
(xxxii) a code indicating whether the Mortgage Loan is subject
to a Prepayment Charge, the term of such Prepayment Charge and the
amount of such Prepayment Charge;
(xxxiii) the product type (e.g., 2/28, 15 year fixed, 30 year
fixed, 15/30 balloon, etc.);
(xxxiv) the Mortgagor's debt to income ratio;
(xxxv) the FICO score at origination;
(xxxvi) the amount of any Arrearage;
(xxxvii) a code indicating a Foreclosure Restricted Mortgage
Loan;
(xxxviii)the amount of Servicing Advances made prior to the
Cut-off Date and outstanding as of such date;
(xxxix) whether such Mortgage Loan is a Simple Interest
Mortgage Loan; and
(xl) the applicable Servicer.
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The Mortgage Loan Schedule shall set forth the following information
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Depositor in accordance with the
provisions of this Agreement. With respect to any Qualified Substitute Mortgage
Loan, the Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate with
respect to each Adjustable Rate Mortgage Loan (A) as of any date of
determination until the first Adjustment Date following the Cut-off Date shall
be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in
effect immediately following the Cut-off Date and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in
the Mortgage Note, of the Index, as most recently available as of a date prior
to the Adjustment Date as set forth in the related Mortgage Note, plus the
related Gross Margin; provided that the Mortgage Rate on such Adjustable Rate
Mortgage Loan on any Adjustment Date shall never be more than the lesser of (i)
the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date
plus the related Periodic Rate Cap, if any, and (ii) the related Maximum
Mortgage Rate, and shall never be less than the greater of (i) the Mortgage Rate
in effect immediately prior to the Adjustment Date less the Periodic Rate Cap,
if any, and (ii) the related Minimum Mortgage Rate. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) the amount of any collections in respect of
Arrearages on the Mortgage Loans, (ii) any Overcollateralization Reduction
Amount for such Distribution Date and (iii) the excess of (x) the Available
Distribution Amount for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Senior Interest Distribution Amount payable to the
Holders of the Class A-1 Certificates, (B) the aggregate Interest Distribution
Amounts payable to the holders of the Mezzanine Certificates and (C) the
Principal Remittance Amount.
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"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Administration Fee Rate.
"Net Simple Interest Excess": As of any Distribution Date, an
amount equal to the excess, if any, of the aggregate amount of Simple Interest
Excess with respect to the Mortgage Loans over the amount of Simple Interest
Shortfall with respect to the Mortgage Loans.
"Net Simple Interest Shortfall": As of any Distribution Date,
an amount equal to the excess, if any, of the aggregate amount of Simple
Interest Shortfall with respect to the Mortgage Loans over the amount of Simple
Interest Excess with respect to the Mortgage Loans.
"Net WAC Pass-Through Rate": With respect to the Class A-1
Certificates and the Mezzanine Certificates and any Distribution Date, a rate
per annum equal to the product of (x) the weighted average of the Net Mortgage
Rates on the then outstanding Mortgage Loans, weighted based on their Scheduled
Principal Balances as of the first day of the calendar month preceding the month
in which the Distribution Date occurs and (y) a fraction, the numerator of which
is 30 and the denominator of which is the actual number of days elapsed in the
related Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC I Remittance Rates on the REMIC I Regular Interests, weighted on the
basis of the Uncertificated Balance of each such REMIC I Regular Interest.
"Net WAC Rate Carryover Amount": With respect to any Class
A-1 Certificate or Mezzanine Certificate and any Distribution Date on which the
Pass-Through Rate is limited to the applicable Net WAC Pass-Through Rate, an
amount equal to the sum of (i) the excess of (x) the amount of interest such
Class would have been entitled to receive on such Distribution Date if the
applicable Net WAC Pass-Through Rate would not have been applicable to such
Class on such Distribution Date over (y) the amount of interest paid to such
Class on such Distribution Date at the applicable Net WAC Pass-Through Rate plus
(ii) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously distributed to such Class together with interest thereon at
a rate equal to the Pass-Through Rate for such Class for the most recently ended
Interest Accrual Period without taking into account the applicable Net WAC
Pass-Through Rate.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.
"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 related Servicer or a successor to the
related Servicer (including the Trustee or the Master Servicer) will not or, in
the case of a proposed P&I Advance, would not be ultimately recoverable from
related Late Collections, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
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"Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the related Servicer, will
not or, in the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP) for such Distribution
Date.
"Ocwen": Ocwen Federal Bank FSB, and any successor thereto.
"Ocwen Mortgage Loans": Those Mortgage Loans serviced by Ocwen
pursuant to the terms of this Agreement as specified on the Mortgage Loan
Schedule.
"Offered Certificates": The Class A-1 Certificates and the
Mezzanine Certificates, collectively.
"Officer's Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the related Servicer, the
Seller or the Depositor, as applicable.
"One-Month LIBOR": With respect to the Class A-1 Certificates,
the Mezzanine Certificates, REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4 and any Interest Accrual Period
therefor, the rate determined by the Securities Administrator on the related
Interest Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such Interest Determination Date; provided that if such rate
does not appear on Telerate Page 3750, the rate for such date will be determined
on the basis of the offered rates of the Reference Banks for one-month U.S.
dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination
Date. In such event, the Securities Administrator will request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
If on such Interest Determination Date, two or more Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16). If on such Interest
Determination Date, fewer than two Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the previous Interest Determination Date
and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination Date would be
based on LIBOR for the previous Interest Determination Date for the third
consecutive Interest Determination Date, the Securities Administrator shall
select an alternative comparable index (over which the Securities Administrator
has no control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of One-Month LIBOR by
26
the Securities Administrator and the Securities Administrator's subsequent
calculation of the One-Month LIBOR Pass-Through Rates for the relevant Interest
Accrual Period, shall, in the absence of manifest error, be final and binding.
"One-Month LIBOR Pass-Through Rate": With respect to the Class
A-1 Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.
With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor, the related Servicer,
the Securities Administrator or the Master Servicer, acceptable to the Trustee,
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel.
"Option One": Option One Mortgage Corporation, and any
successor thereto.
"Option One Mortgage Loans": Those Mortgage Loans serviced by
Option One pursuant to the terms of this Agreement as specified on the Mortgage
Loan Schedule.
"Optional Termination Date": The Distribution Date on which
the aggregate principal balance of the Mortgage Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is equal to or less than 10% of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
"Overcollateralization Amount": With respect to any
Distribution Date, the excess, if any, of (a) the aggregate Scheduled Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date over (b) the sum of the aggregate Certificate Principal
Balances of the Class A-1 Certificates, the Mezzanine Certificates and the Class
P Certificates as of such Distribution Date (after taking into account the
payment of the Principal Remittance Amount on such Distribution Date).
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"Overcollateralization Increase Amount": With respect to the
Class A-1 Certificates and the Mezzanine Certificates, and any Distribution Date
is any amount of Net Monthly Excess Cashflow actually applied as an accelerated
payment of principal to the extent the Required Overcollateralization Amount
exceeds the Overcollateralization Amount.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, is the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided however that on any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by a Servicer in respect of any Determination Date pursuant to
Section 5.03 of this Agreement, an Advance Financing Person pursuant to Section
3.25 of this Agreement or in respect of any Distribution Date by a successor
Servicer (including the Master Servicer) pursuant to Section 8.02 of this
Agreement (which advances shall not include principal or interest shortfalls due
to bankruptcy proceedings or application of the Relief Act or similar state or
local laws.)
"Pass-Through Rate": With respect to the Class A-1
Certificates and the Mezzanine Certificates and any Distribution Date, a rate
per annum equal to the lesser of (i) the One Month LIBOR Pass-Through Rate for
such Distribution Date and (ii) the Net WAC Pass Through Rate for the
Distribution Date.
With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (i)
through (viii) below, and the denominator of which is the aggregate
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and
REMIC I Regular Interest I-LTZZ. For purposes of calculating the Pass-Through
Rate for the Class CE Certificates, the numerator is equal to the sum of the
following components:
(i) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC II Regular Interest I-LTAA;
(ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA1;
(iii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM1;
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(iv) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM2;
(v) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM3;
(vi) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM4;
(vii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and
(viii) 100% of the interest on REMIC I Regular Interest I-LTP.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. The Class A-1 Certificates and the Mezzanine
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $25,000 and integral multiples
of $1.00 in excess thereof. The Class P Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances of
$20 and integral multiples thereof. The Class CE Certificates are issuable only
in minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of each such Class of Certificates
may be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance of such Class or to an otherwise
authorized denomination for such Class plus such remainder. With respect to any
Residual Certificate, the undivided percentage ownership in such Class evidenced
by such Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 5% in excess thereof.
"Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Adjustable Rate Mortgage Loan may increase or decrease (without
regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such
Adjustment Date from the Mortgage Rate in effect immediately prior to such
Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Servicers, the Master
Servicer, the Trustee or any of their respective Affiliates:
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(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) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company (or, if the only Rating Agency is S&P, in the case of
the principal depository institution in a depository institution
holding company, debt obligations of the depository institution holding
company) or its ultimate parent has a short-term uninsured debt rating
in the highest available rating category of Xxxxx'x, Fitch and S&P and
provided that each such investment has an original maturity of no more
than 365 days; and provided further that, if the only Rating Agency is
S&P and if the depository or trust company is a principal subsidiary of
a bank holding company and the debt obligations of such subsidiary are
not separately rated, the applicable rating shall be that of the bank
holding company; and, provided further that, if the original maturity
of such short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of S&P
if S&P is the Rating Agency; and (B) any other demand or time deposit
or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated A-1+ or higher by S&P, F-1 or higher by Fitch and A2
or higher by Moody's, provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type described in
clause (i) above and must (A) be valued daily at current market prices
plus accrued interest, (B) pursuant to such valuation, be equal, at all
times, to 105% of the cash transferred by a party in exchange for such
collateral and (C) be delivered to such party or, if such party is
supplying the collateral, an agent for such party, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(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;
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(vi) units of money market funds that have been rated "AAA" by
Fitch (if rated by Fitch), "AAAm" by S&P or "Aaa" by Moody's including
any such money market fund managed or advised by the Master Servicer,
the Trustee or any of their Affiliates; 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 securities having ratings
equivalent to its highest initial rating of the Class A-1 Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, limited liability company,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Xxxxx plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Prepayment Assumption": A prepayment rate of 28% CPR. The
Prepayment Assumption is used solely for determining the accrual of original
issue discount on the Certificates for federal income tax purposes. A CPR (or
Constant Prepayment Rate) represents an annualized constant assumed rate of
prepayment each month of a pool of mortgage loans relative to its outstanding
principal balance for the life of such pool.
"Prepayment Charge": With respect to any Principal Prepayment,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related Mortgage Note.
"Prepayment Charge Schedule": As of any date, the list of
Mortgage Loans providing for a Prepayment Charge included in the Trust Fund on
such date, attached hereto as Schedule 2 (including the prepayment charge
summary attached thereto). The Depositor shall deliver or cause the delivery of
the Prepayment Charge Schedule to each Servicer, the Master Servicer and the
Trustee on the Closing Date. The Prepayment Charge Schedule shall set forth the
following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
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(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on
the related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Scheduled Principal Balance of the related
Mortgage Loan; and
(vi) the Scheduled Principal Balance of the related Mortgage
Loan as of the Cut-off Date.
"Prepayment Interest Excess": With respect to each Mortgage
Loan that was the subject of a Principal Prepayment in full during the portion
of the related Prepayment Period occurring between the first day of the calendar
month in which such Distribution Date occurs and the Determination Date of the
calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. Each Servicer may withdraw such Prepayment Interest Excess from the
related Collection Account in accordance with Section 3.09(a)(x).
"Prepayment Interest Shortfall": With respect to any
Distribution Date other than the first Distribution Date, for each such Mortgage
Loan that was the subject of a Principal Prepayment in full or in part during
the portion of the related Prepayment Period occurring between the first day of
the related Prepayment Period and the last day of the calendar month preceding
the month in which such Distribution Date occurs that was applied by the related
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the calendar month preceding such
Distribution Date. The obligations of the Servicers and the Master Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.22 and
Section 4.18, respectively of this Agreement.
"Prepayment Period": With respect to the first Distribution
Date, the period commencing on December 1, 2004 and ending on January 15, 2005,
and with respect to any Distribution Date thereafter and (i) the Ocwen Mortgage
Loans and SPS Mortgage Loans, the calendar month preceding the month in which
the related Distribution Date occurs with respect to prepayments in part, and
the period beginning on the 16th day of the month preceding the related
Distribution Date (or, the period commencing on the Cut-off Date, in connection
with the first Prepayment Period) and ending on the 15th day of the month in
which such Distribution Date occurs with respect to prepayments in full; and
(ii) the Option One Mortgage Loans, the period beginning on the 16th day of the
month preceding the related Distribution Date (or, the period commencing on the
Cut-off Date, in connection with the first Prepayment Period) and ending on the
15th day of the month of such Distribution Date.
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"Principal Prepayment": Any voluntary payment of principal
made by the Mortgagor on a Mortgage Loan which is received in advance of its
scheduled Due Date and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment.
"Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Mortgage Loans due during the related Due Period, whether or not
received on or prior to the related Determination Date (including without
limitation the principal portion of all Monthly Payments due before the Cut-off
Date and collected by the Servicers after the Cut-off Date); (ii) the principal
portion of all proceeds received in respect of the repurchase of a Mortgage Loan
or, in the case of a substitution, certain amounts representing a principal
adjustment, during the calendar month preceding such Distribution Date pursuant
to or as contemplated by Section 2.03, Section 3.13(c) and Section 10.01; (iii)
the principal portion of all other unscheduled collections, including Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries received during the
calendar month preceding such Distribution Date, and all Principal Prepayments
in full and in part received during the related Prepayment Period, to the extent
applied as recoveries of principal on the Mortgage Loans, net in each case of
payments or reimbursements to the Trustee, the Custodian, the Master Servicer,
the Credit Risk Manager, the Securities Administrator and the Servicers and (iv)
the amount of any Overcollateralization Increase Amount for such Distribution
Date MINUS (v) the amount of any Overcollateralization Reduction Amount for such
Distribution Date.
"Principal Remittance Amount": With respect to any
Distribution Date will be the sum of the amounts described in clauses (i)
through (iii) of the definition of Principal Distribution Amount.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.13(c) or Section 10.01, and as confirmed by a certification of a Servicing
Officer of the related Servicer to the Trustee, an amount equal to the sum of
(i) 100% of the Scheduled Principal Balance thereof as of the date of purchase
(or such other price as provided in Section 10.01), (ii) in the case of (x) a
Mortgage Loan, accrued interest on such Scheduled Principal Balance at the
applicable Net Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or a P&I Advance
by the related Servicer, which payment or P&I Advance had as of the date of
purchase been distributed pursuant to Section 5.01, through the end of the
calendar month in which the purchase is to be effected and (y) an REO Property,
the sum of (1) accrued interest on such Scheduled Principal Balance at the
applicable Net Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or a P&I Advance
by the related Servicer through the end of the calendar month immediately
preceding the calendar month in which such REO Property was acquired, plus (2)
REO Imputed Interest for such REO Property for each calendar month commencing
with the calendar month in which such REO Property was acquired and ending with
the calendar month in which such purchase is to be effected, net of the total of
all net rental income, Insurance Proceeds, Liquidation Proceeds and P&I Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 5.01, (iii) any unreimbursed Servicing Advances and
P&I Advances (including Nonrecoverable P&I Advances and
33
Nonrecoverable Servicing Advances) and any unpaid Servicing Fees allocable to
such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from
the Collection Account pursuant to Section 3.09(a)(ix) and Section 3.13(b) and
(v) in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the related Servicer or
the Trustee in respect of the breach or defect giving rise to the purchase
obligation and any costs and damages incurred by the Trust Fund and the Trustee
in connection with any violation by any such Mortgage Loan of any predatory or
abusive lending law.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) if the mortgage loan is an Adjustable
Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) if the mortgage loan is an
Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the mortgage loan is
an Adjustable Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin
of the Deleted Mortgage Loan, (vi) if the mortgage loan is an Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) be secured by the same priority lien on the
related Mortgaged Property as the Deleted Mortgage Loan, (xi) have a credit
grade at least equal to the credit grading assigned on the Deleted Mortgage
Loan, (xii) be a "qualified mortgage" as defined in the REMIC Provisions and
(xiii) conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the terms described in clause (vii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such mortgage
loan, the credit grades described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage
34
loan and any subordinate mortgage loan of the Mortgagor on the related Mortgaged
Property and to pay related closing costs.
"Rating Agency or Rating Agencies": Fitch and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicers.
"Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero), as reported by the related Servicer to the Master Servicer (in
substantially the form of Schedule 4 hereto, or another form mutually acceptable
to the related Servicer and the Master Servicer) equal to (i) the unpaid
principal balance of such Mortgage Loan as of the commencement of the calendar
month in which the Final Recovery Determination was made, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
through the end of the calendar month in which such Final Recovery Determination
was made, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on such Mortgage Loan and (B) on a principal amount equal to the Scheduled
Principal Balance of such Mortgage Loan as of the close of business on the
Distribution Date during such calendar month, plus (iii) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage Loan pursuant
to Section 3.09(a)(ix) and Section 3.13(b), minus (iv) the proceeds, if any,
received in respect of such Mortgage Loan during the calendar month in which
such Final Recovery Determination was made, net of amounts that are payable
therefrom to the related Servicer with respect to such Mortgage Loan pursuant to
Section 3.09(a)(iii) of this Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the
Scheduled Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) REO
Imputed Interest for such REO Property for each calendar month commencing with
the calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.09(a)(ix) and Section 3.13(b) of
this Agreement, minus (v) the aggregate of all P&I Advances and Servicing
Advances (in the case of Servicing Advances, without duplication of amounts
netted out of the rental income, Insurance Proceeds and Liquidation Proceeds
described in clause (vi) below) made by the related Servicer in respect of such
REO Property or the related Mortgage Loan for which the related Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.21 of this Agreement out of rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property, minus (vi) the total of all
35
net rental income, Insurance Proceeds and Liquidation Proceeds received in
respect of such REO Property that has been, or in connection with such Final
Recovery Determination, will be transferred to the Distribution Account pursuant
to Section 3.21 of this Agreement.
With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected Monthly Payment.
To the extent the related Servicer receives Subsequent
Recoveries, with respect to any Mortgage Loan, the amount of Realized Loss with
respect to that Mortgage Loan will be reduced to the extent such recoveries are
applied to reduce the Certificate Principal Balance of any Class on any
Distribution Date.
"Record Date": With respect to each Distribution Date and the
Class A-1 Certificates and the Mezzanine Certificates, the Business Day
immediately preceding such Distribution Date for so long as such Certificates
are Book-Entry Certificates. With respect to each Distribution Date and any
other Class of Certificates, including any Definitive Certificates, the last day
of the calendar month immediately preceding the month in which such Distribution
Date occurs.
"Reference Banks": Xxxxxxx'x Bank PLC, The Tokyo Mitsubishi
Bank and National Westminster Bank PLC and their successors in interest;
provided, however, that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Securities
Administrator which are engaged in transactions in Eurodollar deposits in the
International Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of or under common control with
the Depositor or any Affiliate thereof and (iii) which have been designated as
such by the Securities Administrator.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A-1 Certificate, Mezzanine
Certificate, Class CE Certificate or Class P Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Servicemembers Civil Relief Act, as amended,
or similar state or local laws.
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"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 Relief Act.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby); and (v) the Collection Accounts, the
Distribution Account and any REO Account, and such assets that are deposited
therein from time to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto. Notwithstanding the
foregoing, however, REMIC I specifically excludes (i) all payments and other
collections of principal and interest due on the Mortgage Loans on or before the
Cut-off Date and all Prepayment Charges payable in connection with Principal
Prepayments made before the Cut-off Date; (ii) the Reserve Fund and any amounts
on deposit therein from time to time and any proceeds thereof and (iii) the Cap
Contract.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Scheduled Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, divided by (b) 12.
"REMIC I Overcollateralization Amount": With respect to any
date of determination, (i) the aggregate Uncertificated Balances of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4 and REMIC I Regular Interest I-LTP, in each case as of such date
of determination.
"REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Scheduled Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and the denominator of
which is the aggregate of the Uncertificated Balances of REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and
REMIC I Regular Interest I-LTZZ.
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"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest I-LTAA": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTAA
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal,
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subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTZZ": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTZZ
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTZZ and REMIC I Regular
Interest I-LTP, the weighted average of the Net Mortgage Rates of the Mortgage
Loans.
"REMIC I Required Overcollateralization Amount": 1% of the
Required Overcollateralization Amount.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit
of the REMIC II Certificateholders pursuant to Section 2.07, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC II Certificate": Any Regular Certificate or Class R
Certificate.
"REMIC II Certificateholder": The Holder of any REMIC II
Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
"Remittance Report": A report by the related Servicer pursuant
to Section 5.03(a).
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
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"REO Account": The account or accounts maintained, or caused
to be maintained, by each Servicer in respect of an REO Property pursuant to
Section 3.21 of this Agreement.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Scheduled
Principal Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan, if appropriate) as of the close of
business on the Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the related
Servicer pursuant to Section 3.21(d) of this Agreement for unpaid Servicing Fees
in respect of the related Mortgage Loan and unreimbursed Servicing Advances and
P&I Advances in respect of such REO Property or the related Mortgage Loan, over
(b) the REO Imputed Interest in respect of such REO Property for such calendar
month.
"REO Property": A Mortgaged Property acquired by a Servicer or
its nominee on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.21 of this Agreement.
"Required Overcollateralization Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 5.75% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 11.50% of the aggregate Scheduled Principal Balance
of the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date. Notwithstanding the foregoing,
on and after any Distribution Date following the reduction of the aggregate
Certificate Principal Balance of the Class A-1 Certificates and Mezzanine
Certificates to zero, the Required Overcollateralization Amount shall be zero.
"Reserve Fund": A fund created pursuant to Section 3.24 which
shall be an asset of the Trust Fund but which shall not be an asset of any Trust
REMIC.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Securities Administrator
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates
which New York City banks selected by the Securities Administrator, after
consultation with the Depositor, are quoting on the relevant Interest
Determination Date to the
40
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Securities Administrator can determine no such arithmetic
mean, the lowest one-month U.S. dollar lending rate which New York City banks
selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Xxxxxx Xxx eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.
"Residual Certificate": Any one of the Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any officer of the Trustee having direct responsibility for the administration
of this Agreement and, with respect to a particular matter, to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"S&P": Standard and Poor's, a division of the XxXxxx-Xxxx
Companies, Inc.
"Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date as set forth on the Mortgage Loan Schedule; (b) as
of any Due Date subsequent to the Cut-off Date up to and including the Due Date
in the calendar month in which a Liquidation Event occurs with respect to such
Mortgage Loan, the outstanding principal balance of such Mortgage Loan as of the
Cut-off Date, minus the sum of (i) the principal portion of each Monthly Payment
due on or before such Due Date but subsequent to the Cut-off Date, whether or
not received, (ii) the principal portion of all Monthly Payments due before the
Cut-off Date and collected by the related Servicer after the Cut-off Date, (iii)
all Principal Prepayments received before such Due Date but after the Cut-off
Date, (iv) the principal portion of all Liquidation Proceeds and Insurance
Proceeds received before such Due Date but after the Cut-off Date, net of any
portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(v) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of REO Property for all previously ended calendar months; and
41
(b) as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such REO Property, zero.
"Securities Act": The Securities Act of 1933, as amended.
"Securities Administrator": As of the Closing Date, Xxxxx
Fargo Bank, N.A. and thereafter, its respective successors in interest that meet
the qualifications of this Agreement. The Securities Administrator and the
Master Servicer shall at all times be the same Person.
"Seller": DB Structured Products, Inc. or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A-1 Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A-1 Certificates.
"Servicer": Ocwen Federal Bank FSB, Option One Mortgage
Corporation or Select Portfolio Servicing, Inc., or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Mortgage Loans (collectively, the "Servicers").
"Servicer Event of Default": One or more of the events
described in Section 8.01(a).
"Servicer Remittance Date": With respect to any Distribution
Date, by 12:00 p.m. New York time on the third (3rd) Business Day immediately
preceding the related Distribution Date.
"Servicer Report": A report (substantially in the form of
Schedule 4 hereto) or otherwise in form and substance acceptable to the related
Servicer, Master Servicer and Securities Administrator on an electronic data
file or tape prepared by the related Servicer pursuant to Section 5.03(a) of
this Agreement with such additions, deletions and modifications as agreed to by
the Master Servicer, the Securities Administrator and the related Servicer.
"Servicing Advances": The customary and reasonable
"out-of-pocket" costs and expenses incurred prior to or on or after the Cut-off
Date (the amounts incurred prior to the Cut-off Date are identified on Schedule
5 hereto) by the related Servicer in connection with a default, delinquency or
other unanticipated event by such Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including but not limited to foreclosures, in respect of a
particular Mortgage Loan, including any expenses incurred in relation to any
such proceedings that result from the Mortgage Loan being registered on the
MERS(R) System, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of its
obligations under Section 3.01, Section 3.07, Section 3.11, Section 3.13 and
Section 3.21 of this Agreement. Servicing Advances also include any reasonable
"out-of-pocket" cost and expenses (including legal fees) incurred by the related
Servicer in connection with executing and recording instruments of satisfaction,
deeds of reconveyance or Assignments to the extent not recovered from the
42
Mortgagor or otherwise payable under this Agreement. None of the Servicers shall
be required to make any Nonrecoverable Servicing Advances.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one-twelfth of the product of the
Servicing Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month. The Servicing Fee is
payable solely from collections of interest on the Mortgage Loans.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the related Servicer, or
any employee designated by an officer of such Servicer, in each case involved
in, or responsible for, the administration and servicing of Mortgage Loans,
whose name and specimen signature appear on a list of Servicing Officers
furnished by the related Servicer to the Trustee, the Master Servicer, the
Securities Administrator and the Depositor on the Closing Date, as such list may
from time to time be amended.
"Simple Interest Excess": As of any Determination Date for
each Simple Interest Qualifying Loan, the excess, if any, of (i) the portion of
the Monthly Payment received from the Mortgagor for such Mortgage Loan allocable
to interest with respect to the related Due Period, over (ii) 30 days' interest
on the Scheduled Principal Balance of such Mortgage Loan at the Mortgage Rate.
"Simple Interest Excess Sub-Account": The sub-account of the
Collection Account established by each Servicer servicing Simple Interest
Mortgage Loans pursuant to Section 3.08(b). Each Simple Interest Excess
Sub-Account shall be an Eligible Account.
"Simple Interest Mortgage Loan": Any Mortgage Loan for which
the interest due thereon is calculated based on the actual number of days
elapsed between the date on which interest was last paid through the date on
which the most current payment is received and identified as such on the
Mortgage Loan Schedule.
"Simple Interest Qualifying Loan": As of any Determination
Date, any Simple Interest Mortgage Loan that was neither prepaid in full during
the related Due Period, nor delinquent with respect to a payment that became due
during the related Due Period as of the close of business on the Determination
Date following such Due Period.
"Simple Interest Shortfall": As of any Determination Date for
each Simple Interest Qualifying Loan, the excess, if any, of (i) 30 days'
interest on the Scheduled Principal Balance of such Mortgage Loan at the
Mortgage Rate, over (ii) the portion of the Monthly Payment received from the
Mortgagor for such Mortgage Loan allocable to interest with respect to the
related Due Period.
"Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.
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"SPS": Select Portfolio Servicing, Inc.
"SPS Mortgage Loans": Those Mortgage Loans serviced by SPS
pursuant to this Agreement.
"Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 11.01(b) hereof.
"Stepdown Date": The earlier to occur of (i) the later to
occur of (a) the Distribution Date occurring in January 2008 and (b) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to any distribution of the Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 54.50% and (ii) the first
Distribution Date on which the Certificate Principal Balance of the Class A-1
Certificates has been reduced to zero.
"Subordinate Certificates": Collectively, the Mezzanine
Certificates and the Class CE Certificates.
"Subsequent Recoveries": As of any Distribution Date, amounts
received during the related Prepayment Period by a Servicer specifically related
to a defaulted Mortgage Loan or disposition of an REO Property prior to the
related Prepayment Period that resulted in a Realized Loss, after the
liquidation or disposition of such defaulted Mortgage Loan.
"Sub-Servicer": Any Person with which a Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicers pursuant to Section 3.02 of this Agreement.
"Sub-Servicing Agreement": The written contract between a
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02 of this Agreement.
"Substitution Shortfall Amount": As defined in Section 2.03.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust REMICs under the REMIC Provisions, together
with any and all other information reports or returns that may be required to be
furnished to the Certificateholders or filed with the Internal Revenue Service
or any other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on
the Dow Xxxxx Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 10.01.
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"Terminator": As defined in Section 10.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if either (x) the Delinquency Percentage exceeds 29.50% of
the Credit Enhancement Percentage with respect to such Distribution Date or (y)
the aggregate amount of Realized Losses incurred since the Cut-off Date through
the last day of the related Due Period divided by the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable
percentages set forth below with respect to such Distribution Date:
DISTRIBUTION DATE PERCENTAGE
January 2008 to December 2008 4.25%, plus 1/12 of 1.50% for each month thereafter
January 2009 to December 2009 5.75%, plus 1/12 of 1.15% for each month thereafter
January 2010 to December 2010 6.90%, plus 1/12 of 0.35% for each month thereafter
January 2011 and thereafter 7.25%
"Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2005-SD1, the trust created hereunder.
"Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II and the Reserve Fund and any amounts on deposit therein and any
proceeds thereof, the Prepayment Charges and the Cap Contract.
"Trust REMIC": REMIC I or REMIC II.
"Trustee": HSBC Bank USA, National Association a national
banking association, or its successor in interest, or any successor trustee
appointed as herein provided.
"Uncertificated Balance": The amount of the REMIC I Regular
Interests outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
the REMIC I Regular Interest shall be reduced by all distributions of principal
made on such
45
REMIC I Regular Interest on such Distribution Date pursuant to Section 5.01 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 5.04 and the
Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be increased by
interest deferrals as provided in Section 5.01(a)(1)(i). The Uncertificated
Balance of each REMIC I Regular Interest shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of the REMIC
I Regular Interests shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.22
or Section 4.18 of this Agreement and (b) the aggregate amount of any Relief Act
Interest Shortfall, if any allocated, in each case, to such REMIC I Regular
Interest or REMIC I Regular Interest pursuant to Section 1.02. In addition,
Uncertificated Interest with respect to each Distribution Date, as to any
Uncertificated REMIC Regular Interest, shall be reduced by Realized Losses, if
any, allocated to such Uncertificated REMIC Regular Interest pursuant to Section
1.02 and Section 5.04.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.11.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations)
provided that, for purposes solely of the restrictions on the transfer of any
Class R Certificate, no partnership or other entity treated as a partnership for
United States federal income tax purposes shall be treated as a United States
Person unless all persons that own an interest in such partnership either
directly or through any entity that is not a corporation for United States
federal income tax purposes are required to be United States Persons, or an
estate whose income is subject to United States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
a trust which was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under subpart E of part I of subchapter J of chapter I of
the Code), and which was treated as a United States person on August 20, 1996
may elect to continue to be treated as a United States person notwithstanding
the previous sentence. The term "United States" shall have the meaning set forth
in Section 7701 of the Code.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of Xxxxxx Xxx and Xxxxxxx
Mac and (b) the value thereof as determined by a
46
review appraisal conducted by the originator of the Mortgage Loan in accordance
with such originator's underwriting guidelines, (ii) the purchase price paid for
the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan; provided, however, (A) in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the originator of the Mortgage Loan of
such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by an appraiser who met the minimum requirements of Xxxxxx Mae and
Xxxxxxx Mac and (2) the value thereof as determined by a review appraisal
conducted by the originator of the Mortgage Loan in accordance with such
originator's underwriting guidelines, and (B) in the case of a Mortgage Loan
originated in connection with a "lease-option purchase," such value of the
Mortgaged Property is based on the lower of the value determined by an appraisal
made for the originator of such Mortgage Loan at the time of origination or the
sale price of such Mortgaged Property if the "lease option purchase price" was
set less than 12 months prior to origination, and is based on the value
determined by an appraisal made for the originator of such Mortgage Loan at the
time of origination if the "lease option purchase price" was set 12 months or
more prior to origination and (iii) the value determined pursuant to a broker's
price opinion or an automated value model conducted on behalf of the Seller.
"Verification Report": As defined in Section 4.19.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any such Certificate. With respect to any
date of determination, 98% of all Voting Rights will be allocated among the
holders of the Class A-1 Certificates, the Mezzanine Certificates and the Class
CE Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.
"Xxxxx Fargo": Xxxxx Fargo Bank, N.A. or any successor
thereto.
Section 1.02. ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A-1
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Servicers pursuant to
Section 3.22 of this Agreement or the Master Servicer pursuant to Section 4.18
and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans
for any Distribution Date shall be allocated first, to the Class CE
Certificates, second, to the Class M-4 Certificates, third, to the Class M-3
Certificates, fourth, to the Class M-2 Certificates, fifth, to the Class M-1
Certificates and sixth, to the Class A-1 Certificates, on a PRO RATA basis, in
each case based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount, as applicable, of each such Certificate and (2) the
aggregate amount of any Realized Losses allocated to the Mezzanine Certificates
and Net WAC Rate Carryover Amounts paid to the Class A-1 Certificates and the
47
Mezzanine Certificates incurred for any Distribution Date shall be allocated to
the Class CE Certificates on a PRO RATA basis based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount thereof, as
applicable.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Servicers pursuant to Section 3.22 of this Agreement
or the Master Servicer pursuant to Section 4.18) and any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated among REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and
REMIC I Regular Interest I-LTZZ PRO RATA based on, and to the extent of, one
month's interest at the then applicable respective REMIC I Remittance Rate on
the respective Uncertificated Balance of each such REMIC I Regular Interest.
48
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF THE MORTGAGE LOANS.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse, for the benefit of the
Certificateholders, all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in and
to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement (including, without
limitation the right to enforce the obligations of the other parties thereto
thereunder), and all other assets included or to be included in REMIC I. Such
assignment includes all interest and principal received by the Depositor or the
Servicers on or with respect to the Mortgage Loans (including all payments of
principal and interest due on such Mortgage Loans on or before the Cut-off Date
but not paid by the related Mortgagors by such date). The Depositor herewith
delivers to the Trustee and each Servicer an executed copy of the Mortgage Loan
Purchase Agreement.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with the Custodian pursuant to the Custodial
Agreement the documents with respect to each Mortgage Loan as described under
Section 2 of the Custodial Agreement (the "Mortgage Loan Documents"). In
connection with such delivery and as further described in the Custodial
Agreement, the Custodian will be required to review such Mortgage Loan Documents
and deliver to the Trustee, the Depositor, the related Servicer and the Seller
certifications (in the forms attached to the Custodial Agreement) with respect
to such review with exceptions noted thereon. In addition, under the Custodial
Agreement the Depositor will be required to cure certain defects with respect to
the Mortgage Loan Documents for the related Mortgage Loans after the delivery
thereof by the Depositor to the Custodian as more particularly set forth
therein.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.11, and preparation and delivery of the certifications shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement.
The Depositor shall deliver or cause the related originator to
deliver to the related Servicer copies of all trailing documents required to be
included in the related Mortgage File at the same time the originals or
certified copies thereof are delivered to the Trustee or Custodian, such
documents including the mortgagee policy of title insurance and any Mortgage
Loan Documents upon return from the recording office. The Servicers shall not be
responsible for any custodian fees or other costs incurred in obtaining such
documents and the Depositor shall cause the Servicers to be reimbursed for any
such costs the Servicers may incur in connection with performing their
obligations under this Agreement.
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The Mortgage Loans permitted by the terms of this Agreement to be included in
the Trust are limited to (i) Mortgage Loans (which the Depositor acquired
pursuant to the Mortgage Loan Purchase Agreement, which contains, among other
representations and warranties, a representation and warranty of the Seller that
no Mortgage Loan is a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003, as defined in the New Mexico Home
Loan Protection Act effective January 1, 2004) or as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Xxx. Laws Ch. 183C) and (ii) Qualified Substitute Mortgage Loans (which,
by definition as set forth herein and referred to in the Mortgage Loan Purchase
Agreement, are required to conform to, among other representations and
warranties, the representation and warranty of the Seller that no Qualified
Substitute Mortgage Loan is a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership Act effective November 27, 2003, as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004 or as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Xxx. Laws Ch. 183C). The Depositor and the Trustee on behalf of the Trust
understand and agree that it is not intended that any mortgage loan be included
in the Trust that is a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003, as defined in the New Mexico Home
Loan Protection Act effective January 1, 2004 or as defined in the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Xxx. Laws
Ch. 183C).
Section 2.02. ACCEPTANCE OF REMIC I BY TRUSTEE.
The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage
Loan Documents and all other assets included in the definition of "REMIC I"
under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the Distribution Account) and declares that it holds (or the Custodian on its
behalf holds) and will hold such documents and the other documents delivered to
it constituting a Mortgage Loan Document, and that it holds (or the Custodian on
its behalf holds) or will hold all such assets and such other assets included in
the definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.
Section 2.03. REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS.
(a)Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File,
other than a defective or missing document with respect to the Mortgage Loans
listed on Schedule A to the Mortgage Loan Purchase Agreement or of a breach by
the Seller of any representation, warranty or covenant under the Mortgage Loan
Purchase Agreement in respect of any Mortgage Loan that materially and adversely
affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Seller and the related
Servicer of such defect, missing document or breach and request that the Seller
deliver such missing document, cure such defect or breach within 60 days from
the date the Seller was notified of such missing document, defect or breach, and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Trustee shall enforce
the obligations of the Seller under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date on which the Seller was notified of such missing document, defect
or breach, if and to the extent that the
50
Seller is obligated to do so under the Mortgage Loan Purchase Agreement. The
Purchase Price for the repurchased Mortgage Loan shall be remitted to the
related Servicer for deposit in the related Collection Account and the Trustee,
upon receipt of written certification from the related Servicer of such deposit,
shall release or cause the Custodian (upon receipt of a request for release in
the form attached to the Custodial Agreement) to release to the Seller the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, representation or
warranty, as the Seller shall furnish to it and as shall be necessary to vest in
the Seller any Mortgage Loan released pursuant hereto, and the Trustee shall not
have any further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be
removed from REMIC I (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(b). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee and the Certificateholders.
In addition, promptly upon the earlier of discovery by a
Servicer or receipt of notice by a Servicer of the breach of the representation
or covenant of the Seller set forth in Section 5(xiv) of the Mortgage Loan
Purchase Agreement which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment Charge, such Servicer
shall promptly notify the Seller and the Trustee of such breach. The Trustee
shall enforce the obligations of the Seller under the Mortgage Loan Purchase
Agreement to remedy such breach to the extent and in the manner set forth in the
Mortgage Loan Purchase Agreement.
(b)Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the date which is two years after the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee or the Custodian on
behalf of the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the
Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary endorsements thereon, as are
required by Section 2 of the Custodial Agreement, as applicable, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Custodian on behalf of the Trustee shall acknowledge receipt of such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, an
initial certification pursuant to the Custodial Agreement, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian on behalf of the Trustee shall deliver to the Depositor, the Trustee
and the related Servicer a final certification pursuant to the Custodial
Agreement with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due
51
with respect to Qualified Substitute Mortgage Loans in the month of substitution
are not part of REMIC I and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Deleted Mortgage Loan on or before the Due Date in the month
of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee and the related Servicer. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall constitute part of the Trust
Fund and shall be subject in all respects to the terms of this Agreement and the
Mortgage Loan Purchase Agreement, including all applicable representations and
warranties thereof included herein or in the Mortgage Loan Purchase Agreement.
For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer will determine the amount (the "Substitution Shortfall
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate of, as to each such Qualified Substitute
Mortgage Loan, the Scheduled Principal Balance thereof as of the date of
substitution, together with one month's interest on such Scheduled Principal
Balance at the applicable Net Mortgage Rate, plus all outstanding P&I Advances
and Servicing Advances (including Nonrecoverable P&I Advances and Nonrecoverable
Servicing Advances) related thereto. On the date of such substitution, the
Seller will deliver or cause to be delivered to the related Servicer for deposit
in the related Collection Account an amount equal to the Substitution Shortfall
Amount, if any, and the Trustee or the Custodian on behalf of the Trustee, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans, upon receipt
of a request for release in the form attached to the Custodial Agreement and
certification by the related Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and the Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as the Seller shall deliver to it and as
shall be necessary to vest therein any Deleted Mortgage Loan released pursuant
hereto.
In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any Trust
REMIC, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any Trust REMIC
to fail to qualify as a REMIC at any time that any Certificate is outstanding.
(c)Upon discovery by the Depositor, the Seller, a Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or substitute one
or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within 90 days of the earlier of discovery or receipt of such notice with
respect to such affected Mortgage Loan. Such repurchase or substitution shall be
made by (i) the Seller if the
52
affected Mortgage Loan's status as a non-qualified mortgage is or results from a
breach of any representation, warranty or covenant made by the Seller under the
Mortgage Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage
Loan's status as a non-qualified mortgage is a breach of no representation or
warranty. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a). The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
(d)With respect to a breach of the representations made
pursuant to Section 5(xiv) of the Mortgage Loan Purchase Agreement that
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Seller shall be required to take the
actions set forth in this Section 2.03.
(e)Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan or Prepayment Charge, the Servicer shall cure such breach in all material
respects.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF THE MASTER
SERVICER.
The Master Servicer hereby represents, warrants and covenants
to the Servicers, the Depositor and the Trustee, for the benefit of each of the
Trustee and the Certificateholders, that as of the Closing Date or as of such
date specifically provided herein:
(i) The Master Servicer is a national banking association duly
formed, validly existing and in good standing under the laws of the
United States of America and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Master Servicer;
(ii) The Master Servicer has the full power and authority to
conduct its business as presently conducted by it and to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly authorized
the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the
Master Servicer, the consummation by the Master 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 Master Servicer and will not (A) result in a breach of any term
or provision of charter and by-laws of the Master Servicer or (B)
conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of
53
any other material agreement or instrument to which the Master Servicer
is a party or by which it may be bound, or any statute, order or
regulation applicable to the Master Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over the Master Servicer; and the Master Servicer is not a party to,
bound by, or in breach or violation of any indenture or other agreement
or instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to the Master Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the Master
Servicer to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Master Servicer taken as a whole;
(iv) The Master Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant made by it and contained in this Agreement;
(v) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to perform any of its other obligations hereunder in accordance with
the terms hereof,
(vi) There are no actions or proceedings against, or
investigations known to it of, the Master Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by the Master
Servicer of its obligations under, or validity or enforceability of,
this Agreement; and
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of, or compliance by
the Master Servicer with, this Agreement or the consummation by it of
the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.04 shall survive the
resignation or termination of the parties hereto and the termination of this
Agreement and shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.
Section 2.05. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICERS.
(a)Ocwen hereby represents, warrants and covenants to the
Master Servicer, Option One, SPS, the Securities Administrator, the Depositor
and the Trustee, for the benefit of each of such Persons and the
Certificateholders that as of the Closing Date or as of such date specifically
provided herein:
54
(i)Ocwen is a federally chartered savings bank duly organized
and validly existing under the laws of the United States and is duly
authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by Ocwen in any state in which a
Mortgaged Property related to an Ocwen 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 Ocwen Mortgage Loan and to service the Ocwen
Mortgage Loans in accordance with the terms of this Agreement;
(ii) Ocwen has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. Ocwen has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of Ocwen, enforceable
against it in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity;
(iii) The execution and delivery of this Agreement by Ocwen,
the servicing of the Ocwen Mortgage Loans by Ocwen hereunder, the
consummation by Ocwen 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 Ocwen and will not (A)
result in a breach of any term or provision of the charter or by-laws
of Ocwen 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 Ocwen is a party or by which
it may be bound, or any statute, order or regulation applicable to
Ocwen of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Ocwen; and Ocwen is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Ocwen's knowledge, would in
the future materially and adversely affect, (x) the ability of Ocwen to
perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of Ocwen taken as
a whole or (z) the legality, validity or enforceability of this
Agreement;
(iv) Ocwen does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made
by it and contained in this Agreement;
(v)No litigation is pending against Ocwen that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Ocwen to service the
Ocwen Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
55
(vi) There are no actions or proceedings against, or
investigations known to it of, Ocwen before any court, administrative
or other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially
and adversely affect the performance by Ocwen of its obligations under,
or the validity or enforceability of, this Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Ocwen of, or compliance by Ocwen with, this
Agreement or the consummation by it of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date;
(viii) Ocwen has fully furnished and will continue 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 Trans Union Credit Information Company or their successors
on a monthly basis; and
(ix) Ocwen will not waive any Prepayment Charge other than in
accordance with the standard set forth in Section 3.01.
(b)Option One hereby represents, warrants and covenants to the
Master Servicer, Ocwen, SPS, the Securities Administrator, the Depositor and the
Trustee, for the benefit of each of such Persons and the Certificateholders that
as of the Closing Date or as of such date specifically provided herein:
(i)Option One is a corporation duly organized and validly
existing under the laws of the State of California and is duly
authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by Option One in any state in which a
Mortgaged Property related to an Option One 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 Option One Mortgage Loan and to service the
Option One Mortgage Loans in accordance with the terms of this
Agreement;
(ii) Option One has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. Option One has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of Option One,
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
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(iii) The execution and delivery of this Agreement by Option
One, the servicing of the Option One Mortgage Loans by Option One
hereunder, the consummation by Option One 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 Option
One and will not (A) result in a breach of any term or provision of the
articles of incorporation or by-laws of Option One 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 Option One is a party or by which it may be bound, or any
statute, order or regulation applicable to Option One of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Option One; and Option One is not a party to, bound
by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to Option One's knowledge, would in the future
materially and adversely affect, (x) the ability of Option One to
perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of Option One
taken as a whole or (z) the legality, validity or enforceability of
this Agreement;
(iv) Option One does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
made by it and contained in this Agreement;
(v)No litigation is pending against Option One that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Option One to
service the Option One Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(vi) There are no actions or proceedings against, or
investigations known to it of, Option One before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by Option One of its
obligations under, or the validity or enforceability of, this
Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Option One of, or compliance by Option One
with, this Agreement or the consummation by it of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date;
(viii) Option One has fully furnished and will continue 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 Trans Union Credit Information Company or their successors
on a monthly basis; and
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(ix) Option One will not waive any Prepayment Charge other
than in accordance with the standard set forth in Section 3.01.
(c)SPS hereby represents, warrants and covenants to the Master
Servicer, Ocwen, Option One, the Securities Administrator, the Depositor and the
Trustee, for the benefit of each of such Persons and the Certificateholders that
as of the Closing Date or as of such date specifically provided herein:
(i)SPS is a corporation duly organized and validly existing
under the laws of the State of Utah and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by SPS in any state in which a Mortgaged
Property related to an SPS 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 SPS
Mortgage Loan and to service the SPS Mortgage Loans in accordance with
the terms of this Agreement;
(ii) SPS has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. SPS has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of SPS, enforceable
against it in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity;
(iii) The execution and delivery of this Agreement by SPS, the
servicing of the SPS Mortgage Loans by SPS hereunder, the consummation
by SPS 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 SPS and will not (A) result in a breach of any
term or provision of the articles of incorporation or by-laws of SPS 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 SPS is a party or by which it may be bound, or any
statute, order or regulation applicable to SPS of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over SPS; and SPS is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject
to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to
SPS's knowledge, would in the future materially and adversely affect,
(x) the ability of SPS to perform its obligations under this Agreement,
(y) the business, operations, financial condition, properties or assets
of SPS taken as a whole or (z) the legality, validity or enforceability
of this Agreement;
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(iv) SPS does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made
by it and contained in this Agreement;
(v)No litigation is pending against SPS that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or the ability of SPS to service the SPS Mortgage Loans or to
perform any of its other obligations hereunder in accordance with the
terms hereof;
(vi) There are no actions or proceedings against, or
investigations known to it of, SPS before any court, administrative or
other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially
and adversely affect the performance by SPS of its obligations under,
or the validity or enforceability of, this Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by SPS of, or compliance by SPS with, this
Agreement or the consummation by it of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date;
(viii) SPS has fully furnished and will continue 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 Trans Union Credit Information Company or their successors
on a monthly basis; and
(ix) SPS will not waive any Prepayment Charge other than in
accordance with the standard set forth in Section 3.01.
(d)Notwithstanding anything to the contrary contained in this
Agreement, if the covenant of the Servicer set forth in clause (ix) of Section
2.05(a), (b) or (c) above is breached, the related Servicer will pay the amount
of such waived Prepayment Charge, from its own funds without any right of
reimbursement, for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the related Collection Account within 90 days of the
earlier of discovery by the related Servicer or receipt of notice by the related
Servicer of such breach. Furthermore, notwithstanding any other provisions of
this Agreement, any payments made by the related Servicer in respect of any
waived Prepayment Charges pursuant to this paragraph shall be deemed to be paid
outside of the Trust Fund.
(e) It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive the
resignation or termination of the parties hereto, the termination of this
Agreement and the delivery of the Mortgage Files to the Custodian and shall
inure to the benefit of the Trustee, the Master Servicer, the Securities
Administrator, the Depositor and the Certificateholders. Upon discovery by any
such Person or the related Servicer of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the
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interests therein of the Certificateholders, the party discovering such breach
shall give prompt written notice (but in no event later than two Business Days
following such discovery) to the Trustee. Subject to Section 8.01, unless such
breach shall not be susceptible of cure within 90 days, the obligation of the
related Servicer set forth in Section 2.03(e) to cure breaches shall constitute
the sole remedy against the related Servicer available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders respecting a breach of the representations, warranties and
covenants contained in this Section 2.05.
Section 2.06. ISSUANCE OF THE REMIC I REGULAR INTERESTS AND
THE CLASS R-I INTEREST.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to the Custodian on its behalf of the Mortgage Loan
Documents, subject to the provisions of Section 2.01 and Section 2.02 hereof and
Section 2 of the Custodial Agreement, together with the assignment to it of all
other assets included in REMIC I, the receipt of which is hereby acknowledged.
The interests evidenced by the Class R-I Interest, together with the REMIC I
Regular Interests, constitute the entire beneficial ownership interest in REMIC
I. The rights of the Holders of the Class R-I Interest and REMIC I (as holder of
the REMIC I Regular Interests) to receive distributions from the proceeds of
REMIC I in respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.
Section 2.07. CONVEYANCE OF THE REMIC I REGULAR INTERESTS;
ACCEPTANCE OF REMIC I BY THE TRUSTEE.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R-II Interest
and REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Holders of the Class R-II Interest and REMIC II (as holder of the
REMIC I Regular Interests). The rights of the Holder of the Class R-II Interest
and REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC II in respect of the Class R-II
Interest and Regular Certificates, respectively, and all ownership interests
evidenced or constituted by the Class R-II Interest and the Regular Interests,
shall be as set forth in this Agreement. The Class R-II Interest and the Regular
Certificates shall constitute the entire beneficial ownership interest in REMIC
II.
Section 2.08. ISSUANCE OF CLASS R CERTIFICATES.
The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Securities Administrator has executed and authenticated and the Trustee has
delivered to or upon the order of the Depositor, the Class R
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Certificates in authorized denominations. The Class R Certificates evidence
ownership in the Class R-I Interest and the Class R-II Interest.
Section 2.09. ESTABLISHMENT OF THE TRUST.
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 to be known, for convenience, as "ACE Securities Corp., Home Equity Loan
Trust, Series 2005-SD1" and does hereby appoint HSBC Bank USA, National
Association as Trustee in accordance with the provisions of this Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS; ACCOUNTS
Section 3.01. SERVICERS TO ACT AS SERVICERS.
The obligations of each of Ocwen, Option One and SPS hereunder
to service and administer the Mortgage Loans shall be limited to the Ocwen
Mortgage Loans, Option One Mortgage Loans and the SPS Mortgage Loans,
respectively, and with respect to the duties and obligations of each Servicer
references herein to the related Mortgage Loans shall be limited to the Ocwen
Mortgage Loans (and the related proceeds thereof and related REO Properties) in
the case of Ocwen, the Option One Mortgage Loans (and the related proceeds
thereof and related REO Properties) in the case of Option One and the SPS
Mortgage Loans (and the related proceeds and related REO Properties) in the case
of SPS and in no event shall any Servicer have any responsibility or liability
with respect to any Mortgage Loans serviced by any other Servicer hereunder.
The Servicers shall service and administer the Mortgage Loans
on behalf of the Trust Fund and in the best interests of and for the benefit of
the Certificateholders (as determined by the Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and all applicable law and regulations 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 prudent mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:
(i) any relationship that the related Servicer or any
Affiliate of the related Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the related Servicer
or any Affiliate of the Servicer;
(iii) the related Servicer's obligation to make P&I Advances
or Servicing Advances; or
(iv) the related Servicer's right to receive compensation for
its services hereunder.
To the extent consistent with the foregoing, each Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes related to the Mortgage Loans and shall waive (or
permit a Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and such waiver is related to a default or reasonably foreseeable
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default and would, in the reasonable judgment of the related Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan and, if such waiver is made in connection
with a refinancing of the related Mortgage Loan, such refinancing is related to
a default or a reasonably foreseeable default, (ii) such Prepayment Charge is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law 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. Notwithstanding any provision in this Agreement to the
contrary, in the event the Prepayment Charge payable under the terms of the
Mortgage Note related to a Mortgage Loan is less than the amount of the
Prepayment Charge set forth in the Prepayment Charge Schedule or other
information provided to the related Servicer, the related Servicer shall not
have any liability or obligation with respect to such difference, and in
addition shall not have any liability or 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 Prepayment Charge
Schedule.
Subject only to the above-described servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective Mortgage Loans, the related Servicer shall have full power and
authority, 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 with the
goal of maximizing proceeds of the Mortgage Loan. Without limiting the
generality of the foregoing, the related Servicer in its own name is hereby
authorized and empowered by the Trustee when the related Servicer believes it
appropriate in its best judgment, to execute and deliver, on behalf of the Trust
Fund, the Certificateholders and the Trustee or any of them, and upon written
notice to the Trustee, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge or subordination, 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, for the
benefit of the Trust Fund and the Certificateholders. The related 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 related 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 3.14, the
Trustee shall execute, at the written request of a Servicer, and furnish to the
related Servicer a power of attorney in the form Exhibit D hereto and other
documents necessary or appropriate to enable the related Servicer to carry out
its servicing and administrative duties hereunder and furnished to the Trustee
by the related Servicer, and the Trustee shall not be liable for the actions of
the related Servicer under such powers of attorney and shall be indemnified by
the related Servicer for any cost, liability or expense incurred by the Trustee
in connection with the related Servicer's use or misuse of any such power of
attorney.
In accordance with Accepted Servicing Practices, the related
Servicer shall make or cause to be made Servicing Advances as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which Servicing Advances shall be reimbursable in the first instance
from related collections from the related Mortgagors pursuant to Section 3.07,
and further as provided in Section 3.09; provided, however, the related Servicer
shall only make such Servicing Advance if the related Mortgagor has not made
such payment and if the failure to make such Servicing Advance would result in
the loss of the related Mortgaged Property due to a tax sale or foreclosure as
result of a tax lien. Any cost incurred by
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a Servicer in effecting the payment of taxes and assessments on a Mortgaged
Property shall not, for the purpose of calculating the Scheduled Principal
Balance of such Mortgage Loan or distributions to Certificateholders, be added
to the unpaid principal balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit. The parties to this Agreement
acknowledge that Servicing Advances shall be reimbursable pursuant to Section
3.06 of this Agreement, and agree that no Servicing Advance shall be rejected or
disallowed by any party unless it has been shown that such Servicing Advance was
not made in accordance with the terms of this Agreement. Notwithstanding the
foregoing, each Servicer shall be reimbursed for Servicing Advances made by the
Seller or the related Servicer prior to the Cut-off Date to the extent not
previously reimbursed.
Notwithstanding anything in this Agreement to the contrary,
the Servicers may not make any future advances with respect to a Mortgage Loan
and the Servicers shall not permit any modification with respect to any related
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 related Mortgage Loan
(unless, as provided in Section 3.06, the related Mortgagor is in default with
respect to the related Mortgage Loan or such default is, in the judgment of the
related Servicer, reasonably foreseeable) or 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 any Trust REMIC created hereunder 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.
In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to arbitrate
disputes (at the option of the Trustee, on behalf of the Trust), the Trustee
hereby authorizes the related Servicer to waive the Trustee's right or option to
arbitrate disputes and to send written notice of such waiver to the Mortgagor,
although the Mortgagor may still require arbitration at its option.
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN EACH SERVICER
AND SUB-SERVICERS.
Each Servicer may arrange for the subservicing of any Mortgage
Loan by a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that
such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Each
Sub-Servicer shall be (i) authorized to transact business in the state or states
where the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a Xxxxxxx
Mac or Xxxxxx Mae approved mortgage servicer. Notwithstanding the provisions of
any Sub-Servicing Agreement, any of the provisions of
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this Agreement relating to agreements or arrangements between the related
Servicer or a Sub-Servicer or reference to actions taken through the related
Servicer or otherwise, the related Servicer shall remain obligated and liable to
the Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the related Servicer alone were servicing and administering the Mortgage
Loans. Every Sub-Servicing Agreement entered into by the related Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed. All actions of each
Sub-Servicer performed pursuant to the related Sub-Servicing Agreement shall be
performed as an agent of the related Servicer with the same force and effect as
if performed directly by the related Servicer.
For purposes of this Agreement, the related Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Mortgage Loans that are received by a Sub-Servicer regardless of whether
such payments are remitted by the Sub-Servicer to the Servicer.
Section 3.03. SUCCESSOR SUB-SERVICERS.
Any Sub-Servicing Agreement shall provide that the related
Servicer shall be entitled to terminate any Sub-Servicing Agreement and to
either itself directly service the related Mortgage Loans or enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 3.02. Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by any successor to the Servicer (which
may be the Trustee or the Master Servicer) without fee, in accordance with the
terms of this Agreement, in the event that the related Servicer (or any
successor to the Servicer) shall, for any reason, no longer be the related
Servicer of the Mortgage Loans (including termination due to a Servicer Event of
Default).
Section 3.04. NO CONTRACTUAL RELATIONSHIP BETWEEN
SUB-SERVICER, TRUSTEE OR THE CERTIFICATEHOLDERS.
Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the related Servicer alone and the Master
Servicer, the Trustee and the Certificateholders shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to any Sub-Servicer except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OR TERMINATION OF SUB-SERVICING
AGREEMENT BY SUCCESSOR SERVICER.
In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the related
Servicer hereunder by a successor Servicer (which may be the Trustee or the
Master Servicer) pursuant to Section 8.02, it is understood and agreed that the
related Servicer's rights and obligations under any Sub-Servicing Agreement then
in force between the related Servicer and a Sub-Servicer shall be assumed
simultaneously by such successor Servicer without act or deed on the part of
such successor Servicer; provided, however, that any successor Servicer may
terminate the Sub-Servicer.
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The related Servicer shall, upon the reasonable request of the
Master Servicer, but at the expense of the related Servicer, deliver to the
assuming party documents and records relating to each Sub-Servicing Agreement
and an accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
The Servicing Fee payable to any such successor Servicer shall
be payable from payments received on the Mortgage Loans in the amount and in the
manner set forth in this Agreement.
Section 3.06. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
Each Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the related Mortgage
Loans, and shall, to the extent such procedures shall be consistent with this
Agreement and Accepted Servicing Practices, 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, each Servicer may
in its discretion (i) waive any late payment charge or, if applicable, penalty
interest or (ii) extend the due dates for the Monthly Payments due on a Mortgage
Note for a period of not greater than 180 days; provided that any extension
pursuant to this clause shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the related Servicer, such default is reasonably foreseeable, the related
Servicer, consistent with Accepted Servicing Practices may waive, modify or vary
any term of such Mortgage Loan (including modifications that change the Mortgage
Rate, forgive the payment of principal or interest or extend the final maturity
date of such Mortgage Loan), accept payment from the related Mortgagor of an
amount less than the Scheduled Principal Balance in final satisfaction of such
Mortgage Loan, or consent to the postponement of strict compliance with any such
term or otherwise grant indulgence to any Mortgagor if in the related Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action).
Section 3.07. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; SERVICING ACCOUNTS.
To the extent the terms of a Mortgage provide for Escrow
Payments, the related Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the related
Mortgagors (or related advances from Sub-Servicers) for the payment of taxes,
assessments, fire, flood, and hazard insurance premiums, and comparable items
for the account of the Mortgagors ("Escrow Payments") shall be deposited and
retained. Servicing Accounts shall be Eligible Accounts. The related Servicer
shall deposit in the Servicing Accounts on a daily basis and in no event later
than the second Business Day after receipt, and retain therein, all Escrow
Payments collected on account of the Mortgage Loans, for the purpose of
effecting the timely payment of any such items as required under the terms of
this Agreement. Withdrawals of amounts from a Servicing Account may be made only
to (i) effect timely payment of taxes, assessments, fire, flood, and hazard
insurance premiums, and
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comparable items; (ii) reimburse itself out of related collections for any
Servicing Advances made prior to the Cut-off Date by the Seller or the related
Servicer to the extent not previously reimbursed or following the Cut-off Date
by the related Servicer pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.11 (with respect to fire, flood and 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 Servicing Account; or (v) clear and terminate the Servicing
Account at the termination of the related Servicer's obligations and
responsibilities in respect of the related Mortgage Loans under this Agreement
in accordance with Article X. As part of its servicing duties, the related
Servicer shall pay to the Mortgagors interest on funds in Servicing Accounts, to
the extent required by law and, to the extent that interest earned on funds in
the Servicing Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. Notwithstanding the foregoing,
the Servicers shall not be obligated to collect Escrow Payments if the related
Mortgage Loan does not require such payments but the related Servicer shall
nevertheless be obligated to make Servicing Advances as provided in Section 3.01
and Section 3.11. In the event a Servicer shall deposit in the Servicing
Accounts any amount not required to be deposited therein, it may at any time
withdraw such amount from the related Servicing Accounts, any provision to the
contrary notwithstanding.
To the extent that a Mortgage does not provide for Escrow
Payments, the related Servicer (i) shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien and (ii) shall ensure that all insurance required to be maintained
on the Mortgaged Property pursuant to this Agreement is maintained. If any such
payment has not been made and the related Servicer receives notice of a tax lien
with respect to the Mortgage Loan being imposed, the related Servicer shall,
promptly and to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property unless the related Servicer determines the advance to be
nonrecoverable. Each Servicer assumes full responsibility for the payment of all
such bills 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 Servicing Advances to effect such payments
subject to its determination of recoverability.
Section 3.08. COLLECTION ACCOUNT, SIMPLE INTEREST EXCESS
SUB-ACCOUNT AND DISTRIBUTION ACCOUNT.
(a) On behalf of the Trust Fund, each Servicer shall establish
and maintain one or more "Collection Accounts", held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, each
Servicer shall deposit or cause to be deposited in the Collection Account on a
daily basis and in no event later than two Business Days after receipt, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
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(ii) all payments on account of interest (net of the related
Servicing Fee and any Prepayment Interest Excess) on each Mortgage
Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property) and
all Subsequent Recoveries;
(iv) any amounts required to be deposited by the related
Servicer pursuant to Section 3.10 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 related
Servicer pursuant to the second paragraph of Section 3.11(a) in respect
of any blanket policy deductibles;
(vi) any Purchase Price or Substitution Shortfall Amount
delivered to the related Servicer and all proceeds (net of amounts
payable or reimbursable to the related Servicer, the Master Servicer,
the Trustee, the Custodian or the Securities Administrator) of Mortgage
Loans purchased in accordance with Section 2.03, Section 3.13 or
Section 10.01; and
(vii) any Prepayment Charges collected by the related Servicer
in connection with the Principal Prepayment of any of the Mortgage
Loans or amounts required to be deposited by the related Servicer in
connection with a breach of its obligations under Section 2.05.
The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, assumption fees or other similar fees need not be deposited by the
related Servicer in the Collection Account and may be retained by the related
Servicer as additional compensation. In the event a Servicer shall deposit in
the related 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)Except as set forth below, no later than the Closing Date,
each Servicer servicing Simple Interest Mortgage Loans shall establish and
maintain a sub-account of the Collection Account titled "[Servicer's name],
Simple Interest Excess Sub-Account in trust for the Holders of ACE Securities
Corp., Home Equity Loan Trust, Series 2005-SD1, Asset Backed Pass-Through
Certificates". The related Servicer shall, on each Determination Date transfer
from the Collection Account to the Simple Interest Excess Sub-Account all Net
Simple Interest Excess, if any, pursuant to Section 3.09(xi), and shall maintain
a record of all such deposits. In lieu of establishing a Simple Interest Excess
Sub-Account, each Servicer may maintain any Net Simple Interest Excess in the
Collection Account and maintain a separate accounting therefore.
The related Servicer shall withdraw amounts on deposit in the
Simple Interest Excess Sub-Account or in the Collection Account (in respect of
any Net Simple Interest Excess) on each Determination Date for deposit to the
Distribution Account in an amount
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equal to the lesser of (i) the amount on deposit therein, and (ii) the Net
Simple Interest Shortfall for such Distribution Date.
The related Servicer shall remit to the Securities
Administrator which shall thereupon distribute to the Class CE
Certificateholder, based on the information provided to it by the Servicer, the
amount of any Net Simple Interest Excess remaining in the Simple Interest Excess
Sub-Account or in the Collection Account, as applicable, on the Distribution
Date each year occurring in December, commencing in December 2005. Such
distributions shall be deemed to be made on a first-in, first-out basis. In
addition, the related Servicer shall clear and terminate the Simple Interest
Excess Sub-Account, if any, upon the termination of this Agreement and retain
any funds remaining therein.
(c)On behalf of the Trust Fund, the Securities Administrator
shall establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee, the Trust
Fund and the Certificateholders. On behalf of the Trust Fund, each Servicer
shall deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before 12:00 noon New York time on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the related Collection Account and
the amount of all Prepayment Charges collected by the related Servicer in
connection with the Principal Prepayment of any of the Mortgage Loans then on
deposit in the related Collection Account and the amount of any funds
reimbursable to an Advance Financing Person pursuant to Section 3.25. If the
balance on deposit in a Collection Account exceeds $100,000 as of the
commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the related Servicer shall, on or before 5:00 p.m. New
York time on such Business Day, withdraw from the related Collection Account any
and all amounts payable or reimbursable to the Depositor, the related Servicer,
the Trustee, the Master Servicer, the Securities Administrator or the Seller
pursuant to Section 3.09(a) and shall pay such amounts to the Persons entitled
thereto.
With respect to any remittance received by the Securities
Administrator after the Servicer Remittance Date on which such payment was due,
the Securities Administrator shall send written notice thereof to the related
Servicer. The related Servicer shall pay to the Securities Administrator
interest on any such late payment by such Servicer at an annual rate equal to
Prime Rate (as defined in THE WALL STREET JOURNAL) plus one percentage point,
but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be paid by the related Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the Servicer Remittance Date and ending with the Business Day on
which such payment is made, both inclusive. The payment by the related Servicer
of any such interest, or the failure of the Securities Administrator to notify
the related Servicer of such interest, shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the related Servicer.
(d) Funds in each Collection Account, in each Simple Interest
Excess Sub-Account and funds in the Distribution Account may be invested in
Permitted Investments in
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accordance with the provisions set forth in Section 3.10. The related Servicer
shall give notice to the Trustee, the Securities Administrator and the Master
Servicer of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Securities Administrator shall
give notice to the Servicers and the Depositor of the location of the
Distribution Account when established and prior to any change thereof.
(e) Funds held in a Collection Account at any time may be
delivered by the related Servicer in immediately available funds to the
Securities Administrator for deposit in the Distribution Account. In the event a
Servicer shall deliver to the Securities Administrator for deposit in the
Distribution Account any amount not required to be deposited therein, it may at
any time request that the Securities Administrator withdraw such amount from the
Distribution Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In no event shall the Securities Administrator
incur liability as a result of withdrawals from the Distribution Account at the
direction of a Servicer in accordance with the immediately preceding sentence.
In addition, each Servicer shall deliver to the Securities Administrator no
later than the Servicer Remittance Date the amounts set forth in clauses (i)
through (iv) below:
(i) any P&I Advances, as required pursuant to Section 5.03;
(ii) any amounts required to be deposited pursuant to Section
3.21(d) or 3.21(f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01; and
(iv) any amounts required to be deposited pursuant to Section
3.22 in connection with any Prepayment Interest Shortfalls.
Section 3.09. WITHDRAWALS FROM THE COLLECTION ACCOUNT AND
DISTRIBUTION ACCOUNT.
(a) Each Servicer shall, from time to time, make withdrawals
from Collection Account for any of the following purposes or as described in
Section 5.03:
(i) to remit to the Securities Administrator for deposit in
the Distribution Account the amounts required to be so remitted
pursuant to Section 3.08(c) or permitted to be so remitted pursuant to
the first sentence of Section 3.08(e);
(ii) subject to Section 3.13(d), to reimburse itself
(including any successor Servicer) for P&I Advances made by it, but
only to the extent of amounts received which represent Late Collections
(net of the related Servicing Fees) of Monthly Payments on related
Mortgage Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 5.03;
(iii) subject to Section 3.13(d), to pay itself any unpaid
Servicing Fees and reimburse itself any unreimbursed Servicing Advances
made by the Seller or the related Servicer prior to or following the
Cut-off Date with respect to each Mortgage
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Loan, but only to the extent of any Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan;
(iv) to pay to itself as servicing compensation (in addition
to the Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;
(v) to pay itself or the Seller, as the case may be, with
respect to each Mortgage Loan that has previously been purchased or
replaced pursuant to Section 2.03 or Section 3.13(c) all amounts
received thereon not included in the Purchase Price or the Substitution
Shortfall Amount;
(vi) to reimburse itself (including any successor Servicer)
for
(A) any P&I Advance or Servicing Advance previously
made by the Seller or the related Servicer prior to
or following the Cut-off Date which it has determined
to be a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance in accordance with
the provisions of Section 5.03; or
(B) any unpaid Servicing Fees to the extent not
recoverable from Liquidation Proceeds, Insurance
Proceeds or other amounts received with respect to
the related Mortgage Loan under Section 3.06(a)(iii);
(vii) to reimburse itself or the Depositor for expenses
incurred by or reimbursable to it or the Depositor, as the case may be,
pursuant to Section 3.01 or Section 7.03;
(viii) to reimburse itself or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect
giving rise to the purchase obligation under Section 2.03 of this
Agreement that were included in the Purchase Price of the related
Mortgage Loan, including any expenses arising out of the enforcement of
the purchase obligation;
(ix) to pay, or to reimburse itself for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.13(b);
(x) to pay to itself any Prepayment Interest Excess on the
Mortgage Loans to the extent not retained pursuant to Section
3.08(a)(ii));
(xi) to deposit in the Simple Interest Excess Sub-Account any
amount required to be deposited therein pursuant to Section 3.08(b);
and
(xii) to clear and terminate the related Collection Account
pursuant to Section 10.01.
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Each Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (ii), (iii), (v), (vi), (vii), (viii),
(ix), (x) and (xi) above.
(b) The Securities Administrator shall, from time to time,
make withdrawals from the Distribution Account, for any of the following
purposes, without priority:
(i) to make distributions to Certificateholders in accordance
with Section 5.01;
(ii) to pay to itself, the Custodian and the Master Servicer
amounts to which it is entitled pursuant to Section 9.05 or any other
provision of this Agreement and any Extraordinary Trust Fund Expenses;
(iii) to reimburse itself or the Master Servicer pursuant to
Section 8.02;
(iv) to pay to an Advance Financing Person reimbursements for
P&I Advances and/or Servicing Advances pursuant to Section 3.25;
(v) to pay any amounts in respect of taxes pursuant to Section
11.01(g)(v);
(vi) to pay the Master Servicing Fee to the Master Servicer;
(vii) to pay the Credit Risk Management Fee to the Credit Risk
Manager; and
(viii) to clear and terminate the Distribution Account
pursuant to Section 10.01.
Section 3.10. INVESTMENT OF FUNDS IN THE INVESTMENT ACCOUNTS.
(a)Each Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
related Collection Account or Simple Interest Excess Sub-Account to invest the
funds in such Collection Account or Simple Interest Excess Sub-Account (for
purposes of this Section 3.10, an "Investment Account") in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date on
which such funds are
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required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Securities Administrator is the obligor thereon, and (ii)
no later than the date on which such funds are required to be withdrawn from
such account pursuant to this Agreement, if the Securities Administrator is the
obligor on such Permitted Investment. Amounts in the Distribution Account may be
invested in Permitted Investments as directed in writing by the Master Servicer
and maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the
Securities Administrator is the obligor thereon, and (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if the Securities Administrator is the obligor thereon. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds shall be made in the name of the Trustee (in its capacity as
such) or in the name of a nominee of the Trustee. The Securities Administrator
shall be entitled to sole possession over each such investment in the
Distribution Account and, subject to subsection (b) below, the income thereon,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Securities Administrator or its agent, together with
any document of transfer necessary to transfer title to such investment to the
Trustee or its nominee. In the event amounts on deposit in a Collection Account
are at any time invested in a Permitted Investment payable on demand, the party
with investment discretion over such Investment Account shall:
(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 promptly upon
receipt by such party of written notice from the related Servicer that
such Permitted Investment would not constitute a Permitted Investment
in respect of funds thereafter on deposit in the Investment Account.
(b)All income and gain realized from the investment of funds
deposited in the related Collection Account or Simple Interest Excess
Sub-Account, shall be for the benefit of the related Servicer and shall be
subject to its withdrawal in accordance with Section 3.09. Each Servicer shall
deposit in the related Collection Account or Simple Interest Excess Sub-Account
the amount of any loss incurred in respect of any such Permitted Investment made
with funds in such account immediately upon realization of such loss. All
earnings and gain realized from the investment of funds deposited in the
Distribution Account shall be for the benefit of the Master Servicer. The Master
Servicer shall remit from its own funds for deposit into the Distribution
Account the amount of any loss incurred on Permitted Investments in the
Distribution Account.
(c)Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 9.01 and Section
9.02(a)(v), shall, at the written direction of the related Servicer, take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
(d)The Trustee, the Master Servicer or their respective
Affiliates are permitted to receive additional compensation that could be deemed
to be in the Trustee's or the Master Servicer'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
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compensation shall not be considered an amount that is reimbursable or payable
to the Trustee or the Master Servicer pursuant to Section 3.09 or 3.10 or
otherwise payable in respect of Extraordinary Trust Fund Expenses. Such
additional compensation shall not be an expense of the Trust Fund.
Section 3.11. MAINTENANCE OF HAZARD INSURANCE, ERRORS AND
OMISSIONS AND FIDELITY COVERAGE AND PRIMARY MORTGAGE INSURANCE.
(a)The terms of each Mortgage Note require the related
Mortgagor to maintain fire, flood and hazard insurance policies. To the extent
such policies are not maintained, the related Servicer shall cause to be
maintained for each Mortgaged Property fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located in
an amount which is at least equal to the lesser of the current principal balance
of such Mortgage Loan and the amount necessary to compensate fully for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis, 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. Each Servicer shall also cause to be maintained
fire and hazard insurance on each REO Property with extended coverage as is
customary in the area where the Mortgaged Property is located 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. Each 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 the related 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 Accepted Servicing Practices, subject to the terms
and conditions of the related Mortgage and Mortgage Note) shall be deposited in
the related Collection Account, subject to withdrawal pursuant to Section 3.09,
if received in respect of a Mortgage Loan, or in the REO Account, subject to
withdrawal pursuant to Section 3.21, if received in respect of an REO Property.
Any cost incurred by a Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, 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, the related 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 a Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:VI or better
in Best's Key Rating Guide or otherwise acceptable to Xxxxxx Xxx or Xxxxxxx Mac
insuring against hazard losses on all of the
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Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations to cause fire and hazard insurance to be maintained on the Mortgaged
Properties, it being understood and agreed that such policy may contain a
deductible clause, in which case the related 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 3.11,
and there shall have been one or more losses which would have been covered by
such policy, deposit into the related 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 related Servicer agrees to prepare and present, on behalf of
itself, the Trustee, the Trust Fund and the Certificateholders, claims under any
such blanket policy in a timely fashion in accordance with the terms of such
policy.
(b)Each 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 its respective 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 related Servicer, has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. Each 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 related Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. A Servicer shall be deemed to have
complied with this provision if an Affiliate of such 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 such
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.
(c)The Servicers shall not take any action that would result
in noncoverage under any applicable primary mortgage insurance policy of any
loss which, but for the actions of the related Servicer would have been covered
thereunder. Each Servicer shall use its best efforts to keep in force and effect
any applicable primary mortgage insurance policy and, to the extent that the
related Mortgage Loan requires the Mortgagor to maintain such insurance, any
other primary mortgage insurance applicable to any Mortgage Loan. Except as
required by applicable law or the related Mortgage Loan Documents, the Servicers
shall not cancel or refuse to renew any such primary mortgage insurance policy
that is in effect at the date of the initial issuance of the related Mortgage
Note and is required to be kept in force hereunder.
Each Servicer agrees to present on behalf of the Trustee and
the Certificateholders claims to the applicable insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Section 3.08, any
amounts collected by a Servicer under any primary mortgage insurance policies
shall be deposited in the related Collection Account, subject to withdrawal
pursuant to Section 3.09. Notwithstanding any provision to the contrary, the
Servicers shall not have any responsibility with respect to a primary mortgage
insurance policy unless the related Servicer has been made aware of such policy,
as reflected on the Mortgage Loan Schedule or otherwise and have been provided
with adequate information to administer such policy.
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Section 3.12. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS.
Each Servicer shall, to the extent it has knowledge of any
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 related Servicer
shall not exercise any such rights if prohibited by law from doing so. If a
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 related Servicer shall 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 related 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 then current underwriting criteria of the related Servicer
for mortgage loans similar to the Mortgage Loans. In connection with any
assumption or substitution, the related 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 related 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. Any fee collected by the related Servicer in respect of an assumption or
substitution of liability agreement will be retained by the related Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The related Servicer
shall notify the Trustee (or the Custodian) that any such substitution 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 related 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 related Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.12,
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.
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Section 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) Each Servicer shall use its best efforts, consistent with
Accepted Servicing Practices, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.06. Each Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the related Servicer as contemplated in Sections 3.09
and 3.21. The foregoing is subject to the provision that, in any case in which a
Mortgaged Property shall have suffered damage from an Uninsured Cause, the
related Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.13 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which a Servicer has received actual notice of, or has actual knowledge
of, the presence of any toxic or hazardous substance on the related Mortgaged
Property, the related Servicer shall not, on behalf of the Trust Fund, either
(i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trust Fund, the Trustee or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the related Servicer
has also previously determined, based on its reasonable judgment and a prudent
report prepared by an Independent Person who regularly conducts environmental
audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in
the best economic interest of the Trust Fund to take such
actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal
of any hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials for which investigation,
testing, monitoring, containment, clean-up or remediation
could be required under any federal, state or local law or
regulation, or that if any such materials are present for
which such action could be required, that it would be in the
best economic interest of the Trust Fund to take such actions
with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.13 shall be advanced by the related Servicer, subject to such
Servicer's right to be reimbursed therefor
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from the related Collection Account as provided in Section 3.09(a)(ix), such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the related Collection Account received in respect of the
affected Mortgage Loan or other Mortgage Loans.
If the related Servicer determines, as described above, that
it is in the best economic interest of the Trust Fund to take such actions as
are necessary to bring any such Mortgaged Property into compliance with
applicable environmental laws, or to take such action with respect to the
containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials affecting any such
Mortgaged Property, then the related Servicer shall take such action as it deems
to be in the best economic interest of the Trust Fund. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the related
Servicer, subject to the related Servicer's right to be reimbursed therefor from
the Collection Account as provided in Sections 3.09(a)(iii) or 3.09(a)(ix), such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the related Collection Account received in respect of the
affected Mortgage Loan or other Mortgage Loans.
(c)The Seller and, with respect to the Ocwen Mortgage Loans,
Ocwen, shall have the right to purchase from REMIC I any defaulted Mortgage Loan
that is 90 days or more delinquent, which the Seller or Ocwen, as applicable,
determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee, in form and substance satisfactory to the Seller, Ocwen and the
Trustee, as applicable, prior to purchase), at a price equal to the Purchase
Price. The Purchase Price for any Mortgage Loan purchased hereunder shall be
deposited in the related Collection Account, and the Trustee, upon receipt of
written certification from the Seller or Ocwen, as applicable, of such deposit,
shall release or cause to be released to the Seller or Ocwen, as applicable, the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, representation or
warranty, as the Seller or Ocwen, as applicable, shall furnish and as shall be
necessary to vest in the Seller or Ocwen, as applicable, title to any Mortgage
Loan released pursuant hereto.
(d)Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
related Servicer for any related unreimbursed Servicing Advances and P&I
Advances, pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the related Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the related Servicer pursuant to Section 3.09(a)(iii). The portion
of the recovery allocated to interest (net of unpaid Servicing Fees) and the
portion of the recovery allocated to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the related Servicer for any related
unreimbursed
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Servicing or P&I Advances in accordance with Section 3.09(a)(ii) and any other
amounts reimbursable to the related Servicer pursuant to Section 3.09, and
second, as part of the amounts to be transferred to the Distribution Account in
accordance with Section 3.08(c).
(e)Notwithstanding the foregoing provisions of this Section
3.13 or any other provision of this Agreement, Ocwen shall not acquire title to
a Mortgaged Property related to a Foreclosure Restricted Mortgage Loan if
acquiring title to such Mortgaged Property would cause the adjusted basis (for
federal income tax purposes) of the Mortgaged Properties in respect of
Foreclosure Restricted Mortgage Loans that are currently owned by REMIC I after
foreclosure (along with any other assets owned by REMIC I other than "qualified
mortgages" and "permitted investments" within the meaning of Section 860G of the
Internal Revenue Code) to exceed 0.75% of the adjusted basis of the assets in
REMIC I. Instead, Ocwen shall dispose of the Foreclosure Restricted Mortgage
Loan for cash in a foreclosure sale. In addition, if Ocwen determines that,
following a distribution on any Distribution Date, the adjusted basis of the REO
Properties relating to such Foreclosure Restricted Mortgage Loans (along with
any other assets owned by REMIC I other than "qualified mortgages" and
"permitted investments" within the meaning of Section 860G of the Internal
Revenue Code) exceeds 1.0% of the adjusted basis of the assets of REMIC I
immediately after the Distribution Date, then prior to the next Distribution
Date, Ocwen shall dispose of enough of such REO Properties for cash, so that the
adjusted basis of such REO Properties relating to Foreclosure Restricted
Mortgage Loans (along with any other assets owned by REMIC I other than
"qualified mortgages" and "permitted investments" within the meaning of Section
860G of the Internal Revenue Code) will be less than 1.0% of the adjusted basis
of the assets of REMIC I. In either event, Ocwen is permitted to acquire (for
its own account and not on behalf of the Trust Fund) the REO Property at the
foreclosure sale for an amount not less than the greater of: (i) the highest
amount bid by any other person at the foreclosure sale, or (ii) the estimated
fair market value of the REO Property, as determined by Ocwen in good faith.
These restrictions will be lifted with respect to a Foreclosure Restricted
Mortgage Loan if such Mortgage Loan becomes current for three consecutive
Monthly Payments.
Section 3.14. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a)Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by a Servicer of a notification that payment in full has
been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the related Servicer will
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
request for release substantially in the form attached to the Custodial
Agreement signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the related Collection Account have been or will be so
deposited) and shall request that the Custodian, on behalf of the Trustee,
deliver to the related Servicer the related Mortgage File. Upon receipt of such
certification and request, the Custodian, on behalf of the Trustee, shall within
five (5) Business Days release the related Mortgage File to the related Servicer
and the Trustee and Custodian shall have no further responsibility with regard
to such Mortgage File. Upon any such payment in full, the related Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured
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the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, 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, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the related Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of the related Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release within five (5) Business Days the
related Mortgage File held in its possession or control to the related Servicer.
Such trust receipt shall obligate the related Servicer to return the Mortgage
File to the Custodian on behalf of the Trustee, when the need therefor by the
related Servicer no longer exists unless the Mortgage Loan shall be liquidated,
in which case, upon receipt of a certificate of a Servicing Officer similar to
that hereinabove specified, the Mortgage File shall be released by the
Custodian, on behalf of the Trustee, to the related Servicer.
Notwithstanding the foregoing, in connection with a Principal
Prepayment in full of any Mortgage Loan, the Master Servicer may request release
of the related Mortgage File from the Custodian, in accordance with the
provisions of the Custodial Agreement, in the event the related Servicer fails
to do so.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the related Servicer, any court pleadings, requests
for trustee's sale or other documents prepared and delivered to the Trustee and
reasonably acceptable to it and 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. 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. So long as no Servicer Event of Default shall have occurred and
be continuing, the related Servicer shall have the right to execute any and all
such court pleadings, requests and other documents as attorney-in-fact for, and
on behalf of the Trustee.
Section 3.15. SERVICING COMPENSATION.
As compensation for the activities of the Servicers hereunder,
each Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan serviced by such Servicer
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payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.22. In addition, the related Servicer shall be entitled to
recover unpaid Servicing Fees out of Insurance Proceeds or Liquidation Proceeds
to the extent permitted by Section 3.09(a)(iii) and out of amounts derived from
the operation and sale of an REO Property to the extent permitted by Section
3.21. Except as set forth in Section 3.25 of this Agreement, the right to the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the related Servicer's responsibilities and
obligations under this Agreement to the extent permitted herein.
Additional servicing compensation in the form of assumption
fees, late payment charges and other miscellaneous fees (other than Prepayment
Charges) shall be retained by the Servicer only to the extent such fees or
charges are received by the related Servicer. Each Servicer shall also be
entitled pursuant to Section 3.09(a)(iv) to withdraw from the related Collection
Account and pursuant to Section 3.21(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.10. In addition, each Servicer shall be entitled
to retain or withdraw from the related Collection Account, pursuant to Section
3.09(a)(x), any Prepayment Interest Excess as additional servicing compensation.
Each Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided herein.
Section 3.16. COLLECTION ACCOUNT STATEMENTS.
Not later than fifteen days after each Distribution Date, each
Servicer shall forward to the Master Servicer, the Securities Administrator, the
Trustee and the Depositor a statement prepared by the institution at which the
related Collection Account is maintained setting forth the status of the related
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the related Collection Account of each
category of deposit specified in Section 3.08(a) and each category of withdrawal
specified in Section 3.09. Copies of such statement shall be provided by the
Securities Administrator to any Certificateholder and to any Person identified
to the Securities Administrator as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the related Servicer to the Securities Administrator.
Section 3.17. STATEMENT AS TO COMPLIANCE.
With respect to Ocwen and Option One, not later than March
15th, and with respect to SPS, not later than March 1st of each calendar year
commencing in 2006, each Servicer shall deliver to the Trustee, the Master
Servicer and the Depositor an Officers' Certificate in a form acceptable for
filing with the Securities and Exchange Commission as an exhibit to Form 8-K or
other required form (upon which the Master Servicer can conclusively rely in
connection with its obligations under Section 5.06) stating, as to each
signatory thereof, that (i) a review of the activities of the related Servicer
during the preceding year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officer's
knowledge, based on such review, the related 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
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obligation, specifying each such default known to such officer and the nature
and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder, upon request at the expense of the requesting
party, provided such statement is delivered by the related Servicer to the
Trustee.
Section 3.18. INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT.
With respect to Ocwen and Option One, not later than March
15th, and with respect to SPS, not later than March 1st of each calendar year
commencing in 2006, each Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
related Servicer a report in a form acceptable for filing with the Securities
and Exchange Commission as an exhibit to Form 8-K or other required form stating
that (i) it has obtained a letter of representation regarding certain matters
from the management of the related Servicer which includes an assertion that the
related 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 fiscal 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 and such
firm has determined that the related Servicer has complied in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. Immediately upon receipt of such report, the related Servicer shall
furnish a copy of such report to the Master Servicer, the Trustee and each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the related Servicer's expense, provided that
such statement is delivered by the related Servicer to the Trustee.
Section 3.19. ANNUAL CERTIFICATION.
(a)Each Servicer shall deliver to the Master Servicer, on or
before March 15th with respect to Ocwen and Option One, and on or before March
1st with respect to SPS, of each calendar year beginning in 2006 (or, if any
such day is not a Business Day, the immediately preceding Business Day) or such
alternative date reasonably specified by the Master Servicer which shall occur
not later than 15 days prior to the date any Form 10-K is required to be filed
with the Commission in connection with the transactions contemplated by this
Agreement, a certification in the form attached hereto as Exhibit C. Such
certification shall be signed by the senior officer in charge of servicing of
the related Servicer. In addition, each Servicer shall provide such other
information with respect to the Mortgage Loans and the servicing and
administration thereof within the control of the related Servicer which shall be
required to enable the Master Servicer to comply with the reporting requirements
of the Securities and Exchange Act of 1934, as amended, pursuant to Section 5.06
hereof.
(b)The related Servicer shall indemnify and hold harmless the
Master Servicer, the Securities Administrator, the Trustee, the Depositor and
their respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the related Servicer or any of its officers, directors,
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agents or affiliates of its obligations under this Section 3.19 or the related
Servicer's negligence, bad faith or willful misconduct in connection therewith.
Such indemnity shall survive the termination or resignation of the parties
hereto or the termination of this Agreement. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Master Servicer, the
Securities Administrator, the Trustee and the Depositor, then the related
Servicer agrees that it shall contribute to the amount paid or payable by the
Master Servicer, the Securities Administrator, the Trustee and the Depositor as
a result of the losses, claims, damages or liabilities of the Master Servicer,
the Securities Administrator, the Trustee and the Depositor in such proportion
as is appropriate to reflect the relative fault of the Master Servicer, the
Securities Administrator, the Trustee and the Depositor on the one hand and the
related Servicer on the other in connection with a breach of the related
Servicer's obligations under this Section 3.19.
Section 3.20. ACCESS TO CERTAIN DOCUMENTATION.
Each Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificate Owner,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
related Servicer designated by it. Nothing in this Section 3.20 shall limit the
obligation of the related Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section. Nothing in this
Section 3.20 shall require any Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual course of
business. The Servicers shall not be required to make copies of or ship
documents to any Person unless provisions have been made for the reimbursement
of the costs thereof.
Section 3.21. TITLE, MANAGEMENT AND DISPOSITION OF REO
PROPERTY.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, on behalf of the Trust Fund
and for the benefit of the Certificateholders. The related Servicer, on behalf
of REMIC I, shall either sell any REO Property by the close of the third
calendar year following the calendar year in which REMIC I acquires ownership of
such REO Property for purposes of Section 860G(a)(8) of the Code or request from
the Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless the related Servicer had delivered to the Trustee an
Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by REMIC I of such REO Property subsequent to three years after
its acquisition will not result in the imposition on any Trust REMIC created
hereunder of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause any Trust REMIC hereunder to fail to qualify as a
REMIC under Federal law at any time that any Certificates are outstanding. Each
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders 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)
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of the Code or result in the receipt by any Trust REMIC created hereunder of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions.
(b) Each Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee, on
behalf of the Trust Fund and for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. The related Servicer shall be
permitted to allow the related Collection Account to serve as the REO Account,
subject to the maintenance of separate ledgers for each REO Property. The
related Servicer shall be entitled to retain or withdraw any interest income
paid on funds deposited in the REO Account.
(c) Each Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the related Servicer manages and operates similar property owned
by it or any of its Affiliates, all on such terms and for such period as the
related Servicer deems to be in the best interests of Certificateholders. In
connection therewith, the related Servicer shall deposit, or cause to be
deposited, on a daily basis in the REO Account all revenues received by it with
respect to an REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of such REO Property including,
without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the related
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the related Servicer would make such advances if the
related Servicer owned the REO Property and if in the related Servicer's
judgment, the payment of such amounts will be recoverable from the rental or
sale of the REO Property.
Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding the foregoing, the related
Servicer, on behalf of the Trust Fund, shall not:
(i) enter into, renew or extend any New Lease with respect to
any REO Property, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
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(ii) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement
thereon, and then only if more than ten percent of the construction of
such building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(iv) allow any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust
Fund;
unless, in any such case, the related Servicer has obtained an Opinion of
Counsel, provided to the related Servicer and the Trustee, to the effect that
such action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by REMIC I, in which case the Servicer may take such actions as are
specified in such Opinion of Counsel.
Each Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the related Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.21(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Servicer of any of its duties
and obligations to the Trustee on behalf of the Trust Fund and for the
benefit of the Certificateholders with respect to the operation and
management of any such REO Property; and
(iv) the related Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of such
REO Property.
Each Servicer shall be entitled to enter into any agreement
with any Independent Contractor performing services for it related to its duties
and obligations hereunder for indemnification of the related Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The related Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the related Servicer's compensation pursuant to Section 3.15 is sufficient to
pay such fees. Any such agreement shall include a provision that such agreement
may be immediately
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terminated by the Trustee (as successor Servicer) or any other successor
Servicer (including the Master Servicer) without fee, in the event the related
Servicer shall for any reason, no longer be the Servicer of the Mortgage Loans
(including termination due to a Servicer Event of Default).
(d)In addition to the withdrawals permitted under Section
3.21(c), each Servicer may from time to time make withdrawals from the related
REO Account for any REO Property: (i) to pay itself unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Servicer Remittance Date,
the related Servicer shall withdraw from each REO Account maintained by it and
deposit into the Distribution Account in accordance with Section 3.08(e)(ii),
for distribution on the related Distribution Date in accordance with Section
5.01, the income from the related REO Property received during the prior
calendar month, net of any withdrawals made pursuant to Section 3.21(c) or this
Section 3.21(d).
(e)Subject to the time constraints set forth in Section
3.21(a), each REO Disposition shall be carried out by the related Servicer at
such price and upon such terms and conditions as the related Servicer shall deem
necessary or advisable, as shall be normal and usual in accordance with Accepted
Servicing Practices.
(f)The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the related Servicer as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.08(e)(ii) on the Servicer Remittance Date in the month following the receipt
thereof for distribution on the related Distribution Date in accordance with
Section 5.01. Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g)Each Servicer shall file information returns (and shall
provide a certification of a Servicing Officer to the Master Servicer that such
filings have been made) with respect to the receipt of mortgage interest
received in a trade or business, reports of foreclosures and abandonments of any
Mortgaged Property and cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
Section 3.22. OBLIGATIONS OF EACH SERVICER IN RESPECT OF
PREPAYMENT INTEREST SHORTFALLS; RELIEF ACT INTEREST SHORTFALLS.
Each Servicer shall deliver to the Securities Administrator
for deposit into the Distribution Account on or before 12:00 noon New York time
on the Servicer Remittance Date from its own funds an amount equal to the lesser
of (i) the aggregate amount of the Prepayment Interest Shortfalls attributable
to prepayments in full on the Mortgage Loans for the related Distribution Date
resulting solely from voluntary Principal Prepayments received by the related
Servicer during the related Prepayment Period; provided that, with respect to
the first Distribution Date, the Servicers shall only be required to pay the
amount of such Prepayment
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Interests Shortfalls with respect to prepayments in full received from January
1, 2005 to and including January 15, 2005, and (ii) with respect to SPS, half of
the aggregate amount of the related Servicing Fees payable to SPS and with
respect to Ocwen and Option One, the aggregate amount of the related Servicing
Fees payable to the related Servicer on such Distribution Date with respect to
the Mortgage Loans. The Servicers shall not have the right to reimbursement for
any amounts remitted to the Securities Administrator in respect of this Section
3.22. The Servicers shall not be obligated to pay the amounts set forth in this
Section 3.22 with respect to shortfalls resulting from the application of the
Relief Act.
Section 3.23. OBLIGATIONS OF EACH SERVICER IN RESPECT OF
MORTGAGE RATES AND MONTHLY PAYMENTS.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Scheduled Principal Balances
that were made by the related Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the related Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the
Securities Administrator for deposit in the Distribution Account from its own
funds the amount of any such shortfall and shall indemnify and hold harmless the
Trust Fund, the Trustee, the Securities Administrator and the Master Servicer,
the Depositor and any successor Servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.23 shall not limit the ability of
the related Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note and Mortgage, to the
extent permitted by applicable law.
Section 3.24. RESERVE FUND.
(a)No later than the Closing Date, the Securities
Administrator shall establish and maintain a separate, segregated trust account
entitled, "Reserve Fund, Xxxxx Fargo Bank, N.A., in trust for the registered
holders of ACE Securities Corp. Home Equity Loan Trust, Series 2005-SD1, Asset
Backed Pass-Through Certificates." On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Reserve Fund $1,000. In addition,
the amount deposited in the Reserve Fund shall be increased by any payments
received by the Securities Administrator under the Cap Contract and deposited
into Reserve Fund for the benefit of the Class A-1, the Mezzanine and the Class
CE Certificates.
(b)On each Distribution Date, the Securities Administrator
shall deposit into the Reserve Fund the amounts described in clause SIXTH of
Section 5.01(a)(5), rather than distributing such amounts to the Class CE
Certificateholders, and in clause SEVENTH of Section 5.01(a)(5). On each such
Distribution Date, the Securities Administrator shall hold all such amounts for
the benefit of the Holders of the Class A-1 Certificates and the Mezzanine
Certificates and will distribute such amounts to the Holders of the Class A-1
Certificates and the Mezzanine Certificates, in the amounts and priorities set
forth in clause SIXTH of Section 5.01(a)(5). If no Net WAC Rate Carryover
Amounts are payable on a Distribution Date, the Securities Administrator shall
deposit, into the Reserve Fund on behalf of the Class CE Certificateholders,
from amounts otherwise distributable to the Class CE Certificateholders, an
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amount such that when added to other amounts already on deposit in the Reserve
Fund, the aggregate amount on deposit therein is equal to $1,000.
(c)For federal and state income tax purposes, the Class CE
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000 and any amounts paid to the Trust Fund by the counterparty to the Cap
Contract) and any amounts paid to the Reserve Fund shall be treated as amounts
distributed by REMIC II to the Holders of the Class CE Certificates (other than
any amount paid to the Reserve Fund by the Cap Contract). Upon the termination
of the Trust Fund, or the payment in full of the Class A-1 Certificates and the
Mezzanine Certificates, all amounts remaining on deposit in the Reserve Fund
will be released by the Trust Fund and distributed to the Class CE
Certificateholders or their designees. The Reserve Fund will be part of the
Trust Fund but not part of any REMIC and any payments to the Holders of the
Class A-1 Certificates and the Mezzanine Certificates of Net WAC Rate Carryover
Amounts will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860(G)(a)(1).
(d)By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that its agreement to such action by the Securities Administrator is given for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by such acceptance.
(e)At the direction of the Holders of a majority in Percentage
Interest in the Class CE Certificates, the Securities Administrator shall direct
any depository institution maintaining the Reserve Fund to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Securities Administrator or an Affiliate manages or advises such investment,
and (ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the Reserve Fund. In no event shall the
Securities Administrator be liable for any investments made pursuant to this
clause (e). If the Holders of a majority in Percentage Interest in the Class CE
Certificates fail to provide investment instructions, funds on deposit in the
Reserve Fund shall be held uninvested by the Securities Administrator without
liability for interest or compensation.
(f)For federal tax return and information reporting, the right
of the Class A-1 Certificateholders and the Mezzanine Certificateholders to
receive payments from the Reserve Fund in respect of any Net WAC Rate Carryover
Amount shall be assigned a value of $153,000 with respect to Certificates
covered by the Cap Contract.
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Section 3.25. ADVANCE FACILITY.
(a)Notwithstanding anything to the contrary contained herein,
(i) each Servicer is hereby authorized to enter into an advance facility
("Advance Facility") but no more than two Advance Facilities without the prior
written consent of the Trustee, which consent shall not be unreasonably
withheld, under which (A) the related Servicer sells, assigns or pledges to an
advancing person (an "Advance Financing Person") the related Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
and/or (B) an Advance Financing Person agrees to finance some or all P&I
Advances or Servicing Advances required to be made by the related Servicer
pursuant to this Agreement and (ii) the related Servicer is hereby authorized to
assign its rights to the Servicing Fee (which rights shall terminate upon the
resignation, termination or removal of the related Servicer pursuant to the
terms of this Agreement); it being understood that neither the Trust Fund nor
any party hereto shall have a right or claim (including without limitation any
right of offset) to any amounts for reimbursement of P&I Advances or Servicing
Advances so assigned or to the portion of the Servicing Fee so assigned. Subject
to the provisions of the first sentence of this Section 3.25(a), no consent of
the Depositor, Trustee, Certificateholders or any other party is required before
the related Servicer may enter into an Advance Facility, but the related
Servicer shall provide notice to the Depositor, Master Servicer and the Trustee
of the existence of any such Advance Facility promptly upon the consummation
thereof stating (a) the identity of the Advance Financing Person and (b) the
identity of any Person ("Servicer's Assignee") who has the right to receive
amounts in reimbursement of previously xxxxxxxxxxxx X&X Advances or Servicing
Advances. Notwithstanding the existence of any Advance Facility under which an
advancing person agrees to finance P&I Advances and/or Servicing Advances on the
related Servicer's behalf, the related 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.
(b)Reimbursement amounts ("Advance 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 related Servicer
would be permitted to reimburse itself in accordance with this Agreement,
assuming the related Servicer had made the related P&I Advance(s) and/or
Servicing Advance(s).
(c)The related Servicer shall maintain and provide to any
successor Servicer (with, upon request, a copy to the Trustee) 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.
(d)Reimbursement amounts distributed with respect to each
Mortgage Loan shall 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. The documentation establishing any
Advance Facility shall require the related Servicer to provide to the related
advancing person or its designee loan-by-loan information with respect
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to each such reimbursement amount distributed to such advancing person or
Advance Facility trustee on each Distribution Date, to enable the advancing
person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The related 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
related Servicer to the extent the related rights to be reimbursed therefor have
not been sold, assigned or pledged to an advancing person.
(e)Any amendment to this Section 3.25 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.25,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor and the related Servicer without the
consent of any Certificateholder, notwithstanding anything to the contrary in
this Agreement, provided, that the Trustee has been provided an Opinion of
Counsel that such amendment is authorized hereunder and has no material adverse
effect on the Certificateholders, 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; provided, further, that the amendment 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
(instead of obtaining an Opinion of Counsel to such effect) 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 rating 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. Prior to entering into an
Advance Facility, the related Servicer shall notify the lender under such
facility in writing that: (a) the P&I Advances and/or Servicing Advances
financed by and/or pledged to the lender are obligations owed to the related
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of P&I Advances and/or Servicing
Advances only to the extent provided herein, and neither the Master Servicer,
the Securities Administrator, the Trustee nor the Trust are otherwise obligated
or liable to repay any P&I Advances and/or Servicing Advances financed by the
lender; (b) the related Servicer will be responsible for remitting to the lender
the applicable amounts collected by it as Servicing Fees and as reimbursement
for P&I Advances and/or Servicing Advances funded by the lender, as applicable,
subject to the restrictions and priorities created in this Agreement; and (c)
neither the Master Servicer, the Securities Administrator nor the Trustee shall
have any responsibility to calculate any amount payable under an Advance
Facility or to track or monitor the administration of the financing arrangement
between the related Servicer and the lender or the payment of any amount under
an Advance Facility.
(f)The related Servicer shall indemnify the Master Servicer,
the Securities Administrator, the Trustee and the Trust Fund for any cost,
liability or expense relating to the Advance Facility including, without
limitation, a claim, pending or threatened, by an Advance Financing Person.
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Section 3.26. THE SERVICER INDEMNIFICATION.
Each Servicer agrees to indemnify Trustee, Master Servicer and
the Securities Administrator, from, and hold the Trustee, Master Servicer and
the Securities Administrator harmless against, any loss, liability or expense
(including reasonable attorney's fees and expenses) incurred by any such Person
by reason of the related Servicer's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement or by reason of
such Servicer's reckless disregard of its obligations and duties under this
Agreement. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of the related Servicer, the Trustee,
the Master Servicer and the Securities Administrator. Any payment hereunder made
by the related Servicer to any such Person shall be from such Servicer's own
funds, without reimbursement from REMIC I therefor.
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ARTICLE IV
ADMINISTRATION AND MASTER SERVICING
OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 4.01. MASTER SERVICER.
The Master Servicer shall supervise, monitor and oversee the
obligation of the Servicers to service and administer the Mortgage Loans in
accordance with the terms of this Agreement and shall have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such master servicing and administration. In performing its
obligations hereunder, the Master Servicer shall act in a manner consistent with
Accepted Master Servicing Practices. Furthermore, the Master Servicer shall
oversee and consult with the Servicers as necessary from time-to-time to carry
out the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master Servicer
by the Servicers and shall cause the Servicers to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicers under this Agreement. The Master Servicer shall independently and
separately monitor each Servicer's servicing activities with respect to each
related Mortgage Loan, reconcile the results of such monitoring with such
information provided in the previous sentence on a monthly basis and coordinate
corrective adjustments to the related Servicer's and Master Servicer's records,
and based on such reconciled and corrected information, prepare the statements
specified in Section 5.03 and any other information and statements required to
be provided by the Master Servicer hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicers to the Distribution Account pursuant to the terms
hereof based on information provided to the Master Servicer by the related
Servicer.
The Trustee shall furnish each Servicer and the Master
Servicer with any limited powers of attorney and other documents in form as
provided to it necessary or appropriate to enable the related Servicer and the
Master Servicer to service and administer the related Mortgage Loans and REO
Property. The Trustee shall have no responsibility for any action of the Master
Servicer or the related Servicer pursuant to any such limited power of attorney
and shall be indemnified by the Master Servicer or the related Servicer, as
applicable, for any cost, liability or expense incurred by the Trustee in
connection with such Person's misuse of any such power of attorney.
The Trustee, the Custodian and the Securities Administrator
shall provide access to the records and documentation in possession of the
Trustee, the Custodian or the Securities Administrator regarding the related
Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee, the Custodian or the
Securities Administrator; provided, however, that, unless otherwise required by
law, none of the Trustee, the Custodian or the Securities Administrator shall be
required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Trustee,
the Custodian and the Securities Administrator shall allow representatives of
the above entities to
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photocopy any of the records and documentation and shall provide equipment for
that purpose at a charge that covers the Trustee's, the Custodian's or the
Securities Administrator's actual costs.
The Trustee shall execute and deliver to the related Servicer
or the Master Servicer upon request any court pleadings, requests for trustee's
sale or other documents necessary or desirable to (i) the foreclosure or
trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or any
other Mortgage Loan Document; (iii) obtain a deficiency judgment against the
Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage
Note or any other Mortgage Loan Document or otherwise available at law or
equity.
Section 4.02. REMIC-RELATED COVENANTS.
For as long as each REMIC shall exist, the Trustee and the
Securities Administrator shall act in accordance herewith to treat such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the Servicer or the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.03 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a Opinion of Counsel stating that
such contribution will not result in an Adverse REMIC Event as defined in
Section 11.01(f).
Section 4.03. MONITORING OF THE SERVICERS.
(a)The Master Servicer shall be responsible for monitoring the
compliance by each Servicer with its duties under this Agreement. In the review
of the related Servicer's activities, the Master Servicer may rely upon an
officer's certificate of the related Servicer with regard to the related
Servicer's compliance with the terms of this Agreement. In the event that the
Master Servicer, in its judgment, determines that a Servicer should be
terminated in accordance with the terms hereof or that a notice should be sent
pursuant to the terms hereof with respect to the occurrence of an event that,
unless cured, would constitute a Servicer Event of Default by the related
Servicer, the Master Servicer shall notify the related Servicer, the Seller and
the Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.
(b)The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicers under this
Agreement and shall, in the event that a Servicer fails to perform its
obligations in accordance with this Agreement, subject to this Section and
Article VIII, cause the Trustee to terminate the rights and obligations of the
related Servicer hereunder in accordance with the provisions of Article VIII.
Such enforcement, including, without limitation, the legal prosecution of claims
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require
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were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except to
the extent that the Master Servicer shall have received reasonable indemnity for
its costs and expenses in pursuing such action.
(c)The Master Servicer shall be entitled to be reimbursed by
the related Servicer (or from amounts on deposit in the Distribution Account if
the related Servicer is unable to fulfill its obligations hereunder) for all
reasonable out-of-pocket or third party costs associated with the transfer of
servicing from the predecessor Servicer (or if the predecessor Servicer is the
Master Servicer, from the related Servicer immediately preceding the Master
Servicer), including without limitation, any reasonable out-of-pocket or third
party costs or expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Master Servicer to correct any errors or insufficiencies
in the servicing data or otherwise to enable the Master Servicer to service the
Mortgage Loans properly and effectively, upon presentation of reasonable
documentation of such costs and expenses.
(d)The Master Servicer shall require each Servicer to comply
with the remittance requirements and other obligations set forth in this
Agreement.
(e)If the Master Servicer acts as successor to a Servicer, it
will not assume liability for the representations and warranties of the
terminated Servicer.
Section 4.04. FIDELITY BOND.
The Master Servicer, at its expense, shall maintain in effect
a blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
Section 4.05. POWER TO ACT; PROCEDURES.
The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit any Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause
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REMIC I or REMIC II to fail to qualify as a REMIC or result in the imposition of
a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not would
cause REMIC I or REMIC II to fail to qualify as a REMIC or result in the
imposition of a tax upon REMIC I or REMIC II, as the case may be. The Trustee
shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney prepared and delivered to it and reasonably
acceptable to it by empowering the Master Servicer or the related Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with
this Agreement, and the Trustee shall execute and deliver such other documents
prepared and delivered to it and reasonably acceptable to it, as the Master
Servicer or the related Servicer may request, to enable the Master Servicer to
master service and administer the Mortgage Loans and carry out its duties
hereunder, in each case in accordance with Accepted Master Servicing Practices
(and the Trustee shall have no liability for misuse of any such powers of
attorney by the Master Servicer or the related Servicer and shall be indemnified
by the Master Servicer or the related Servicer, as applicable, for any cost,
liability or expense incurred by the Trustee in connection with such Person's
use or misuse of any such power of attorney). If the Master Servicer or the
Trustee has been advised that it is likely that the laws of the state in which
action is to be taken prohibit such action if taken in the name of the Trustee
or that the Trustee would be adversely affected under the "doing business" or
tax laws of such state if such action is taken in its name, the Master Servicer
shall join with the Trustee in the appointment of a co-trustee pursuant to
Section 9.10. In the performance of its duties hereunder, the Master Servicer
shall be an independent contractor and shall not, except in those instances
where it is taking action in the name of the Trustee, be deemed to be the agent
of the Trustee.
Section 4.06. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
To the extent Mortgage Loans contain enforceable due-on-sale
clauses, the Master Servicer shall cause the related Servicer to enforce such
clauses in accordance with this Agreement. If applicable law prohibits the
enforcement of a due-on-sale clause or such clause is otherwise not enforced in
accordance with this Agreement and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with this Agreement.
Section 4.07. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
MASTER SERVICER TO BE HELD FOR TRUSTEE.
(a)The Master Servicer shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
in respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be remitted to the Securities Administrator for deposit in
the Distribution Account. The Master Servicer shall, and, subject to Section
3.20, shall cause the
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Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Trustee, its agents and accountants at any time upon
reasonable request and during normal business hours, and to Certificateholders
that are savings and loan associations, banks or insurance companies, the Office
of Thrift Supervision, the FDIC and the supervisory agents and examiners of such
Office and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of the
Office of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and during
normal business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b)All Mortgage Files and funds collected or held by, or under
the control of, the Master Servicer, in respect of any Mortgage Loans, whether
from the collection of principal and interest payments or from Liquidation
Proceeds or Insurance Proceeds, shall be remitted to the Trustee for deposit in
the Distribution Account.
Section 4.08. STANDARD HAZARD INSURANCE AND FLOOD INSURANCE
POLICIES.
For each Mortgage Loan, the Master Servicer shall enforce the
obligation of each Servicer under this Agreement to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of this Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in Section 3.11 and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
Section 4.09. PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
The Master Servicer shall enforce each Servicer's obligations
under this Agreement to, prepare and present on behalf of the Trustee and the
Certificateholders all claims under the insurance policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer in respect of such policies, bonds
or contracts shall be promptly remitted to the Trustee for deposit in the
Distribution Account upon receipt, except that any amounts realized that are to
be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable insurance policy need not be so or remitted.
Section 4.10. MAINTENANCE OF PRIMARY MORTGAGE INSURANCE
POLICIES.
(a)The Master Servicer shall not take, or permit any Servicer
to take (to the extent such action is prohibited by this Agreement), any action
that would result in noncoverage under any primary mortgage insurance policy of
any loss which, but for the actions of the Master Servicer or the related
Servicer, as applicable, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer to keep in force
and effect (to the extent that the Mortgage Loan requires the Mortgagor to
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maintain such insurance), primary mortgage insurance applicable to each Mortgage
Loan in accordance with the provisions of this Agreement. The Master Servicer
shall not, and shall not permit any Servicer to, cancel or refuse to renew any
primary mortgage insurance policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement.
(b)The Master Servicer agrees to cause each Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any primary mortgage insurance policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
primary mortgage insurance policies respecting defaulted Mortgage Loans.
Section 4.11. TRUSTEE TO RETAIN POSSESSION OF CERTAIN
INSURANCE POLICIES AND DOCUMENTS.
The Trustee or the applicable Custodian, shall retain
possession and custody of the originals (to the extent available) of any primary
mortgage insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
Servicers have otherwise fulfilled their respective obligations under this
Agreement, the Trustee or the Custodian shall also retain possession and custody
of each Mortgage File in accordance with and subject to the terms and conditions
of this Agreement and the Custodial Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the Custodian, upon
the execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and such other documents or instruments
that constitute Mortgage Loan Documents that come into the possession of the
Master Servicer from time to time.
Section 4.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
Subject to Section 3.13(e), the Master Servicer shall cause
each Servicer to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged 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, all in accordance with this
Agreement.
Section 4.13. COMPENSATION FOR THE MASTER SERVICER.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Master Servicing Fee and
the income from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The Master Servicing Fee
payable to the Master Servicer in respect of any Distribution Date shall be
reduced in accordance with Section 4.18. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.
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Section 4.14. REO PROPERTY.
(a)In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause each Servicer to sell, any
REO Property as expeditiously as possible and in accordance with the provisions
of this Agreement. Further, the Master Servicer shall cause each Servicer to
sell any REO Property prior to three years after the end of the calendar year of
its acquisition by REMIC I unless (i) the Trustee shall have been supplied by
the related Servicer with an Opinion of Counsel to the effect that the holding
by the Trust Fund of such REO Property subsequent to such three-year period will
not result in the imposition of taxes on "prohibited transactions" of any REMIC
hereunder as defined in section 860F of the Code or cause any REMIC hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding, in
which case the Trust Fund may continue to hold such Mortgaged Property (subject
to any conditions contained in such Opinion of Counsel) or (ii) the related
Servicer shall have applied for, prior to the expiration of such three-year
period, an extension of such three-year period in the manner contemplated by
Section 856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable extension period. The Master Servicer shall cause the
related Servicer to protect and conserve, such REO Property in the manner and to
the extent required by this Agreement in accordance with the REMIC Provisions
and in a manner that does not result in a tax on "net income from foreclosure
property" or cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code.
(b)The Master Servicer shall cause each Servicer to deposit
all funds collected and received in connection with the operation of any REO
Property in the related REO Account.
Section 4.15. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
(a)The Master Servicer shall deliver to the Trustee and the
Rating Agencies on or before March 15 of each year, commencing on March 15, 2006
an Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Master Servicer has
failed to perform any of its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
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(b)Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 4.16. ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING
REPORT.
If the Master Servicer has, during the course of any calendar
year, directly serviced any of the Mortgage Loans, then the Master Servicer at
its expense shall cause a nationally recognized firm of independent certified
public accountants to furnish a statement to the Trustee, the Rating Agencies
and the Seller on or before March 15 of each year, commencing on March 15,
2006to the effect that, with respect to the most recently ended fiscal year,
such firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Xxxxxxx Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.
Section 4.17. UCC.
The Depositor agrees to file continuation statements for any
Uniform Commercial Code financing statements which the Seller has informed the
Depositor were filed on the Closing Date in connection with the Trust. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.
Section 4.18. OBLIGATION OF THE MASTER SERVICER IN RESPECT OF
PREPAYMENT INTEREST SHORTFALLS.
In the event of any Prepayment Interest Shortfalls, the Master
Servicer shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicers with respect to Prepayment Interest
Shortfalls attributable to Principal Prepayments in full on the Mortgage Loans
for the related Distribution Date, and not so paid by the Servicers and (ii) the
aggregate
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amount of the related Master Servicing Fees for such Distribution Date, without
reimbursement therefor.
Section 4.19. PREPAYMENT PENALTY VERIFICATION.
On or prior to each Servicer Remittance Date, each Servicer
shall provide in an electronic format acceptable to the Master Servicer and it
the data necessary for the Master Servicer to perform its verification duties
set forth in this Section 4.19. The Master Servicer or a third party reasonably
acceptable to the Master Servicer and the Depositor (the "Verification Agent")
will perform such verification duties and will use its best efforts to issue its
findings in a report (the "Verification Report") delivered to the Master
Servicer and the Depositor within ten (10) Business Days following the related
Distribution Date; provided, however, that if the Verification Agent is unable
to issue the Verification Report within ten (10) Business Days following the
Distribution Date, the Verification Agent may issue and deliver to the Master
Servicer and the Depositor the Verification Report upon the completion of its
verification duties. The Master Servicer shall forward the Verification Report
to the related Servicer and shall notify the related Servicer if the Master
Servicer has determined that the related Servicer did not deliver the
appropriate Prepayment Charge to the Securities Administrator in accordance with
this Agreement. Such written notification from the Master Servicer shall include
the loan number, prepayment penalty code and prepayment penalty amount as
calculated by the Master Servicer or the Verification Agent, as applicable, of
each Mortgage Loan for which there is a discrepancy. If the related Servicer
agrees with the verified amounts, such Servicer shall adjust the immediately
succeeding Servicer Report and the amount remitted to the Trustee with respect
to prepayments accordingly. If Ocwen or Option One disagree with the
determination of the Master Servicer, the related Servicer shall, within five
(5) Business Days of its receipt of the Verification Report, notify the Master
Servicer of such disagreement and provide the Master Servicer with detailed
information to support its position. If SPS disagrees with the determination of
the Master Servicer, SPS shall use its best efforts to notify the Master
Servicer of such disagreement and provide the Master Servicer with detailed
information to support its position within ten (10) Business Days of its receipt
of the Verification Report. The related Servicer and the Master Servicer shall
cooperate to resolve any discrepancy on or prior to the immediately succeeding
Servicer Remittance Date, and the related Servicer will indicate the effect of
such resolution on the related Servicer Report and shall adjust the amount
remitted with respect to prepayments on such Servicer Remittance Date
accordingly.
During such time as the related Servicer and the Master
Servicer are resolving discrepancies with respect to the Prepayment Charges, no
payments in respect of any disputed Prepayment Charges will be remitted to the
Securities Administrator for deposit in the Distribution Account and the Master
Servicer shall not be obligated to deposit such payments, unless otherwise
required pursuant to Section 8.01 hereof. In connection with such duties, the
Master Servicer shall be able to rely solely on the information provided to it
by the related Servicer in accordance with this Section. The Master Servicer
shall not be responsible for verifying the accuracy of any of the information
provided to it by the related Servicer.
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ARTICLE V
PAYMENTS TO CERTIFICATEHOLDERS
Section 5.01. DISTRIBUTIONS.
(a) (1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates, in respect
of the Class R-I Interest, as the case may be:
(i) to Holders of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTZZ and REMIC I
Regular Interest I-LTP, PRO RATA, in an amount equal to (A) the
Uncertificated Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Interest in respect of REMIC I
Regular Interest I-LTZZ shall be reduced when the REMIC I
Overcollateralization Amount is less than the REMIC I Required
Overcollateralization Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral
Amount and such amount will be payable to the Holders of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3 and REMIC I
Regular Interest I-LTM4, in the same proportion as the
Overcollateralization Increase Amount is allocated to the Corresponding
Certificates and the Uncertificated Balance of REMIC I Regular Interest
I-LTZZ shall be increased by such amount;
(ii) to the Holders of REMIC I Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (i) above,
allocated as follows:
(A) 98.00% of such remainder to the Holders of REMIC
I Regular Interest I-LTAA, until the Uncertificated Balance of
such Uncertificated REMIC I Regular Interest is reduced to
zero;
(B) 2.00% of such remainder first to the Holders of
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3 and REMIC I Regular Interest I-LTM4, 1.00% of
and in the same proportion as principal payments are allocated
to the Corresponding Certificates, until the Uncertificated
Balances of such REMIC I Regular Interests are reduced to zero
and second to the Holders of REMIC I Regular Interest I-LTZZ,
until the Uncertificated Balance of such REMIC I Regular
Interest is reduced to zero;
(C) to the Holders of REMIC I Regular Interest I-LTP,
on the Distribution Date immediately following the expiration
of the latest Prepayment
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Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed
pursuant to this clause; then
(D) any remaining amount to the Holders of the Class
R-I Interest, in respect of the Class R-I Interest;
provided, however, that 98.00% and 2.00% of any principal payments
that are attributable to an Overcollateralization Reduction Amount
shall be allocated to Holders of REMIC I Regular Interest I-LTAA and
REMIC I Regular Interest I-LTZZ, respectively.
Notwithstanding the distributions described in Section
5.01(a)(1), distributions of funds shall be made to Certificateholders
only in accordance with Section 5.01(a)(2) through (5) and Section
5.01(b).
(2) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Interest Remittance Amount and make the following
disbursements and transfers in the order of priority described below, in each
case to the extent of the Interest Remittance Amount remaining for such
Distribution Date:
FIRST, to the Holders of the Class A-1 Certificates, the Senior
Interest Distribution Amount allocable to the Class A-1 Certificates;
and
SECOND, sequentially, to the Holders of the Class X-0, Xxxxx X-0, Class
M-3 and Class M-4, Certificates, in that order, the Interest
Distribution Amount allocable to each such Class.
(3) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Securities Administrator shall withdraw
from the Distribution Account to the extent on deposit therein an amount equal
to the Principal Distribution Amount and distribute to the Certificateholders
the following amounts, in the following order of priority:
FIRST, to the Holders of the Class A-1 Certificates until the
Certificate Principal Balance of the Class A-1 Certificates has been
reduced to zero; and
SECOND, sequentially, to the Holders of the Class X-0, Xxxxx X-0,
Class M-3 and Class M-4 Certificates, in that order, until the
Certificate Principal Balance of each such Class has been reduced to
zero.
(4) On each Distribution Date (a) on or after the Stepdown Date and (b)
on which a Trigger Event is not in effect, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Principal Distribution Amount and distribute to the
Certificateholders the following amounts, in the following order of priority:
FIRST, to the Holders of the Class A-1 Certificates, the Class A-1
Principal Distribution Amount until the Certificate Principal Balance
of the Class A-1 Certificates has been reduced to zero;
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SECOND, to the Holders of the Class M-1 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Holders of the Class A-1 Certificates under
clause FIRST above, and (y) the Class M-1 Principal Distribution
Amount, until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero;
THIRD, to the Holders of the Class M-2 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii) the sum
of the amounts distributed to the Holders of the Class A-1
Certificates under clause FIRST above and to the Holders of the Class
M-1 Certificates under clause SECOND above, and (y) the Class M-2
Principal Distribution Amount, until the Certificate Principal Balance
of the Class M-2 Certificates has been reduced to zero;
FOURTH, to the Holders of the Class M-3 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount over (ii) the
sum of the amounts distributed to the holders of the Class A-1
Certificates under clause FIRST above, to the Holders of the Class M-1
Certificates pursuant to clause SECOND above and to the Holders of the
Class M-2 Certificates pursuant to clause THIRD above, and (y) the
Class M-3 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to
zero;
FIFTH, to the Holders of the Class M-4 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii) the sum
of the amounts distributed to the holders of the Class A-1
Certificates under clause FIRST above, to the Holders of the Class M-1
Certificates pursuant to clause SECOND above, to the Holders of the
Class M-2 Certificates pursuant to clause THIRD above and to the
Holders of the Class M-3 Certificates pursuant to clause FOURTH above
and (y) the Class M-4 Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-4 Certificates has been
reduced to zero.
(5) On each Distribution Date, the Net Monthly Excess Cashflow (or, in
the case of clause FIRST below, the Net Monthly Excess Cashflow exclusive of any
Overcollateralization Reduction Amount) shall be distributed as follows:
FIRST, to the Holders of the Class or Classes of Certificates then
entitled to receive distributions in respect of principal, in an
amount equal to any Extra Principal Distribution Amount, payable to
such Holders in accordance with the priorities set forth in Section
5.01(b) below;
SECOND, sequentially, to the Holders of the Class X-0, Xxxxx X-0,
Class M-3 and Class M-4 Certificates, in that order, in an amount
equal to the Interest Carry Forward Amount allocable to each such
Class;
THIRD, sequentially, to the Holders of the Class X-0, Xxxxx X-0, Class
M-3 and Class M-4 Certificates, in that order, in an amount equal to
the Allocated Realized Loss Amount allocable to each such Class;
FOURTH, to the Holders of the Class A-1 Certificates, in an amount
equal to such Certificates' allocated share of any Prepayment Interest
Shortfalls on the Mortgage
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Loans to the extent not covered by payments pursuant to Section 3.22 or
4.18 and any shortfalls resulting from the application of the Relief
Act or similar state or local law or the bankruptcy code with respect
to the Mortgage Loans to the extent not previously reimbursed pursuant
to 1.02;
FIFTH, to the Holders of the Class X-0, Xxxxx X-0, Class M-3 and Class
M-4 Certificates, in an amount equal to such Certificates' allocated
share of any Prepayment Interest Shortfalls on the Mortgage Loans to
the extent not covered by payments pursuant to Section 3.22 or 4.18
and any shortfalls resulting from the application of the Relief Act or
similar state or local law or the bankruptcy code with respect to the
Mortgage Loans to the extent not previously reimbursed pursuant to
1.02;
SIXTH, to the Reserve Fund from amounts otherwise payable to the Class
CE Certificates, and then from the Reserve Fund to the Class A-1,
Class M-1, Class M-2, Class M-3 and Class M-4 Certificates, in that
order, in an amount equal to the unpaid amount of any Net WAC Rate
Carryover Amount for each such Class for such Distribution Date;
SEVENTH, to the Reserve Fund, the amount required to be deposited
therein pursuant to Section 3.24(b), after taking into account amounts
received under the Cap Contract;
EIGHTH, to the Holders of the Class CE Certificates the sum of (a) the
Interest Distribution Amount and (b) any Overcollateralization
Reduction Amount for such Distribution Date; and
NINTH, to the Holders of the Class R Certificates, in respect of the
Class R-II Interest, any remaining amounts; provided that if such
Distribution Date is the Distribution Date immediately following the
expiration of the latest Prepayment Charge term as identified on the
Mortgage Loan Schedule or any Distribution Date thereafter, then any
such remaining amounts will be distributed first, to the Holders of
the Class P Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and second, to the Holders of the
Class R Certificates.
On each Distribution Date, after making the distributions of the
Available Distribution Amount as set forth above, the Securities Administrator
will FIRST, withdraw from the Reserve Fund all income from the investment of
funds in the Reserve Fund and distribute such amount to the Holders of the Class
CE Certificates, and SECOND, withdraw from the Reserve Fund, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount sequentially to the
Class A-1, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates, in that
order, in each case to the extent to the extent any Net WAC Rate Carryover
Amount is allocable to each such Class. In addition, the Securities
Administrator shall withdraw from the Reserve Fund any Excess Cap Payment and
remit such amounts to the Holder of the Class CE Certificates.
(b)(i) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Extra Principal
Distribution Amount shall be distributed in the following order of priority;
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FIRST, to the Holders of the Class A-1 Certificates until the
Certificate Principal Balance of the Class A-1 Certificates has been
reduced to zero; and
SECOND, sequentially, to the Holders of the Class X-0, Xxxxx X-0,
Class M-3 and Class M-4 Certificates, in that order, until the
Certificate Principal Balance of each such Class has been reduced to
zero.
(ii) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions of
principal to the extent of the Extra Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, the lesser of (x) the Principal Distribution Amount and (y) the
Class A-1 Principal Distribution Amount, shall be distributed to the
Holders of the Class A-1 Certificates until the Certificate Principal
Balance of the Class A-1 Certificates has been reduced to zero;
SECOND, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the amount distributed to the Holders of the Class
A-1 Certificates pursuant to clause FIRST of this Section 5.01(b)(ii)
and (y) the Class M-1 Principal Distribution Amount, shall be
distributed to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance of the Class M-1 Certificates has been
reduced to zero;
THIRD, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of
the Class A-1 Certificates pursuant to clause FIRST of this Section
5.01(b)(ii) and to the Holders of the Class M-1 Certificates pursuant
to clause SECOND of this Section 5.01(b)(ii) and (y) the Class M-2
Principal Distribution Amount, shall be distributed to the Holders of
the Class M-2 Certificates, until the Certificate Principal Balance of
the Class M-2 Certificates has been reduced to zero;
FOURTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of
the Class A-1 Certificates pursuant to clause FIRST of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause SECOND of this Section 5.01(b)(ii) and to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this Section
5.01(b)(ii) and (y) the Class M-3 Principal Distribution Amount, shall
be distributed to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance of the Class M-3 Certificates has been
reduced to zero; and
FIFTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of
the Class A-1 Certificates pursuant to clause FIRST of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause SECOND of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause THIRD of this Section 5.01(b)(ii)
and to the Holders of the Class M-3 Certificates pursuant to clause
FOURTH of this Section 5.01(b)(ii) and (y) the Class M-4 Principal
Distribution Amount, shall be distributed to the Holders of the Class
M-4 Certificates, until the Certificate Principal Balance of the Class
M-4 Certificates has been reduced to zero.
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(c)On each Distribution Date, the Securities Administrator
shall withdraw any amounts then on deposit in the Distribution Account that
represent Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.
(d)All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 5.01(e) or
Section 10.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance that is in excess of the lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust Office
of the Securities Administrator or such other location specified in the notice
to Certifcateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Depositor, the Servicer, the Securities Administrator or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee, the
Servicers, the Securities Administrator or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
(f) Except as otherwise provided in Section 10.01, whenever
the Securities Administrator expects that the final distribution with respect to
any Class of Certificates will be made on the next Distribution Date, the
Securities Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:
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(i) the Securities Administrator expects that the final
distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Securities Administrator therein
specified, and
(ii) no interest shall accrue on such Certificates from and
after the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Securities Administrator and credited to the
account of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 5.01(f) shall not
have been surrendered for cancellation within six months after the time
specified in such notice, the Securities Administrator shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates but shall continue to hold any remaining funds for the benefit of
non-tendering Certificateholders. The costs and expenses of maintaining the
funds in trust and of contacting such Certificateholders shall be paid out of
the assets remaining in such trust fund. If within one year after the final
notice any such Certificates shall not have been surrendered for cancellation,
the Securities Administrator shall pay to the Depositor all such amounts, and
all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Securities Administrator as a result of such
Certificateholder's failure to surrender its Certificate(s) on the final
Distribution Date for final payment thereof in accordance with this Section
5.01(f). Any such amounts held in trust by the Securities Administrator shall be
held uninvested in an Eligible Account.
(g)Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A-1 Certificate or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 5.04 and (b) distributed to the Holder of such Certificate
in reduction of the Certificate Principal Balance thereof pursuant to this
Section 5.01 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Balance of a REMIC Regular Interest be reduced more than once in
respect of any particular amount both (a) allocated to such REMIC Regular
Interest in respect of Realized Losses pursuant to Section 5.04 and (b)
distributed on such REMIC Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 5.01.
Section 5.02. STATEMENTS TO CERTIFICATEHOLDERS.
On each Distribution Date, the Securities Administrator (based
on the information set forth in the Servicer Report for such Distribution Date
and information provided by the Trustee or the counterparty to the Cap Contract
with respect to payments made pursuant to the
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Cap Contract) shall make available to each Holder of the Certificates, a
statement as to the distributions made on such Distribution Date setting forth:
(i) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
principal, and the amount of the distribution made on such Distribution
Date to the Holders of the Class P Certificates allocable to Prepayment
Charges;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
interest;
(iii) the aggregate Servicing Fee received by the Servicers
and Master Servicing Fee received by the Master Servicer during the
related Due Period;
(iv) the aggregate amount of P&I Advances for such
Distribution Date;
(v) Reserved;
(vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) delinquent 30 to 59 days, (b) delinquent 60 to 89
days, (c) delinquent 90 or more days, in each case, as of the last day
of the preceding calendar month, (d) as to which foreclosure
proceedings have been commenced and (e) with respect to which the
related Mortgagor has filed for protection under applicable bankruptcy
laws, with respect to whom bankruptcy proceedings are pending or with
respect to whom bankruptcy protection is in force;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid principal balance and the Scheduled Principal
Balance of such Mortgage Loan;
(ix) if available, the book value of any REO Property as of
the close of business on the last Business Day of the calendar month
preceding the Distribution Date;
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period and the aggregate amount of any
Prepayment Charges received in respect thereof;
(xi) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the aggregate amount of Realized
Losses incurred since the Closing Date;
(xii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Distribution Account for such Distribution
Date;
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(xiii) the aggregate Certificate Principal Balance of each
Class of Certificates, after giving effect to the distributions, and
allocations of Realized Losses, made on such Distribution Date,
separately identifying any reduction thereof due to allocations of
Realized Losses;
(xiv) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of the Class
A-1 Certificates, the Mezzanine Certificates and the Class CE
Certificates for such Distribution Date and the Interest Carry Forward
Amount, if any, with respect to the Class A-1 Certificates and the
Mezzanine Certificates on such Distribution Date, and in the case of
the Class A-1 Certificates and the Mezzanine Certificates separately
identifying any reduction thereof due to allocations of Realized
Losses, Prepayment Interest Shortfalls, Relief Act Interest Shortfalls
and Net WAC Rate Carryover Amounts;
(xvi) the aggregate amount of any Prepayment Interest
Shortfall for such Distribution Date, to the extent not covered by
payments by the Servicers pursuant to Section 3.22 or the Master
Servicer pursuant to Section 4.18;
(xvii) the aggregate amount of Relief Act Interest Shortfalls
for such Distribution Date;
(xviii) the Required Overcollateralization Amount and the
Credit Enhancement Percentage for such Distribution Date;
(xix) the Overcollateralization Increase Amount, if any, for
such Distribution Date;
(xx) the Overcollateralization Reduction Amount, if any, for
such Distribution Date;
(xxi) the Net WAC Rate Carryover Amount, if any, for such
Distribution Date;
(xxii) the Net WAC Rate Carryover Amount, if any, outstanding
after reimbursements therefor on such Distribution Date and any amounts
received under the Cap Contract;
(xxiii) the respective Pass-Through Rates applicable to the
Class A-1 Certificates, the Mezzanine Certificates and the Class CE
Certificates for such Distribution Date;
(xxiv) the amount of any deposit to the Reserve Fund
contemplated by Section 3.24(b);
(xxv) the balance of the Reserve Fund prior to the deposit or
withdrawal of any amounts on such Distribution Date;
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(xxvi) the amount of any deposit to the Reserve Fund pursuant
to clause SEVENTH of Section 5.01(a)(5);
(xxvii) the balance of the Reserve Fund after all deposits and
withdrawals on such Distribution Date;
(xxviii) the Loss Severity Percentage with respect to each
Mortgage Loan;
(xxix) the Aggregate Loss Severity Percentage; and
(xxx) the number and aggregate unpaid principal balance of (a)
Mortgage Loans with respect to which bankruptcy protection is in force
that are delinquent 60 or more days under an applicable bankruptcy plan
as of the last day of the preceding calendar month and (b) Mortgage
Loans that are the subject of forebearance plans that are delinquent 60
or more days under an applicable forebearance plan as of the last day
of the preceding calendar month.
The Securities Administrator will make such statement (and, at
its option, any additional files containing the same information in an
alternative format) available each month to the Certificateholders and the
Rating Agencies via the Securities Administrator's internet website. The
Securities Administrator's internet website shall initially be located at
http:\\xxx.xxxxxxx.xxx and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at 0-000-000-0000.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes.
In the case of information furnished pursuant to subclauses
(i) and (ii) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.
Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Regular
Certificate a statement containing the information set forth in subclauses (i)
through (iii) above, aggregated for such calendar year or applicable portion
thereof during which such person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.
Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Residual
Certificate a statement setting forth the amount, if any, actually distributed
with respect to the Residual Certificates, as appropriate, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder.
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The Securities Administrator shall, upon request, furnish to
each Certificateholder during the term of this Agreement, such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be reasonable with respect to the Certificateholder, as applicable, or
otherwise with respect to the purposes of this Agreement, all such reports or
information to be provided at the expense of the Certificateholder, in
accordance with such reasonable and explicit instructions and directions as the
Certificateholder may provide.
On each Distribution Date the Securities Administrator shall
provide Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for
each Class of Certificates as of such Distribution Date, using a format and
media mutually acceptable to the Securities Administrator and Bloomberg.
Section 5.03. SERVICER REPORTS; P&I ADVANCES.
(a)On or before 12:00 noon New York time on the 18th calendar
day of each month, and if the 18th calendar day is not a Business Day, the
immediately following Business Day, with respect to Ocwen and SPS, and no later
than three Business Days following the related Determination Date, with respect
to Option One, the related Servicer shall deliver to the Master Servicer and the
Securities Administrator by telecopy or electronic mail (or by such other means
as the related Servicer, the Master Servicer and the Securities Administrator
may agree from time to time) a remittance report containing such information
with respect to the related Mortgage Loans and the related Distribution Date as
is reasonably available to the related Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the Mortgage Loans and oversee the servicing by the
related Servicer and the Securities Administrator to fulfill its obligations
hereunder with respect to securities and tax reporting. Any report delivered by
a Servicer pursuant to this Section 5.03(a) shall include the amount collected
by the related Servicer in respect of Arrearages and principal due on the
Mortgage Loans prior to the Cut-off Date.
(b)The amount of P&I Advances to be made by the related
Servicer on any Distribution Date shall equal, subject to Section 5.03(d), (i)
with respect to the Mortgage Loans other than the Simple Interest Mortgage
Loans, the aggregate amount of Monthly Payments (net of the related Servicing
Fees), due during the related Due Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent as of the close of business on the related
Determination Date, (ii) with respect to the Simple Interest Mortgage Loans,
thirty (30) days' interest (net of the related Servicing Fees) on each such
Mortgage Loan for which the Monthly Payment was due during the related Due
Period which Monthly Payments were delinquent as of the close of business on the
related Determination Date and (iii) with respect to each REO Property, which
was acquired during or prior to the related Prepayment Period and as to which an
REO Disposition did not occur during the related Prepayment Period, an amount
equal to the excess, if any, of the REO Imputed Interest on such REO Property
for the most recently ended calendar month, over the net income from such REO
Property deposited in the related Collection Account pursuant to Section 3.21
for distribution on such Distribution Date; provided, however, no Servicer shall
be required to make P&I Advances with respect to any Monthly Payments due on a
Mortgage Loan prior to the Cut-off Date, any Relief Act Interest Shortfalls, or
with respect to Prepayment Interest Shortfalls in excess of its obligations
under Section 3.22. For purposes of the preceding sentence, the Monthly Payment
on each
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Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the assumed
monthly payment that would have been due on the related Due Date based on the
original principal amortization schedule for such Balloon Mortgage Loan.
Notwithstanding the generality of the foregoing, for purposes of a Servicer's
determination of whether or not a P&I Advance is required to be made on a
Mortgage Loan for which the Mortgagor has failed to make one or more Monthly
Payments due on such Mortgage Loan on or prior to the Cut-off Date, any payment
in an amount equal to a Monthly Payment received by the related Servicer during
the Due Period relating to such Servicer Remittance Date shall be deemed to be
the Monthly Payment due during such Due Period and the related Servicer shall
not be required to make a P&I Advance with respect to such Mortgage Loan. In
addition, no portion of such Monthly Payment received on such Mortgage Loan will
constitute the receipt of an Arrearage with respect to such Mortgage Loan unless
all Monthly Payments required to be made on such Mortgage Loan for all prior Due
Periods occurring subsequent to the Cut-off Date have been received by the
related Servicer.
By 12:00 noon New York time on the Servicer Remittance Date,
each Servicer shall remit in immediately available funds to the Securities
Administrator for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans serviced by such Servicer for the related Distribution Date either (i)
from its own funds or (ii) from the related Collection Account, to the extent of
any Amounts Held For Future Distribution on deposit therein (in which case it
will cause to be made an appropriate entry in the records of the related
Collection Account that Amounts Held For Future Distribution have been, as
permitted by this Section 5.03, used by the related 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 related Servicer
with respect to the Mortgage Loans. In addition, the related Servicer shall have
the right to reimburse itself for any outstanding P&I Advance made from its own
funds from Amounts Held for Future Distribution. Any Amounts Held For Future
Distribution used by the related Servicer to make P&I Advances or to reimburse
itself for outstanding P&I Advances shall be appropriately reflected in the
related Servicer's records and replaced by the related Servicer by deposit in
the related Collection Account no later than the close of business on the
Servicer Remittance Date immediately following the Due Period or Prepayment
Period for which such amounts relate. The Securities Administrator will notify
the related Servicer and the Master Servicer by the close of business on the
Business Day prior to the Distribution Date in the event that the amount
remitted by the related Servicer to the Securities Administrator on such date is
less than the P&I Advances required to be made by the related Servicer for the
related Distribution Date.
(c)The obligation of each Servicer to make such P&I Advances
with respect to the Mortgage Loans serviced by such Servicer is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan or REO Property, shall continue until a
Final Recovery Determination in connection therewith or the removal thereof from
the Trust Fund pursuant to any applicable provision of 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 any
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or
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Nonrecoverable Servicing Advance, respectively. The determination by the related
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 Nonrecoverable Servicing
Advance, respectively, shall be evidenced by a certification of a Servicing
Officer delivered to the Master Servicer.
(e)Subject to and in accordance with the provisions of Article
VIII, in the event a Servicer fails to make any required P&I Advance, then the
Master Servicer (in its capacity as successor servicer) or any other successor
Servicer shall be required to make such P&I Advance on the Distribution Date on
which the related Servicer was required to make such Advance, subject to its
determination of recoverability.
Section 5.04. ALLOCATION OF REALIZED LOSSES.
(a)Prior to the Determination Date, the related Servicer shall
determine as to each Mortgage Loan and REO Property and include in the monthly
remittance report provided to the Master Servicer and the Securities
Administrator (substantially in the form of Schedule 4 hereto or another form
mutually acceptable to the related Servicer and the Master Servicer) such
information as is reasonably available to the related Servicer as the Master
Servicer or the Securities Administrator may reasonably require so as to enable
the Master Servicer to master service the Mortgage Loans and oversee the
servicing by the related Servicer and the Securities Administrator to fulfill
its obligations hereunder with respect to securities and tax reporting, which
shall include, but not be limited to: (i) the total amount of Realized Losses,
if any, incurred in connection with any Final Recovery Determinations made
during the related Prepayment Period; and (ii) the respective portions of such
Realized Losses allocable to interest and allocable to principal. Prior to each
Determination Date, the Servicer shall also determine as to each Mortgage Loan:
(i) the total amount of Realized Losses, if any, incurred in connection with any
Deficient Valuations made during the related Prepayment Period; and (ii) the
total amount of Realized Losses, if any, incurred in connection with Debt
Service Reductions in respect of Monthly Payments due during the related Due
Period.
(b)All Realized Losses on the Mortgage Loans allocated to any
REMIC I Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans
shall, on any Distribution Date, first, cause a reduction in Net Monthly Excess
Cashflow for that Distribution Date and second, cause a reduction in the
Overcollateralization Amount for such Distribution Date until reduced to zero.
To the extent that Realized Losses on a Distribution Date cause the aggregate
Certificate Principal Balance of the Offered Certificates after taking into
account all distributions on such Distribution Date to exceed the aggregate
Scheduled Principal Balance of the Mortgage Loans as of the last day of the Due
Period, such excess shall be allocated by the Securities Administrator as
follows; first, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; second, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; third,
to the Class M-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and fourth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the
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Certificate Principal Balance of any Class of Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each case
to be allocated to such Class of Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificates shall be made by reducing the amount otherwise payable
in respect thereof pursuant to clause EIGHTH of Section 5.01(a)(5). No
allocations of any Realized Losses shall be made to the Certificate Principal
Balances of the Class A-1 Certificates or Class P Certificates.
As used herein, an allocation of a Realized Loss on a "pro
rata basis" among two or more specified Classes of Certificates means an
allocation on a pro rata basis, among the various Classes so specified, to each
such Class of Certificates on the basis of their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date. All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the, Certificates of such
Class in proportion to the Percentage Interests evidenced thereby.
In addition, in the event that a Servicer receives any
Subsequent Recoveries, the related Servicer shall deposit such funds into the
related Collection Account pursuant to Section 3.08. If, after taking into
account such Subsequent Recoveries, the amount of a Realized Loss is reduced,
the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Mezzanine Certificates with the
highest payment priority to which Realized Losses have been allocated, but not
by more than the amount of Realized Losses previously allocated to that Class of
Mezzanine Certificates pursuant to this Section 5.04 and not previously
reimbursed to such Class of Mezzanine Certificates with Net Monthly Excess
Cashflow pursuant to clause THIRD of Section 5.01(a)(5). The amount of any
remaining Subsequent Recoveries will be applied to sequentially increase the
Certificate Principal Balance of the Mezzanine Certificates, beginning with the
Class of Mezzanine Certificates with the next highest payment priority, up to
the amount of such Realized Losses previously allocated to such Class of
Mezzanine Certificates pursuant to this Section 5.04 and not previously
reimbursed to such Class of Mezzanine Certificates with Net Monthly Excess
Cashflow pursuant to clause THIRD of Section 5.01(a)(5). Holders of such
Certificates will not be entitled to any payment in respect of current interest
on the amount of such increases for any Interest Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases shall be
applied to the Certificate Principal Balance of each Mezzanine Certificate of
such Class in accordance with its respective Percentage Interest.
(c)Realized Losses on the Mortgage Loans shall be allocated by
the Trustee, based solely on the instructions of the Securities Administrator,
on each Distribution Date to the following REMIC I Regular Interests in the
specified percentages, as follows: first, to Uncertificated Interest payable to
the REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98.00%
and 2.00%, respectively; second, to the Uncertificated Balances of the REMIC I
Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an
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aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98.00%
and 2.00%, respectively; third, to the Uncertificated Balances of REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTM4 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM4 has been reduced to zero; fourth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM3 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM3 has been reduced to zero; fifth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM2 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM2 has been reduced to zero; and sixth,
to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTM1 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and
1.00%, respectively, until the Uncertificated Balance of REMIC I Regular
Interest I-LTM1 has been reduced to zero.
Section 5.05. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the
Trustee and the Securities Administrator shall comply with all federal
withholding requirements respecting payments to Certificateholders of interest
or original issue discount that the Trustee reasonably believes are applicable
under the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Securities Administrator does withhold any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Securities
Administrator shall indicate the amount withheld to such Certificateholders.
Section 5.06. REPORTS FILED WITH SECURITIES AND EXCHANGE
COMMISSION.
The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within 15 days after each Distribution Date,
the Securities Administrator shall, in accordance with industry standards, file
with the Commission via the Electronic Data Gathering and Retrieval System
("XXXXX"), a Form 8-K (or other comparable Form containing the same or
comparable information or other information mutually agreed upon) with a copy of
the statement to be furnished to the Certificateholders for such Distribution
Date as an exhibit thereto. Prior to January 30, 2006, the Securities
Administrator shall, in accordance with industry standards, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 20, 2006 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 20th of each year thereafter, the Master Servicer
shall provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of the each Servicer to be delivered pursuant to
this Agreement, and, if applicable, the annual independent accountant's
servicing report and annual statement of compliance to be delivered by the
Master Servicer pursuant to Sections 4.15 and 4.16. Prior to (i) March 31, 2006
and (ii) unless and until a Form 15 Suspension Notice shall have been filed,
March 31 of each year thereafter, the Securities Administrator shall file a Form
10-K, in substance conforming to industry standards, with respect to the Trust.
Such Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second
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preceding sentence. The Depositor hereby grants to the Securities Administrator
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 Securities Administrator from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. The Depositor agrees to promptly furnish to the Securities Administrator,
from time to time upon request, such further information, reports and financial
statements within its control related to this Agreement, the Mortgage Loans as
the Securities Administrator reasonably deems appropriate to prepare and file
all necessary reports with the Commission. The Securities Administrator shall
have no responsibility to file any items other than those specified in this
Section 5.06; provided, however, the Securities Administrator will cooperate
with the Depositor in connection with any additional filings with respect to the
Trust Fund as the Depositor deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Fees and expenses incurred by the
Securities Administrator in connection with this Section 5.06 shall not be
reimbursable from the Trust Fund.
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ARTICLE VI
THE CERTIFICATES
Section 6.01. THE CERTIFICATES.
(a)The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-5. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b)The Class A-1 Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Securities Administrator except to another Depository that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall only transfer the Ownership Interests in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Securities Administrator is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
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delivered to the Depositor, the Servicers and, if the Trustee is not the
Book-Entry Custodian, the Trustee, any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.
(c)The Trustee, the Servicers, the Securities Administrator,
the Master Servicer and the Depositor may for all purposes (including the making
of payments due on the Book-Entry Certificates) deal with the Depository as the
authorized representative of the Certificate Owners with respect to the
Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the Book-Entry Certificates shall be limited to those established by law and
agreements between such Certificate Owners and the Depository Participants and
brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of the Book-Entry
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Certificateholders and shall
give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Securities Administrator
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (B) the Depositor is unable to
locate a qualified successor, (ii) the Depositor at its option advises the
Securities Administrator in writing that it elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Servicer Event
of Default, Certificate Owners representing in the aggregate not less than 51%
of the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Securities Administrator of the
Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Securities Administrator shall cause the
Definitive Certificates to be issued. Such Definitive Certificates will be
issued in minimum denominations of $10,000 except that any beneficial ownership
that was represented by a Book-Entry Certificate in an amount less than $10,000
immediately prior to the issuance of a Definitive Certificate shall be issued in
a minimum denomination equal to the amount represented by such Book-Entry
Certificate. None of the Depositor, the Servicers, the Master Servicer, the
Securities Administrator or the Trustee shall be liable for any delay in the
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the
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Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates, and the Securities Administrator shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder.
Section 6.02. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a)The Securities Administrator shall cause to be kept at one
of the offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b)No transfer of any Class CE Certificate, Class P
Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. In the event that such a
transfer of a Class CE Certificate, Class P Certificate or Residual Certificate
is to be made without registration or qualification (other than in connection
with the initial transfer of any such Certificate by the Depositor), the
Securities Administrator shall require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the form
attached hereto as Exhibit B-1; (ii) if such transfer is purportedly being made
in reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-2; and (iii) in all other cases, an Opinion of Counsel
satisfactory to the Securities Administrator that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Trust Fund or of the Depositor, the Trustee, the Master
Servicer, the Securities Administrator or the Servicers), together with copies
of the written certification(s) of the Certificateholder desiring to effect the
transfer and/or such Certificateholder's prospective transferee upon which such
Opinion of Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the 1933 Act or any other securities laws or to take any action not otherwise
required under this Agreement to permit the transfer of such Certificates
without registration or qualification. Any Certificateholder desiring to effect
the transfer of any such Certificate shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer, the Securities Administrator
and the Servicers 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.
(c)No transfer of a Class CE Certificate, Class P Certificate
or a Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the
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Securities Administrator is provided with an Opinion of Counsel on which the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Servicers may rely, which establishes to the satisfaction of the Securities
Administrator that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Servicer, the Trustee, the Master Servicer, the Securities Administrator or the
Trust Fund to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Depositor,
any Servicer, the Trustee, the Master Servicer, the Securities Administrator or
the Trust Fund. An Opinion of Counsel will not be required in connection with
the initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the
Securities Administrator, shall be a written representation) from the Depositor
of the status of such transferee as an affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate will be deemed to
have represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, or (b) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in PTCE 95-60, and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied.
If any Certificate or any interest therein is acquired or held
in violation of the conditions described in this Section 6.02(c), the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, each Servicer, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.
(d)(i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Securities
Administrator or its designee under clause (iii)(A) below to deliver payments to
a Person other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of Transfer and to do
all other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(A)Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status
as a Permitted Transferee.
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(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate, the Trustee
shall require delivery to it, and shall not register the
Transfer of any Residual Certificate until its receipt of, an
affidavit and agreement (a "Transfer Affidavit and Agreement,"
in the form attached hereto as Exhibit B-3) from the proposed
Transferee, in form and substance satisfactory to the
Securities Administrator, representing and warranting, among
other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any Person that is
not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor
to remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 6.02(d) and agrees to be bound by
them.
(C)Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed Transferee under clause
(B) above, if an authorized officer of the Securities
Administrator who is assigned to this transaction has actual
knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D)Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (x) to require
a Transfer Affidavit and Agreement from any other Person to
whom such Person attempts to transfer its Ownership Interest
in a Residual Certificate and (Y) not to transfer its
Ownership Interest unless it provides a Transferor Affidavit
(in the form attached hereto as Exhibit B-2) to the Securities
Administrator stating that, among other things, it has no
actual knowledge that such other Person is not a Permitted
Transferee.
(E)Each Person holding or acquiring an Ownership
Interest in a Residual Certificate, by purchasing an Ownership
Interest in such Certificate, agrees to give the Securities
Administrator written notice that it is a "pass-through
interest holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Residual Certificate, if
it is, or is holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through interest holder."
(ii) The Securities Administrator will register the Transfer
of any Residual Certificate only if it shall have received the Transfer
Affidavit and Agreement and all of such other documents as shall have
been reasonably required by the Securities Administrator as a condition
to such registration. In addition, no Transfer of a Residual
Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such
Certificate to the effect that such Transferee is a Permitted
Transferee.
(iii) (A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
6.02(d), then the last
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preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive to the
date of registration of such Transfer of such Residual Certificate. The
Securities Administrator shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by this Section 6.02(d) or for making any payments due on
such Certificate to the holder thereof or for taking any other action
with respect to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a holder
of a Residual Certificate in violation of the restrictions in
this Section 6.02(d) and to the extent that the retroactive
restoration of the rights of the holder of such Residual
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Securities
Administrator shall have the right, without notice to the
holder or any prior holder of such Residual Certificate, to
sell such Residual Certificate to a purchaser selected by the
Securities Administrator on such terms as the Securities
Administrator may choose. Such purported Transferee shall
promptly endorse and deliver each Residual Certificate in
accordance with the instructions of the Securities
Administrator. Such purchaser may be the Securities
Administrator itself or any Affiliate of the Securities
Administrator. The proceeds of such sale, net of the
commissions (which may include commissions payable to the
Securities Administrator or its Affiliates), expenses and
taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Securities
Administrator, and the Securities Administrator shall not be
liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
(iv) The Securities Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax imposed (A) as
a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is a Disqualified Organization, including
the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Residual Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Residual
Certificate having as among its record holders at any time any Person
which is a Disqualified Organization. Reasonable compensation for
providing such information may be charged or collected by the
Securities Administrator.
(v)The provisions of this Section 6.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided
that there shall have been delivered to the Securities Administrator at
the expense of the party seeking to modify, add to or eliminate any
such provision the following:
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(A)written notification from each Rating Agency to
the effect that the modification, addition to or elimination
of such provisions will not cause such Rating Agency to
downgrade its then-current ratings of any Class of
Certificates; and
(B)an Opinion of Counsel, in form and substance
satisfactory to the Securities Administrator, to the effect
that such modification of, addition to or elimination of such
provisions will not cause any Trust REMIC to cease to qualify
as a REMIC and will not cause any Trust REMIC, as the case may
be, to be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person that is not a
Permitted Transferee or a Person other than the prospective
transferee to be subject to a REMIC-tax caused by the Transfer
of a Residual Certificate to a Person that is not a Permitted
Transferee.
(e)Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f)At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing.
(g)No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Securities Administrator
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
(h)All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Securities Administrator in accordance
with its customary procedures.
Section 6.03. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the
Securities Administrator, or the Securities Administrator receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected purchaser, the Securities
Administrator, shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a
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new Certificate of the same Class and of like denomination and Percentage
Interest. Upon the issuance of any new Certificate under this Section, the
Securities Administrator may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Securities
Administrator) connected therewith. Any replacement Certificate issued pursuant
to this Section shall constitute complete and indefeasible evidence of ownership
in the applicable REMIC created hereunder, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
Section 6.04. PERSONS DEEMED OWNERS.
The Depositor, the Servicers, the Trustee, the Master
Servicer, the Securities Administrator and any agent of any of them may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Depositor, the Servicers,
the Trustee, the Master Servicer, the Securities Administrator or any agent of
any of them shall be affected by notice to the contrary.
Section 6.05. CERTAIN AVAILABLE INFORMATION.
On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Securities Administrator ten copies of
any private placement memorandum or other disclosure document used by the
Depositor in connection with the offer and sale of such Certificate. In
addition, if any such private placement memorandum or disclosure document is
revised, amended or supplemented at any time following the delivery thereof to
the Securities Administrator, the Depositor promptly shall inform the Securities
Administrator of such event and shall deliver to the Securities Administrator
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Securities Administrator shall maintain at
its office as set forth in Section 12.05 hereof and shall make available free of
charge during normal business hours for review by any Holder of a Certificate or
any Person identified to the Securities Administrator as a prospective
transferee of a Certificate, originals or copies of the following items: (i) in
the case of a Holder or prospective transferee of a Class CE Certificate, Class
P Certificate or Residual Certificate, the related private placement memorandum
or other disclosure document relating to such Class of Certificates, in the form
most recently provided to the Securities Administrator; and (ii) in all cases,
(A) this Agreement and any amendments hereof entered into pursuant to Section
11.01, (B) all monthly statements required to be delivered to Certificateholders
of the relevant Class pursuant to Section 5.02 since the Closing Date, and all
other notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date and (C) any copies of all Officers' Certificates of any Servicer
since the Closing Date delivered to the Master Servicer to evidence such
Person's determination that any P&I Advance or Servicing Advance was, or if
made, would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance.
Copies and mailing of any and all of the foregoing items will be available from
the Securities Administrator upon request at the expense of the Person
requesting the same.
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ARTICLE VII
THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER
Section 7.01. LIABILITY OF THE DEPOSITOR, THE SERVICERS AND
THE MASTER SERVICER.
The Depositor, each Servicer and the Master Servicer each
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement upon them in their respective capacities
as Depositor, Servicer and Master Servicer and undertaken hereunder by the
Depositor, the related Servicer and the Master Servicer herein.
Section 7.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR, ANY
SERVICER OR THE MASTER SERVICER.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
Ocwen will keep in full effect its existence, rights and franchises as a
federally chartered savings bank and each of Option One and SPS will keep in
full effect its existence, rights, and franchises as a corporation. Subject to
the following paragraph, the Master Servicer will keep in full effect its
existence, rights and franchises as a national banking association. The
Depositor, each Servicer and the Master Servicer each will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor, the Servicers or the Master Servicer may be
merged or consolidated with or into any Person, or transfer all or substantially
all of its assets to any Person, in which case any Person resulting from any
merger or consolidation to which the Depositor, a Servicer or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, such Servicer or the Master Servicer, shall be the successor of the
Depositor, such Servicer or the Master Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that any successor of a Servicer or the Master Servicer shall
meet the eligibility requirements set forth in clauses (i) and (iii) of the last
paragraph of Section 8.02(a) or Section 7.06, as applicable.
Section 7.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE
SERVICERS, THE MASTER SERVICER AND OTHERS.
None of the Depositor, the Servicers, the Securities
Administrator, the Master Servicer or any of the directors, officers, employees
or agents of the Depositor, the Servicers or the Master Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the
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Depositor, any Servicer, the Securities Administrator, the Master Servicer or
any such person against any breach of warranties, representations or covenants
made herein or against any specific liability imposed on any such Person
pursuant hereto or against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder. The Depositor, each Servicer, the Securities Administrator, the
Master Servicer and any director, officer, employee or agent of the Depositor,
the related Servicer, the Securities Administrator and the Master Servicer may
rely in good faith on any document of any kind which, PRIMA FACIE, is properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, each Servicer, the Securities Administrator, the Master Servicer
and any director, officer, employee or agent of the Depositor, the related
Servicer, the Securities Administrator or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement,
the Certificates or any Credit Risk Management Agreement or any loss, liability
or expense incurred other than by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the
Servicers, the Securities Administrator or the Master Servicer shall be under
any obligation to appear in, prosecute or defend any legal action unless such
action is related to its respective duties under this Agreement and, in its
opinion, does not involve it in any expense or liability; provided, however,
that each of the Depositor, each Servicer, the Securities Administrator and the
Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom (except any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the related Servicer, the Securities Administrator and the Master
Servicer shall be entitled to be reimbursed therefor from the related Collection
Account or the Distribution Account as and to the extent provided in Article III
and Article IV, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Accounts and the
Distribution Account.
Notwithstanding anything to the contrary contained herein, the
Servicers shall not be liable for any actions or inactions prior to the Cut-off
Date of any prior servicer of the Mortgage Loans and the Master Servicer shall
not be liable for any action or inaction of the Servicers, except to the extent
expressly provided herein, or the Credit Risk Manager.
Section 7.04. LIMITATION ON RESIGNATION OF THE SERVICERS.
(a) Except as expressly provided herein, no Servicer shall
assign all or substantially all of its rights under this Agreement or the
servicing hereunder or delegate all or substantially all of its duties hereunder
nor sell or otherwise dispose of all or substantially all of its property or
assets without, in each case, the prior written consent of the Master Servicer,
which consent shall not be unreasonably withheld; provided, that in each case,
there must be delivered to the Trustee and the Master Servicer a letter from
each Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification,
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withdrawal or downgrade of the then-current rating of any of the Certificates.
Notwithstanding the foregoing, each Servicer, without the consent of the Trustee
or the Master Servicer, may retain third-party contractors to perform certain
servicing and loan administration functions, including without limitation hazard
insurance administration, tax payment and administration, flood certification
and administration, collection services and similar functions, PROVIDED,
HOWEVER, that the retention of such contractors by the related Servicer shall
not limit the obligation of such Servicer to service the related Mortgage Loans
pursuant to the terms and conditions of this Agreement. No Servicer shall resign
from the obligations and duties hereby imposed on it except by consent of the
Master Servicer or upon determination that its duties hereunder are no longer
permissible under applicable law or as provided in Section 7.04(c). Any such
determination pursuant to the preceding sentence permitting the resignation
(other than pursuant to Section 7.04(c)) of a Servicer shall be evidenced by an
Opinion of Counsel to such effect obtained at the expense of the related
Servicer and delivered to the Trustee and the Rating Agencies. No resignation of
a Servicer shall become effective until the Master Servicer or a successor
Servicer shall have assumed the related Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.
(b) Except as expressly provided herein, no Servicer shall
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the related Servicer hereunder. The foregoing prohibition on
assignment shall not prohibit the related Servicer from designating a
Sub-Servicer as payee of any indemnification amount payable to the related
Servicer hereunder; provided, however, that as provided in Section 3.02, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Sub-Servicer as an indemnitee under this
Agreement.
(c) Notwithstanding anything to the contrary herein, each
Servicer may pledge or assign as collateral all its rights, title and interest
under this Agreement to a lender (the "Lender"), provided, that:
(1) upon an Event of Default and receipt of a notice
of termination by the related Servicer, the Lender may direct
the related Servicer or its designee to appoint a successor
Servicer pursuant to the provisions, and subject to the
conditions, set forth in Section 8.02 regarding the related
Servicer's appointment of a successor Servicer;
(2) the Lender's rights are subject to this
Agreement; and
(3) the related Servicer shall remain subject to
termination as a servicer under this Agreement pursuant to the
terms hereof.
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Section 7.05. LIMITATION ON RESIGNATION OF THE MASTER
SERVICER.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination pursuant
to the preceding sentence permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect obtained at the
expense of the Master Servicer and delivered to the Trustee and the Rating
Agencies. No resignation of the Master Servicer shall become effective until the
Trustee or a successor Master Servicer meeting the criteria specified in Section
7.06 shall have assumed the Master Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.
Section 7.06. ASSIGNMENT OF MASTER SERVICING.
The Master Servicer may sell and assign its rights and
delegate its duties and obligations in its entirety as Master Servicer under
this Agreement; provided, however, that: (i) the purchaser or transferee accept
in writing such assignment and delegation and assume the obligations of the
Master Servicer hereunder (a) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (b) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (c) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an officer's certificate and
an Opinion of Independent counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising out of
acts or omissions prior to the effective date thereof.
Section 7.07. RIGHTS OF THE DEPOSITOR IN RESPECT OF THE
SERVICERS AND THE MASTER SERVICER.
The Master Servicer and each Servicer shall afford (and any
Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford) the
Depositor and the Trustee, upon reasonable notice, during normal business hours,
access to all records maintained by the Master Servicer or the related Servicer
(and any such Sub-Servicer) in respect of the related Servicer's rights and
obligations hereunder and access to officers of the Master Servicer or the
related Servicer (and those of any such Sub-Servicer) responsible for such
obligations, and the Master Servicer shall have access to all such records
maintained by the related Servicer and any Sub-Servicers. Upon request, each of
the Master Servicer and the related Servicer shall furnish to the
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Depositor and the Trustee its (and any such Sub-Servicer's) most recent
financial statements and such other information relating to the Master
Servicer's or the related Servicer's capacity to perform its obligations under
this Agreement as it possesses (and that any such Sub-Servicer possesses). To
the extent such information is not otherwise available to the public, the
Depositor and the Trustee shall not disseminate any information obtained
pursuant to the preceding two sentences without the Master Servicer's or related
Servicer's written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) to its legal counsel, auditors,
taxing authorities or other governmental agencies and the Certificateholders,
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor and the Trustee or the Trust Fund, and in any case, the Depositor or
the Trustee, (iii) disclosure of any and all information that is or becomes
publicly known, or information obtained by the Trustee from sources other than
the Depositor, the related Servicer or the Master Servicer, (iv) disclosure as
required pursuant to this Agreement or (v) disclosure of any and all information
(A) in any preliminary or final offering circular, registration statement or
contract or other document pertaining to the transactions contemplated by the
Agreement approved in advance by the Depositor, the related Servicer or the
Master Servicer or (B) to any affiliate, independent or internal auditor, agent,
employee or attorney of the Trustee having a need to know the same, provided
that the Trustee advises such recipient of the confidential nature of the
information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing in this
Section 7.07 shall limit the obligation of the related Servicer to comply with
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the related Servicer to provide access as provided
in this Section 7.07 as a result of such obligation shall not constitute a
breach of this Section. Nothing in this Section 7.07 shall require a Servicer to
collect, create, collate or otherwise generate any information that it does not
generate in its usual course of business. The Servicers shall not be required to
make copies of or ship documents to any party unless provisions have been made
for the reimbursement of the costs thereof. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer and each Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer or the
related Servicer under this Agreement or exercise the rights of the Master
Servicer or the related Servicer under this Agreement; provided that neither the
Master Servicer nor the related Servicer shall be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer or any Servicer and is
not obligated to supervise the performance of the Master Servicer or the
Servicers under this Agreement or otherwise.
Section 7.08. DUTIES OF THE CREDIT RISK MANAGER.
For and on behalf of the Depositor, the Credit Risk Manager
will provide reports and recommendations concerning certain delinquent and
defaulted Mortgage Loans, and as to the collection of any Prepayment Charges
with respect to the Mortgage Loans. Such reports and recommendations will be
based upon information provided to the Credit Risk Manager pursuant to the
Credit Risk Management Agreements, and the Credit Risk Manager shall look solely
to the related Servicer and/or Master Servicer for all information and data
(including loss and delinquency information and data) relating to the servicing
of the related Mortgage Loans.
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Section 7.09. LIMITATION UPON LIABILITY OF THE CREDIT RISK
MANAGER.
Neither the Credit Risk Manager, nor any of its directors,
officers, employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by a Servicer and/or Master Servicer under
the related Credit Risk Management Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Credit Risk Manager
or any such person against liability that would otherwise be imposed by reason
of willful malfeasance or bad faith in its performance of its duties. The Credit
Risk Manager and any director, officer, employee, or agent of the Credit Risk
Manager 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 or
under the related Credit Risk Management Agreement, and may rely in good faith
upon the accuracy of information furnished by a Servicer and/or Master Servicer
pursuant to the related Credit Risk Management Agreement in the performance of
its duties thereunder and hereunder. The Credit Risk Manager shall be held
harmless and indemnified by the Trust Fund for any claims, costs or liability
(each a "Claim") arising out of or related in any way to the performance of its
duties hereunder absent bad faith, willful misfeasance or gross negligence on
the part of the Credit Risk Manager with respect to the applicable Claim and the
legal expenses for any applicable Claim shall be expenses, costs and liabilities
of the Trust Fund.
Section 7.10. REMOVAL OF THE CREDIT RISK MANAGER.
So long as Deutsche Bank Securities Inc. is the Holder of the
Class CE Certificate it may, at its option, terminate the Credit Risk Manager if
the Credit Risk Manager breaches its obligations under the Credit Risk
Management Agreements in any material respect and has not cured such breach as
promptly as practicable but in no event later than 30 days after receiving
written notice of such breach. In the event that a party other than Deutsche
Bank Securities Inc. is the Holder of the Class CE Certificate, the Holder of
the Class CE Certificate shall not have such termination right. In addition, the
Credit Risk Manager may be removed as Credit Risk Manager under both Credit Risk
Management Agreements by Certificateholders holding not less than 66 2/3% of the
Voting Rights in the Trust Fund, in the exercise of its or their sole
discretion. Upon the termination of the Credit Risk Manager by the
Certificateholders or Deutsche Bank Securities Inc. as provided above, the
Certificateholders or Deutsche Bank Securities Inc., as applicable, shall
provide written notice of the Credit Risk Manager's removal to the Trustee and
the Servicers. Upon receipt of such notice, the Trustee shall provide written
notice to the Credit Risk Manager of its removal, which shall be effective upon
receipt of such notice by the Credit Risk Manager with a copy to the Securities
Administrator and the Master Servicer.
Upon the termination of the Credit Risk Manager by the Holder
of the Class CE Certificate as provided above, the Holder of the Class CE
Certificate may, at its option, appoint a successor Credit Risk Manager. If the
Holder of the Class CE Certificate fails to appoint a successor Credit Risk
Manager, the Depositor may appoint a successor Credit Risk Manager. Upon the
termination of the Credit Risk Manager by the Certificateholders as provided
above, the Depositor shall appoint a successor Credit Risk Manager.
Notwithstanding the foregoing, the termination of the Credit Risk Manager
pursuant to this Section shall not become effective until the appointment of a
successor Credit Risk Manager.
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ARTICLE VIII
DEFAULT
Section 8.01. SERVICER EVENTS OF DEFAULT.
(a) "Servicer Event of Default," wherever used herein, means
any one of the following events:
(i) any failure by the related Servicer to remit to the
Securities Administrator for distribution to the Certificateholders any
payment (other than a P&I Advance required to be made from its own
funds on any Servicer Remittance Date pursuant to Section 5.03)
required to be made under the terms of the Certificates and this
Agreement which continues unremedied for a period of one Business Day
after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the related Servicer by
the Depositor or the Trustee (in which case notice shall be provided by
telecopy), or to the related Servicer, the Depositor, the Trustee and
by the Holders of Certificates entitled to at least 25% of the Voting
Rights; or
(ii) any failure on the part of the related Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the related Servicer contained in this
Agreement, or the material breach by the related Servicer of any
representation and warranty contained in Section 2.05, which continues
unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the related Servicer by the Depositor or the Trustee or
to the related Servicer, the Depositor and the Trustee by the Holders
of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that in the case of a failure that cannot be cured
within thirty (30) days, the cure period may be extended for an
additional thirty (30) days if the related Servicer can demonstrate to
the reasonable satisfaction of the Trustee that the related Servicer is
diligently pursuing remedial action; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the related
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 90 days; or
(iv) the related Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to it or of or relating to all or substantially all of
its property; or
(v) the related 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
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insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations;
(vi) failure by the related Servicer to duly perform, within
the required time period, its obligations under Section 3.17, 3.18 or
3.19 which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the related Servicer by
any party to this Agreement; or
(vii) any failure of the related Servicer to make any P&I
Advance on any Servicer Remittance Date required to be made from its
own funds pursuant to Section 5.03 which continues unremedied until
3:00 p.m. New York time on the Business Day immediately following the
Servicer Remittance Date; or
(viii) failure of the related Servicer to maintain at least an
"average" rating from the Rating Agencies.
If a Servicer Event of Default described in clauses (i) through (vi) of this
Section shall occur, then, and in each and every such case, so long as such
Servicer Event of Default shall not have been remedied, the Depositor or the
Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the related Servicer (and to the Depositor if given by the Trustee or
to the Trustee if given by the Depositor) with a copy to the Master Servicer and
each Rating Agency, terminate all of the rights and obligations of the related
Servicer in its capacity as a Servicer under this Agreement, to the extent
permitted by law, and in and to the related Mortgage Loans and the proceeds
thereof. If a Servicer Event of Default described in clause (vii) hereof shall
occur, the Trustee shall, by notice in writing to the related Servicer, the
Depositor and the Master Servicer, terminate all of the rights and obligations
of the related Servicer in its capacity as a Servicer under this Agreement and
in and to the related Mortgage Loans and the proceeds thereof. Subject to
Section 8.02, on or after the receipt by the related Servicer of such written
notice, all authority and power of the related Servicer under this Agreement,
whether with respect to the Certificates (other than as a Holder of any
Certificate) or the related Mortgage Loans or otherwise, shall pass to and be
vested in the Master Servicer pursuant to and under this Section, and, without
limitation, the Master Servicer is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the related Servicer, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the related Mortgage Loans and related documents,
or otherwise. The related Servicer agrees promptly (and in any event no later
than ten Business Days subsequent to such notice) to provide the Master Servicer
with all documents and records requested by it to enable it to assume the
related Servicer's functions under this Agreement, and to cooperate with the
Master Servicer in effecting the termination of the related Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Master Servicer for administration
by it of all cash amounts which at the time shall be or should have been
credited by the related Servicer to the related Collection Account held by or on
behalf of the related Servicer or thereafter be received with respect to the
related Mortgage Loans or any REO Property (provided, however, that the related
Servicer shall
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continue to be entitled to receive all amounts accrued or owing to it under this
Agreement on or prior to the date of such termination, whether in respect of P&I
Advances, Servicing Advances, accrued and unpaid Servicing Fees or otherwise,
and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(a), the Trustee shall not
be deemed to have knowledge of a Servicer Event of Default unless a Responsible
Officer of the Trustee assigned to and working in the Trustee's Corporate Trust
Office has actual knowledge thereof or unless written notice of any event which
is in fact such a Servicer Event of Default is received by the Trustee at its
Corporate Trust Office and such notice references the Certificates, the Trust or
this Agreement. The Trustee shall promptly notify the Master Servicer and the
Rating Agencies of the occurrence of a Servicer Event of Default of which it has
knowledge as provided above.
The Master Servicer shall be entitled to be reimbursed by the
related Servicer (or from amounts on deposit in the Distribution Account if the
related Servicer is unable to fulfill its obligations hereunder) for all
reasonable out-of-pocket or third party costs associated with the transfer of
servicing from the predecessor Servicer (or if the predecessor Servicer is the
Master Servicer, from the Servicer immediately preceding the Master Servicer),
including without limitation, any reasonable out-of-pocket or third party costs
or expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer to service the Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.
(b) "Master Servicer Event of Default," wherever used herein,
means any one of the following events:
(i) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in this
Agreement, or the breach by the Master Servicer of any representation
and warranty contained in Section 2.04, which continues unremedied for
a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Master Servicer by the Depositor or the Trustee or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least 25% of the Voting Rights; or
(ii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 90 days; or
(iii) the Master Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling
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of assets and liabilities or similar proceedings of or relating to it
or of or relating to all or substantially all of its property; or
(iv) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations.
If a Master Servicer Event of Default shall occur, then, and in each and every
such case, so long as such Master Servicer Event of Default shall not have been
remedied, the Depositor or the Trustee may, and at the written direction of the
Holders of Certificates entitled to at least 51% of Voting Rights, the Trustee
shall, by notice in writing to the Master Servicer (and to the Depositor if
given by the Trustee or to the Trustee if given by the Depositor) with a copy to
each Rating Agency, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement, to the extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Certificates (other than as a Holder of any Certificate) or the
Mortgage Loans or otherwise including, without limitation, the compensation
payable to the Master Servicer under this Agreement, shall pass to and be vested
in the Trustee pursuant to and under this Section, and, without limitation, the
Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to
execute and deliver, on behalf of and at the expense of the Master Servicer, any
and all documents and other instruments and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees promptly (and in any event no later than ten Business Days subsequent to
such notice) to provide the Trustee with all documents and records requested by
it to enable it to assume the Master Servicer's functions under this Agreement,
and to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights under this Agreement (provided, however,
that the Master Servicer shall continue to be entitled to receive all amounts
accrued or owing to it under this Agreement on or prior to the date of such
termination and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(b), the Trustee shall not
be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default of which it has knowledge as
provided above.
To the extent that the costs and expenses of the Trustee
related to the termination of the Master Servicer, appointment of a successor
Master Servicer or the transfer and assumption of the master servicing by the
Trustee (including, without limitation, (i) all legal costs and expenses and all
due diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Event of
Default and (ii) all costs and expenses associated with the complete transfer of
the master servicing,
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including all servicing files and all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
successor Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
Section 8.02. MASTER SERVICER TO ACT; APPOINTMENT OF
SUCCESSOR.
(a)On and after the time a Servicer receives a notice of
termination, the Master Servicer shall be the successor in all respects to such
Servicer in its capacity as a Servicer under this Agreement and the transactions
set forth or provided for herein, and all the responsibilities, duties and
liabilities relating thereto and arising thereafter shall be assumed by the
Master Servicer (except for any representations or warranties of the related
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03 and the obligation to deposit amounts in respect of
losses pursuant to Section 3.10(b)) by the terms and provisions hereof
including, without limitation, the related Servicer's obligations to make P&I
Advances pursuant to Section 5.03; provided, however, that if the Master
Servicer is prohibited by law or regulation from obligating itself to make
advances regarding delinquent mortgage loans, then the Master Servicer shall not
be obligated to make P&I Advances pursuant to Section 5.03; and provided
further, that any failure to perform such duties or responsibilities caused by
the related Servicer's failure to provide information required by Section 8.01
shall not be considered a default by the Master Servicer as successor to the
related Servicer hereunder; provided, however, that (1) it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 120 days) before the actual servicing functions can be fully
transferred to the Master Servicer or any successor Servicer appointed in
accordance with the following provisions and (2) any failure to perform such
duties or responsibilities caused by the related Servicer's failure to provide
information required by Section 8.01 shall not be considered a default by the
Master Servicer as successor to the related Servicer hereunder. As compensation
therefor, the Master Servicer shall be entitled to the Servicing Fee and all
funds relating to the Mortgage Loans to which the related Servicer would have
been entitled if it had continued to act hereunder. Notwithstanding the above
and subject to the immediately following paragraph, the Master Servicer may, if
it shall be unwilling to so act, or shall, if it is unable to so act promptly
appoint or petition a court of competent jurisdiction to appoint, a Person that
satisfies the eligibility criteria set forth below as the successor to the
related Servicer under this Agreement in the assumption of all or any part of
the responsibilities, duties or liabilities of the related Servicer under this
Agreement.
Notwithstanding any provision in this Agreement to the
contrary, for a period of 30 days following the date on which the related
Servicer shall have received a notice of termination pursuant to Section 8.01,
the related Servicer or its designee may appoint a successor Servicer that
satisfies the eligibility criteria of a successor Servicer set forth below,
which appointment shall be subject to the consent of the Depositor, the Seller,
the Master Servicer, and the Trustee, which consent shall not be unreasonably
withheld or delayed; provided that such successor Servicer agrees to fully
effect the servicing transfer within 120 days following the termination of the
related Servicer and to make all P&I Advances that would otherwise be made by
the Master Servicer under Section 8.01 as of the date of such
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appointment, and to reimburse the related Servicer and/or the Master Servicer
for any xxxxxxxxxxxx X&X Advances they have made and any reimbursable expenses
that they may have incurred in connection with this Section 8.02. Any proceeds
received in connection with the appointment of such successor Servicer shall be
the property of the related Servicer or its designee. This 30-day period shall
terminate immediately (i) at the close of business on the second Business Day of
such 30-day period if (A) the related Servicer was terminated because of an
Event of Default described in Section 8.01 (a)(vii) for failing to make a
required P&I Advance, and (B) the related Servicer shall have failed to make (or
cause to be made) such P&I Advance, or shall fail to reimburse (or cause to be
reimbursed) the Master Servicer for a P&I Advance made by the Master Servicer,
by the close of business on such second Business Day, or (ii) at the close of
business on the second Business Day following the date (if any) during such
30-day period on which a P&I Advance is due to be made, if the related Servicer
shall have failed to make (or caused to be made) such P&I Advance, or the
related Servicer shall have failed to reimburse (or cause to be reimbursed) the
Master Servicer for such P&I Advance, by the close of business on such second
Business Day.
Notwithstanding anything herein to the contrary, in no event
shall the Trustee or the Master Servicer be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement and the transactions set forth or provided for herein.
Any successor Servicer appointed under this Agreement must (i)
be an established mortgage loan servicing institution that is a Xxxxxx Xxx and
Xxxxxxx Mac approved seller/servicer, (ii) be approved by each Rating Agency by
a written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates, (iii) have a net worth
of not less than $15,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the related Servicer (other than liabilities of the related
Servicer hereunder incurred prior to termination of the related Servicer under
Section 8.01 herein) under this Agreement as if originally named as a party to
this Agreement.
(b)(1) All servicing transfer costs (including, without
limitation, servicing transfer costs of the type described in Section 8.02(a)
and incurred by the Trustee, the Master Servicer and any successor Servicer
under paragraph (b)(2) below) shall be paid by the terminated Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
or initial Servicer, as applicable, defaults in its obligation to pay such
costs, the successor Servicer, the Master Servicer and the Trustee shall be
entitled to reimbursement therefor from the assets of the Trust Fund.
(2) No appointment of a successor to the related Servicer
under this Agreement shall be effective until the assumption by the successor of
all of the related Servicer's responsibilities, duties and liabilities
hereunder. In connection with such appointment and assumption described herein,
the Trustee may make such arrangements for the compensation of such successor
out of payments on the related Mortgage Loans as it and such successor shall
agree; PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the related Servicer as such hereunder. The Depositor, the Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
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Pending appointment of a successor to the related Servicer under this Agreement,
the Master Servicer shall act in such capacity as hereinabove provided.
Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS.
(a)Upon any termination of a Servicer or the Master Servicer
pursuant to Section 8.01(a) or (b) or any appointment of a successor to a
Servicer or the Master Servicer pursuant to Section 8.02, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register.
(b)Not later than the later of 60 days after the occurrence of
any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Servicer Event of Default or a Master Servicer Event of
Default or five days after a Responsible Officer of the Trustee becomes aware of
the occurrence of such an event, the Trustee shall transmit by mail to all
Holders of Certificates notice of each such occurrence, unless such default or
Servicer Event of Default or Master Servicer Event of Default shall have been
cured or waived.
Section 8.04. WAIVER OF SERVICER EVENTS OF DEFAULT.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default, Servicer Event
of Default or Master Servicer Event of Default hereunder may waive such default,
Servicer Event of Default or Master Servicer Event of Default; PROVIDED,
HOWEVER, that a Servicer Event of Default under clause (i) or (vii) of Section
8.01(a) may be waived only by all of the Holders of the Regular Certificates.
Upon any such waiver of a default, Servicer Event of Default or Master Servicer
Event of Default, such default, Servicer Event of Default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default, Servicer Event of Default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.
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ARTICLE IX
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01. DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing or waiver of all Master Servicer Events of
Default which may have occurred, and the Securities Administrator each undertake
to perform such duties and only such duties as are specifically set forth in
this Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of a Master Servicer Event of Default, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
Each of the Trustee and the Securities Administrator, upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to it, which are specifically
required to be furnished pursuant to any provision of this Agreement, shall
examine them to determine whether they conform to the requirements of this
Agreement. If any such instrument is found not to conform to the requirements of
this Agreement in a material manner, the Trustee or the Securities
Administrator, as the case may be, shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to its satisfaction, the Securities Administrator will provide notice
to the Trustee thereof and the Trustee will provide notice to the
Certificateholders.
The Trustee shall promptly remit to the related Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.
No provision of this Agreement shall be construed to relieve
the Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; PROVIDED,
HOWEVER, that:
(i) Prior to the occurrence of a Master Servicer Event of
Default, and after the curing or waiver of all such Master Servicer
Events of Default which may have occurred with respect to the Trustee
and at all times with respect to the Securities Administrator, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, neither the Trustee nor the
Securities Administrator shall be liable except for the performance of
such duties and obligations as are
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specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee or
the Securities Administrator and, in the absence of bad faith on the
part of the Trustee or the Securities Administrator, respectively, the
Trustee or the Securities Administrator, respectively, may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished
to the Trustee or the Securities Administrator, respectively, that
conform to the requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee or an
officer or officers of the Securities Administrator, respectively,
unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the
pertinent facts; and
(iii) Neither the Trustee nor the Securities Administrator
shall 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 entitled to at least 25% of the Voting Rights
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee or the Securities Administrator or
exercising any trust or power conferred upon the Trustee or the
Securities Administrator under this Agreement.
Section 9.02. CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES
ADMINISTRATOR.
(a) Except as otherwise provided in Section 9.01:
(i)The Trustee and the Securities Administrator may request
and rely upon and shall be protected in acting or refraining from
acting upon any resolution, Officers' Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel of its selection and any advice of such counsel or 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 advice or Opinion
of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee or the Securities Administrator, as the case may be,
reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the
obligation,
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upon the occurrence of a Master Servicer Event of Default (which has
not been cured or waived), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs;
(iv) Neither the Trustee nor the Securities Administrator
shall be liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of
Default hereunder and after the curing or waiver of all Master Servicer
Events of Default which may have occurred with respect to the Trustee
and at all times with respect to the Securities Administrator, neither
the Trustee nor the Securities Administrator shall 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 entitled
to at least 25% of the Voting Rights; PROVIDED, HOWEVER, that if the
payment within a reasonable time to the Trustee or the Securities
Administrator of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee or the Securities Administrator, as applicable, not
reasonably assured to the Trustee or the Securities Administrator by
such Certificateholders, the Trustee or the Securities Administrator,
as applicable, may require reasonable indemnity satisfactory to it
against such expense, or liability from such Certificateholders as a
condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(vii) The Trustee shall not be liable for any loss resulting
from the investment of funds held in any Collection Account, for any
loss resulting from the investment of funds held in the Reserve Fund or
for any loss resulting from the redemption or sale of any such
investment as therein authorized;
(viii) The Trustee shall not be deemed to have notice of any
default, Master Servicer Event of Default or Servicer Event of Default
unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by a Responsible Officer of the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Certificates and this Agreement; and
(ix) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, each
agent, custodian and other Person employed to act hereunder.
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(b)All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(c)The Trustee is hereby directed by the Depositor to execute
the Cap Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap Contract,
including, without limitation, the representations and warranties contained
therein. Any funds payable by the Trustee under the Cap Contract at closing
shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contract, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contract.
(d)None of the Securities Administrator, the Master Servicer,
any Servicer, the Seller, the Depositor, the Custodian or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.
Section 9.03. TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE
FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other
than the signature of the Securities Administrator, the authentication of the
Securities Administrator on the Certificates, the acknowledgments of the Trustee
contained in Article II and the representations and warranties of the Trustee in
Section 9.12) shall be taken as the statements of the Depositor and neither the
Trustee nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from any Collection Account
by the related Servicer, other than with respect to the Securities Administrator
any funds held by it or on behalf of the Trustee in accordance with Section 3.23
and 3.24.
Section 9.04. TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN
CERTIFICATES.
Each of the Trustee and the Securities Administrator in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates and may transact business with other interested parties and their
Affiliates with the same rights it would have if it were not Trustee or the
Securities Administrator.
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Section 9.05. FEES AND EXPENSES OF TRUSTEE AND SECURITIES
ADMINISTRATOR.
The fees of the Trustee and the Securities Administrator
hereunder and of Xxxxx Fargo under the Custodial Agreement shall be paid in
accordance with a side letter agreement with the Master Servicer and at the sole
expense of the Master Servicer. In addition, the Trustee, the Securities
Administrator, the Custodian and any director, officer, employee or agent of the
Trustee, the Securities Administrator and the Custodian shall be indemnified by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator in connection with any claim or legal action or
any pending or threatened claim or legal action arising out of or in connection
with the acceptance or administration of its respective obligations and duties
under this Agreement, including the Cap Contract and any and all other
agreements related hereto, other than any loss, liability or expense (i) for
which the Trustee is indemnified by the Master Servicer or any Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 11.01(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment hereunder made by the Master Servicer to the Trustee shall be from
the Master Servicer's own funds, without reimbursement from REMIC I therefor.
Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND
SECURITIES ADMINISTRATOR.
The Trustee and the Securities Administrator shall at all
times be a corporation or an association (other than the Depositor, the Seller,
the Master Servicer or any Affiliate of the foregoing) organized and doing
business under the laws of any state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 (or a member of a bank holding company whose
capital and surplus is at least $50,000,000) and subject to supervision or
examination by federal or state authority. If such corporation or association
publishes reports of conditions at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining
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authority, then for the purposes of this Section the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of conditions so
published. In case at any time the Trustee or the Securities Administrator, as
applicable, shall cease to be eligible in accordance with the provisions of this
Section, the Trustee or the Securities Administrator, as applicable, shall
resign immediately in the manner and with the effect specified in Section 9.07.
Additionally, the Securities Administrator (i) may not be an
Originator, Master Servicer, Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator is in an institutional trust
department, (ii) must be authorized to exercise corporate trust powers under the
laws of its jurisdiction of organization, and (iii) must be rated at least
"A/F1" by Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P
(or such rating acceptable to Fitch pursuant to a rating confirmation). If no
successor securities administrator shall have been appointed and shall have
accepted appointment within 60 days after Xxxxx Fargo Bank, N.A., as Securities
Administrator, ceases to be the securities administrator pursuant to this
Section 9.06, then the Trustee shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator. Notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth herein as
the Trustee under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Trustee under this Agreement.
Section 9.07. RESIGNATION AND REMOVAL OF TRUSTEE AND
SECURITIES ADMINISTRATOR.
The Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Depositor, to the Master Servicer, to the Securities
Administrator (or the Trustee, if the Securities Administrator resigns) and to
the Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee or successor securities administrator
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee or Securities Administrator, as applicable, and to the
successor trustee or successor securities administrator, as applicable. A copy
of such instrument shall be delivered to the Certificateholders, the Trustee,
the Securities Administrator and the Master Servicer by the Depositor. If no
successor trustee or successor securities administrator shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee or Securities Administrator, as the
case may be, may, at the expense of the Trust Fund, petition any court of
competent jurisdiction for the appointment of a successor trustee, successor
securities administrator, Trustee or Securities Administrator, as applicable.
If at any time the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 9.06 and
shall fail to resign after written request therefor by the Depositor, or if at
any time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or the Securities Administrator or of its property shall be appointed, or any
public officer
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shall take charge or control of the Trustee or the Securities Administrator or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Trustee or the Securities
Administrator, as applicable and appoint a successor trustee or successor
securities administrator, as applicable, by written instrument, in duplicate,
which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee or the Securities Administrator
and appoint a successor trustee or successor securities administrator by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 9.08.
Notwithstanding anything to the contrary contained herein, the
Master Servicer and the Securities Administrator shall at all times be the same
Person.
Section 9.08. SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.
Any successor trustee or successor securities administrator
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator 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 or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents and
statements to the extent held by it hereunder, as well as all moneys, held by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator 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 or successor securities administrator
all such rights, powers, duties and obligations.
No successor trustee or successor securities administrator
shall accept appointment as provided in this Section unless at the time of such
acceptance such successor
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trustee or successor securities administrator shall be eligible under the
provisions of Section 9.06 and the appointment of such successor trustee or
successor securities administrator shall not result in a downgrading of any
Class of Certificates by any Rating Agency, as evidenced by a letter from each
Rating Agency.
Upon acceptance of appointment by a successor trustee or
successor securities administrator as provided in this Section, the Depositor
shall mail notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.
Section 9.09. MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.
Any corporation or association into which the Trustee or the
Securities Administrator may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities Administrator
shall be a party, or any corporation or association succeeding to the business
of the Trustee or the Securities Administrator shall be the successor of the
Trustee or the Securities Administrator hereunder, provided such corporation or
association shall be eligible under the provisions of Section 8.06, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 9.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the REMIC I or property securing the same may at the time be located,
the Trustee 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 REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 9.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or
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unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to REMIC I or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee, or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
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 or co-trustee.
Section 9.11. APPOINTMENT OF OFFICE OR AGENCY.
The Certificates may be surrendered for registration of
transfer or exchange at the Securities Administrator's office located at Sixth
and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator where
notices and demands to or upon the Securities Administrator in respect of the
Certificates and this Agreement may be served.
Section 9.12. REPRESENTATIONS AND WARRANTIES.
The Trustee hereby represents and warrants to the Master
Servicer, the Securities Administrator, the Servicers and the Depositor as
applicable, as of the Closing Date, that:
(i) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States.
(ii) The execution and delivery of this Agreement by it, and
the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association or bylaws or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
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(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) It is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order
or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority,
which violation, in its good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of it to perform
its obligations under this Agreement or its financial condition.
(vi) No litigation is pending or, to the best of its
knowledge, threatened against it, which would prohibit it from entering
into this Agreement or, in its good faith reasonable judgment, is
likely to materially and adversely affect either the ability of it to
perform its obligations under this Agreement or its financial
condition.
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ARTICLE X
TERMINATION
Xxxxxxx 00.00. XXXXXXXXXXX XXXX XXXXXXXXXX OR LIQUIDATION OF
ALL MORTGAGE LOANS.
(a)Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicers to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or the Classes of Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Terminator (as defined
below) of all Mortgage Loans and each REO Property remaining in REMIC I and (ii)
the final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or REO Property remaining in REMIC I; PROVIDED, HOWEVER,
that in no event shall the trust created hereby continue beyond the earlier of
(a) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof and (b) the Last Scheduled
Distribution Date.
(b)The Master Servicer or, if the Master Servicer fails to
exercise such optional termination right, Ocwen (either the Master Servicer or
Ocwen, the "Terminator") shall have the right to purchase all of the Mortgage
Loans and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
above only if the aggregate Scheduled Principal Balance of the Mortgage Loans
and each REO Property remaining in the Trust Fund at the time of such election
is equal to or less than 10% of the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the Cut-off Date with respect to the Master Servicer, and
5% of the aggregate Scheduled Principal Balance of the Mortgage Loans as of the
Cut-off Date with respect to Ocwen. By acceptance of the Residual Certificates,
the Holder of the Residual Certificates agrees, in connection with any
termination hereunder, to assign and transfer any portion of the Termination
Price in excess of par, and to the extent received in respect of such
termination, to pay any such amounts to the Holders of the Class CE
Certificates. Notwithstanding the foregoing, the optional termination right may
only be exercised by Ocwen if (i) it receives written notification from the
Master Servicer that it will not exercise such optional termination right, (ii)
it provides written notice to the Authorized Officers of the Seller that it
intends to exercise such optional termination right and (iii) it receives
written authorization from the Authorized Officers of the Seller to exercise
such optional termination right.
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(c)Notice of the liquidation of the Certificates shall be
given promptly by the Securities Administrator by letter to the
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Terminator,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and the final payment in respect
of the REMIC I Regular Interests, REMIC I Regular Interests or the Certificates
will be made upon presentation and surrender of the related Certificates at the
office of the Securities Administrator therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests, REMIC I Regular Interests or Certificates from and
after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Securities Administrator. In the event
such notice is given in connection with the purchase of all of the Mortgage
Loans and each REO Property remaining in REMIC I by the Terminator, the
Terminator shall deliver to the Securities Administrator for deposit in the
Distribution Account not later than the Business Day prior to the Distribution
Date on which the final distribution on the Certificates an amount in
immediately available funds equal to the above-described Termination Price. The
Securities Administrator shall remit to the Servicers, the Master Servicer, the
Trustee and the Custodian from such funds deposited in the Distribution Account
(i) any amounts which the related Servicer would be permitted to withdraw and
retain from the Collection Account related pursuant to Section 3.09 as if such
funds had been deposited therein (including all unpaid Servicing Fees and all
outstanding P&I Advances and Servicing Advances) and (ii) any other amounts
otherwise payable by the Securities Administrator to the Master Servicer, the
Trustee, the Custodian and the Servicers from amounts on deposit in the
Distribution Account pursuant to the terms of this Agreement prior to making any
final distributions pursuant to Section 10.01(d) below. Upon certification to
the Trustee by the Securities Administrator of the making of such final deposit,
the Trustee shall promptly release or cause to be released to the Terminator the
Mortgage Files for the remaining Mortgage Loans, and Trustee shall execute all
assignments, endorsements and other instruments delivered to it and necessary to
effectuate such transfer.
(d)Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Securities Administrator
shall distribute to each Certificateholder so presenting and surrendering its
Certificates the amount otherwise distributable on such Distribution Date in
accordance with Section 5.01 in respect of the Certificates so presented and
surrendered. Any funds not distributed to any Holder or Holders of Certificates
being retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 10.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Securities Administrator shall mail
a second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered
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for cancellation, the Securities Administrator shall, directly or through an
agent, mail a final notice to the remaining non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the trust funds. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Securities Administrator shall pay to the Depositor all such
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Securities Administrator as
a result of such Certificateholder's failure to surrender its Certificate(s) on
the final Distribution Date for final payment thereof in accordance with this
Section 10.01. Any such amounts held in trust by the Securities Administrator
shall be held uninvested in an Eligible Account.
Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS.
(a)In the event that the Terminator purchases all the Mortgage
Loans and each REO Property or the final payment on or other liquidation of the
last Mortgage Loan or REO Property remaining in REMIC I pursuant to Section
10.01, the Trust Fund shall be terminated in accordance with the following
additional requirements:
(i)The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to each Trust REMIC's final
Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
satisfy all requirements of a qualified liquidation under Section 860F
of the Code and any regulations thereunder, as evidenced by an Opinion
of Counsel obtained by and at the expense of the Terminator;
(ii) During such 90-day liquidation period and, at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of REMIC I to the Terminator for
cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit,
or cause to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand in the Trust Fund (other than cash
retained to meet claims), and the Trust Fund shall terminate at that
time.
(b)At the expense of the requesting Terminator (or, if the
Trust Fund is being terminated as a result of the occurrence of the event
described in clause (ii) of the first paragraph of Section 10.01, at the expense
of the Trust Fund), the Terminator shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each Trust REMIC pursuant to this Section 10.02.
(c)By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.
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ARTICLE XI
REMIC PROVISIONS
Section 11.01. REMIC ADMINISTRATION.
(a)The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Securities Administrator on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. The Class A-1 Certificates and the Mezzanine
Certificates (exclusive of any right to receive payments from the Reserve Fund),
the Class P Certificates and the Class CE Certificates shall be designated as
the Regular Interests in REMIC II and the Class R-II Interest shall be
designated as the Residual Interests in REMIC II. The Trustee shall not permit
the creation of any "interests" in each Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests and the
interests represented by the Certificates.
(b)The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c)The Securities Administrator shall be reimbursed for any
and all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each Trust REMIC that involve the Internal Revenue Service or
state tax authorities), including the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Securities Administrator, as
agent for each Trust REMIC's tax matters person shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving any Trust
REMIC and (ii) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The holder of the largest Percentage Interest of
each Class of Residual Certificates shall be designated, in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.
(d)The Securities Administrator shall prepare and file and the
Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.
(e)The Securities Administrator shall perform on behalf of
each Trust REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the
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Internal Revenue Service or any state or local taxing authority. Among its other
duties, as required by the Code, the REMIC Provisions or other such compliance
guidance, the Securities Administrator shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee upon receipt of additional reasonable compensation, (ii)
to the Certificateholders such information or reports as are required by the
Code or the REMIC Provisions including reports relating to interest, original
issue discount and market discount or premium (using the Prepayment Assumption
as required) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
Trust REMIC. The Depositor shall provide or cause to be provided to the
Securities Administrator, within ten (10) days after the Closing Date, all
information or data that the Securities Administrator reasonably determines to
be relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f)To the extent in the control of the Trustee or the
Securities Administrator, each such Person (i) shall take such action and shall
cause each REMIC created hereunder to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions,
(ii) shall not take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (A) endanger the
status of each Trust REMIC as a REMIC or (B) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless such action or inaction is permitted
under this Agreement or the Trustee and the Securities Administrator have
received an Opinion of Counsel, addressed to the them (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee
or the Securities Administrator) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor (iii) shall the Securities Administrator take or
fail to take any action (whether or not authorized hereunder) as to which the
Trustee has advised it in writing that it has received an Opinion of Counsel to
the effect that an Adverse REMIC Event could occur with respect to such action;
provided that the Securities Administrator may conclusively rely on such Opinion
of Counsel and shall incur no liability for its action or failure to act in
accordance with such Opinion of Counsel. In addition, prior to taking any action
with respect to any Trust REMIC or the respective assets of each, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Securities Administrator will consult with the Trustee or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any Trust REMIC, and the Securities
Administrator shall not take any such action or cause any Trust REMIC to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be home by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee.
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(g)In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 11.03, if such
tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article XI, (ii) to the Securities Administrator pursuant
to Section 11.03, if such tax arises out of or results from a breach by the
Securities Administrator of any of its obligations under this Article XI, (iii)
to the Master Servicer pursuant to Section 11.03, if such tax arises out of or
results from a breach by the Master Servicer of any of its obligations under
Article IV or under this Article XI, (iv) to the Servicer pursuant to Section
11.03, if such tax arises out of or results from a breach by the Servicer of any
of its obligations under Article III or under this Article XI, or (v) in all
other cases, against amounts on deposit in the Distribution Account and shall be
paid by withdrawal therefrom.
(h)The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.
(i)Following the Startup Day, neither the Securities
Administrator nor the Trustee shall accept any contributions of assets to any
Trust REMIC other than in connection with any Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03 unless it shall have received an
Opinion of Counsel to the effect that the inclusion of such assets in the Trust
Fund will not cause the related REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(j)Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(k)The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.
Section 11.02. PROHIBITED TRANSACTIONS AND ACTIVITIES.
None of the Depositor, any Servicer, the Securities
Administrator, the Master Servicer or the Trustee shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of REMIC I, (iii) the termination of REMIC I pursuant to Article X of
this
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Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a
purchase of Mortgage Loans pursuant to Article II of this Agreement), nor
acquire any assets for any Trust REMIC (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Securities
Administrator (at the expense of the party seeking to cause such sale,
disposition, substitution, acquisition or contribution but in no event at the
expense of the Trustee) that such sale, disposition, substitution, acquisition
or contribution will not (a) affect adversely the status of any Trust REMIC as a
REMIC or (b) cause any Trust REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Section 11.03. INDEMNIFICATION.
(a)The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicers including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or a Servicer as a result of the
Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.
(b)Each Servicer agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer, the Securities Administrator, the other
SErvicers and the Trustee for any taxes and costs including any reasonable
attorneys' fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator, the other Servicers or the
Trustee, as a result of the related Servicer's failure to perform its covenants
set forth in Article III in accordance with the standard of care of the related
Servicer set forth in this Agreement.
(c)The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, each Servicer and the Trustee for any taxes and costs including any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicers or the Trustee, as a result of the Master Servicer's
failure to perform its covenants set forth in Article IV in accordance with the
standard of care of the Master Servicer set forth in this Agreement.
(d)The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor, the Servicers or the
Trustee including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, a Servicer or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. AMENDMENT.
This Agreement may be amended from time to time by the
Depositor, the Servicers, the Master Servicer, the Securities Administrator and
the Trustee, but without the consent of any of the Certificateholders, (i) to
cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder;
provided that any such amendment shall be deemed not to adversely affect in any
material respect the interests of the Certificateholders and no such Opinion of
Counsel shall be required if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates. No amendment shall be deemed to adversely affect in any material
respect the interests of any Certificateholder who shall have consented thereto,
and no Opinion of Counsel shall be required to address the effect of any such
amendment on any such consenting Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Master Servicer, the Securities Administrator and
the Trustee with the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner, other than as described in
(i), without the consent of the Holders of Certificates of such Class evidencing
at least 66% of the Voting Rights allocated to such Class, or (iii) modify the
consents required by the immediately preceding clauses (i) and (ii) without the
consent of the Holders of all Certificates then outstanding. Notwithstanding any
other provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 12.01, Certificates registered in the name of
the Depositor or a Servicer or any Affiliate thereof shall be entitled to Voting
Rights with respect to matters affecting such Certificates. Without limiting the
generality of the foregoing, any amendment to this Agreement required in
connection with the compliance with or the clarification of any reporting
obligations described in Section 5.06 hereof shall not require the consent of
any Certificateholder and without the need for any Opinion of Counsel or Rating
Agency confirmation.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment is
permitted hereunder and will not result in the
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imposition of any tax on any Trust REMIC pursuant to the REMIC Provisions or
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding and that such amendment is authorized or permitted
by this Agreement.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee .
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 12.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Depositor at the expense of the Certificateholders, but only
upon direction of the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number 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 12.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any
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liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in 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 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder. and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 12.04. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without regard to
conflicts of laws principles thereof.
Section 12.05. NOTICES.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when received if sent by facsimile, receipt
confirmed, if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service or delivered in any other manner
specified herein, to (a) in the case of the Depositor, ACE Securities Corp.,
AMACAR GROUP, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: Xxxxxxx Xxxxxxx (telecopy number:(000) 000-0000), or such
other address or telecopy number as may hereafter be furnished to the Servicers,
the Master Servicer, the Securities Administrator and the Trustee in writing by
the Depositor, (b) in the case of Ocwen, Ocwen Federal Bank FSB, 1675 Palm Beach
Xxxxx Xxxxxxxxx, Xxxxx 00X, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, Attention: Secretary
(telecopy number: (000) 000-0000), or such other address or telecopy number as
may hereafter be furnished to the Trustee, the Master Servicer, the Securities
Administrator and the Depositor in writing by Ocwen, (c) in the case of the
Master Servicer and the Securities Administrator, X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000 and for overnight delivery to 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Ace Securities Corp., 2005-SD1 (telecopy number:
(000) 000-0000), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Depositor and the Servicers in writing by the
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Master Servicer or the Securities Administrator, (d) in the case of Option One,
Option One Mortgage Corporation, 3 Xxx, Xxxxxx, Xxxxxxxxxx 00000 Attention: ACE
2005-SD1, Attention: Secretary (telecopy number: (000) 000-0000), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
Master Servicer, the Securities Administrator and the Depositor in writing by
Option One, (e) in the case of SPS, Select Portfolio Servicing, Inc., 0000 Xxxxx
Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000-0000, Attention: General Counsel
(telecopy number (000) 000-0000), or such other address or telecopy number as
may hereafter be furnished to the Trustee, the Master Servicer, the Securities
Administrator and the Depositor in writing by Option One and (f) in the case of
the Trustee, at the Corporate Trust Office or such other address or telecopy
number as the Trustee may hereafter be furnish to the Servicers, the Master
Servicer, the Securities Administrator and the Depositor in writing by the
Trustee. Any notice required or permitted to be given to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above.
Section 12.06. 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 12.07. NOTICE TO RATING AGENCIES.
The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which a
Responsible Officer has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicer Event of Default or Master
Servicer Event of Default that has not been cured or waived;
3. The resignation or termination of the Servicer, the Master
Servicer or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant
to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Distribution Account; and
7. Any event that would result in the inability of the Trustee
as successor Servicer to make advances regarding delinquent Mortgage
Loans.
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In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.
The Servicer shall make available to each Rating Agency copies
of the following:
1. Each annual statement as to compliance described in Section
3.17;
2. Each annual independent public accountants' servicing
report described in Section 3.18; and
3. Any change in the location of the Collection Account.
Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's, a division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and to Fitch Ratings, 0 Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.
Section 12.08. ARTICLE AND SECTION REFERENCES.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
Section 12.09. GRANT OF SECURITY INTEREST.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, on behalf of
the Trust and for the benefit of the Certificateholders, be, and be construed
as, a sale of the Mortgage Loans by the Depositor and not a pledge of the
Mortgage Loans to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and for
the benefit of the Certificateholders, to secure a debt or other obligation of
the Depositor and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 shall be deemed to be a grant by the Depositor to
the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Accounts and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
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acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
and for the benefit of the Certificateholders, a security interest in the
Mortgage Loans and all other property described in clause (2) of the preceding
sentence, for the purpose of securing to the Trustee the performance by the
Depositor of the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.01 to be a true, absolute and unconditional sale of the Mortgage
Loans and assets constituting the Trust Fund by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders.
Section 12.10. SURVIVAL OF INDEMNIFICATION.
Any and all indemnities to be provided by any party to this
Agreement shall survive the termination and resignation of any party hereto and
the termination of this Agreement.
160
IN WITNESS WHEREOF, the Depositor, the Servicer, the Master
Servicer, the Securities Administrator and the Trustee have caused their names
to be signed hereto by their respective officers thereunto duly authorized, in
each case as of the day and year first above written.
ACE SECURITIES CORP.,
as Depositor
By:__________________________________________
Name:
Title:
By:__________________________________________
Name:
Title:
OCWEN FEDERAL BANK FSB,
as a Servicer
By:__________________________________________
Name:
Title:
OPTION ONE MORTGAGE CORPORATION, as
a Servicer
By:__________________________________________
Name:
Title:
SELECT PORTFOLIO SERVICING, INC., as a
Servicer
By:__________________________________________
Name:
Title:
HSBC BANK USA, NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
By:__________________________________________
Name:
Title:
XXXXX FARGO BANK, N.A.
as Master Servicer and Securities Administrator
By:__________________________________________
Name:
Title:
Acknowledged and Agreed for purposes of Sections
7.08, 7.09 and 7.10:
RISK MANAGEMENT GROUP, LLC
By:__________________________________________
Name:
Title:
Acknowledged and Agreed for purposes of Section
9.05:
DB STRUCTURED PRODUCTS, INC
By:__________________________________________
Name:
Title:
By:__________________________________________
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of January 2005, before me, a notary public in
and for said State, personally appeared _____________________ known to me to be
a _____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the __ day of January 2005, before me, a notary public in
and for said State, personally appeared ___________________________ known to me
to be a ____________________ of ACE Securities Corp., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of January 2005, before me, a notary public in
and for said State, personally appeared _______________ known to me to be a
_______________ of ________________, the Ocwen Federal Bank FSB, a federally
chartered savings bank that executed the within instrument, and also known to me
to be the person who executed it on behalf of said federally chartered savings
bank, and acknowledged to me that such federally chartered savings bank executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of January 2005, before me, a notary public in
and for said State, personally appeared _______________ known to me to be a
_______________ of ________________, the Option One Mortgage Corporation, a
California corporation that executed the within instrument, and also known to me
to be the person who executed it on behalf of said federally chartered savings
bank, and acknowledged to me that such federally chartered savings bank executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of January 2005, before me, a notary public in
and for said State, personally appeared _______________ known to me to be a
_______________ of ________________, the Select Portfolio Servicing, Inc., a
Utah corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said federally chartered savings bank,
and acknowledged to me that such federally chartered savings bank executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of January 2005, before me, a notary public in
and for said State, personally appeared ____________________, known to me to be
a __________________ of Xxxxx Fargo Bank, N.A., a national banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of January 2005, before me, a notary public in
and for said State, personally appeared ____________________, known to me to be
a __________________ of HSBC Bank USA, National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________________
Notary Public
[Notarial Seal] My commission expires
EXHIBIT A-1
-----------
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Series 2005-SD1, Class A-1
Aggregate Certificate
Principal Balance of the
Class A-1 Certificates as
of the Issue Date: $
Pass-Through Rate: Variable Denomination: $
Date of Pooling and Servicing Agreement: Master Servicer: Xxxxx Fargo Bank, N.A.
January 1, 2005
First Distribution Date: January 25, 2005 Trustee: HSBC Bank USA, National Association
Cut-off Date: November 30, 2004 Issue Date: January 14, 2005
No.__ CUSIP:________________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
A-1-2
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-SD1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and junior lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A-1 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A. as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB as a servicer
("Ocwen"), Option One Mortgage Corporation as a servicer ("Option One"), Select
Portfolio Servicing, Inc. as a servicer ("SPS"; each of SPS, Ocwen and Option
One, a "Servicer" and together, the "Servicers") and HSBC Bank USA, National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class A-1 Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
A-1-3
immediately prior to such Distribution Date and is the registered owner of Class
A-1 Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class A-1 Certificates, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be a rate per annum equal to the lesser of (i) One-Month LIBOR plus 0.40%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is less than or equal
to 10% of the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date, or One-Month LIBOR plus 0.80%, in the case of any Distribution
Date thereafter and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contract, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this
A-1-4
Certificate for registration of transfer at the offices or agencies appointed by
the Securities Administrator as provided in the Agreement, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Securities Administrator duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, a Servicer or any agent of the Depositor, the Master
Servicer, the Trustee, the Securities Administrator or a Servicer may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-1-5
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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 A-2
-----------
FORM OF CLASS M-[1][2][3][4] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES [[,/AND]
CLASS M-1 CERTIFICATES [,/AND] CLASS M-2 CERTIFICATES[,/AND] CLASS M-3
CERTIFICATES] TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 6.02(c) OF THE AGREEMENT REFERRED
TO HEREIN.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE
SECURITIES ADMINISTRATOR NAMED HEREIN.
Series 2005-SD1, Class M-[1][2][3][4] Aggregate Certificate Principal Balance of the
Class M-[1][2][3][4] Certificates as of the Issue
Date: $______________
Pass-Through Rate: Variable Denomination: $______________
Date of Pooling and Servicing Agreement: January 1, Master Servicer: Xxxxx Fargo Bank, N.A.
2005
First Distribution Date: January 25, 2005 Trustee: HSBC Bank USA, National Association
Cut-off Date: November 30, 2004 Issue Date: January 14, 2005
No.___ CUSIP:_________________
A-2-2
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-SD1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and junior lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
M-[1][2][3][4] Certificates as of the Issue Date) in that certain beneficial
ownership interest evidenced by all the Class M-[1][2][3][4] Certificates in
REMIC II created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ACE Securities Corp. as depositor
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Xxxxx Fargo Bank, N.A. as master servicer (the "Master
Servicer") and securities administrator (the "Securities Administrator"), Ocwen
Federal Bank FSB as a servicer ("Ocwen"), Option One Mortgage Corporation as a
servicer ("Option One"), Select Portfolio Servicing, Inc. as a servicer ("SPS";
each of SPS, Ocwen and Option One, a "Servicer" and together, the "Servicers")
and HSBC Bank USA, National Association as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class M-[1][2][3][4] Certificates
on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified
A-2-3
the Securities Administrator in writing at least five Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-[1][2][3][4] Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-[1][2][3][4] Certificates, or otherwise by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Securities
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be a rate per annum equal to the lesser of (i) One-Month LIBOR plus [____]% , in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is less than or equal
to 10% of the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date, or One-Month LIBOR plus [____]%, in the case of any Distribution
Date thereafter and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contract, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-2-4
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, a Servicer or any agent of the Depositor, the Master
Servicer, the Trustee, the Securities Administrator or a Servicer may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
A-2-5
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-2-6
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-[1][2][3][4] Certificates referred
to in the within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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 A-3
-----------
FORM OF CLASS CE CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES AND THE
MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF "REGULATION D" UNDER THE ACT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE
AGREEMENT.
Series 2005-SD1, Class CE Aggregate Certificate Principal Balance of
the Class CE Certificates as of the Issue
Date: $_____________
Pass-Through Rate: Variable Denomination: $_________________
Date of Pooling and Servicing Agreement: January 1, 2005 Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: January 25, 2005 Trustee: HSBC Bank USA, National Association
Cut-off Date: November 30, 2004 Issue Date: January 14, 2005
No. __
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-SD1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and junior lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. as depositor (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A. as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank
A-3-2
FSB as a servicer ("Ocwen"), Option One Mortgage Corporation as a servicer
("Option One"), Select Portfolio Servicing, Inc. as a servicer ("SPS"; each of
SPS, Ocwen and Option One, a "Servicer" and together, the "Servicers") and HSBC
Bank USA, National Association as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class CE Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
CE Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class CE Certificates, or otherwise
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
A-3-3
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer and from such Holder's prospective transferee,
substantially in the form attached to the Agreement as Exhibit B-2 and (iii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder of
the Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities
A-3-4
Administrator against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, a Servicer or any agent of the Depositor, the Master
Servicer, the Trustee, the Securities Administrator or a Servicer may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-3-5
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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 A-4
-----------
CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF "REGULATION D" UNDER THE ACT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE
AGREEMENT.
Series 2005-SD1, Class P Aggregate Certificate Principal Balance of the Class
P Certificates as of the Issue Date: $100.00
Date of Pooling and Servicing Agreement: January 1, 2005 Denomination: $100.00
First Distribution Date: January 25, 2005 Master Servicer: Xxxxx Fargo Bank, N.A.
Cut-off Date: November 30, 2004 Trustee: HSBC Bank USA, National Association
No. __ Issue Date: January 14, 2005
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
A-4-2
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-SD1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and junior lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A. as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB as a servicer
("Ocwen"), Option One Mortgage Corporation as a servicer ("Option One"), Select
Portfolio Servicing, Inc. as a servicer ("SPS"; each of SPS, Ocwen and Option
One, a "Servicer" and together, the "Servicers") and HSBC Bank USA, National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class P Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified
A-4-3
the Securities Administrator in writing at least five Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class P Certificates the aggregate initial Certificate Principal
Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial Certificate Principal Balance of the Class P
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-4-4
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer and from such Holder's prospective transferee,
substantially in the form attached to the Agreement as Exhibit B-2 and (iii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder of
the Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, a Servicer or any agent of the Depositor, the Master
Servicer, the Trustee, the Securities Administrator or a Servicer may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee,
A-4-5
the Securities Administrator, the Servicers nor any such agent shall be affected
by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-4-6
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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 A-5
-----------
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS THE SOLE "RESIDUAL INTEREST" IN EACH "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(3) ANY ORGANIZATION DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
SECTION 6.02(d) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS
A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
Series 2005-SD1, Class R Aggregate Percentage Interest of the Class R
Certificates as of the Issue Date: 100.00%
Date of Pooling and Servicing Agreement Master Servicer: Xxxxx Fargo Bank, N.A.
and Cut-off Date: January 1, 2005
First Distribution Date: January 25, 2005 Trustee: HSBC Bank USA, National Association
Cut-off Date: November 30, 2004 Issue Date: January 14, 2005
No __
A-5-2
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-SD1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and junior lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
A-5-3
This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ACE Securities
Corp. as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Xxxxx Fargo Bank, N.A. as master servicer
(the "Master Servicer") and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB as a servicer ("Ocwen"), Option One
Mortgage Corporation as a servicer ("Option One"), Select Portfolio Servicing,
Inc. as a servicer ("SPS"; each of SPS, Ocwen and Option One, a "Servicer" and
together, the "Servicers") and HSBC Bank USA, National Association as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class R Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
A-5-4
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the
A-5-5
Depositor, the Trustee, the Master Servicer or the Securities Administrator in
their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Trustee or the Securities
Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02 of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Securities Administrator (i) an affidavit to the effect that such transferee is
any Person other than a Disqualified Organization or the agent (including a
broker, nominee or middleman) of a Disqualified Organization, and (ii) a
certificate that acknowledges that (A) the Class R Certificates have been
designated as representing the beneficial ownership of the residual interests in
each of REMIC I and REMIC II, (B) it will include in its income a pro rata share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 6.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
A-5-6
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, a Servicer or any agent of the Depositor, the Master
Servicer, the Trustee, the Securities Administrator or a Servicer may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-5-7
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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-1
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-SD1
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2005-SD1
Asset Backed Pass-Through Certificates
Class CE, Class P and Class R Certificates
------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ______________________ (the
"Transferor") to ___________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
January 1, 2005, among ACE Securities Corp. as Depositor, Ocwen Federal Bank FSB
as a servicer, Option One Mortgage Corporation as a servicer, Select Portfolio
Servicing, Inc. as a servicer, Xxxxx Fargo Bank, N.A. as Master Servicer and
Securities Administrator and HSBC Bank USA, National Association as trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.
B-1-1
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:____________________
Name:
Title:
B-1-2
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-SD1
Re: ACE Securities Corp. Home Equity Loan Trust, Series
2005-SD1 Asset Backed Pass-Through Certificates Class
CE, Class P and Class R Certificates
------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ________________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional
buyer" as that term is defined in Rule 144A ("Rule 144A")
under the Securities Act of 1933 (the "1933 Act") and has
completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. The Transferee is aware
that the sale to it is being made in reliance on Rule 144A.
The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer,
and understands that such Certificate may be resold, pledged
or transferred only (i) to a person reasonably believed to be
a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer
to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
2. The Transferee has been furnished with all
information regarding (a) the Certificates and distributions
thereon, (b) the nature, performance and servicing of the
Mortgage Loans, (c) the Pooling and Servicing Agreement
referred to below, and (d) any credit enhancement mechanism
associated with the Certificates, that it has requested.
3. The Transferee: (a) is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (each, a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss.12510.3-101 or (b) has provided the Securities
Administrator with an opinion of counsel on which the Trustee, the Depositor,
the Master Servicer, the Securities Administrator and the Servicers may rely,
acceptable to and in form and substance satisfactory to the Trustee to the
effect that the purchase of Certificates is permissible under applicable law,
will not constitute
B-1-3
or result in any non-exempt prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Trust Fund, the Trustee, the Depositor, the
Master Servicer, the Securities Administrator or a Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Pooling and Servicing
Agreement.
In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicers that the Transferee will
not transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 3 above.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of January 1, 2005, among ACE Securities Corp. as Depositor,
Xxxxx Fargo Bank, N.A. as Master Servicer and Securities Administrator, Ocwen
Federal Bank FSB as a Servicer, Option One Mortgage Corporation as a Servicer,
Select Portfolio Servicing, Inc. as a Servicer and HSBC Bank USA, National
Association as Trustee, pursuant to which the Certificates were issued.
[TRANSFEREE]
By:______________________
Name:
Title:
X-0-0
XXXXX 0 XX XXXXXXX X-0
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Xxxxx Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
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
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
_______________________
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
B-1-5
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE
(i) securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (iii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iv) bank deposit notes and
certificates of deposit, (v) loan participations, (vi) repurchase agreements,
(vii) securities owned but subject to a repurchase agreement and (viii)
currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with
Rule 144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only
B-1-6
purchase for the account of a third party that at the time is a "qualified
institutional buyer" within the meaning of Rule 144A. In addition, the
Transferee agrees that the Transferee will not purchase securities for a third
party unless the Transferee has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to
which this certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
________________________
Print Name of Transferee
By:________________________
Name:
Title:
X-0-0
XXXXX 0 XX XXXXXXX X-0
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Xxxxx Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
___ The Transferee owned $________________________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
___ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $_______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include
(i) securities of issuers that are affiliated with the Transferee or are part of
the Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
B-1-8
5. The Transferee is familiar with Rule 144A and
understands that the parties to which this certification is being made are
relying and will continue to rely on the statements made herein because one or
more sales to the Transferee will be in reliance on Rule 144A. In addition, the
Transferee will only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
___________________________________
Print Name of Transferee or Advisor
By:________________________________
Name:
Title:
IF AN ADVISER:
___________________________________
Print Name of Transferee
B-1-9
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer",
as defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933, as
amended.
3. As of the date specified below (which is not earlier
than the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser_______________________________________________________________
By: (Signature)_________________________________________________________________
Name of Signatory_______________________________________________________________
Title___________________________________________________________________________
Date of this certificate________________________________________________________
Date of information provided in paragraph 3_____________________________________
X-0-00
XXXXXXX X-0
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
____________, 20__
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-SD1
Re: ACE Securities Corp. Home Equity Loan Trust, Series
2005-SD1 Asset Backed Pass-Through Certificates,
Class CE, Class P and Class R Certificates
------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act'), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
Very truly yours,
_________________________
(Transferor)
By:______________________
Name:
Title:
B-2-1
FORM OF TRANSFEREE LETTER
_______________, 20__
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-SD1
Re: ACE Securities Corp. Home Equity Loan Trust, Series
2005-SD1 Asset Backed Pass-Through Certificates,
Class CE, Class P and Class R Certificates
------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:
1. The Transferee understands that (a) the Certificates
have not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Act") or any state securities
law, (b) the Depositor is not required to so register or qualify the
Certificates, (c) the Certificates may be resold only if registered and
qualified pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. The Transferee is acquiring the Certificates for its
own account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Transferee is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an investment
and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Act.
4. The Transferee has been furnished with, and has had
an opportunity to review (a) a copy of the Pooling and Servicing
Agreement and (b) such other information concerning the Certificates,
the Mortgage Loans and the Depositor as has been requested by the
Transferee from the Depositor or the Transferor and is relevant to the
Transferee's decision to purchase the Certificates. The Transferee has
had any questions arising from such review answered by the Depositor or
the Transferor to the satisfaction of the Transferee.
B-2-2
5. The Transferee has not and will not nor has it
authorized or will it authorize any person to (a) offer, pledge, sell,
dispose of or otherwise transfer any Certificate, any interest in any
Certificate or any other similar security to any person in any manner,
(b) solicit any offer to buy or to accept a pledge, disposition of
other transfer of any Certificate, any interest in any Certificate or
any other similar security from any person in any manner, (c) otherwise
approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any
manner, (d) make any general solicitation by means of general
advertising or in any other manner or (e) take any other action, that
(as to any of (a) through (e) above) would constitute a distribution of
any Certificate under the Act, that would render the disposition of any
Certificate a violation of Section 5 of the 1933 Act or any state
securities law, or that would require registration or qualification
pursuant thereto. The Transferee will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
6. The Transferee: (a) is not an employee benefit or
other plan subject to the prohibited transaction provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") (each, a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor
("DOL") regulation at 29 C.F.R. ss.12510.3-101 or (b) has provided the
Trustee with an opinion of counsel on which the Depositor, the Master
Servicer, the Securities Administrator, the Trustee and the Servicers
may rely, acceptable to and in form and substance satisfactory to the
Trustee to the effect that the purchase of Certificates is permissible
under applicable law, will not constitute or result in any non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Trust Fund, the Trustee, the Master Servicer, the
Securities Administrator, the Depositor or a Servicer to any obligation
or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the
Pooling and Servicing Agreement.
In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicers that the Transferee will
not transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 6 above.
Very truly yours,
By:______________________
Name:
Title:
X-0-0
XXXXXXX X-0
-----------
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
___________________________ being duly sworn, deposes, represents and
warrants as follows:
1. I am a _____________________ of
_______________________________ (the "Owner") a corporation
duly organized and existing under the laws of
_________________________, the record owner of ACE Securities
Corp. Home Equity Loan Trust, Series 2005-SD1 Asset Backed
Pass-Through Certificates, Class R Certificates (the "Class R
Certificates"), on behalf of whom I make this affidavit and
agreement. Capitalized terms used but not defined herein have
the respective meanings assigned thereto in the Pooling and
Servicing Agreement pursuant to which the Class R Certificates
were issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________. ____ and (ii) is acquiring the Class R
Certificates for its own account or for the account of another
Owner from which it has received an affidavit in substantially
the same form as this affidavit. A "Permitted Transferee" is
any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a
"disqualified organization" means the United States, any state
or political subdivision thereof, any agency or
instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to
tax and, except for the Federal Home Loan Mortgage
Corporation, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign
government, international organization or any agency or
instrumentality of such foreign government or organization,
any real electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified
organizations under the Internal Revenue Code of 1986 that
applies to all transfers of the Class R Certificates after
April 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person
includes a broker, nominee or middleman) for a non-Permitted
Transferee, on the agent; (iii) that the person otherwise
liable for the tax shall be relieved of liability for the tax
if the transferee furnishes to such person an affidavit that
the transferee is a Permitted Transferee and, at the time of
transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that each of the Class R
Certificates may be a "noneconomic residual interest" within
the meaning of proposed Treasury regulations promulgated under
the Code
B-3-1
and that the transferor of a "noneconomic residual interest"
will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or
collection of tax.
4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time
during the taxable year of the pass-through entity, a
non-Permitted Transferee is the record holder of an interest
in such entity. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. The Owner is aware that the Securities Administrator will not
register the transfer of any Class R Certificate unless the
transferee, or the transferee's agent, delivers to the
Securities Administrator, among other things, an affidavit in
substantially the same form as this affidavit. The Owner
expressly agrees that it will not consummate any such transfer
if it knows or believes that any of the representations
contained in such affidavit and agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of
counsel to constitute a reasonable arrangement to ensure that
the Class R Certificates will only be owned, directly or
indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is
________________.
8. The Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section
6.02(d) of the Pooling and Servicing Agreement under which the
Class R Certificates were issued (in particular, clauses
(iii)(A) and (iii)(B) of Section 6.02(d) which authorize the
Securities Administrator to deliver payments to a person other
than the Owner and negotiate a mandatory sale by the
Securities Administrator in the event that the Owner holds
such Certificate in violation of Section 6.02(d)); and that
the Owner expressly agrees to be bound by and to comply with
such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection
of any tax.
10. The Owner anticipates that it will, so long as it holds the
Class R Certificates, have sufficient assets to pay any taxes
owed by the holder of such Class R Certificates, and hereby
represents to and for the benefit of the person from whom it
acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class
R Certificates.
B-3-2
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as
it holds the Class R Certificates.
12. The Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as
any of the Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or
entity that will not have sufficient assets to pay any taxes
owed by the holder of such Class R Certificates, or that may
become insolvent or subject to a bankruptcy proceeding, for so
long as the Class R Certificates remain outstanding.
14. The Owner will, in connection with any transfer that it makes
of the Class R Certificates, obtain from its transferee the
representations required by Section 6.02(d) of the Pooling and
Servicing Agreement under which the Class R Certificate were
issued and will not consummate any such transfer if it knows,
or knows facts that should lead it to believe, that any such
representations are false.
15. The Owner will, in connection with any transfer that it makes
of the Class R Certificates, deliver to the Securities
Administrator an affidavit, which represents and warrants that
it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of
the Class R Certificates; (ii) may become insolvent or subject
to a bankruptcy proceeding for so long as the Class R
Certificates remains outstanding; and (iii) is not a
"Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized
in, or under the laws of, the United States or any political
subdivision thereof, or an estate or trust whose income from
sources without the United States may be included in gross
income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or
business within the United States.
17. The Owner of the Class R Certificate, hereby agrees that in
the event that the Trust Fund created by the Pooling and
Servicing Agreement is terminated pursuant to Section 10.01
thereof, the undersigned shall assign and transfer to the
Holders of the Class CE and the Class P Certificates any
amounts in excess of par received in connection with such
termination. Accordingly, in the event of such termination,
the Securities Administrator is hereby authorized to withhold
any such amounts in excess of par and to pay such amounts
directly to the Holders of the Class CE and the Class P
Certificates. This agreement shall bind and be enforceable
against any successor, transferee or assigned of the
undersigned in the Class R Certificate. In connection with any
transfer of the Class R Certificate, the Owner shall obtain an
agreement substantially similar to this clause from any
subsequent owner.
B-3-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
_________________, ____.
[OWNER]
By:_______________________
Name:
Title: [Vice] President
ATTEST:
By:___________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named
__________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, and acknowledged
to me that [he/she] executed the same as [his/her] free act and deed and the
free act and deed of the Owner.
Subscribed and sworn before me this ______________ day of
__________, ____.
___________________________
Notary Public
County of_________________
State of__________________
My Commission expires:
B-3-4
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
_________________________, being duly sworn, deposes,
represents and warrants as follows:
1. I am a ____________________ of _____________________
(the "Owner"), a corporation duly organized and existing under the laws of
_____________, on behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R
Certificates (the "Residual Certificates") to impede the assessment or
collection of any tax.
3. The Owner has no actual knowledge that the Person
that is the proposed transferee (the "Purchaser") of the Residual Certificates:
(i) has insufficient assets to pay any taxes owed by such proposed transferee as
holder of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has
delivered to the Trustee or a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit B-2. The Owner does
not know or believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Pooling and Servicing Agreement.
B-3-5
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
________________, ____.
[OWNER]
By:_____________________
Name:
Title: [Vice] President
ATTEST:
By:___________________________
Name:
Title. [Assistant] Secretary
Personally appeared before me the above-named
_________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, and acknowledged
to me that [he/she] executed the same as [his/her] free act and deed and the
free act and deed of the Owner.
Subscribed and sworn before me this ______ day of
_____________, ____.
___________________________
Notary Public
County of_________________
State of__________________
My Commission expires:
B-3-6
EXHIBIT C
FORM OF SERVICER CERTIFICATION
Re: __________ (the "Trust")
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-SD1
I, [identify the certifying individual], certify to ACE Securities Corp. (the
"Depositor"), HSBC Bank USA, National Association (the "Trustee") and Xxxxx
Fargo Bank, National Association (the "Master Servicer"), and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. Based on my knowledge, the information in the Annual Statement
of Compliance, the Annual Independent Public Accountant's
Servicing Report and all servicing reports, officer's
certificates and other information relating to the servicing
of the Mortgage Loans submitted to the Master Servicer taken
as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact (constituting
information required to be provided by [Ocwen Federal Bank
FSB][Option One Mortgage Corporation][Select Portfolio
Servicing, Inc.] (the "Servicer") under the Agreement)
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading as of the date of this certification.
2. Based on my knowledge, the servicing information required to
be provided to Master Servicer by the Servicer under the
Agreement has been provided to the Master Servicer.
3. I am responsible for reviewing the activities performed by the
Servicer under the Agreement and based upon my knowledge and
the review required by the Agreement, and except as disclosed
in the Annual Statement of Compliance or the Annual
Independent Public Accountant's Servicing Report submitted to
the Master Servicer, the Servicer has fulfilled its
obligations under the Agreement; and
4. I have disclosed to the Master Servicer all significant
deficiencies relating to the servicer's compliance with the
minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth
in the pooling and servicing agreement.
Capitalized terms used and not otherwise defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement, dated as of January 1,
2005 (the "Agreement"), among ACE Securities Corp., Ocwen Federal Bank FSB,
Option One Mortgage Corporation, Select Portfolio Servicing, Inc., Xxxxx Fargo
Bank, N.A. and HSBC Bank USA, National Association
C-1
Date:________________________________________
_____________________________________________
[Signature]
_____________________________________________
[Title]
C-2
EXHIBIT D
FORM OF POWER OF ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
[Servicer] [Servicer's Address]
Attn: _________________________________
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that , having its principal place of business at
, as Trustee (the "Trustee") pursuant to that Pooling and Servicing Agreement
among ACE Securities Corp. (the "Depositor"), Ocwen Federal Bank FSB ("Ocwen"),
Option One Mortgage Corporation ("Option One"), Select Portfolio Servicing, Inc.
("SPS") and the Trustee, dated as of January 1, 2005 (the "Pooling and Servicing
Agreement"), hereby constitutes and appoints [Ocwen][Option One][SPS], by and
through [Ocwen][Option One][SPS]'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 [Ocwen][Option
One][SPS] pursuant to the Pooling and Servicing Agreement for the purpose of
performing all acts and executing all documents in the name of the Trustee as
may be customarily and reasonably 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 [Ocwen][Option One][SPS] is acting as servicer, all subject to the
terms of the Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recordings is 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 and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed of
Trust as insured.
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
D-1-1
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 a 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.
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 lawfully do or cause
to be done by authority hereof.
D-2-2
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, as Trustee pursuant to that Pooling and Servicing Agreement
among the Depositor, Ocwen, Option One, SPS and the Trustee, dated as of January
1, 2005 (ACE Securities Corp. Home Equity Loan Trust, Series 2005-SD1 Asset
Backed Pass-Through Certificates), has caused its corporate seal to be hereto
affixed and these presents to be signed and acknowledged in its name and behalf
by_________________________ its duly elected and authorized Vice President
this_____ day of_____ , 200__.
___________________________________
as Trustee for ACE Securities Corp.
Home Equity Loan Trust, Series
2005-SD1 Asset Backed Pass-Through
Certificates
By ________________________________
STATE OF__________
COUNTY OF_________
On , 200__, before me, the undersigned, a Notary Public in and for said state,
personally appeared , Vice President of as Trustee for ACE Securities Corp. Home
Equity Loan Trust, Series 2005-SD1 Asset Backed Pass-Through Certificates,
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.
WITESS my hand and official seal.
(SEAL)
_______________________________
Notary Public
My Commission Expires ___________________
D-3-3
SCHEDULE 1
MORTGAGE LOAN SCHEDULE
SCHEDULE 2
PREPAYMENT CHARGE SCHEDULE
SCHEDULE 3
WITH RESPECT TO OCWEN AND OPTION ONE:
-------------------------------------
STANDARD FILE LAYOUT- DELINQUENCY REPORTING
Exhibit 1: Standard File Layout - Delinquency Reporting
------------------------- -------------------------------------------------------------- ------- ----------------
Column/Header Name Description Decimal Format Comment
------------------------- -------------------------------------------------------------- ------- ----------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
------------------------- -------------------------------------------------------------- ------- ----------------
LOAN_NBR A unique identifier assigned to each loan by the originator.
------------------------- -------------------------------------------------------------- ------- ----------------
CLIENT_NBR Servicer Client Number
------------------------- -------------------------------------------------------------- ------- ----------------
SERV_INVESTOR_NBR Contains a unique number as assigned by an external servicer
to identify a group of loans in their system.
------------------------- -------------------------------------------------------------- ------- ----------------
BORROWER_FIRST_NAME First Name of the Borrower.
------------------------- -------------------------------------------------------------- ------- ----------------
BORROWER_LAST_NAME Last name of the borrower.
------------------------- -------------------------------------------------------------- ------- ----------------
XXXX_XXXXXXX Xxxxxx Name and Number of Property
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_STATE The state where the property located.
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_ZIP Zip code where the property is located.
------------------------- -------------------------------------------------------------- ------- ----------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the MM/DD/YYYY
servicer at the end of processing cycle, as
reported by Servicer.
------------------------- -------------------------------------------------------------- ------- ----------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_CASE_NBR The case number assigned by the
court to the bankruptcy filing.
------------------------- -------------------------------------------------------------- ------- ----------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved MM/DD/YYYY
by the courts
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_DCHRG The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
_DISM_DATE Dismissal, Discharged and/or a Motion For Relief Was
Granted.
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with
instructions to begin foreclosure proceedings. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_SALE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
_EXPECTED_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the MM/DD/YYYY
property from the borrower.
------------------------- -------------------------------------------------------------- ------- ----------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
------------------------- -------------------------------------------------------------- ------- ----------------
Column/Header Name Description Decimal Format Comment
------------------------- -------------------------------------------------------------- ------- ----------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the Servicer. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
OCCUPANT_CODE Classification of how the property is occupied.
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
CURR_PROP_VAL The current "as is" value of the property based on brokers 2
price opinion or appraisal.
------------------------- -------------------------------------------------------------- ------- ----------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or appraisal.
------------------------- -------------------------------------------------------------- ------- ----------------
If applicable:
------------------------- -------------------------------------------------------------- ------- ----------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
------------------------- -------------------------------------------------------------- ------- ----------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying
on a loan. Code indicates the reason why the loan is in
default for this cycle.
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool MM/DD/YYYY
Insurer
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
_FILED_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
_PAID_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM Amount HUD Paid on Part A Claim 2 No commas(,) or
_PAID_AMT dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
_FILED_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
_PAID_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM Amount HUD Paid on Part B Claim 2 No commas(,) or
_PAID_AMT dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
Exhibit 2: Standard File Codes - Delinquency Reporting
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
------------- --------------------------------------------
Delinquency Delinquency Description
Code
------------- --------------------------------------------
001 FNMA-Death of principal mortgagor
------------- --------------------------------------------
002 FNMA-Illness of principal mortgagor
------------- --------------------------------------------
003 FNMA-Illness of mortgagor's family member
------------- --------------------------------------------
004 FNMA-Death of mortgagor's family member
------------- --------------------------------------------
005 FNMA-Marital difficulties
------------- --------------------------------------------
006 FNMA-Curtailment of income
------------- --------------------------------------------
007 FNMA-Excessive Obligation
------------- --------------------------------------------
008 FNMA-Abandonment of property
------------- --------------------------------------------
009 FNMA-Distant employee transfer
------------- --------------------------------------------
011 FNMA-Property problem
------------- --------------------------------------------
012 FNMA-Inability to sell property
------------- --------------------------------------------
013 FNMA-Inability to rent property
------------- --------------------------------------------
014 FNMA-Military Service
------------- --------------------------------------------
015 FNMA-Other
------------- --------------------------------------------
016 FNMA-Unemployment
------------- --------------------------------------------
017 FNMA-Business failure
------------- --------------------------------------------
019 FNMA-Casualty loss
------------- --------------------------------------------
022 FNMA-Energy environment costs
------------- --------------------------------------------
023 FNMA-Servicing problems
------------- --------------------------------------------
026 FNMA-Payment adjustment
------------- --------------------------------------------
027 FNMA-Payment dispute
------------- --------------------------------------------
029 FNMA-Transfer of ownership pending
------------- --------------------------------------------
030 FNMA-Fraud
------------- --------------------------------------------
031 FNMA-Unable to contact borrower
------------- --------------------------------------------
INC FNMA-Incarceration
------------- --------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:
----------- --------------------------------------------
Status Code Status Description
----------- --------------------------------------------
09 Forbearance
----------- --------------------------------------------
17 Pre-foreclosure Sale Closing Plan Accepted
----------- --------------------------------------------
24 Government Seizure
----------- --------------------------------------------
26 Refinance
----------- --------------------------------------------
27 Assumption
----------- --------------------------------------------
28 Modification
----------- --------------------------------------------
29 Charge-Off
----------- --------------------------------------------
30 Third Party Sale
----------- --------------------------------------------
31 Probate
----------- --------------------------------------------
32 Military Indulgence
----------- --------------------------------------------
43 Foreclosure Started
----------- --------------------------------------------
44 Deed-in-Lieu Started
----------- --------------------------------------------
49 Assignment Completed
----------- --------------------------------------------
61 Junior Lien Considerations
----------- --------------------------------------------
62 Veteran's Affairs-No Bid
----------- --------------------------------------------
63 Veteran's Affairs-Refund
----------- --------------------------------------------
64 Veteran's Affairs-Buydown
----------- --------------------------------------------
65 Chapter 7 Bankruptcy
----------- --------------------------------------------
66 Chapter 11 Bankruptcy
----------- --------------------------------------------
67 Chapter 13 Bankruptcy
----------- --------------------------------------------
Exhibit 3: Calculation of Realized Loss/Gain Form 332- Instruction Sheet
1. The numbers on the form correspond with the numbers listed
below.
Liquidation and Acquisition Expenses:
-------------------------------------
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default
through liquidation breaking out the net interest and
servicing fees advanced is required.
2. The Total Interest Due less the aggregate amount of servicing
fee that would have been earned if all delinquent payments had
been made as agreed. For documentation, an Amortization
Schedule from date of default through liquidation breaking out
the net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal
Balance of the Mortgage Loan as calculated on a monthly basis.
For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
4-12. Complete as applicable. All line entries must be supported by
copies of appropriate statements, vouchers, receipts, bills,
canceled checks, etc., to document the expense. Entries not
properly documented will not be reimbursed to the Servicer.
13. The total of lines 1 through 12.
2. CREDITS:
--------
14-21. Complete as applicable. All line entries must be supported by
copies of the appropriate claims forms, EOBs, HUD-1 and/or
other proceeds verification, statements, payment checks, etc.
to document the credit. If the Mortgage Loan is subject to a
Bankruptcy Deficiency, the difference between the Unpaid
Principal Balance of the Note prior to the Bankruptcy
Deficiency and the Unpaid Principal Balance as reduced by the
Bankruptcy Deficiency should be input on line 20.
22. The total of lines 14 through 21.
PLEASE NOTE: For HUD/VA loans, use line (15) for Part A/Initial
proceeds and line (16) for
Part B/Supplemental proceeds.
3. Total Realized Loss (or Amount of Any Gain)
-------------------------------------------
23. The total derived from subtracting line 22 from 13. If the
amount represents a realized gain, show the amount in
parenthesis ( ).
Exhibit 3A: Calculation of Realized Loss/Gain Form 332
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS/GAIN
Prepared by:__________________ Date:_____________________
Phone:________________________ Email Address:_____________________
----------------- ------------- ----------------
Servicer Loan No. Servicer Name Servicer Address
----------------- ------------- ----------------
XXXXX FARGO BANK, N.A. Loan No._______________________________________________
Borrower's Name:______________________________________________________________
Property Address:_____________________________________________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ______________(1)
(2) Interest accrued at Net Rate ______________(2)
(3) Accrued Servicing Fees ______________(3)
(4) Attorney's Fees ______________(4)
(5) Taxes ______________(5)
(6) Property Maintenance ______________(6)
(7) MI/Hazard Insurance Premiums ______________(7)
(8) Utility Expenses ______________(8)
(9) Appraisal/BPO ______________(9)
(10) Property Inspections ______________(10)
(11) FC Costs/Other Legal Expenses ______________(11)
(12) Other (itemize) $ ______________(12)
Cash for Keys__________________________ ______________
HOA/Condo Fees_________________________ ______________
_______________________________________ ______________
_______________________________________ ______________
Total Expenses $ ______________(13)
Credits:
(14) Escrow Balance $ ______________(14)
(15) HIP Refund ______________(15)
(16) Rental Receipts ______________(16)
(17) Hazard Loss Proceeds ______________(17)
(18) Primary Mortgage Insurance Proceeds ______________(18)
(19) Pool Insurance Proceeds ______________(19)
(20) Proceeds from Sale of Acquired Property ______________(20)
(21) Other (itemize) ______________(21)
___________________________________________ ______________
___________________________________________ ______________
Total Credits $ ______________(22)
Total Realized Loss (or Amount of Gain) $ ______________(23)
WITH RESPECT TO SPS:
--------------------
------------------------ ----------------- -----------------------------
Data Field Format Data Description
------------------------ ----------------- -----------------------------
Servicer loan number VARCHAR2(15) Individual number that
uniquely identifies loan
as defined by servicer.
------------------------ ----------------- -----------------------------
Investor number NUMBER (10,2) Unique number assigned
to a group of loans in
the servicing system.
------------------------ ----------------- -----------------------------
% of MI coverage NUMBER(6,5) The percent of coverage
provided by the PMI
company in the event of
loss on a defaulted
loan.
------------------------ ----------------- -----------------------------
Actual bankruptcy DATE(MM/DD/YYYY) Actual date that the
start date bankruptcy petition is
filed with the court.
------------------------ ----------------- -----------------------------
Actual discharge date DATE(MM/DD/YYYY) Actual date that the
Discharge Order is
entered in the
bankruptcy docket.
------------------------ ----------------- -----------------------------
Actual due date DATE(MM/DD/YYYY) Actual due date of the
next outstanding payment
amount due from the
mortgagor.
------------------------ ----------------- -----------------------------
Actual eviction DATE(MM/DD/YYYY) Actual date that the
complete date eviction proceedings are
completed by local
counsel.
------------------------ ----------------- -----------------------------
Actual eviction DATE(MM/DD/YYYY) Actual date that the
start date eviction proceedings are
commenced by local counsel.
------------------------ ----------------- -----------------------------
Actual first legal date DATE(MM/DD/YYYY) Actual date that
foreclosure counsel
filed the first legal
action as defined by
state statute.
------------------------ ----------------- -----------------------------
Actual MI claim NUMBER(15,2) The amount of the claim
amount filed that was filed by the
servicer with the PMI
company.
------------------------ ----------------- -----------------------------
Actual MI claim DATE(MM/DD/YYYY) Actual date that the
filed date claim was submitted to
the PMI company.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Actual redemption DATE(MM/DD/YYYY) Actual date that the
end date foreclosure redemption
period expires.
------------------------ ----------------- -----------------------------
Bankruptcy Case Number VARCHAR2(15) The court assigned case
number of the bankruptcy
filed by a party with
interest in the
property.
------------------------ ----------------- -----------------------------
Bankruptcy chapter VARCHAR2(2) Chapter of bankruptcy filed.
7=Chapter 7
filed
11=Chapter 11
filed
12=Chapter 12
filed
13=Chapter 13
filed
------------------------ ----------------- -----------------------------
Bankruptcy flag VARCHAR2(2) Servicer defined
Y=Active indicator that
Bankruptcy identifies that the
N=No Active property is an asset in
Bankruptcy an active bankruptcy
case.
------------------------ ----------------- -----------------------------
Corporate expense NUMBER(10,2) Total of all cumulative
balance expenses advanced by the
servicer for non-escrow
expenses such as but not
limited to: FC fees and
costs, bankruptcy fees
and costs, property
preservation and
property inspections.
------------------------ ----------------- -----------------------------
Current loan amount NUMBER(10,2) Current unpaid principal
balance of the loan as
of the date of reporting
to Aurora Master
Servicing.
------------------------ ----------------- -----------------------------
Date FC sale scheduled DATE(MM/DD/YYYY) Date that the foreclosure
scheduled to be held. sale is
------------------------ ----------------- -----------------------------
Date relief/dismissal DATE(MM/DD/YYYY) Actual date that the
granted dismissal or relief from
stay order is entered by
the bankruptcy court.
------------------------ ----------------- -----------------------------
Date REO offer accepted DATE(MM/DD/YYYY) Actual date of acceptance of
an REO offer.
------------------------ ----------------- -----------------------------
Date REO offer received DATE(MM/DD/YYYY) Actual date of receipt of an
REO offer.
------------------------ ----------------- -----------------------------
Delinquency flag VARCHAR2(2) Servicer defined
Y=90+ delinq. indicator that
Not in FC, Bky indentifies that the
or Loss mit loan is delinquent but
N=Less than 90 is not involved in loss
days delinquent mitigation, foreclosure,
bankruptcy or REO.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Delinquency value NUMBER(10,2) Value obtained typically
from a BPO prior to
foreclosure referral not
related to loss
mitigation activity.
------------------------ ----------------- -----------------------------
Delinquency value date DATE(MM/DD/YYYY) Date that the
delinquency valuation
amount was completed by
vendor or property
management company.
------------------------ ----------------- -----------------------------
Delinquency value source VARCHAR2(15) Name of vendor or
BPO=Broker's management company that
Price Opinion provided the delinquency
Appraisal= valuation amount.
Appraisal
------------------------ ----------------- -----------------------------
Escrow balance/advance NUMBER(10,2) The positive or negative
balance account balance that is
dedicated to payment of
hazard insurance,
property taxes, MI, etc.
(escrow items only)
------------------------ ----------------- -----------------------------
First Vacancydate/ DATE(MM/DD/YYYY) The date that the most
Occupancy status date recent occupancy status
was determined.
Typically the date of
the most recent property
inspection.
------------------------ ----------------- -----------------------------
Foreclosure actual DATE(MM/DD/YYYY) Actual date that the
sale date foreclosure sale was held.
------------------------ ----------------- -----------------------------
Foreclosure attorney DATE(MM/DD/YYYY) Actual date that the
referral date loan was referred to
local counsel to begin
foreclosure proceedings.
------------------------ ----------------- -----------------------------
Foreclosure flag VARCHAR2(2) Servicer defined indicator
Y=Active that identifies that the
foreclosure loan is involved in
N=No active foreclosure proceedings.
foreclosure
------------------------ ----------------- -----------------------------
Foreclosure valuation NUMBER(15,2) Value obtained during
amount the foreclosure process.
Usually as a result of a
BPO and typically used
to calculate the bid.
------------------------ ----------------- -----------------------------
Foreclosure valuation DATE(MM/DD/YYYY) Date that foreclosure
date valuation amount was
completed by vendor or
property management
company.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Foreclosure valuation VARCHAR2(80) Name of vendor or
source BPO=Broker's management company that
Price Opinion provided the foreclosure
Appraisal= valuation amount.
Appraisal
------------------------ ----------------- -----------------------------
Loan type VARCHAR2(2) Type of loan being
1=FHA serviced generally
2=VA Residential defined by the existence
3=Conventional of certain types of
w/o PMI insurance. (ie: FHA, VA,
4=Commercial Residential conventional
5=FHA Project insured, conventional
6=Conventional uninsured, SBA, etc.)
w/PMI
7=HUD
235/265
8=Daily Simple
Interest Loan
9=Farm
Loan
U=Unknown
S=Sub prime
------------------------ ----------------- -----------------------------
Loss mit approval date DATE(MM/DD/YYYY) The date determined that
the servicer and
mortgagor agree to
pursue a defined loss
mitigation alternative.
------------------------ ----------------- -----------------------------
Loss mit flag VARCHAR2(2) Servicer defined
Y=Active loss indicator that
mitigation identifies that the loan
N=No active loss is involved in
mitigation completing aloss
mitigation alternative.
------------------------ ----------------- -----------------------------
Loss mit removal date DATE(MM/DD/YYYY) The date that the
mortgagor is denied loss
mitigation alternatives
or the date that the
loss mitigation
alternative is completed
resulting in a current
or liquidated loan.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Loss mit type VARCHAR2(2) The defined loss
L=Loss Mitigation mitigation alternative
LT=Ligitation identified on the loss
pending mit approval date.
NP=Pending non-
performing sale
CH=Charge off
DI=Deed in lieu
FB=Forbearance
plan
MO=Modification
PC=Partial claim
SH=Short sale
VA=VA refunding
------------------------ ----------------- -----------------------------
Loss mit value NUMBER(10,2) Value obtained typically
from a BPO prior to
foreclosure sale
intended to aid in the
completion of loss
mitigation activity.
------------------------ ----------------- -----------------------------
Loss mit value date DATE(MM/DD/YYYY) Name of vendor or
management company that
provided the loss
mitigation valuation
amount.
------------------------ ----------------- -----------------------------
Loss mit value source VARCHAR2(15) Date that the lostt
BPO=Broker's mitigation valuation
Price Opinion amount was completed by
Appraisal= vendor or property
Appraisal management company.
------------------------ ----------------- -----------------------------
LPMI Cost NUMBER(7,7) The current premium paid
to the PMI company for
Lender Paid Mortgage
Insurance.
------------------------ ----------------- -----------------------------
MI certificate number VARCHAR2(15) A number that is
assigned individually to
the loan by the PMI
company at the time of
origination. Similar to
the VA LGC/FHA Case
Number in purpose.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
MI claim amount paid NUMBER(15,2) The amount paid to the
servicer by the PMI
company as a result of
submitting an MI claim.
------------------------ ----------------- -----------------------------
MI claim funds DATE(MM/DD/YYYY) Actual date that funds
received date were received from the
PMI company as a result
of transmitting an MI
claim.
------------------------ ----------------- -----------------------------
Occupancy status VARCHAR2(1) The most recent status
O=Owner occupied of the property
T=Tenant occupied regarding who if anyone
U=Unknown is occupying the
V=Vacant property. Typically a
result of a routine
property inspection.
------------------------ ----------------- -----------------------------
Original loan amount NUMBER(10,2) Amount of the
contractual obligations
(ie: note and
mortgage/deed of trust).
------------------------ ----------------- -----------------------------
Original value NUMBER(10,2) Appraised value of
amount property as of
origination typically
determined through the
appraisal process.
------------------------ ----------------- -----------------------------
Origination date DATE(MM/DD/YYYY) Date that the
contractual obligations
(ie: note and
mortgage/deed of trust)
of the mortgagor was
executed.
------------------------ ----------------- -----------------------------
Post petition due date DATE(MM/DD/YYYY) The post petition due
date of a loan involved
in a chapter 13
bankruptcy.
------------------------ ----------------- -----------------------------
Property condition VARCHAR2(2) Physical condition of
1=Excellent the property as most
2=Good recently reported to the
3=Average servicer by vendor or
4=Fair property management
5=Poor company.
6=Very poor
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Property type VARCHAR2(2) Type of property secured
1=Single family by mortgage such as:
2=Town house single family, 2-4 unit,
3=Condo etc.
4=Multifamily
5=Other
6=Prefabricated
B=Commercial
C=Land only
7=Mobile home
U=Unknown
D=Farm
A=Church
P=PUD
R=Row house
O=Co-op
M=Manufactured
housing
24= 2-4 family
CT=Condotel
MU=Mixed use
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Reason for default VARCHAR2(3) Cause of delinquency as
001=Death of identified by mortgagor.
principal mtgr
002=Illness of
principal mtgr
003=Illness of
mtgr's family
member
004=Death of
mtgr's family
member
005=Marital
difficulties
006=Curtailment
of income
007=Excessive
obligations
008=Abandonment
of property
009=Distant
employee
transfer
011=Property
problem
012=Inability to
sell property
013=Inability to
rent property
014=Military
service
015=Other
016=Unemployment
017=Business
failure
019=Casualty loss
022=Energy-
Environment
costs
023= Servicing
problems
026=Payment
adjustment
027=Payment
dispute
029=Transfer
ownership
pending
030=Fraud
031=Unable to
contact
borrower
INC=Incarceration
------------------------ ----------------- -----------------------------
REO actual closing date DATE(MM/DD/YYYY) The actual date that the
sale of the REO property
closed escrow.
------------------------ ----------------- -----------------------------
REO flag VARCHAR2(7) Servicer defined
Y=Active REO indicator that
N=No active REO identifies that the
property is now Real
Estate Owned.
------------------------ ----------------- -----------------------------
REO list price NUMBER(15,2) The most recent
adjustment amount listing/pricing amount
as updated by the
servicer for REO
properties.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
REO list price DATE(MM/DD/YYYY) The most recent date
adjustment date that the servicer
advised the agent to
make an adjustment to
the REO listing price.
------------------------ ----------------- -----------------------------
REO net sales proceeds NUMBER(10,2) The actual REO sales
price less closing costs
paid. The net sales
proceeds are identified
within the HUD1
settlement statement.
------------------------ ----------------- -----------------------------
REO original list date DATE(MM/DD/YYYY) The initial/first date
that the property was
listed with an agent as
an REO.
------------------------ ----------------- -----------------------------
REO original list price NUMBER(15,2) The initial/first price
that was used to list
the property with an
agent as an REO.
------------------------ ----------------- -----------------------------
REO repaired value NUMBER(10,2) The projected value of
the property that is
adjusted from the "as
is" value assuming
necessary repairs have
been made to the
property as determined
by the vendor/property
management company.
------------------------ ----------------- -----------------------------
REO sales price NUMBER(10,2) Actual sales price
agreed upon by both the
purchaser and servicer
as documented on the
HUD1 settlement
statement.
------------------------ ----------------- -----------------------------
REO scheduled close date DATE(MM/DD/YYYY) The date that the sale
of the REO property is
scheduled to close
escrow.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
REO value (as is) NUMBER(10,2) The value of the
property without making
any repairs as
determined by the
vendor/property
management copmany.
------------------------ ----------------- -----------------------------
REO value date DATE(MM/DD/YYYY)
Date that
the vendor
or
management
company
completed
the
valuation
of the
property
resulting
in the REO
value (as
is).
------------------------ ----------------- -----------------------------
REO value source VARCHAR2(15) Name of vendor or
BPO= Broker's management company that
Price Opinion provided the REO value
Appraisal= (as is).
Appraisal
------------------------ ----------------- -----------------------------
Repay first due date DATE(MM/DD/YYYY) The due date of the
first scheduled payment
due under a forbearance
or repayment plan agreed
to by both the mortgagor
and servicer.
------------------------ ----------------- -----------------------------
Repay next due date DATE(MM/DD/YYYY) The due date of the next
outstanding payment due
under a forbearance or
repayment plan agreed to
by both the mortgagor
and servicer.
------------------------ ----------------- -----------------------------
Repay plan DATE(MM/DD/YYYY) The servicer defined
broken/reinstated/ date upon which the
closed date servicer considers that
the plan is no longer in
effect as a result of
plan completion or
mortgagor's failure to
remit payments as
scheduled.
------------------------ ----------------- -----------------------------
------------------------ ----------------- -----------------------------
Repay plan created DATE(MM/DD/YYYY) The date that both the
date mortgagor and servicer
agree to the terms of a
forebearance or
repayment plan.
------------------------ ----------------- -----------------------------
Restricted escrow NUMBER(10,2) Money held in escrow by
balance the mortgage company
through completion of
repairs to property.
------------------------ ----------------- -----------------------------
Suspense balance NUMBER(10,2) Money submitted to the
servicer, credited to
the mortgagor's account
but not allocated to
principal, interest,
escrow, etc.
------------------------ ----------------- -----------------------------
Zip Code VARCHAR2(5) US postal zip code that
corresponds to property
location.
------------------------ ----------------- -----------------------------
Field Description Decimal Format Comment
----- ----------- ------- --------------
RPT_DATE Period Report Cutoff Date n/a YYYYMM
3 digit
Investor Client ID n/a alphanumeric
3 digit
Category Client ID 2nd level n/a alphanumeric
loan_no Servicer Loan Number n/a
10 digit loan_no Servicer Loan Number in 10 digit format n/a 10 digit
inv_loanno client loan number n/a
int_rate gross scheduled interest rate 5
sf_rate service fee rate 5
yield net scheduled interest rate 5
DUE_Date borrower due date as of cutoff n/a MM/DD/YY
PI_CONst scheduled principal and interest installment 2
beg_sch_bal beginning of month scheduled unpaid pricipal balance 2
sch_Prn scheduled pricipal installment 2
Gross_Int scheduled gross interest installment 2
sch_net_int scheduled net interest installment 2
Svc_Fee scheduled service fee 2
Stop Date scheduled installment stop advancing date n/a MM/DD/YY
Stop Prin current month installment not advanced 2
Stop Int current month installment not advanced 2
BeG_PRN_BAL actual beginning principal balance 2
End_Prn_bal actual ending principal balance 2
prn_coll actual principal collected during cutoff period 2
int_coll actual interest collected during cutoff period 2
S_FEE_COLL actual sf collected during cutoff period 2
PIF Date paid in full date or liquidation date n/a MM/DD/YY
Pif_prin scheduled principal payoff amount 2
Xxxx actual curtailment collections during cutoff 2
Curt_Adj comp interest on curtailment paid 2
Pool To Security pool to security balance test 2
Total Prin Adj curtailment + curtailment interest + pool to
security adjustment 2
Principal principal collections on stop advance loans during
period, after all
Collections After advanced payments have been
Stop repaid 2
Interest
Collections After net interest collections on stop advance loans
Stop during period, after all advanced payments
have been repaid 2
PPP prepayment penalty collections during the collection
period 2
Fee Code W prepayment penalty on curtailment collections during
the collection period 2
Dlq_Prn cumulative delinquent principal installments 2
PrePay_Prn cumulative prepaid principal installments 2
Losses losses on loans during the collection period 2
End_Sch_bal ending scheduled unpaid principal balance 2
REMITTANCE total remittance amount per loan 2
BASE LIQUIDATION REPORT
-----------------------
Type of Liquidation: Investor Loan Number:
Loan Number: Liq Report Log No:
Lien Position: Report Date:
REMIC # Ending Interest Rate:
Original Amount of Loan: Fixed or Adjustable:
UPB Accrued Int. to frcl sale:
Advanced Delinquent Interest:
Date Borrower Paid To:
Borrowers Name:
Property Address:
MSP Bank/Category:
Note Date:
Date of REO:
Disposition Date:
AMOUNT DATE OF VALUATION TYPE OF VALUATION
------ ----------------- -----------------
Market Value AS IS:
Repaired:
Supplemental Value AS IS:
Repaired:
REO BPO Value:
List Price:
Sales Price:
PROCEEDS EXPENSES
-------- --------
List Price: Servicing Advances:
Sales Price: Payee 70R01 Acquisition:
Brokers Commission: Payee 75R60 REO:
Bonus Commission: Payee 75R49 Foreclosure:
Lien Purchase/Paid Off: Payee 75R36 Escrow:
Seller Closing Costs: Payee 75R52 Bankruptcy:
Repair Costs: Discrepancy Amount:
Seller Concessions: Servicing Advance Total:
Other Closing Costs: Advances Applied After
Liquidation:
Prior Additional Advances:
Net Proceeds: Escrow Advance:
Escrow Balance: Interest On Advances:
Suspense Balance: Other Advances:
Restricted Escrow: Servicing Advance Holdbacks:
Rental Income Received: Property Inspection:
Insurance Settlement Received: BPO:
Other: Lender Placed Insurance:
Total Liquidation Proceeds: Utilities:
REO Repair Costs:
Total Liquidation Expenses: Foreclosure Fees:
Net Liquidation Proceeds: Bankruptcy.
Eviction Costs:
Loan Principal Balance: Transfer Tax:
Realized Gain/Loss Amount: Reconveyance Fees:
Other Holdbacks:
Additional Proceeds Applied: Demand Fee:
Prior Additional Proceeds: Total Holdbacks:
Loss Severity: Other Fees (Including Fee Code
B):
UPB Accrued Interest to XXX:
Notes: Advanced Delinquent Interest:
Stopped Delinquent Interest:
Deferred Interest:
Additional Interest:
Total Liquidation Expenses:
Mgr. Approval.. Corp. Approval
______________________________ ______________________________
SCHEDULE 4
WITH RESPECT TO OCWEN AND OPTION ONE:
-------------------------------------
STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED
Exhibit 1: Standard File Layout - Scheduled/Scheduled
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Column Name Description Decimal Format Comment
------------------------------- -------------------------------------------------- ----------- ------------------------------------
LOAN_NBR Loan Number assigned by investor Text up to 10 digits
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SERVICER LOAN_NBR Servicer Loan Number Text up to 10 digits
------------------------------- -------------------------------------------------- ----------- ------------------------------------
BORROWER_NAME Mortgagor name assigned to Note Max length of 30
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_PMT_AMT P&I constant 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NOTE_INT_RATE Gross Interest Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NET_RATE Gross Interest Rate less the Service Fee Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SERV_FEE_RATE Service Fee Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NEW_PAY_AMT ARM loan's forecasted P&I constant 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NEW_LOAN_RATE ARM loan's forecasted Gross Interest Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ARM_INDEX_RATE ARM loan's index Rate used 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ACTL_BEG_BAL Beginning Actual Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ACTL_END_BAL Ending Actual Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NEXT_DUE_DATE Borrower's next due date MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_AMT_1 Curtailment Amount 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_DATE_1 Due date Curtailment was applied to MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_ADJ_ AMT_1 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_AMT_2 Curtailment Amount 2 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_DATE_2 Due date Curtailment was applied to MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_ADJ_ AMT2 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_AMT_3 Curtailment Amount 3 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_DATE_3 Due date Curtailment was applied to MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_ADJ_AMT3 Curtailment Interest, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_BEG_BAL Beginning Scheduled Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_END_BAL Ending Scheduled Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_PRIN_AMT Scheduled Principal portion of P&I 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Scheduled Net Interest (less Service Fee)
SCHED_NET_INT portion of P&I 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Liquidation Principal Amt to bring balance to
LIQ_AMT zero 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
PIF_DATE Liquidation Date MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ACTION_CODE Either 60 for liquidation or 65 for Repurchase Max length of 2
------------------------------- -------------------------------------------------- ----------- ------------------------------------
PRIN_ADJ_AMT Principal Adjustments made to loan, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
INT_ADJ_AMT Interest Adjustment made to loan, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
PREPAYMENT PENALTY AMT Prepayment penalty amount, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Soldier and Sailor Adjustment amount, if
SOILDER_SAILOR ADJ AMT applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NON ADV LOAN AMT Non Recoverable Loan Amount, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
WITH RESPECT TO SPS:
--------------------
[TO BE AGREED UPON BETWEEN THE MASTER SERVICER AND SPS]
SCHEDULE 5
SCHEDULE OF SERVICING ADVANCES MADE PRIOR TO THE CUT-OFF DATE
