EXECUTION COPY
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
AURORA LOAN SERVICES LLC, as Master Servicer,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee
----------
TRUST AGREEMENT
Dated as of January 1, 2005
----------
STRUCTURED ADJUSTABLE RATE MORTGAGE LOAN TRUST
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-1
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.............................................................................................9
Section 1.01. Definitions..................................................................................9
Section 1.02. Calculations Respecting Mortgage Loans......................................................47
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................48
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans........................48
Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation for Trust Fund.................52
Section 2.03. Representations and Warranties of the Depositor.............................................53
Section 2.04. Discovery of Breach.........................................................................55
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans......................................56
Section 2.06. Grant Clause................................................................................57
ARTICLE III THE CERTIFICATES.....................................................................................57
Section 3.01. The Certificates............................................................................57
Section 3.02. Registration................................................................................59
Section 3.03. Transfer and Exchange of Certificates.......................................................59
Section 3.04. Cancellation of Certificates................................................................65
Section 3.05. Replacement of Certificates.................................................................65
Section 3.06. Persons Deemed Owners.......................................................................65
Section 3.07. Temporary Certificates......................................................................66
Section 3.08. Appointment of Paying Agent.................................................................66
Section 3.09. Book-Entry Certificates.....................................................................66
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................68
Section 4.01. Collection Account..........................................................................68
Section 4.02. Application of Funds in the Collection Account..............................................70
Section 4.03. Reports to Certificateholders...............................................................72
Section 4.04. Certificate Account.........................................................................75
Section 4.05. Determination of LIBOR......................................................................76
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................78
Section 5.01. Distributions Generally.....................................................................78
Section 5.02. Distributions from the Certificate Account..................................................78
Section 5.03. Allocation of Realized Losses...............................................................87
Section 5.04. Advances by the Master Servicer and the Securities Administrator............................89
Section 5.05. Compensating Interest Payments..............................................................90
Section 5.06. Cap Agreement Reserve Fund..................................................................90
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT...........................92
i
Section 6.01. Duties of Trustee and Securities Administrator..............................................92
Section 6.02. Certain Matters Affecting the Trustee and the Securities Administrator......................94
Section 6.03. Trustee and Securities Administrator Not Liable for Certificates............................96
Section 6.04. Trustee and Securities Administrator May Own Certificates...................................96
Section 6.05. Eligibility Requirements for Trustee and Securities Administrator...........................96
Section 6.06. Resignation and Removal of Trustee and Securities Administrator.............................97
Section 6.07. Successor Trustee and Successor Securities Administrator....................................98
Section 6.08. Merger or Consolidation of Trustee or Securities Administrator. ...........................98
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian....................................99
Section 6.10. Authenticating Agents......................................................................100
Section 6.11. Indemnification of Trustee and Securities Administrator....................................101
Section 6.12. Fees and Expenses of Securities Administrator, Trustee and Custodian.......................102
Section 6.13. Collection of Monies.......................................................................102
Section 6.14. Events of Default; Securities Administrator To Act;
Appointment of Successor...................................................................102
Section 6.15. Additional Remedies of Trustee Upon Event of Default.......................................107
Section 6.16. Waiver of Defaults.........................................................................107
Section 6.17. Notification to Holders....................................................................108
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default....................................................................108
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default..............108
Section 6.20. Preparation of Tax Returns and Other Reports...............................................108
Section 6.21. Reporting Requirements of the Commission...................................................110
ARTICLE VII PURCHASE AND TERMINATION OF THE TRUST FUND..........................................................110
Section 7.01. Termination of Trust Fund Upon Repurchase or Liquidation of All Mortgage Loans.............110
Section 7.02. Procedure Upon Termination of Trust Fund...................................................111
Section 7.03. Additional Requirements under the REMIC Provisions.........................................112
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................113
Section 8.01. Limitation on Rights of Holders............................................................113
Section 8.02. Access to List of Holders..................................................................113
Section 8.03. Acts of Holders of Certificates............................................................114
ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER................................115
Section 9.01. Duties of the Master Servicer..............................................................115
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance Policy....115
Section 9.03. Master Servicer's Financial Statements and Related Information.............................116
Section 9.04. Power to Act; Procedures...................................................................116
Section 9.05. Servicing Agreements Between the Master Servicer and Servicers; Enforcement of Servicers'
Obligations................................................................................118
Section 9.06. Collection of Taxes, Assessments and Similar Items.........................................119
ii
Section 9.07. Termination of Servicing Agreements; Successor Servicers...................................120
Section 9.08. Master Servicer Liable for Enforcement.....................................................120
Section 9.09. No Contractual Relationship Between Servicers and Trustee or Depositor.....................120
Section 9.10. Assumption of Servicing Agreement by Securities Administrator..............................121
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements...............................................121
Section 9.12. Release of Mortgage Files..................................................................122
Section 9.13. Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.....................................................................123
Section 9.14. Representations and Warranties of the Master Servicer......................................124
Section 9.15. Closing Certificate and Opinion............................................................126
Section 9.16. Standard Hazard and Flood Insurance Policies...............................................127
Section 9.17. Presentment of Claims and Collection of Proceeds...........................................127
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies.....................................127
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies and Documents...................128
Section 9.20. Realization Upon Defaulted Mortgage Loans..................................................128
Section 9.21. Compensation to the Master Servicer........................................................129
Section 9.22. REO Property...............................................................................130
Section 9.23. [Reserved].................................................................................130
Section 9.24. Reports to the Trustee and the Securities Administrator....................................130
Section 9.25. Annual Officer's Certificate as to Compliance..............................................131
Section 9.26. Annual Independent Accountants' Servicing Report...........................................132
Section 9.27. Merger or Consolidation....................................................................132
Section 9.28. Resignation of Master Servicer.............................................................133
Section 9.29. Assignment or Delegation of Duties by the Master Servicer..................................133
Section 9.30. Limitation on Liability of the Master Servicer and Others..................................133
Section 9.31. Indemnification; Third-Party Claims........................................................134
ARTICLE X REMIC ADMINISTRATION..................................................................................135
Section 10.01. REMIC and Grantor Trust Administration.....................................................135
Section 10.02. Prohibited Transactions and Activities.....................................................139
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status.....................140
Section 10.04. REO Property...............................................................................140
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................141
Section 11.01. Binding Nature of Agreement; Assignment....................................................141
Section 11.02. Entire Agreement...........................................................................141
Section 11.03. Amendment..................................................................................141
Section 11.04. Voting Rights..............................................................................142
Section 11.05. Provision of Information...................................................................143
Section 11.06. Governing Law..............................................................................143
Section 11.07. Notices....................................................................................143
Section 11.08. Severability of Provisions.................................................................144
Section 11.09. Indulgences; No Waivers....................................................................144
Section 11.10. Headings Not To Affect Interpretation......................................................144
Section 11.11. Benefits of Agreement......................................................................144
Section 11.12. Special Notices to the Rating Agencies.....................................................144
iii
Section 11.13. Counterparts...............................................................................145
Section 11.14. Transfer of Servicing......................................................................145
iv
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 Form of Interim Certification
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreements
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreements
Exhibit L-1 Form of Transfer Certificate for Transfer from Restricted Global Security to Regulation S
Global Security
Exhibit L-2 Form of Transfer Certificate for Transfer from Regulation S Global Security to Restricted
Global Security
Exhibit M Form of Certification to be Provided to the Depositor and the Master Servicer by the Trustee
Exhibit N Form of Cap Agreement
Schedule A Mortgage Loan Schedule
This TRUST AGREEMENT, dated as of January 1, 2005 (the "Agreement"), is
by and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), AURORA LOAN SERVICES LLC, as master servicer (the
"Master Servicer"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
corporation, as securities administrator (the "Securities Administrator") and
HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association, as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from Xxxxxx Brothers
Holdings (the "Seller"), and at the Closing Date is the owner of the Mortgage
Loans and the other property being conveyed by it to the Trustee for inclusion
in the Trust Fund. On the Closing Date, the Depositor will acquire the
Certificates from the Trust Fund as consideration for its transfer to the Trust
Fund of the Mortgage Loans and the other property constituting the Trust Fund.
The Depositor has duly authorized the execution and delivery of this Agreement
to provide for the conveyance to the Trustee of the Mortgage Loans and the other
property constituting the Trust Fund. All covenants and agreements made by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
herein with respect to the Mortgage Loans and the other property constituting
the Trust Fund are for the benefit of the Holders from time to time of the
Certificates. The Depositor, the Securities Administrator and the Master
Servicer are entering into this Agreement, and the Trustee is accepting the
Trust Fund created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund (other
than the rights to Prepayment Penalty Amounts, the Cap Agreements and the Cap
Agreement Reserve Fund) be treated for federal income tax purposes as comprising
three real estate mortgage investment conduits (each a "REMIC" or, in the
alternative, REMIC 1, REMIC 2 and REMIC 3, (REMIC 3 also being referred to
herein as the "Upper Tier REMIC")). As is described in Section 10.01 hereof, the
Trust Fund will also be treated for federal income tax purposes as including
three grantor trusts. Each Certificate, other than the Class P, Class CX, Class
Z and Class R Certificates, and each of the Class Z Components, represents
ownership of a regular interest in the Upper Tier REMIC for purposes of the
REMIC Provisions. The Class R Certificate represents ownership of the sole class
of residual interest in each of REMIC 1, REMIC 2 and REMIC 3 for purposes of the
REMIC Provisions. The Upper Tier REMIC shall hold as assets the several classes
of uncertificated REMIC 2 Regular Interests. Each REMIC 2 Regular Interest is
hereby designated as a regular interest in REMIC 2. REMIC 2 shall hold as assets
the several classes of uncertificated REMIC 1 Regular Interests. Each REMIC 1
Regular Interest is hereby designated as a regular interest in REMIC 1. REMIC 1
shall hold as assets all property of the Trust Fund other than the REMIC 1
Interests, the REMIC 2 Interests, the REMIC 3 Regular Interests, the REMIC 3
Residual Interest, the Cap Agreements, the Cap Agreement Reserve Fund and the
rights to Prepayment Penalty Amounts.
REMIC 1
The following table specifies the class designation, interest rate,
principal amount and related Mortgage Pool for each class of REMIC 1 Interests.
REMIC 1 Initial Class or Related Pool
Class Designation Interest Rate Principal Amount or Pools
------------------ ------------- -------------------- ------------
Class LT1-1A (1) $ 331,611.7238 Pool 1
Class LT1-1B (2) $ 4,949,312.7238 Pool 1
Class LT1-2A (1) $ 128,625.5007 Pool 2
Class LT1-2B (3) $ 1,919,635.5007 Pool 2
Class LT1-3A (1) $ 74,124.5890 Pool 3
Class LT1-3B (4) $ 1,106,304.5890 Pool 3
Class LT1-4A (1) $ 74,072.0602 Pool 4
Class LT1-4B (5) $ 1,105,502.0602 Pool 4
Class LT1-5A (1) $ 302,203.3340 Pool 5
Class LT1-5B (6) $ 4,510,453.3340 Pool 5
Class LT1-6A (1) $ 47,696.3770 Pool 6
Class LT1-6B (7) $ 711,856.3770 Pool 6
Class LT1-Z (1) $ 1,415,045,060.3006 N/A
Class LT1-R (8) (8) N/A
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(1) For any Distribution Date, the interest rate for the Class LT1-1A,
Class LT1-2A, Class LT1-3A, Class LT1-4A, Class LT1-5A, Class LT1-6A
and Class LT1-Z Interest shall be a per annum rate equal to the
weighted average of the Net Mortgage Rates of the Mortgage Loans at
the beginning of the related Due Period, weighted on the basis of
their respective Scheduled Principal Balances.
(2) For any Distribution Date, the interest rate for the Class LT1-1B
Interest shall be the Net WAC for Pool 1 for such Distribution Date.
(3) For any Distribution Date, the interest rate for the Class LT1-2B
Interest shall be the Net WAC for Pool 2 for such Distribution Date.
(4) For any Distribution Date, the interest rate for the Class LT1-3B
Interest shall be the Net WAC for Pool 3 for such Distribution Date.
(5) For any Distribution Date, the interest rate for the Class LT1-4B
Interest shall be the Net WAC for Pool 4 for such Distribution Date.
(6) For any Distribution Date, the interest rate for the Class LT1-5B
Interest shall be the Net WAC for Pool 5 for such Distribution Date.
(7) For any Distribution Date, the interest rate for the Class LT1-6B
Interest shall be the Net WAC for Pool 6 for such Distribution Date.
(8) The Class LT1-R Interest shall represent the sole class of residual
interest in REMIC 1. The Class LT1-R Interest will not have a
principal amount or an interest rate. The Class LT1-R Interest shall
be represented by the Class R Certificate.
Distributions shall be deemed to be made to the REMIC 1 Regular
Interests first, so as to keep the Uncertificated Principal Balance of each
REMIC 1 Regular Interest ending with the designation "B" equal to 1% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Mortgage Pool; second, to each REMIC 1 Regular Interest ending with the
designation "A" so that the Uncertificated Principal Balance of each such REMIC
1 Regular Interest is equal to 1% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Mortgage Pool over (y)
the aggregate Class Principal Amounts of the Certificate Group related to such
Mortgage Pool (except that if 1% of any such excess is
2
greater than the principal amount of the corresponding REMIC 1 Regular Interest
ending with the designation "A", the least amount of principal shall be
distributed to such REMIC 1 Regular Interests such that the REMIC 1 Subordinated
Balance Ratio is maintained); and finally, any remaining principal to the Class
LT1-Z Interest. Realized Losses shall be applied after all distributions have
been made on each Distribution Date first, so as to keep the Uncertificated
Principal Balance of each REMIC 1 Regular Interest ending with the designation
"B" equal to 1% of the aggregate Scheduled Principal Balance of the Mortgage
Loans in the related Mortgage Pool; second, to each REMIC 1 Regular Interest
ending with the designation "A" so that the Uncertificated Principal Balance of
each such REMIC 1 Regular Interest is equal to 1% of the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Mortgage Pool over (y) the aggregate Class Principal Amounts of the Certificate
Group related to such Mortgage Pool (except that if 1% of any such excess is
greater than the principal amount of the corresponding REMIC 1 Regular Interest
ending with the designation "A", the least amount of Realized Losses shall be
allocated to such REMIC 1 Regular Interests such that the REMIC 1 Subordinated
Balance Ratio is maintained); and third, the remaining Realized Losses shall be
allocated to the Class LT1-Z Interest. All computations with respect to any
REMIC 1 Interest shall be taken out to eight decimal places.
If on any Distribution Date there is an increase in the Certificate
Principal Amount of any Class of Certificates as a result of the proviso in the
definition of Certificate Principal Amount, then, prior to distributions of
principal and allocations of losses on such Distribution Date with respect to
REMIC 1, there shall be a corresponding increase in the principal amount of the
REMIC 1 Regular Interests, with such increase allocated among the REMIC 1
Regular Interests as follows: (i) first, to each REMIC 1 Regular Interest ending
with the designation "B" so as to keep the Uncertificated Principal Balance of
such REMIC 1 Regular Interest equal to 1% of the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Mortgage Pool, (ii) second, to each
REMIC 1 Regular Interest ending with the designation "A", so that the
Uncertificated Principal Balance of each such REMIC 1 Regular Interest is as
close as possible to (but does not exceed) 1% of the excess of (x) the aggregate
Scheduled Principal balance of the Mortgage Loans in the related Mortgage Pool
over (y) the aggregate Class Principal Amounts of the Senior Certificates of the
Certificate Group related to such Mortgage Pool; provided, however, that (a) the
REMIC 1 Subordinated Balance Ratio is maintained and (b) amounts allocated to
any REMIC 1 Regular Interest pursuant to this clause (ii) shall not exceed the
amount of any previous realized losses allocated to such REMIC 1 Regular
Interest not previously offset by distributions or increases in the principal
amount of such REMIC 1 Regular Interest and (iii) finally, all remaining
increases are allocated to the Class LT1-Z Interest.
REMIC 2
The following table specifies the class designation, interest rate,
principal amount and Classes of Corresponding Certificates or Class Z Components
for each class of REMIC 2 Interests:
3
REMIC 2 Pass-Through Corresponding Certificates
REMIC Interest Initial Balance Rate or Class Z Components
-------------- ---------------- ------------ --------------------------
LT2-1A1 $ 445,190,000.00 (1) 1-A1
LT2-1A2 $ 16,580,000.00 (1) 1-A2
LT2-1R $ 100.00 (1) R
LT2-2A $ 179,101,000.00 (2) 2-A
LT2-3A $ 103,218,000.00 (3) 3-A, 3-AX
LT2-4A1 $ 97,598,000.00 (4) 4-A1
LT2-4A2 $ 5,545,000.00 (4) 4-A2
LT2-5A1 $ 387,899,000.00 (5) 5-A1
LT2-5A2 $ 32,926,000.00 (5) 5-A2
LT2-6A $ 66,416,000.00 (6) 6-A
LT2-B1 $ 15,731,000.00 (7) B1, B1X, Class XX0
Xxxxxxxxx
XX0-X0 $ 13,584,000.00 (7) B2, B2X, Class XX0
Xxxxxxxxx
XX0-X0 $ 8,579,000.00 (7) X0, X0X
LT2-B4 $ 15,014,000.00 (7) X0, X0X
LT2-B5 $ 5,718,000.00 (7) X0, X0X
LT2-B6 $ 8,579,000.00 (8) X0
XX0-X0 $ 1,427,000.00 (7) X0, X0X
LT2-B8 $ 4,287,000.00 (8) X0
XX0-X0 $ 3,572,000.00 (8) X0
XX0-X00 $ 1,427,000.00 (7) X00, X00X
LT2-B11 $ 7,148,000.00 (7) X00, X00X
LT2-B12 $ 6,433,000.00 (8) X00
XX0-X00 $ 4,334,358.47 (8) X00
XX0-X (9) (9) N/A
----------
(1) For any Distribution Date, the interest rate for each of the Class
LT2-1A1 Interest, Class LT2-1A2 and the Class LT2-1R Interest shall be
a per annum rate equal to the Net WAC for Pool 1 for such Distribution
Date.
(2) For any Distribution Date, the interest rate for the Class LT2-2A
Interest shall be a per annum rate equal to the Net WAC for Pool 2 for
such Distribution Date.
(3) For any Distribution Date, the interest rate for the Class LT2-3A
Interest shall be a per annum rate equal to the Net WAC for Pool 3 for
such Distribution Date.
(4) For any Distribution Date, the interest rate for the Class LT2-4A1
Interest and Class LT2-4A2 Interest shall be a per annum rate equal to
the Net WAC for Pool 4 for such Distribution Date.
(5) For any Distribution Date, the interest rate for the Class LT2-5A1
Interest and the Class LT4-5A2 Interest shall be a per annum rate
equal to the Net WAC for Pool 5 for such Distribution Date.
(6) For any Distribution Date, the interest rate for the Class LT2-6A
Interest shall be a per annum rate equal to the Net WAC for Pool 6 for
such Distribution Date.
4
(7) For any Distribution Date, the Class LT2-B1 Interest, Class LT2-B2
Interest, Class LT2-B3 Interest, Class LT2-B4 Interest, Class LT2-B5
Interest, Class LT2-B7 Interest, Class LT2-B10 Interest and Class
LT2-B11 Interest will bear interest at a per annum rate equal to the
LIBOR Available Funds Cap for such Distribution Date which is the
mathematical equivalent of the product of (i) the weighted average of
the pass-through rates on the REMIC 1 Regular Interests ending with
the designation "A", weighted on the basis of the uncertificated
principal balance of each such REMIC 1 Regular Interest immediately
preceding the Distribution Date; provided that for purposes of such
weighted average, the pass-through rate of each such REMIC 1 Regular
Interest shall be subject to a cap and floor equal to the pass-through
rate of the REMIC 1 Regular Interest that ends with the designation
"B" and is related to the same Mortgage Pool and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual
number of days in the related Accrual Period.
(8) For any Distribution Date, the Class LT2-B6 Interest, Class LT2-B8
Interest, Class LT2-B9 Interest, Class LT2-B12 Interest and Class
LT2-B13 Interest will bear interest at a per annum rate equal to the
Pool 1-6 Underlying Subordinate Rate for such Distribution Date which
is the mathematical equivalent of the weighted average of the
pass-through rates on the REMIC 1 Regular Interests ending with the
designation "A", weighted on the basis of the uncertificated principal
balance of each such REMIC 1 Regular Interest immediately preceding
the Distribution Date; provided that for purposes of such weighted
average, the pass-through rate of each such REMIC 1 Regular Interest
shall be subject to a cap and floor equal to the pass-through rate of
the REMIC 1 Regular Interest that ends with the designation "B" and is
related to the same Mortgage Pool.
(9) The Class LT2-R Interest shall represent the sole class of residual
interest in REMIC 2. The Class LT2-R Interest will not have a
principal amount or an interest rate. The Class LT2-R Interest shall
be represented by the Class R Certificate.
Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the REMIC 2 Regular Interests as such amounts (not
including Floating Rate Certificate Shortfalls and Excess REMIC Payments) are
payable and allocable to the Corresponding Certificates or Class Z Components.
Notwithstanding the preceding sentence, (i) the first $0.47 of losses with
respect to principal on the Mortgage Loans shall be allocated to the Class
LT2-B13 Interest and (ii) immediately preceding any payment to the Class R
Certificate pursuant to Section 5.02(f) attributable to principal received with
respect to any Mortgage Loan, a payment shall be treated as made to the Class
LT2-B13 Interest in reduction of the principal balance thereof, if any, to zero.
If on any Distribution Date there is an increase in the Certificate Principal
Amount of any Class of Certificates as a result of the proviso in the definition
of Certificate Principal Amount, then there shall be a corresponding increase in
the principal amount of the corresponding REMIC 2 Regular Interest.
UPPER TIER REMIC
The following table specifies the Class designation, Certificate Interest Rate,
initial Class Principal Amount or Class Notional Amount, and minimum
denomination (by dollar amount or Percentage Interest) for each Class of
Certificates representing the interests in the Trust Fund created hereunder.
Each Certificate (other than the Class Z, Class P, Class CX and Class R
Certificates) and each of the Class Z Components represents ownership of a
regular interest in the Upper Tier REMIC (or REMIC 3) for purposes of the REMIC
provisions.
5
Initial Class
Principal Amount
Certificate or Class Minimum
Class Designation Interest Rate Notional Amount Denomination
----------------- ------------- ---------------- ------------
Class 1-A1 (1) $ 445,190,000 $ 25,000
Class 1-A2 (1) $ 16,580,000 $ 25,000
Class 2-A (2) $ 179,101,000 $ 25,000
Class 3-A (3) $ 103,218,000 $ 25,000
Class 3-AX 4.50%(3) $ 21,799,464(4) $ 1,000,000
Class 4-A1 (5) $ 97,598,000 $ 25,000
Class 4-A2 (5) $ 5,545,000 $ 25,000
Class 5-A1 (6) $ 387,899,000 $ 25,000
Class 5-A2 (6) $ 32,926,000 $ 25,000
Class 6-A (7) $ 66,416,000 $ 25,000
Class B1 (8) $ 15,731,000 $ 100,000
Class B1X (9) $ 15,731,000(9) $ 1,000,000
Class B2 (10) $ 13,584,000 $ 100,000
Class B2X (11) $ 13,584,000(11) $ 1,000,000
Class B3 (12) $ 8,579,000 $ 100,000
Class B3X (13) $ 8,579,000(13) $ 1,000,000
Class B4 (14) $ 15,014,000 $ 100,000
Class B4X (15) $ 15,014,000(15) $ 1,000,000
Class B5 (16) $ 5,718,000 $ 100,000
Class B5X (17) $ 5,718,000(17) $ 1,000,000
Class B6 (18) $ 8,579,000 $ 100,000
Class B7 (19) $ 1,427,000 $ 100,000
Class B7X (20) $ 1,427,000(20) $ 1,000,000
Class B8 (18) $ 4,287,000 $ 100,000
Class B9 (18) $ 3,572,000 $ 100,000
Class B10 (21) $ 1,427,000 $ 100,000
Class B10X (22) $ 1,427,000(22) $ 1,000,000
Class B11 (23) $ 7,148,000 $ 250,000
Class B11X (24) $ 7,148,000(24) $ 1,000,000
Class B12 (18) $ 6,433,000 $ 250,000
Class B13 (18) $ 4,334,358 $ 250,000
Class R (1) $ 100 $ 100
Class P (25) (25) 25%
Class CX (26) (26) 25%
Class Z (27) (27) 100%
----------
(1) For any Distribution Date, the Certificate Interest Rate on the Class
1-A1, Class 1-A2 and Class R Certificates shall be a per annum rate
equal to the Net WAC for Pool 1 for such Distribution Date.
(2) For any Distribution Date, the Certificate Interest Rate on the Class
2-A Certificates shall be a per annum rate equal to the Net WAC for
Pool 2 for such Distribution Date.
(3) For any Distribution Date on or prior to December 2009, the
Certificate Interest Rate on the Class 3-A Certificates shall be a per
annum rate equal to 4.50% subject to a maximum rate equal to the Net
WAC for Pool 3 for such Distribution Date. Beginning with the
Distribution Date in January 2010, the Certificate
6
Interest Rate on the Class 3-A Certificates shall be a per annum rate
equal to the Net WAC for Pool 3 for such Distribution Date.
(4) The Class 3-AX Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class 3-AX
Certificates for each Distribution Date on or prior to December 2009
will be an annual rate equal to 4.50%. Thereafter, the Class 3-AX
Certificates will not accrue interest and will not be entitled to any
distributions related to subsequent Distribution Dates. For any
Distribution Date, the Class Notional Amount of the Class 3-AX
Certificates shall be equal to the product of (i) a fraction, the
numerator of which is the excess, if any, of (1) the Net WAC for Pool
3 for the related Distribution Date over (2) 4.50%, and the
denominator of which is 4.50% and (ii) the Class Principal Amount of
the Class 3-A Certificates immediately prior to such Distribution
Date.
(5) For any Distribution Date, the Certificate Interest Rate on the Class
4-A1 and Class 4-A2 Certificates shall be a per annum rate equal to
the Net WAC for Pool 4 for such Distribution Date.
(6) For any Distribution Date, the Certificate Interest Rate for the Class
5-A1 and Class 5-A2 Certificates shall be a per annum rate equal to
the Net WAC for Pool 5 for such Distribution Date.
(7) For any Distribution Date, the Certificate Interest Rate on the Class
6-A Certificates shall be a per annum rate equal to the Net WAC for
Pool 6 for such Distribution Date.
(8) The Certificate Interest Rate for the Class B1 Certificates for each
Distribution Date will be the lesser of (i) LIBOR plus 0.45% per annum
and (ii) the Class B1 LIBOR Available Funds Cap.
(9) The Class B1X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B1X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the Class B1 LIBOR Available
Funds Cap over (b) the per annum rate of the Class B1 Certificates.
For any Distribution Date, the Class Notional Amount of the Class B1X
Certificates shall be equal to the Class Principal Amount of the Class
B1 Certificates immediately prior to such Distribution Date.
(10) The Certificate Interest Rate for the Class B2 Certificates for each
Distribution Date will be equal to the lesser of (i) LIBOR plus 0.47%
per annum and (ii) the Class B2 LIBOR Available Funds Cap.
(11) The Class B2X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B2X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the Class B2 LIBOR Available
Funds Cap over (b) the per annum rate of the Class B2 Certificates.
For any Distribution Date, the Class Notional Amount of the Class B2X
Certificates shall be equal to the Class Principal Amount of the Class
B2 Certificates immediately prior to such Distribution Date.
(12) The Certificate Interest Rate for the Class B3 Certificates for each
Distribution Date will be equal to the lesser of (i) LIBOR plus 0.52%
per annum and (ii) the LIBOR Available Funds Cap.
(13) The Class B3X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B3X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the LIBOR Available Funds Cap
over (b) the per annum rate of the Class B3 Certificates. For any
Distribution Date, the Class Notional Amount of the Class B3X
Certificates shall be equal to the Class Principal Amount of the Class
B3 Certificates immediately prior to such Distribution Date.
(14) The Certificate Interest Rate for the Class B4 Certificates for each
Distribution Date will be equal to the lesser of (i) LIBOR plus 0.58%
per annum and (ii) the LIBOR Available Funds Cap.
(15) The Class B4X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B4X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the LIBOR Available Funds Cap
over (b) the per annum rate of the Class B4 Certificates. For any
Distribution Date, the Class Notional Amount of the Class B4X
Certificates shall be equal to the Class Principal Amount of the Class
B4 Certificates immediately prior to such Distribution Date.
7
(16) The Certificate Interest Rate for the Class B5 Certificates for each
Distribution Date will be equal to the lesser of (i) LIBOR plus 0.78%
per annum and (ii) the LIBOR Available Funds Cap.
(17) The Class B5X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B5X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the LIBOR Available Funds Cap
over (b) the per annum rate of the Class B5 Certificates. For any
Distribution Date, the Class Notional Amount of the Class B5X
Certificates shall be equal to the Class Principal Amount of the Class
B5 Certificates immediately prior to such Distribution Date.
(18) For any Distribution Date, the Class B6, Class B8, Class B9, Class B12
and Class B13 Certificates shall bear interest at a per annum rate
equal to the Pool 1-6 Underlying Subordinate Rate.
(19) The Certificate Interest Rate for the Class B7 Certificates for each
Distribution Date will be equal to the lesser of (i) LIBOR plus 1.40%
per annum and (ii) the LIBOR Available Funds Cap.
(20) The Class B7X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B7X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the LIBOR Available Funds Cap
over (b) the per annum rate of the Class B7 Certificates. For any
Distribution Date, the Class Notional Amount of the Class B7X
Certificates shall be equal to the Class Principal Amount of the Class
B7 Certificates immediately prior to such Distribution Date.
(21) The Certificate Interest Rate for the Class B10 Certificates for each
Distribution Date will be the lesser of (i) LIBOR plus 3.75% per annum
and (ii) the Class X00 XXXXX Available Funds Cap.
(22) The Class B10X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B10X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the Class B10 LIBOR Available
Funds Cap over (b) the per annum rate of the Class B10 Certificates.
For any Distribution Date, the Class Notional Amount of the Class B10X
Certificates shall be equal to the Class Principal Amount of the Class
B10 Certificates immediately prior to such Distribution Date.
(23) The Certificate Interest Rate for the Class B11 Certificates for each
Distribution Date will be the lesser of (i) LIBOR plus 5.00% per annum
and (ii) the Class X00 XXXXX Available Funds Cap.
(24) The Class B11X Certificates are Notional Certificates. For any
Distribution Date, the Certificate Interest Rate for the Class B11X
Certificates will be an annual rate equal to the greater of: (i) 0.00%
per annum and (ii) the excess of (a) the Class B11 LIBOR Available
Funds Cap over (b) the per annum rate of the Class B11 Certificates.
For any Distribution Date, the Class Notional Amount of the Class B11X
Certificates shall be equal to the Class Principal Amount of the Class
B11 Certificates immediately prior to such Distribution Date.
(25) The Class P Certificates will be entitled to receive Prepayment
Penalty Amounts paid by borrowers upon voluntary full or partial
prepayment of the Mortgage Loans in Pool 1, Pool 2, Pool 3, Pool 4,
Pool 5 and Pool 6.
(26) For any Distribution Date on or prior to the Distribution Date in
December 2009, the Class CX Certificates will be entitled to receive
any amounts received under the terms of the Cap Agreements related to
the Class B1, Class B2, Class B3, Class B4, Class B5 and Class B7
Certificates on such Distribution Date that were not used to pay the
Floating Rate Certificate Shortfall. For any Distribution Date on or
prior to the Distribution Date in January 2010, the Class CX
Certificates will be entitled to receive any amounts received under
the terms of the Cap Agreements related to the Class B10 and Class B11
Certificates on such Distribution Date that were not used to pay the
Floating Rate Certificate Shortfall. Beginning with the Distribution
Date in February 2010, the Class CX Certificateholders will not be
entitled to any distributions.
(27) The Class Z Certificates shall not have a principal amount or interest
rate. The Class Z Certificates shall be entitled to distributions as
described in Section 5.02 hereof. For federal income tax purposes, the
Class Z Certificates shall have the characteristics described in
Section 10.01 hereof.
8
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $1,430,306,458.47.
For purposes hereof, each pool of Mortgage Loans constitutes a fully
separate and distinct sub-trust.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accepted 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
Securities Administrator (as successor Master Servicer) or the Master Servicer
or (y) as provided in the applicable Servicing Agreement, to the extent
applicable to the related Servicer.
Accountant: A person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accretion Directed Certificate: Not applicable.
Accretion Termination Date: Not applicable.
Accrual Amount: As to any Class of Accrual Certificates and each
Distribution Date through the Credit Support Depletion Date, the sum of (x) any
amount of Accrued Certificate Interest allocable to such Class pursuant to
Section 5.02(a)(ii) on such Distribution Date and (y) any Interest Shortfall
allocable to such Class pursuant to Section 5.02(a)(iii) on such Distribution
Date. As to any Class of Accrual Certificates and each Distribution Date after
the Credit Support Depletion Date, zero.
Accrual Certificate: None.
Accrual Component: None.
Accrual Period: With respect to any Distribution Date and any Class of
Certificates (except for the Class B1, Class B1X, Class B2, Class B2X, Class B3,
Class B3X, Class B4, Class B4X, Class B5, Class B5X, Class B7, Class B7X, Class
B10, Class B10X, Class B11 and Class B11X Certificates), REMIC 1 Interests,
REMIC 2 Interests (except for the Class LT2-B1
9
Interest, Class LT2-B2 Interest, Class LT2-B3 Interest, Class LT2-B4 Interest,
Class LT2-B5 Interest, Class LT2-B7 Interest, Class LT2-B10 Interest and Class
LT2-B11 Interest), the one-month period beginning immediately following the end
of the preceding Accrual Period (or from the Cut-off Date, in the case of the
first Accrual Period) and ending on the last day of the month immediately
preceding the month in which such Distribution Date occurs. In the case of the
Class B1, Class B1X, Class B2, Class B2X, Class B3, Class B3X, Class B4, Class
B4X, Class B5, Class B5X, Class B7, Class B7X, Class B10, Class B10X, Class B11
and Class B11X Certificates and the Class LT2-B1 Interest, Class LT2-B2
Interest, Class LT2-B3 Interest, Class LT2-B4 Interest, Class LT2-B5 Interest,
Class LT2-B7 Interest, Class LT2-B10 Interest and Class LT2-B11 Interest, the
Accrual Period will be the period from and including the preceding Distribution
Date (or from January 28, 2005 in the case of the first Distribution Date) to
and including the day prior to such Distribution Date.
Accrued Certificate Interest: As to any Class of Certificates and any
Distribution Date, the product of the Certificate Interest Rate for such Class
of Certificates and the Class Principal Amount (or Class Notional Amount) of
such Class of Certificates immediately preceding such Distribution Date, as
reduced by such Class's share of the interest portion of (i) any Excess Losses
for the related Mortgage Pool or Mortgage Pools for such Distribution Date and
(ii) any Relief Act Reduction for the related Mortgage Pool or Mortgage Pools
for such Distribution Date, in each case allocable among the Senior Certificates
of the related Certificate Group pro rata based on the Accrued Certificate
Interest otherwise distributable thereto, and allocable to the Class B1, Class
B2, Class B3, Class B4, Class B5, Class B6, Class B7, Class B8, Class B9, Class
B10, Class B11, Class B12 and Class B13 Certificates pro rata based on interest
accrued at the Underlying Subordinate Rate for the related Mortgage Pool on
their respective Apportioned Principal Balances. Amounts so allocated to the
Class B1, Class B2, Class B3, Class B4, Class B5, Class B7, Class B10 and Class
B11 Certificates shall be allocated between the Class B1 and Class B1X
Certificates or between the Class B2 and Class B2X Certificates or between the
Class B3 and Class B3X Certificates or between the Class B4 and Class B4X
Certificates or between the Class B5 and Class B5X Certificates or between the
Class B7 and Class B7X Certificates or between the Class B10 and Class B10X
Certificates or between the Class B11 and Class B11X Certificates, as the case
may be, proportionately, based upon the Accrued Certificate Interest thereon.
All calculations of interest on each Class of Certificates (other than Class B1,
Class B1X, Class B2, Class B2X, Class B3, Class B3X, Class B4, Class B4X, Class
B5, Class B5X, Class B7, Class B7X, Class B10, Class B10X, Class B11 and Class
B11X Certificates) and each of the REMIC 1 Interests and REMIC 2 Interests
(other than the Class LT2-B1 Interest, Class LT2-B2 Interest, Class LT2-B3
Interest, Class LT2-B4 Interest, Class LT2-B5 Interest, Class LT2-B7 Interest,
Class LT2-B10 Interest and Class LT2-B11 Interest) shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months. All calculations of
interest on the Class B1, Class B1X, Class B2, Class B2X, Class B3, Class B3X,
Class B4, Class B4X, Class B5, Class B5X, Class B7, Class B7X, Class B10, Class
B10X, Class B11 and Class B11X Certificates and the Class LT2-B1 Interest, Class
LT2-B2 Interest, Class LT2-B3 Interest, Class LT2-B4 Interest, Class LT2-B5
Interest, Class LT2-B7 Interest, Class LT2-B10 Interest and Class LT2-B11
Interest will be made on the basis of a 360-day year and the actual number of
days elapsed in the applicable Accrual Period.
Act: As defined in Section 3.03(c).
10
Additional Collateral: None.
Additional Collateral Servicing Agreement: None.
Advance: An advance of the aggregate of payments of principal and
interest (net of the Retained Interest Rate (if applicable), the Master
Servicing Fee and the applicable Servicing Fee) on one or more Mortgage Loans
that were due on the Due Date in the related Due Period and not received as of
the close of business on the related Determination Date, required to be made by
or on behalf of the Master Servicer and the related Servicer (or by the
Securities Administrator solely in its capacity as successor Master Servicer in
accordance with Section 6.14) pursuant to Section 5.04.
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 Master Servicing Compensation: Not applicable.
Aggregate Principal Balance: The aggregate of the Scheduled Principal
Balances for all Mortgage Loans at any date of determination.
Aggregate Subordinate Percentage: With respect to any Distribution Date,
the sum of the Class Principal Amounts of the Subordinate Certificates
immediately prior to such date divided by the sum of the Pool Balances for all
of the Mortgage Pools for the immediately preceding Distribution Date.
Aggregate Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements
hereto.
AP Percentage: Not applicable.
AP Principal Distribution Amount: Not applicable.
Applicants: As defined in Section 8.02(b).
Apportioned Principal Balance: As to any Class of Subordinate
Certificates and any Distribution Date, the Class Principal Amount of such Class
immediately prior to such Distribution Date multiplied by a fraction, the
numerator of which is the applicable Group Subordinate Amount for such date and
the denominator of which is the sum of the Group Subordinate Amounts for all
Mortgage Pools for such date.
11
Appraised Value: With respect to any Mortgage Loan, the amount set forth
in an appraisal made in connection with the origination of such Mortgage Loan as
the value of the related Mortgaged Property.
Associated Mortgage Loan: Not applicable.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall not
be responsible for determining whether any such assignment is in recordable
form.
Aurora: Aurora Loan Services LLC or its successor in interest, in its
capacity as a Servicer.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10.
Authorized Officer: Not applicable.
Available Distribution Amount: As to each Mortgage Pool and on any
Distribution Date, the sum of the following amounts:
(i) the total amount of all cash received by the Master
Servicer through the Remittance Date applicable to each Servicer and
deposited with the Securities Administrator by the Master Servicer by
the Deposit Date for such Distribution Date on the Mortgage Loans of
such Mortgage Pool (including proceeds of any Insurance Policy and any
other credit support relating to such Mortgage Loans and including any
Subsequent Recovery), plus all Advances made by the Master Servicer or
any Servicer (or the Securities Administrator, solely in its capacity as
successor Master Servicer) for such Distribution Date, any Compensating
Interest Payment for such date and Mortgage Pool, any amounts received
with respect to any Additional Collateral, if any, or any surety bond,
if any, related thereto and any amounts paid by any Servicer in respect
of Prepayment Interest Shortfalls in respect of the related Mortgage
Loans for such date, but not including:
(A) all amounts distributed pursuant to Section 5.02
on prior Distribution Dates;
(B) all Scheduled Payments of principal and interest
collected but due on a date subsequent to the related Due
Period;
(C) all Principal Prepayments received or identified
by the applicable Servicer after the applicable Prepayment
Period (together with any interest payments received with such
prepayments to the extent that they represent the
12
payment of interest accrued on the related Mortgage Loans for
the period subsequent to the applicable Prepayment Period);
(D) any other unscheduled collection, including Net
Liquidation Proceeds, Subsequent Recoveries and Insurance
Proceeds, received by the Master Servicer after the applicable
Prepayment Period;
(E) all fees and amounts due or reimbursable to the
Master Servicer, the Trustee (or its custodian) , the Securities
Administrator, the Custodian or a Servicer pursuant to the terms
of this Agreement, the applicable Custodial Agreement or the
applicable Servicing Agreement;
(F) [Reserved];
(G) [Reserved];
(H) Prepayment Interest Excess, to the extent not
offset by Prepayment Interest Shortfalls; and
(ii) any other payment made by the Master Servicer, any
Servicer, the Seller, the Depositor, or any other Person with respect to
such Distribution Date (including the Purchase Price with respect to any
Mortgage Loan purchased by the Seller, the Depositor or any other
Person).
Balloon Mortgage Loan: Not applicable.
Balloon Payment: None.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the United States Bankruptcy Code of 1986,
as amended, or any other similar state laws.
Bankruptcy Coverage Termination Date: As to any Mortgage Pool, the
Distribution Date on which the Bankruptcy Loss Limit has been reduced to zero
(or less than zero).
Bankruptcy Loss Limit: As of the Cut-off Date, $530,630, which amount
shall be reduced from time to time by the amount of Bankruptcy Losses that are
allocated to the Certificates.
Bankruptcy Losses: With respect to the Mortgage Loans in the related
Mortgage Pool, losses that are incurred as a result of Deficient Valuations and
any reduction, in a bankruptcy proceeding, of the amount of the Scheduled
Payment on a Mortgage Loan other than as a result of a Deficient Valuation.
13
Basis Risk Shortfall: Not applicable.
Blanket Mortgage: Not applicable.
Book-Entry Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of which
shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a condition
whereupon book-entry registration and transfer are no longer permitted and
Definitive Certificates are to be issued to Certificate Owners, such Book-Entry
Certificates shall no longer be "Book-Entry Certificates." As of the Closing
Date, all of the Classes of Certificates listed in the Upper Tier REMIC table in
the Preliminary Statement, other than the Class R, Class CX, Class P and Class Z
Certificates, will constitute Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in Colorado, Minnesota, Maryland, New York or, if
other than New York, the city in which the Corporate Trust Office of the Trustee
is located, or (iii) with respect to any Remittance Date or any Servicer
reporting date, the States specified in the definition of "Business Day" in the
applicable Servicing Agreement, are authorized or obligated by law or executive
order to be closed.
Cap Agreement: Each of (i) the interest rate cap agreement (Global Deal
IDs: 2068568 and 2068569), dated as of January 28, 2005, entered into between
the Trustee on behalf of the Trust Fund (for the benefit of the Class B1, Class
B2 and Class CX Certificateholders) and the Cap Provider, (ii) the interest rate
cap agreement (Global Deal IDs: 2068576 and 2068579), dated as of January 28,
2005, entered into between the Trustee on behalf of the Trust Fund (for the
benefit of the Class B3, Class B4 and Class CX Certificateholders) and the Cap
Provider, (iii) the interest rate cap agreement (Global Deal IDs: 2068582 and
2068586), dated as of January 28, 2005, entered into between the Trustee on
behalf of the Trust Fund (for the benefit of the Class B5 and Class CX
Certificateholders) and the Cap Provider, (iv) the interest rate cap agreement
(Global Deal IDs: 2068589 and 2068638), dated as of January 28, 2005, entered
into between the Trustee on behalf of the Trust Fund (for the benefit of the
Class B7 and Class CX Certificateholders) and the Cap Provider, (v) the interest
rate cap agreement (Global Deal IDs: 2068592 and 2068598), dated as of January
28, 2005, entered into between the Trustee on behalf of the Trust Fund (for the
benefit of the Class B10 and Class CX Certificateholders) and the Cap Provider
and (vi) the interest rate cap agreement (Global Deal IDs: 2068599 and 2068600),
dated as of January 28, 2005, entered into between the Trustee on behalf of the
Trust Fund (for the benefit of the Class B11 and Class CX Certificateholders)
and the Cap Provider, commencing in February 2005 and terminating on the Cap
Agreement Termination Date, together with the confirmation and schedules
relating thereto, in the form of Exhibit N hereto. The initial notional amount
for each Cap Agreement will decline on each Distribution Date to an amount equal
to the lesser of (i) the Class Principal Amount of the Class B1 and Class B2
Certificates, Class B3 and Class B4 Certificates, Class B5, Class B7, Class B10
or Class B11 Certificates, as applicable, and (ii) the respective Cap Agreement
Notional Amount set forth in the definition thereof for the related Distribution
Date.
Cap Agreement Reserve Fund: The separate Eligible Account (which shall
not constitute an asset of any REMIC) created and maintained by the Securities
Administrator pursuant to
14
Section 5.06, which shall be held in trust for the Trust Fund for the uses and
purposes set forth in this Agreement.
Cap Agreement Notional Amount: With respect to any Distribution Date,
the notional amount set forth in the schedule in the Cap Agreement, attached
hereto as Exhibit N.
Cap Agreement Termination Date: The Distribution Date in December 2009
(in the case of the Cap Agreements relating to the Class B1, Class B2, Class B4,
Class B5 and Class B7 Certificates) or January 2010 (in the case of the Cap
Agreements relating to the Class B10 and Class B11 Certificates).
Cap Provider: Xxxxxx Brothers Special Financing Inc.
Certificate: Any one of the certificates signed by the Trustee and
countersigned by the Authenticating Agent in substantially the forms attached
hereto as Exhibit A.
Certificate Account: The account maintained by the Securities
Administrator in accordance with the provisions of Section 4.04.
Certificate Group: The Group 1 Certificates, the Group 2 Certificates,
the Group 3 Certificates, the Group 4 Certificates, the Group 5 Certificates or
the Group 6 Certificates, as applicable. Certificate Interest Rate: With respect
to each Class of Certificates and any Distribution Date, the applicable per
annum rate specified or determined as provided in the Preliminary Statement
hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate other than
a Notional Certificate, at the time of determination, the maximum specified
dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the initial principal amount set forth on
the face of such Certificate (plus, in the case of any Negative Amortization
Certificate, any Deferred Interest allocated thereto on previous Distribution
Dates, and plus, in the case of any Accrual Certificate, its Percentage Interest
of any related Accrual Amount for each previous Distribution Date), less the
amount of all principal distributions previously made with respect to such
Certificate, and all Realized Losses allocated to such Certificate and, in the
case of a Subordinate Certificate, any Subordinate Certificate Writedown Amount
allocated to such Certificates; provided, however, that on any Distribution Date
on which a Subsequent Recovery is distributed, the Certificate Principal Amount
of any Class of Certificates then outstanding for which any Realized Loss or any
Subordinate Certificate Writedown Amount has been applied will be increased, in
order of seniority, by an amount equal to the lesser of (i) the amount the Class
of Certificates has been reduced by any Realized Losses or any Subordinate
Certificate Writedown Amount which have not been previously offset by any
Subsequent
15
Recovery pursuant to this proviso and (ii) the total amount of any Subsequent
Recovery distributed on such date to Certificateholders (as reduced (x) by
increases in the Certificate Principal Amount of more senior Classes of
Certificates on such Distribution Date and (y) to reflect a proportionate amount
of what would (but for this clause (y) have been the increases in the
Certificate Principal Amount of Classes of Certificates of equal seniority on
such Distribution Date). For purposes of Article V hereof, unless specifically
provided to the contrary, Certificate Principal Amounts shall be determined as
of the close of business of the immediately preceding Distribution Date, after
giving effect to all distributions made on such date. Notional Certificates are
issued without Certificate Principal Amounts.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.
Class: All Certificates bearing the same class designation, and, in the
case of REMIC 1, REMIC 2 or REMIC 3, all Interests bearing the same designation.
Class AP Certificate: None.
Class AP Deferred Amount: Not applicable.
Class B Certificate: Any Class B1, Class B1X, Class B2, Class B2X, Class
B3, Class B3X, Class B4, Class B4X, Class B5, Class B5X, Class B6, Class B7,
Class B7X, Class B8, Class B9, Class B10, Class B10X, Class B11, Class B11X,
Class B12 and Class B13 Certificate.
Class B1 LIBOR Available Funds Cap: For each Distribution Date will be
equal to the product of (1) the excess between (i) the Pool 1-6 Underlying
Subordinate Rate for such Distribution Date and (ii) 0.92% and (2) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Accrual Period.
Class B2 LIBOR Available Funds Cap: For each Distribution Date will be
equal to the product of (1) the excess between (i) the Pool 1-6 Underlying
Subordinate Rate for such Distribution Date and (ii) 0.92% and (2) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Accrual Period.
Class B10 LIBOR Available Funds Cap: For each Distribution Date will be
equal to (A) the sum of (x) the Pool 1-6 Underlying Subordinate Rate for such
Distribution Date and (y) the product of (i) 0.1002% and (ii) the Class B10
Multiplier, multiplied by (B) a fraction, expressed as a percentage, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
Class B10 Multiplier: For any Distribution Date will be equal to the
percentage equivalent of a fraction, the numerator of which is the sum of (1)
the Class Principal Amount of the Class B1 Certificates and (2) the Class B2
Certificates and the denominator of which is the Class Principal Amount of the
Class B10 Certificates, in each case immediately prior to that Distribution
Date.
Class B11 LIBOR Available Funds Cap: For each Distribution Date will be
equal to (A) the sum of (x) the Pool 1-6 Underlying Subordinate Rate for such
Distribution Date and (y) the product of (i) 0.8198% and (ii) the Class B11
Multiplier, multiplied by (B) a fraction, expressed
16
as a percentage, the numerator of which is 30 and the denominator of which is
the actual number of days in the related Accrual Period.
Class B11 Multiplier: For any Distribution Date will be equal to the
percentage equivalent of a fraction, the numerator of which is the sum of (1)
the Class Principal Amount of the Class B1 Certificates and (2) the Class B2
Certificates and the denominator of which is the Class Principal Amount of the
Class B11 Certificates, in each case immediately prior to that Distribution
Date.
Class LT1-R Interest: The sole residual interest in REMIC 1.
Class LT2-R Interest: The sole residual interest in REMIC 2.
Class Notional Amount: With respect to each Class of Notional
Certificates the applicable class notional amount calculated as provided in the
Preliminary Statement hereto.
Class P Certificates: The Class P Certificates.
Class Percentage: With respect to each Class of Subordinate
Certificates, for each Distribution Date, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such Distribution
Date by the sum of the Class Principal Amounts of all Certificates immediately
prior to such date.
Class Principal Amount: With respect to each Class of Certificates other
than any Class of Notional Certificates, the aggregate of the Certificate
Principal Amounts of all Certificates of such Class at the date of
determination. With respect to each Class of Notional Certificates and the Class
P Certificates, zero.
Class Z Components: Each of the Class ZB1 Component and the Class ZB2
Component.
Class Z Extra Distribution Amount: For any Distribution Date, the excess
of (A) the sum of (x) the interest accrued on the Class ZB1 Component and (y)
the interest accrued on the Class ZB2 Component over (B) the sum of all Excess
REMIC Payments for such Distribution Date.
Class ZB1 Component: An interest-only "regular interest" in the Upper
Tier REMIC represented by the Class Z Certificates entitled on any Distribution
Date to interest accrued on the Class LT2-B1 Interest at a per annum rate of
0.92%. Interest on the Class ZB1 Component shall be calculated on the basis of a
360-day year consisting of twelve 30-day months. For purposes of the REMIC
Provisions, the Class ZB1 Component shall represent the right to a "specified
portion" of the interest on the Class LT2-B1 Interest.
Class ZB2 Component: An interest-only "regular interest" in the Upper
Tier REMIC represented by the Class Z Certificates entitled on any Distribution
Date to interest accrued on the Class LT2-B2 Interest at a per annum rate of
0.92%. Interest on the Class ZB2 Component shall be calculated on the basis of a
360-day year consisting of twelve 30-day months. For purposes of the REMIC
Provisions, the Class ZB2 Component shall represent the right to a "specified
portion" of the interest on the Class LT2-B2 Interest.
17
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
Clearstream: Clearstream Banking, societe anonyme, and any successor
thereto.
Closing Date: January 28, 2005.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Account: A separate account established and maintained by the
Master Servicer pursuant to Section 4.01.
Commission: As defined in Section 6.20(a).
Compensating Interest Payment: With respect to any Distribution Date, an
amount equal to the aggregate amount of any Prepayment Interest Shortfalls
required to be paid by the Servicers with respect to such Distribution Date. The
Master Servicer shall not be responsible to make any Compensating Interest
Payment.
Component: Not applicable.
Component Certificate: Not applicable.
Component Interest Rate: Not applicable.
Component Notional Amount: Not applicable.
Component Principal Amount: Not applicable.
Component Writedown Amount: Not applicable.
Conventional Loan: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.
Converted Mortgage Loan: Not applicable.
Convertible Mortgage Loan: Not applicable.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
18
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Loan Documents: As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3 financing
statements (or copies thereof) or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single-family dwelling located in a Cooperative
Property.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: SARM 2005-1, or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders, the Depositor,
the Master Servicer and the Securities Administrator or the principal corporate
trust office of any successor Trustee. With respect to the Securities
Administrator for purposes of presentment of Certificates for registration of
transfer, exchange or final payment, Xxxxx Fargo Bank, National Association,
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: SARM
2005-1.
Corresponding Certificates or Class Z Components: With respect to any
class of REMIC 2 Interests, the Class or Classes of Certificates or Class Z
Components so designated in the Preliminary Statement hereto.
Corresponding Class: Not applicable.
Corresponding Component: None.
Credit Score: With respect to any Mortgage Loan, a numerical assessment
of default risk with respect to the Mortgagor under such Mortgage Loan,
determined on the basis of a methodology developed by Fair, Xxxxx & Co., Inc.
Credit Support Depletion Date: The Distribution Date on which, after
giving effect to all distributions on such date, the aggregate Certificate
Principal Amount of the Subordinate Certificates is reduced to zero.
19
Credit Support Percentage: As to any Class of Subordinate Certificates
and any Distribution Date, the sum of the Class Percentages of all Classes of
Certificates that rank lower in priority than such Class.
Custodial Agreement: Each custodial agreement attached as Exhibit K
hereto, and any custodial agreement subsequently executed by the Trustee
substantially in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a
Custodial Agreement, and any successor thereto. The initial Custodians are
LaSalle Bank National Association, U.S. Bank National Association and Xxxxx
Fargo Bank, N.A.
Cut-off Date: January 1, 2005.
Cut-off Date Aggregate Principal Balance: Not applicable.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
of the Scheduled Payment that the related Mortgagor is obligated to pay on any
Due Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.
Deferred Interest: None.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under such Mortgage Loan, which valuation
results from a proceeding under Bankruptcy law or any similar proceeding.
Definitive Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
Trust Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
Deposit Date: With respect to each Distribution Date, the Business Day
immediately preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware
corporation having its principal place of business in New York, or its
successors in interest.
Designated Rate: Not applicable.
Determination Date: With respect to each Distribution Date, the
Remittance Date immediately preceding such Distribution Date.
Direct Obligations: As defined in the definition of Eligible
Investments.
Discount Mortgage Loan: None.
20
Disqualified Organization: Either (i) the United States, (ii) any state
or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative described
in section 521 of the Code) which 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, (vii) any organization described in section 1381(a)(2)(C) of the
Code, (viii) any "electing large partnership" described in section 775 of the
Code, or (ix) any other entity designated as a Disqualified Organization by
relevant legislation amending the REMIC Provisions and in effect at or proposed
to be effective as of the time of the determination. In addition, a corporation
will not be treated as an instrumentality of the United States or of any state
or political subdivision thereof if all of its activities are subject to tax
and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such governmental unit.
Distribution Date: The 25th day of each month, or, if such 25th day is
not a Business Day, the next succeeding Business Day commencing in February
2005.
Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.
Due Period: With respect to any Distribution Date, 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: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company or
depository institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category, or (iii) a segregated trust
account or accounts (which shall be a "special deposit account") maintained with
the Trustee, the Securities Administrator or any other federal or state
chartered depository institution or trust company, acting in its fiduciary
capacity, in a manner acceptable to the Trustee and the Rating Agencies.
Eligible Accounts may bear interest.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed
as to timely payment of principal and interest by, the United States of
America or any agency or instrumentality of the United States of America
the obligations of which are backed by the full faith and credit of the
United States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any
depository institution or trust company (including
21
U.S. subsidiaries of foreign depositories and the Trustee or any agent
of the Trustee or the Securities Administrator, acting in its respective
commercial capacity) incorporated or organized under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal or state banking authorities, so long as at
the time of investment or the contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or
deposit institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category or one of its two
highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by GNMA, FNMA or FHLMC with any
registered broker/dealer subject to Securities Investors' Protection
Corporation jurisdiction or any commercial bank insured by the FDIC, if
such broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any state thereof which have a credit rating from each Rating
Agency, at the time of investment or the contractual commitment
providing for such investment, at least equal to one of the two highest
short-term credit ratings of each Rating Agency; provided, however, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation
and held as part of the Trust Fund to exceed 20% of the sum of the
Aggregate Principal Balance and the aggregate principal amount of all
Eligible Investments in the Certificate Account; provided, further, that
such securities will not be Eligible Investments if they are published
as being under review with negative implications from either Rating
Agency;
(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 180 days after the date of issuance
thereof) rated by each Rating Agency in its highest short-term ratings;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and
(viii) any other demand, money market fund, common trust fund
or time deposit or obligation, or interest-bearing or other security or
investment (including those managed or advised by the Securities
Administrator or an Affiliate thereof), (A) rated in
22
the highest rating category by each Rating Agency (if rated by such
Rating Agency) or (B) that would not adversely affect the then current
rating by either Rating Agency of any of the Certificates and has a
short term rating of at least "A-1" or its equivalent by each Rating
Agency. Such investments in this subsection (viii) may include money
market mutual funds for which the Trustee, the Securities Administrator,
the Master Servicer or an affiliate thereof serves as an investment
advisor, administrator, shareholder servicing agent, and/or custodian or
subcustodian, notwithstanding that (i) any such Person or an Affiliate
thereof charges and collects fees and expenses from such funds for
services rendered, (ii) any such Person or an Affiliate thereof charges
and collects fees and expenses for services rendered pursuant to this
Agreement, and (iii) services performed for such funds and pursuant to
this Agreement may converge at any time. The Trustee specifically
authorizes any such Person or an Affiliate thereof to charge and collect
from the Trust Fund such fees as are collected from all investors in
such funds for services rendered to such funds (but not to exceed
investment earnings thereon);
provided, however, that (x) no such instrument shall be an Eligible Investment
if such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations and (y) each such investment must
be a "permitted investment" within the meaning of Section 860G(a)(5) of the
Code.
Employee Mortgage Loan: None.
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Labor regulations issued pursuant
thereto in temporary or final form.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of the
Underwriter's Exemption, except, in relevant part, for the requirement that the
certificates have received a rating at the time of acquisition that is in one of
the three (or four, in the case of a "designated transaction") highest generic
rating categories by at least one of the Rating Agencies.
ERISA-Restricted Certificate: Any Class R, Class P, Class B11, Class B12
or Class B13 Certificate and any other Certificate, unless the acquisition and
holding of such other Certificate is covered by and exempt under the
Underwriter's Exemption.
Escrow Account: Any account established and maintained by a Servicer
pursuant to the applicable Servicing Agreement.
Euroclear: Euroclear S.A./N.V., as operator of the Euroclear System.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14(a).
23
Excess Loss: Any Bankruptcy Loss, or portion thereof, in excess of the
then-applicable Bankruptcy Loss Limit, any Fraud Loss, or portion thereof, in
excess of the then-applicable Fraud Loss Limit, and any Special Hazard Loss, or
portion thereof, in excess of the then-applicable Special Hazard Loss Limit.
Excess REMIC Payment: For any Distribution Date, any of (i) any interest
payable to the Class B10 Certificates at a rate in excess of the LIBOR Available
Funds Cap, (ii) any interest payable to the Class B11 Certificates at a rate in
excess of the LIBOR Available Funds Cap, (iii) any interest payable to the Class
B10X Certificates substituting "LIBOR Available Funds Cap" for "Class B10 LIBOR
Available Funds Cap" in the Certificate Interest Rate for the Class B10X
Certificates and (iv) any interest payable to the Class B11X Certificates
substituting "LIBOR Available Funds Cap" for "Class B11 LIBOR Available Funds
Cap" in the Certificate Interest Rate for the Class B11X Certificates.
Extended Period: As defined in Section 10.04(b).
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Scheduled Distribution Date: For the Certificates (other than the
Class 3-AX Certificates) is the Distribution Date in February 2035; for the
Class 3-AX Certificates is the Distribution Date in December 2009.
Financial Intermediary: Not applicable.
Fitch: Not applicable.
Floating Rate Certificate Shortfall: With respect to the Class B1
Certificates and any Distribution Date on or prior to the Distribution Date in
December 2009, in the event that the Certificate Interest Rate for such Class B1
Certificates is based upon the Class B1 LIBOR Available Funds Cap, is equal to
the sum of (A) the excess of (i) the amount of interest that such Class B1
Certificates would have been entitled to receive on such Distribution Date had
the Certificate Interest Rate for such Class B1 Certificates not been calculated
based on the Class B1 LIBOR Available Funds Cap over (ii) the amount of interest
such Class B1 Certificates was entitled to receive based on the Class B1 LIBOR
Available Funds Cap and (B) any unpaid Floating Rate Certificate Shortfall for
such Class B1 Certificates with respect to any prior Distribution Date plus
interest accrued thereon at a per annum rate of LIBOR plus 0.45% per annum. With
respect to the Class B2 Certificates and any Distribution Date on or prior to
the Distribution Date in December 2009, in the event that the Certificate
Interest Rate for such Class B2 Certificates is based upon the Class B2 LIBOR
Available Funds Cap, is equal to the sum of (A) the excess of (i) the amount of
interest that such Class B2 Certificates would have been entitled to receive on
such Distribution Date had the Certificate Interest Rate for such Class B2
Certificates not been calculated based on the Class B2 LIBOR Available Funds Cap
over (ii) the amount of interest such Class B2 Certificates was entitled to
receive based on the Class B2 LIBOR Available Funds Cap and (B) any unpaid
Floating Rate Certificate Shortfall for such Class B2 Certificates with respect
to any prior Distribution Date plus interest accrued thereon at a per annum rate
of LIBOR plus 0.47% per annum. With respect to the Class B3 Certificates and
24
any Distribution Date on or prior to the Distribution Date in December 2009, in
the event that the Certificate Interest Rate for such Class B3 Certificates is
based upon the LIBOR Available Funds Cap, is equal to the sum of (A) the excess
of (i) the amount of interest that such Class B3 Certificates would have been
entitled to receive on such Distribution Date had the Certificate Interest Rate
for such Class B3 Certificates not been calculated based on the LIBOR Available
Funds Cap over (ii) the amount of interest such Class B3 Certificates was
entitled to receive based on the LIBOR Available Funds Cap and (B) any unpaid
Floating Rate Certificate Shortfall for such Class B3 Certificates with respect
to any prior Distribution Date plus interest accrued thereon at a per annum rate
of LIBOR plus 0.52% per annum. With respect to the Class B4 Certificates and any
Distribution Date on or prior to the Distribution Date in December 2009, in the
event that the Certificate Interest Rate for such Class B4 Certificates is based
upon the LIBOR Available Funds Cap, is equal to the sum of (A) the excess of (i)
the amount of interest that such Class B4 Certificates would have been entitled
to receive on such Distribution Date had the Certificate Interest Rate for such
Class B4 Certificates not been calculated based on the LIBOR Available Funds Cap
over (ii) the amount of interest such Class B4 Certificates was entitled to
receive based on the LIBOR Available Funds Cap and (B) any unpaid Floating Rate
Certificate Shortfall for such Class B4 Certificates with respect to any prior
Distribution Date plus interest accrued thereon at a per annum rate of LIBOR
plus 0.58% per annum. With respect to the Class B5 Certificates and any
Distribution Date on or prior to the Distribution Date in December 2009, in the
event that the Certificate Interest Rate for such Class B5 Certificates is based
upon the LIBOR Available Funds Cap, is equal to the sum of (A) the excess of (i)
the amount of interest that such Class B5 Certificates would have been entitled
to receive on such Distribution Date had the Certificate Interest Rate for such
Class B5 Certificates not been calculated based on the LIBOR Available Funds Cap
over (ii) the amount of interest such Class B5 Certificates was entitled to
receive based on the LIBOR Available Funds Cap and (B) any unpaid Floating Rate
Certificate Shortfall for such Class B5 Certificates with respect to any prior
Distribution Date plus interest accrued thereon at a per annum rate of LIBOR
plus 0.78% per annum. With respect to the Class B7 Certificates and any
Distribution Date on or prior to the Distribution Date in December 2009, in the
event that the Certificate Interest Rate for such Class B7 Certificates is based
upon the LIBOR Available Funds Cap, is equal to the sum of (A) the excess of (i)
the amount of interest that such Class B7 Certificates would have been entitled
to receive on such Distribution Date had the Certificate Interest Rate for such
Class B7 Certificates not been calculated based on the LIBOR Available Funds Cap
over (ii) the amount of interest such Class B7 Certificates was entitled to
receive based on the LIBOR Available Funds Cap and (B) any unpaid Floating Rate
Certificate Shortfall for such Class B7 Certificates with respect to any prior
Distribution Date plus interest accrued thereon at a per annum rate of LIBOR
plus 1.40% per annum. With respect to the Class B10 Certificates and any
Distribution Date on or prior to the Distribution Date in January 2010, in the
event that the Certificate Interest Rate for such Class B10 Certificates is
based upon the Class B10 LIBOR Available Funds Cap, is equal to the sum of (A)
the excess of (i) the amount of interest that such Class B10 Certificates would
have been entitled to receive on such Distribution Date had the Certificate
Interest Rate for such Class B10 Certificates not been calculated based on the
Class X00 XXXXX Available Funds Cap over (ii) the amount of interest such Class
B10 Certificates was entitled to receive based on the Class B10 LIBOR Available
Funds Cap and (B) any unpaid Floating Rate Certificate Shortfall for such Class
B10 Certificates with respect to any prior Distribution Date plus interest
accrued thereon at a per annum rate of LIBOR plus 3.75% per annum. With respect
to the Class B11
25
Certificates and any Distribution Date on or prior to the Distribution Date in
January 2010, in the event that the Certificate Interest Rate for such Class B11
Certificates is based upon the Class B11 LIBOR Available Funds Cap, is equal to
the sum of (A) the excess of (i) the amount of interest that such Class B11
Certificates would have been entitled to receive on such Distribution Date had
the Certificate Interest Rate for such Class B11 Certificates not been
calculated based on the Class X00 XXXXX Available Funds Cap over (ii) the amount
of interest such Class B11 Certificates was entitled to receive based on the
Class B11 LIBOR Available Funds Cap and (B) any unpaid Floating Rate Certificate
Shortfall for such Class B11 Certificates with respect to any prior Distribution
Date plus interest accrued thereon at a per annum rate of LIBOR plus 5.00% per
annum.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
Form 10-K Certification: As defined in Section 6.20(a) hereof.
Fraud Loss: Any Realized Loss on a Liquidated Mortgage Loan sustained by
reason of a default arising from fraud, dishonesty or misrepresentation in
connection with the related Mortgage Loan, as reported by the applicable
Servicer to the Master Servicer.
Fraud Loss Limit: With respect to any Distribution Date (x) prior to the
first anniversary of the Cut-off Date, $28,606,129 less the aggregate of Fraud
Losses since the Cut-off Date and (y) from the first anniversary to the fifth
anniversary of the Cut-off Date, an amount equal to (1) the lesser of (a) the
Fraud Loss Limit as of the most recent anniversary of the Cut-off Date and (b)
1% of the aggregate principal balance of all the Mortgage Loans as of the most
recent anniversary of the Cut-off Date less (2) the aggregate of Fraud Losses
since the most recent anniversary of the Cut-off Date. On or after the fifth
anniversary of the Cut-off Date, the Fraud Loss Limit shall be zero.
Global Securities: The global certificates representing the Book-Entry
Certificates.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
Grantor Trust: Any of Grantor Trust I or any grantor trust described in
Section 10.01(n) hereof.
Grantor Trust I: That certain "grantor trust" (within the meaning of the
Grantor Trust Provisions) consisting of the Grantor Trust I Assets.
Grantor Trust I Assets: Any Prepayment Penalty Amounts collected with
respect to Pool 1, Pool 2, Pool 3, Pool 4, Pool 5 or Pool 6.
Grantor Trust Provisions: Subpart E of Subchapter J of the Code,
including Treasury regulation section 301.7701-4(c)(2).
Group 1: All of the Group 1 Certificates.
26
Group 1 Certificate: Any Class 1-A1, Class 1-A2 or Class R Certificate.
Group 2: All of the Group 2 Certificates.
Group 2 Certificate: Any Class 2-A Certificate.
Group 3: All of the Group 3 Certificates.
Group 3 Certificate: Any Class 3-A Certificate.
Group 4: All of the Group 4 Certificates.
Group 4 Certificate: Any Class 4-A1 or Class 4-A2 Certificate.
Group 5: All of the Group 5 Certificates.
Group 5 Certificate: Any Class 5-A1 or Class 5-A2 Certificate.
Group 6: All of the Group 6 Certificates.
Group 6 Certificate: Any Class 6-A Certificate.
Group Subordinate Amount: With respect to any Mortgage Pool and any
Distribution Date, the excess, if any, of the Pool Balance of such Mortgage Pool
for the immediately preceding Distribution Date over the sum of the aggregate of
the Certificate Principal Amounts of the Senior Certificates of the related
Certificate Group immediately prior to the related Distribution Date.
Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the Master
Servicer, the Cap Provider, any Servicer, or any Affiliate thereof shall be
deemed not to be outstanding in determining whether the requisite percentage
necessary to effect any such consent has been obtained, except that, in
determining whether the Trustee shall be protected in relying upon any such
consent, only Certificates which a Responsible Officer of the Trustee knows to
be so owned shall be disregarded. The Trustee may request and conclusively rely
on certifications by the Depositor, the Master Servicer, the Cap Provider or any
Servicer in determining whether any Certificates are registered to an Affiliate
of the Depositor, the Master Servicer, the Cap Provider or such Servicer,
respectively.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person,
27
and (c) is not connected with such other Person or any Affiliate of such other
Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
Initial LIBOR Rate: 2.55%.
Initial Net Mortgage Rate: Not applicable.
Initial Senior Enhancement Percentage: 6.70%.
Insurance Policy: Any Primary Mortgage Insurance Policy and any standard
hazard insurance policy, flood insurance policy, earthquake insurance policy or
title insurance policy relating to the Mortgage Loans or the Mortgaged
Properties, to be in effect as of the Closing Date or thereafter during the term
of this Agreement.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy, other than amounts (i) to cover expenses incurred by or on behalf of the
applicable Servicer in connection with procuring such proceeds, (ii) to be
applied to restoration or repair of the related Mortgaged Property, or (iii)
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note.
Interest Distribution Amount: Not applicable.
Interest Shortfall: With respect to any Class of Certificates and any
Distribution Date, any Accrued Certificate Interest not distributed (or added to
principal) with respect to any previous Distribution Date, other than any Net
Prepayment Interest Shortfalls.
Intervening Assignments: The original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument.
IRS: The Internal Revenue Service.
Latest Possible Maturity Date: The Distribution Date in February 2035.
Xxxxxx Brothers Holdings: Xxxxxx Brothers Holdings Inc., or any
successor in interest.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR Rate.
With respect to each subsequent Accrual Period, the per annum rate determined
pursuant to Section 4.05 on the basis of London interbank offered rate
quotations for one month Eurodollar deposits, as such quotations may appear on
the display designated as page "LIBOR" on the Bloomberg Financial Markets
Commodities News (or such other page as may replace such page on that service
for the purpose of displaying London interbank offered quotations of major
banks).
LIBOR Available Funds Cap: For each Distribution Date will be equal to
the product of (i) the Pool 1-6 Underlying Subordinate Rate for such
Distribution Date and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual Period.
28
LIBOR Certificate: Any Class B1, Class B2, Class B3, Class B4, Class B5,
Class B7, Class B10 or Class B11 Certificate.
LIBOR Component: Not applicable.
LIBOR Determination Date: The second London Business Day immediately
preceding the commencement of each Accrual Period with respect to any LIBOR
Certificate other than the first such Accrual Period.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer or the applicable Servicer has determined that all amounts that
it expects to recover on behalf of the Trust Fund from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master Servicer
or any Servicer in connection with the liquidation of any defaulted Mortgage
Loan and are not recoverable under the applicable Primary Mortgage Insurance
Policy, including, without limitation, foreclosure and rehabilitation expenses,
legal expenses and unreimbursed amounts expended pursuant to Sections 9.06, 9.16
or 9.22. Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property (including any Additional Collateral) if the
Mortgaged Property (including such Additional Collateral) is acquired in
satisfaction of the Mortgage Loan, including any amounts remaining in the
related Escrow Account.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of the
principal balance of such Mortgage Loan at origination, or such other date as is
specified, to the Original Value thereof.
London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Losses: As defined in Section 10.03.
Maintenance: Not applicable.
Master Servicer: Aurora Loan Services LLC, or any successor in interest,
or if any successor master servicer shall be appointed as herein provided, then
such successor master servicer.
Master Servicer Remittance Date: With respect to each Distribution Date,
the Business Day immediately preceding such Distribution Date.
Master Servicing Fee: As to any Distribution Date and each Mortgage
Loan, an amount equal to the product of the Master Servicing Fee Rate and the
Scheduled Principal Balance of such Mortgage Loan as of the first day of the
related Due Period. The Master Servicing Fee for any Mortgage Loan shall be
payable in respect of any Distribution Date solely from the interest
29
portion of the Scheduled Payment or other payment or recovery with respect to
such Mortgage Loan.
Master Servicing Fee Rate: With respect to each Mortgage Loan (other
than any Participation), 0.000% per annum.
Material Defect: As defined in Section 2.02(c) hereof.
Maximum Rate of Payment: The applicable rates set forth in the columns
titled "Maximum Rate %" in the schedules to the Cap Agreements attached hereto
as Exhibit N.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
Corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS,
as agent for the holder from time to time of the Mortgage Note.
Moody's: Xxxxx'x Investors Service, Inc, or any successor in interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage 100(SM) Loan: Not applicable.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan required to be delivered to the Trustee
or a Custodian pursuant to this Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant to Section 2.01 or Section 2.05,
including without limitation, each Mortgage Loan listed on the Mortgage Loan
Schedule, as amended from time to time. In addition, as used herein the term
"Mortgage Loan" includes the Participations, except where otherwise specified or
where the context requires otherwise.
Mortgage Loan Sale Agreement: The agreement, dated as of January 1,
2005, for the sale of certain Mortgage Loans by Xxxxxx Brothers Holdings to the
Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time to reflect the addition of Mortgage Loans to, or the deletion of
Mortgage Loans from, the Trust Fund. The Mortgage Loan Schedule shall include,
among other information agreed upon by the Depositor, the Master Servicer, the
applicable Servicer, the Securities Administrator and the Trustee, data fields
specifying the terms and method of calculation of any Prepayment Penalty Amount
with respect to each Mortgage Loan. The Depositor shall be responsible for
providing the Trustee, the Master Servicer and the Securities Administrator with
all amendments to the Mortgage Loan Schedule.
30
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: Any of Pool 1, Pool 2, Pool 3, Pool 4, Pool 5 or Pool 6.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan.
Mortgaged Property: Either of (x) the fee simple interest in real
property, together with improvements thereto including any exterior improvements
to be completed within 120 days of disbursement of the related Mortgage Loan
proceeds, or (y) in the case of a Cooperative Loan, the related Cooperative
Shares and Proprietary Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization Certificate: None.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances, Servicing
Advances and Servicing Fees received and retained in connection with the
liquidation of such Mortgage Loan.
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by the sum of the applicable Master Servicing Fee Rate,
Servicing Fee Rate, Securities Administrator Fee Rate, the Retained Interest
Rate (if applicable) and any mortgage insurance premium rate (if applicable).
Net Prepayment Interest Shortfall: With respect to any Master Servicer
Remittance Date, the excess, if any, of any Prepayment Interest Shortfalls with
respect to the Mortgage Loans in such Mortgage Pool for such date over the sum
of any amounts paid by the applicable Servicer with respect to such shortfalls
and any amount that is required to be paid by the Master Servicer in respect of
such shortfalls pursuant to this Agreement.
Net WAC: With respect to each Mortgage Pool and any Distribution Date,
the weighted average of Net Mortgage Rates of the Mortgage Loans in the related
Mortgage Pool at the beginning of the related Due Period, weighted on the basis
of their Scheduled Principal Balances at the beginning of the related Due
Period.
Non-AP Percentage: Not applicable.
Non-AP Senior Certificate: Not applicable.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Discount Mortgage Loan: None.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
31
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than (i) a citizen or resident of the
United States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the District
of Columbia; (iii) a partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate whose
income is includible in gross income for United States income tax purposes
regardless of its source; or (v) a trust, if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more U.S. Persons have authority to control all substantial decisions of
the trust. Notwithstanding the last clause of the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on August
20, 1996, and treated as U.S. Persons prior to such date, may elect to continue
to be U.S. Persons.
Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: Any Class 3-AX, Class B1X, Class B2X, Class B3X,
Class B4X, Class B5X, Class B7X, Class B10X or Class B11X Certificate.
Notional Component: None.
Offering Document: Either of the private placement memorandum dated
January 27, 2005 relating to the Class B11, Class B11X, Class B12 and Class B13
Certificates, or the Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, and who may be in-house or outside counsel
to the Depositor, the Master Servicer or the applicable Servicer but which must
be Independent outside counsel with respect to any such opinion of counsel
concerning the transfer of any Residual Certificate or concerning certain
matters with respect to ERISA, or the taxation, or the federal income tax
status, of each REMIC. For purpose of Section 2.01(c)(i), the Opinion of Counsel
referred to therein may take the form of a memorandum of law or other acceptable
assurance.
Original Credit Support Percentage: With respect to any Class of
Subordinate Certificates (other than the Class B13 Certificates), the Credit
Support Percentage with respect to such Class on the Closing Date.
Original Group Subordinate Amount: As to any Mortgage Pool, the Group
Subordinate Amount for such Mortgage Pool on the Closing Date.
32
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor at
the time the related Mortgage Loan was originated.
Parent Power(SM) Loan: Not applicable.
Participation Agreement: None.
Participation: None.
Participation Schedule: None.
Participation Master Servicer: Not applicable.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
Permitted Transferee: As defined in Section 3.03(f).
Percentage Interest: With respect to any Certificate and the related
Class, such Certificate's percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by all Certificates of the same
Class as such Certificate. With respect to any Certificate other than a Notional
Certificate, the Percentage Interest evidenced thereby shall equal the initial
Certificate Principal Amount thereof divided by the initial Class Principal
Amount of all Certificates of the same Class. With respect to any Notional
Certificate and any Class P Certificate, the Percentage Interest evidenced
thereby shall be as specified on the face thereof.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Placement Agent: Xxxxxx Brothers Inc.
Plan Asset Regulations: Not applicable.
Pledged Asset Loan-to-Value Ratio: Not applicable.
Pledged Asset Mortgage Loan: None.
Pool 1: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 1.
Pool 1-6 Underlying Subordinate Rate: The weighted average of the
Underlying Subordinate Rate for Pool 1, Pool 2, Pool 3, Pool 4, Pool 5 and Pool
6, weighted by the corresponding Group Subordinate Amounts.
Pool 2: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 2.
33
Pool 3: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 3.
Pool 4: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 4.
Pool 5: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 5.
Pool 6: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 6.
Pool Balance: As to each Mortgage Pool and any Distribution Date, the
sum of the Scheduled Principal Balance of the Mortgage Loans included in such
Mortgage Pool.
Prepayment Interest Excess: With respect to any Distribution Date and
any Principal Prepayment in full received on the Mortgage Loans serviced by
Aurora from the first day through the sixteenth day of the month during which
such Distribution Date occurs, all amounts paid in respect of interest at the
applicable Net Mortgage Rate on such Principal Prepayment in full.
Prepayment Interest Shortfall: With respect to any Distribution Date and
(x) any Principal Prepayment in part (other than those Mortgage Loans serviced
by Washington Mutual Bank, FA) and, with respect to those Mortgage Loans
serviced by Servicers other than Aurora, any Principal Prepayment in full, (y)
any Principal Prepayment in full with respect to those Mortgage Loans serviced
by Aurora if received on or after the seventeenth day of the month immediately
preceding the month of such Distribution Date but on or before the last day of
the month immediately preceding the month of such Distribution Date and (z) any
Principal Prepayment in full or in part with respect to those Mortgage Loans
serviced by Countrywide Home Loans Servicing LP if received on or after the
second day of the month immediately preceding the month of such Distribution
Date but on or before the last day of the month immediately preceding the month
of such Distribution Date, the difference between (i) one full month's interest
at the applicable Mortgage Rate (after giving effect to any applicable Relief
Act Reduction), as reduced by the applicable Servicing Fee Rate, the Master
Servicing Fee Rate and the applicable Retained Interest Rate, if any, on the
outstanding principal balance of such Mortgage Loan immediately prior to such
prepayment and (ii) the amount of interest actually received with respect to
such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Penalty Amounts: With respect to any Distribution Date, all
premiums or charges paid by the obligors under the related Mortgage Notes due to
Principal Prepayments collected by the applicable Servicer during the
immediately preceding Prepayment Period, if any.
Prepayment Period: With respect to those Mortgage Loans serviced by
Servicers other than Aurora and Countrywide Home Loans Servicing LP, any
Distribution Date and any Principal Prepayment, whether in part or in full
(including any liquidation), the calendar month immediately preceding the month
in which such Distribution Date occurs. With respect to any Distribution Date
and a Principal Prepayment in full (including any liquidation) with respect to
those Mortgage Loans serviced by Aurora, the period from the seventeenth (or, in
the case of the
34
first Distribution Date, the first) day of the month immediately preceding the
month of such Distribution Date to the sixteenth day of the month of such
Distribution Date. With respect to those Mortgage Loans serviced by Aurora, any
Distribution Date and any Principal Prepayment in part, the calendar month
immediately preceding the month in which such Distribution Date occurs. With
respect to any Distribution Date and a Principal Prepayment in full or in part
(including any liquidation) with respect to those Mortgage Loans serviced by
Countrywide Home Loans Servicing LP, the period from the second day of the month
immediately preceding the month of such Distribution Date to the first day of
the month of such Distribution Date.
Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if any,
on an individual Mortgage Loan, as evidenced by a policy or certificate.
Principal Amount Schedules: Not applicable.
Principal Only Certificate: Not applicable.
Principal Prepayment: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled Due
Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the applicable Servicing
Agreement.
Proceeding: Not applicable.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated January 27, 2005, together
with the accompanying prospectus dated January 25, 2005, relating to the Senior
Certificates and the Class B1, Class B1X, Class B2, Class B2X, Class B3, Class
B3X, Class B4, Class B4X, Class B5, Class B5X, Class B6, Class B7, Class B7X,
Class B8, Class B9, Class B10 and Class B10X Certificates.
Purchase Price: With respect to the repurchase of a Mortgage Loan
pursuant to this Agreement, an amount equal to the sum of (a) 100% of the unpaid
principal balance of such Mortgage Loan, (b) accrued interest thereon at the
Mortgage Rate, from the date as to which interest was last paid to (but not
including) the Due Date immediately preceding the next Distribution Date, (c)
any unreimbursed Servicing Advances with respect to such Mortgage Loan and (d)
any costs and damages incurred by the Trust Fund in connection with any
violation by such Mortgage Loan of any predatory- or abusive-lending law. The
Master Servicer or the applicable Servicer (or the Securities Administrator, if
applicable) shall be reimbursed from the Purchase Price for any Mortgage Loan or
related REO Property for any Advances made with respect to such Mortgage Loan
that are reimbursable to the Master Servicer, such Servicer or the Securities
Administrator under this Agreement or the applicable Servicing Agreement, as
well as any unreimbursed Servicing Advances and accrued and unpaid Master
Servicing Fees or Servicing Fees, as applicable.
QIB: As defined in Section 3.03(c).
35
Qualified GIC: A guaranteed investment contract or surety bond providing
for the investment of funds in the Collection Account or the Certificate Account
and insuring a minimum, fixed or floating rate of return on investments of such
funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two highest
rating categories or, if such insurance company has no long-term debt, whose
claims paying ability is rated by each Rating Agency in one of its two highest
rating categories, and whose short-term debt is rated by each Rating Agency in
its highest rating category;
(b) provide that the Trustee may exercise all of the rights under
such contract or surety bond without the necessity of taking any action by any
other Person;
(c) provide that if at any time the then current credit standing of
the obligor under such guaranteed investment contract is such that continued
investment pursuant to such contract of funds would result in a downgrading of
any rating of the Certificates, the Trustee shall terminate such contract
without penalty and be entitled to the return of all funds previously invested
thereunder, together with accrued interest thereon at the interest rate provided
under such contract to the date of delivery of such funds to the Trustee;
(d) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder; and
(e) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the Collection Account or the Certificate
Account, as the case may be, not later than the Business Day prior to any
Distribution Date.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the related Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability is
rated by each Rating Agency in its highest rating category or whose selection as
an insurer will not adversely affect the rating of the Certificates.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess of the
Scheduled Principal Balance of the related Deleted Mortgage Loan, provided,
however, that, to the extent that the Scheduled Principal Balance of such
Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together with
interest thereon at the applicable Mortgage Rate net of the applicable Master
Servicing Fee and the applicable Servicing Fee from the date as to which
interest was last paid through the end of the Due Period in which such
substitution occurs, shall be paid by the party effecting such substitution to
the Master Servicer for deposit into the Collection Account, and shall be
treated as a Principal Prepayment hereunder; (ii) has a Net Mortgage Rate not
lower than the Net Mortgage Rate of the related Deleted Mortgage Loan and
36
will be a Discount Mortgage Loan if the Deleted Mortgage Loan was a Discount
Mortgage Loan or a Non-Discount Mortgage Loan if the Deleted Mortgage Loan was a
Non-Discount Mortgage Loan; (iii) has a remaining stated term to maturity not
more than eighteen months longer than, and not more than eighteen months shorter
than, the remaining term to stated maturity of the related Deleted Mortgage
Loan; (iv) (A) has a Loan-to-Value Ratio as of the date of such substitution of
not greater than 80%, provided, however, that if the related Deleted Mortgage
Loan has a Loan-to-Value Ratio of greater than 80%, then the Loan-to-Value Ratio
of such substitute Mortgage Loan may be greater than 80% but shall not be
greater than the Loan-to-Value Ratio of the related Deleted Mortgage Loan and
(B) the addition of such substitute Mortgage Loan does not increase the weighted
average Loan-to-Value Ratio of the related Mortgage Pool by more than 5%; (v)
will comply with all of the representations and warranties relating to Mortgage
Loans set forth herein, as of the date as of which such substitution occurs;
(vi) is not a Cooperative Loan unless the related Deleted Mortgage Loan was a
Cooperative Loan; (vii) if applicable, has the same index as and a margin not
less than that of the related Deleted Mortgage Loan; (viii) has not been
delinquent for a period of more than 30 days more than once in the twelve months
immediately preceding such date of substitution; (ix) is covered by a Primary
Mortgage Insurance Policy if the related Deleted Mortgage Loan is so covered,
and the Loan-to-Value Ratio of such Mortgage Loan is greater than 80%; (x) has a
Credit Score not greater than 20 points lower than the Credit Score of the
related Deleted Mortgage Loan, provided, however, that if the Deleted Mortgage
Loan does not have a Credit Score, then such substitute Mortgage Loan shall have
a Credit Score equal to or greater than 700; (xi) has its initial adjustment
date after the related Reset Date; and (xii) has a gross margin no less than the
related Deleted Mortgage Loan. In the event that either one mortgage loan is
substituted for more than one Deleted Mortgage Loan or more than one mortgage
loan is substituted for one or more Deleted Mortgage Loans, then (a) the
Scheduled Principal Balance referred to in clause (i) above shall be determined
such that the aggregate Scheduled Principal Balance of all such substitute
Mortgage Loans shall not exceed the aggregate Scheduled Principal Balance of all
Deleted Mortgage Loans and (b) each of (1) the rate referred to in clause (ii)
above, (2) the remaining term to stated maturity referred to in clause (iii)
above, (3) the Loan-to-Value Ratio referred to in clause (iv) above and (4) the
Credit Score referred to in clause (x) above shall be determined on a weighted
average basis, provided that the final scheduled maturity date of any Qualifying
Substitute Mortgage Loan shall not exceed the Final Scheduled Distribution Date
of any Class of Certificates. Whenever a Qualifying Substitute Mortgage Loan is
substituted for a Deleted Mortgage Loan pursuant to this Agreement, the party
effecting such substitution shall certify such qualification in writing to the
Trustee and the Master Servicer.
Rating Agency: Each of S&P or Xxxxx'x.
Realized Loss: (a) with respect to each Liquidated Mortgage Loan, an
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of the
date of liquidation, plus (ii) interest at the applicable Net Mortgage Rate from
the date as to which interest was last paid up to the last day of the month of
such liquidation, minus (iii) Liquidation Proceeds received, net of amounts that
are reimbursable to the Master Servicer or the applicable Servicer with respect
to such Mortgage Loan (other than Advances of principal and interest) including
expenses of liquidation or (b) with respect to each Mortgage Loan that has
become the subject of a Deficient Valuation, the difference between the unpaid
principal balance of such Mortgage Loan immediately prior to such Deficient
Valuation and the unpaid principal balance of such
37
Mortgage Loan as reduced by the Deficient Valuation. In determining whether a
Realized Loss on a Liquidated Mortgage Loan is a Realized Loss of interest or
principal, Liquidation Proceeds shall be allocated, first, to payment of
expenses related to such Liquidated Mortgage Loan (including payment of any
Retained Interest), then to accrued unpaid interest and finally to reduce the
principal balance of the Mortgage Loan.
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
Record Date: With respect to any Distribution Date and each Class of
Certificates (other than the Class B1, Class B1X, Class B2, Class B2X, Class B3,
Class B3X, Class B4, Class B4X, Class B5, Class B5X, Class B7, Class B7X, Class
B10, Class B10X, Class B11 and Class B11X Certificates), the close of business
on the last Business Day of the month immediately preceding the month in which
such Distribution Date occurs. The Record Date for each Distribution Date for
the Class B1, Class B1X, Class B2, Class B2X, Class B3, Class B3X, Class B4,
Class B4X, Class B5, Class B5X, Class B7, Class B7X, Class B10, Class B10X,
Class B11 and Class B11X Certificates will be the close of business on the
Business Day immediately preceding such Distribution Date.
Redemption Certificate: None.
Reference Banks: As defined in Section 4.05(c).
Regulation S: Regulation S promulgated under the Act or any successor
provision thereto, in each case as the same may be amended from time to time;
and all references to any rule, section or subsection of, or definition or term
contained in, Regulation S means such rule, section, subsection, definition or
term, as the case may be, or any successor thereto, in each case as the same may
be amended from time to time.
Regulation S Global Security: The meaning specified in Section 3.01(c).
Relief Act Reduction: With respect to any Mortgage Loan as to which
there has been a reduction in the amount of interest collectible thereon as a
result of application of the Servicemembers Civil Relief Act or any similar
state law, any amount by which interest collectible on such Mortgage Loan for
the Due Date in the related Due Period is less than interest accrued thereon for
the applicable one-month period at the Mortgage Rate without giving effect to
such reduction.
REMIC: Each of REMIC 1, REMIC 2 and the Upper Tier REMIC, as described
in the Preliminary Statement hereto.
REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
38
REMIC 1: REMIC 1 as described in the Preliminary Statement hereto.
REMIC 1 Interest: Any one of the classes of REMIC 1 Interests described
in the Preliminary Statement hereto.
REMIC 1 Regular Interest: Any of the REMIC 1 Interests other than the
Class LT1-R Interest.
REMIC 1 Subordinated Balance Ratio: As of any Distribution Date, the
ratio among the Uncertificated Principal Balances of each of the REMIC 1 Regular
Interests ending with the designation "A" that is equal to the ratio among, with
respect to each such REMIC 1 Regular Interest, the excess of (x) the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Mortgage Pool
over (y) the aggregate Class Principal Amounts of the Senior Certificates of the
Certificate Group related to such Mortgage Pool (after giving effect to
distributions on such Distribution Date).
REMIC 2: REMIC 2 as described in the Preliminary Statement hereto.
REMIC 2 Interest: Any one of the classes of REMIC 2 Interests described
in the Preliminary Statement hereto.
REMIC 2 Regular Interest: Any of the REMIC 2 Interests other than the
Class LT2-R Interest.
REMIC 3: REMIC 3 as described under the heading "Upper Tier REMIC" in
the Preliminary Statement hereto.
REMIC 3 Interest: Any one of the classes of REMIC 3 Interests described
in the Preliminary Statement hereto.
REMIC 3 Regular Interest: Any of (i) the Class 1-A1, Class 1-A2, Class
2-A, Class 3-A, Class 3-AX, Class 4-A1, Class 4-A2, Class 5-A1, Class 5-A2,
Class B1X, Class B2X, Class B3X, Class B4X, Class B5X, Class B6, Class B7X,
Class B8, Blass B9, Class B12 and Class B13 Certificates and (ii) the
uncertificated REMIC regular interests represented by (w) each of the Class Z
Components and (x) the rights associated with the Class B1, Class B2, Class B3,
Class B4, Class B5, Class B7, Class B10, Class B10X, Class B11 and Class B11X
Certificates other than rights to receive payments in respect of Floating Rate
Certificate Shortfalls and Excess REMIC Payments.
REMIC 3 Residual Interest: The sole class of residual interest in the
Upper-Tier REMIC, representing the rights to receive all distributions on the
Class R Certificate other than distributions in respect of the Class LT1-R and
Class LT2-R Interests.
Remittance Date: The day in each month on which each Servicer is
required to remit payments to the account maintained by the Master Servicer, as
specified in the applicable Servicing Agreement, which is the 18th day of each
month (or if such 18th day is not a Business Day, the next succeeding Business
Day).
39
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.
Repurchase Price: As defined in Section 7.01.
Reserve Interest Rate: As defined in Section 4.05(a)(ii).
Reset Date: With respect to Pool 3, December 2009.
Residual Certificate: Any Class R Certificate.
Responsible Officer: When used with respect to the Trustee or the
Securities Administrator, any Vice President, Assistant Vice President, the
Secretary, any assistant secretary, any Trust Officer, the Treasurer, or any
assistant treasurer, working in its corporate trust department and having direct
responsibility for the administration of this Agreement and any other officer to
whom a matter arising under this Agreement may be referred.
Restricted Certificate: Any Class B11, Class B11X, Class B12 or Class
B13 Certificate but excluding any Regulation S Global Security.
Restricted Global Security: The meaning specified in Section 3.01(c).
Retained Interest: Interest in respect of each Employee Mortgage Loan,
retained in each case by the Retained Interest Holder at the Retained Interest
Rate.
Retained Interest Holder: Xxxxxx Brothers Holdings or any successor in
interest by assignment or otherwise.
Retained Interest Rate: For each Due Period, 0.00% per annum; provided,
however, if the Mortgagor of the Employee Mortgage Loan ceases to be an employee
of Xxxxxx Brothers Inc. or its Affiliates, 0.25% per annum.
Rounding Account: Not applicable.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
or any successor in interest.
Scheduled Payment: Each scheduled payment of principal and interest (or
of interest only, if applicable) to be paid by the Mortgagor on a Mortgage Loan,
as reduced (except where otherwise specified herein) by the amount of any
related Debt Service Reduction (excluding all amounts of principal and interest
that were due on or before the Cut-off Date whenever received) and, in the case
of an REO Property, an amount equivalent to the Scheduled Payment that would
have been due on the related Mortgage Loan if such Mortgage Loan had remained in
existence. In the case of any bi-weekly payment Mortgage Loan, all payments due
on such Mortgage Loan during any Due Period shall be deemed collectively to
constitute the Scheduled Payment due on such Mortgage Loan in such Due Period.
40
Scheduled Principal Amount: Not applicable.
Scheduled Principal Balance: With respect to (i) any Mortgage Loan as of
any Distribution Date, the principal balance of such Mortgage Loan at the close
of business on the Cut-off Date, after giving effect to principal payments due
on or before the Cut-off Date, whether or not received, less an amount equal to
principal payments due after the Cut-off Date and on or before the Due Date in
the related Due Period, whether or not received from the Mortgagor or advanced
by the applicable Servicer or the Master Servicer, and all amounts allocable to
unscheduled principal payments (including Principal Prepayments, Net Liquidation
Proceeds, Insurance Proceeds and condemnation proceeds, in each case to the
extent identified and applied prior to or during the applicable Prepayment
Period) and (ii) any REO Property as of any Distribution Date, the Scheduled
Principal Balance of the related Mortgage Loan on the Due Date immediately
preceding the date of acquisition of such REO Property by or on behalf of the
Trustee (reduced by any amount applied as a reduction of principal on the
Mortgage Loan). With respect to any Mortgage Loan as of the Cut-off Date, as
specified in the Mortgage Loan Schedule or the Participation Schedule, as the
case may be.
Securities Administrator: Xxxxx Fargo Bank, National Association, not in
its individual capacity but solely as Securities Administrator, or any successor
in interest, or if any successor Securities Administrator shall be appointed as
herein provided, then such successor Securities Administrator.
Securities Administrator Fee: As to any Distribution Date and each
Mortgage Loan, an amount equal to the product of the Securities Administrator
Fee Rate and the Scheduled Principal Balance of such Mortgage Loan as of the
first day of the related Due Period.
Securities Administrator Fee Rate: 0.0035% per annum.
Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.
Seller: Xxxxxx Brothers Holdings or any successor in interest.
Senior Certificate: Any Class 1-A1, Class 1-A2, Class 2-A, Class 3-A,
Class 3-AX, Class 4-A1, Class 4-A2, Class 5-A1, Class 5-A2, Class 6-A or Class R
Certificate.
Senior Enhancement Percentage: For each Mortgage Pool for any
Distribution Date the percentage equivalent of a fraction, the numerator of
which is the sum of the Class Principal Amounts of the Subordinate Certificates
and the denominator of which is the sum of the Pool Balances for each Mortgage
Pool for the immediately preceding Distribution Date.
Senior Percentage: With respect to each Mortgage Pool and any
Distribution Date, the percentage equivalent of the fraction, the numerator of
which is the aggregate of the Certificate Principal Amounts of the Class 1-A1,
Class 1-A2 and Class R Certificates, in the case of Pool 1, the Class 2-A
Certificates, in the case of Pool 2, the Class 3-A Certificates, in the case of
Pool 3, the Class 4-A1 and Class 4-A2 Certificates, in the case of Pool 4, the
Class 5-A1 and Class 5-A2
41
Certificates, in the case of Pool 5 and the Class 6-A Certificates, in the case
of Pool 6, in each case immediately prior to such Distribution Date and the
denominator of which is the related Pool Balance for the immediately preceding
Distribution Date.
Senior Prepayment Percentage: With respect to each Mortgage Pool and any
Distribution Date occurring during the seven years beginning on the first
Distribution Date, 100%, except as described herein below. With respect to each
Mortgage Pool and for any Distribution Date occurring on or after the seventh
anniversary of the first Distribution Date, the related Senior Percentage plus
the following percentage of the related Subordinate Percentage for such
Distribution Date: for any Distribution Date in the first year thereafter, 70%;
for any Distribution Date in the second year thereafter, 60%; for any
Distribution Date in the third year thereafter, 40%; for any Distribution Date
in the fourth year thereafter, 20%; and for any subsequent Distribution Date,
0%; provided, however, (i) if on any of the foregoing Distribution Dates the
Senior Enhancement Percentage is less than the Initial Senior Enhancement
Percentage, the Senior Prepayment Percentage for each Mortgage Pool on such
Distribution Date shall once again equal 100%, (ii) unless the condition
described in clause (i) has occurred, if on any Distribution Date before the
Distribution Date in February 2008, prior to giving effect to any distributions
on such Distribution Date, the Senior Enhancement Percentage for such
Distribution Date is greater than or equal to twice the Initial Senior
Enhancement Percentage, then the Senior Prepayment Percentage for each Mortgage
Pool for such Distribution Date will equal the related Senior Percentage plus
50% of the related Subordinate Percentage for such Mortgage Pool and (iii)
unless the condition described in clause (i) has occurred, if on any
Distribution Date on or after the Distribution Date in February 2008, prior to
giving effect to any distributions on such Distribution Date, the Senior
Enhancement Percentage for such Distribution Date is greater than or equal to
twice the Initial Senior Enhancement Percentage, then the Senior Prepayment
Percentage for each Mortgage Pool on such Distribution Date will equal the
related Senior Percentage.
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage for any Mortgage Pool below the respective levels in effect for the
most recent prior period set forth in the paragraph above shall be effective on
any Distribution Date if, as of the first Distribution Date as to which any such
decrease applies, (i) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates of all Mortgage
Loans in the related Mortgage Pool that were delinquent 60 days or more
(including for this purpose any Mortgage Loans in foreclosure and the Scheduled
Payments that would have been due on Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust Fund if the related
Mortgage Loan had remained in existence) is greater than or equal to 50% of the
applicable Group Subordinate Amount immediately prior to such Distribution Date
or (ii) cumulative Realized Losses with respect to the Mortgage Loans in the
related Mortgage Pool exceed (a) with respect to the Distribution Date prior to
the third anniversary of the first Distribution Date, 20% of the related
Original Group Subordinate Amount, (b) with respect to the Distribution Date on
or after the third anniversary and prior to the sixth anniversary of the first
Distribution Date, 30% of the related Original Group Subordinate Amount, (c)
with respect to the Distribution Date on or after the sixth anniversary and
prior to the seventh anniversary of the first Distribution Date, 35% of the
related Original Group Subordinate Amount, (d) with respect to the Distribution
Date on or after the seventh anniversary and prior to the eighth anniversary of
the first Distribution Date, 40% of the related Original Group Subordinate
42
Amount, (e) with respect to the Distribution Date on or after the eighth
anniversary and prior to the ninth anniversary of the first Distribution Date,
45% of the related Original Group Subordinate Amount, and (f) with respect to
the Distribution Date on or after the ninth anniversary of the first
Distribution Date or thereafter, 50% of the related Original Group Subordinate
Amount. After the Class Principal Amount of each Class of Senior Certificates in
any Certificate Group has been reduced to zero, the Senior Prepayment Percentage
for the related Mortgage Pool shall be 0%.
Senior Principal Distribution Amount: For each Certificate Group and any
Distribution Date, the sum of the following amounts:
(i) the product of (a) the related Senior Percentage for
such date and (b) the principal portion of each Scheduled Payment
(without giving effect to any Debt Service Reduction occurring prior to
the Bankruptcy Coverage Termination Date), on each Mortgage Loan in the
related Mortgage Pool due during the related Due Period;
(ii) the product of (a) the related Senior Prepayment
Percentage for such date and (b) each of the following amounts: (1) each
Principal Prepayment on the Mortgage Loans in the related Mortgage Pool
collected during the related Prepayment Period, (2) each other
unscheduled collection, including any Subsequent Recovery, Insurance
Proceeds and Net Liquidation Proceeds (other than with respect to any
Mortgage Loan in the related Mortgage Pool that was finally liquidated
during the related Prepayment Period) representing or allocable to
recoveries of principal received during the related Prepayment Period,
and (3) the principal portion of all proceeds of the purchase of any
Mortgage Loan in the related Mortgage Pool (or, in the case of a
permitted substitution, amounts representing a principal adjustment)
actually received by the Securities Administrator during the related
Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the lesser of
(a) the related net Liquidation Proceeds allocable to principal and (b)
the product of the related Senior Prepayment Percentage for such date
and the Scheduled Principal Balance of such related Mortgage Loan at the
time of liquidation; and
(iv) any amounts described in clauses (i) through (iii) for
any previous Distribution Date that remain unpaid.
If on any Distribution Date the Class Principal Amount of each Class of Senior
Certificates in any Certificate Group has been reduced to zero, the Senior
Principal Distribution Amount for such Certificate Group for such date
(following such reduction) and each subsequent Distribution Date shall be zero.
Servicer: Any Servicer that has entered into any of the Servicing
Agreements attached as Exhibit E hereto, or any successor in interest.
Initially, the Servicers are Aurora, Bank of America, National Association,
Cendant Mortgage Corporation, Colonial Savings, F.A.,
43
Countrywide Home Loans Servicing LP, IndyMac Bank, F.S.B., Midwest Loan
Services, Inc., Washington Mutual Bank, FA and Xxxxx Fargo Bank, N.A.
Servicing Advances: Expenditures incurred by a Servicer in connection
with the liquidation or foreclosure of a Mortgage Loan which are eligible for
reimbursement under the applicable Servicing Agreement.
Servicing Agreement: Each Servicing Agreement between a Servicer and the
Seller, dated as of January 1, 2005, attached hereto in Exhibit E, and any other
servicing agreement entered into between a successor servicer and the Seller or
the Trustee pursuant to the terms hereof.
Servicing Fee: With respect to each Servicer, the Servicing Fee
specified in the applicable Servicing Agreement and set forth on the Mortgage
Loan Schedule.
Servicing Fee Rate: With respect to a Servicer, the rate specified in
the applicable Servicing Agreement.
Servicing Officer: Any officer of the Master Servicer involved in or
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished by
the Master Servicer to the Trustee, as such list may from time to time be
amended.
Similar Law: As defined in Section 3.03(d).
Special Hazard Loss: With respect to the Mortgage Loans, (x) any
Realized Loss arising out of any direct physical loss or damage to a Mortgaged
Property which is caused by or results from any cause, exclusive of any loss
covered by a hazard policy or a flood insurance policy required to be maintained
in respect of such Mortgaged Property and any loss caused by or resulting from
(i) normal wear and tear, (ii) conversion or other dishonest act on the part of
the Trustee, the Master Servicer, any Servicer or any of their agents or
employees, or (iii) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues, or (y) any
Realized Loss arising from or related to the presence or suspected presence of
hazardous wastes, or hazardous substances on a Mortgaged Property unless such
loss is covered by a hazard policy or flood insurance policy required to be
maintained in respect of such Mortgaged Property, in any case, as reported by
any Servicer to the Master Servicer.
Special Hazard Loss Limit: As of the Cut-off Date, $14,301,064, which
amount shall be reduced from time to time to an amount equal on any Distribution
Date to the lesser of (a) the greatest of (i) 1% of the aggregate of the
Scheduled Principal Balances of the Mortgage Loans; (ii) twice the Scheduled
Principal Balance of the Mortgage Loan having the highest Scheduled Principal
Balance, and (iii) the aggregate Scheduled Principal Balances of the Mortgage
Loans secured by Mortgaged Properties located in the single California postal
zip code area having the highest aggregate Scheduled Principal Balance of
Mortgage Loans of any such postal zip code area and (b) the Special Hazard Loss
Limit as of the Closing Date less the amount, if any, of Special Hazard Losses
incurred with respect to Mortgage Loans since the Closing Date.
Specified Rating: Not applicable.
44
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Strike Rate: The applicable rates set forth in the columns titled
"Strike Rate %" in the schedules to the Cap Agreements attached hereto as
Exhibit N.
Subordinate Certificate: Any Class B Certificate.
Subordinate Certificate Writedown Amount: As to any Distribution Date,
the amount by which (i) the sum of the Class Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction of the Certificate Principal Amounts
of the Certificates on such Distribution Date) exceeds (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans for such Distribution Date.
Subordinate Class Percentage: With respect to any Distribution Date and
any Class of Subordinate Certificates (exclusive of the Class B1X, Class B2X,
Class B3X, Class B4X, Class B5X, Class B7X, Class B10X and Class B11X
Certificates), the percentage obtained by dividing the Class Principal Amount of
such Class immediately prior to such Distribution Date by the aggregate
Certificate Principal Amount of all Subordinate Certificates immediately prior
to such Distribution Date.
Subordinate Component Percentage: Not applicable.
Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior Percentage
for such Distribution Date.
Subordinate Prepayment Percentage: With respect to each Mortgage Pool
and any Distribution Date, the difference between 100% and the related Senior
Prepayment Percentage for such Distribution Date.
Subordinate Principal Distribution Amount: For each Mortgage Pool and
any Distribution Date, the sum of the following:
(i) the product of (a) the related Subordinate Percentage
for such date and (b) the principal portion of each Scheduled Payment
(without giving effect to any Debt Service Reduction occurring prior to
the applicable Bankruptcy Coverage Termination Date) on each Mortgage
Loan in the related Mortgage Pool due during the related Due Period;
(ii) the product of (a) the related Subordinate Prepayment
Percentage for such date and (b) each of the following amounts: (1) each
Principal Prepayment on the Mortgage Loans in the related Mortgage Pool
collected during the related Prepayment Period, (2) each other
unscheduled collection, including Subsequent Recoveries, Insurance
Proceeds and Net Liquidation Proceeds (other than with respect to any
Mortgage Loan in the related Mortgage Pool that was finally liquidated
during the related Prepayment Period) representing or allocable to
recoveries of principal received during the related Prepayment Period,
and (3) the principal portion of all proceeds of the purchase of any
Mortgage Loan in the related Mortgage Pool (or, in the case of a
45
permitted substitution, amounts representing a principal adjustment)
actually received by the Securities Administrator during the related
Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the related net
Liquidation Proceeds allocable to principal less any related amount paid
pursuant to subsection (iii) of the definition of Senior Principal
Distribution Amount for the related Certificate Group; and
(iv) any amounts described in clauses (i) through (iii) for
any previous Distribution Date that remain unpaid.
Subsequent Recovery: The amount, if any, recovered by the related
Servicer or the Master Servicer with respect to a Liquidated Mortgage Loan with
respect to which a Realized Loss has been incurred after liquidation and
disposition of such Mortgage Loan.
Surety: Not applicable.
Surety Bond: Not applicable.
Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions.
Title Insurance Policy: A title insurance policy maintained with respect
to a Mortgage Loan.
Transfer Agreement: As defined in the Mortgage Loan Sale Agreement.
Transferor: Each seller of Mortgage Loans to Xxxxxx Brothers Holdings
pursuant to a Transfer Agreement.
Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans (other than any Retained Interest), the
assignment of the Depositor's rights under the Mortgage Loan Sale Agreement and
the Participation Agreement, the Participations, the Additional Collateral, the
Cap Agreements and all amounts received from the Cap Provider thereunder, such
amounts as shall from time to time be held in the Cap Agreement Reserve Fund,
the Collection Account, the Certificate Account, any Escrow Account, the
Insurance Policies, any REO Property and the other items referred to in, and
conveyed to the Trustee under, Section 2.01(a).
Trust Rate: Not applicable.
Trust REMIC: Any of REMIC 1, REMIC 2 or REMIC 3.
Trustee: HSBC Bank USA, National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors
46
may be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Trustee Fee: Not applicable.
Trustee Fee Rate: Not applicable.
Undercollateralization Distribution: As defined in Section
5.02(g)(ii)(A).
Undercollateralized Group: With respect to any Distribution Date, the
Senior Certificates of any Certificate Group as to which the aggregate
Certificate Principal Amount thereof, after giving effect to distributions
pursuant to Sections 5.02(a) and (b) on such date, is greater than the Pool
Balance of the related Mortgage Pool for such Distribution Date.
Underlying Subordinate Rate: For Mortgage Pool 1 for each Distribution
Date, will be the Pool 1 Net WAC; for Mortgage Pool 2 for each Distribution
Date, will be the Pool 2 Net WAC; for Mortgage Pool 3 for each Distribution
Date, will be the Pool 3 Net WAC; for Mortgage Pool 4 for each Distribution
Date, will be the Pool 4 Net WAC; for Mortgage Pool 5 for each Distribution
Date, will be the Pool 5 Net WAC; and for Mortgage Pool 6 for each Distribution
Date, will be the Pool 6 Net WAC.
Underwriter's Exemption: Prohibited Transaction Exemption 91-14, 56 Fed.
Reg. 7413 (1991), as amended (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of Labor.
Unpaid Basis Risk Shortfall: Not applicable.
Upper Tier REMIC: One of the separate REMICs as described in the
Preliminary Statement hereto.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement
until the Class Notional Amount of each Class of Notional Certificates has been
reduced to zero, 92% of all Voting Interests shall be allocated to the
Certificates other than the Notional Certificates and the Class P, Class Z and
Class CX Certificates, 5% of all Voting Interests shall be allocated to the
Notional Certificates, 1% shall be allocated to the Class P Certificates, 1%
shall be allocated to the Class Z Certificates and 1% shall be allocated to the
Class CX Certificates. After the Class Notional Amounts of all Classes of
Notional Certificates have been reduced to zero, 97% of all Voting Interests
shall be allocated to the remaining Classes of Certificates other than the Class
P, Class Z and Class CX Certificates. Voting Interests allocated to the Notional
Certificates shall be allocated among the Classes of such Certificates (and
among the Certificates of each such Class) in proportion to their Class Notional
Amounts (or Notional Amounts). Voting Interests shall be allocated among the
Class P, Class Z and Class CX Certificates in proportion to their Percentage
Interest. Voting Interests shall be allocated among the other Classes of
Certificates (and among the Certificates of each such Class) in proportion to
their Class Principal Amounts (or Certificate Principal Amounts).
Section 1.02. Calculations Respecting Mortgage Loans.
47
Calculations required to be made pursuant to this Agreement with respect
to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and distributions to be made
to the Certificateholders as supplied to the Securities Administrator by the
Master Servicer. The Securities Administrator shall not be required to
recompute, verify or recalculate the information supplied to it by the Master
Servicer.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this Agreement,
the Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, subject to Sections 2.02, 2.04, 2.05
and 2.06, in trust, all the right, title and interest of the Depositor in and to
the Mortgage Loans (including the Participations). Such conveyance includes,
without limitation, the right to all distributions of principal and interest
received on or with respect to the Mortgage Loans on and after the Cut-off Date
(other than payments of principal and interest due on or before such date), and
all such payments due after such date but received prior to such date and
intended by the related Mortgagors to be applied after such date, together with
all of the Depositor's right, title and interest in and to the Collection
Account and all amounts from time to time credited to and the proceeds of the
Collection Account, the Certificate Account and all amounts from time to time
credited to and the proceeds of the Certificate Account, any Escrow Account
established pursuant to Section 9.06 hereof and all amounts from time to time
credited to and the proceeds of any such Escrow Account, any REO Property and
the proceeds thereof, the Depositor's rights under any Insurance Policies
related to the Mortgage Loans, and the Depositor's security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties and any Additional Collateral, and any proceeds of the foregoing, to
have and to hold, in trust; and the Trustee declares that, subject to the review
provided for in Section 2.02, it (or a Custodian on its behalf) has received and
shall hold the Trust Fund, as trustee, in trust, for the benefit and use of the
Holders of the Certificates and for the purposes and subject to the terms and
conditions set forth in this Agreement, and, concurrently with such receipt, has
caused to be executed, authenticated and delivered to or upon the order of the
Depositor, in exchange for the Trust Fund, Certificates in the authorized
denominations evidencing the entire ownership of the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
the Mortgage Loan Sale Agreement; including all rights of the Seller under the
applicable Servicing Agreement to the extent assigned under the Mortgage Loan
Sale Agreement. The Trustee hereby accepts such assignment, and shall be
entitled to exercise all rights of the Depositor under the Mortgage Loan Sale
Agreement as if, for such purpose, it were the Depositor.
It is agreed and understood by the Depositor and the Trustee (and the
Seller has so represented and recognized in the Mortgage Loan Sale Agreement)
that it is not intended that
48
any Mortgage Loan to be included in the Trust Fund be either (i) a "High-Cost
Home Loan" as defined in the New Jersey Home Ownership Act effective November
27, 2003 or (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004.
The foregoing sale, transfer, assignment, set-over, deposit and
conveyance and the assignment and transfer with respect to Additional Collateral
does not and is not intended to result in creation or assumption by the Trustee
of any obligation of the Depositor, the Seller, or any other Person in
connection with the Mortgage Loans, the Servicing Agreements or any other
agreement or instrument relating thereto except as specifically set forth
herein. The Depositor hereby confirms its direction to the Trustee, solely in
its capacity as Trustee hereunder, to execute, deliver and perform its
obligations under the Cap Agreement on the Closing Date and thereafter on behalf
of the Holders of the Class B1, Class B2, Class B3, Class B4, Class B5, Class
B7, Class B10, Class B11 and Class CX Certificates. The Depositor, the Master
Servicer and the Holders of the Class B1, Class B2, Class B3, Class B4, Class
B5, Class B7, Class B10, Class B11 and Class CX Certificates by their acceptance
of their Certificates acknowledge that the Trustee shall execute, deliver and
perform its obligations under the Cap Agreement and shall do so solely in its
capacity as trustee and the Trustee shall have no duty or responsibility to
enter into any other interest rate cap agreement upon the expiration or
termination of the Cap Agreement.
In addition, with respect to any Pledged Asset Mortgage Loan, the
Depositor does hereby transfer, assign, set-over and otherwise convey to the
Trustee without recourse (except as provided herein) (i) its rights as assignee
under any security agreements, pledge agreements or guarantees relating to the
Additional Collateral supporting any Pledged Asset Mortgage Loan, (ii) its
security interest in and to any Additional Collateral, (iii) its right to
receive payments in respect of any Pledged Asset Mortgage Loan pursuant to the
Additional Collateral Servicing Agreement, and (iv) its rights as beneficiary
under the surety bond in respect of any Pledged Asset Mortgage Loan.
Notwithstanding anything to the contrary in this Agreement, the Trust Fund shall
not obtain title to or beneficial ownership of any Additional Collateral as a
result of or in lieu of the disposition thereof or otherwise.
(b) In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, or cause to be delivered to and
deposited with, the Trustee, and/or the Custodian acting on the Trustee's
behalf, the following documents or instruments with respect to each Mortgage
Loan (each a "Mortgage File") so transferred and assigned (other than the
Participations):
(i) with respect to each Mortgage Loan, the original
Mortgage Note endorsed without recourse in proper form to the order of
the Trustee, or in blank (in each case, with all necessary intervening
endorsements as applicable);
(ii) the original of any guarantee, security agreement or
pledge agreement relating to any Additional Collateral and executed in
connection with the Mortgage Note, assigned to the Trustee;
49
(iii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original recorded Mortgage with evidence of
recording indicated thereon and the original recorded power of attorney,
if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon or, if such Mortgage or power of attorney
has been submitted for recording but has not been returned from the
applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may
be, certified to be a true and complete copy of the original submitted
for recording. If, in connection with any Mortgage Loan, the Depositor
cannot deliver the Mortgage with evidence of recording thereon on or
prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost, the Depositor shall deliver or
cause to be delivered to the Trustee (or its custodian), in the case of
a delay due to recording, a true copy of such Mortgage, pending delivery
of the original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such Mortgage delivered to the
Trustee (or its custodian) is a true copy and that the original of such
Mortgage has been forwarded to the public recording office, or, in the
case of a Mortgage that has been lost, a copy thereof (certified as
provided for under the laws of the appropriate jurisdiction) and a
written Opinion of Counsel acceptable to the Trustee and the Depositor
that an original recorded Mortgage is not required to enforce the
Trustee's interest in the Mortgage Loan;
(iv) the original of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loans, or, as
to any assumption, modification or substitution agreement which cannot
be delivered on or prior to the Closing Date because of a delay caused
by the public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, a photocopy
of such assumption, modification or substitution agreement, pending
delivery of the original thereof, together with an Officer's Certificate
of the Depositor certifying that the copy of such assumption,
modification or substitution agreement delivered to the Trustee (or its
custodian) is a true copy and that the original of such agreement has
been forwarded to the public recording office;
(v) with respect to each Non-MERS Mortgage Loan other than a
Cooperative Loan, the original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned
either (A) in blank, without recourse or (B) to "HSBC Bank USA, National
Association, as Trustee of the Structured Adjustable Rate Mortgage Loan
Trust Mortgage Pass Through Certificates, Series 2005-1," without
recourse for each Mortgage Loan;
(vi) if applicable, such original intervening assignments of
the Mortgage, notice of transfer or equivalent instrument (each, an
"Intervening Assignment"), as may be necessary to show a complete chain
of assignment from the originator, or, in the case of an Intervening
Assignment that has been lost, a written Opinion of Counsel acceptable
to the Trustee that such original Intervening Assignment is not required
to enforce the Trustee's interest in the Mortgage Loans;
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(vii) the original Primary Mortgage Insurance Policy or
certificate, if private mortgage guaranty insurance is required;
(viii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original mortgagee title insurance policy or
attorney's opinion of title and abstract of title;
(ix) the original of any security agreement, chattel mortgage
or equivalent executed in connection with the Mortgage or as to any
security agreement, chattel mortgage or their equivalent that cannot be
delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such document has been delivered for
recordation, a photocopy of such document, pending delivery of the
original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such security agreement, chattel
mortgage or their equivalent delivered to the Trustee (or its custodian)
is a true copy and that the original of such document has been forwarded
to the public recording office; and
(x) with respect to any Cooperative Loan, the Cooperative
Loan Documents.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
With respect to each Participation, the Depositor does hereby deliver
to, and deposit with, or cause to be delivered to and deposited with, the
Trustee, and/or any custodian acting on the Trustee's behalf, a copy of the
Participation Agreement and the original Participation issued to the Trustee.
(c) (i) Assignments of Mortgage with respect to each
Non-MERS Mortgage Loan other than a Cooperative Loan shall be recorded;
provided, however, that such Assignments need not be recorded if, in the
Opinion of Counsel (which must be from Independent counsel) acceptable
to the Trustee and the Rating Agencies, recording in such states is not
required to protect the Trustee's interest in the related Non-MERS
Mortgage Loans. Subject to the preceding sentence, as soon as
practicable after the Closing Date (but in no event more than 3 months
thereafter except to the extent delays are caused by the applicable
recording office), the Master Servicer (or its Custodian), at the
expense of the Depositor and with the cooperation of the applicable
Servicer, shall cause to be properly recorded by such Servicer in each
public recording office where the related Mortgages are recorded each
Assignment of Mortgage referred to in subsection (b)(v) above with
respect to a Non-MERS Mortgage Loan. With respect to each Cooperative
Loan, the Master Servicer (or its Custodian), at the expense of the
Depositor and with the cooperation of the applicable Servicer, shall
cause such Servicer to take such actions as are necessary under
applicable law in order to perfect the interest of the Trustee in the
related Mortgaged Property.
(ii) With respect to each MERS Mortgage Loan, the Master
Servicer (or its applicable Custodian), at the expense of the Depositor
and with the cooperation of the applicable Servicer, shall cause to be
taken such actions by such Servicer as are necessary
51
to cause the Trustee to be clearly identified as the owner of each such
Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by
MERS.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee, or to the applicable Custodian on behalf of the
Trustee, under clause (b)(viii) above and is not so delivered, the Depositor
will provide a copy of such Title Insurance Policy to the Trustee, or to the
applicable Custodian on behalf of the Trustee, as promptly as practicable after
the execution and delivery hereof, but in any case within 180 days of the
Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full after
the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Trustee, or to the
applicable Custodian on behalf of the Trustee, an Officer's Certificate which
shall include a statement to the effect that all amounts received in connection
with such prepayment that are required to be deposited in the applicable
Collection Account pursuant to Section 4.01 have been so deposited. All original
documents that are not delivered to the Trustee or the applicable Custodian on
behalf of the Trustee shall be held by the Master Servicer or the applicable
Servicer in trust for the benefit of the Trustee and the Certificateholders.
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust Fund.
(a) The Trustee or the applicable Custodian on behalf of the
Trustee, by execution and delivery hereof, acknowledges receipt of the
Participations and the Mortgage Files pertaining to the Mortgage Loans listed on
the Mortgage Loan Schedule, subject to review thereof by the Trustee, or by the
applicable Custodian on behalf of the Trustee, under this Section 2.02. The
Trustee, or the applicable Custodian on behalf of the Trustee, will execute and
deliver to the Trustee, the Depositor and the Master Servicer on the Closing
Date an Initial Certification in the form annexed hereto as Exhibit B-1 (or in
the form annexed to the applicable Custodial Agreement as Exhibit B-1, as
applicable).
(b) Within 45 days after the Closing Date, the applicable Custodian
will, on behalf of the Trustee and for the benefit of Holders of the
Certificates, review each Mortgage File to ascertain that all required documents
set forth in Section 2.01 have been received and appear on their face to contain
the requisite signatures by or on behalf of the respective parties thereto, and
shall deliver to the Trustee, the Depositor and the Master Servicer an Interim
Certification in the form annexed hereto as Exhibit B-2 (or in the form annexed
to the applicable Custodial Agreement as Exhibit B-2, as applicable) to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
of the applicable documents specified in Section 2.01(b) are in its possession
and (ii) such documents have been reviewed by it and appear to relate to such
Mortgage Loan. The Trustee, or the applicable Custodian on behalf of the
Trustee, shall make sure that the documents are executed and endorsed, but shall
be under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that the same are valid,
binding, legally effective, properly endorsed, genuine, enforceable or
appropriate for the
52
represented purpose or that they have actually been recorded or are in
recordable form or that they are other than what they purport to be on their
face. Neither the Trustee nor any Custodian shall have any responsibility for
verifying the genuineness or the legal effectiveness of or authority for any
signatures of or on behalf of any party or endorser.
(c) If in the course of the review described in paragraph (b) above
the Trustee or the applicable Custodian discovers any document or documents
constituting a part of a Mortgage File that is missing, does not appear regular
on its face (i.e., is mutilated, damaged, defaced, torn or otherwise physically
altered) or appears to be unrelated to the Mortgage Loans identified in the
Mortgage Loan Schedule (each, a "Material Defect"), the Trustee, or the
applicable Custodian on behalf of the Trustee, shall promptly identify the
Mortgage Loan to which such Material Defect relates in the Interim Certificate
delivered to the Depositor or the Master Servicer (and to the Trustee). Within
90 days of its receipt of such notice, the Depositor shall be required to cure
such Material Defect (and, in such event, the Depositor shall provide the
Trustee with an Officer's Certificate confirming that such cure has been
effected). If the Depositor does not so cure such Material Defect, it shall, if
a loss has been incurred with respect to such Mortgage Loan that would, if such
Mortgage Loan were not purchased from the Trust Fund, constitute a Realized
Loss, and such loss is attributable to the failure of the Depositor to cure such
Material Defect, repurchase the related Mortgage Loan from the Trust Fund at the
Purchase Price. A loss shall be deemed to be attributable to the failure of the
Depositor to cure a Material Defect if, as determined by the Depositor, upon
mutual agreement with the Servicer acting in good faith, absent such Material
Defect, such loss would not have been incurred. Within the two-year period
following the Closing Date, the Depositor may, in lieu of repurchasing a
Mortgage Loan pursuant to this Section 2.02, substitute for such Mortgage Loan a
Qualifying Substitute Mortgage Loan subject to the provisions of Section 2.05.
The failure of the Trustee or the applicable Custodian to give the notice
contemplated herein within 45 days after the Closing Date shall not affect or
relieve the Depositor of its obligation to repurchase any Mortgage Loan pursuant
to this Section 2.02 or any other Section of this Agreement requiring the
repurchase of Mortgage Loans from the Trust Fund.
(d) Within 180 days following the Closing Date, the Trustee, or the
applicable Custodian, shall deliver to the Trustee, the Depositor and the Master
Servicer a Final Certification substantially in the form annexed hereto as
Exhibit B-3 (or in the form annexed to the applicable Custodial Agreement as
Exhibit B-3, as applicable) evidencing the completeness of the Mortgage Files in
its possession or control, with any exceptions noted thereto.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
(f) Each of the parties hereto acknowledges that the applicable
Custodian shall hold the related Mortgage Files and shall perform the applicable
review of the Mortgage Loans and deliver the respective certifications thereof
as provided in this Section 2.02 and the related Custodial Agreement.
Section 2.03. Representations and Warranties of the Depositor.
53
(a) The Depositor hereby represents and warrants to the Trustee, for
the benefit of Certificateholders, the Master Servicer and the Securities
Administrator, as of the Closing Date or such other date as is specified, that:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter into
and perform its obligations under this Agreement, and to create the
trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Depositor; neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated,
nor compliance with the provisions hereof, will conflict with or result
in a breach of, or constitute a default under, any of the provisions of
any law, governmental rule, regulation, judgment, decree or order
binding on the Depositor or its properties or the certificate of
incorporation or bylaws of the Depositor;
(iii) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except
such as has been obtained, given, effected or taken prior to the date
hereof;
(iv) this Agreement has been duly executed and delivered by
the Depositor and, assuming due authorization, execution and delivery by
the Trustee, the Securities Administrator and the Master Servicer,
constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms except as such enforceability
may be subject to (A) applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether
such enforcement is considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or,
to the knowledge of the Depositor, threatened or likely to be asserted
against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Agreement or (B) with
respect to any other matter which in the judgment of the Depositor will
be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect it or its
business, assets, operations or condition, financial or otherwise, or
adversely affect its ability to perform its obligations under this
Agreement; and
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of
record and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1)
54
liens of current real property taxes and assessments not yet due and
payable and, if the related Mortgaged Property is a condominium unit,
any lien for common charges permitted by statute, (2) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage acceptable
to mortgage lending institutions in the area in which the related
Mortgaged Property is located and specifically referred to in the
lender's Title Insurance Policy or attorney's opinion of title and
abstract of title delivered to the originator of such Mortgage Loan, and
(3) such other matters to which like properties are commonly subject
which do not, individually or in the aggregate, materially interfere
with the benefits of the security intended to be provided by the
Mortgage, of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan pursuant to
this Agreement.
(b) The representations and warranties of each Transferor with
respect to the related Mortgage Loans in the applicable Transfer Agreement,
which have been assigned to the Trustee hereunder, were made as of the date
specified in the applicable Transfer Agreement (or underlying agreement, if such
Transfer Agreement is in the form of an assignment of a prior agreement). To the
extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of both (i) a representation or warranty of the applicable
Transferor under the applicable Transfer Agreement and (ii) a representation or
warranty of Xxxxxx Brothers Holdings under the Mortgage Loan Sale Agreement, the
only right or remedy of the Trustee or of any Certificateholder shall be the
Trustee's right to enforce the obligations of the applicable Transferor under
any applicable representation or warranty made by it. The Trustee acknowledges
that Xxxxxx Brothers Holdings shall have no obligation or liability with respect
to any breach of a representation or warranty made by it with respect to the
Mortgage Loans if the fact, condition or event constituting such breach also
constitutes a breach of a representation or warranty made by the applicable
Transferor in the applicable Transfer Agreement, without regard to whether such
Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee further acknowledges that the Depositor
shall have no obligation or liability with respect to any breach of any
representation or warranty with respect to the Mortgage Loans (except as set
forth in Section 2.03(a)(vi)) under any circumstances.
Section 2.04. Discovery of Breach.
It is understood and agreed that the representations and warranties (i)
set forth in Section 2.03, (ii) of Xxxxxx Brothers Holdings set forth in the
Mortgage Loan Sale Agreement and assigned to the Trustee by the Depositor
hereunder and (iii) of each Transferor, assigned by Xxxxxx Brothers Holdings to
the Depositor pursuant to the Mortgage Loan Sale Agreement and assigned to the
Trustee by the Depositor hereunder shall each survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue throughout the term of this Agreement. Upon discovery by either
the Depositor, the Master Servicer or the Trustee of a breach of any of such
representations and warranties that adversely and materially affects the value
of the related Mortgage Loan, the party discovering such breach shall give
prompt written notice to the other parties. Within 90 days of the discovery of a
breach of any representation or warranty given or assigned to the Trustee by the
Depositor, any Transferor, or Xxxxxx Brothers Holdings, the Depositor, such
Transferor, or Xxxxxx Brothers
55
Holdings, as applicable, shall either (a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan or any property acquired in respect
thereof from the Trustee at the Purchase Price or (c) within the two year period
following the Closing Date, substitute a Qualifying Substitute Mortgage Loan for
the affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of any Transferor assigned to the Trustee, the
Trustee shall enforce its rights under the applicable Transfer Agreement and the
Mortgage Loan Sale Agreement for the benefit of Certificateholders. As provided
in the Mortgage Loan Sale Agreement, if any Transferor substitutes for a
Mortgage Loan for which there is a breach of any representations and warranties
in the related Transfer Agreement which adversely and materially affects the
value of such Mortgage Loan and such substitute mortgage loan is not a
Qualifying Substitute Mortgage Loan, under the terms of the Mortgage Loan Sale
Agreement, Xxxxxx Brothers Holdings will, in exchange for such substitute
Mortgage Loan, (i) provide the applicable Purchase Price for the affected
Mortgage Loan or (ii) within two years of the Closing Date, substitute such
affected Mortgage Loan with a Qualifying Substitute Mortgage Loan.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.
(a) With respect to any Mortgage Loan repurchased by the Depositor
pursuant to this Agreement, by Xxxxxx Brothers Holdings pursuant to the
applicable Mortgage Loan Sale Agreement or by any Transferor pursuant to the
applicable Transfer Agreement, the principal portion of the funds received by
the Master Servicer in respect of such repurchase of a Mortgage Loan will be
considered a Principal Prepayment and shall be deposited in the Collection
Account pursuant to Section 4.01. The Trustee, upon receipt of the full amount
of the Purchase Price for a Deleted Mortgage Loan, or upon receipt of
notification from the related Custodian that it received the Mortgage File for a
Qualifying Substitute Mortgage Loan substituted for a Deleted Mortgage Loan (and
any applicable Substitution Amount), shall release or cause to be released to
the Depositor, Xxxxxx Brothers Holdings or the applicable Transferor, as
applicable, the related Mortgage File for the Deleted Mortgage Loan and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be necessary to vest in
such party or its designee or assignee title to any Deleted Mortgage Loan
released pursuant hereto, free and clear of all security interests, liens and
other encumbrances created by this Agreement, which instruments shall be
prepared by the Trustee (or a Custodian), and the Trustee shall have no further
responsibility with respect to the Mortgage File relating to such Deleted
Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee (or a Custodian) pursuant to the terms of this Article
II in exchange for a Deleted Mortgage Loan: (i) the Depositor, the applicable
Transferor, or Xxxxxx Brothers Holdings, as applicable, must deliver to the
Trustee (or its custodian) the Mortgage File for the Qualifying Substitute
Mortgage Loan containing the documents set forth in Section 2.01(b) along with a
written certification certifying as to the delivery of such Mortgage File and
containing the granting language set forth in Section 2.01(a); and (ii) the
Depositor will be deemed to have made, with respect to such Qualified Substitute
Mortgage Loan, each of the representations and warranties made by it with
respect to the related Deleted Mortgage Loan. As soon as practicable after the
delivery of any Qualifying Substitute Mortgage Loan hereunder, the Master
Servicer, at the expense of the Depositor and at the direction and with the
cooperation of the applicable Servicer, shall (i) with respect to a Qualifying
Substitute Mortgage Loan that is a Non-MERS
56
Mortgage Loan, cause the Assignment of Mortgage to be recorded by such Servicer
if required pursuant to Section 2.01(c)(i), or (ii) with respect to a Qualifying
Substitute Mortgage Loan that is a MERS Mortgage Loan, cause to be taken such
actions by such Servicer as are necessary to cause the Trustee to be clearly
identified as the owner of each such Mortgage Loan on the records of MERS if
required pursuant to Section 2.01(c)(ii).
(c) Notwithstanding any other provision of this Agreement, the right
to substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Qualifying Substitute Mortgage
Loan for a Deleted Mortgage Loan shall be made unless the Trustee has received
an Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions. The Depositor shall cause the
Mortgage Loan Schedule to be amended in accordance with the terms of this
Agreement.
Section 2.06. Grant Clause.
It is intended that the conveyance of the Depositor's right, title and
interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (i) the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement; (ii) the Depositor hereby grants to the Trustee for the
benefit of the Holders of the Certificates a first priority security interest in
all of the Depositor's right, title and interest in, to and under, whether now
owned or hereafter acquired, the Trust Fund and all proceeds of any and all
property constituting the Trust Fund to secure payment of the Certificates; and
(iii) this Agreement shall constitute a security agreement under applicable law.
If such conveyance is deemed to be in respect of a loan and the Trust created by
this Agreement terminates prior to the satisfaction of the claims of any Person
holding any Certificate, the security interest created hereby shall continue in
full force and effect and the Trustee shall be deemed to be the collateral agent
for the benefit of such Person, and all proceeds shall be distributed as herein
provided.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates.
(a) The Certificates shall be issuable in registered form only and
shall be securities governed by Article 8 of the New York Uniform Commercial
Code. The Book-Entry Certificates will be evidenced by one or more certificates,
beneficial ownership of which will be held in the dollar denominations in
Certificate Principal Amount or Notional Principal Amount, as applicable, or in
the Percentage Interests, specified herein. Each Class of Book-Entry
Certificates shall be issued in the minimum denominations in Certificate
Principal Amount (or Notional Amount) or Percentage Interest specified in the
Preliminary Statement hereto and in
57
integral multiples of $1 or 5% (in the case of Certificates issued in Percentage
Interests) in excess thereof. Each Class of Non-Book Entry Certificates other
than the Residual Certificate shall be issued in definitive, fully registered
form in the minimum denominations in Certificate Principal Amount (or Notional
Amount) specified in the Preliminary Statement hereto and in integral multiples
of $1 in excess thereof. The Residual Certificate shall be issued as a single
Certificate and maintained in definitive, fully registered form in a minimum
denomination equal to $100. The Class P Certificates shall be maintained in
definitive, fully registered form in a minimum denomination equal to 25% of the
Percentage Interest of such Class of Certificates. The Class Z Certificates
shall be maintained in definitive, fully registered form in a minimum
denomination equal to 100% of the Percentage Interest of such Class of
Certificates. The Certificates may be issued in the form of typewritten
certificates. One Certificate of each Class of Certificates other than any Class
of Residual Certificates may be issued in any denomination in excess of the
minimum denomination.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Authenticating Agent by an authorized officer of the
Trustee or the Authenticating Agent. Each Certificate shall, on original issue,
be authenticated by the Authenticating Agent upon the order of the Depositor
upon receipt by the Trustee of the Mortgage Files described in Section 2.01. 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 for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Depositor to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent shall authenticate and deliver such
Certificates as in this Agreement provided and not otherwise.
(c) The Class B11, Class B11X, Class B12 or Class B13 Certificates
offered and sold in reliance on the exemption from registration under Rule 144A
shall be issued initially in the form of one or more permanent global
Certificates in definitive, fully registered form without interest coupons with
the applicable legends set forth in Exhibit A added to the forms of such
Certificates (each, a "Restricted Global Security"), which shall be deposited on
behalf of the subscribers for such Certificates represented thereby with the
Securities Administrator, as custodian for DTC and registered in the name of a
nominee of DTC, duly executed and authenticated by the Trustee as hereinafter
provided. The aggregate principal amounts of the Restricted Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee or DTC or its nominee, as the case may be, as hereinafter
provided.
The Class B11, Class B11X, Class B12 or Class B13 Certificates sold in
offshore transactions in reliance on Regulation S shall be issued initially in
the form of one or more permanent global Certificates in definitive, fully
registered form without interest coupons with the applicable legends set forth
in Exhibit A hereto added to the forms of such Certificates (each, a "Regulation
S Global Security"), which shall be deposited on behalf of the subscribers for
such Certificates represented thereby with the Securities Administrator, as
custodian for DTC and registered in the name of a nominee of DTC, duly executed
and authenticated by the Trustee as hereinafter
58
provided. The aggregate principal amounts of the Regulation S Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Securities Administrator or DTC or its nominee, as the case may
be, as hereinafter provided.
(d) The Class B11, Class B11X, Class B12 or Class B13 Certificates sold
to an "accredited investor" complying with the transfer provision set forth in
Section 3.03 under Rule 501(a)(1), (2), (3) or (7) under the Act shall be issued
initially in the form of one or more Definitive Certificates.
Section 3.02. Registration.
The Securities Administrator is hereby appointed, and hereby accepts its
appointment as, the initial Certificate Registrar in respect of the Certificates
and shall maintain books for the registration and for the transfer of
Certificates (the "Certificate Register"). A registration book shall be
maintained for the Certificates collectively. The Certificate Registrar may
resign or be discharged or removed and a new successor may be appointed in
accordance with the procedures and requirements set forth in Sections 6.06 and
6.07 hereof with respect to the resignation, discharge or removal of the Trustee
and the appointment of a successor trustee. The Certificate Registrar may
appoint, by a written instrument delivered to the Holders and the Master
Servicer, any bank or trust company to act as co-registrar under such conditions
as the Certificate Registrar may prescribe; provided, however, that the
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Trustee shall execute, and the
Trustee or any Authenticating Agent shall authenticate and deliver to the
transferee, one or more new Certificates of the same Class and evidencing, in
the aggregate, the same aggregate Certificate Principal Amount as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
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payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and the
Trustee or the Authenticating Agent shall authenticate, date and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(c) By acceptance of a Restricted Certificate or a Regulation S
Global Security, whether upon original issuance or subsequent transfer, each
Holder of such a Certificate acknowledges the restrictions on the transfer of
such Certificate set forth thereon and agrees that it will transfer such a
Certificate only as provided herein. In addition, each Holder of a Regulation S
Global Security shall be deemed to have represented and warranted to the
Trustee, the Certificate Registrar and any of their respective successors that:
(i) such Person is not a U.S. person within the meaning of Regulation S and was,
at the time the buy order was originated, outside the United States and (ii)
such Person understands that such Certificates have not been registered under
the Securities Act of 1933, as amended (the "Act"), and that (x) until the
expiration of the 40-day distribution compliance period (within the meaning of
Regulation S), no offer, sale, pledge or other transfer of such Certificates or
any interest therein shall be made in the United States or to or for the account
or benefit of a U.S. person (each as defined in Regulation S), (y) if in the
future it decides to offer, resell, pledge or otherwise transfer such
Certificates, such Certificates may be offered, resold, pledged or otherwise
transferred only (A) to a person which the seller reasonably believes is a
"qualified institutional buyer" (a "QIB") as defined in Rule 144A under the Act,
that is purchasing such Certificates for its own account or for the account of a
qualified institutional buyer to which notice is given that the transfer is
being made in reliance on Rule 144A or (B) in an offshore transaction (as
defined in Regulation S) in compliance with the provisions of Regulation S, in
each case in compliance with the requirements of this Agreement; and it will
notify such transferee of the transfer restrictions specified in this Section.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of
a Restricted Certificate if the requested transfer is (x) to the
Depositor or the Placement Agent, an affiliate (as defined in Rule 405
under the Act) of the Depositor or the Placement Agent or (y) being made
to a QIB by a transferor that has provided the Certificate Registrar
with a certificate in the form of Exhibit F hereto; and
(ii) The Certificate Registrar shall register the transfer of
a Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the
Act by a transferor who furnishes to the Certificate Registrar a letter
of the transferee substantially in the form of Exhibit G hereto.
(d) No Transfer of an ERISA-Restricted Certificate that is a Class R
Certificate will be registered unless the Trustee, the Certificate Registrar and
the Depositor receive a representation as set forth in Exhibit D-1 to the effect
that such transferee is not an employee benefit plan or arrangement subject to
Title I of ERISA, a plan subject to Section 4975 of the
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Code or a plan subject to any provisions under any federal, state, local,
non-U.S. or other laws or regulations that are substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), and is not directly or indirectly acquiring the Class R Certificate
for, on behalf of, or with any assets of any such Plan. Each Person to whom a
Class R Certificate is to be transferred shall be required or deemed to
represent that it is not a Plan.
No Transfer of an ERISA-Restricted Certificate (other than the Class R
Certificate) will be registered unless the Trustee, the Certificate Registrar
and the Depositor receive (A) a representation as set forth in Exhibit H that
the transferee is not a Plan and is not directly or indirectly acquiring the
Certificate for, on behalf of, or with any assets of any such Plan, (B) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation as set forth in Exhibit H that such transferee is an insurance
company that is acquiring the Certificate with assets contained in an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(C) solely in the case of a Definitive Certificate, an Opinion of Counsel
satisfactory to the Trustee, the Certificate Registrar and the Depositor, and
upon which the Trustee, the Certificate Registrar and the Depositor shall be
entitled to rely, to the effect that the acquisition and holding of such
Certificate will not constitute or result in a nonexempt prohibited transaction
under ERISA or the Code, or a violation of Similar Law, and will not subject the
Trustee, the Certificate Registrar, the Master Servicer or the Depositor to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Trustee, the Certificate
Registrar, the Master Servicer or the Depositor.
For purposes of this Subsection 3.03(d), other than clause (C) in the
immediately preceding paragraph, the representations set forth in Exhibit D-1 or
Exhibit H, as applicable, shall be deemed to have been made to the Trustee, the
Certificate Registrar and the Depositor by the transferee's acceptance of an
ERISA- Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any Class of ERISA-Restricted Certificates). The Trustee,
the Certificate Registrar and the Depositor shall not have any obligation to
monitor transfers of Book-Entry Certificates or Restricted Global Securities
that are ERISA-Restricted Certificates or any liability for transfers of such
Certificates in violation of the transfer restrictions.
Notwithstanding any other provision herein to the contrary, any
purported transfer of an ERISA-Restricted Certificate to or on behalf of a Plan
without the delivery to the Trustee, the Certificate Registrar and the Depositor
of a representation or an Opinion of Counsel satisfactory to the Trustee, the
Certificate Registrar and the Depositor as described above shall be void and of
no effect. The Trustee, the Certificate Registrar and the Depositor shall not
have any liability to any Person for any registration or transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
3.03(d) and the Trustee, the Certificate Registrar and the Depositor shall not
have any liability for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered by the
Trustee in accordance with the foregoing requirements. The Trustee, the
Certificate Registrar and the Depositor shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact a
Plan and that held such Certificate in violation of this Section 3.03(d) all
payments made on such
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ERISA-Restricted Certificate at and after the time it commenced such holding.
Any such payments so recovered shall be paid and delivered to the last preceding
Holder of such Certificate that is not a Plan.
(e) As a condition of the registration of transfer or exchange of
any Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless, in the case of clause (ii),
such person is (A) not a Non-U.S. Person or (B) is a Non-U.S. Person that holds
a Residual Certificate in connection with the conduct of a trade or business
within the United States and has furnished the transferor and the Trustee with
an effective Internal Revenue Service Form W-8ECI or successor form at the time
and in the manner required by the Code (any such person who is not covered by
clause (A) or (B) above is referred to herein as a "Non-permitted Foreign
Holder").
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee or the Certificate Registrar an affidavit in
substantially the form attached hereto as Exhibit D-1 representing and
warranting, among other things, that such transferee is neither a Disqualified
Organization, an agent or nominee acting on behalf of a Disqualified
Organization, nor a Non-permitted Foreign Holder (any such transferee, a
"Permitted Transferee"), and the proposed transferor shall deliver to the
Trustee an affidavit in substantially the form attached hereto as Exhibit D-2.
In addition, the Trustee or the Certificate Registrar may (but shall have no
obligation to) require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Depositor, the Trustee and the Certificate Registrar satisfactory in form and
substance to the Depositor, that such proposed transferee or, if the proposed
transferee is an agent or nominee, the proposed beneficial owner, is not a
Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder. Notwithstanding the registration in the Certificate Register of any
transfer, sale, or other disposition of a Residual Certificate to a Disqualified
Organization, an agent or nominee thereof, or Non-permitted Foreign Holder, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization, agent or nominee thereof, or Non-permitted
Foreign Holder shall not be deemed to be a Certificateholder for any purpose
hereunder, including, but not limited to, the receipt of distributions on such
Residual Certificate. Neither the Trustee nor the Certificate Registrar shall be
under any liability to any person for any registration or transfer of a Residual
Certificate to a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder or for the maturity of any payments due on such
Residual Certificate to the Holder thereof or for taking any other action with
respect to such Holder under the provisions of the Agreement, so long as the
transfer was effected in accordance with this Section 3.03(f), unless the
Trustee or the Certificate Registrar shall have actual knowledge at the time of
such transfer or the time of such
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payment or other action that the transferee is a Disqualified Organization,
agent or nominee thereof, or Non-permitted Foreign Holder. The Trustee or the
Certificate Registrar shall be entitled to recover from any Holder of a Residual
Certificate that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate at
and after either such times (and all costs and expenses, including but not
limited to attorneys' fees, incurred in connection therewith). Any payment (not
including any such costs and expenses) so recovered by the Trustee or the
Certificate Registrar shall be paid and delivered to the last preceding Holder
of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee or the Certificate Registrar
that the registration of transfer of such Residual Certificate was not in fact
permitted by this Section 3.03(f), the last preceding Permitted Transferee shall
be restored to all rights as Holder thereof retroactive to the date of such
registration of transfer of such Residual Certificate. Neither the Trustee nor
the Certificate Registrar shall be under any liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not permitted
by this Section 3.03(f), for making any payment due on such Certificate to the
registered Holder thereof or for taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer was
registered upon receipt of the affidavit described in the preceding paragraph of
this Section 3.03(f).
(g) Each Holder of a Residual Certificate, by such Holder's
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this section.
(h) Notwithstanding any provision to the contrary herein, so long as
a Global Security representing any of the Class B11, Class B12 or Class B13
Certificates remains outstanding and is held by or on behalf of DTC, transfers
of a Global Security representing any such Certificates, in whole or in part,
shall only be made in accordance with Section 3.01 and this Section 3.03(h).
(A) Subject to clauses (B) and (C) of this Section 3.03(h),
transfers of a Global Security representing any of the Class B11, Class
B12 or Class B13 Certificates shall be limited to transfers of such
Global Security, in whole or in part, to nominees of DTC or to a
successor of DTC or such successor's nominee.
(B) Restricted Global Security to Regulation S Global
Security. If a holder of a beneficial interest in a Restricted Global
Security deposited with or on behalf of DTC wishes at any time to
exchange its interest in such Restricted Global Security for an interest
in a Regulation S Global Security, or to transfer its interest in such
Restricted Global Security to a Person who wishes to take delivery
thereof in the form of an interest in a Regulation S Global Security,
such holder, provided such holder is not a U.S. person, may, subject to
the rules and procedures of DTC, exchange or cause the exchange of such
interest for an equivalent beneficial interest in the Regulation S
Global Security. Upon receipt by the Certificate Registrar, of (I)
instructions from DTC directing the Certificate Registrar, to be
credited a beneficial interest in a Regulation S Global Security in
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an amount equal to the beneficial interest in such Restricted Global
Security to be exchanged but not less than the minimum denomination
applicable to such holder's Certificates held through a Regulation S
Global Security, (II) a written order given in accordance with DTC's
procedures containing information regarding the participant account of
DTC and, in the case of a transfer pursuant to and in accordance with
Regulation S, the Euroclear or Clearstream account to be credited with
such increase and (III) a certificate in the form of Exhibit L-1 hereto
given by the holder of such beneficial interest stating that the
exchange or transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Global Securities, including
that the holder is not a U.S. person, and pursuant to and in accordance
with Regulation S, the Certificate Registrar, shall reduce the principal
amount of the Restricted Global Security and increase the principal
amount of the Regulation S Global Security by the aggregate principal
amount of the beneficial interest in the Restricted Global Security to
be exchanged, and shall instruct Euroclear or Clearstream, as
applicable, concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in the Regulation S Global Security equal to the
reduction in the principal amount of the Restricted Global Security.
(C) Regulation S Global Security to Restricted Global
Security. If a holder of a beneficial interest in a Regulation S Global
Security deposited with or on behalf of DTC wishes at any time to
transfer its interest in such Regulation S Global Security to a Person
who wishes to take delivery thereof in the form of an interest in a
Restricted Global Security, such holder may, subject to the rules and
procedures DTC, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Restricted Global Security. Upon
receipt by the Certificate Registrar, of (I) instructions from DTC
directing the Certificate Registrar, to cause to be credited a
beneficial interest in a Restricted Global Security in an amount equal
to the beneficial interest in such Regulation S Global Security to be
exchanged but not less than the minimum denomination applicable to such
holder's Certificates held through a Restricted Global Security, to be
exchanged, such instructions to contain information regarding the
participant account with DTC to be credited with such increase, and (II)
a certificate in the form of Exhibit L-2 hereto given by the holder of
such beneficial interest and stating, among other things, that the
Person transferring such interest in such Regulation S Global Security
reasonably believes that the Person acquiring such interest in a
Restricted Global Security is a QIB, is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and in
accordance with any applicable securities laws of any State of the
United States or any other jurisdiction, then the Certificate Registrar,
will reduce the principal amount of the Regulation S Global Security and
increase the principal amount of the Restricted Global Security by the
aggregate principal amount of the beneficial interest in the Regulation
S Global Security to be transferred and the Certificate Registrar, shall
instruct DTC, concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in
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the Restricted Global Security equal to the reduction in the principal
amount of the Regulation S Global Security.
(D) Other Exchanges. In the event that a Global Security is
exchanged for Certificates in definitive registered form without
interest coupons, pursuant to Section 3.09(c) hereof, such Certificates
may be exchanged for one another only in accordance with such procedures
as are substantially consistent with the provisions above (including
certification requirements intended to insure that such transfers comply
with Rule 144A, comply with Rule 501(a)(1), (2), (3) or (7) or are to
Non-U.S. Persons in compliance with Regulation S under the Act, as the
case may be), and as may be from time to time adopted by the Certificate
Registrar.
(E) Restrictions on U.S. Transfers. Transfers of interests
in the Regulation S Global Security to U.S. persons (as defined in
Regulation S) shall be limited to transfers made pursuant to the
provisions of Section 3.03(h)(C).
Section 3.04. Cancellation of Certificates.
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Trustee or the
Certificate Registrar.
Section 3.05. Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee or
any Authenticating Agent or (ii) the Trustee or any Authenticating Agent
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee or the Authenticating Agent
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Depositor and any Authenticating
Agent that such destroyed, lost or stolen Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and Certificate Principal Amount. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee and Authenticating Agent may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee or the Authenticating Agent) connected
therewith. Any replacement Certificate issued pursuant to this Section 3.05
shall constitute complete and indefeasible evidence of ownership in the
applicable Trust Fund, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Securities Administrator, the Master Servicer,
the Trustee, the Certificate Registrar and any agent of any of them may treat
the Person in whose name any Certificate is registered upon the books of the
Certificate Registrar as the owner of such Certificate for the
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purpose of receiving distributions pursuant to Sections 5.01 and 5.02 and for
all other purposes whatsoever, and neither the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Certificate Registrar nor
any agent of any of them shall be affected by notice to the contrary.
Section 3.07. Temporary Certificates.
(a) Pending the preparation of Definitive Certificates, upon the
order of the Depositor, the Trustee shall execute and the Authenticating Agent
shall authenticate and deliver temporary Certificates that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the Definitive Certificates in lieu
of which they are issued and with such variations as the authorized officers
executing such Certificates may determine, as evidenced by their execution of
such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
Definitive Certificates to be prepared without unreasonable delay. After the
preparation of Definitive Certificates, the temporary Certificates shall be
exchangeable for Definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Certificate Registrar without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and the Authenticating Agent shall
authenticate and deliver in exchange therefor a like aggregate Certificate
Principal Amount of Definitive Certificates of the same Class in the authorized
denominations. Until so exchanged, the temporary Certificates shall in all
respects be entitled to the same benefits under this Agreement as Definitive
Certificates of the same Class.
Section 3.08. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent (which may be the Trustee) for
the purpose of making distributions to Certificateholders hereunder. The
Securities Administrator is hereby appointed, and hereby accepts its appointment
as Paying Agent in respect of the Certificates. The Trustee shall cause such
Paying Agent (if other than the Trustee) to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to the Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee. If the Paying Agent is not the Trustee, the Trustee shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in immediately available funds, the funds to
be distributed on such Distribution Date. Any Paying Agent shall be either a
bank or trust company or otherwise authorized under law to exercise corporate
trust powers.
Section 3.09. Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance,
shall be issued in the form of one or more typewritten Certificates representing
the Book-Entry Certificates, to be
66
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Depositor. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a Definitive Certificate
representing such Certificate Owner's interest in the Book-Entry Certificates,
except as provided in Section 3.09(c). Unless Definitive Certificates have been
issued to Certificate Owners of Book-Entry Certificates pursuant to Section
3.09(c):
(i) the provisions of this Section 3.09 shall be in full
force and effect;
(ii) the Depositor, the Securities Administrator, the Master
Servicer, the Paying Agent, the Certificate Registrar and the Trustee
may deal with the Clearing Agency for all purposes (including the making
of distributions on the Book-Entry Certificates) as the authorized
representatives of the Certificate Owners and the Clearing Agency shall
be responsible for crediting the amount of such distributions to the
accounts of such Persons entitled thereto, in accordance with the
Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal of and interest on the
Book-Entry Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders
is required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the Trustee
shall give all such notices and communications specified herein to be given to
Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i) (A) the Depositor advises the Certificate Registrar in
writing that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities with respect to the Book-Entry Certificates, and
(B) the Trustee or the Depositor is unable to locate a qualified successor, (ii)
the Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Principal Amount of a Class
of Book-Entry Certificates identified as such to the Trustee by an Officer's
Certificate from the Clearing Agency advise the Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners of a Class of Book-Entry Certificates, the Trustee
shall notify or cause the Certificate Registrar to notify the Clearing Agency to
effect notification to all Certificate
67
Owners, through the Clearing Agency, of the occurrence of any such event and of
the availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall issue the Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in 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 Clearing
Agency shall be deemed to be imposed upon and performed by the Trustee, to the
extent applicable, with respect to such Definitive Certificates and the Trustee
shall recognize the holders of the Definitive Certificates as Certificateholders
hereunder.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account.
(a) On the Closing Date, the Master Servicer shall open and shall
thereafter maintain a segregated account held in trust (the "Collection
Account"), entitled "Aurora Loan Services LLC, as Master Servicer, in trust for
the benefit of the Holders of Structured Adjustable Rate Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2005-1." The Collection Account shall
relate solely to the Certificates issued by the Trust Fund hereunder, and funds
in such Collection Account shall not be commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an
existing Collection Account ceases to be an Eligible Account, the Master
Servicer shall establish a new Collection Account that is an Eligible Account
within 30 days and transfer all funds on deposit in such existing Collection
Account into such new Collection Account.
(c) The Master Servicer shall give to the Trustee and the Securities
Administrator prior written notice of the name and address of the depository
institution at which the Collection Account is maintained and the account number
of such Collection Account. On each Master Servicer Remittance Date, the entire
amount on deposit in the Collection Account (subject to permitted withdrawals
set forth in Section 4.02), not including any amounts which are to be excluded
from the Available Distribution Amount for such Distribution Date pursuant to
clauses (A) through (H) of paragraph (i) of the definition thereof (other than
any amounts due or reimbursable to the Trustee, the Custodians or the Securities
Administrator pursuant to this Agreement), shall be remitted to the Securities
Administrator for deposit into the Certificate Account by wire transfer in
immediately available funds. The Master Servicer, at its option, may choose to
make daily remittances from the Collection Account to the Securities
Administrator for deposit into the Certificate Account.
(d) The Master Servicer shall deposit or cause to be deposited into
the Collection Account, no later than the Business Day following the Closing
Date, any amounts representing Scheduled Payments on the Mortgage Loans due
after the Cut-off Date and received by the Master Servicer on or before the
Closing Date. Thereafter, the Master Servicer shall deposit or
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cause to be deposited in the Collection Account on the applicable Remittance
Date the following amounts received or payments made by it (other than in
respect of principal of and interest on the Mortgage Loans due on or before the
Cut-Off Date):
(i) all payments on account of principal, including
Principal Prepayments and late collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans (other than payments due prior to the Cut-off Date), net of the
applicable Servicing Fee and Master Servicing Fee with respect to each
such Mortgage Loan, but only to the extent of the amount permitted to be
withdrawn or withheld from the Collection Account in accordance with
Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with respect
to a Mortgage Loan not otherwise specified in this paragraph (d),
including any Subsequent Recovery, all Net Liquidation Proceeds with
respect to the Mortgage Loans and REO Property, and all amounts received
in connection with the operation of any REO Property, net of any unpaid
Servicing Fees and Master Servicing Fees with respect to such Mortgage
Loans, but only to the extent of the amount permitted to be withdrawn or
withheld from the Collection Account in accordance with Sections 5.04
and 9.21; provided that if the applicable Servicer is also the Retained
Interest Holder with respect to any Mortgage Loan, payments on account
of interest on the Mortgage Loans as to which such Servicer is the
Retained Interest Holder may also be made net of the related Retained
Interest with respect to each such Mortgage Loan.
(iv) all Insurance Proceeds;
(v) all Advances made by the Master Servicer or the
applicable Servicer pursuant to Section 5.04 or the applicable Servicing
Agreement;
(vi) all Prepayment Penalty Amounts; and
(vii) all proceeds of any Mortgage Loan purchased by any
Person.
(e) Funds in the Collection Account may be invested in Eligible
Investments (selected by and at the written direction of the Master Servicer)
which shall mature not later than one Business Day prior to the Master Servicer
Remittance Date (except that if such Eligible Investment is an obligation of the
Trustee, then such Eligible Investment shall mature not later than such
applicable Master Servicer Remittance Date), and any such Eligible Investment
shall not be sold or disposed of prior to its maturity. All such Eligible
Investments shall be made in the name of the Master Servicer in trust for the
benefit of the Trustee and Holders of Structured Adjustable Rate Mortgage Loan
Trust, Mortgage Pass-Through Certificates, Series 2005-1. All income and gain
realized from any such investment shall be for the benefit of the Master
Servicer, while such Collection Account is maintained by the Master Servicer,
and shall be subject to its withdrawal or order from time to time and shall not
be part of the Trust Fund. The amount of any losses incurred in respect of any
such investments shall be deposited in such Collection Account by the Master
Servicer out of its own funds, without any right of reimbursement therefor,
immediately as realized. The foregoing requirements for deposit in the
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Collection Account are exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments of interest on funds in the
Collection Account and payments in the nature of late payment charges or
assumption fees need not be deposited by the Master Servicer in the Collection
Account and may be retained by the Master Servicer or the applicable Servicer as
additional servicing compensation. If the Master Servicer deposits in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from such Collection Account.
Section 4.02. Application of Funds in the Collection Account.
The Master Servicer may, from time to time, make, or cause to be made,
withdrawals from the Collection Account for the following purposes:
(i) to reimburse itself or any Servicer for Advances made by
it or by such Servicer pursuant to Section 5.04 or the applicable
Servicing Agreement; the Master Servicer's right to reimburse itself
pursuant to this subclause (i) is limited to amounts received on or in
respect of particular Mortgage Loans (including, for this purpose,
Liquidation Proceeds and amounts representing Insurance Proceeds with
respect to the property subject to the related Mortgage) which represent
late recoveries (net of the applicable Servicing Fee and the Master
Servicing Fee) of payments of principal or interest respecting which any
such Advance was made, it being understood, in the case of any such
reimbursement, that the Master Servicer's or Servicer's right thereto
shall be prior to the rights of the Certificateholders;
(ii) to reimburse itself or any Servicer for any Advances or
Servicing Advances made by it or by such Servicer that it or such
Servicer determines in good faith will not be recoverable from amounts
representing late recoveries of payments of principal or interest
respecting the particular Mortgage Loan as to which such Advance or
Servicing Advance was made or from Liquidation Proceeds or Insurance
Proceeds with respect to such Mortgage Loan, it being understood, in the
case of any such reimbursement, that such Master Servicer's or
Servicer's right thereto shall be prior to the rights of the
Certificateholders;
(iii) to reimburse itself or any Servicer from Liquidation
Proceeds for Liquidation Expenses and for amounts expended by it
pursuant to Sections 9.20 and 9.22(a) or the applicable Servicing
Agreement in good faith in connection with the restoration of damaged
property and, to the extent that Liquidation Proceeds after such
reimbursement exceed the unpaid principal balance of the related
Mortgage Loan, together with accrued and unpaid interest thereon at the
applicable Mortgage Rate less the applicable Servicing Fee and the
Master Servicing Fee for such Mortgage Loan to the Due Date next
succeeding the date of its receipt of such Liquidation Proceeds, to pay
to itself out of such excess the amount of any unpaid assumption fees,
late payment charges or other Mortgagor charges on the related Mortgage
Loan and to retain any excess remaining thereafter as additional
servicing compensation, it being understood, in the case of any such
reimbursement or payment, that such Master Servicer's or Servicer's
right thereto shall be prior to the rights of the Certificateholders;
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(iv) in the event it has elected not to pay itself the Master
Servicing Fee out of any Mortgagor payment on account of interest or
other recovery with respect to a particular Mortgage Loan prior to the
deposit of such Mortgagor payment or recovery in the Collection Account,
to pay to itself the Master Servicing Fee for each Distribution Date and
any unpaid Master Servicing Fees for prior Distribution Dates, as
reduced pursuant to Section 5.05, from any Mortgagor payment as to
interest or such other recovery with respect to that Mortgage Loan, as
is permitted by this Agreement;
(v) to reimburse itself or any Servicer for expenses
incurred by and recoverable by or reimbursable to it or such Servicer
pursuant to Section 9.04, 9.06, 9.16 or 9.22(a) or pursuant to the
applicable Servicing Agreement (to the extent such reimbursement
constitutes "unanticipated expenses" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii)), and to reimburse itself for any
expenses reimbursable to it pursuant to Section 10.01(c);
(vi) to pay to the applicable Person, with respect to each
Mortgage Loan or REO Property acquired in respect thereof that has been
repurchased by such Person pursuant to this Agreement, all amounts
received thereon and not distributed on the date on which the related
repurchase was effected;
(vii) subject to Section 5.04, to pay to itself income earned
on the investment of funds deposited in the Collection Account;
(viii) to make payments to the Securities Administrator on each
Master Servicer Remittance Date for deposit into the Certificate Account
in the amounts and in the manner provided for in Section 4.04;
(ix) to make distributions of the Retained Interest to the
Retained Interest Holder on each Distribution Date (other than any
Retained Interest not deposited into the Collection Account in
accordance with Section 4.01(d)(iii));
(x) to make payment to itself, the Trustee and others
pursuant to any provision of this Agreement and to reimburse the
Custodian pursuant to the Custodial Agreement, but only to the extent
that the items reimbursed constitute "unanticipated expenses" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(xi) to withdraw funds deposited in error in the Collection
Account;
(xii) to clear and terminate any Collection Account pursuant
to Section 7.02;
(xiii) to reimburse a successor Master Servicer (solely in its
capacity as successor Master Servicer, including the Securities
Administrator), for any fee or advance occasioned by a termination of
the Master Servicer, and the assumption of such duties by the Securities
Administrator or a successor Master Servicer appointed by the Securities
Administrator pursuant to Section 6.14, in each case to the extent not
reimbursed by the terminated Master Servicer, it being understood, in
the case of any such reimbursement or payment, that the right of the
Master Servicer or the Securities Administrator thereto shall be prior
to the rights of the Certificateholders; and
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(xiv) to reimburse any Servicer for such amounts as are due
thereto under the applicable Servicing Agreement and have not been
retained by or paid to such Servicer to the extent provided in such
Servicing Agreement provided such amounts are Servicing Fees or
"anticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii).
If provided in the related Servicing Agreement, each Servicer shall be
entitled to retain as additional servicing compensation any Prepayment Interest
Excess (to the extent not offset by Prepayment Interest Shortfalls). The
Servicers of the Participations shall be entitled to retain as additional
servicing compensation any Prepayment Penalty Amounts received with respect to
the Participations.
In connection with withdrawals pursuant to subclauses (i), (iii), (iv)
and (vi) above, the Master Servicer's or Servicer's entitlement thereto is
limited to collections or other recoveries on the related Mortgage Loan. The
Master Servicer shall therefore keep and maintain a separate accounting for each
Mortgage Loan it master services for the purpose of justifying any withdrawal
from the Collection Account it maintains pursuant to such subclause (i), (iii),
(iv) and (vi).
In the event that the Master Servicer fails on any Master Servicer
Remittance Date to remit to the Securities Administrator any amounts required to
be so remitted to the Securities Administrator pursuant to sub-clause (viii) by
such date, the Master Servicer shall pay the Securities Administrator, for the
account of the Securities Administrator, interest calculated at the "prime rate"
(as published in the "Money Rates" section of The Wall Street Journal) on such
amounts not timely remitted for the period from and including that Master
Servicer Remittance Date to but not including the related Distribution Date. The
Master Servicer shall only be required to pay the Securities Administrator
interest for the actual number of days such amounts are not timely remitted
(e.g., one day's interest, if such amounts are remitted one day after the Master
Servicer Remittance Date).
Section 4.03. Reports to Certificateholders.
(a) On each Distribution Date, the Securities Administrator shall
have prepared (based on information provided by the Master Servicer and the Cap
Provider) and shall make available to the Trustee and each Certificateholder a
written report setting forth the following information, by Mortgage Pool and
Certificate Group (on the basis of Mortgage Loan level information obtained from
the applicable Servicer and the Master Servicer):
(i) the aggregate amount of the distribution to be made on
such Distribution Date to the Holders of each Class of Certificates,
other than any Class of Notional Certificates, to the extent applicable,
allocable to principal on the Mortgage Loans, including any Subsequent
Recovery, Liquidation Proceeds and Insurance Proceeds, stating
separately the amount attributable to scheduled principal payments and
unscheduled payments in the nature of principal in each Mortgage Pool;
(ii) the aggregate amount of the distribution to be made on
such Distribution Date to the Holders of each Class of Certificates
allocable to interest, including any Accrual Amount added to the Class
Principal Amount of any Class of Accrual Certificates;
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(iii) the amount, if any, of any distribution to the Holders
of a Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to be
made by or on behalf of the Master Servicer or any Servicer (or, if
applicable, the Securities Administrator, solely in its capacity as
successor Master Servicer) with respect to such Distribution Date, (B)
the aggregate amount of such Advances actually made, and (C) the amount,
if any, by which (A) above exceeds (B) above;
(v) the Aggregate Principal Balance of the Mortgage Loans
and the Pool Balance of each Mortgage Pool for such Distribution Date,
after giving effect to payments allocated to principal reported under
clause (i) above;
(vi) the Class Principal Amount (or Class Notional Amount) of
each Class of Certificates, to the extent applicable, as of such
Distribution Date after giving effect to payments allocated to principal
reported under clause (i) above (and to the addition of any Accrual
Amount in the case of any Class of Accrual Certificates), separately
identifying any reduction of any of the foregoing Certificate Principal
Amounts due to Realized Losses;
(vii) any Realized Losses realized with respect to the
Mortgage Loans (x) in the applicable Prepayment Period and (y) in the
aggregate since the Cut-off Date, stating separately the amount of
Special Hazard Losses, Fraud Losses and Bankruptcy Losses and the
aggregate amount of such Realized Losses, and the remaining Special
Hazard Loss Amount, Fraud Loss Amount and Bankruptcy Loss Amount;
(viii) the amount of the Master Servicing Fees, Servicing Fees
and Securities Administrator Fee paid during the Due Period to which
such distribution relates;
(ix) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Securities Administrator by the
Master Servicer, (a) remaining outstanding, (b) delinquent one month,
(c) delinquent two months, (d) delinquent three or more months and (e)
as to which foreclosure proceedings have been commenced as of the close
of business on the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs;
(x) the deemed aggregate principal balance of all REO
Properties as of the close of business on the last Business Day of the
calendar month immediately preceding the month in which such
Distribution Date occurs;
(xi) with respect to substitution of Mortgage Loans in the
preceding calendar month, the aggregate Scheduled Principal Balance of
all such Deleted Mortgage Loans, and of all Qualifying Substitute
Mortgage Loans;
(xii) the aggregate outstanding Interest Shortfalls and Net
Prepayment Interest Shortfalls, if any, for each Class of Certificates,
after giving effect to the distribution made on such Distribution Date;
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(xiii) the Certificate Interest Rate applicable to such
Distribution Date with respect to each Class of Certificates;
(xiv) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Certificateholders would have received if there were sufficient
available amounts in the Certificate Account and the amounts actually
distributed);
(xv) the amount of payments made to each of the Class B1,
Class B2, Class B3, Class B4, Class B5, Class B7, Class B10 and Class
B11 Certificates in respect of Floating Rate Certificate Shortfalls and
the amount of any unpaid outstanding Floating Rate Certificate
Shortfalls;
(xvi) the amount of any payments made by the Cap Provider to
the Trust Fund under the Cap Agreements; and
(xvii) the amount of payments made to each Class of
Certificates that are treated as payments received in respect of a REMIC
3 Regular Interest and the amount of any payments to each Class of
Certificates that are not treated as payments in respect of a REMIC 3
Regular Interest.
In the case of information furnished pursuant to subclauses (i), (ii)
and (viii) above, the amounts shall be expressed as a dollar amount per $1,000
of original principal amount of Certificates.
The Securities Administrator shall make such report and additional loan
level information (and, at its option, any additional files provided by the
Master Servicer containing the same information in an alternative format)
available each month to the Trustee, Certificateholders and the Rating Agencies
via the Securities Administrator's internet website. The Trustee's internet
website shall initially be located at xxx.xxxxxxx.xxx. Assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at (000) 000-0000. Such parties that are unable to use the website
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Securities Administrator
shall have the right to change the way 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.
The foregoing information and reports shall be prepared and determined
by the Securities Administrator based solely on Mortgage Loan data provided to
the Securities Administrator by the Master Servicer no later than four Business
Days prior to the Distribution Date. In preparing or furnishing the Mortgage
Loan data to the Securities Administrator, the Master Servicer shall be entitled
to rely conclusively on the accuracy of the information or data regarding the
Mortgage Loans and the related REO Property that has been provided to the Master
Servicer by each Servicer, and the Master Servicer shall not be obligated to
verify, recompute, reconcile or recalculate any such information or data. The
Securities Administrator shall be entitled to
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conclusively rely on the Mortgage Loan data provided by the Master Servicer and
shall have no liability for any errors in such Mortgage Loan data or other
information.
On each Distribution Date, the Securities Administrator shall also
provide or make available to the Depositor a copy of the above described written
report, to the following address: Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxxx, or to such other
address as the Depositor may designate.
(b) Upon the reasonable advance written request of any
Certificateholder that is a savings and loan, bank or insurance company, which
request, if received by the Trustee or the Securities Administrator, will be
promptly forwarded to the Master Servicer, the Master Servicer shall provide, or
cause to be provided, (or, to the extent that such information or documentation
is not required to be provided by a Servicer under the applicable Servicing
Agreement, shall use reasonable efforts to obtain such information and
documentation from such Servicer, and provide) to such Certificateholder such
reports and access to information and documentation regarding the Mortgage Loans
as such Certificateholder may reasonably deem necessary to comply with
applicable regulations of the Office of Thrift Supervision or its successor or
other regulatory authorities with respect to investment in the Certificates;
provided, however, that the Master Servicer shall be entitled to be reimbursed
by such Certificateholder for such Master Servicer's actual expenses incurred in
providing such reports and access.
(c) Within 90 days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Securities
Administrator shall have prepared and shall make available, upon written
request, to each Person who at any time during the calendar year was a
Certificateholder of record, and make available to Certificate Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to Certificateholders
pursuant to Section 4.03(a) on an annual basis as may be required to enable such
Holders to prepare their federal income tax returns. Such information shall
include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund. The
Securities Administrator shall be deemed to have satisfied this requirement if
it forwards such information in any other format permitted by the Code. The
Master Servicer shall provide the Securities Administrator with such Mortgage
Loan level information as is necessary for the Securities Administrator to
prepare such reports.
Section 4.04. Certificate Account.
(a) The Securities Administrator shall establish and maintain in its
name, as securities administrator, a trust account (the "Certificate Account"),
to be held in trust for the benefit of the Certificateholders until disbursed
pursuant to the terms of this Agreement. The Certificate Account shall be an
Eligible Account. If the existing Certificate Account ceases to be an Eligible
Account, the Securities Administrator shall establish a new Certificate Account
that is an Eligible Account within 20 Business Days and transfer all funds on
deposit in such existing Certificate Account into such new Certificate Account.
The Certificate Account shall relate solely to the Certificates issued hereunder
and funds in the Certificate Account shall be held separate and apart from and
shall not be commingled with any other monies including, without limitation,
other monies of the Securities Administrator held under this Agreement.
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(b) The Securities Administrator shall cause to be deposited into
the Certificate Account on the day on which, or, if such day is not a Business
Day, the Business Day immediately following the day on which, any monies are
remitted by the Master Servicer to the Securities Administrator all such
amounts. The Securities Administrator shall make withdrawals from the
Certificate Account only for the following purposes:
(i) to withdraw amounts deposited in the Certificate Account
in error;
(ii) to pay itself the Securities Administrator Fee and any
investment income earned with respect to funds in the Certificate
Account invested in Eligible Investments as set forth in subsection (c)
below, and to make payments to itself, the Trustee and others prior to
making distributions pursuant to Section 5.02 for any expenses or other
indemnification owing to itself, the Trustee and others pursuant to any
provision of this Agreement;
(iii) to make payments of the Master Servicing Fee (to the
extent not already withheld or withdrawn from the Collection Account by
the Master Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders pursuant
to Article V; and
(v) to clear and terminate the Certificate Account pursuant
to Section 7.02.
(c) The Securities Administrator may invest, or cause to be
invested, funds held in the Certificate Account, which funds, if invested, shall
be invested in Eligible Investments (which may be obligations of the Securities
Administrator). All such investments must mature no later than the next
Distribution Date, and shall not be sold or disposed of prior to their maturity.
All such Eligible Investments will be made in the name of the Securities
Administrator (in its capacity as such) or its nominee. All income and gain
realized from any such investment shall be paid to the Securities Administrator
and shall be subject to its withdrawal on order from time to time. The amount of
any losses incurred in respect of any such investments shall be paid by the
Securities Administrator for deposit in the Certificate Account out of its own
funds, without any right of reimbursement therefor, immediately as realized.
Funds held in the Certificate Account that are not invested shall be held in
cash.
Section 4.05. Determination of LIBOR.
(a) If the outstanding Certificates include any LIBOR Certificates,
then on each LIBOR Determination Date the Securities Administrator shall
determine LIBOR on the basis of the offered LIBOR quotations of the Reference
Banks as of 11:00 a.m. London time on such LIBOR Determination Date as follows:
(i) If on any LIBOR Determination Date two or more of the
Reference Banks provide such offered quotations, LIBOR for the next
Accrual Period will be the arithmetic mean of such offered quotations
(rounding such arithmetic mean if necessary to the nearest five decimal
places);
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(ii) If on any LIBOR Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the next
Accrual Period will be whichever is the higher of (x) LIBOR as
determined on the previous LIBOR Determination Date or (y) the Reserve
Interest Rate. The "Reserve Interest Rate" will be either (A) the rate
per annum which the Securities Administrator determines to be the
arithmetic mean (rounding such arithmetic mean if necessary to the
nearest five decimal places) of the one-month Eurodollar lending rates
that New York City banks selected by the Depositor are quoting, on the
relevant LIBOR Determination Date, to the principal London offices of at
least two leading banks in the London interbank market or (B) in the
event that the Securities Administrator can determine no such arithmetic
mean, the lowest one-month Eurodollar lending rate that the New York
City banks selected by the Depositor are quoting on such LIBOR
Determination Date to leading European banks; and
(iii) If on any LIBOR Determination Date the Securities
Administrator is required but is unable to determine the Reserve
Interest Rate in the manner provided in paragraph (ii) above, LIBOR for
the next Accrual Period will be LIBOR as determined on the previous
LIBOR Determination Date or, in the case of the first LIBOR
Determination Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Securities Administrator and
the Securities Administrator's subsequent calculation of the Certificate
Interest Rate (or Rates) applicable to the LIBOR Certificates for the relevant
Accrual Period, in the absence of manifest error, will be final and binding. In
all cases, the Securities Administrator may conclusively rely on quotations of
LIBOR for the Reference Banks as such quotations appear on the display
designated "LIBOR" on the Bloomberg Financial Markets Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, England, (ii) whose
quotations appear on the "Bloomberg Screen LIBOR Index Page" (as described in
the definition of LIBOR) on the applicable LIBOR Determination Date and (iii)
which have been designated as such by the Depositor and are able and willing to
provide such quotations to the Depositor on each LIBOR Determination Date. The
Reference Banks initially shall be: Barclay's plc, Bank of Tokyo, National
Westminster Bank and Trust Company and Bankers Trust Company. If any of the
initial Reference Banks should be removed from the Bloomberg Screen LIBOR Index
Page or in any other way fail to meet the qualifications of a Reference Bank,
the Depositor shall use its best efforts to designate alternate Reference Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date LIBOR would, without giving effect to this
paragraph (d), be determined pursuant to such clause (a)(iii), then the
Depositor shall select an alternative interest rate index over which the
Depositor has no control that is used for determining Eurodollar lending rates
and is calculated and published (or otherwise made available) by an independent
third party, and such alternative interest rate index shall constitute LIBOR for
all purposes hereof.
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ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally.
(a) Subject to Section 7.01 with respect to the final distribution
on the Certificates, on each Distribution Date the Trustee or the Paying Agent
shall make distributions in accordance with this Article V. Such distributions
shall be made by check mailed to each Certificateholder's address as it appears
on the Certificate Register of the Certificate Registrar or, upon written
request made to the Securities Administrator at least five Business Days prior
to the related Distribution Date to any Certificateholder, by wire transfer in
immediately available funds to an account specified in the request and at the
expense of such Certificateholder; provided, however, that the final
distribution in respect of any Certificate shall be made only upon presentation
and surrender of such Certificate at the Corporate Trust Office. Wire transfers
may be made at the expense of the Holder requesting such wire transfer by
deducting a wire transfer fee from the related distribution. Notwithstanding
such final payment of principal of any of the Certificates, each Residual
Certificate will remain outstanding until the termination of each REMIC and the
payment in full of all other amounts due with respect to the Residual
Certificate and at such time such final payment in retirement of the Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office of the Certificate Registrar. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Certificate Principal Amounts (or initial Notional
Amounts).
Section 5.02. Distributions from the Certificate Account.
(a) On each Distribution Date, the Securities Administrator (or any
successor Paying Agent on behalf of the Trustee) shall withdraw from the
Certificate Account, to the extent of funds available therefor, the Available
Distribution Amount (excluding all Prepayment Penalty Amounts) with respect to
each Mortgage Pool, and shall distribute such amount in the following order of
priority based on the report of the Securities Administrator:
(i) from the Available Distribution Amount for each Mortgage
Pool, to each Class of Senior Certificates in the related Certificate
Group, the Accrued Certificate Interest thereon for such Distribution
Date, as reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for the related Mortgage Pool for such Distribution
Date; provided, however, that any shortfall in available amounts for a
Mortgage Pool shall be allocated among the Classes of the related
Certificate Group in proportion to the amount of Accrued Certificate
Interest (as so reduced) that would otherwise be distributable thereon;
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(ii) from the remaining Available Distribution Amount for
each Mortgage Pool, to each Class of Senior Certificates in the related
Certificate Group, any related Interest Shortfall for such Distribution
Date; provided, however, that any shortfall in available amounts for
each Mortgage Pool shall be allocated among the Classes of the related
Certificate Group in proportion to the Interest Shortfall (as so
reduced) for each such Class on such Distribution Date;
(iii) from the remaining Available Distribution Amount for
each Mortgage Pool, to the Senior Certificates of the related
Certificate Group in reduction of the Class Principal Amounts thereof,
concurrently, as follows:
(A) to the Class R, Class 1-A1 and Class 1-A2
Certificates from the Available Distribution Amount for Pool 1,
the Senior Principal Distribution Amount for such Mortgage Pool,
in reduction of their Class Principal Amounts, sequentially as
follows:
(I) first, to the Class R Certificate, until
its Class Principal Amount has been reduced to zero; and
(II) second, pro rata, to the Class 1-A1 and
Class 1-A2 Certificates until their Class Principal
Amounts have been reduced to zero;
(B) to the Class 2-A Certificates from the Available
Distribution Amount for Pool 2 for such Distribution Date, the
Senior Principal Distribution Amount for such Mortgage Pool for
such Distribution Date, in reduction of its Class Principal
Amount until its Class Principal Amount has been reduced to
zero;
(C) to the Class 3-A Certificates from the Available
Distribution Amount for Pool 3 for such Distribution Date, the
Senior Principal Distribution Amount for such Mortgage Pool for
such Distribution Date, in reduction of its Class Principal
Amount until its Class Principal Amount has been reduced to
zero;
(D) pro rata, to the Class 4-A1 and Class 4-A2
Certificates from the Available Distribution Amount for Pool 4
for such Distribution Date, the Senior Principal Distribution
Amount for such Mortgage Pool for such Distribution Date, in
reduction of their Class Principal Amounts until their Class
Principal Amounts have been reduced to zero;
(E) pro rata, to the Class 5-A1 and Class 5-A2
Certificates from the Available Distribution Amount for Pool 5
for such Distribution Date, the Senior Principal Distribution
Amount for such Mortgage Pool for such Distribution Date, in
reduction of their Class Principal Amounts until their Class
Principal Amounts have been reduced to zero;
(F) to the Class 6-A Certificates from the Available
Distribution Amount for Pool 6 for such Distribution Date, the
Senior Principal Distribution
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Amount for such Mortgage Pool for such Distribution Date, in
reduction of its Class Principal Amount until its Class
Principal Amount has been reduced to zero; and
(iv) from the remaining Available Distribution Amount for
each Mortgage Pool, subject to the prior distribution of amounts
pursuant to Section 5.02(g) in the case of clauses (C), (F), (I), (L),
(O), (R), (U), (X), (AA), (DD), (GG), (JJ) and (MM) below, to the
Subordinated Certificates, in the following order of priority:
(A) concurrently, to the Class B1 and Class B1X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(B) concurrently, to the Class B1 and Class B1X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(C) to the Class B1 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(D) concurrently, to the Class B2 and Class B2X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(E) concurrently, to the Class B2 and Class B2X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(F) to the Class B2 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(G) concurrently, to the Class B3 and Class B3X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(H) concurrently, to the Class B3 and Class B3X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(I) to the Class B3 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in
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Section 5.02(c), until the Class Principal Amount thereof has
been reduced to zero;
(J) concurrently, to the Class B4 and Class B4X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(K) concurrently, to the Class B4 and Class B4X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(L) to the Class B4 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(M) concurrently, to the Class B5 and Class B5X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(N) concurrently, to the Class B5 and Class B5X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(O) to the Class B5 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(P) to the Class B6 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(Q) to the Class B6 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(R) to the Class B6 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(S) concurrently, to the Class B7 and Class B7X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
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(T) concurrently, to the Class B7 and Class B7X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(U) to the Class B7 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(V) to the Class B8 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(W) to the Class B8 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(X) to the Class B8 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(Y) to the Class B9 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(Z) to the Class B9 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(AA) to the Class B9 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(BB) concurrently, to the Class B10 and Class B10X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(CC) concurrently, to the Class B10 and Class B10X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(DD) to the Class B10 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
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(EE) concurrently, to the Class B11 and Class B11X
Certificates, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of
any Net Prepayment Interest Shortfalls for such Distribution
Date;
(FF) concurrently, to the Class B11 and Class B11X
Certificates, any Interest Shortfall for such Class on such
Distribution Date;
(GG) to the Class B11 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(HH) to the Class B12 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(II) to the Class B12 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(JJ) to the Class B12 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero;
(KK) to the Class B13 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(LL) to the Class B13 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(MM) to the Class B13 Certificates, in reduction of
the Class Principal Amount thereof, such Class's Subordinate
Class Percentage of each Subordinate Principal Distribution
Amount for such Distribution Date, except as provided in Section
5.02(c), until the Class Principal Amount thereof has been
reduced to zero; and
(NN) to the Class Z Certificates, the Class Z Extra
Distribution Amount for such Distribution Date and an amount
equal to any Class Z Extra Distribution Amount for prior
Distribution Dates not previously paid.
(b) Net Prepayment Interest Shortfalls for each Mortgage Pool shall
be allocated among the Certificates of the related Certificate Group and the
Subordinate Certificates pro rata based on (i) in the case of the related Senior
Certificates, the Accrued Certificate Interest otherwise distributable thereon,
and (ii) in the case of the Subordinate Certificates, interest
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accrued (at the Underlying Subordinate Rate for each Mortgage Pool) on the
related Apportioned Principal Balances. Amounts so allocated to the Class B1,
Class B2, Class B3, Class B4, Class B5, Class B7, Class B10 and Class B11
Certificates will be allocated between the Class B1 and Class B1X Certificates,
between the Class B2 and Class B2X Certificates, between the Class B3 and Class
B3X Certificates, between the Class B4 and Class B4X Certificates, between the
Class B5 and Class B5X Certificates, between the Class B7 and Class B7X
Certificates, Class B10 and Class B10X Certificates or between the Class B11 and
Class B11X Certificates, as the case may be, proportionately, based upon the
Accrued Certificate Interest thereon.
(c) (i) if on any Distribution Date the Credit Support Percentage
for the Class B1 Certificates is less than the Original Credit Support
Percentage for such Class, then, notwithstanding anything to the contrary in
Section 5.02(a), no distribution of amounts described in clauses (ii) and (iii)
of the definition of Subordinate Principal Distribution Amount will be made in
respect of the Class B2, Class B3, Class B4, Class B5, Class B6, Class B7, Class
B8, Class B9, Class B10, Class B11, Class B12 or Class B13 Certificates on such
Distribution Date; (ii) if on any Distribution Date the Credit Support
Percentage for the Class B2 Certificates is less than the Original Credit
Support Percentage for such Class, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Class B3, Class B4, Class B5, Class B6, Class B7,
Class B8, Class B9, Class B10, Class B11, Class B12 or Class B13 Certificates on
such Distribution Date; (iii) if on any Distribution Date the Credit Support
Percentage for the Class B3 Certificates is less than the Original Credit
Support Percentage for such Class, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Class B4, Class B5, Class B6, Class B7, Class B8,
Class B9, Class B10, Class B11, Class B12 or Class B13 Certificates on such
Distribution Date; (iv) if on any Distribution Date the Credit Support
Percentage for the Class B4 Certificates is less than the Original Credit
Support Percentage for such Class, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Class B5, Class B6, Class B7, Class B8, Class B9,
Class B10, Class B11, Class B12 or Class B13 Certificates on such Distribution
Date; (v) if on any Distribution Date the Credit Support Percentage for the
Class B5 Certificates is less than the Original Credit Support Percentage for
such Class, then, notwithstanding anything to the contrary in Section 5.02(a),
no distribution of amounts described in clauses (ii) and (iii) of the definition
of Subordinate Principal Distribution Amount will be made in respect of the
Class B6, Class B7, Class B8, Class B9, Class B10, Class B11, Class B12 or Class
B13 Certificates on such Distribution Date; (vi) if on any Distribution Date the
Credit Support Percentage for the Class B6 Certificates is less than the
Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B7, Class B8, Class B9,
Class B10, Class B11, Class B12 or Class B13 Certificates on such Distribution
Date; (vii) if on any Distribution Date the Credit Support Percentage for the
Class B7 Certificates is less than the Original Credit Support Percentage for
such Class, then, notwithstanding anything to the contrary in Section 5.02(a),
no distribution of amounts described in clauses (ii) and (iii) of the definition
of Subordinate Principal Distribution Amount will be made in respect of the
Class B8, Class B9, Class B10, Class B11, Class B12 or
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Class B13 Certificates on such Distribution Date; (viii) if on any Distribution
Date the Credit Support Percentage for the Class B8 Certificates is less than
the Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B9, Class B10, Class
B11, Class B12 or Class B13 Certificates on such Distribution Date; (ix) if on
any Distribution Date the Credit Support Percentage for the Class B9
Certificates is less than the Original Credit Support Percentage for such Class,
then, notwithstanding anything to the contrary in Section 5.02(a), no
distribution of amounts described in clauses (ii) and (iii) of the definition of
Subordinate Principal Distribution Amount will be made in respect of the Class
B10, Class B11, Class B12 or Class B13 Certificates on such Distribution Date;
(x) if on any Distribution Date the Credit Support Percentage for the Class B10
Certificates is less than the Original Credit Support Percentage for such Class,
then, notwithstanding anything to the contrary in Section 5.02(a), no
distribution of amounts described in clauses (ii) and (iii) of the definition of
Subordinate Principal Distribution Amount will be made in respect of the Class
B11, Class B12 or Class B13 Certificates on such Distribution Date; (xi) if on
any Distribution Date the Credit Support Percentage for the Class B11
Certificates is less than the Original Credit Support Percentage for such Class,
then, notwithstanding anything to the contrary in Section 5.02(a), no
distribution of amounts described in clauses (ii) and (iii) of the definition of
Subordinate Principal Distribution Amount will be made in respect of the Class
B12 or Class B13 Certificates on such Distribution Date; and (xii) if on any
Distribution Date the Credit Support Percentage for the Class B12 Certificates
is less than the Original Credit Support Percentage for such Class, then,
notwithstanding anything to the contrary in Section 5.02(a), no distribution of
amounts described in clauses (ii) and (iii) of the definition of Subordinate
Principal Distribution Amount will be made in respect of the Class B13
Certificates on such Distribution Date;
Any amount not distributed in respect of any Class on any Distribution
Date pursuant to the immediately preceding paragraph will be allocated among the
remaining Subordinate Classes in proportion to their respective Certificate
Principal Amounts.
(d) On each Distribution Date, the Securities Administrator shall
distribute sequentially to the Holders of (i) the Class B1 and Class B2
Certificates, pro rata, any payments received by the Securities Administrator
under the terms of the Cap Agreement related to the Class B1 and Class B2
Certificates up to the amount of any Floating Rate Certificate Shortfall related
to such Certificates; (ii) the Class B3 and Class B4 Certificates, pro rata, any
payments received by the Securities Administrator under the terms of the Cap
Agreement related to the Class B3 and Class B4 Certificates up to the amount of
any Floating Rate Certificate Shortfall related to such Certificates; (iii) the
Class B5 Certificates any payments received by the Securities Administrator
under the terms of the Cap Agreement related to the Class B5 Certificates up to
the amount of any Floating Rate Certificate Shortfall related to such
Certificates; (iv) the Class B7 Certificates any payments received by the
Securities Administrator under the terms of the Cap Agreement related to the
Class B7 Certificates up to the amount of any Floating Rate Certificate
Shortfall related to such Certificates; (v) the Class B10 Certificates any
payments received by the Securities Administrator under the terms of the Cap
Agreement related to the Class B10 Certificates up to the amount of any Floating
Rate Certificate Shortfall related to such Certificates; (vi) the Class B11
Certificates any payments received by the Securities Administrator under the
terms of the Cap Agreement related to the Class B11
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Certificates up to the amount of any Floating Rate Certificate Shortfall related
to such Certificates; and (vii) the Class CX Certificates any amounts received
by the Securities Administrator under the terms of the Cap Agreements that are
not used to pay the Floating Rate Certificate Shortfall; provided, however, that
for any Distribution Date on which there is a payment under a Cap Agreement
based on a notional balance in excess of the aggregate Certificate Principal
Amount of the related Class of Certificates, the amount representing such excess
payment shall not be an asset of the Trust Fund and, instead, shall be paid into
and distributed out of a separate trust created by this Agreement for the
benefit of the Class CX Certificates and shall be distributed to the Class CX
Certificates; provided, further, however, that any amounts payable pursuant to
the terms of the Cap Agreement related to the Class B1 and Class B2 Certificates
or the Cap Agreement related to the Class B3 and Class B4 Certificates will be
allocated, pro rata, between the Class B1 and Class B2 Certificates or between
the Class B3 and Class B4 Certificates, as applicable, based on their
respective initial Class Principal Amounts, in each case up to the amount of the
applicable Floating Rate Certificate Shortfall.
(e) On each Distribution Date, the Paying Agent shall distribute to
the Holders of the Class P Certificates, any Prepayment Penalty Amounts paid by
borrowers upon voluntary full or partial prepayment of the Mortgage Loans in
Pool 1, Pool 2, Pool 3, Pool 4, Pool 5 and Pool 6.
(f) On each Distribution Date, the Paying Agent shall distribute to
the Holder of the Class R Certificate any Available Distribution Amount for each
of the Mortgage Pools remaining for such Distribution Date after application of
all amounts described in paragraph (a) and (e) of this Section 5.02. Any
distributions pursuant to this paragraph (f) shall not reduce the Class
Principal Amount of the Class R Certificate.
(g) (i) (A) On each Distribution Date prior to the Credit Support
Depletion Date but on or after the date on which the aggregate Certificate
Principal Amount of the Senior Certificates of any Certificate Group has been
reduced to zero, amounts otherwise distributable as principal on each Class of
Subordinate Certificates in accordance with the priorities set forth in Section
5.02(a)(v), in reverse order of priority, in respect of such Class's Subordinate
Class Percentage of the Subordinate Principal Distribution Amount for the
Mortgage Pool relating to such retired Senior Certificates, shall be distributed
as principal to the Senior Certificates remaining outstanding in accordance with
the priorities set forth in Section 5.02(a)(iv), until the Class Principal
Amounts thereof have been reduced to zero, provided that on such Distribution
Date (a) the Aggregate Subordinate Percentage for such Distribution Date is less
than 200% of the Aggregate Subordinate Percentage as of the Cut-off Date or (b)
the average outstanding principal balance of the Mortgage Loans in Pool 1 (if
the aggregate Certificate Principal Amount of the Senior Certificates of Group
2, Group 3, Group 4, Group 5 or Group 6 has been reduced to zero), Pool 2 (if
the aggregate Certificate Principal Amount of the Senior Certificates of Group
1, Group 3, Group 4, Group 5 or Group 6 has been reduced to zero), Pool 3 (if
the aggregate Certificate Principal Amount of the Senior Certificates of Group
1, Group 2, Group 4, Group 5 or Group 6 has been reduced to zero), Pool 4 (if
the aggregate Certificate Principal Amount of the Senior Certificates of Group
1, Group 2, Group 3, Group 5 or Group 6 has been reduced to zero), Pool 5 (if
the aggregate Certificate Principal Amount of the Senior Certificates of Group
1, Group 2, Group 3, Group 4 or Group 6 has been reduced to zero) or Pool 6 (if
the aggregate Certificate Principal Amount of the Senior Certificates of Group
1, Group 2, Group 3, Group 4 or Group 5 has been reduced to zero), that are
delinquent 60 days or more for the last six months as a percentage of the
related Group Subordinate Amount is greater than or equal to 50%.
(B) On each Distribution Date on which the Senior
Certificates of two or more Certificate Groups remain outstanding, any
amounts distributable pursuant to this Section 5.02(g)(i) will be
distributed in proportion to the
86
aggregate Certificate Principal Amounts of such Certificates of each
such Certificate Group.
(ii) (A) On any Distribution Date on which any Certificate
Group constitutes an Undercollateralized Group, all amounts otherwise
distributable as principal on the Subordinate Certificates, in reverse
order of priority (other than amounts necessary to pay unpaid Interest
Shortfalls) (or, following the Credit Support Depletion Date, such other
amounts described in the immediately following sentence), will be
distributed as principal to the Senior Certificates of such
Undercollateralized Group in accordance with the priorities set forth in
Section 5.02(a)(iv), until the aggregate Certificate Principal Amount of
such Senior Certificates equals the Pool Balance of the related Mortgage
Pool (such distribution, an "Undercollateralization Distribution"). In
the event that any Certificate Group constitutes an Undercollateralized
Group on any Distribution Date following the Credit Support Depletion
Date, Undercollateralization Distributions will be made from the excess
of the Available Distribution Amount for the other such Mortgage Pools
not related to an Undercollateralized Group remaining after all required
amounts have been distributed to the Senior Certificates of the other
Certificate Groups. In addition, the amount of any unpaid Interest
Shortfalls with respect to an Undercollateralized Group on any
Distribution Date (including any Interest Shortfalls for such
Distribution Date) will be distributed to the Senior Certificates of
such Undercollateralized Group prior to the payment of any
Undercollateralization Distributions from amounts otherwise
distributable as principal on the Subordinate Certificates, in reverse
order of priority (or, following the Credit Support Depletion Date, as
provided in the preceding sentence).
(h) If on any Distribution Date two or more Certificate Groups are
Undercollateralized Groups and one or more Certificate Group is not an
Undercollateralized Group, the distributions described in paragraph (ii)(A)
above will be made in proportion to the amount by which the aggregate
Certificate Principal Amount of the Senior Certificates, after giving effect to
distributions pursuant to Sections 5.02(a) and (b) on such Distribution Date, of
each Undercollateralized Group exceeds the Pool Balance of the related Mortgage
Pool for such Distribution Date.
Section 5.03. Allocation of Realized Losses.
(a) (i) On any Distribution Date, the principal portion of each
Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan shall
be allocated in the following order of priority:
first, to the Class B13 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
second, to the Class B12 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
third, to the Class B11 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
87
fourth, to the Class B10 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
fifth, to the Class B9 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
sixth, to the Class B8 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
seventh, to the Class B7 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
eighth, to the Class B6 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
ninth, to the Class B5 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
tenth, to the Class B4 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
eleventh, to the Class B3 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
twelfth, to the Class B2 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
thirteenth, to the Class B1 Certificates, until the
Class Principal Amount thereof has been reduced to zero; and
fourteenth, to the Classes of Senior Certificates of the
related Certificated Group, pro rata, in accordance with their
Class Principal Amounts; provided, that any such loss allocated
to any Class of Accrual Certificates shall be allocated (subject
to Section 5.03(c)) on the basis of the lesser of (x) the Class
Principal Amount thereof immediately prior to the applicable
Distribution Date and (y) the Class Principal Amount thereof on
the Closing Date (as reduced by any Realized Losses previously
allocated thereto); provided, however, that any Realized Losses
otherwise allocable to the Class 1-A1 Certificates pursuant to
this Section 5.03 shall be allocated to the Class 1-A2
Certificates until the Class Principal Amount of such Class has
been reduced to zero; any Realized Losses otherwise allocable to
the Class 4-A1 Certificates pursuant to this Section 5.03 shall
be allocated to the Class 4-A2 Certificates until the Class
Principal Amount of such Class has been reduced to zero and any
Realized Losses otherwise allocable to the Class 5-A1
Certificates pursuant to this Section 5.03 shall be allocated to
the Class 5-A2 Certificates until the Class Principal Amount of
such Class has been reduced to zero.
88
Notwithstanding the foregoing, the first $0.47 of principal portion of Realized
Losses shall not be allocated to any Class of Certificates.
(b) With respect to any Distribution Date, the principal portion of
any Excess Loss in respect of a Mortgage Loan shall be allocated, pro rata, to
the Subordinate Certificates (without regard to which Mortgage Pool experienced
the loss) and the Senior Certificates of the related Certificate Group and on
the basis of the Apportioned Principal Balances of the Classes of Subordinate
Certificates and Class Principal Amounts of the Senior Certificates; provided,
that any such loss allocated to any Class of Accrual Certificates (and any
Accrual Component) shall be allocated (subject to Section 5.03(c)) on the basis
of the lesser of (x) the Class Principal Amount thereof immediately prior to the
applicable Distribution Date and (y) the Class Principal Amount thereof on the
Closing Date (as reduced by any Realized Losses previously allocated thereto).
(c) Any Realized Losses allocated to a Class of Certificates
pursuant to Section 5.03(a) or (b) shall be allocated among the Certificates of
such Class in proportion to their respective Certificate Principal Amounts. Any
allocation of Realized Losses pursuant to this paragraph (c) shall be
accomplished by reducing the Certificate Principal Amount of the related
Certificates on the related Distribution Date in accordance with Section
5.03(d).
(d) Realized Losses allocated in accordance with this Section 5.03
shall be allocated on the Distribution Date in the month following the month in
which such loss was incurred and, in the case of the principal portion thereof,
after giving effect to distributions made on such Distribution Date.
(e) On each Distribution Date, the Subordinate Certificate Writedown
Amount for such date shall effect a corresponding reduction in the Certificate
Principal Amount of the lowest ranking Class of outstanding Subordinate
Certificates, which reduction shall occur on such Distribution Date after giving
effect to distributions made on such Distribution Date.
Section 5.04. Advances by the Master Servicer and the Securities
Administrator.
(a) Advances shall be made in respect of each Deposit Date as
provided herein. If, on any Determination Date, the Master Servicer determines
that any Scheduled Payments due during the related Due Period (other than
Balloon Payments) have not been received, the Master Servicer shall, or shall
cause the applicable Servicer to, advance such amount on the Master Servicer
Remittance Date immediately following such Determination Date, less an amount,
if any, to be set forth in an Officer's Certificate to be delivered to the
Trustee and the Securities Administrator on such Determination Date, which if
advanced the Master Servicer or such Servicer has determined would not be
recoverable from amounts received with respect to such Mortgage Loan, including
late payments, Liquidation Proceeds, Insurance Proceeds or otherwise. The
Securities Administrator shall be able to rely conclusively on any
non-recoverability determination made by the Master Servicer. If the Master
Servicer determines that an Advance is required, it shall on the Master Servicer
Remittance Date immediately following such Determination Date either (i) remit
to the Securities Administrator from its own funds (or funds advanced by the
applicable Servicer) for deposit in the Securities Administrator Account
immediately available funds in an amount equal to such Advance, (ii) cause to be
made an
89
appropriate entry in the records of the Collection Account that funds in
such account being held for future distribution or withdrawal have been, as
permitted by this Section 5.04, used by the Master Servicer to make such
Advance, and remit such immediately available funds to the Securities
Administrator for deposit in the Certificate Account or (iii) make Advances in
the form of any combination of clauses (i) and (ii) aggregating the amount of
such Advance. Any funds being held in the Collection Account for future
distribution to Certificateholders and so used shall be replaced by the Master
Servicer from its own funds by remittance to the Securities Administrator for
deposit in the Securities Administrator Account on or before any future Master
Servicer Remittance Date to the extent that funds in the Certificate Account on
such Master Servicer Remittance Date shall be less than payments to
Certificateholders required to be made on the related Distribution Date. The
Securities Administrator shall be entitled to conclusively rely upon any
determination by the Master Servicer that an Advance, if made, would constitute
a non-recoverable advance. The Master Servicer and each Servicer shall be
entitled to be reimbursed from the Collection Account for all Advances made by
it as provided in Section 4.02.
(b) In the event that the Master Servicer fails for any reason to
make an Advance required to be made pursuant to Section 5.04(a) on or before the
Master Servicer Remittance Date, the Securities Administrator, solely in its
capacity as successor Master Servicer pursuant to Section 6.14, shall, on or
before the related Distribution Date, deposit in the Certificate Account an
amount equal to the excess of (a) Advances required to be made by the Master
Servicer or any Servicer that would have been deposited in such Certificate
Account over (b) the amount of any Advance made by the Master Servicer or such
Servicer with respect to such Distribution Date; provided, however, that the
Securities Administrator shall be required to make such Advance only if it is
not prohibited by law from doing so and it has determined that such Advance
would be recoverable from amounts to be received with respect to such Mortgage
Loan, including late payments, Liquidation Proceeds, Insurance Proceeds, or
otherwise. The Securities Administrator shall be entitled to be reimbursed from
the Certificate Account for Advances made by it pursuant to this Section 5.04 as
if it were the Master Servicer.
Section 5.05. Compensating Interest Payments.
The Master Servicer shall not be responsible for making any Compensating
Interest Payments not made by the Servicers. Any Compensating Interest Payments
made by the Servicers shall be a component of the Interest Remittance Amount.
Section 5.06. Cap Agreement Reserve Fund.
(a) On or prior to the Closing Date, the Securities Administrator shall
establish and maintain in its name, in trust for the benefit of the holders of
the Class B1, Class B2, Class B3, Class B4, Class B5, Class B7, Class B10, Class
B11 and Class CX Certificates, a Cap Agreement Reserve Fund. One Business Day
prior to each Distribution Date, the Cap Provider shall distribute to the
Securities Administrator, on behalf of the Trust Fund, an amount equal to one
month's interest calculated at an annual rate equal to the lesser of (i) the
respective Maximum Rate of Payment in effect of such Distribution Date and (ii)
the excess, if any, of LIBOR over the respective Strike Rate in effect for such
Distribution Date, based on a calculated notional amount equal to the lesser of
(i) the Class Principal Amount of the Class B1 and Class B2 Certificates, Class
B3 and Class B4 Certificates, Class B5, Class B7, Class B10 and Class B11
Certificates, as applicable, and
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(ii) the respective Cap Agreement Notional Amount set forth in the definition
thereof for the related Distribution Date, in each case multiplied by the actual
number of days in the applicable Accrual Period, and divided by 360.
(b) The Securities Administrator shall deposit amounts received
under the terms of the Cap Agreements one Business Day prior to each
Distribution Date. The Cap Agreement Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Securities Administrator held pursuant to this Agreement.
(c) On each Distribution Date on or prior to the Cap Agreement
Termination Date, the Securities Administrator shall distribute to the Holders
of the Class B1, Class B2 and Class CX Certificates payments received under the
terms of the Cap Agreement related to the Class B1 and Class B2 Certificates in
the order of priority and to the extent specified in Section 5.02(d) of this
Agreement. On each Distribution Date on or prior to the Cap Agreement
Termination Date, the Securities Administrator shall distribute to the Holders
of the Class B3, Class B4 and Class CX Certificates payments received under the
terms of the Cap Agreement related to the Class B3 and Class B4 Certificates in
the order of priority and to the extent specified in Section 5.02(d) of this
Agreement. On each Distribution Date on or prior to the Cap Agreement
Termination Date, the Securities Administrator shall distribute to the Holders
of the Class B5 and Class CX Certificates payments received under the terms of
the Cap Agreement related to the Class B5 Certificates in the order of priority
and to the extent specified in Section 5.02(d) of this Agreement. On each
Distribution Date on or prior to the Cap Agreement Termination Date, the
Securities Administrator shall distribute to the Holders of the Class B7 and
Class CX Certificates payments received under the terms of the Cap Agreement
related to the Class B7 Certificates in the order of priority and to the extent
specified in Section 5.02(d) of this Agreement. On each Distribution Date on or
prior to the Cap Agreement Termination Date, the Securities Administrator shall
distribute to the Holders of the Class B10 and Class CX Certificates payments
received under the terms of the Cap Agreement related to the Class B10
Certificates in the order of priority and to the extent specified in Section
5.02(d) of this Agreement. On each Distribution Date on or prior to the Cap
Agreement Termination Date, the Securities Administrator shall distribute to the
Holders of the Class B11 and Class CX Certificates payments received under the
terms of the Cap Agreement related to the Class B11 Certificates in the order of
priority and to the extent specified in Section 5.02(d) of this Agreement.
(d) Funds in the Cap Agreement Reserve Fund shall be invested in
Eligible Investments. The Class CX Certificate shall evidence ownership of the
Cap Agreement Reserve Fund for federal income tax purposes and Xxxxxx Brothers
Holdings on behalf of the Holder thereof shall direct the Securities
Administrator, in writing, as to investment of amounts on deposit therein.
Xxxxxx Brothers Holdings shall be liable for any losses incurred on such
investments. Xxxxxx Brothers Holdings hereby directs the Securities
Administrator to invest funds on deposit in the Cap Agreement Reserve Fund in
Xxxxx Fargo Prime Money Market Fund Investment Account or such other investment
as is hereafter specified to the Securities Administrator by Xxxxxx Brothers
Holdings. On the Cap Agreement Termination Date, all amounts remaining in the
Cap Agreement Reserve Fund following the distribution required to be made
pursuant to paragraph (c) above will be paid to the Class CX Certificates and
the Securities Administrator shall close the Cap Agreement Reserve Fund.
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(e) The Cap Agreements are terminable by the Trust Fund or the Cap
Provider following the occurrence of certain specified events of default,
including failure of the Cap Provider to make required payments, and certain
standard events under the 1992 International Swaps and Derivatives Association,
Inc. Master Swap Agreement (Multi-Cross-Border).
ARTICLE VI
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR;
EVENTS OF DEFAULT
Section 6.01. Duties of Trustee and Securities Administrator.
(a) The Trustee, except during the continuance of an Event of
Default (of which a Responsible Officer of the Trustee shall have actual
knowledge), and the Securities Administrator undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement. Any
permissive right of the Trustee or the Securities Administrator provided for in
this Agreement shall not be construed as a duty of the Trustee or the Securities
Administrator. If an Event of Default (of which a Responsible Officer of the
Trustee or the Securities Administrator shall have actual knowledge) has
occurred and has not otherwise been cured or waived, the Trustee or the
Securities Administrator shall exercise such of the rights and powers vested in
it by this Agreement and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of such Person's own affairs unless the Securities Administrator is acting as
Master Servicer, in which case it shall use the same degree of care and skill as
the Master Servicer hereunder.
(b) Each of the Trustee and the Securities Administrator, upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee or the
Securities Administrator which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they are in the form required by this Agreement; provided, however, that
neither the Trustee not the Securities Administrator shall be responsible for
the accuracy or content of any such resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by the Master Servicer, to
the Trustee or the Securities Administrator, as applicable, pursuant to this
Agreement, and neither the Trustee nor the Securities Administrator shall be
required to recalculate or verify any numerical information furnished to the
Trustee or the Securities Administrator pursuant to this Agreement or any Cap
Agreement.
(c) Neither the Trustee nor the Securities Administrator shall have
any liability arising out of or in connection with this Agreement, except for
its negligence or willful misconduct. 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
willful misconduct; provided, however, that:
(i) Neither the Trustee nor the Securities Administrator
shall be personally liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the consent
or direction of Holders of Certificates as provided in Section 6.18
hereof;
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(ii) For all purposes under this Agreement, the Trustee shall
not be deemed to have notice of any Event of Default (other than
resulting from a failure by the Master Servicer (i) to remit funds (or
to make Advances) or (ii) to furnish information to the Trustee when
required to do so) 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 the Trustee at the Corporate Trust
Office, and such notice references the Holders of the Certificates and
this Agreement;
(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of Default
(other than resulting from a failure by the Master Servicer to remit
funds or to furnish information to the Securities Administrator when
required to do so) unless a Responsible Officer of the Securities
Administrator has actual knowledge thereof or unless written notice of
any event which is in fact such a default is received by the Securities
Administrator at the address provided in Section 11.07, and such notice
references the Holders of the Certificates and this Agreement; and
(iv) With respect to amounts that would be treated as
"unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii) if paid or reimbursed by the REMICs
hereunder, no provision of this Agreement shall require the Trustee or
the Securities Administrator to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities
Administrator to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer under this
Agreement except, with respect to the Securities Administrator, during
such time, if any, as the Securities Administrator shall be the
successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer in accordance with the terms of this
Agreement.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall use its best efforts to remit to the Master Servicer upon
receipt any such complaint, claim, demand, notice or other document (i) which is
delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real property
to which such document relates is a Mortgaged Property.
(e) Neither the Trustee or the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of Certificateholders
of any Class holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or the
Securities
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Administrator, as applicable, or exercising any trust or power conferred upon
the Trustee or the Securities Administrator, as applicable, under this
Agreement.
(f) Neither the Trustee nor the Securities Administrator shall be
held liable by reason of any insufficiency in any account (including without
limitation the Securities Administrator Account, the Cap Agreement Reserve Fund
and the Certificate Account) held by or on behalf of the Trustee or the
Securities Administrator resulting from any investment loss on any Eligible
Investment included therein (except to the extent that the Trustee is the
obligor and has defaulted thereon).
(g) Except as otherwise provided herein, neither the Trustee nor the
Securities Administrator shall have any duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any re-recording, re-filing or re-depositing of any thereof,
(B) to see to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Collection Account or the Certificate
Account, or (D) to confirm or verify the contents of any reports or certificates
of the Master Servicer delivered to the Trustee or the Securities Administrator
pursuant to this Agreement believed by the Trustee or the Securities
Administrator, as applicable, to be genuine and to have been signed or presented
by the proper party or parties.
(h) Neither the Securities Administrator nor the Trustee shall be
liable in its individual capacity for an error of judgment made in good faith by
a Responsible Officer or other officers of the Trustee or the Securities
Administrator, as applicable, unless it shall be proved that the Trustee or the
Securities Administrator, as applicable, was negligent in ascertaining the
pertinent facts.
(i) Notwithstanding anything in this Agreement to the contrary,
neither the Securities Administrator nor the Trustee shall be liable for
special, indirect or consequential losses or damages of any kind whatsoever
(including, but not limited to, lost profits), even if the Trustee or the
Securities Administrator , as applicable, has been advised of the likelihood of
such loss or damage and regardless of the form of action.
(j) Neither the Securities Administrator nor the Trustee shall be
responsible for the acts or omissions of the other or any Servicer, Custodian or
the Master Servicer, it being understood that this Agreement shall not be
construed to render any of them agents of one another.
Section 6.02. Certain Matters Affecting the Trustee and the Securities
Administrator.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of
auditors, Opinion of Counsel or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or
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other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) Each of the Trustee and the Securities Administrator may
consult with counsel and any advice of its counsel or Opinion of Counsel
shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be personally liable for any action taken, suffered or omitted by
it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, 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 (provided the same appears regular on its face), unless
requested in writing to do so by Holders of at least a majority in Class
Principal Amount (or Class Notional Amount) of each Class of
Certificates; provided, however, that, if the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, 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, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee or the Securities
Administrator, as applicable, may require reasonable indemnity against
such expense or liability or payment of such estimated expenses as a
condition to proceeding. The reasonable expense thereof shall be paid by
the Holders requesting such investigation;
(v) Each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians, or
attorneys, which agents, custodians or attorneys shall have any and all
of the rights, powers, duties and obligations of the Trustee and the
Securities Administrator, respectively, conferred on them by such
appointment provided that each of the Trustee and the Securities
Administrator shall continue to be responsible for its duties and
obligations hereunder to the extent provided herein, and provided
further that neither the Trustee nor the Securities Administrator shall
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by the Trustee or the
Securities Administrator, as applicable;
(vi) 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, in each case 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 applicable,
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
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(vii) The right of the Trustee and the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be answerable for other than its
negligence or willful misconduct in the performance of such act; and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety in respect of the execution
of the Trust Fund created hereby or the powers granted hereunder.
Section 6.03. Trustee and Securities Administrator Not Liable for
Certificates.
The Trustee and the Securities Administrator make no representations as
to the validity or sufficiency of this Agreement, the Cap Agreements or any
Custodial Agreement, of the Certificates (other than the certificate of
authentication on the Certificates), or of any Mortgage Loan or Servicing
Agreement, or related document save that the Trustee and the Securities
Administrator each represent that, assuming due execution and delivery by the
other parties hereto, this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms except that such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally, and (B) general
principles of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law. Neither the Trustee nor the Securities
Administrator shall be accountable for the use or application by the Depositor
of funds paid to the Depositor in consideration of the assignment of the
Mortgage Loans to the Trust Fund by the Depositor or for the use or application
of any funds deposited into the Collection Account, the Certificate Account, any
Escrow Account or any other fund or account maintained with respect to the
Certificates. Neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement, the Cap Agreements,
the Custodial Agreements or the Servicing Agreements or the validity, priority,
perfection or sufficiency of the security for the Certificates issued or
intended to be issued hereunder. Except as otherwise provided herein, neither
the Trustee nor the Securities Administrator shall have any responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to record this Agreement.
Section 6.04. Trustee and Securities Administrator May Own Certificates.
The Trustee, the Securities Administrator and any Affiliate or agent of
the Trustee or Securities Administrator in its individual or any other capacity
may become the owner or pledgee of Certificates and may transact banking and
trust with the other parties hereto with the same rights it would have if it
were not Trustee, Securities Administrator or such agent.
Section 6.05. Eligibility Requirements for Trustee and Securities
Administrator.
Each of the Trustee and the Securities Administrator hereunder shall at
all times be (i) an institution insured by the FDIC and (ii) a corporation or
national banking association, 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 not less
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than $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time either the Trustee or the Securities Administrator shall cease to be
eligible in accordance with 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 6.06.
Section 6.06. Resignation and Removal of Trustee and Securities
Administrator.
(a) Each of 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 Trustee or the Securities Administrator, as applicable,
the Depositor and the Master Servicer. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee or
successor Securities Administrator, as applicable, by written instrument, one
copy of which instrument shall be delivered to the resigning Trustee or
resigning Securities Administrator, as applicable, one copy to the successor
trustee or to the successor securities administrator, as applicable, one copy to
the Master Servicer. If no successor trustee or successor securities
administrator, as applicable shall have been so appointed and shall have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or resigning Securities Administrator, as
applicable, may petition any court of competent jurisdiction for the appointment
of a successor trustee.
(b) If at any time (i) either the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
Section 6.05 and shall fail to resign after written request therefor by the
Depositor, (ii) the Trustee or the Securities Administrator shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or the Securities Administrator or of either of their property
shall be appointed, or any public officer shall take charge or control of the
Trustee or the Securities Administrator or of either of their property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii) a
tax is imposed or threatened with respect to the Trust Fund by any state in
which the Trustee or the Trust Fund held by the Trustee is located, or (iv) the
continued use of the Trustee or the Securities Administrator would result in a
downgrading of the rating by the Rating Agencies of any Class of Certificates
with a rating, then the Depositor shall remove the Trustee or the Securities
Administrator, as applicable, and appoint a successor trustee or successor
securities administrator, as applicable, by written instrument, one copy of
which instrument shall be delivered to the Trustee or the Securities
Administrator, as applicable, so removed, one copy to the successor trustee or
the successor securities administrator, as applicable, and one copy to the
Master Servicer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee, the Securities Administrator and the
Depositor remove the Trustee or the Securities Administrator by such written
instrument, signed by such Holders or their attorney-in-fact duly authorized,
one copy of which instrument shall be delivered to the Depositor, one copy to
the
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Trustee or Securities Administrator, as applicable, so removed and one copy
to the Master Servicer; the Depositor shall thereupon use its best efforts to
appoint a mutually acceptable successor trustee or successor securities
administrator, as applicable, in accordance with this Section.
(d) Any resignation or removal of the Trustee or Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 6.07.
Section 6.07. Successor Trustee and Successor Securities Administrator.
(a) Any successor trustee or successor securities administrator
appointed as provided in Section 6.06 shall execute, acknowledge and deliver to
the Depositor, the Master Servicer and to its predecessor trustee or predecessor
securities administrator, as applicable, an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee or predecessor securities administrator, as applicable,
shall become effective and such successor trustee or successor securities
administrator, as applicable, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee or
securities administrator, as applicable, herein. The predecessor trustee or
predecessor securities administrator, as applicable shall deliver to the
successor trustee (or assign to the successor trustee its interest under each
Custodial Agreement, to the extent permitted thereunder) or predecessor
securities administrator, as applicable, all Mortgage Files and documents and
statements related to each Mortgage Files held by it hereunder, and shall duly
assign, transfer, deliver and pay over to the successor trustee the entire Trust
Fund, together with all necessary instruments of transfer and assignment or
other documents properly executed necessary to effect such transfer and such of
the record or copies thereof maintained by the predecessor trustee in the
administration hereof as may be requested by the successor trustee and shall
thereupon be discharged from all duties and responsibilities under this
Agreement. In addition, the Master Servicer and the predecessor trustee or
predecessor securities administrator, as applicable, shall execute and deliver
such other instruments and do such other things as may reasonably be required to
more fully and certainly vest and confirm in the successor trustee or securities
administrator, as applicable all such rights, powers, duties and obligations.
(b) No successor trustee or securities administrator, as applicable,
shall accept appointment as provided in this Section unless at the time of such
appointment such successor trustee or securities administrator, as applicable,
shall be eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee or
successor securities administrator, as applicable, as provided in this Section,
the Master Servicer shall mail notice of the succession of such trustee or
securities administrator, as applicable and to all Holders of Certificates at
their addresses as shown in the Certificate Register and to the Rating Agencies.
The expenses of such mailing shall be borne by the predecessor trustee.
Section 6.08. Merger or Consolidation of Trustee or Securities
Administrator.
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Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons succeeding to the business of the
Trustee or the Securities Administrator, shall be the successor to the Trustee
or the Securities Administrator 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 that such Person shall be
eligible under the provisions of Section 6.05.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of the
Class Principal Amount (or Class Notional Amount) of each Class of Certificates
shall each have the power from time to time to appoint one or more Persons to
act either as co-trustees jointly with the Trustee, or as separate trustees, or
as custodians, for the purpose of holding title to, foreclosing or otherwise
taking action with respect to any Mortgage Loan outside the state where the
Trustee has its principal place of business where such separate trustee or
co-trustee is necessary or advisable (or the Trustee has been advised by the
Master Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a property securing a Mortgage
Loan is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a property securing
a Mortgage Loan is located or in any state in which any portion of the Trust
Fund is located. The separate trustees, co-trustees, or custodians so appointed
shall be trustees or custodians for the benefit of all the Certificateholders
and shall have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee. The
obligation of the Trustee to make Advances pursuant to Section 5.04 and 6.14
hereof shall not be affected or assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred
upon the Trustee in respect of the receipt, custody and payment of
moneys shall be exercised solely by the Trustee;
(ii) all other 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,
co-trustee, or custodian jointly, except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations, including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction, shall be exercised and
performed by such separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally
liable by reason of any act or omission of any other trustee or
custodian hereunder; and
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(iv) the Trustee or the Certificateholders evidencing more
than 50% of the Aggregate Voting Interests of the Certificates may at
any time accept the resignation of or remove any separate trustee,
co-trustee or custodian, so appointed by it or them, if such resignation
or removal does not violate the other terms of this Agreement.
(c) 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, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
(d) Any separate trustee, co-trustee or custodian 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. The Trustee shall not
be responsible for any action or inaction of any separate trustee, co-trustee or
custodian. If any separate trustee, co-trustee or custodian 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.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to Certificateholders of the appointment shall be
required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trust Fund shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 6.12 hereof (which compensation shall not reduce any compensation
payable to the Trustee under such Section).
Section 6.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which
shall be authorized to act on behalf of the Trustee in authenticating
Certificates. The Trustee hereby appoints the Securities Administrator to act as
the initial Authenticating Agent, and the Securities Administrator hereby
accepts such appointment. Wherever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be a corporation organized and doing business
under the laws of the United States of America or of any state, having a
combined
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capital and surplus of at least $15,000,000, authorized under such laws to do a
trust business and subject to supervision or examination by federal or state
authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.10, the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 6.10. No Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any Authenticating Agent shall be entitled to reasonable compensation for its
services and, if paid by the Trustee, it shall be a reimbursable expense to the
extent provided in Section 6.12.
Section 6.11. Indemnification of Trustee and Securities Administrator.
The Trustee and the Securities Administrator and their respective
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense incurred in connection
with any legal proceeding or incurred without negligence or willful misconduct
on their part, arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder or in connection with the
performance of their duties hereunder or under the Certificates, any Cap
Agreement, the Mortgage Loan Sale Agreement, any Custodial Agreement or any
Servicing Agreement, including any applicable fees and expenses payable pursuant
to Section 6.12 and the costs and expenses of defending themselves against any
claim in connection with the exercise or performance of any of their powers or
duties hereunder, provided that:
(i) with respect to any such claim, the Trustee or the
Securities Administrator, as applicable, shall have given the Depositor,
the Master Servicer and the Holders written notice thereof promptly
after the Trustee or the Securities Administrator, as applicable, shall
have knowledge thereof; provided that failure to so notify shall not
relieve the Trust Fund of the obligation to indemnify the Trustee or the
Securities Administrator;
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(ii) while maintaining control over its own defense, the
Trustee or the Securities Administrator, as applicable, shall cooperate
and consult fully with the Depositor in preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section
6.11, the Trust Fund shall not be liable for settlement of any such
claim by the Trustee or the Securities Administrator, as applicable,
entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld; and
(iv) any such loss, liability or expense indemnified by the
Trust Fund must constitute an "unanticipated expense" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).
The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee or the Securities
Administrator, as applicable, and shall be construed to include, but not be
limited to any loss, liability or expense under any environmental law.
Section 6.12. Fees and Expenses of Securities Administrator, Trustee and
Custodian.
The Securities Administrator shall be entitled to (a) the Securities
Administrator Fee, and is authorized to pay itself the amount of income or gain
earned from investment of funds in the Securities Administrator Account and (b)
reimbursement of all reasonable expenses, disbursements and advancements
incurred or made by the Securities Administrator in accordance with this
Agreement (including fees and expenses of its counsel and all persons not
regularly in its employment), except any such expenses, disbursements and
advancements that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii). The Trustee shall be
compensated as separately agreed with the Securities Administrator. The
Custodian shall be compensated as separately agreed with the Depositor.
Section 6.13. Collection of Monies.
Except as otherwise expressly provided in this Agreement, the Trustee
may demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement. The Trustee shall hold all such money and property received by it as
part of the Trust Fund and shall distribute it as provided in this Agreement. If
the Trustee shall not have timely received amounts to be remitted with respect
to the Mortgage Loans from the Master Servicer, the Trustee shall request the
Master Servicer to make such distribution as promptly as practicable or legally
permitted. If the Trustee shall subsequently receive any such amount, it may
withdraw such request.
Section 6.14. Events of Default; Securities Administrator To Act;
Appointment of Successor.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default":
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(i) Any failure by the Master Servicer to furnish the
Securities Administrator the Mortgage Loan data sufficient to prepare
the reports described in Section 4.03(a) which continues unremedied for
a period of two (2) Business Days after the date upon which written
notice of such failure shall have been given to such Master Servicer by
the Trustee or the Securities Administrator or to such Master Servicer,
the Securities Administrator and the Trustee by the Holders of not less
than 25% of the Class Principal Amount (or Class Notional Amount) of
each Class of Certificates affected thereby; or
(ii) 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 such Master Servicer contained in this
Agreement which continues unremedied for a period of 30 days (or 15
days, in the case of a failure to maintain any Insurance Policy required
to be maintained pursuant to this Agreement) after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to such Master Servicer by the Trustee, or to such
Master Servicer and the Trustee by the Holders of not less than 25% of
the Class Principal Amount (or Class Notional Amount) of each Class of
Certificates affected thereby; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days or
any Rating Agency reduces or withdraws or threatens to reduce or
withdraw the rating of the Certificates because of the financial
condition or loan servicing capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to such Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose
of all or substantially all of its assets, or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the criteria
for a successor servicer as specified in Section 9.27 hereof; or
(vii) If a representation or warranty set forth in Section
9.14 hereof shall prove to be incorrect as of the time made in any
respect that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of
which such representation or
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warranty was incorrect shall not have been eliminated or cured within 60
days after the date on which written notice of such incorrect
representation or warranty shall have been given to the Master Servicer
by the Trustee or to the Master Servicer and the Trustee by the Holders
of not less than 25% of the Aggregate Certificate Principal Amount of
each Class of Certificates; or
(viii) A sale or pledge of the any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Trustee and
Certificateholders holding more than 50% of the Class Principal Amount
(or Class Notional Amount) of each Class of Certificates; or
(ix) The Master Servicer has notice or actual knowledge that
any Servicer at any time is not either an FNMA- or FHLMC-approved
Seller/Servicer, and the Master Servicer has not terminated the rights
and obligations of such Servicer under the applicable Servicing
Agreement and replaced such Servicer with an FNMA- or FHLMC-approved
servicer within 60 days of the date the Master Servicer receives such
notice or actual knowledge; or
(x) Any failure of the Master Servicer to remit to the
Securities Administrator any payment required to be made to the
Securities Administrator for the benefit of Certificateholders under the
terms of this Agreement, including any Advance, on any Master Servicer
Remittance Date, which such failure continues unremedied after 1:00 p.m.
Eastern Standard Time one Business Day after the date upon which notice
of such failure shall have been given to the Master Servicer and the
Trustee by the Securities Administrator.
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the Master Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates, terminate all of the
rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. If an Event of Default described in
clause (x) of this Section 6.14 shall occur, then, in each and every case,
subject to applicable law, so long as such Event of Default shall not have been
remedied within the time period prescribed by clause (x) of this Section 6.14,
the Trustee, by notice in writing to the Master Servicer, shall promptly
terminate all of the rights and obligations of the Master Servicer hereunder 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, and only in its capacity as Master Servicer under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Securities Administrator and upon receipt of written
notice by the Securities Administrator from the Trustee pursuant to and under
the terms of this Agreement; and the Securities Administrator is hereby
authorized and empowered to execute and deliver, on behalf of the defaulting
Master Servicer as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related
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documents or otherwise. The defaulting Master Servicer agrees to cooperate with
the Trustee and the Securities Administrator in effecting the termination of the
defaulting Master Servicer's responsibilities and rights hereunder as Master
Servicer including, without limitation, notifying Servicers of the assignment of
the master servicing function and providing the Securities Administrator or its
designee all documents and records in electronic or other form reasonably
requested by it to enable the Securities Administrator or its designee to assume
the defaulting Master Servicer's functions hereunder and the transfer to the
Securities Administrator for administration by it of all amounts which shall at
the time be or should have been deposited by the defaulting Master Servicer in
the Collection Account maintained by such defaulting Master Servicer and any
other account or fund maintained with respect to the Certificates or thereafter
received with respect to the Mortgage Loans. The Master Servicer being
terminated shall bear all costs of a master servicing transfer, including but
not limited to those of the Trustee and Securities Administrator reasonably
allocable to specific employees and overhead, legal fees and expenses,
accounting and financial consulting fees and expenses, and costs of amending the
Agreement, if necessary. The Securities Administrator shall be entitled to be
reimbursed from the Master Servicer (or by the Trust, if the Master Servicer is
unable to fulfill its obligations hereunder) for all costs associated with the
transfer of servicing from the predecessor Master Servicer, including, without
limitation, any 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 Securities Administrator to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Securities
Administrator to master service the Mortgage Loans properly and effectively. If
the terminated Master Servicer does not pay such reimbursement within thirty
(30) days of its receipt of an invoice therefor, such reimbursement shall be an
expense of the Trust and the Securities Administrator shall be entitled to
withdraw such reimbursement from amounts on deposit in the Certificate Account
pursuant to Section 4.04; provided that the terminated Master Servicer shall
reimburse the Trust for any such expense incurred by the Trust; and provided,
further, that the Trustee shall decide whether and to what extent it is in the
best interest of the Certificateholders to pursue any remedy against any party
obligated to make such reimbursement.
Notwithstanding the termination of its activities as Master Servicer,
each terminated Master Servicer shall continue to be entitled to reimbursement
to the extent provided in Section 4.02(i), (ii), (iii), (iv), (v), (vi), (vii),
(ix) and (xi) to the extent such reimbursement relates to the period prior to
such Master Servicer's termination.
If any Event of Default shall occur of which a Responsible Officer of
the Trustee has actual knowledge, the Trustee, upon becoming aware of the
occurrence thereof through the proper execution of its duties under this
Agreement, shall promptly notify the Securities Administrator and the Rating
Agencies of the nature and extent of such Event of Default. The Trustee or the
Securities Administrator shall immediately give written notice to the Master
Servicer upon such Master Servicer's failure to remit funds on the Master
Servicer Remittance Date.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee receives
the resignation of the Master Servicer evidenced by an Opinion of Counsel
pursuant to Section 9.28 and within a period of time not to exceed 90 days after
the Securities Administrator receives written notice from the
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Trustee pursuant to Section 6.14(a) or Section 9.28, the Securities
Administrator, unless another master servicer shall have been appointed, shall
be the successor in all respects to the Master Servicer in its capacity as such
under this Agreement and the transactions set forth or provided for herein and
shall have all the rights and powers and be subject to all the responsibilities,
duties and liabilities relating thereto and arising thereafter placed on the
Master Servicer hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the Master Servicer's or the Trustee's failure to provide information required
by this Agreement shall not be considered a default by the Securities
Administrator hereunder. In addition, the Securities Administrator shall have no
responsibility for any act or omission of the Master Servicer prior to the
issuance of any notice of termination and within a period of time not to exceed
90 days after the Securities Administrator receives written notice from the
Trustee pursuant to Section 6.14(a) or Section 9.28, as applicable. The
Securities Administrator shall have no liability relating to the representations
and warranties of the Master Servicer set forth in Section 9.14. In the
Securities Administrator's capacity as such successor, the Securities
Administrator shall have the same limitations on liability herein granted to the
Master Servicer. As compensation therefor, the Securities Administrator shall be
entitled to receive all compensation payable to the Master Servicer under this
Agreement, including the Master Servicing Fee. The Securities Administrator
shall be entitled to be reimbursed from the Master Servicer (or by the Trust
Fund if the Master Servicer is unable to fulfill its obligations hereunder) for
all costs associated with the transfer of master servicing from the predecessor
master servicer, including, without limitation, any costs or expenses associated
with the complete transfer of all master servicing data and the completion,
correction or manipulation of such master servicing data as may be required by
the Securities Administrator to correct any errors or insufficiencies in the
master servicing data or otherwise to enable the Securities Administrator to
master service the Mortgage Loans properly and effectively.
(c) Notwithstanding the above, the Securities Administrator may, if
it shall be unwilling to continue to so act, or shall, if it is unable to so
act, request the Trustee to appoint, petition a court of competent jurisdiction
to appoint, or appoint on its own behalf any established housing and home
finance institution servicer, master servicer, servicing or mortgage servicing
institution having a net worth of not less than $15,000,000 and meeting such
other standards for a successor master servicer as are set forth in this
Agreement, as the successor to such Master Servicer in the assumption of all of
the responsibilities, duties or liabilities of a master servicer, like the
Master Servicer. Any entity designated by the Trustee or the Securities
Administrator as a successor master servicer may be an Affiliate of the Trustee
or the Securities Administrator; provided, however, that, unless such Affiliate
meets the net worth requirements and other standards set forth herein for a
successor master servicer, the Trustee or the Securities Administrator, in its
individual capacity shall agree, at the time of such designation, to be and
remain liable to the Trust Fund for such Affiliate's actions and omissions in
performing its duties hereunder. In connection with such appointment and
assumption, the Trustee or the Securities Administrator may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted to the Master Servicer
hereunder. The Trustee, the Securities Administrator and such successor shall
take such actions, consistent with this Agreement, as shall be necessary to
effectuate any such succession and may make other arrangements with respect to
the servicing to be conducted hereunder which are not inconsistent herewith. The
Master Servicer shall cooperate with the Trustee, the Securities Administrator
and
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any successor master servicer in effecting the termination of the Master
Servicer's responsibilities and rights hereunder including, without limitation,
notifying Mortgagors of the assignment of the master servicing functions and
providing the Securities Administrator and successor master servicer, as
applicable, all documents and records in electronic or other form reasonably
requested by it to enable it to assume the Master Servicer's functions hereunder
and the transfer to the Trustee, the Securities Administrator or such successor
master servicer, as applicable, all amounts which shall at the time be or should
have been deposited by the Master Servicer in the Collection Account and any
other account or fund maintained with respect to the Certificates or thereafter
be received with respect to the Mortgage Loans. Neither the Trustee, the
Securities Administrator nor any other successor master servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Master Servicer to deliver, or any delay in delivering, cash,
documents or records to it, (ii) the failure of the Master Servicer to cooperate
as required by this Agreement, (iii) the failure of the Master Servicer to
deliver the Mortgage Loan data to the Securities Administrator as required by
this Agreement or (iv) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer. Neither the Securities Administrator nor
any other successor master servicer shall be deemed to be in default hereunder
by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the terminated
Master Servicer to deliver, or any delay in delivering cash, documents or
records to it, or (ii) the failure of the terminated Master Servicer to
cooperate as required by this Agreement.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as trustee
of an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 6.16. Waiver of Defaults.
35% or more of the Aggregate Voting Interests of Certificateholders may
waive any default or Event of Default by the Master Servicer in the performance
of its obligations hereunder, except that a default in the making of any
required deposit to the Certificate Account that would result in a failure of
the Trustee to make any required payment of principal of or interest on the
Certificates may only be waived with the consent of 100% of the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
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Section 6.17. Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor to
the Master Servicer, in each case as provided herein, the Trustee shall promptly
mail notice thereof by first class mail to the Securities Administrator and the
Certificateholders at their respective addresses appearing on the Certificate
Register. The Trustee shall also, within 45 days after the occurrence of any
Event of Default known to a Responsible Officer of the Trustee, give written
notice thereof to the Securities Administrator and the Certificateholders,
unless such Event of Default shall have been cured or waived prior to the
issuance of such notice and within such 45-day period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default.
Subject to the provisions of Section 8.01 hereof, during the continuance
of any Event of Default, Holders of Certificates evidencing not less than 25% of
the Class Principal Amount (or Class Notional Amount) of each Class of
Certificates may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement; provided, however, that the
Trustee shall be under no obligation to pursue any such remedy, or to exercise
any of the trusts or powers vested in it by this Agreement (including, without
limitation, (i) the conducting or defending of any administrative action or
litigation hereunder or in relation hereto and (ii) the terminating of the
Master Servicer or any successor master servicer from its rights and duties as
master servicer hereunder) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses and
liabilities which may be incurred therein or thereby; and, provided further,
that, subject to the provisions of Section 8.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee, in accordance with
an Opinion of Counsel, determines that the action or proceeding so directed may
not lawfully be taken or if the Trustee in good faith determines that the action
or proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the non-assenting Certificateholders.
Section 6.19. Action Upon Certain Failures of the Master Servicer and
Upon Event of Default.
In the event that a Responsible Officer of the Trustee shall have actual
knowledge of any action or inaction of the Master Servicer that would become an
Event of Default upon the Master Servicer's failure to remedy the same after
notice, the Trustee shall give notice thereof to the Master Servicer. For all
purposes of this Agreement, in the absence of actual knowledge by a Responsible
Officer of the Trustee, the Trustee shall not be deemed to have knowledge of any
failure of the Master Servicer or any other Event of Default unless notified in
writing by the Depositor, the Securities Administrator, the Master Servicer or a
Certificateholder.
Section 6.20. Preparation of Tax Returns and Other Reports.
(a) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter, within 10 days (or, if applicable,
within such shorter period of time as is
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required under the rules of the U.S. Securities and Exchange Commission (the
"Commission") as in effect from time to time (the "Rules")) following each
Distribution Date, the Securities Administrator shall, in accordance with
industry standards and the Rules, prepare and file with the Commission via the
Electronic Data Gathering and Retrieval System (XXXXX), a Form 8-K (or such
other form as is prescribed by the Rules) that includes (i) a copy of the
statement to the Certificateholders for such Distribution Date and (ii) such
other information as is required by the Rules and available to the Securities
Administrator in a format compatible with Xxxxx filing requirements. Prior to
January 30 in the first year, unless it has received prior instructions from the
Depositor not to do so, the Securities Administrator shall, in accordance with
industry standards, prepare and file a Form 15 Suspension Notification with
respect to the Trust Fund, if applicable. Prior to March 30, 2006 and, unless
and until a Form 15 Suspension Notification shall have been filed, on or prior
to March 30 of each year thereafter, the Securities Administrator shall file
(but will not execute) a Form 10-K, in substance conforming to industry
standards and complying with the Rules, with respect to the Trust Fund. The Form
10-K shall include the certification required pursuant to Rule 13a-14 under the
Securities and Exchange Act of 1934, as amended (the "Form 10-K Certification")
signed by an appropriate party or parties (which Form 10-K Certification the
Securities Administrator shall not be required to prepare or sign) and such
other information as is required by the Rules. The Securities Administrator
shall promptly send copies of each periodic report filed on Form 8-K or other
applicable form, each annual report on Form 10-K, and each Form 15 Suspension
Notification, together in each case with the acceptance confirmation receipt
from XXXXX, to XxXxx Xxxxxx LLP and to the Depositor (i) by e-mail to the e-mail
addresses provided in writing by each of XxXxx Xxxxxx LLP and the Depositor,
respectively and (ii) to XxXxx Xxxxxx LLP at 0000 X Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, and to the Depositor at the address specified in Section 11.07, in
each case to the attention of a designated contact specified by each of XxXxx
Xxxxxx LLP and the Depositor, respectively. The Securities Administrator shall
have no liability for any delay in filing the Form 10-K or Form 10-K
Certification due to the failure of any party to sign such Form 10-K or Form
10-K Certification. The Depositor hereby grants to the Securities Administrator
a limited power of attorney to execute and file each Form 8-K (or other
applicable form for filing of periodic reports). 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 or (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 and 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 6.20(a).
(b) If so requested, the Securities Administrator shall sign a
certification (in the form attached hereto as Exhibit M) for the benefit of the
Person(s) signing the Form 10-K Certification regarding certain aspects of such
Form 10-K Certification (provided, however, that the Securities Administrator
shall not be required to undertake an analysis of, and shall have no
responsibility for, any financial information, accountant's report,
certification or other matter contained therein, except for computations
performed by the Securities Administrator and reflected in distribution
reports), which certification shall be delivered to such Person(s) not later
than five Business Days prior to the date on which the Form 10-K is required to
be filed with the Commission.
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(c) If so requested, the Master Servicer shall sign a certification
for the benefit of the Person(s) signing the Form 10-K Certification regarding
certain aspects of such Form 10-K Certification (provided, however, that the
Master Servicer shall not be required to undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K).
(d) Each person (including their officers or directors) that signs
any Form 10-K Certification shall be entitled to indemnification from the Trust
Fund for any liability or expense incurred by it in connection with such
certification, other than any liability or expense attributable to such Person's
own bad faith, negligence or willful misconduct. The provisions of this
subsection shall survive any termination of this Agreement and the resignation
or removal of such Person.
Section 6.21. Reporting Requirements of the Commission.
The Securities Administrator and the Master Servicer shall reasonably
cooperate with the Depositor and its counsel to enter into such amendments or
modifications to the Agreement as may be necessary to comply with the Rules and
any interpretation thereof by the staff of the Commission, subject to the
provisions of Section 11.03 hereof.
ARTICLE VII
PURCHASE AND TERMINATION
OF THE TRUST FUND
Section 7.01. Termination of Trust Fund Upon Repurchase or Liquidation
of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee,
the Securities Administrator and the Master Servicer created hereby (other than
the obligation of the Trustee to make payments to Certificateholders as set
forth in Section 7.02, the obligation of the Master Servicer to make a final
remittance to the Securities Administrator for deposit into the Certificate
Account pursuant to Section 4.01 and the obligations of the Master Servicer to
the Securities Administrator and the Trustee pursuant to Sections 9.10 and
9.14), shall terminate on the earlier of (i) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the sale of all remaining property held
by the Trust Fund in accordance with Section 7.01(b); provided, however, that in
no event shall the Trust Fund created hereby continue beyond the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof. Any termination of the Trust Fund shall be carried
out in such a manner so that the termination of each REMIC included therein
shall qualify as a "qualified liquidation" under the REMIC Provisions.
(b) On any Distribution Date occurring after the date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans in the Trust Fund is
less than 10% of the Principal Balance of the Mortgage Loans in the Trust Fund
(determined in the aggregate rather than by pool) as of the Cut-off Date, the
Master Servicer, with the consent of the Seller (which
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consent will not be unreasonably withheld), may, upon written direction to the
Trustee, cause the Trustee to sell (or arrange for the sale of) the assets of
the Trust Fund. Upon the repurchase of the Mortgage Loans in the Trust Fund, the
Master Servicer shall, upon written direction to the Trustee, cause each REMIC
included in the Trust Fund to adopt a plan of complete liquidation pursuant to
Section 7.03 hereof to sell all of its property. The property of the Trust Fund
shall be sold at a price (the "Repurchase Price") equal to: (i) 100% of the
unpaid principal balance of each Mortgage Loan on the day of such purchase plus
interest accrued thereon at the applicable Mortgage Rate with respect to any
Mortgage Loan to the Due Date in the Due Period immediately preceding such
Distribution Date, (ii) the fair market value of any REO Property and any other
property held by the Trust Fund, such fair market value to be determined by an
appraiser or appraisers appointed by the Master Servicer with the consent of the
Trustee and (iii) any unreimbursed Servicing Advances with respect to each
Mortgage Loan in the Trust Fund. The Master Servicer and each Servicer (or the
Trustee, if applicable) shall be reimbursed from the Repurchase Price for any
Mortgage Loan or related REO Property for any Advances or Servicing Advances
made with respect to the Mortgage Loans that are reimbursable to the Master
Servicer under this Agreement or to each Servicer under the related Servicing
Agreement (or to the Trustee hereunder), together with any accrued and unpaid
compensation and any other amounts due to the Master Servicer and the Trustee
hereunder or the Custodians or the Servicers under their respective Custodial or
Servicing Agreements, provided that any such compensation or other amount to be
paid to the Custodians and any other amounts to be paid to the Servicers are
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). The Trustee shall distribute the assets of the Trust Fund on
the Distribution Date on which the repurchase occurred. Upon the repurchase of
the Mortgage Loans, the Trust Fund shall terminate in accordance with the terms
of this Agreement.
Section 7.02. Procedure Upon Termination of Trust Fund.
(a) Notice of any termination pursuant to the provisions of Section
7.01, specifying the Distribution Date upon which the final distribution shall
be made, shall be given promptly by the Trustee by first class mail to
Certificateholders mailed (x) no later than five Business Days after the Trustee
has received notice from the Master Servicer of its intent to exercise its right
to cause the termination of the Trust Fund pursuant to Section 7.01(b) or (y)
upon the final payment or other liquidation of the last Mortgage Loan or REO
Property in the Trust Fund. Such notice shall specify (A) the Distribution Date
upon which final distribution on the Certificates of all amounts required to be
distributed to Certificateholders pursuant to Section 5.02 will be made upon
presentation and surrender of the Certificates at the Corporate Trust Office,
and (B) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distribution being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Securities Administrator, the Master
Servicer, the Depositor and the Certificate Registrar at the time such notice is
given to Holders of the Certificates. Upon any such termination, the duties of
the Certificate Registrar with respect to the Certificates shall terminate and
the Trustee shall terminate, or request the Master Servicer to terminate, the
Collection Account it maintains, the Certificate Account and any other account
or fund maintained with respect to the Certificates, subject to the Trustee's
obligation hereunder to hold all amounts payable to Certificateholders in trust
without interest pending such payment.
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(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the remaining Certificateholders concerning surrender of such Certificates, and
the cost thereof shall be paid out of the amounts distributable to such Holders.
If within two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall, subject to applicable state law
relating to escheatment, hold all amounts distributable to such Holders for the
benefit of such Holders. No interest shall accrue on any amount held by the
Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section.
(c) Any reasonable expenses incurred by the Trustee and the
Securities Administrator in connection with any termination or liquidation of
the Trust Fund shall be paid from proceeds received from the liquidation of the
Trust Fund, but only to the extent that such expenses constitute "unanticipated
expenses" within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
Section 7.03. Additional Requirements under the REMIC Provisions.
(a) Any termination of the Trust Fund shall be effected in
accordance with the following additional requirements, unless the Trustee seeks
(at the request of the Master Servicer), and subsequently receives, an Opinion
of Counsel (at the expense of the Master Servicer), addressed to the Trustee to
the effect that the failure of the Trust Fund to comply with the requirements of
this Section 7.03 will not (i) result in the imposition of taxes on any REMIC
under the REMIC Provisions or (ii) cause any REMIC established hereunder to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Trustee shall sell all of the assets of the Trust
Fund for cash and, within 90 days of such sale, shall distribute the
proceeds of such sale to the Certificateholders in complete liquidation
of the Trust Fund, REMIC 1, REMIC 2 and the Upper Tier REMIC; and
(ii) The Trustee shall attach a statement to the final
Federal income tax return for each of REMIC 1, REMIC 2 and the Upper
Tier REMIC stating that pursuant to Treasury Regulation Section
1.860F-1, the first day of the 90-day liquidation period for each such
REMIC was the date on which the Trustee sold the assets of the Trust
Fund.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby (i) authorizes the Trustee and the Securities Administrator to take the
action described in paragraph (a) above and (ii) agrees to take such other
action as may be necessary to facilitate liquidation of each REMIC created under
this Agreement, which authorization shall be binding upon all successor Residual
Certificateholders.
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ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer or
the operation and management of the Trust Fund, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing 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 an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount (or Class Notional Amount) of Certificates of each Class
affected thereby 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 cost, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for sixty 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 and no direction inconsistent with such written request has been
given such Trustee during such sixty-day period by such Certificateholders; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing 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 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 8.02. Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may
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reasonably require, of the names and addresses of the Certificateholders of each
Class as of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Trustee, and such
application states that the Applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants reasonable access during the normal
business hours of the Trustee to the most recent list of Certificateholders held
by the Trustee or shall, as an alternative, send, at the Applicants' expense,
the written communication proffered by the Applicants to all Certificateholders
at their addresses as they appear in the Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Securities Administrator, the Master Servicer, the Certificate Registrar and the
Trustee that neither the Depositor, the Securities Administrator, the Master
Servicer, the Certificate Registrar nor the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 8.03. Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders or Certificate Owner, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee, the
Securities Administrator and, where expressly required herein, to the Master
Servicer. Such instrument or instruments (as the action embodies therein and
evidenced thereby) are herein sometimes referred to as an "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agents shall be sufficient for
any purpose of this Agreement and conclusive in favor of the Trustee, the
Securities Administrator and Master Servicer, if made in the manner provided in
this Section. Each of the Trustee, the Securities Administrator and Master
Servicer shall promptly notify the others of receipt of any such instrument by
it, and shall promptly forward a copy of such instrument to the others.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
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(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Securities Administrator, the
Master Servicer and the Depositor shall not be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee, the
Securities Administrator or the Master Servicer in reliance thereon, whether or
not notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer.
The Certificateholders, by their purchase and acceptance of the
Certificates, appoint Aurora Loan Services LLC, as Master Servicer. For and on
behalf of the Depositor, the Trustee and the Certificateholders, the Master
Servicer shall master service the Mortgage Loans in accordance with the
provisions of this Agreement and the provisions of the applicable Servicing
Agreement.
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors
and Omissions Insurance Policy.
(a) The Master Servicer, at its expense, shall maintain in effect a
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 that would meet the requirements of FNMA or FHLMC if it were the
purchaser of the Mortgage Loans. The Master Servicer shall (i) require each
Servicer to maintain an Errors and Omissions Insurance Policy and a Fidelity
Bond in accordance with the provisions of the applicable Servicing Agreement,
(ii) cause each Servicer to provide to the Master Servicer certificates
evidencing that such policy and bond is in effect and to furnish to the Master
Servicer any notice of cancellation, non-renewal or modification of the policy
or bond received by it, as and to the extent provided in the applicable
Servicing Agreement, and (iii) furnish copies of the certificates and notices
referred to in clause (ii) to the Trustee upon its request. The Fidelity Bond
and Errors and Omissions Insurance Policy may be obtained and maintained in
blanket form.
(b) The Master Servicer shall promptly report to the Trustee any
material changes that may occur in the Master Servicer Fidelity Bond or the
Master Servicer Errors and Omissions Insurance Policy and shall furnish to the
Trustee, on request, certificates evidencing that such
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bond and insurance policy are in full force and effect. The Master Servicer
shall promptly report to the Trustee all cases of embezzlement or fraud, if such
events involve funds relating to the Mortgage Loans. The total losses,
regardless of whether claims are filed with the applicable insurer or surety,
shall be disclosed in such reports together with the amount of such losses
covered by insurance. If a bond or insurance claim report is filed with any of
such bonding companies or insurers, the Master Servicer shall promptly furnish a
copy of such report to the Trustee. Any amounts relating to the Mortgage Loans
collected by the Master Servicer under any such bond or policy shall be promptly
remitted by the Master Servicer to the Trustee for deposit into the Certificate
Account. Any amounts relating to the Mortgage Loans collected by any Servicer
under any such bond or policy shall be remitted to the Master Servicer to the
extent provided in the applicable Servicing Agreement.
Section 9.03. Master Servicer's Financial Statements and Related
Information.
For each year this Agreement is in effect, the Master Servicer shall
submit to the Trustee, each Rating Agency and the Depositor a copy of its annual
unaudited financial statements on or prior to the last day of February of each
year commencing on February 28, 2006. Such financial statements shall include a
balance sheet, income statement, statement of retained earnings, statement of
additional paid-in capital, statement of changes in financial position and all
related notes and schedules and shall be in comparative form, certified by a
nationally recognized firm of Independent Accountants to the effect that such
statements were examined and prepared in accordance with generally accepted
accounting principles applied on a basis consistent with that of the preceding
year.
Section 9.04. Power to Act; Procedures.
(a) 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 X hereof, and each Servicer shall have full power and
authority (to the extent provided in the applicable Servicing Agreement) to do
any and all things that it may deem necessary or desirable in connection with
the 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 and the applicable Servicing Agreement, as applicable; provided
that the Master Servicer shall not take, or knowingly permit any Servicer to
take, any action that is inconsistent with or prejudices the interests of the
Trust Fund or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor, the Trustee and the Certificateholders under this
Agreement. The Master Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name or
in the name of any Servicer, when the Master Servicer or a Servicer, as the case
may be, believes it is appropriate in its best judgment to register any Mortgage
Loan with MERS, or cause the removal from the registration of any Mortgage Loan
on the MERS system, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable
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instruments with respect to such assignment or re-recording of a Mortgage in the
name of MERS, solely as nominee for the Trustee and its successors and assigns.
The Master Servicer shall represent and protect the interests of the Trust Fund
in the same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan and
shall not make or knowingly permit any Servicer to make any modification, waiver
or amendment of any term of any Mortgage Loan that would cause any REMIC
included in the Trust Fund to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Servicer, and each Servicer, to the extent such
authority is delegated to such Servicer by the Master Servicer under the
applicable Servicing Agreement, is hereby authorized and empowered by the
Trustee when the Master Servicer or a Servicer, as the case may be, believes it
appropriate in its best judgment and in accordance with Accepted Servicing
Practices and the applicable Servicing Agreement, to execute and deliver, on
behalf of itself and the Certificateholders, the Trustee or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. The Trustee shall furnish
the Master Servicer or a Servicer, upon request, with any powers of attorney
prepared by the Master Servicer or such Servicer empowering the Master Servicer
or such 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 the applicable Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, necessary or appropriate to enable the Master Servicer to master
service the Mortgage Loans and carry out its duties hereunder and to allow each
Servicer to service the Mortgage Loans, in each case in accordance with Accepted
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or the applicable Servicer). 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, then upon request of the Trustee, the Master Servicer shall join with the
Trustee in the appointment of a co-trustee pursuant to Section 6.09 hereof. 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.
(b) In master servicing and administering the Mortgage Loans, the
Master Servicer shall employ procedures and exercise the same care that it
customarily employs and exercises in master servicing and administering loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with this Agreement. Consistent with the
foregoing, the Master Servicer may, and may permit any Servicer to, in its
discretion (i) waive any late payment charge (but not any Prepayment Penalty
Amount, except as set forth below) and (ii) extend the due dates for payments
due on a Mortgage Note for a period not greater than 120 days; provided,
however, that the maturity of any Mortgage Loan shall not be extended past the
date on which the final payment is due on the latest maturing Mortgage Loan as
of the Cut-off Date. In the event of any extension described in clause (ii)
above, the Master Servicer shall make or cause to be made Advances on the
related Mortgage Loan in
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accordance with the provisions of Section 5.04 on the basis of the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
extension. Notwithstanding anything to the contrary in this Agreement, the
Master Servicer shall not make or knowingly permit any modification, waiver or
amendment of any material term of any Mortgage Loan unless: (1) such Mortgage
Loan is in default or default by the related Mortgagor is, in the reasonable
judgment of the Master Servicer or the applicable Servicer, reasonably
foreseeable, (2) in the case of a waiver of a Prepayment Penalty Amount if (a)
such Mortgage Loan is in default or default by the related Mortgagor is
reasonably foreseeable, and such waiver would maximize recovery of total
proceeds taking into account the value of such Prepayment Penalty Amount and the
related Mortgage Loan or (b) if the prepayment is not the result of a refinance
by the Servicer or any of its affiliates and (i) such Mortgage Loan is in
default or default by the related Mortgagor is, in the reasonable judgment of
the Master Servicer or the applicable Servicer, reasonably foreseeable, and such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Penalty Amount and the related Mortgage Loan or (ii) the
collection of the Prepayment Penalty Amount would be in violation of applicable
laws or (iii) the collection of such Prepayment Penalty Amount 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, and (3) the Master Servicer
shall have provided or caused to be provided to the Trustee an Opinion of
Counsel (which opinion shall, if provided by the Master Servicer, be an expense
reimbursed, to the extent it is an unanticipated expense within the meaning of
Treasury Regulation Section 1.860G-1(b)(3)(ii) from the Collection Account
pursuant to Section 4.02(v)) in writing to the effect that such modification,
waiver or amendment would not cause an Adverse REMIC Event; provided, in no
event shall an Opinion of Counsel be required for the waiver of a Prepayment
Penalty Amount under clause (2) above.
Section 9.05. Servicing Agreements Between the Master Servicer and
Servicers; Enforcement of Servicers' Obligations.
(a) Each Servicing Agreement requires the applicable Servicer to
service the Mortgage Loans in accordance with the provisions thereof. References
in this Agreement to actions taken or to be taken by the Master Servicer include
such actions taken or to be taken by a Servicer pursuant to a Servicing
Agreement. Any fees, costs and expenses and other amounts payable to such
Servicers shall be deducted from amounts remitted to the Master Servicer by the
applicable Servicer (to the extent permitted by the applicable Servicing
Agreement) and shall not be an obligation of the Trust, the Trustee or the
Master Servicer.
(b) The Master Servicer shall not be required to (i) take any action
with respect to the servicing of any Mortgage Loan that the related Servicer is
not required to take under the related Servicing Agreement and (ii) cause a
Servicer to take any action or refrain from taking any action if the related
Servicing Agreement does not require the Servicer to take such action or refrain
from taking such action; in both cases notwithstanding any provision of this
Agreement that requires the Master Servicer to take such action or cause the
Servicer to take such action.
(c) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall use its reasonable best efforts to
enforce the obligations of each Servicer under the related
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Servicing Agreement and shall, upon its obtaining actual knowledge of the
failure of a Servicer to perform its obligations in accordance with the related
Servicing Agreement, to the extent that the non-performance of any such
obligations would have a material adverse effect on a Mortgage Loan, the Trust
Fund or Certificateholders, terminate the rights and obligations of such
Servicer thereunder to the extent and in the manner permitted by the related
Servicing Agreement and either act as servicer of the related Mortgage Loans or
enter into a Servicing Agreement with a successor Servicer. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Servicing Agreements and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor initially only
(i) from a general recovery resulting from such enforcement only to the extent,
if any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans, (ii) from a specific recovery of costs, expenses or attorneys'
fees against the party against whom such enforcement is directed, and then, to
the extent that such amounts are insufficient to reimburse the Master Servicer
for the costs of such enforcement or (iii) from the Collection Account.
(d) The Master Servicer shall be entitled to conclusively rely on
any certifications or other information provided by the Servicers under the
terms of the applicable Servicing Agreement, in its preparation of any
certifications, filings or reports, in accordance with the terms hereof or as
may be required by applicable law or regulation.
Section 9.06. Collection of Taxes, Assessments and Similar Items.
(a) To the extent provided in the applicable Servicing Agreement,
the Master Servicer shall cause each Servicer to establish and maintain one or
more custodial accounts at a depository institution (which may be a depository
institution with which the Master Servicer or any Servicer establishes accounts
in the ordinary course of its servicing activities), the accounts of which are
insured to the maximum extent permitted by the FDIC (each, an "Escrow Account")
and shall deposit therein any collections of amounts received with respect to
amounts due for taxes, assessments, water rates, Standard Hazard Insurance
Policy premiums or any comparable items for the account of the Mortgagors.
Withdrawals from any Escrow Account may be made (to the extent amounts have been
escrowed for such purpose) only in accordance with the applicable Servicing
Agreement. Each Servicer shall be entitled to all investment income not required
to be paid to Mortgagors on any Escrow Account maintained by such Servicer. The
Master Servicer shall make (or cause to be made) to the extent provided in the
applicable Servicing Agreement advances to the extent necessary in order to
effect timely payment of taxes, water rates, assessments, Standard Hazard
Insurance Policy premiums or comparable items in connection with the related
Mortgage Loan (to the extent that the Mortgagor is required, but fails, to pay
such items), provided that it has determined that the funds so advanced are
recoverable from escrow payments, reimbursement pursuant to Section 4.02(v) or
otherwise.
(b) Costs incurred by the Master Servicer or by Servicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans may be added to the amount owing under the related
Mortgage Note where the terms of the Mortgage Note so permit; provided, however,
that the addition of any such cost shall not be taken into account for
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purposes of calculating the distributions to be made to Certificateholders. Such
costs, to the extent that they are unanticipated expenses within the meaning of
Treasury Regulations Section 1.860G-1(b)(3)(ii) shall be recoverable by the
Master Servicer pursuant to Section 4.02(v).
Section 9.07. Termination of Servicing Agreements; Successor Servicers.
(a) The Master Servicer shall be entitled to terminate the rights
and obligations of any Servicer under the applicable Servicing Agreement in
accordance with the terms and conditions of such Servicing Agreement and without
any limitation by virtue of this Agreement; provided, however, that in the event
of termination of any Servicing Agreement by the Master Servicer or the related
Servicer, the Master Servicer shall either act as Servicer of the related
Mortgage Loans, or enter into a Servicing Agreement with a successor Servicer.
The parties acknowledge that notwithstanding the preceding sentence,
there may be a transition period, not to exceed 90 days, in order to effect the
transfer of servicing to a successor Servicer. The Master Servicer shall be
entitled to be reimbursed from each Servicer (or by the Trust Fund, if such
Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing from the predecessor servicer,
including without limitation, any 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.
(b) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
Master Servicer, as applicable, may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
Section 9.08. Master Servicer Liable for Enforcement.
Notwithstanding any Servicing Agreement, the Master Servicer shall
remain obligated and liable to the Trustee and the Certificateholders in
accordance with the provisions of this Agreement, to the extent of its
obligations hereunder, without diminution of such obligation or liability by
virtue of such Servicing Agreements or arrangements. The Master Servicer shall
use commercially reasonable efforts to ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall use
commercially reasonable efforts to enforce the provisions of each Servicing
Agreement for the benefit of the Certificateholders. The Master Servicer shall
be entitled to enter into any agreement with the Servicers for indemnification
of the Master Servicer and nothing contained in this Agreement shall be deemed
to limit or modify such indemnification. Except as expressly set forth herein,
the Master Servicer shall have no liability for the acts or omissions of any
Servicer in the performance by such Servicer of its obligations under the
related Servicing Agreement.
Section 9.09. No Contractual Relationship Between Servicers and Trustee
or Depositor.
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Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer in
its capacity as such and not as an originator shall be deemed to be between such
Servicer, the Seller and the Master Servicer, and the Trustee, the Securities
Administrator and the Depositor shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to such
Servicer except as set forth in Section 9.10 hereof.
Section 9.10. Assumption of Servicing Agreement by Securities
Administrator.
(a) In the event the Master Servicer shall for any reason no longer
be the Master Servicer (including by reason of any Event of Default under this
Agreement), after a period not to exceed ninety days after the Securities
Administrator receives written notice from the Trustee pursuant to Section 6.14
or Section 9.28, as applicable, the Securities Administrator shall thereupon
assume all of the rights and obligations of such Master Servicer hereunder and
enforce the rights under each Servicing Agreement entered into with respect to
the Mortgage Loans. The Securities Administrator, its designee or any successor
master servicer appointed by the Securities Administrator or the Trustee shall
be deemed to have assumed all of the Master Servicer's interest herein and
therein to the same extent as if such Servicing Agreement had been assigned to
the assuming party, except that the Master Servicer shall not thereby be
relieved of any liability or obligations of the Master Servicer under such
Servicing Agreement accruing prior to its replacement as Master Servicer, and
shall be liable to the Securities Administrator, and hereby agrees to indemnify
and hold harmless the Securities Administrator from and against all costs,
damages, expenses and liabilities (including reasonable attorneys' fees)
incurred by the Securities Administrator as a result of such liability or
obligations of the Master Servicer and in connection with the Securities
Administrator's assumption (but not its performance, except to the extent that
costs or liability of the Securities Administrator are created or increased as a
result of negligent or wrongful acts or omissions of the Master Servicer prior
to its replacement as Master Servicer) of the Master Servicer's obligations,
duties or responsibilities thereunder; provided that the Master Servicer shall
not indemnify or hold harmless the Securities Administrator against negligent or
willful misconduct of the Securities Administrator.
(b) The Master Servicer that has been terminated shall, upon request
of the Securities Administrator but at the expense of such Master Servicer or at
the expense of the Trust Fund, deliver to the assuming party all documents and
records relating to each Servicing Agreement and the related Mortgage Loans and
an accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of each Servicing Agreement
to the assuming party.
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements.
(a) To the extent provided in the applicable Servicing Agreement, to
the extent Mortgage Loans contain enforceable due-on-sale clauses, and to the
extent that the Master Servicer has knowledge of the conveyance of a Mortgaged
Property, the Master Servicer shall use its reasonable best efforts to cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing
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Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with the applicable
Servicing Agreement.
(b) The Master Servicer or the related Servicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for the granting of an
easement thereon in favor of another Person or any alteration or demolition of
the related Mortgaged Property if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be materially adversely affected
thereby. Any fee collected by the Master Servicer or the related Servicer for
processing such a request will be retained by the Master Servicer or such
Servicer as additional servicing compensation.
Section 9.12. Release of Mortgage Files.
(a) Upon (i) becoming aware of the payment in full of any Mortgage
Loan, (ii) the receipt by the Master Servicer of a notification that payment in
full has been or will be escrowed in a manner customary for such purposes, or
(iii) in the case of a Mortgage Loan as to which the related Mortgaged Property
is located in California, receipt by the Master Servicer of notification from
the applicable Servicer that the Servicer reasonably expects that payment in
full will be received promptly, the Master Servicer will, or will cause the
applicable Servicer to, promptly notify the Trustee (or the applicable
Custodian) by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment that are required to be deposited in the Collection Account maintained
by the Master Servicer pursuant to Section 4.01 have been or will be so
deposited) of a Servicing Officer and shall request the Trustee or the
applicable Custodian, to deliver to the applicable Servicer the related Mortgage
File. In lieu of sending a hard copy certification of a Servicing Officer, the
Master Servicer may, or may cause the Servicer to, deliver the request for
release in a mutually agreeable electronic format. To the extent that such a
request, on its face, originates from a Servicing Officer, no signature shall be
required. Upon receipt of such certification and request, the Trustee or the
applicable Custodian, shall promptly release the related Mortgage File to the
applicable Servicer and neither the Trustee nor the Custodian shall have any
further responsibility with regard to such Mortgage File. The Master Servicer is
authorized, and each Servicer, to the extent such authority is delegated to such
Servicer by the Master Servicer under the applicable Servicing Agreement, is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured 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 Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of, or other legal proceedings relating to, any Mortgage Loan and in
accordance with Accepted Servicing Practices and the applicable Servicing
Agreement, the Trustee shall execute such pleadings, request for trustee's sale
or other documents as shall be prepared and furnished to the Trustee by the
Master Servicer, or by a Servicer (in form reasonably acceptable to the Trustee)
and as are necessary to the prosecution of any such proceedings. The Trustee or
the Custodian, shall, upon
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request of the Master Servicer, or of a Servicer, and delivery to the Trustee or
the applicable Custodian, of a trust receipt signed by a Servicing Officer
substantially in the form annexed hereto as Exhibit C or in the form annexed to
the applicable Custodial Agreement as Exhibit C, release the related Mortgage
File held in its possession or control to the Master Servicer (or the applicable
Servicer). Such trust receipt shall obligate the Master Servicer or applicable
Servicer to return the Mortgage File to the Trustee or Custodian, as applicable,
when the need therefor by the Master Servicer or applicable Servicer no longer
exists unless (i) the Mortgage Loan shall be liquidated, in which case, upon
receipt of a certificate of a Servicing Officer similar to that herein above
specified, the trust receipt shall be released by the Trustee or the Custodian,
as applicable, to the Master Servicer (or the applicable Servicer) or (ii) the
Mortgage File has been delivered directly or through a Servicer to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered directly or through a Servicer to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.
Section 9.13. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit, or cause the applicable
Servicer to transmit, to the Trustee such documents and instruments coming into
the possession of the Master Servicer or such Servicer from time to time as are
required by the terms hereof to be delivered to the Trustee including notifying
the Trustee (or the applicable Custodian) and the Securities Administrator in
the event that any Mortgagor of any Employee Mortgage Loan ceases to be an
employee of Xxxxxx Brothers Inc. or its Affiliates. Any funds received by the
Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as a Subsequent
Recovery, Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage
Loan shall be held for the benefit of the Trustee and the Certificateholders
subject to the Master Servicer's right to retain or withdraw from the Collection
Account the Master Servicing Fee and other amounts provided in this Agreement,
and to the right of each Servicer to retain its Servicing Fee and other amounts
as provided in the applicable Servicing Agreement. The Master Servicer shall,
and shall (to the extent provided in the applicable Servicing Agreement) cause
each 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, or any Servicer, in respect of any Mortgage
Loans, whether from the collection
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of principal and interest payments or from a Subsequent Recovery, Liquidation
Proceeds or Insurance Proceeds, shall be held by the Master Servicer, or by such
Servicer, for and on behalf of the Trustee and the Certificateholders and shall
be and remain the sole and exclusive property of the Trustee; provided, however,
that the Master Servicer and each Servicer shall be entitled to setoff against,
and deduct from, any such funds any amounts that are properly due and payable to
the Master Servicer or such Servicer under this Agreement or the applicable
Servicing Agreement and shall be authorized to remit such funds to the
Securities Administrator in accordance with this Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with
the execution of this Agreement, the Trustee shall own or, to the extent that a
court of competent jurisdiction shall deem the conveyance of the Mortgage Loans
from the Seller to the Depositor not to constitute a sale, the Trustee shall
have a security interest in the Mortgage Loans and in all Mortgage Files
representing such Mortgage Loans and in all funds and investment property now or
hereafter held by, or under the control of, a Servicer or the Master Servicer
that are collected by such Servicer or the Master Servicer in connection with
the Mortgage Loans, whether as scheduled installments of principal and interest
or as full or partial prepayments of principal or interest or as a Subsequent
Recovery, Liquidation Proceeds or Insurance Proceeds or otherwise, and in all
proceeds of the foregoing and proceeds of proceeds (but excluding any fee or
other amounts to which such Servicer is entitled under the applicable Servicing
Agreement, or the Master Servicer or the Depositor is entitled to hereunder);
and the Master Servicer agrees that so long as the Mortgage Loans are assigned
to and held by the Trustee or any Custodian, all documents or instruments
constituting part of the Mortgage Files, and such funds relating to the Mortgage
Loans which come into the possession or custody of, or which are subject to the
control of, the Master Servicer or any Servicer shall be held by the Master
Servicer or such Servicer for and on behalf of the Trustee as the Trustee's
agent and bailee for purposes of perfecting the Trustee's security interest
therein as provided by the applicable Uniform Commercial Code or other laws.
(d) The Master Servicer agrees that it shall not, and shall not
authorize any Servicer to, create, incur or subject any Mortgage Loans, or any
funds that are deposited in any custodial account, Escrow Account or the
Collection Account, or any funds that otherwise are or may become due or payable
to the Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on, or
in connection with, a Mortgage Loan.
Section 9.14. Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is validly existing and in good standing under the
jurisdiction of its formation, and as Master Servicer has full power and
authority to transact any and all business contemplated by this
Agreement and to execute, deliver and comply with its obligations under
the terms of this Agreement, the execution, delivery and performance
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of which have been duly authorized by all necessary corporate action on
the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative decree
or order to which it is subject or (C) 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 contract,
agreement or other instrument to which the Master Servicer is a party or
by which it is bound or to which any of its assets are subject, which
violation, default or breach would materially and adversely affect the
Master Servicer's ability to perform its obligations under this
Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to
any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency to the extent that any
such default would materially and adversely affect its performance
hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer of
its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is an FNMA- and FHLMC- approved seller/servicer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of or compliance by the
Master Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders (if any) as have been obtained;
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(ix) the consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Master
Servicer; and
(x) the Master Servicer has obtained an Errors and Omissions
Insurance Policy and a Fidelity Bond in accordance with Section 9.02,
each of which is in full force and effect, and each of which provides at
least such coverage as is required hereunder.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 9.14 shall survive the execution and
delivery of this Agreement. The Master Servicer shall indemnify the Depositor,
the Securities Administrator and the Trustee and hold them harmless against any
loss, damages, penalties, fines, forfeitures, legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Master Servicer's representations and warranties contained in Section
9.14(a). Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits). It
is understood and agreed that the enforcement of the obligation of the Master
Servicer set forth in this Section to indemnify the Depositor, the Securities
Administrator and the Trustee as provided in this Section constitutes the sole
remedy (other than as set forth in Section 6.14) of the Depositor, the
Securities Administrator and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by any of the Depositor, the Master
Servicer, the Securities Administrator or the Trustee or notice thereof by any
one of such parties to the other parties.
(c) It is understood and agreed that the representations and
warranties of the Depositor set forth in Sections 2.03(a)(i) through (vi) shall
survive the execution and delivery of this Agreement. The Depositor shall
indemnify the Master Servicer and hold it harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the Depositor's
representations and warranties contained in Sections 2.03(a)(i) through (vi). It
is understood and agreed that the enforcement of the obligation of the Depositor
set forth in this Section to indemnify the Master Servicer as provided in this
Section constitutes the sole remedy of the Master Servicer respecting a breach
by the Depositor of the representations and warranties in Sections 2.03(a)(i)
through (vi).
Any cause of action against the Depositor relating to or arising out of
the breach of the representations and warranties made in Sections 2.03(a)(i)
through (vi) shall accrue upon discovery of such breach by either the Depositor
or the Master Servicer or notice thereof by any one of such parties to the other
parties.
Section 9.15. Closing Certificate and Opinion.
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On or before the Closing Date, the Master Servicer shall cause to be
delivered to the Depositor and Xxxxxx Brothers Inc. an Opinion of Counsel, dated
the Closing Date, in form and substance reasonably satisfactory to the Depositor
and Xxxxxx Brothers Inc., as to the due authorization, execution and delivery of
this Agreement by the Master Servicer and the enforceability thereof.
Section 9.16. Standard Hazard and Flood Insurance Policies.
For each Mortgage Loan (other than a Cooperative Loan), the Master
Servicer shall maintain, or cause to be maintained by each Servicer, standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. It is understood and agreed that such insurance shall
be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement 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.
Pursuant to Section 4.01, any amounts collected by the Master Servicer,
or by any Servicer, under any insurance policies maintained pursuant to this
Section 9.16 (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or released to the Mortgagor in
accordance with the Master Servicer's or the Servicer's normal servicing
procedures and Accepted Servicing Practices) shall be deposited into the
Collection Account, subject to withdrawal pursuant to Section 4.02. Any cost
incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02(v).
Section 9.17. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall, or shall cause each Servicer (to the extent
provided in the applicable Servicing Agreement) to, prepare and present on
behalf of the Trustee and the Certificateholders all claims under the Insurance
Policies with respect to the Mortgage Loans, 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 (or disbursed to a Servicer and remitted to the
Master Servicer) in respect of such policies or bonds shall be promptly
deposited in the Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property or release to the Mortgagor in accordance with the Master
Servicer's or the Servicer's normal servicing procedures need not be so
deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies.
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(a) The Master Servicer shall not take, or knowingly permit any
Servicer (consistent with the applicable Servicing Agreement) to take, any
action that would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. To the extent that coverage is
available, the Master Servicer shall use its best reasonable efforts to keep in
force and effect, or to cause each Servicer to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer to, cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in effect at the date of the initial issuance of the Certificates
and is required to be kept in force hereunder except as required by a applicable
law or in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or 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.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the applicable Custodian, as directed by the Trustee),
shall retain possession and custody of the originals of the 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 otherwise
has fulfilled its obligations under this Agreement, the Trustee (or the
applicable Custodian, as directed by the Trustee) shall also retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the applicable Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of the
Primary Mortgage Insurance Policies and any certificates of renewal thereof, and
such other documents or instruments that constitute portions of the Mortgage
File that come into the possession of the Master Servicer from time to time.
Section 9.20. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall use its reasonable best efforts to, or to
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 the applicable Servicing Agreement. Alternatively, the Master
Servicer may take, or authorize any Servicer to take, other actions in respect
of a defaulted Mortgage Loan,
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which may include (i) accepting a short sale (a payoff of the Mortgage Loan for
an amount less than the total amount contractually owed in order to facilitate a
sale of the Mortgaged Property by the Mortgagor) or permitting a short
refinancing (a payoff of the Mortgage Loan for an amount less than the total
amount contractually owed in order to facilitate refinancing transactions by the
Mortgagor not involving a sale of the Mortgaged Property), (ii) arranging for a
repayment plan or (iii) agreeing to a modification in accordance with Section
9.04. In connection with such foreclosure or other conversion or action, the
Master Servicer shall, consistent with Section 9.18, follow such practices and
procedures as it shall reasonably determine to be in the best interests of the
Trust Fund and the Certificateholders and which shall be consistent with its
customary practices in performing its general mortgage servicing activities;
provided that the Master Servicer shall not be liable in any respect hereunder
if the Master Servicer is acting in connection with any such foreclosure or
other conversion or action in a manner that is consistent with the provisions of
this Agreement. Neither the Master Servicer, nor any Servicer, shall be required
to expend its own funds or incur other reimbursable charges in connection with
any foreclosure, or attempted foreclosure which is not completed, or toward the
correction of any default on a related senior mortgage loan, or towards the
restoration of any property unless it shall determine (i) that such restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to the Certificateholders after reimbursement to itself for such expenses
or charges and (ii) that such expenses and charges will be recoverable to it
through Liquidation Proceeds or Insurance Proceeds (as provided in Section
4.02).
Section 9.21. Compensation to the Master Servicer.
The Master Servicer shall (i) be entitled, at its election, either (a)
to pay itself the Master Servicing Fee, in respect of the Mortgage Loans out of
any Mortgagor payment on account of interest prior to the deposit of such
payment in the Collection Account it maintains or (b) to withdraw from the
Collection Account the Master Servicing Fee to the extent permitted by Section
4.02(iv). The Master Servicer shall also be entitled, at its election, either
(a) to pay itself the Master Servicing Fee in respect of each delinquent
Mortgage Loan master serviced by it out of Liquidation Proceeds in respect of
such Mortgage Loan or other recoveries with respect thereto to the extent
permitted in Section 4.02 or (b) to withdraw from the Collection Account it
maintains the Master Servicing Fee in respect of each Liquidated Mortgage Loan
to the extent of such Liquidation Proceeds or other recoveries, to the extent
permitted by Section 4.02. Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (but not
including any Prepayment Penalty Amount) shall be retained by the Master
Servicer (or the applicable Servicer) and shall not be deposited in the
Collection Account. If the Master Servicer does not retain or withdraw the
Master Servicing Fee from the Collection Account as provided herein, the Master
Servicer shall be entitled to direct the Trustee to pay the Master Servicing Fee
to such Master Servicer by withdrawal from the Certificate Account to the extent
that payments have been received with respect to the applicable Mortgage Loan.
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. Pursuant to Section
4.01(e), all income and gain realized from any investment of funds in the
Collection Account shall be for the benefit of the Master Servicer as additional
compensation. The provisions of this Section 9.21 are subject to the provisions
of Section 6.14(b).
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Section 9.22. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the
Certificateholders. The Master Servicer shall use its reasonable best efforts to
sell, or, to the extent provided in the applicable Servicing Agreement, cause
the applicable Servicer to sell, any REO Property as expeditiously as possible
and in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable, but in all events within the time period,
and subject to the conditions set forth in Article X hereof. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall protect and
conserve, or cause the applicable Servicer to protect and conserve, such REO
Property in the manner and to such extent required by the applicable Servicing
Agreement, subject to Article X hereof.
(b) The Master Servicer shall deposit or cause to be deposited all
funds collected and received by it, or recovered from any Servicer, in
connection with the operation of any REO Property in the Collection Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances as well as any unpaid Master Servicing Fees or
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that (without limitation of any
other right of reimbursement that the Master Servicer or any Servicer shall have
hereunder) any such unreimbursed Advances as well as any unpaid Master Servicing
Fees or Servicing Fees may be reimbursed or paid, as the case may be, prior to
final disposition, out of any net rental income or other net amounts derived
from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the applicable Servicer
as provided above, shall be deposited in the Collection Account on or prior to
the Determination Date in the month following receipt thereof (and the Master
Servicer shall provide written notice to the Securities Administrator upon such
deposit) and be remitted by wire transfer in immediately available funds to the
Trustee for deposit into the Certificate Account on the next succeeding Master
Servicer Remittance Date.
Section 9.23. [Reserved].
Section 9.24. Reports to the Trustee and the Securities Administrator.
(a) Not later than 30 days after each Distribution Date, the Master
Servicer shall forward to the Trustee and the Securities Administrator a
statement, deemed to have been certified by a Servicing Officer, setting forth
the status of the Collection Account maintained by the Master Servicer as of the
close of business on the related Distribution Date, indicating that all
distributions required by this Agreement to be made by the Master Servicer have
been made (or if any required distribution has not been made by the Master
Servicer, specifying the nature and status thereof) and showing, for the period
covered by such statement, the aggregate of deposits into and withdrawals from
the Collection Account maintained by the Master Servicer. Copies of such
statement shall be provided by the Master Servicer to the Depositor, Attention:
Contract
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Finance, and, upon request, any Certificateholders (or by the Securities
Administrator at the Master Servicer's expense if the Master Servicer shall fail
to provide such copies (unless (i) the Master Servicer shall have failed to
provide the Securities Administrator with such statement or (ii) the Securities
Administrator shall be unaware of the Master Servicer's failure to provide such
statement)).
(b) Not later than two Business Days following each Distribution
Date, the Master Servicer shall deliver to the Person designated by the
Depositor, in a format consistent with other electronic loan level reporting
supplied by the Master Servicer in connection with similar transactions, "loan
level" information with respect to the Mortgage Loans as of the related
Determination Date, to the extent that such information has been provided to the
Master Servicer by the Servicers or by the Depositor.
(c) All information, reports and statements prepared by the Master
Servicer under this Agreement shall be based on information supplied to the
Master Servicer by the Servicers without independent verification thereof and
the Master Servicer shall be entitled to rely on such information.
(d) The Master Servicer shall provide the Securities Administrator
with such information as the Securities Administrator may reasonably request in
connection with its responsibilities under Section 10.01 hereof.
Section 9.25. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee, the Securities
Administrator and the Rating Agencies five Business Days after March 15 of each
year commencing in March 2006, an Officer's Certificate, certifying that with
respect to the period ending on the immediately preceding December 31; (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 any Servicer has failed to perform any of its duties,
responsibilities and obligations under its Servicing 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; (iv) the Master Servicer has received from each Servicer such
Servicer's annual certificate of compliance and a copy of such Servicer's annual
audit report, in each case to the extent required under the applicable Servicing
Agreement, or, if any such certificate or report has not been received by the
Master Servicer, the Master Servicer is using its best reasonable efforts to
obtain such certificate or report; and (v) such other additional items as may be
required by applicable law or regulation.
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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 9.26. Annual Independent Accountants' Servicing Report.
If the Master Servicer has, during the course of any fiscal 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
Depositor on or before the last day of February of each year commencing on
February 28, 2006, to 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 FHLMC or the Uniform Single Attestation Program for
Mortgage Bankers or such other attestation program as may be required by
applicable law or regulation, 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 FHLMC 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. 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.
To the extent that the Master Servicer receives an Annual Independent
Accountants' Servicing Report from any Servicer, the Master Servicer shall
forward a copy of such report to the Securities Administrator and the Trustee.
If the report is not received from the Servicer, the Trustee may request that
the Master Servicer contact the applicable Servicer to obtain such report. The
Master Servicer will not be liable for the failure of a Servicer to provide such
report.
Section 9.27. Merger or Consolidation.
Any Person into which the Master Servicer may be merged or consolidated,
or any Person resulting from any merger, conversion, other change in form or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor to the
Master Servicer hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor or resulting
Person to the Master Servicer shall be a Person that shall be qualified and
approved to service mortgage loans for FNMA or FHLMC and shall have a net worth
of not less than $15,000,000.
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Section 9.28. Resignation of Master Servicer.
Except as otherwise provided in Sections 9.27 and 9.29 hereof, the
Master Servicer shall not resign from the obligations and duties hereby imposed
on it unless it or the Trustee or the Securities Administrator determines that
the Master Servicer's duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel that shall be Independent to such effect delivered to the
Trustee and the Securities Administrator. In the event such determination of
ineligibility of the Master Servicer to continue in the capacity of master
servicer is made by the Master Servicer or the Trustee, no such resignation
shall become effective until a period of time not to exceed ninety days after
the Securities Administrator receives written notice thereof from the Trustee
and until the Securities Administrator shall have assumed, or a successor master
servicer shall have been appointed by the Trustee or the Securities
Administrator, as applicable, and until such successor shall have assumed, the
Master Servicer's responsibilities and obligations under this Agreement. Notice
of such resignation shall be given promptly by the Master Servicer to the
Depositor.
Section 9.29. Assignment or Delegation of Duties by the Master Servicer.
Except as expressly provided herein, the Master Servicer shall not
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 Master Servicer hereunder; provided, however, that the Master
Servicer shall have the right without the prior written consent of the Trustee,
the Securities Administrator, the Depositor or the Rating Agencies to delegate
or assign to or subcontract with or authorize or appoint an Affiliate of the
Master Servicer to perform and carry out any duties, covenants or obligations to
be performed and carried out by the Master Servicer hereunder. In no case,
however, shall any such delegation, subcontracting or assignment to an Affiliate
of the Master Servicer relieve the Master Servicer of any liability hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor, the Securities Administrator and the Trustee. If,
pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire amount of the Master
Servicing Fees and other compensation payable to the Master Servicer pursuant
hereto, including amounts payable to or permitted to be retained or withdrawn by
the Master Servicer pursuant to Section 9.21 hereof, shall thereafter be payable
to such successor master servicer.
Section 9.30. Limitation on Liability of the Master Servicer and Others.
(a) The Master Servicer undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Master Servicer from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that the duties
and obligations of the Master Servicer shall be determined solely by the express
provisions of this Agreement, the Master Servicer shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
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this Agreement; no implied covenants or obligations shall be read into this
Agreement against the Master Servicer and, in absence of bad faith on the part
of the Master Servicer, the Master Servicer 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 Master Servicer and
conforming to the requirements of this Agreement.
(c) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Trustee 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 Master
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement. The Master Servicer and any director, officer,
employee or agent of the Master Servicer shall be entitled to indemnification by
the Trust Fund and will be held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of his or its
duties hereunder or by reason of reckless disregard of his or its obligations
and duties hereunder. The Master Servicer and any director, officer, employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer shall be under no obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
master service the Mortgage Loans in accordance with this Agreement and that in
its opinion may involve it in any expenses or liability; provided, however, that
the Master Servicer may in its sole discretion undertake any such action that it
may deem necessary or desirable in 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 shall be expenses, costs and liabilities of the
Trust Fund and the Master Servicer shall be entitled to be reimbursed therefor
out of the Collection Account it maintains as provided by Section 4.02.
Notwithstanding anything herein to the contrary, neither the Master Servicer nor
the Trustee shall have any liability for the servicing of the Additional
Collateral, including, without limitation, the perfection, continuation, partial
release, release, termination, realization upon, substitution, foreclosure,
sale, or any other matter with respect to the Additional Collateral, or the
enforcement of the Additional Collateral Servicing Agreement.
Section 9.31. Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor, the Securities
Administrator and the Trustee, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the Depositor,
the Securities Administrator and the Trustee may sustain as a result of the
failure of the Master Servicer to perform its duties and master service the
Mortgage Loans in compliance with the terms of this Agreement. The Depositor,
the Securities Administrator and the Trustee shall immediately notify the Master
Servicer if a claim is made by a third party with respect to this Agreement or
the Mortgage Loans entitling the Depositor, the Securities Administrator or the
Trustee to indemnification hereunder, whereupon the Master Servicer shall
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assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or them in respect of such
claim.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC and Grantor Trust Administration.
(a) As set forth in the Preliminary Statement hereto, REMIC status
shall be elected in accordance with the REMIC Provisions with respect to each of
REMIC 1, REMIC 2 and the Upper Tier REMIC. The Trustee shall make such elections
on Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of such elections, each of the REMIC 1
Regular Interests is hereby designated as a regular interest in REMIC 1. Each of
the REMIC 2 Regular Interests is hereby designated as a regular interest in
REMIC 2. Each of the REMIC 3 Regular Interests is hereby designated as a regular
interest in the Upper Tier REMIC. The Class LT1-R Interest is hereby designated
as the sole residual interest in REMIC 1. The Class LT2-R Interest is hereby
designated as the sole residual interest in REMIC 2. The REMIC 3 Residual
Interest is hereby designated as the sole residual interest in the Upper Tier
REMIC. The Class R Certificate evidences ownership of the Class LT1-R Interest,
the Class LT2-R Interest and the REMIC 3 Residual Interest. It is the intention
of the parties hereto that the segregated pool of assets consisting of any
collections of Prepayment Penalty Amounts with respect to Pool 1, Pool 2, Pool
3, Pool 4, Pool 5 and Pool 6 constitute a grantor trust for federal income tax
purposes. The Trustee, by its execution and delivery hereof, acknowledges the
assignment to it of the Grantor Trust I Assets and declares that it holds and
will hold such assets in trust for the exclusive use and benefit of all present
and future Holders of the Class P Certificates. The rights of Holders of the
Class P Certificates to receive distributions from the proceeds of the Grantor
Trust I Assets and all ownership interests of such Holders in and to such
distributions, shall be as set forth in this Agreement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) is the
"Latest Possible Maturity Date".
(c) The Securities Administrator shall pay any and all tax related
expenses (not including taxes) of each REMIC and each Grantor Trust, including
but not limited to any professional fees or expenses related to audits or any
administrative or judicial proceedings with respect to such REMIC or such
Grantor Trust that involve the Internal Revenue Service or state tax
authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Securities Administrator in fulfilling its duties hereunder
(including its duties as tax return preparer). The Securities Administrator
shall be entitled to reimbursement from the Certificate Account of the expenses
to the extent (x) provided in clause (i) above and (y) in the case of expenses
relating to a REMIC provided for hereunder, such
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expenses are "unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii).
(d) The Securities Administrator shall prepare and file, and the
Trustee shall sign, all of each REMIC's federal and state tax and information
returns as such REMIC's direct representative. The Securities Administrator
shall prepare and file, and the Trustee shall sign, all of the tax returns in
respect of each Grantor Trust. The Securities Administrator shall comply with
such requirement by filing Form 1041. The expenses of preparing and filing such
returns shall be borne by the Securities Administrator. If any Disqualified
Organization acquires any Ownership Interest in a Residual Certificate, then the
Securities Administrator will upon request provide to the Internal Revenue
Service, and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, such information as required in Section 860D(a)(6)(B) of the Code needed
to compute the tax imposed under Section 860E(e) of the Code on transfers of
residual interests to disqualified organizations and the Securities
Administrator will be reimbursed by the Trust for all expenses incurred
therewith solely from amounts received for the provision of such information
from persons specified in Sections 860E(e)(3) and (6) of the Code.
(e) The Securities Administrator or its designee shall perform on
behalf of each REMIC and each Grantor Trust all reporting and other tax
compliance duties that are the responsibility of such REMIC or Grantor Trust
under the Code, the REMIC Provisions, or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, if required by the Code, the REMIC Provisions, or other such guidance,
the Securities Administrator shall provide (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization and (ii) to the Certificateholders such information or
reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Securities Administrator, the Master Servicer
and the Holders of Certificates shall take any action or cause any REMIC
hereunder to take any action necessary to create or maintain the status of such
REMIC as a REMIC under the REMIC Provisions and shall assist each other as
necessary to create or maintain such status. Neither the Trustee, the Securities
Administrator, the Master Servicer nor the Holder of any Residual Certificate
shall take any action, cause any REMIC 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 (i) endanger the status of any such
REMIC as a REMIC or (ii) result in the imposition of a tax upon any such REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee, the Securities Administrator and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger such status
or result in the imposition of such a tax. In addition, prior to taking any
action with respect to any such REMIC or the assets therein, or causing any such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of a Residual Certificate will consult with the
Trustee, the Securities Administrator and the Master Servicer, or their
respective designees, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to such REMIC, and no such
Person shall take any such action or cause such REMIC to take any such action as
to which the Trustee, the Securities
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Administrator or the Master Servicer has advised it in writing that an Adverse
REMIC Event could occur.
(g) The Securities Administrator shall prepare or cause to be
prepared on behalf of the Trust Fund, based upon information calculated in
accordance with this Agreement pursuant to instructions given by the Depositor,
the Trustee shall sign and the Securities Administrator shall file, federal tax
returns and appropriate state income tax returns and such other returns as may
be required by applicable law relating to the Trust Fund, and shall file any
other documents to the extent required by applicable state tax law (to the
extent such documents are in the Securities Administrator's possession). The
Securities Administrator shall forward copies to the Depositor of all such
returns and Form 1099 supplemental tax information and such other information
within the control of the Securities Administrator as the Depositor may
reasonably request in writing, and shall forward to the Trustee for distribution
to each Certificateholder such forms and furnish such information within the
control of the Securities Administrator as are required by the Code and the
REMIC Provisions to be furnished to them, and will prepare and furnish to the
Trustee for distribution to Certificateholders Form 1099 (supplemental tax
information) (or otherwise furnish information within the control of the
Securities Administrator) to the extent required by applicable law. The Master
Servicer will indemnify the Securities Administrator and the Trustee for any
liability of or assessment against the Securities Administrator or the Trustee,
as applicable, resulting from any error in any of such tax or information
returns directly resulting from errors in the information provided by such
Master Servicer.
(h) The Securities Administrator shall prepare and file with the
Internal Revenue Service ("IRS"), on behalf of each of REMIC 1, REMIC 2 and the
Upper Tier REMIC, an application on IRS Form SS-4. The Securities Administrator,
upon receipt from the IRS of the Notice of Taxpayer Identification Number
Assigned for each REMIC, shall promptly forward copies of such notices to the
Trustee, the Master Servicer and the Depositor. The Securities Administrator
will file an IRS Form 8811 for the REMICs created hereunder. The Trustee shall
sign such forms referred to in this Section 10.01(h) as may be required under
applicable law.
(i) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Securities Administrator shall pay any remaining REMIC
taxes out of current or future amounts otherwise distributable to the Holder of
the Residual Certificate in such REMIC or, if no such amounts are available, out
of other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to holders of regular interests in such REMIC, as the case may
be.
(j) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis.
(k) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Qualified
Substitute Mortgage Loans.
(l) Neither the Securities Administrator nor the Master Servicer
shall enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
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(m) Upon the request of any Rating Agency, the Securities
Administrator shall deliver to such Rating Agency an Officer's Certificate
stating the Securities Administrator's compliance with the provisions of this
Section 10.01.
(n) It is intended that the rights of the Class B1, Class B2, Class
B3, Class B4, Class B5, Class B7, Class B10 and Class B11 Certificates to
receive payments in respect of Floating Rate Certificate Shortfalls shall be
treated as rights in respect of interest rate cap contracts written by the Class
CX Certificateholders in favor of the holders of the Class B1, Class B2, Class
B3, Class B4, Class B5, Class B7, Class B10 and Class B11 Certificates and shall
be accounted for as property separate and apart from the REMIC 3 Regular
Interests represented by the Class B1, Class B2, Class B3, Class B4, Class B5,
Class B7, Class B10 and Class B11 Certificates. This provision is intended to
comply with the requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of property rights coupled with regular interests to be separately
respected and shall be interpreted consistently with such regulation. The
Holders of the Class B1, Class B2, Class B3, Class B4, Class B5, Class B7, Class
B10 and Class B11 Certificates agree, by their acceptance of such Certificates,
that they will take tax reporting positions that allocate no more than a nominal
value to the right to receive payments in respect of Floating Rate Certificate
Shortfalls. The Holders of the Class CX Certificates agree, by their acceptance
of such Certificates, to take tax reporting positions consistent with
allocations by the Holders of the Class B1, Class B2, Class B3, Class B4, Class
B5, Class B7, Class B10 and Class B11 Certificates of no more than a nominal
value to the right to receive payments in respect of Floating Rate Certificate
Shortfalls. For information reporting purposes, it will be assumed that such
rights have no value. Each payment made to the Class B1, Class B2, Class B3,
Class B4, Class B5, Class B7, Class B10 and Class B11 Certificates in respect of
Floating Rate Certificate Shortfalls shall be treated for federal income tax
purposes as having been distributed to the Class CX Certificates and then paid
by the holders of the Class CX Certificates to the holders of the relevant Class
B1, Class B2, Class B3, Class B4, Class B5, Class B7, Class B10 and Class B11
Certificates. Each holder or beneficial owner of a Class B1, Class B2, Class B3,
Class B4, Class B5, Class B7, Class B10 and Class B11 Certificates, by virtue of
its acquisition of such Certificate or a beneficial interest in such
Certificate, agrees to adopt tax reporting positions consistent with the
characterization of payments made to the Class B1, Class B2, Class B3, Class B4,
Class B5, Class B7, Class B10 and Class B11 Certificates in respect of Floating
Rate Certificate Shortfalls as payments in respect of interest rate cap
agreements written by the holders of the Class CX Certificates. The parties
hereto intend that rights under the Cap Agreements and the ownership of the Cap
Agreement Reserve Fund represented by the Class CX Certificates, together with
the related obligations to make payments to the Class B1, Class B2, Class B3,
Class B4, Class B5, Class B7, Class B10 and Class B11 Certificates, shall be
treated as a grantor trust under the Code and the provisions hereof shall be
interpreted consistently with this intention. In furtherance of such intention,
the Trustee shall (i) furnish to the holders of the Class CX Certificates
information regarding items of income, gain, loss and deduction of such grantor
trust and (ii) file or cause to be filed with the Internal Revenue Service Form
1041 (together with any necessary attachments) or such other form as may be
applicable and (iii) comply with such information reporting obligations with
respect to payments from such grantor trusts as may be applicable under the Code
or other applicable tax laws.
It is intended that the rights of the Class B10, Class B10X, Class B11
and Class B11X Certificates to receive payments in respect of Excess REMIC
Payments shall be treated as rights
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in respect of interest rate cap contracts written by the Class Z
Certificateholders in favor of the holders of the Class B10, Class B10X, Class
B11 and Class B11X Certificates. Such rights shall be accounted for as property
separate and apart from the REMIC 3 Regular Interests represented by the Class
B10, Class B10X, Class B11 and Class B11X Certificates. This provision is
intended to comply with the requirements of Treasury Regulations Section
1.860G-2(i) for the treatment of property rights coupled with regular interests
to be separately respected and shall be interpreted consistently with such
regulation. Each payment made to the Class B10, Class B10X, Class B11 and Class
B11X Certificates in respect of Excess REMIC Payments shall be treated for
federal income tax purposes as having been distributed to the Class Z
Certificates and then paid by the holders of the Class Z Certificates to the
holders of the relevant Class B10, Class B10X, Class B11 and Class B11X
Certificates. Each holder or beneficial owner of a Class B10, Class B10X, Class
B11 and Class B11X and Class Z Certificate, by virtue of its acquisition of such
Certificate or a beneficial interest in such Certificate, agrees to adopt tax
reporting positions consistent with the characterization of payments made to the
Class B10, Class B10X, Class B11 and Class B11X Certificates in respect of
Excess REMIC Payments as payments in respect of interest rate cap agreements
written by the holders of the Class Z Certificates. The parties hereto intend
that the REMIC 3 Regular Interests represented by the Class Z Certificates,
together with the related obligations to make payments to the Class B10, Class
B10X, Class B11 and Class B11X Certificates shall be treated as a grantor trust
under the Code and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall (i) furnish
to the holders of the Class Z Certificates information regarding items of
income, gain, loss and deduction of such grantor trust and (ii) file or cause to
be filed with the Internal Revenue Service Form 1041 (together with any
necessary attachments) or such other form as may be applicable and (iii) comply
with such information reporting obligations with respect to payments from such
grantor trust as may be applicable under the Code or other applicable tax laws.
(o) The Trustee shall provide the Securities Administrator such
information as the Securities Administrator may reasonably request in connection
with its responsibilities under this Section 10.01.
Section 10.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of each REMIC pursuant to Article VII of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement, or (v)
a repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in the
Certificate Account for gain, nor accept any contributions to any REMIC after
the Closing Date, unless it has received an Opinion of Counsel (at the expense
of the party causing such sale, disposition, or substitution) that such
disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of such REMIC as a REMIC or of the Certificates other than
the Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
139
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
In the event that a REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Trustee or the Securities Administrator, as
applicable, of its duties and obligations set forth herein, the Trustee or the
Securities Administrator, as applicable, shall indemnify the Holder of the
Residual Certificate against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that
neither the Trustee nor the Securities Administrator shall be liable for any
such Losses attributable to the action or inaction of the Master Servicer, the
Depositor, or the Holder of such Residual Certificate, as applicable, nor for
any such Losses resulting from misinformation provided by the Holder of such
Residual Certificate on which the Trustee or the Securities Administrator, as
applicable, has relied. The foregoing shall not be deemed to limit or restrict
the rights and remedies of the Holder of such Residual Certificate now or
hereafter existing at law or in equity. Notwithstanding the foregoing, however,
in no event shall the Trustee or the Securities Administrator have any liability
(1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than arising out of a
negligent performance by the Trustee or the Securities Administrator,
respectively, of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
Section 10.04. REO Property.
(a) Notwithstanding any other provision of this Agreement, the
Master Servicer, acting on behalf of the Trustee hereunder, shall not (except to
the extent provided in the applicable Servicing Agreement), permit any Servicer
to, rent, lease, or otherwise earn income on behalf of any REMIC with respect to
any REO Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of section 860G(a)(8) of the Code or
result in the receipt by any REMIC of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Master Servicer has advised, or has caused the applicable Servicer to
advise, the Trustee and the Securities Administrator in writing to the effect
that, under the REMIC Provisions, such action would not adversely affect the
status of any REMIC as a REMIC and any income generated for such REMIC by the
REO Property would not result in the imposition of a tax upon such REMIC.
(b) The Master Servicer shall make, or shall cause the applicable
Servicer to make, reasonable efforts to sell any REO Property for its fair
market value. In any event, however, the Master Servicer shall, or shall cause
the applicable Servicer to, dispose of any REO Property within three years from
the end of the calendar year of its acquisition by the Trust Fund unless the
Trustee has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the applicable REMIC may hold REO
Property for a longer period without adversely
140
affecting the REMIC status of such REMIC or causing the imposition of a Federal
or state tax upon such REMIC. If the Trustee has received such an extension ,
then (a) the Trustee shall provide a copy of such extension to the Master
Servicer and Securities Administrator and (b) the Trustee, or the Master
Servicer, acting on its behalf hereunder, shall, or shall cause the applicable
Servicer to, continue to attempt to sell the REO Property for its fair market
value for such period longer than three years as such extension permits (the
"Extended Period"). If the Trustee has not received such an extension and the
Trustee, or the Master Servicer acting on behalf of the Trustee hereunder, or
the applicable Servicer is unable to sell the REO Property within 33 months
after its acquisition by the Trust Fund or if the Trustee has received such an
extension, and the Trustee, or the Master Servicer acting on behalf of the
Trustee hereunder, is unable to sell the REO Property within the period ending
three months before the close of the Extended Period, the Master Servicer shall,
or shall cause the applicable Servicer to, before the end of the three year
period or the Extended Period, as applicable, (i) purchase such REO Property at
a price equal to the REO Property's fair market value or (ii) auction the REO
Property to the highest bidder (which may be the Master Servicer) in an auction
reasonably designed to produce a fair price prior to the expiration of the
three-year period or the Extended Period, as the case may be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02. Entire Agreement.
This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.
Section 11.03. Amendment.
(a) This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
without notice to or the consent of any of the Holders, (i) to cure any
ambiguity, (ii) to cause the provisions herein to conform to or be consistent
with or in furtherance of the statements made with respect to the Certificates,
the Trust Fund or this Agreement in any Offering Document; or to correct or
supplement any provision herein which may be inconsistent with any other
provisions herein or with the provisions of any Servicing Agreement, (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or (iv) to add, delete, or amend any provisions to the extent
necessary or desirable to comply with any requirements imposed by the Code and
the REMIC
141
Provisions. No such amendment effected pursuant to the preceding sentence shall,
as evidenced by an Opinion of Counsel, adversely affect the status of any REMIC
created pursuant to this Agreement, nor shall such amendment effected pursuant
to clause (iii) of such sentence adversely affect in any material respect the
interests of any Holder. Prior to entering into any amendment without the
consent of Holders pursuant to this paragraph, the Trustee may require an
Opinion of Counsel (at the expense of the party requesting such amendment) to
the effect that such amendment is permitted under this paragraph. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder, if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce, qualify or
withdraw the then current rating assigned to the Certificates (and any Opinion
of Counsel requested by the Trustee in connection with any such amendment may
rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of not less than 66 2/3% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders; provided, however, that no such amendment
shall be made unless the Trustee receives an Opinion of Counsel, at the expense
of the party requesting the change, that such change will not adversely affect
the status of any REMIC as a REMIC or cause a tax to be imposed on such REMIC;
and provided further, that no such amendment may (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 or (ii) reduce the aforesaid percentages of Class Principal
Amount (or Percentage Interest) of Certificates of each Class, the Holders of
which are required to consent to any such amendment without the consent of the
Holders of 100% of the Class Principal Amount (or Class Notional Amount) of each
Class of Certificates affected thereby. For purposes of this paragraph,
references to "Holder" or "Holders" shall be deemed to include, in the case of
any Class of Book-Entry Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to any amendment of any Servicing
Agreement except pursuant to the standards provided in this Section with respect
to amendment of this Agreement.
Section 11.04. Voting Rights.
142
Except to the extent that the consent of all affected Certificateholders
is required pursuant to this Agreement, with respect to any provision of this
Agreement requiring the consent of Certificateholders representing specified
percentages of aggregate outstanding Certificate Principal Amount (or Notional
Amount), Certificates owned by the Depositor, the Securities Administrator, the
Master Servicer, the Trustee or any Servicer or Affiliates thereof are not to be
counted so long as such Certificates are owned by the Depositor, the Securities
Administrator, the Master Servicer, the Trustee or any Servicer or Affiliates
thereof.
Section 11.05. Provision of Information.
(a) For so long as any of the Certificates of any Series or Class
are "restricted securities" within the meaning of Rule 144(a)(3) under the Act,
each of the Depositor, the Master Servicer and the Trustee agree to cooperate
with each other to provide to any Certificateholders and to any prospective
purchaser of Certificates designated by such Certificateholder, upon the request
of such Certificateholder or prospective purchaser, any information required to
be provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Act. Any reasonable, out-of-pocket expenses
incurred by the Trustee or the Securities Administrator in providing such
information shall be reimbursed by the Depositor.
(b) The Securities Administrator will make available to any person
to whom a Prospectus was delivered, upon the request of such person specifying
the document or documents requested, (i) a copy (excluding exhibits) of any
report on Form 8-K or Form 10-K filed with the Securities and Exchange
Commission pursuant to Section 6.20(c) and (ii) a copy of any other document
incorporated by reference in the Prospectus to the extent in the possession of
the Securities Administrator. Any reasonable out-of-pocket expenses incurred by
the Securities Administrator in providing copies of such documents shall be
reimbursed by the Depositor.
(c) [Reserved].
Section 11.06. 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
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW).
Section 11.07. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered to such party at the
relevant address, facsimile number or electronic mail address set forth below
(or at such other address, facsimile number or electronic mail address as such
party may designate from time to time by written notice in accordance with this
Section 11.07): received by (a) in the case of the Depositor, Structured Asset
Securities Corporation, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx Xxxx, (b) in the case of the Securities Administrator, Xxxxx
Fargo Bank, National Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or, for
overnight deliveries,
143
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 21045) (SARM 2005-1) or for purposes
of presentment of Certificates for transfer, exchange and/or payment, the
Securities Administrator's Corporate Trust Office, (c) in the case of the
Certificate Registrar, its Corporate Trust Office, (d) in the case of the
Trustee, HSBC Bank USA, National Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Issuer Services and (e) in the case of the Master
Servicer, Aurora Loan Services LLC, 000 Xxxxxxxxx Xxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx, 00000, Mail Stop Code 3195; Attention: Master Servicing or as to each
party such other address as may hereafter be furnished by such party to the
other parties in writing. Any notice required or permitted to be mailed to a
Holder 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, whether or not the Holder receives such notice.
Section 11.08. 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 11.09. Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
Section 11.10. Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of
reference only, and they shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except to
the extent specified in Section 11.14.
Section 11.12. Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies of
the occurrence of any of the following events of which it has notice:
144
(i) any amendment to this Agreement pursuant to Section
11.03;
(ii) any Assignment by the Master Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the Master Servicer
pursuant to Section 6.14 and any resignation of the Master Servicer
hereunder;
(v) the appointment of any successor to any Master Servicer
pursuant to Section 6.14; and
(vi) the making of a final payment pursuant to Section 7.02.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight courier,
as follows:
If to Moody's, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to S&P, to:
Standard & Poor's
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) The Securities Administrator shall provide or make available to
the Rating Agencies reports prepared pursuant to Section 4.03. In addition, the
Securities Administrator shall, at the expense of the Trust Fund, make available
to each Rating Agency such information as such Rating Agency may reasonably
request regarding the Certificates or the Trust Fund, to the extent that such
information is reasonably available to the Securities Administrator.
Section 11.13. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Section 11.14. Transfer of Servicing.
The Seller agrees that it shall provide written notice to the Trustee,
the Securities Administrator and the Master Servicer thirty days prior to any
transfer or assignment by the Seller of its rights under any Servicing Agreement
or of the servicing thereunder or delegation of its rights or duties thereunder
or any portion thereof to any Person other than the initial Servicer under such
Servicing Agreement; provided that the Seller shall not be required to provide
prior
145
notice of any transfer of servicing that occurs within three months following
the Closing Date to an entity that is a Servicer on the Closing Date. In
addition, the ability of the Seller to transfer or assign its rights and
delegate its duties under a Servicing Agreement or to transfer the servicing
thereunder to a successor servicer shall be subject to the following conditions:
(i) Satisfaction of the conditions to such transfer as set
forth in the Servicing Agreement including, without limitation, receipt
of written consent of the Master Servicer to such transfer;
(ii) Such successor servicer must be qualified to service
loans for FNMA or FHLMC;
(iii) Such successor servicer must satisfy the seller/servicer
eligibility standards in the applicable Servicing Agreement, exclusive
of any experience in mortgage loan origination, and must be reasonably
acceptable to the Master Servicer, whose approval shall not be
unreasonably withheld;
(iv) Such successor servicer must execute and deliver to the
Trustee and the Master Servicer an agreement, in form and substance
reasonably satisfactory to the Trustee, the Securities Administrator and
the Master Servicer, that contains an assumption by such successor
servicer of the due and punctual performance and observance of each
covenant and condition to be performed and observed by the applicable
Servicer under the applicable Servicing Agreement or, in the case of a
transfer of servicing to a party that is already a Servicer pursuant to
this Agreement, an agreement to add the related Mortgage Loans to the
Servicing Agreement already in effect with such Servicer;
(v) If the successor servicer is not a Servicer of Mortgage
Loans at the time of such transfer, there must be delivered to the
Trustee and the Securities Administrator a letter from each Rating
Agency to the effect that such transfer of servicing will not result in
a qualification, withdrawal or downgrade of the then-current rating of
any of the Certificates;
(vi) The Seller shall, at its cost and expense, take such
steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to such successor servicer, including,
but not limited to, the following: (A) to the extent required by the
terms of the Mortgage Loans and by applicable federal and state laws and
regulations, the Seller shall cause the prior Servicer to timely mail to
each obligor under a Mortgage Loan any required notices or disclosures
describing the transfer of servicing of the Mortgage Loans to the
successor servicer; (B) prior to the effective date of such transfer of
servicing, the Seller shall cause the prior Servicer to transmit to any
related insurer notification of such transfer of servicing; (C) on or
prior to the effective date of such transfer of servicing, the Seller
shall cause the prior Servicer to deliver to the successor servicer all
Mortgage Loan Documents and any related records or materials; (D) on or
prior to the effective date of such transfer of servicing, the Seller
shall cause the prior Servicer to transfer to the successor servicer,
or, if such transfer occurs after a Remittance
146
Date but before the next succeeding Master Servicer Remittance Date, to
the Master Servicer, all funds held by the applicable Servicer in
respect of the Mortgage Loans; (E) on or prior to the effective date of
such transfer of servicing, the Seller shall cause the prior Servicer
to, after the effective date of the transfer of servicing to the
successor servicer, continue to forward to such successor servicer,
within one Business Day of receipt, the amount of any payments or other
recoveries received by the prior Servicer, and to notify the successor
servicer of the source and proper application of each such payment or
recovery; and (F) the Seller shall cause the prior Servicer to, after
the effective date of transfer of servicing to the successor servicer,
continue to cooperate with the successor servicer to facilitate such
transfer in such manner and to such extent as the successor servicer may
reasonably request.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
147
IN WITNESS WHEREOF, the Depositor, the Securities Administrator, the
Trustee and the Master Servicer have caused their names to be signed hereto by
their respective officers hereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET SECURITIES CORPORATION,
as Depositor
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
HSBC BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By:
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
AURORA LOAN SERVICES LLC,
as Master Servicer
By:
-----------------------------------
Name: E. Xxxx Xxxxxxxxxx
Title: Executive Vice President
Solely for purposes of Section 11.14,
accepted and agreed to by:
XXXXXX BROTHERS HOLDINGS INC.
By:
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
X-0
XXXXXXX X-0
FORM OF INITIAL CERTIFICATION
Date
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of January 1,
2005 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services LLC, as Master Servicer, Xxxxx
Fargo Bank, National Association, as Securities Administrator
and HSBC Bank USA, National Association, as Trustee, with
respect to Structured Adjustable Rate Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2005-1
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as Custodian on behalf of the
Trustee, hereby certifies that it (or its custodian) has received the documents
listed in Section 2.01(b) of the Trust Agreement for each Mortgage File
pertaining to each Mortgage Loan listed on Schedule A, to the Trust Agreement,
subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Trust Agreement and the Trust Agreement sections cross-referenced
therein.
[Custodian], on behalf of
HSBC Bank USA, National Association,
as Trustee
By:
-------------------------------
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF INTERIM CERTIFICATION
Date
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of January 1,
2005 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services LLC, as Master Servicer, Xxxxx
Fargo Bank, National Association, as Securities Administrator
and HSBC Bank USA, National Association, as Trustee, with
respect to Structured Adjustable Rate Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2005-1
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on Schedule I hereto) it (or its custodian) has
received the applicable documents listed in Section 2.01(b) of the Trust
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents identified above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said
B-3-1
Trust Agreement including, but not limited to, Section 2.02(b).
[Custodian], on behalf of
HSBC Bank USA, National Association,
as Trustee
By:
-------------------------------
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF FINAL CERTIFICATION
Date
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of January 1,
2005 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services LLC, as Master Servicer, Xxxxx
Fargo Bank, National Association, as Securities Administrator
and HSBC Bank USA, National Association, as Trustee, with
respect to Structured Adjustable Rate Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2005-1
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on Schedule I hereto) it (or its custodian) has
received the applicable documents listed in Section 2.01(b) of the Trust
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said
B-4-1
Trust Agreement.
[Custodian], on behalf of
HSBC Bank USA, National Association,
as Trustee
By:
-------------------------------
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF ENDORSEMENT
Pay to the order of HSBC Bank USA, National Association, as trustee (the
"Trustee") under the Trust Agreement dated as of January 1, 2005, among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services LLC,
as Master Servicer, Xxxxx Fargo Bank, National Association, as Securities
Administrator and the Trustee relating to Structured Adjustable Rate Mortgage
Loan Trust Mortgage Pass-Through Certificates, Series 2005-1, without recourse.
-------------------------------
[current signatory on note]
By:
-------------------------------
Name:
Title:
C-1
EXHIBIT C
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
Date
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of January 1, 2005 among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services LLC,
as Master Servicer, Xxxxx Fargo Bank, National Association, as Securities
Administrator and you, as Trustee (the "Trust Agreement"), the undersigned
Master Servicer hereby requests a release of the Mortgage File held by you as
Trustee with respect to the following described Mortgage Loan for the reason
indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The Master Servicer hereby certifies that
all amounts received in connection with the loan have been or will be
credited to the Collection Account or the Certificate Account (whichever
is applicable) pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The Master Servicer hereby certifies that a
Qualifying Substitute Mortgage Loan has been assigned and delivered to
you along with the related Mortgage File pursuant to the Trust
Agreement.)
4. Mortgage Loan repurchased. (The Master Servicer hereby certifies that
the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Trust
Agreement.)
5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Trust Agreement and
will be returned to you within ten (10) days of our receipt of the Mortgage
File, except if the Mortgage Loan has
D-1-1
been paid in full, or repurchased or substituted for a Qualifying Substitute
Mortgage Loan (in which case the Mortgage File will be retained by us
permanently) and except if the Mortgage Loan is being foreclosed (in which case
the Mortgage File will be returned when no longer required by us for such
purpose).
Capitalized terms used herein shall have the meanings ascribed to them
in the Trust Agreement.
-------------------------------
[Name of Master Servicer]
By:
-------------------------------
Name:
Title: Servicing Officer
D-1-2
EXHIBIT D-1
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], ___________ being first duly sworn, deposes and says:
That he [she] is [title of officer] ________________________ of [name of
Purchaser] _________________________________________ (the "Purchaser"), a
_______________________ [description of type of entity] duly organized and
existing under the laws of the [State of __________] [United States], on behalf
of which he [she] makes this affidavit.
1. That the Purchaser's Taxpayer Identification Number is ______________.
2. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as
amended (the "Code") and will not be a "disqualified organization" as of
__________________ [date of transfer], and that the Purchaser is not
acquiring a Residual Certificate (as defined in the Agreement) for the
account of, or as agent (including a broker, nominee, or other
middleman) for, any person or entity from which it has not received an
affidavit substantially in the form of this affidavit. For these
purposes, a "disqualified organization" means the United States, any
state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (other than an instrumentality if all of its activities are
subject to tax and a majority of its board of directors is not selected
by such governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural areas
as described in Code Section 1381(a)(2)(C), any "electing large
partnership" within the meaning of Section 775 of the Code, or any
organization (other than a farmers' cooperative described in Code
Section 521) that is exempt from federal income tax unless such
organization is subject to the tax on unrelated business income imposed
by Code Section 511.
3. That the Purchaser is not, and on _______________ [date of transfer]
will not be, an employee benefit plan or arrangement subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions
under any federal, state, local, non-U.S. or other laws or regulations
that are substantively similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan"), and is not directly or indirectly
acquiring the Residual Certificate for, on behalf of or with any assets
of any such Plan.
D-2-1
4. That the Purchaser hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among Structured Asset Securities
Corporation, HSBC Bank USA, National Association, as Trustee, Xxxxx
Fargo Bank, National Association, as Securities Administrator and Aurora
Loan Services LLC, as Master Servicer, dated as of January 1, 2005, no
transfer of a Residual Certificate shall be permitted to be made to any
person unless the Depositor and the Trustee have received a certificate
from such transferee containing the representations in paragraphs 2, 3
and 4 hereof.
5. That the Purchaser does not hold REMIC residual securities as nominee to
facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations
(such entity, a "Book-Entry Nominee").
6. That the Purchaser does not have the intention to impede the assessment
or collection of any federal, state or local taxes legally required to
be paid with respect to such Residual Certificate, and that the
Purchaser has provided financial statements or other financial
information requested by the transferor in connection with the transfer
of the Residual Certificate in order to permit the transferor to assess
the financial capability of the Purchaser to pay such taxes.
7. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge that
the requirements set forth in paragraph 2, paragraph 5 or paragraph 9
hereof are not satisfied or that the Purchaser has reason to believe
does not satisfy the requirements set forth in paragraph 6 hereof, and
(ii) without obtaining from the prospective Purchaser an affidavit
substantially in this form and providing to the Trustee a written
statement substantially in the form of Exhibit D-2 to the Agreement.
8. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any
cash flows generated by the interest and that it intends to pay taxes
associated with holding such Residual Certificate as they become due.
9. That the Purchaser (i) is a U.S. Person or (ii) is a Non-U.S. Person
that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the
transferor and the Trustee with an effective Internal Revenue Service
Form W-8 ECI (Certificate of Foreign Person's Claim for Exemption From
Withholding on Income Effectively Connected with the Conduct of a Trade
or Business in the United States) or successor form at the time and in
the manner required by the Code. "Non-U.S. Person" means any person
other than (i) a citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia; (iii) a partnership (or entity treated as a
partnership for tax purposes) organized in the United States or under
the laws of the United States or of any state thereof, including, for
this purpose, the District of Columbia (unless provided otherwise by
future Treasury regulations); (iv) an estate whose income is includible
in gross income for United States income tax purposes regardless of its
source; (v) a trust, if a court within the United States is able to
exercise
primary supervision over the administration of the trust and one or more
U.S. Persons have authority to control all substantial decisions of the
trust or; (vi) and, to the extent provided in Treasury regulations,
certain trusts in existence prior to August 20, 1996 that are treated as
United States persons prior to such date and elect to continue to be
treated as United States persons.
10. That the Purchaser agrees to such amendments of the Trust Agreement as
may be required to further effectuate the restrictions on transfer of
any Residual Certificate to such a "disqualified organization," an agent
thereof, a Book-Entry Nominee, or a person that does not satisfy the
requirements of paragraph 6 and paragraph 9 hereof.
11. That the Purchaser consents to the designation of the Securities
Administrator as its agent to act as "tax matters person" of the Trust
Fund pursuant to the Trust Agreement.
Terms used in this transfer affidavit which are not otherwise defined
herein have the respective meanings assigned thereto in the Trust Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________, 20__.
-------------------------------
[name of Purchaser]
By:
-------------------------------
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, 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 Purchaser.
Subscribed and sworn before me this _____ day of __________, 20__.
NOTARY PUBLIC
------------------------------
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________, 20__.
EXHIBIT D-2
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
Date
Re: Structured Adjustable Rate Mortgage Loan Trust Mortgage
Pass-Through Certificates, Series 2005-1
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true and has no reason to believe that the
information contained in paragraph 6 thereof is not true, and has no reason to
believe that the Transferee has the intention to impede the assessment or
collection of any federal, state or local taxes legally required to be paid with
respect to a Residual Certificate. In addition, the Transferor has conducted a
reasonable investigation at the time of the transfer and found that the
Transferee had historically paid its debts as they came due and found no
significant evidence to indicate that the Transferee will not continue to pay
its debts as they become due.
Very truly yours,
-------------------------------
Name:
Title:
E-1
EXHIBIT E
SERVICING AGREEMENTS
[INTENTIONALLY OMITTED]
E-1
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Structured Adjustable Rate Mortgage Loan Trust Mortgage
Pass-Through Certificates, Series 2005-1
Reference is hereby made to the Trust Agreement (the "Trust Agreement"),
dated as of January 1, 2005 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services LLC, as Master Servicer Xxxxx Fargo Bank,
National Association, as Securities Administrator and HSBC Bank USA, National
Association, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Trust Agreement.
This letter relates to $_________ initial Certificate Principal Amount
of Class Certificates which are held in the form of Definitive Certificates
registered in the name of (the "Transferor"). The Transferor has requested a
transfer of such Definitive Certificates for Definitive Certificates of such
Class registered in the name of [insert name of transferee].
In connection with such request, and in respect of such Certificates,
the Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Trust Agreement
and the Certificates and (ii) Rule 144A under the Securities Act to a purchaser
that the Transferor reasonably believes is a "qualified institutional buyer"
within the meaning of Rule 144A purchasing for its own account or for the
account of a "qualified institutional buyer", which purchaser is aware that the
sale to it is being made in reliance upon Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other applicable jurisdiction.
This certificate and the statements contained herein are made for the
benefit of the Trustee, the Securities Administrator, the Placement Agent and
the Depositor.
-------------------------------
[Name of Transferor]
By:
-------------------------------
Name:
Title:
Dated: ___________, ________
G-1
EXHIBIT G
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Structured Adjustable Rate Mortgage Loan Trust Mortgage Pass-Through
Certificates, Series 2005-1 (the "Privately Offered Certificates") of Structured
Asset Securities Corporation (the "Depositor") which are held in the form of
Definitive Certificates, we confirm that:
1. We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell any Privately Offered Certificates within two years of the
later of the date of original issuance of the Privately Offered
Certificates or the last day on which such Privately Offered
Certificates are owned by the Depositor or any affiliate of the
Depositor (which includes the Placement Agent) we will do so only (A) to
the Depositor, (B) to "qualified institutional buyers" (within the
meaning of Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act ("QIBs"), (C) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act, or (D)
to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that
is not a QIB (an "Institutional Accredited Investor") which, prior to
such transfer, delivers to the Trustee under the Trust Agreement (the
"Trust Agreement"), dated as of January 1, 2005 among Structured Asset
Securities Corporation, as Depositor, Aurora Loan Services LLC, as
Master Servicer, Xxxxx Fargo Bank, National Association, as Securities
Administrator and HSBC Bank USA, National Association, as Trustee, a
signed letter in the form of this letter; and we further agree, in the
capacities stated above, to provide to any person purchasing any of the
Privately Offered Certificates from us a notice advising such purchaser
that resales of the Privately Offered Certificates are restricted as
stated herein.
2. We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Trustee, the Certificate Registrar
and the Depositor a certification from such transferee in the form
hereof to confirm that the proposed sale is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. We further understand that the
Privately Offered Certificates purchased by us will bear a legend to the
foregoing effect.
H-1
3. We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
4. We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
5. We have received such information as we deem necessary in order to make
our investment decision.
6. If we are acquiring an ERISA-Restricted Certificate, we are not a Plan
and we are not acquiring the ERISA-Restricted Certificate for, on behalf
of or with any assets of a Plan, except as may be permitted pursuant to
Section 3.03(d) of the Trust Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Trust Agreement.
You and the Depositor, the Securities Administrator and the Trustee are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
-------------------------------
[Purchaser]
By
-------------------------------
Name:
Title:
H-2
EXHIBIT H
[FORM OF ERISA TRANSFER AFFIDAVIT]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
7. The undersigned is the ______________________ of (the "Investor"), a
[corporation duly organized] and existing under the laws of __________,
on behalf of which he makes this affidavit.
8. The Investor (A) is not, and on _______________ [date of transfer] will
not be, an employee benefit plan or arrangement subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions
under any federal, state, local, non-U.S. or other laws or regulations
that are substantively similar to the foregoing provisions of ERISA or
the Code ("Similar Law") (collectively, a "Plan"), and is not directly
or indirectly acquiring the Certificate for, on behalf of or with any
assets of any such Plan, (B) if the Certificate has been the subject of
an ERISA-Qualifying Underwriting, is an insurance company that is
acquiring the Certificate with assets of an "insurance company general
account" as defined in Section V(E) of Prohibited Transaction Class
Exemption ("PTCE") 95-60 and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE
95-60, or (C) solely in the case of a Definitive Certificate, shall
herewith deliver an Opinion of Counsel satisfactory to the Certificate
Registrar, the Trustee and the Depositor, and upon which the Trustee,
the Certificate Registrar and the Depositor shall be entitled to rely,
to the effect that the acquisition and holding of such Certificate by
the Investor will not result in a nonexempt prohibited transaction under
Title I of ERISA or Section 4975 of the Code, or a violation of Similar
Law, and will not subject the Trustee, the Master Servicer, the
Securities Administrator, the Certificate Registrar, any Servicer or the
Depositor to any obligation in addition to those undertaken by such
entities in the Trust Agreement, which Opinion of Counsel shall not be
an expense of the Trustee, the Master Servicer, the Securities
Administrator, the Certificate Registrar, any Servicer or the Depositor.
9. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among Structured Asset Securities
Corporation, as Depositor, Aurora Loan Services LLC, as Master Servicer,
Xxxxx Fargo Bank, National Association and HSBC Bank USA, National
Association, as Trustee, dated as of January 1, 2005, no transfer of the
ERISA-Restricted Certificates (other than the Class R Certificate) shall
be permitted to be made to any person unless the Depositor, the
Certificate Registrar and Trustee have received an affidavit from such
transferee in the form hereof or an opinion of counsel as provided
herein.
I-1
10. Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Trust Agreement.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 20__.
-------------------------------
[Investor]
By:
-------------------------------
Name:
Title:
ATTEST:
-------------------------
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named ___________________, known
or proved to me to be the same person who executed the foregoing instrument and
to be the _________________ of the Investor, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this _____ day of ___________ 20___.
-------------------------------
NOTARY PUBLIC
My commission expires the
____ day of __________, 20__.
EXHIBIT I
MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
I-1
EXHIBIT J
MONTHLY ELECTRONIC DATA TRANSMISSION
[INTENTIONALLY OMITTED]
J-1
EXHIBIT K
CUSTODIAL AGREEMENTS
[INTENTIONALLY OMITTED]
I-1
EXHIBIT L-1
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM RESTRICTED GLOBAL SECURITY
TO REGULATION S GLOBAL SECURITY
(Transfers pursuant to Section 3.03(h)(B)
of the Agreement)
Re: Structured Adjustable Rate Mortgage Loan Trust Mortgage
Loan Trust Mortgage Pass-Through Certificates, Series
2005-1
Reference is hereby made to the Trust Agreement (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services LLC,
as Master Servicer, Xxxxx Fargo Bank, National Association and HSBC Bank USA,
National Association, as Trustee, dated as of January 1, 2005. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Agreement.
This letter relates to U.S. $ aggregate principal amount of Securities
which are held in the form of a Restricted Global Security with DTC in the name
of [name of transferor] (the "Transferor") to effect the transfer of the
Securities in exchange for an equivalent beneficial interest in a Regulation S
Global Security.
In connection with such request, the Transferor does hereby certify that
such transfer has been effected in accordance with the transfer restrictions set
forth in the Agreement and the Securities and in accordance with Rule 904 of
Regulation S, and that:
a. the offer of the Securities was not made to a person in
the United States;
b. at the time the buy order was originated, the transferee
was outside the United States or the Transferor and any person acting on
its behalf reasonably believed that the transferee was outside the
United States;
c. no directed selling efforts have been made in
contravention of the requirements of Rule 903 or 904 of Regulation S, as
applicable;
d. the transaction is not part of a plan or scheme to evade
the registration requirements of the United States Securities Act of
1933, as amended; and
e. the transferee is not a U.S. person (as defined in
Regulation S).
The Depositor, the Securities Administrator and the Trustee are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
[Name of Transferor]
L-2-1
By:
-------------------------------
Name:
Title:
Date: _____________, ____
X-0-0
XXXXXXX X-0
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL SECURITY
TO RESTRICTED GLOBAL SECURITY
(Transfers pursuant to Section 3.03(h)(C)
of the Agreement)
Re: Structured Adjustable Rate Mortgage Loan Trust Mortgage
Pass-Through Certificates, Series 2005-1
Reference is hereby made to the Trust Agreement (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services LLC,
as Master Servicer, Xxxxx Fargo Bank, National Association and HSBC Bank USA,
National Association, as Trustee, dated as of January 1, 2005. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Agreement.
This letter relates to U.S. $ aggregate principal amount of Securities
which are held in the form of a Regulations S Global Security in the name of
[name of transferor] (the "Transferor") to effect the transfer of the Securities
in exchange for an equivalent beneficial interest in a Restricted Global
Security.
In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Agreement and the
Securities and (ii) Rule 144A under the United States Securities Act of 1933, as
amended, to a transferee that the Transferor reasonably believes is purchasing
the Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion, the transferee and any such
account is a qualified institutional buyer within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
[Name of Transferor]
By:
-------------------------------
Name:
Title:
Date: ______________, ___
M-1
EXHIBIT M
FORM OF CERTIFICATION TO BE PROVIDED TO
THE DEPOSITOR AND THE MASTER SERVICER BY THE SECURITIES
ADMINISTRATOR
Structured Asset Securities Corporation
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Structured Adjustable Rate Mortgage Loan Trust, Mortgage Pass-Through
Certificates, Series 2005-1
I, [[Identify the certifying individual]], a [[title]] of Xxxxx Fargo Bank,
National Association, as Securities Administrator, hereby certify to Aurora Loan
Services, Inc., as master servicer (the "Master Servicer"), and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
(i) I have reviewed the annual report on Form 10-K for the fiscal year [[
]], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report,
relating to the above referenced trust;
(ii) Based on my knowledge, the information in these distribution reports
prepared by the Securities Administrator, taken as a whole, does not
contain any untrue statement of a material fact or omit to state
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as
of the last day of the period covered by that annual report; and
(iii) Based on my knowledge, the distribution information required to be
provided by Securities Administrator under the Trust Agreement is
included in these reports.
Date:
Xxxxx Fargo Bank, National Association,
as Securities Administrator
By:
-------------------------------
Name:
Title:
N-1
EXHIBIT N
FORM OF CAP AGREEMENT
[INTENTIONALLY OMITTED]
N-1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
Sch. B-1
