EXHIBIT 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
XXXXX FARGO BANK, N.A.
Trustee
and
WILSHIRE CREDIT CORPORATION,
Servicer
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
-------------------------------
FIRST FRANKLIN MORTGAGE LOAN TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-FF6
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES......................................................46
SECTION 2.01. Conveyance of Mortgage Loans.......................................................................46
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans....................................................50
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.........................................51
SECTION 2.04. Representations and Warranties of the Servicer.....................................................54
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are not "Qualified Mortgages."...............56
SECTION 2.06. Authentication and Delivery of Certificates........................................................56
SECTION 2.07. REMIC Elections....................................................................................56
SECTION 2.08. [RESERVED].........................................................................................60
SECTION 2.09. Covenants of the Servicer..........................................................................60
SECTION 2.10. [RESERVED].........................................................................................60
SECTION 2.11. Permitted Activities of the Trust..................................................................60
SECTION 2.12. Qualifying Special Purpose Entity..................................................................60
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................................................................61
SECTION 3.01. Servicer to Service Mortgage Loans.................................................................61
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of Servicer.............................62
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Servicer.................................63
SECTION 3.04. Trustee to Act as Servicer.........................................................................63
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account; Certificate Account......................64
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts................................67
SECTION 3.07. Access to Certain Documentation and Information Regarding the Mortgage Loans.......................68
SECTION 3.08. Permitted Withdrawals from the Collection Account and Certificate Account..........................68
SECTION 3.09. [RESERVED].........................................................................................70
SECTION 3.10. Maintenance of Hazard Insurance....................................................................70
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements..........................................71
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds........................72
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files....................................................75
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be Held for the Trustee..................76
SECTION 3.15. Servicing Compensation.............................................................................76
SECTION 3.16. Access to Certain Documentation....................................................................77
SECTION 3.17. Annual Statement as to Compliance..................................................................77
i
TABLE OF CONTENTS
(continued)
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial Statements...................77
SECTION 3.19. Rights of the NIMs Insurer.........................................................................77
SECTION 3.20. Periodic Filings...................................................................................78
SECTION 3.21. Annual Certificate by Trustee......................................................................78
SECTION 3.22. Annual Certificate by Servicer.....................................................................79
SECTION 3.23. Prepayment Charge Reporting Requirements...........................................................80
SECTION 3.24. Statements to Trustee..............................................................................80
SECTION 3.25. Indemnification....................................................................................80
SECTION 3.26. Nonsolicitation....................................................................................81
SECTION 3.27. [RESERVED].........................................................................................81
SECTION 3.28. High Cost Mortgage Loans...........................................................................81
ARTICLE IV DISTRIBUTIONS.....................................................................................................81
SECTION 4.01. Advances...........................................................................................81
SECTION 4.02. Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls..............82
SECTION 4.03. Distributions on the REMIC Interests...............................................................83
SECTION 4.04. Distributions......................................................................................83
SECTION 4.05. Monthly Statements to Certificateholders...........................................................89
ARTICLE V THE CERTIFICATES..................................................................................................92
SECTION 5.01. The Certificates...................................................................................92
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates........................93
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..................................................96
SECTION 5.04. Persons Deemed Owners..............................................................................97
SECTION 5.05. Access to List of Certificateholders' Names and Addresses..........................................97
SECTION 5.06. Book-Entry Certificates............................................................................97
SECTION 5.07. Notices to Depository..............................................................................98
SECTION 5.08. Definitive Certificates............................................................................98
SECTION 5.09. Maintenance of Office or Agency....................................................................99
ARTICLE VI THE DEPOSITOR AND THE SERVICER....................................................................................99
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer...........................................99
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer...........................................99
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others..................................99
SECTION 6.04. Limitation on Resignation of Servicer.............................................................100
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds....................................................100
ARTICLE VII DEFAULT; TERMINATION OF SERVICER.................................................................................101
SECTION 7.01. Events of Default.................................................................................101
SECTION 7.02. Trustee to Act; Appointment of Successor..........................................................102
SECTION 7.03. Notification to Certificateholders................................................................103
ii
TABLE OF CONTENTS
(continued)
ARTICLE VIII CONCERNING THE TRUSTEE...........................................................................................103
SECTION 8.01. Duties of the Trustee.............................................................................103
SECTION 8.02. Certain Matters Affecting the Trustee.............................................................104
SECTION 8.03. Trustee Not Liable for Mortgage Loans.............................................................106
SECTION 8.04. Trustee May Own Certificates......................................................................106
SECTION 8.05. Trustee's Fees and Expenses.......................................................................106
SECTION 8.06. Indemnification of Trustee........................................................................106
SECTION 8.07. Eligibility Requirements for Trustee..............................................................107
SECTION 8.08. Resignation and Removal of Trustee................................................................107
SECTION 8.09. Successor Trustee.................................................................................108
SECTION 8.10. Merger or Consolidation of Trustee................................................................109
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.....................................................109
SECTION 8.12. Tax Matters.......................................................................................110
ARTICLE IX TERMINATION......................................................................................................112
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans..................................112
SECTION 9.02. Final Distribution on the Certificates............................................................113
SECTION 9.03. Additional Termination Requirements...............................................................114
ARTICLE X MISCELLANEOUS PROVISIONS.........................................................................................115
SECTION 10.01. Amendment.........................................................................................115
SECTION 10.02. Counterparts......................................................................................117
SECTION 10.03. Governing Law.....................................................................................117
SECTION 10.04. Intention of Parties..............................................................................117
SECTION 10.05. Notices...........................................................................................118
SECTION 10.06. Severability of Provisions........................................................................119
SECTION 10.07. Assignment; Advance Facility......................................................................119
SECTION 10.08. Limitation on Rights of Certificateholders........................................................120
SECTION 10.09. Inspection and Audit Rights.......................................................................121
SECTION 10.10. Certificates Nonassessable and Fully Paid.........................................................121
SECTION 10.11. Third Party Rights................................................................................121
SECTION 10.12. Additional Rights of the NIMs Insurer.............................................................121
iii
TABLE OF CONTENTS
(continued)
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B-1 MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2 MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE 144A INVESTMENT LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M [RESERVED]
EXHIBIT N-1 FORM OF CLASS A-1 CAP CONTRACT
EXHIBIT N-2 FORM OF CLASS A-2 CAP CONTRACT
EXHIBIT N-3 FORM OF SUBORDINATED CERTIFICATE CAP CONTRACT
EXHIBIT O-1 ONE-MONTH LIBOR CAP TABLE - CLASS A-1 CAP
EXHIBIT O-2 ONE MONTH LIBOR CAP TABLE - CLASS A-2 CAP
EXHIBIT O-3 ONE MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP CONTRACT
iv
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of May
1, 2005, among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation,
as depositor (the "Depositor"), XXXXX FARGO BANK, N.A, a national banking
association, as trustee (the "Trustee") and WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as servicer (the "Servicer").
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) two real estate mortgage investment conduits in
a tiered structure, (ii) the right to receive payments distributable to the
Class P Certificates pursuant to Section 4.04(b)(i) hereof, (iii) each Cap
Contract and the Cap Contract Account and (iv) the grantor trusts described in
Section 2.07 hereof. The Lower Tier REMIC will consist of all of the assets
constituting the Trust Fund (other than the assets described in clauses (ii),
(iii) and (iv) above and the Lower Tier REMIC Regular Interests) and will be
evidenced by the Lower Tier REMIC Regular Interests (which will be
uncertificated and will represent the "regular interests" in the Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest" in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular Interests and will
be evidenced by the REMIC Regular Interests (which will represent the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as the single
"residual interest" in the Upper Tier REMIC. The Class R Certificate will
represent beneficial ownership of the Class LTR Interest and the Residual
Interest. The "latest possible maturity date" for federal income tax purposes of
all interests created hereby will be the Latest Possible Maturity Date.
All covenants and agreements made by the Seller in the Sale
Agreement and by the Depositor and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust Fund are for the
benefit of the Holders from time to time of the Certificates and, to the extent
provided herein, the NIMs Insurer.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing
practices, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions that service for their own account mortgage loans
of the same type as the Mortgages Loans in the jurisdictions in which the
related Mortgaged Properties (or Underlying Mortgaged Properties in the case of
Co-op Loans) are located.
Accrual Period: With respect to each Class of Certificates and the
Lower Tier REMIC Interests and any Distribution Date, the period commencing on
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date
on which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such advances being equal to the sum of the aggregate amount of
all payments of principal and interest (net of the Servicing Fee) on the
Mortgage Loans that were due during the applicable Due Period and not received
as of the close of business on the related Determination Date, less the
aggregate amount of any such Delinquent payments that the Servicer has
determined would constitute a Non-Recoverable Advance were an advance to be made
with respect thereto.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the sum of the Class A-1A Certificate Principal Balance, the
Class A-1B Certificate Principal Balance, the Class A-2A Certificate Principal
Balance, the Class A-2B Certificate Principal Balance, the Class A-2C
Certificate Principal Balance, the Class R Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5 Certificate Principal Balance, the Class B-1
Certificate Principal Balance, the Class B-2 Certificate Principal Balance, the
Class B-3 Certificate Principal Balance and the Class B-4 Certificate Principal
Balance, in each case as of such date of determination.
Agreement: This
Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which were used to purchase the related Mortgaged Property (or the related
residential dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan), the "Appraised Value" of a Mortgaged Property (or the related
residential dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan) is the lesser of (1) the appraised value based on an appraisal made
for the Seller by an independent fee appraiser at the time of the origination of
the related Mortgage Loan, and (2) the sales price of such Mortgaged Property
(or the related residential dwelling unit in the Underlying Mortgaged Property
in the case of a Co-op Loan) at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property in
the case of a Co-op Loan) based upon the appraisal obtained at the time of
refinancing.
-2-
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer (or UCC-3 assignment (or equivalent instrument) with respect to each
Co-op Loan) or equivalent instrument, in recordable form (except in the case of
a Co-op Loan) (except for the name of the assignee if such Mortgage Loan is
endorsed in blank), sufficient under the laws of the jurisdiction where the
related Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan) is located to reflect of record the sale and assignment of the
Mortgage Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
Auction: The one-time auction conducted by the Trustee, as described
in Section 9.01(b) hereof.
Auction Date: The date on which the Auction occurs.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the
Class A-2 Available Funds Cap or the Subordinated Certificate Available Funds
Cap.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each of the Class A (other than the Class R Certificate), Class M and
Class B Certificates constitutes a Class of Book-Entry Certificates.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2)
a day on which banking institutions in the State of California, State of
Maryland, State of Minnesota, State of Oregon or in the City of
New York,
New
York are authorized or obligated by law or executive order to be closed.
Cap Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract or the Subordinated Certificate Cap Contract.
Cap Contract Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.04(k)(i) in the name of the
Trustee for the benefit of the Trust Fund and designated "Xxxxx Fargo Bank,
N.A., as Trustee, as trustee, in trust for registered holders of First Franklin
Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-FF6."
Funds in the Cap Contract Account shall be held in trust for the Trust Fund for
the uses and purposes set forth in this Agreement.
Cap Contract Counterparty: Credit Suisse First Boston International.
Cap Contract Notional Balance: Any of the Class A-1 Cap Contract
Notional Balance, the Class A-2 Cap Contract Notional Balance or the
Subordinated Certificate Cap Contract Notional Balance.
Cap Contract Termination Date: Any of the Class A-1 Cap Contract
Termination Date, the Class A-2 Cap Contract Termination Date or the
Subordinated Certificate Cap Contract Termination Date.
Certificate: Any one of the certificates of any Class executed by
the Trustee and authenticated by the Trustee in substantially the forms attached
hereto as Exhibits A.
Certificate Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(e) in the name of the Trustee
for the benefit of the Certificateholders and designated "Xxxxx Fargo Bank,
N.A., as trustee, in trust for registered holders of First Franklin Mortgage
Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-FF6." Funds in
the Certificate
-3-
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or Certificate
Group Two.
Certificate Group One: The Class A-1A, Class A-1B and Class R
Certificates. For purposes of Section 2.07 hereof, Certificate Group One shall
be related to Group One.
Certificate Group Two: The Class A-2A, Class A-2B and Class A-2C
Certificates. For purposes of Section 2.07 hereof, Certificate Group Two shall
be related to Group Two.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced by the
amount of the increase in the Certificate Principal Balance of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section
5.02 hereof.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The NIMs Insurer and the Trustee are entitled to rely conclusively on
a certification of the Depositor or any Affiliate of the Depositor in
determining which Certificates are registered in the name of an Affiliate of the
Depositor.
Class: All Certificates bearing the same Class designation as set
forth in Section 5.01 hereof.
-4-
Class A Certificate Principal Balance: For any date of
determination, the sum of the Class A-1A Certificate Principal Balance, the
Class A-1B Certificate Principal Balance, the Class A-2A Certificate Principal
Balance, the Class A-2B Certificate Principal Balance, the Class A-2C
Certificate Principal Balance and the Class R Certificate Principal Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class
A-2 Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution Date (1) prior to the Stepdown Date or any Distribution Date on
which a Stepdown Trigger Event exists, 100% of the Principal Distribution Amount
for such Distribution Date and (2) on or after the Stepdown Date where a
Stepdown Trigger Event does not exist, the excess of (A) the Class A Certificate
Principal Balance immediately prior to such Distribution Date over (B) the
lesser of (i) 59.60% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (ii) the excess of the
Stated Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount;
provided, however, that in no event will the Class A Principal Distribution
Amount with respect to any Distribution Date exceed the aggregate Certificate
Principal Balance of the Class A Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date,
the per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Mortgage Loans in Group One based on the Net
Mortgage Rates in effect on the related Due Date divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group One as of the first day
of the related Accrual Period (or, in the case of the first Distribution Date,
as of the Cut-off Date) and (iii) 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 A-1 Cap Contract: The amended confirmation and agreement and
any related confirmation thereto, between the Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of Exhibit N-1 hereto).
Class A-1 Cap Contract Notional Balance: With respect to any
Distribution Date, the Class A-1 Cap Contract Notional Balance set forth for
such Distribution Date in the Class A-1 One-Month LIBOR Cap Table attached
hereto as Exhibit O-1.
Class A-1 Cap Contract Termination Date: The Distribution Date in
October 2008.
Class A-1 Certificates: Any of the Class A-1A and Class A-1B
Certificates.
Class A-1 Maximum Rate Cap: With respect to a Distribution Date, the
per annum rate, adjusted to reflect the length of the related Accrual Period,
equal to the weighted average of the maximum lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group One and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group One. The Class A-1 Maximum Rate Cap shall
relate to the Class A-1 and Class R Certificates.
Class A-1 Trigger Event: The situation that exists if (a) with
respect to any Distribution Date, a Stepdown Trigger Event exists or (b) on any
Distribution Date prior to the Distribution Date in June 2008, the quotient
(expressed as a percentage) of (1) the aggregate Realized Losses incurred from
the Cut-off Date through the last day of the calendar month preceding such
Distribution Date and (2) the aggregate principal balance of the Mortgage Loans
as of the Cut-off Date exceeds 2.75%.
-5-
Class A-1 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class A-1 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.740% per annum.
Class A-1A Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1A Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class A-1A
Certificates.
Class A-1A Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-1A
Pass-Through Rate on the Class A-1A Certificate Principal Balance as of such
Distribution Date plus the portion of any previous distributions on such Class
in respect of Class A-1A Current Interest or a Class A-1A Interest Carry Forward
Amount that is recovered as a voidable preference by a trustee in bankruptcy,
less any Non-Supported Interest Shortfall allocated on such Distribution Date to
the Class A-1A Certificates.
Class A-1A Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class A-1A Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class A-1A Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class A-1A Pass-Through Rate
for the related Accrual Period.
Class A-1A Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date, 0.250% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.500% per annum.
Class A-1A Pass-Through Rate: For the first Distribution Date,
3.340% per annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR plus the Class A-1A Margin and (2) the Class A-1 Available Funds
Cap for such Distribution Date.
Class A-1B Certificate: Any Certificate designated as a "Class A-1B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1B Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class A-1B
Certificates.
Class A-1B Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-1B
Pass-Through Rate on the Class A-1B Certificate Principal Balance as of such
Distribution Date plus the portion of any previous distributions on such Class
in respect of Class A-1B Current Interest or a Class A-1B Interest Carry Forward
Amount that is recovered as a voidable preference by a trustee in bankruptcy,
less any Non-Supported Interest Shortfall allocated on such Distribution Date to
the Class A-1B Certificates.
Class A-1B Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class A-1B Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class A-1B Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class A-1B Pass-Through Rate
for the related Accrual Period.
-6-
Class A-1B Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.300% per annum
and, as of any Distribution Date after the Optional Termination Date, 0.600% per
annum.
Class A-1B Pass-Through Rate: For the first Distribution Date,
3.390% per annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR plus the Class A-1B Margin and (2) the Class A-1 Available Funds
Cap for such Distribution Date.
Class A-2 Available Funds Cap: With respect to a Distribution Date,
the per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Mortgage Loans in Group Two based on the Net
Mortgage Rates in effect on the related Due Date divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group Two as of the first day
of the related Accrual Period (or, in the case of the first Distribution Date,
as of the Cut-off Date) and (iii) 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 A-2 Cap Contract: The amended confirmation and agreement and
any related confirmation thereto, between the Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of Exhibit N-2 hereto).
Class A-2 Cap Contract Notional Balance: With respect to any
Distribution Date, the Class A-2 Cap Contract Notional Balance set forth for
such Distribution Date in the Class A-2 One-Month LIBOR Cap Table attached
hereto as Exhibit O-2.
Class A-2 Cap Contract Termination Date: The Distribution Date in
September 2008.
Class A-2 Certificates: Any of the Class A-2A, Class A-2B and Class
A-2C Certificates.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date, the
per annum rate, adjusted to reflect the length of the related Accrual Period,
equal to the weighted average of the maximum lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group Two and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group Two. The Class A-2 Maximum Rate Cap shall
relate to the Class A-2 Certificates.
Class A-2 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class A-2 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.310% per annum.
Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class A-2A
Certificates.
Class A-2A Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-2A
Pass-Through Rate on the Class A-2A Certificate Principal Balance as of such
Distribution Date plus the portion of any previous distributions on such Class
in respect of Class A-2A Current Interest or a Class A-2A Interest Carry Forward
Amount that is recovered as a voidable preference by a trustee in bankruptcy,
less any Non-Supported Interest Shortfall allocated on such Distribution Date to
the Class A-2A Certificates.
-7-
Class A-2A Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class A-2A Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class A-2A Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class A-2A Pass-Through Rate
for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.100% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.200% per annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
3.190% per annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR plus the Class A-2A Margin and (2) the Class A-2 Available Funds
Cap for such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class A-2B
Certificates.
Class A-2B Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-2B
Pass-Through Rate on the Class A-2B Certificate Principal Balance as of such
Distribution Date plus the portion of any previous distributions on such Class
in respect of Class A-2B Current Interest or a Class A-2B Interest Carry Forward
Amount that is recovered as a voidable preference by a trustee in bankruptcy,
less any Non-Supported Interest Shortfall allocated on such Distribution Date to
the Class A-2B Certificates.
Class A-2B Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class A-2B Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class A-2B Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class A-2B Pass-Through Rate
for the related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.220% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.440% per annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
3.310% per annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR plus the Class A-2B Margin and (2) the Class A-2 Available Funds
Cap for such Distribution Date.
Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class A-2C
Certificates.
Class A-2C Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-2C
Pass-Through Rate on the Class A-2C Certificate Principal Balance as of such
Distribution Date plus the portion of any previous distributions on such Class
in respect of Class A-2C Current Interest or a Class A-2C Interest Carry Forward
Amount that is recovered as a voidable
-8-
preference by a trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on such Distribution Date to the Class A-2C Certificates.
Class A-2C Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class A-2C Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class A-2C Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class A-2C Pass-Through Rate
for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.350% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.700% per annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
3.440% per annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR plus the Class A-2C Margin and (2) the Class A-2 Available Funds
Cap for such Distribution Date.
Class B Certificates: Any of the Class B-1, Class B-2, Class B-3 or
Class B-4 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class B-1 Pass-Through
Rate on the Class B-1 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
B-1 Current Interest or a Class B-1 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-1 Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class B-1 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class B-1 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class B-1 Pass-Through Rate
for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 1.180% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
1.770% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 4.270%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class B-1 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
-9-
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance and the Class M Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (F) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Principal Distribution
Amount on such Distribution Date) and (G) the Class B-1 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
89.40% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates and
Class M Certificates has been reduced to zero, the Class B-1 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class B-1 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A
Certificates and Class M Certificates and (II) in no event will the Class B-1
Principal Distribution Amount with respect to any Distribution Date exceed the
Class B-1 Certificate Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class B-2 Pass-Through
Rate on the Class B-2 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
B-2 Current Interest or a Class B-2 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-2 Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class B-2 Current Interest with
respect to prior Distribution Dates over (B) the amount actually
-10-
distributed to the Class B-2 Certificates with respect to Current Interest or
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class B-2
Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 1.270% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
1.905% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 4.360%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class B-2 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class M Certificate Principal Balance and the Class B-1
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Class M-4 Certificate
Principal Balance (after taking into account distributions of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class M-5
Certificate Principal Balance (after taking into account distributions of the
Class M-5 Principal Distribution Amount on such Distribution Date), (G) the
Class B-1 Certificate Principal Balance (after taking into account distributions
of the Class B-1 Principal Distribution Amount on such Distribution Date) and
(H) the Class B-2 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 91.60% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances of the Mortgage Loans
as of the end of the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M and Class B-1 Certificates has been
reduced to zero, the Class B-2 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class B-2
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M and Class B-1 Certificates and (II)
in no event will the Class B-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-2 Certificate Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
-11-
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-3
Certificates.
Class B-3 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class B-3 Pass-Through
Rate on the Class B-3 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
B-3 Current Interest or a Class B-3 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-3 Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class B-3 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class B-3 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class B-3 Pass-Through Rate
for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 1.700% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
2.550% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 4.790%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class B-3 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class M Certificate Principal Balance, the Class B-1
Certificate Principal Balance and the Class B-2 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance (after taking into account distributions of the Class M-5 Principal
Distribution Amount on such Distribution Date), (G) the Class B-1 Certificate
Principal Balance (after taking into account distributions of the Class B-1
Principal Distribution Amount on such Distribution Date), (H) the Class B-2
Certificate Principal Balance (after taking into account distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date) and (I) the
Class B-3 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 93.20% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M, Class B-1 and Class B-2 Certificates
has been reduced to
-12-
zero, the Class B-3 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class B-3 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M, Class B-1 and Class B-2 Certificates and (II) in no
event will the Class B-3 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-3 Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance"
Class B-4 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-4
Certificates.
Class B-4 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class B-4 Pass-Through
Rate on the Class B-4 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
B-4 Current Interest or a Class B-4 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-4 Certificates.
Class B-4 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class B-4 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class B-4 Certificates with respect to Current Interest and Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class B-4 Pass-Through Rate
for the related Accrual Period.
Class B-4 Margin: As of any Distribution Date up to and including
the Optional Termination Date for the Certificates, 3.000% per annum, and, as of
any Distribution Date after the Optional Termination Date, 4.500% per annum.
Class B-4 Pass-Through Rate: For the first Distribution Date, 6.090%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class B-4 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class M Certificate Principal Balance, the Class B-1
Certificate Principal Balance, the Class B-2 Certificate Principal Balance and
the Class B-3 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class
-13-
M-1 Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distributions of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distributions of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Class B-1 Certificate Principal Balance
(after taking into account distributions of the Class B-1 Principal Distribution
Amount on such Distribution Date), (H) the Class B-2 Certificate Principal
Balance (after taking into account distributions of the Class B-2 Principal
Distribution Amount on such Distribution Date), (I) the Class B-3 Certificate
Principal Balance (after taking into account distributions of the Class B-3
Principal Distribution Amount on such Distribution Date) and (J) the Class B-4
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 95.20% of the Stated Principal Balances of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class M, Class B-1, Class B-2 and Class B-3 Certificates has been reduced to
zero, the Class B-4 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class B-4 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M, Class B-1, Class B-2 and Class B-3 Certificates and
(II) in no event will the Class B-4 Principal Distribution Amount with respect
to any Distribution Date exceed the Class B-4 Certificate Principal Balance.
Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class B-4 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class B-4 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class C Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to 99.95% of the aggregate principal balance of
the Lower Tier REMIC Regular Interests immediately prior to such Distribution
Date (such amount of interest representing a "specified portion" (within the
meaning of Treasury Regulations Section 1.860G-1(a)(2)(i)(C)) of interest
payments on the Lower Tier REMIC Regular Interests (other than the Class LTII1B
Interest and the Class LTII2B Interest)), plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class C Certificates.
-14-
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC I Marker Interests and the Class LTIX Interest (treating for purposes of
this clause (b) the interest rate on each of the Lower Tier REMIC I Marker
Interests as being subject to a cap and a floor equal to the interest rate of
the Corresponding Certificates and treating the Class LTIX Interest as being
capped at zero). The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the Lower Tier
REMIC Regular Interests immediately prior to any date of determination.
Class C Interest Carry Forward Amount: As of any Distribution Date,
the excess of (A) the Class C Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class C
Certificates with respect to interest on such prior Distribution Dates or added
to the aggregate Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class C Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class LTA-1A Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificates and an interest rate equal
to the Net Rate.
Class LTA-1B Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTA-2A Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTA-2B Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTA-2C Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTB-2 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTB-3 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
-15-
Class LTB-4 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTIX Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial prinicipal balance equal to the excess of (i) 50% of
the aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC I Marker Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to the excess of (i)
50% of the aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the initial principal balance of the Lower Tier REMIC II Marker Interests,
and with an interest rate equal to the Net Rate.
Class LTII1A Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 0.05% of the excess
of (i) the aggregate Cut-off Date Principal Balance of the Group One Mortgage
Loans over (ii) the aggregate of the initial Certificate Principal Balances of
Certificate Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off Date Principal Balance of the Group One Mortgage Loans, and
with an interest rate equal to the Class A-1 Available Funds Cap.
Class LTII2A Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 0.05% of the excess
of (i) the aggregate Cut-off Date Principal Balance of the Group Two Mortgage
Loans over (ii) the aggregate of the initial Certificate Principal Balances of
Certificate Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage Loans, and
with an interest rate equal to the Class A-2 Available Funds Cap.
Class LTM-1 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTM-2 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTM-4 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTM-5 Interest: An uncertificated regular interest in the
Lower Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
-16-
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3
Certificates, Class M-4 Certificates and Class M-5 Certificates.
Class M Certificate Principal Balance: For any date of
determination, the sum of the Class M-1 Certificate Principal Balance, the Class
M-2 Certificate Principal Balance, the Class M-3 Certificate Principal Balance,
the Class M-4 Certificate Principal Balance and the Class M-5 Certificate
Principal Balance.
Class M-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-1 Pass-Through
Rate on the Class M-1 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
M-1 Current Interest or a Class M-1 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class M-1 Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class M-1 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class M-1 Pass-Through Rate
for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.420% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.630% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 3.510%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-1 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance has been reduced to zero and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date) and (B) the Class M-1 Certificate Principal Balance immediately prior to
such Distribution Date over (2) the lesser of (A) 68.80% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances for the Mortgage
Loans as of the end of the immediately preceding Due Period over the Minimum
Required Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
-17-
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A Certificates and (II) in no event will the Class M-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-1
Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-2 Pass-Through
Rate on the Class M-2 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
M-2 Current Interest or a Class M-2 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class M-2 Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class M-2 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class M-2 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class M-2 Pass-Through Rate
for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.440% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.660% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 3.530%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-2 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance and the Class M-1 Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such
-18-
Distribution Date) and (C) the Class M-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 74.40% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates and the
Class M-1 Certificates has been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-2 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A
Certificates and Class M-1 Certificates and (II) in no event will the Class M-2
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-3
Certificates.
Class M-3 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-3 Pass-Through
Rate on the Class M-3 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
M-3 Current Interest or a Class M-3 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class M-3 Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class M-3 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class M-3 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class M-3 Pass-Through Rate
for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.470% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.705% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 3.560%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-3 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
-19-
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance and Class M-2
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date) and (D) the Class M-3 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
78.00% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates and the Class M-2 Certificates has been reduced to zero,
the Class M-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-3 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M-1 and Class M-2 Certificates and (II) in no event will the
Class M-3 Principal Distribution Amount with respect to any Distribution Date
exceed the Class M-3 Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-4Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-4
Certificates.
Class M-4 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-4 Pass-Through
Rate on the Class M-4 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
M-4 Current Interest or a Class M-4 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class M-4 Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class M-4 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class M-4 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class M-4 Pass-Through Rate
for the related Accrual Period.
-20-
Class M-4 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.650% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
0.975% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 3.740%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-4 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance, Class M-2
Certificate Principal Balance and Class M-3 Certificate Principal Balance have
been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date) and (E) the Class M-4 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 84.30% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of the Class A Certificates, the
Class M-1 Certificates, the Class M-2 Certificates and the Class M-3
Certificates has been reduced to zero, the Class M-4 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class M-4 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M-1, Class M-2
and Class M-3 Certificates and (II) in no event will the Class M-4 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-4
Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-5
Certificates.
Class M-5 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-5 Pass-Through
Rate on the Class M-5 Certificate Principal Balance as of such Distribution Date
plus the portion of any previous distributions on such Class in respect of Class
M-
-21-
5 Current Interest or a Class M-5 Interest Carry Forward Amount that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class M-5 Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution
Date, the sum of (1) the excess of (A) the Class M-5 Current Interest with
respect to prior Distribution Dates over (B) the amount actually distributed to
the Class M-5 Certificates with respect to Current Interest or Interest Carry
Forward Amounts on such prior Distribution Dates and (2) interest on such excess
(to the extent permitted by applicable law) at the Class M-5 Pass-Through Rate
for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including
the Initial Optional Termination Date for the Certificates, 0.690% per annum
and, as of any Distribution Date after the Initial Optional Termination Date,
1.035% per annum.
Class M-5 Pass-Through Rate: For the first Distribution Date, 3.780%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-5 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance, Class M-2
Certificate Principal Balance, Class M-3 Certificate Principal Balance and Class
M-4 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date) and (F) the
Class M-4 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 87.10% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of the Class A Certificates, the Class M-1 Certificates,
the Class M-2 Certificates, the Class M-3 Certificates and the Class M-4
Certificates has been reduced to zero, the Class M-5 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class M-5 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M-1, Class M-2,
Class M-3 and Class M-4 Certificates and (II) in no event will the Class M-5
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-5 Certificate Principal Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-5 Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-5 Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
-22-
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class R Certificate: Any Certificate designated as a "Class R
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class R Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class R
Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Class R
Current Interest or a Class R Interest Carry Forward Amount that is recovered as
a voidable preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class R
Certificate.
Class R Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class R Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to Current Interest or Interest Carry Forward Amounts
on such prior Distribution Dates and (2) interest on such excess (to the extent
permitted by applicable law) at the Class R Pass-Through Rate for the related
Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.250% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.500% per
annum.
Class R Pass-Through Rate: For the first Distribution Date, 3.340%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class R Margin and (2) the Class A-1 Available Funds Cap for such
Distribution Date.
Closing Date: May 26, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and
initially maintained by the Servicer pursuant to Section 3.05(d) in the name of
the Trustee for the benefit of the Certificateholders and designated "Wilshire
Credit Corporation, as servicer for Xxxxx Fargo Bank, N.A., as Trustee, in trust
for registered holders of First Franklin Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-FF6." Funds in the Collection Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Compensating Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the portion of any Prepayment Interest
Shortfalls required to be deposited in the Collection Account by the Servicer
pursuant to Section 4.02 hereof.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related mortgage
loan documents on the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan).
-23-
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Corresponding Certificates: With respect to the Class LTA-1A
Interest, the Class A-1A and Class R Certificates. With respect to the Class
LTA-1B Interest, the Class A-1B Certificates. With respect to the Class LTA-2A
Interest, the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the Class A-2B Certificates. With respect to the Class LTA-2C
Interest, the Class A-2C Certificates. With respect to the Class LTM-1 Interest,
the Class M-1 Certificates. With respect to the Class LTM-2 Interest, the Class
M-2 Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates. With respect to the Class LTB-4 Interest, the Class B-4
Certificates.
Current Interest: Any of the Class A-1A Current Interest, the Class
A-1B Current Interest, the Class A-2A Current Interest, the Class A-2B Current
Interest, the Class A-2C Current Interest, the Class R Current Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5 Current
Interest, the Class B-1 Current Interest, the Class B-2 Current Interest, the
Class B-3 Current Interest, the Class B-4 Current Interest and the Class C
Current Interest.
Cut-off Date: May 1, 2005.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is "30
days delinquent" if such payment has not been received by the close of business
on the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware
corporation, or any successor in interest.
-24-
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of
New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates, the agreement between the Trustee and the initial Depository.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying
the Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th
day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or
political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (2) any
organization (other than a cooperative described in Section 521 of the Code)
which is exempt from tax under Chapter 1 of Subtitle A of the Code unless such
organization is subject to the tax imposed by Section 511 of the Code and (3)
any organization described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such
25th day is not a Business Day, the next succeeding Business Day, commencing in
June 2005.
Due Date: With respect to any Distribution Date and any Mortgage
Loan, the day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a
depository institution the long-term unsecured debt obligations of which are
rated by each Rating Agency in one of its two highest rating categories, or (ii)
maintained with the corporate trust department of a bank which (A) has a rating
of at least Baa3 or P-3 by Xxxxx'x and (B) is either the Depositor or the
corporate trust department of a national bank or banking corporation which has a
rating of at least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts
the deposits in which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable to each Rating Agency without reduction or withdrawal of
the rating of any Class of Certificates, as evidenced in writing, by a
depository institution in which such accounts are insured by the FDIC (to the
limit established by the FDIC), the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
and acceptable to the Trustee, the NIMs Insurer and each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account and a
perfected first security interest against any collateral (which shall be limited
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors
-25-
of the depository institution with which such account is maintained, or (v)
maintained at an eligible institution whose commercial paper, short-term debt or
other short-term deposits are rated at least A-1+ by S&P and F-1+ by Fitch, or
(vi) maintained with a federal or state chartered depository institution the
deposits in which are insured by the FDIC to the applicable limits and the
short-term unsecured debt obligations of which (or, in the case of a depository
institution that is a subsidiary of a holding company, the short-term unsecured
debt obligations of such holding company) are rated A-1 by S&P or Prime-1 by
Xxxxx'x at the time any deposits are held on deposit therein, or (vii) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity, that is acceptable to the Rating Agencies or (viii) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency to the Trustee and the NIMs Insurer.
ERISA: The Employee Retirement Income Security Act of 1974,
including any successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
ERISA Restricted Certificates: The Class B-4, Class C, Class P and
Class R Certificates and any other Certificate, unless the acquisition and
holding of such other Certificate is covered by and exempt under the
Underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for each Class of the
Class A, Class M and Class B Certificates, the excess, if any, of (1) the amount
of interest such Class of Certificates is entitled to receive on such
Distribution Date at its Pass-Through Rate over (2) the amount of interest such
Class of Certificates would have been entitled to receive on such Distribution
Date had the Pass-Through Rate for such Class been the REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (1) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (2)
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced to Certificateholders (and not reimbursed to the Servicer) up
to the Due Date in the month in which such Liquidation Proceeds are required to
be distributed on the unpaid principal balance of such Liquidated Loan
outstanding during each Due Period as to which such interest was not paid or
advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any
Distribution Date, (1) prior to the Stepdown Date, the excess of (A) the sum of
(i) the Aggregate Certificate Principal Balance immediately preceding such
Distribution Date reduced by the Principal Funds with respect to such
Distribution Date and (ii) $26,478,532 over (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date and (2) on and after
the Stepdown Date, (A) the sum of (x) the Aggregate Certificate Principal
Balance immediately preceding such Distribution Date, reduced by the Principal
Funds with respect to such Distribution Date and (y) the greater of (a) 4.80% of
the aggregate Stated Principal Balance of the Mortgage Loans as of such
Distribution Date and (b) the Minimum Required
-26-
Overcollateralization Amount less (B) the aggregate Stated Principal Balance of
the Mortgage Loans as of such Distribution Date; provided, however, that if on
any Distribution Date a Stepdown Trigger Event is in effect, the Extra Principal
Distribution Amount will not be reduced to the applicable percentage of the
then-current aggregate Stated Principal Balance of the Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.
Xxxxxx Xxx: A federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution
Date, in the event that the Pass-Through Rate for a class of Class A, Class M or
Class B Certificates is based upon the related Available Funds Cap, the excess
of (1) the amount of interest that such Class would have been entitled to
receive on such Distribution Date had the Pass-Through Rate for that Class not
been calculated based on the related Available Funds Cap, up to but not
exceeding the amount of interest that such Class would be entitled to, based on
the greater of (x) the related Maximum Rate Cap or (y) the sum of (i) the
related Available Funds Cap and (ii) the product of (A) a fraction, the
numerator of which is 360 and the denominator of which is the actual number of
days in the related Accrual Period and (B) the quotient obtained by dividing (I)
an amount equal to the proceeds, if any, payable under the related Cap Contract
with respect to such Distribution Date by (II) the aggregate Certificate
Principal Balance of each of the Classes of Certificates to which such Cap
Contract relates for such Distribution Date over (2) the amount of interest such
class was entitled to receive on such Distribution Date based on the related
Available Funds Cap, together with (i) the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving effect to the applicable Available
Funds Cap) and (ii) any amount previously distributed with respect to Floating
Rate Certificate Carryover for such class that is recovered as a voidable
preference by a trustee in bankruptcy.
Xxxxxxx Mac: A corporate instrumentality of the United States
created and existing under Title III of the Emergency Home Finance Act of 1970,
as amended, or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note
for each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group
One" in the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified in
the Group One Mortgage Loan Schedule attached hereto as Exhibit B-2.
-27-
Group One Principal Distribution Amount: As of any Distribution
Date, the amount equal to the lesser of (i) the aggregate Certificate Principal
Balance of the Class A-1 and Class R Certificates and (ii) the product of (x)
the Group One Principal Distribution Percentage and (y) the Class A Principal
Distribution Amount; provided, however, that with respect to any Distribution
Date on which the Class A-1 and Class R Certificates are outstanding and the
Certificate Principal Balance of the Class A-2 Certificates has been reduced to
zero, the Group One Principal Distribution Amount will equal the Class A
Principal Distribution Amount.
Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group One and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group
Two" in the Prospectus Supplement.
Group Two Mortgage Loan: Any Mortgage Loan at any time identified in
the Group Two Mortgage Loan Schedule attached hereto as Exhibit B-3.
Group Two Principal Distribution Amount: As of any Distribution
Date, the amount equal to the lesser of (i) the aggregate Certificate Principal
Balance of the Class A-2 Certificates and (ii) the product of (x) the Group Two
Principal Distribution Percentage and (y) the Class A Principal Distribution
Amount; provided, however, that with respect to any Distribution Date on which
the Class A-2 Certificates are outstanding and the Certificate Principal
Balances of the Class A-1 and Class R Certificates have been reduced to zero,
the Group Two Principal Distribution Amount will equal the Class A Principal
Distribution Amount.
Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group Two and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
Indenture: An indenture relating to the issuance of notes guaranteed
by the NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan,
the first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
in effect prior to the Initial Adjustment Date.
Initial Optional Termination Date: The first Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans is equal to
or less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect with respect to such Mortgage
-28-
Loan or Mortgaged Property (or related Underlying Mortgage Property, in the case
of a Co-op Loan), including any replacement policy or policies for any insurance
policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or
the related Mortgaged Property (or the related Underlying Mortgaged Property, in
the case of a Co-op Loan) pursuant to any Insurance Policy or any other
insurance policy covering such Mortgage Loan or Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), to the extent such
proceeds are payable to the mortgagee under the Mortgage, the Servicer or the
trustee under the deed of trust and are not applied to the restoration of the
related Mortgaged Property (or the related Underlying Mortgaged Property, in the
case of a Co-op Loan) or released to the Mortgagor on the related Mortgaged
Property (or the related Underlying Mortgaged Property in the case of a Co-op
Loan) in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property (or the related Underlying Mortgaged Property, in the case of a Co-op
Loan).
Interest Carry Forward Amount: Any of the Class A-1A Interest Carry
Forward Amount, the Class A-1B Interest Carry Forward Amount, the Class A-2A
Interest Carry Forward Amount, the Class A-2B Interest Carry Forward Amount, the
Class A-2C Interest Carry Forward Amount, the Class R Interest Carry Forward
Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward Amount, the
Class B-1 Interest Carry Forward Amount, the Class B-2 Interest Carry Forward
Amount, the Class B-3 Interest Carry Forward Amount, the Class B-4 Interest
Carry Forward Amount or the Class C Interest Carry Forward Amount, as the case
may be.
Interest Determination Date: With respect to the Certificates, the
second LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Funds: With respect to any Distribution Date, the sum,
without duplication, of (1) all scheduled interest due during the related Due
Period and received before the related Servicer Remittance Date or advanced on
or before the related Servicer Remittance Date less the Servicing Fee, (2) all
Advances relating to interest with respect to the Mortgage Loans and such
Distribution Date, (3) all Compensating Interest with respect to the Mortgage
Loans and such Distribution Date, (4) Liquidation Proceeds with respect to the
Mortgage Loans (to the extent such Liquidation Proceeds relate to interest)
collected during the related Prepayment Period, (5) all proceeds of any purchase
pursuant to Section 2.02 or 2.03 during the related Prepayment Period or
pursuant to Section 9.01 not later than the related Determination Date (to the
extent that such proceeds relate to interest) less the Servicing Fee and (6) all
Prepayment Charges received with respect to the Mortgage Loans during the
related Prepayment Period, less (A) all Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable to the Servicer and the Trustee
pursuant to this Agreement.
Latest Possible Maturity Date: The latest maturity date for any
Mortgage Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London,
England and
New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
-29-
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that, pursuant to Section 3.12, has been realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee's sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which the
Servicer has certified (in accordance with Section 3.12) in the related
Prepayment Period that it has received all amounts it expects to receive in
connection with such liquidation.
Liquidation Proceeds: Amounts, including Condemnation Proceeds,
Insurance Proceeds, received in connection with the partial or complete
liquidation of a Mortgage Loan, whether through trustee's sale, foreclosure
sale, sale by the Servicer pursuant to this Agreement or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with the final sale of a
related REO Property, less the sum of related unreimbursed Advances, Servicing
Fees, Servicing Advances and any other expenses related to such Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the original
principal balance of the related Mortgage Loan and the denominator of which is
the lesser of (x) the Appraised Value of the related Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan) and (y) the sales price
of the related Mortgaged Property (or applicable dwelling unit, in the case of a
Co-op Loan) at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section 2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the
Class LTA-1B Interest, the Class LTA-2A Interest, the Class LTA-2B Interest, the
Class LTA-2C Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the
Class LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest, the
Class LTB-1 Interest, the Class LTB-2 Interest, the Class LTB-3 Interest, the
Class LTB-4 Interest, the Class LTIX Interest, the Class LTIIX Interest, the
Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A Interest, the
Class LTII2B Interest and the Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower
Tier REMIC Regular Interests other than the Class LTIX Interest, the Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class LTII2B Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A
Interest, the Class LTII1B Interest, the Class LTII2A Interest and the Class
LTII2B Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the
principal balance of the Class LTII1A Interest to (ii) the principal balance of
the Class LTII2A Interest that is equal to the ratio of (i) the excess of (A)
the aggregate Stated Principal Balance of the Group One Mortgage Loans over (B)
the current Certificate Principal Balances of the Class A-1 and Class R
Certificates to (ii) the excess of (A) the aggregate Stated Principal Balance of
the Group Two Mortgage Loans over (B) the current Certificate Principal Balance
of the Class A-2 Certificates.
-30-
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note and with respect to each Fixed Rate Mortgage Loan, the rate of interest set
forth in the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class
A-2 Maximum Rate Cap or the Subordinated Certificate Maximum Rate Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgage
electronically maintained by MERS.
MIN: The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
Minimum Required Overcollateralization Amount: An amount equal to
the product of (x) 0.50% and (y) the Stated Principal Balances of the Mortgage
Loans as of the Cut-off Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Excess Interest Amount: With respect to each Distribution
Date, the amount, if any, by which the Interest Funds for such Distribution Date
exceeds the aggregate amount distributed on such Distribution Date pursuant to
Section 4.04(b) (other than the last clause thereof).
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in
interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the mortgage, deed of trust or other instrument with all riders attached thereto
creating a first lien or a first priority ownership interest in an estate in fee
simple in real property securing a Mortgage Note. With respect to a Co-op Loan,
the security agreement with all riders attached thereto creating a security
interest in the stock allocated to a dwelling unit in a residential cooperative
housing corporation and pledged to secure such Co-op Loan and the related Co-op
Lease.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the Trustee pursuant to the provisions hereof as from time to time are held
as a part of the Trust Fund (including any REO Properties), the mortgage loans
so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property. Any
mortgage loan that was
-31-
intended by the parties hereto to be transferred to the Trust Fund as indicated
by such Mortgage Loan Schedule which is in fact not so transferred for any
reason shall continue to be a Mortgage Loan hereunder until the Purchase Price
with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to
time amended by the Trustee to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Exhibits X-0, X-0 and
B-3, setting forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining
before maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect
to a Mortgage Loan;
(x) a code indicating whether the residential dwelling at
the time of origination was represented to be
owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of each Adjustment Date;
(B) the next Adjustment Date;
(C) the Maximum Mortgage Rate;
(D) the Minimum Mortgage Rate;
(E) the Mortgage Rate as of the Cut-off Date;
(F) the related Periodic Rate Cap;
(G) the Gross Margin;
(H) the lifetime rate cap;
-32-
(xiii) location of the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan);
(xiv) a code indicating whether a Prepayment Charge is
applicable and, if so the term of such Prepayment Charge;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto with all riders
attached thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the then current Mortgage Rate less the Servicing Fee
Rate.
Net Rate: With respect to any Distribution Date, the product of (x)
the weighted average Net Mortgage Rate for the Mortgage Loans calculated based
on the respective Net Mortgage Rates and the Stated Principal Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
Net WAC: With respect to any Distribution Date and any Mortgage
Group, a per annum rate equal to 12 times the quotient obtained by dividing (x)
the total scheduled interest on the Mortgage Loans in such Mortgage Group based
on the Net Mortgage Rates in effect on the related Due Date by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in such Mortgage Group as of the
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Cut-off Date).
NIM Notes: The notes to be issued pursuant to the Indenture.
NIMs Insurer: Any of the one or more insurers, if any, that is
guaranteeing certain payments under any NIM Notes; provided, that upon the
payment in full of the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.
NIMs Insurer Default: As defined in Section 10.12.
Non-Recoverable Advance: Any portion of an Advance previously made
or proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise with respect to the related Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance previously made or proposed to be made by the Servicer that, in the good
faith judgment of the Servicer, will not or, in the
-33-
case of a current Servicing Advance, would not, be ultimately recoverable by the
Servicer from the related Mortgagor, related Liquidation Proceeds or otherwise
with respect to the related Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A-1, Class A-2, Class M, Class B-1,
Class B-2, Class B-3 and Class R Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a vice president
(however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries of the
Depositor or the Servicer (or any other officer customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with a particular subject) or (2),
if provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor, the Servicer or the Trustee, as the case
may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be
the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of
0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be
the higher of (i) One-Month LIBOR as determined on the
previous Interest Determination Date and (ii) the
Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, reasonably acceptable to each addressee of
such opinion; provided, however, that with respect to Section 6.04 or 10.01, or
the interpretation or application of the REMIC Provisions, such counsel must (1)
in fact be independent of the Depositor and the Servicer, (2) not have any
direct financial interest in the Depositor or the Servicer or in any affiliate
of any such party and (3) not be connected with the Depositor or the Servicer as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Optional Termination: The termination of the Trust Fund hereunder
pursuant to Section 9.01(a) hereof.
Optional Termination Amount: The amount received by the Trustee in
connection with any purchase of all of the Mortgage Loans and REO Properties
pursuant to Section 9.01(b) hereof.
-34-
Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee (including any
reasonable fees and expenses incurred by the Trustee in connection with
conducting the Auction) or the Servicer and any unpaid or unreimbursed Servicing
Fees, Advances and Servicing Advances and (C) any unreimbursed costs, penalties
and/or damages incurred by the Trust Fund in connection with any violation
relating to any of the Mortgage Loans of any predatory or abusive lending law.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess of (1) the Stated Principal Balances of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to the Class A-1A Certificates, the
Class A-1A Pass-Through Rate; with respect to the Class A-1B Certificates, the
Class A-1B Pass-Through Rate; with respect to the Class A-2A Certificates, the
Class A-2A Pass-Through Rate; with respect to the Class A-2B Certificates, the
Class A-2B Pass-Through Rate; with respect to the Class A-2C Certificates, the
Class A-2C Pass-Through Rate; with respect to the Class M-1 Certificates, the
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class B-1 Certificates, the
Class B-1 Pass-Through Rate; with respect to the Class B-2 Certificates, the
Class B-2 Pass-Through Rate; with respect to the Class B-3 Certificates, the
Class B-3 Pass-Through Rate; with respect to the Class B-4 Certificates, the
Class B-4 Pass-Through Rate; and, with respect to the Class R Certificate, the
Class R Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest evidenced by such Class
which shall be equal to the Certificate Principal
Balance
-35-
of such Class divided by the aggregate Certificate
Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced
thereby of the related Class shall equal the percentage
obtained by dividing the Denomination of such
Certificate by the aggregate of the Denominations of all
Certificates of such Class; except that in the case of
any Class P Certificates, the Percentage Interest with
respect to such Certificate shown on the face of such
Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the Trust Fund
created pursuant to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor
and other assets of the Trust Fund, including the Cap
Contracts and any credit enhancement and passive
derivative financial instruments that pertain to
beneficial interests issued or sold to parties other
than the Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets
of the Trust Fund;
(iii) receiving collections on the Mortgage Loans and the Cap
Contracts and making payments on such Certificates and
interests in accordance with the terms of this
Agreement; and
(iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which
activities cannot be contrary to the status of the Trust
Fund as a qualified special purpose entity under
existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith
and credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia
receiving the highest long-term debt rating of each
Rating Agency rating the Certificates;
(iii) commercial or finance company paper, other than
commercial or finance company paper issued by the
Depositor, the Trustee or any of its Affiliates, which
is then receiving the highest commercial or finance
company paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
banker's acceptances (other than bankers' acceptances
issued by the Trustee or any of its Affiliates) issued
by any depository institution or trust company
incorporated under the laws of the United States or of
any state thereof and subject to supervision and
examination by federal and/or state banking authorities,
provided that the commercial paper and/or long term
unsecured debt obligations of such depository
institution or trust
-36-
company are then rated one of the two highest long-term
and the highest short-term ratings of each such Rating
Agency for such securities;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings
institution to the extent that such deposits are fully
insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two
highest long-term or the highest short-term ratings of
each Rating Agency containing, at the time of the
issuance of such agreements, such terms and conditions
as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any such
Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case
entered into with a depository institution or trust
company (acting as principal) described in clause (v)
above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of
115% of the face amount thereof) bearing interest or
sold at a discount issued by any corporation, other than
the Trustee or any of its Affiliates, incorporated under
the laws of the United States or any state thereof
which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency;
(ix) interests in any money market fund (including those
managed or advised by the Trustee or its affiliates)
which at the date of acquisition of the interests in
such fund and throughout the time such interests are
held in such fund has the highest applicable long term
rating by each Rating Agency rating such fund; and
(x) short term investment funds sponsored by any trust
company or national banking association incorporated
under the laws of the United States or any state
thereof, other than the Trustee or any of its
Affiliates, which on the date of acquisition has been
rated by each such Rating Agency in their respective
highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer and/or the Trustee shall receive an Opinion of
Counsel acceptable to the Servicer and/or the Trustee, at the expense of the
party requesting that such investment be made, to the effect that such
investment will not adversely affect the status of the any REMIC provided for
herein as a REMIC under the Code or result in imposition of a tax on the Trust
Fund or any REMIC provided for herein and
-37-
(II) each such investment must be a "permitted investment" within the meaning of
Section 860G(a)(5) of the Code. Permitted Investments that are subject to
prepayment or call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI or applicable successor form. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances, as of such Distribution Date, of the
Mortgage Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j) hereof.
Prepayment Assumption: A rate or rates of prepayment, as described
in the Prospectus Supplement in the definition of "Modeling Assumptions,"
relating to the Offered Certificates or as described in the Private Placement
Memorandum relating to the Class B-4 Certificates.
Prepayment Charges: Any prepayment premium, fee or charge payable by
a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note or Mortgage, as applicable,
as identified on the Mortgage Loan Schedule.
Prepayment Interest Excess: With respect to any Servicer Remittance
Date, for each Mortgage Loan that was the subject of a partial Principal
Prepayment or a Principal Prepayment in full during the portion of the related
Prepayment Period occurring between the first day of the calendar month in which
such Servicer Remittance Date occurs and the last day of the related Prepayment
Period, an amount equal to interest (to the extent received) at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month in which such
-38-
Servicer Remittance Date occurs and ending on the date on which such Principal
Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full (other than a Principal Prepayment in full resulting from the purchase of a
Mortgage Loan pursuant to Section 2.02, 2.03 or 9.01 hereof), the amount, if
any, by which (i) one month's interest at the applicable Net Mortgage Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date or in the case of a partial Principal Prepayment, on the
amount of such prepayment, exceeds (ii) the amount of interest paid or collected
in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period beginning
with the opening of business on the 15th day of the calendar month preceding the
month in which such Distribution Date occurs (or in the case of the first
Distribution Date, beginning with the opening of business on the Cut-off Date)
and ending on the close of business on the 14th day of the month in which such
Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution
Date, the sum of (i) the Principal Funds for such Distribution Date and (ii) any
Extra Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution Date, the sum, without duplication, of (1) all scheduled principal
due during the related Due Period and received before the related Servicer
Remittance Date or advanced on or before the related Servicer Remittance Date,
(2) all Principal Prepayments collected in the related Prepayment Period, (3)
the Stated Principal Balance of each Mortgage Loan that was purchased by the
Depositor or the Servicer during the related Prepayment Period or, in the case
of a purchase pursuant to Section 9.01, on any Business Day prior to such
Distribution Date, (4) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loan is less than the aggregate
unpaid principal of the related Deleted Mortgage Loans delivered by the Seller
in connection with a substitution of a Mortgage Loan pursuant to Section
2.03(c), (5) all Liquidation Proceeds collected during the related Prepayment
Period (to the extent such Liquidation Proceeds related to principal), (6) all
Subsequent Recoveries received during the related Due Period and (7) all other
collections and recoveries in respect of principal during the related Prepayment
Period less (A) all Non-Recoverable Advances relating to principal with respect
to the Mortgage Loans and (B) all other amounts reimbursable to the Servicer and
the Trustee pursuant to this Agreement and allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03 and 9.01 hereof) that is
received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.
Private Placement Memorandum: The Private Placement Memorandum dated
May 2, 2005 relating to the private placement of the Class B-4 Certificates.
Prospectus Supplement: The Prospectus Supplement dated May 24, 2005
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
-39-
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance of the Mortgage
Loan as of the date of such purchase together with any related unreimbursed
Servicing Advances, (ii) accrued interest thereon at the applicable Mortgage
Rate from (a) the date through which interest was last paid by the Mortgagor to
(b) the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders and (iii) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund (or the Trustee on behalf of the Trust Fund) in
connection with any violation relating to such Mortgage Loan of any predatory or
abusive lending law.
Rating Agency: Any of Fitch, S&P or Xxxxx'x. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (1) a Liquidated Loan, the amount, if
any, by which the Stated Principal Balance and accrued interest thereon at the
Net Mortgage Rate exceeds the amount actually recovered by the Servicer with
respect thereto (net of reimbursement of Advances and Servicing Advances) at the
time such Mortgage Loan became a Liquidated Loan or (2) a Mortgage Loan which is
not a Liquidated Loan, any amount of principal that the Mortgagor is no longer
legally required to pay (except for the extinguishment of debt that results from
the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs.
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank, N.A., Xxxxx Fargo Bank, N.A. and NatWest, N.A.; provided that if any
of the foregoing banks are not suitable to serve as a Reference Bank, then any
leading banks selected by the Trustee with the consent of the NIMs Insurer which
are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, England
and (ii) whose quotations appear on the Reuters Screen LIBO Page on the relevant
Interest Determination Date and (iii) which have been designated as such by the
Servicer.
Regular Certificate: Any one of the Class A, Class M, and Class B
Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar state
or local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code. References herein to "the REMICs" or "a
REMIC" shall mean any of (or, as the context requires, all of) the Lower Tier
REMIC and the Upper Tier REMIC.
REMIC Pass-Through Rate: The Class A-1 Available Funds Cap (in the
case of a Class included in Certificate Group One), the Class A-2 Available
Funds Cap (in the case of a Class included in Certificate Group Two) or the
Subordinated Certificate Available Funds Cap (in the case of the Subordinated
Certificates).
-40-
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 2.07 and (ii) the Uncertificated Class C Interest.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer, on
behalf of the Trustee for the benefit of the Certificateholders, through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan; (5) have a remaining term to maturity no
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan; (6) provide for a Prepayment Charge on terms substantially similar to
those of the Prepayment Charge, if any, of the Deleted Mortgage Loan; (7) have
the same lien priority as the Deleted Mortgage Loan; (8) constitute the same
occupancy type as the Deleted Mortgage Loan; and (9) comply with each
representation and warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents submitted
by the Servicer to the Trustee, substantially in the form of Exhibit I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Required Percentage: With respect to any Distribution Date, the
quotient of (1) the excess of (A) the Stated Principal Balances of the Mortgage
Loans as of such Distribution Date, over (B) the Certificate Principal Balance
of the most senior Class of Certificates outstanding as of such Distribution
Date, prior to giving effect to distributions to be made on such Distribution
Date and (2) the Stated Principal Balance of the Mortgage Loans as of such
Distribution Date. As used herein, on any Distribution Date when any of the
Class A Certificates are outstanding, the Certificate Principal Balance of the
most senior Class of
-41-
Certificates will equal the aggregate Certificate Principal Balance of the Class
A Certificates as of such date of calculation.
Reserve Interest Rate: With respect to any Interest Determination
Date, the rate per annum that the Trustee determines to be (1) the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of 0.03125%) of
the one-month United States dollar lending rates which
New York City banks
selected by the Trustee are quoting on the relevant Interest Determination Date
to the principal London offices of leading banks in the London interbank market
or (2) in the event that the Trustee can determine no such arithmetic mean, the
lowest one-month United States dollar lending rate which
New York City banks
selected by the Trustee are quoting on such Interest Determination Date to
leading European banks.
Residual Excess Interest Amount: With respect to any Distribution
Date, the excess of (x) 0.05% of the Monthly Excess Interest Amount for such
Distribution Date and all prior Distribution Dates over (y) all payments
previously made to the Class R Certificate in respect of the Residual Excess
Interest Amount.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled to all distributions of principal and interest on the Class R
Certificate other than distributions in respect of the Class LTR Interest and
distributions on the Class R Certificate in respect of Excess Interest.
Responsible Officer: When used with respect to the Trustee or the
Servicer, any officer of the Trustee or the Servicer with direct responsibility
for the administration of this Agreement and also means any other officer to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace such
LIBO page on that service for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's Ratings Services, a Division of The
XxXxxx-Xxxx Companies, Inc., or any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement
dated as of May 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
Section 302 Requirements: Any rules or regulations promulgated
pursuant to the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to
time).
Securities Act: The Securities Act of 1933, as amended.
Seller: Xxxxxxx Xxxxx Mortgage Capital, Inc., a Delaware
corporation, or its successors in interest.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related
Servicer Remittance Date.
-42-
Servicer Remittance Date: With respect to any Distribution Date, the
later of (A) two Business Days after the 15th day of the month in which such
Distribution Date occurs and (B) the 18th day (or if such day is not a Business
Day, the next succeeding Business Day) of the month in which such Distribution
Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance of the Servicer's
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, inspection, restoration and protection of a Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan), including
without limitation advances in respect of real estate taxes and assessments, (2)
any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (3) the conservation,
management, sale and liquidation of any REO Property, (4) executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage to the extent not otherwise recovered from the related Mortgages or
payable under this Agreement, (5) correcting errors of prior servicers; costs
and expenses charged to the Servicer by the Trustee; tax tracking; title
research; flood certifications; lender paid mortgage insurance, (6) obtaining or
correcting any legal documentation required to be included in the Mortgage Files
and reasonably necessary for the Servicer to perform its obligations under this
Agreement and (7) compliance with the obligations under Sections 3.01 and 3.10;
provided that such amounts are required to be advanced only to the extent such
advances constitute "unanticipated expenses" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii).
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount equal to the product of (x) the Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such lists may from time to time be amended.
Servicing Transfer Costs: All costs associated with the transfer of
servicing from the predecessor Servicer, including, without limitation, any
costs or expenses associated with the termination of the predecessor Servicer,
the appointment of a successor servicer, the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee or any successor servicer to correct any errors
or insufficiencies in the servicing data or otherwise to enable the Trustee or
successor servicer to service the Mortgage Loans properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (1) as of the Cut-off Date, the Cut-off Date Principal
Balance thereof, and (2) as of any Distribution Date, such Cut-off Date
Principal Balance, minus the sum of (A) the principal portion of the Scheduled
Payments (x)
-43-
due with respect to such Mortgage Loan during each Due Period ending prior to
such Distribution Date and (y) that were received by the Servicer as of the
close of business on the Determination Date related to such Distribution Date or
with respect to which Advances were made on the Servicer Advance Date prior to
such Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
Stepdown Date: The later to occur of (1) the Distribution Date in
June 2008 or (2) the first Distribution Date on which (A) the Class A
Certificate Principal Balance (reduced by the Principal Funds with respect to
such Distribution Date) is less than or equal to (B) 59.60% of the Stated
Principal Balances of the Mortgage Loans as of such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------ ---------------------------------
June 2008 -- May 2009 2.75% with respect to June 2008,
plus an additional 1/12th of 1.50%
for each month thereafter
June 2009 -- May 2010 4.25% with respect to June 2009,
plus an additional 1/12th of 1.00%
for each month thereafter
June 2010 -- May 2011 5.25% with respect to June 2010,
plus an additional 1/12th of 0.75%
for each month thereafter
June 2011 and thereafter 6.00%
Stepdown Trigger Event: With respect to the Certificates on or after
the Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties
and Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 38.00%
and (ii) the Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds
the Stepdown Required Loss Percentage.
Subordinated Certificate Available Funds Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted average (weighted in
proportion to the results of subtracting the current Certificate Principal
Balance of the related Class A Certificates from the aggregate Stated Principal
Balance of the Mortgage Loans in each Mortgage Group as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Cut-off Date)) of the Class A-1 Available Funds Cap and the Class A-2
Available Funds Cap.
-44-
Subordinated Certificate Cap Contract: The amended confirmation and
agreement and any related confirmation thereto, between the Trust Fund or
Trustee and the Cap Contract Counterparty (in the form of Exhibit N-3 hereto).
Subordinated Certificate Cap Contract Notional Balance: With respect
to any Distribution Date, the Subordinated Certificate Cap Contract Notional
Balance set forth for such Distribution Date in the Subordinated Certificate
One-Month LIBOR Cap Table attached hereto as Exhibit O-3.
Subordinated Certificate Cap Contract Termination Date: The
Distribution Date in September 2008.
Subordinated Certificate Maximum Rate Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted average (weighted in
proportion to the results of subtracting from the aggregate Stated Principal
Balance of the Mortgage Loans in each Mortgage Group as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Cut-off Date) the current Certificate Principal Balance of the related
Class A Certificates) of the Class A-1 Maximum Rate Cap and the Class A-2
Maximum Rate Cap.
Subordinated Certificate Upper Collar: With respect to each
Distribution Date with respect to which payments are received on the
Subordinated Certificate Cap Contract, a rate equal to the lesser of One-Month
LIBOR and 8.720% per annum.
Subordinated Certificates: Each Class of the Class M and Class B
Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts reimbursed to the Servicer related to such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Tax Matters Person: The Person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trust Fund: The corpus of the trust (the "First Franklin Mortgage
Loan Trust, Series 2005-FF6") created hereunder consisting of (i) the Mortgage
Loans and all interest and principal received on or with respect thereto on and
after the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof, exclusive of interest not required to be deposited in
the Collection Account; (ii) the Collection Account and the Certificate Account
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (v) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property; and (vi) the Cap Contracts and Cap Contract
Account.
Trustee: Xxxxx Fargo Bank, N.A., 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
-45-
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Uncertificated Class C Interest: An uncertificated interest having
(i) the same rights to payments as the Class C Certificates, other than the
rights to payments of amounts with respect to the Cap Contracts, and (ii) the
rights to the payments treated as distributed to the Class C Certificates under
Section 2.07(d), provided, however, that such interest shall have no obligation
to make any payments treated as paid by the Class C Certificates pursuant to
interest rate cap agreements under Section 2.07(d).
Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount, Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss
Amount, Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss
Amount, Class B-1 Unpaid Realized Loss Amount, Class B-2 Unpaid Realized Loss
Amount, Class B-3 Unpaid Realized Loss Amount, Class B-4 Unpaid Realized Loss
Amount and Class C Unpaid Realized Loss Amount, collectively.
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2 Upper
Collar or the Subordinated Certificate Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and
Section 2.07.
USAP Report: A report in compliance with the Uniform Single
Attestation Program for Mortgage Bankers delivered in accordance with Section
3.18.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any of the Certificates for purposes of the
voting provisions hereunder. Voting Rights allocated to each Class of
Certificates shall be allocated as follows: (1) 98% to the Class A, Class M and
Class B Certificates, with the allocation among such Certificates to be in
proportion to the Certificate Principal Balance of each Class relative to the
Certificate Principal Balance of all other Classes and (2) each Class of the
Class C and Class P will be allocated 2% of the Voting Rights. Voting Rights
will be allocated among the Certificates of each such Class in accordance with
their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
It is agreed and understood by the Depositor, the Servicer and the
Trustee that it is not intended that any Mortgage Loan be included in the Trust
that is, without limitation, a "High-Cost Home Loan" as defined by the Home
Ownership and Equity Protection Act of 1994 or any other applicable
anti-predatory
-46-
lending laws, including but not limited to (i) a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003; (ii) a
"High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004; or (iii) a "High-Cost Home Loan" as defined in the
Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 or
(iv) a "High-Cost Home Loan" as defined by the Indiana High Cost Home Loan Law
effective January 1, 2005.
(i) In connection with such assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee, the following documents or
instruments with respect to each Mortgage Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to
the order of Xxxxx Fargo Bank, N.A., as trustee, without recourse"
together with all riders thereto. The Mortgage Note shall include
all intervening endorsements showing a complete chain of the title
from the Transferor to [____________________];
(B) Except as provided below and for each Mortgage Loan that
is not a MERS Loan, the original recorded Mortgage together with all
riders thereto, with evidence of recording thereon, or, if the
original Mortgage has not yet been returned from the recording
office, a copy of the original Mortgage together with all riders
thereto certified by the Transferor to be true copy of the original
of the Mortgage that has been delivered for recording in the
appropriate recording office of the jurisdiction in which the
Mortgaged Property is located and in the case of each MERS Loan, the
original Mortgage together with all riders thereto, noting the
presence of the MIN of the Loan and either language indicating that
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a
MOM Loan at origination, the original Mortgage and the assignment
thereof to MERS, with evidence of recording indicated thereon, or a
copy of the Mortgage certified by the public recording office in
which such Mortgage has been recorded;
(C) In the case of each Mortgage Loan that is not a MERS Loan,
the original Assignment of each Mortgage endorsed either in blank
or, to "Xxxxx Fargo Bank, N.A., as trustee;"
(D) The original policy of title insurance (or a preliminary
title report, commitment or binder if the original title insurance
policy has not been received from the title insurance company);
(E) Originals of any intervening assignments of the Mortgage,
with evidence of recording thereon or, if the original intervening
assignment has not yet been returned from the recording office, a
copy of such assignment certified to be a true copy of the original
of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located;
and
(F) Originals of all assumption and modification agreements,
if any.
(ii) In connection with such assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee the following documents or instruments
with respect to each Mortgage Loan so assigned that is a Co-op Loan:
(A) (i) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii) the
original consolidation, extension and modification agreement (or a
lost note affidavit (including a copy of the original consolidation,
extension and modification agreement)), in either case endorsed
either in blank or, "Pay to the order of Xxxxx Fargo Bank, N.A., as
trustee, without recourse";
-47-
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-Op Loan;
(C) The original Assignment of Mortgage endorsed either in
blank or to "Xxxxx Fargo Bank, N.A., as trustee";
(D) The original assignments of Mortgage showing a complete
chain of assignment from the originator of the related Co-Op Loan to
the last endorsee on the Mortgage Note;
(E) The original Form UCC-1 and any continuation statements
with evidence of filing thereon entered into by the Mortgagor with
respect to such Co-Op Loan (or a recorded copy thereof);
(F) Form UCC-3 (or copy thereof) by the Transferor or its
agent assigning the security interest covered by such Form UCC-1 to
"Xxxxx Fargo Bank, N.A., as trustee," together with all Forms UCC-3
(or copies thereof) showing a complete chain of assignment from the
originator of the related Co-op Loan to the Transferor, with
evidence of recording thereon;
(G) The original stock certificate representing the stock
allocated to the related dwelling unit in the related residential
cooperative housing corporation and pledged by the related Mortgagor
to the originator of such Co-op Loan with a stock power in blank
attached;
(H) The original proprietary lease;
(I) The original assignment of proprietary lease or a copy
thereof, to the Trustee or in blank, and all intervening assignments
thereof;
(J) The original recognition agreement or a copy thereof of
the interests of the mortgagee with respect to the Co-op Loan by the
residential cooperative housing corporation, the stock of which was
pledged by the related Mortgagor to the originator of such Co-op
Loan; and
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F)
above with respect to such Co-op Loan.
If in connection with any Mortgage Loan that is not a Co-op Loan,
the Depositor cannot deliver the Mortgage, Assignments of Mortgage or
assumption, consolidation or modification, as the case may be, with evidence of
recording thereon, if applicable, concurrently with the execution and delivery
of this Agreement solely because of a delay caused by the public recording
office where such Mortgage, Assignments of Mortgage or assumption, consolidation
or modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Trustee written notice
stating that such Mortgage or assumption, consolidation or modification, as the
case may be, has been delivered to the appropriate public recording office for
recordation. Thereafter, the Depositor shall deliver or cause to be delivered to
the Trustee such Mortgage, Assignments of Mortgage or assumption, consolidation
or modification, as the case may be, with evidence of recording indicated
thereon, if applicable, upon receipt thereof from the public recording office.
To the extent any required endorsement is not contained on a Mortgage Note or an
Assignment of Mortgage, the Depositor shall make or cause such endorsement to be
made.
With respect to any Mortgage Loan that is not a Co-op Loan, none of
the Depositor, the Servicer or the Trustee shall be obligated to cause to be
recorded the Assignment of Mortgage referred to in this Section 2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer or the Trustee
shall be
-48-
obligated to cause to be filed the Form UCC-3 referred to in this Section 2.01.
In the event that any Assignment of Mortgage referred to in this Section 2.01 is
not recorded or is improperly recorded, the Servicer and the Trustee shall have
no liability for any failure to receive or act on notices related to such
Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents
of the related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor nor the Servicer shall take any action
inconsistent with such ownership and shall not claim any ownership interest
therein. The Depositor and the Servicer shall respond to any third party
inquiries with respect to ownership of the Mortgage Loans by stating that such
ownership is held by the Trustee on behalf of the Certificateholders. Mortgage
documents relating to the Mortgage Loans not delivered to the Trustee are and
shall be held in trust by the Servicer, for the benefit of the Trustee as the
owner thereof, and the Servicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer is in a custodial capacity
only. The Depositor agrees to take no action inconsistent with the Trustee's
ownership of the Mortgage Loans, to promptly indicate to all inquiring parties
that the Mortgage Loans have been sold and to claim no ownership interest in the
Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders its rights and interests under
the Sale Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement and the benefit
of the repurchase obligations and the obligation of the Seller contained in the
Sale Agreement to take, at the request of the Depositor or the Trustee, all
action on its part which is reasonably necessary to ensure the enforceability of
a Mortgage Loan. The Trustee hereby accepts such assignment, and shall be
entitled to exercise all rights of the Depositor under the Sale Agreement as if,
for such purpose, it were the Depositor. The foregoing sale, transfer,
assignment, set-over, deposit and conveyance does not and is not intended to
result in creation or assumption by the Trustee of any obligation of the
Depositor, the Seller, or any other Person in connection with the Mortgage Loans
or any other agreement or instrument relating thereto except as specifically set
forth herein.
-49-
Section 2.02. Acceptance by the Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered
contemporaneously herewith (the "Exception Report"), the Trustee acknowledges
receipt of the Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does not acknowledge receipt of all documents required to be included
in such Mortgage File) with respect to each Mortgage Loan and declares that it
holds and will hold such documents and any other documents constituting a part
of the Mortgage Files delivered to it in trust for the use and benefit of all
present and future Certificateholders. The Depositor will cause the Seller to
repurchase any Mortgage Loan to which a material exception was taken in the
Exception Report unless such exception is cured to the satisfaction of the
Trustee within 45 Business Days of the Closing Date.
The Trustee acknowledges receipt of the three Cap Contracts (forms
of which are attached hereto as Exhibits N-1, N-2 and N-3) and the Sale
Agreement.
The Trustee agrees, for the benefit of Certificateholders and the
NIMs Insurer, to review each Mortgage File delivered to it within 60 days after
the Closing Date to ascertain and to certify, within 70 days of the Closing
Date, to the NIMs Insurer, the Depositor and the Servicer that all documents
required by Section 2.01 have been executed and received, and that such
documents relate to the Mortgage Loans identified in Exhibit B that have been
conveyed to it. If the Trustee finds any document or documents constituting a
part of a Mortgage File to be missing or defective (that is, mutilated, damaged,
defaced or unexecuted) in any material respect, the Trustee shall promptly (and
in any event within no more than five Business Days) after such finding so
notify the NIMs Insurer, the Servicer, the Seller and the Depositor. In
addition, the Trustee shall also notify the NIMs Insurer, the Servicer, the
Seller and the Depositor if the original Mortgage with evidence of recording
thereon with respect to a Mortgage Loan is not received within 60 days of the
Closing Date; if it has not been received because of a delay caused by the
public recording office where such Mortgage has been delivered for recordation,
the Depositor shall deliver or cause to be delivered to the Trustee written
notice stating that such Mortgage has been delivered to the appropriate public
recording office for recordation and thereafter the Depositor shall deliver or
cause to be delivered such Mortgage with evidence of recording thereon upon
receipt thereof from the public recording office. The Trustee shall request that
the Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 2.03, within 90
days from the date the Seller was notified of such omission or defect and, if
the Seller does not correct or cure such omission or defect within such period,
that the Seller purchase such Mortgage Loan from the Trust Fund within 90 days
from the date the Trustee notified the Seller of such omission, defect or other
irregularity at the Purchase Price of such Mortgage Loan. The Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall be paid to the
Servicer and deposited by the Servicer in the Certificate Account or Collection
Account, as appropriate, promptly upon receipt, and, upon receipt by the Trustee
of written notification of such deposit signed by a Servicing Officer, the
Trustee, upon receipt of a Request for Release, shall promptly release to the
Seller the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, without recourse, as shall be requested
by the Seller and necessary to vest in the Seller or its designee, as the case
may be, any Mortgage Loan released pursuant hereto, and the Trustee shall have
no further responsibility with regard to such Mortgage Loan. It is understood
and agreed that the obligation of the Seller to purchase, cure or substitute any
Mortgage Loan as to which a material defect in or omission of a constituent
document exists shall constitute the sole remedy respecting such defect or
omission available to the Trustee on behalf of Certificateholders and the NIMs
Insurer. The preceding sentence shall not, however, limit any remedies available
to the Certificateholders, the NIMs Insurer, the Depositor or the Trustee
pursuant to the Sale Agreement. The Trustee shall be under no duty or obligation
to inspect, review and examine such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, recordable or
appropriate to the represented purpose, or that they have actually been
recorded, or that they
-50-
are other than what they purport to be on their face. The Servicer and the
Trustee shall keep confidential the name of each Mortgagor except as required
for the performance of this Agreement and the Servicer and the Trustee shall not
solicit any such Mortgagor for the purpose of refinancing the related Mortgage
Loan; notwithstanding anything herein to the contrary, the foregoing shall not
be construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Trustee or the Servicer
from sources other than the other parties hereto, (ii) disclosure of any and all
information (A) if required to do so by any applicable law, rule or regulation,
(B) to any government agency or regulatory body having or claiming authority to
regulate or oversee any aspects of the Trustee's business or that of its
affiliates, (C) pursuant to any subpoena, civil investigation demand or similar
demand or request of any court, regulatory authority, arbitrator or pursuant to
any arbitration to which Trustee or any affiliate or an officer, director,
employer or shareholder thereof is a party or (D) to any affiliate, independent
or internal auditor, agent, employee or attorney of the Trustee having a need to
know the same, provided that the Trustee advises such recipient of the
confidential nature of the information being disclosed, or (iii) any other
disclosure authorized by the Depositor. The Servicer shall provide to the
Depositor any information related to the Mortgage Loans requested by the
Depositor. It is understood and agreed that all rights and benefits relating to
the solicitation of any Mortgagors and the attendant rights, title and interest
in and to the list of Mortgagors and data relating to their Mortgages shall be
retained by the Servicer.
Within 70 days of the Closing Date, the Trustee shall deliver to the
NIMs Insurer, the Depositor and the Servicer the Trustee's Certification,
substantially in the form of Exhibit D attached hereto, evidencing the
completeness of the Mortgage Files, with any exceptions noted thereto.
Section 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the
Servicer, the NIMs Insurer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Delaware and has full power and authority (corporate and other)
necessary to own or hold its properties and to conduct its business
as now conducted by it and to enter into and perform its obligations
under this Agreement and the Sale Agreement.
(ii) The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by, this Agreement and the Sale
Agreement and has duly authorized, by all necessary corporate action
on its part, the execution, delivery and performance of this
Agreement and the Sale Agreement; and this Agreement and the Sale
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, subject, as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the
Sale Agreement by the Depositor, the consummation of the
transactions contemplated by this Agreement and the Sale Agreement,
and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Depositor and will not (A)
result in a material breach of any term or provision of the charter
or by-laws of the Depositor or (B) materially conflict with, result
in a violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to
which the Depositor is a party or by which it may be bound or (C)
constitute a
-51-
material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Depositor's
ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement and the Sale Agreement or the
ability of the Depositor to perform its obligations under this
Agreement and the Sale Agreement in accordance with the terms
hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Depositor of, or compliance by the
Depositor with, this Agreement and the Sale Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Depositor
has obtained the same. The Depositor hereby represents and warrants
to the Trustee with respect to each Mortgage Loan as of the Closing
Date, and following the transfer of the Mortgage Loans to it by the
Seller, the Depositor had good title to the Mortgage Loans and the
Mortgage Notes were subject to no offsets, claims, liens, mortgage,
pledge, charge, security interest, defenses or counterclaims.
(b) The representations and warranties of the Seller with
respect to the Mortgage Loans contained in the Sale Agreement were made as of
the Closing Date. To the extent that any fact, condition or event with respect
to a Mortgage Loan constitutes a breach of a representation or warranty of the
Seller under the Sale Agreement, the only right or remedy of the Trustee, the
NIMs Insurer or of any Certificateholder shall be the Trustee's right to enforce
the obligations of the Seller under any applicable representation or warranty
made by it. The Trustee acknowledges that the Depositor shall have no obligation
or liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any circumstances.
(c) Upon discovery by any of the Depositor, the Servicer,
the NIMs Insurer or the Trustee of a breach of any of such representations and
warranties that adversely and materially affects the value of the related
Mortgage Loan, Prepayment Charges or the interests of the Certificateholders,
the party discovering such breach shall give prompt written notice to the other
parties. Within 90 days of the discovery of such breach of any representation or
warranty, the Seller shall either (a) cure such breach in all material respects,
(b) repurchase such Mortgage Loan or any property acquired in respect thereof
from the Trustee at the Purchase Price or (c) within the two year period
following the Closing Date, substitute a Replacement Mortgage Loan for the
affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of the Seller, the Trustee shall enforce its rights
under the Sale Agreement for the benefit of Certificateholders and the NIMs
Insurer. If a breach of the representations and warranties set forth in the Sale
Agreement exists solely due to the unenforceability of a Prepayment Charge, the
Trustee shall notify the NIMs Insurer thereof and not seek to enforce the
repurchase remedy provided for herein unless directed in writing to do so by the
NIMs Insurer. In the event of a breach of the representations and warranties
with respect to the Mortgage Loans set forth in the Sale Agreement, the Trustee
shall, at the request of the NIMs Insurer, enforce the right of the Trust Fund
and the NIMs Insurer to be indemnified for such breach of representation and
warranty. In the event that such breach relates solely to the unenforceability
of a Prepayment Charge, amounts received in respect of such indemnity up to the
amount of such Prepayment Charge shall be distributed pursuant
-52-
to Section 4.04(b)(i). As provided in the Sale Agreement, if the Seller
substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the Sale Agreement which adversely and
materially affects the value of such Mortgage Loan and such substitute mortgage
loan is not a Replacement Mortgage Loan, the Seller will, in exchange for such
substitute Mortgage Loan, (i) provide the applicable Purchase Price for the
affected Mortgage Loan or (ii) within two years of the Closing Date, substitute
such affected Mortgage Loan with a Replacement Mortgage Loan. Any such
substitution shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit I and
shall not be effected unless it is within two years of the Startup Day. As
provided in the Sale Agreement, the Seller indemnifies and holds the Trust Fund,
the Trustee, the Depositor, the NIMs Insurer, the Servicer and each
Certificateholder harmless against any and all taxes, claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that the Trust Fund, the Trustee, the Depositor,
the NIMs Insurer, the Servicer and any Certificateholder may sustain in
connection with any actions of the Seller relating to a repurchase of a Mortgage
Loan other than in compliance with the terms of this Section 2.03 and the Sale
Agreement, to the extent that any such action causes (i) any federal or state
tax to be imposed on the Trust Fund or any REMIC provided for herein, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on "contributions after the startup day" under
Section 860G(d)(1) of the Code, or (ii) any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificate is outstanding. In
furtherance of the foregoing, if the Seller is not a member of MERS and
repurchases a Mortgage Loan which is registered on the MERS System, the Seller,
at its own expense and without any right of reimbursement, shall cause MERS to
execute and deliver an assignment of the Mortgage in recordable form to transfer
the Mortgage from MERS to the Seller and shall cause such Mortgage to be removed
from registration on the MERS System in accordance with MERS' rules and
regulations.
With respect to any Mortgage Loan repurchased by the Depositor
pursuant to this Agreement or by the Seller pursuant to the Sale Agreement, the
principal portion of the funds received by the Servicer in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and
shall be deposited by the Servicer in the Collection Account pursuant to Section
3.05 and the Servicer shall notify the Trustee of its receipt of the same. The
Trustee, upon receipt of the full amount of the Purchase Price for a Deleted
Mortgage Loan, or upon receipt of the Mortgage File for a Replacement Mortgage
Loan substituted for a Deleted Mortgage Loan, shall release or cause to be
released and reassign to the Depositor or the Seller 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, and the Trustee
shall not have any further responsibility with respect to the Mortgage File
relating to such Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to
the Trustee pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the Depositor or the Seller, as applicable, must deliver to
the Trustee (or its custodian) the Mortgage File for the Replacement Mortgage
Loan containing the documents set forth in Section 2.01 along with a written
certification certifying as to the satisfaction by such Mortgage Loan of all
requirements under the definition of Replacement Mortgage Loan and the delivery
of such Mortgage File and containing the granting language set forth in Section
2.01; and (ii) the Depositor will be deemed to have made, with respect to such
Replacement Mortgage Loan, each of the representations and warranties made by it
with respect to the related Deleted Mortgage Loan. The Trustee (or its
custodian) shall review the Mortgage File with respect to each Replacement
Mortgage Loan and certify to the NIMs Insurer and the Depositor that all
documents required by Section 2.01 have been executed and received.
-53-
For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Replacement Mortgage Loans as of the date of substitution and the
aggregate Prepayment Charges with respect to such Replacement Mortgage Loans is
less than the aggregate Stated Principal Balance (after application of the
principal portion of the Scheduled Payment due in the month of substitution) and
aggregate Prepayment Charges of all such Deleted Mortgage Loans. An amount equal
to the aggregate of the deficiencies described in the preceding sentence (such
amount, the "Substitution Adjustment Amount") plus an amount equal to any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund in
connection with any violation relating to such Deleted Mortgage Loan of any
predatory or abusive lending law shall be remitted by the Seller to the Servicer
for deposit into the Collection Account on the Determination Date for the
Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee and the NIMs Insurer
shall have received an Opinion of Counsel (at the expense of the party seeking
to make the substitution) that, under current law, such substitution will not
(A) affect adversely the status of any REMIC established hereunder as a REMIC,
or of the related "regular interests" as "regular interests" in any such REMIC,
or (B) cause any such REMIC to engage in a "prohibited transaction" or
prohibited contribution pursuant to the REMIC Provisions.
The Trustee shall cause the Mortgage Loan Schedule to be amended in
accordance with the terms of this Agreement.
The Seller shall give or cause to be given written notice to the
Certificateholders and the NIMs Insurer that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Replacement Mortgage Loan or Replacement Mortgage Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to the NIMs Insurer, the Servicer and the
Trustee. Upon such substitution by the Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the Sale
Agreement, including all applicable representations and warranties thereof
included in the Sale Agreement as of the date of substitution.
(d) It is understood and agreed that the representations,
warranties and indemnification (i) set forth in this Section 2.03 and (ii) of
the Seller and the Depositor set forth in the Sale Agreement and assigned to the
Trustee by the Depositor hereunder shall each survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule to the Servicer on the Closing Date.
SECTION 2.04. Representations and Warranties of the Servicer.
(i) The Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of the date hereof:
(ii) The Servicer is duly organized and is validly existing as
a corporation in good standing under the laws of the State of Nevada
and is duly authorized and qualified to transact
-54-
any and all business contemplated by this Agreement to be conducted
by the Servicer in any state in which a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Mortgage Loan, to service the
Mortgage Loans in accordance with the terms of this Agreement and to
perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(iii) The Servicer has the corporate power and authority
to service each Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary corporate
action on the part of the Servicer the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its
terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(iv) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement,
the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of the Servicer and
will not (A) result in a material breach of any term or provision of
the charter or by-laws of the Servicer or (B) materially conflict
with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which
it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to the Servicer of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Servicer; and the Servicer is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or
violation may materially impair the Servicer's ability to perform or
meet any of its obligations under this Agreement.
(v) The Servicer is an approved servicer of mortgage
loans for Xxxxxx Xxx and is an approved servicer of mortgage loans
for Xxxxxxx Mac.
(vi) No litigation is pending or, to the best of the
Servicer's knowledge, threatened, against the Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Servicer to
service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms
hereof.
(vii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of, or
compliance by the Servicer with, this Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, the Servicer has
obtained the same.
(viii) The Servicer has fully furnished and will fully
furnish (for the period it serviced the Mortgage Loans), in
accordance with the Fair Credit Reporting Act and its implementing
-55-
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company on a monthly basis.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which
are not "Qualified Mortgages."
Upon discovery by the Depositor, the Servicer or the Trustee that
any Mortgage Loan does not constitute a "qualified mortgage" within the meaning
of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within 5 Business Days of discovery) give written
notice thereof to the other parties. In connection therewith, the Depositor
shall, at the Depositor's option, either (i) substitute, if the conditions in
Section 2.03(c) with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within 90 days of such discovery in the same manner as it would a
Mortgage Loan for a breach of representation or warranty contained in Section
2.03. The Trustee shall reconvey to the Depositor the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, the Trustee has
caused to be authenticated and delivered to or upon the order of the Depositor,
in exchange for the Mortgage Loans, Certificates duly authenticated by the
Trustee in authorized denominations evidencing ownership of the entire Trust
Fund. The Trustee agrees to hold the Trust Fund and exercise the rights referred
to above for the benefit of all present and future Holders of the Certificates
and to perform its duties set forth in this Agreement in accordance with the
provisions hereof to the best of its abilities, to the end that the interests of
the Holders may be adequately and effectively protected.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the
Trustee to make an appropriate election to treat each of the Upper Tier REMIC
and the Lower Tier REMIC as a REMIC. The Trustee shall sign the returns
providing for such elections and such other tax or information returns which are
required to be signed by the Trustee under applicable law. This Agreement shall
be construed so as to carry out the intention of the parties that each of the
Upper Tier REMIC and the Lower Tier REMIC be treated as a REMIC at all times
prior to the date on which the Trust Fund is terminated.
(b) The Preliminary Statement sets forth the
designations and "latest possible maturity date" for federal income tax purposes
of all interests created hereby. The "Startup Day" for purposes of the REMIC
Provisions shall be the Closing Date. Each REMIC's fiscal year shall be the
calendar year.
The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund, other than (i) amounts distributable to the Class P Certificates pursuant
to Section 4.04(b)(i) hereof, (ii) the interests issued by the Lower Tier REMIC,
(iii) the grantor trusts described in Section 2.07 hereof and (iv) each Cap
Contract and the Cap Contract Account. The Lower Tier REMIC shall issue the
Lower Tier REMIC Regular Interests which shall be designated as regular
interests of such REMIC and shall issue the Class LTR Interest that shall be
designated as the sole class of residual interest in the Lower Tier REMIC. Each
of the Lower Tier REMIC Regular Interests shall have the characteristics set
forth in its definition.
-56-
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC. For
federal income tax purposes, the pass-through rate on each REMIC Regular
Interest (other than the Uncertificated Class C Interest) and on the sole class
of residual interest in the Upper Tier REMIC shall be subject to a cap equal to
the Net Rate.
The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class LTR Interest
shall not have a principal balance or bear interest.
(c) The "tax matters person" with respect to each REMIC
for purposes of the REMIC Provisions shall be the beneficial owner of the Class
R Certificate; provided, however, that the Holder of the Class R Certificate, by
its acceptance thereof, irrevocably appoints the Trustee as its agent and
attorney-in-fact to act as "tax matters person" with respect to each REMIC for
purposes of the REMIC Provisions. If there is more than one beneficial owner of
the Class R Certificate, the "tax matters person" shall be the Person with the
greatest percentage interest in the Class R Certificate and, if there is more
than one such Person, shall be determined under Treasury regulation Section
1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the
Class A, Class M and Class B Certificates to receive payments in respect of
Excess Interest shall be treated as a right in interest rate cap contracts
written by the Class C Certificateholders in favor of the holders of each Class
of the Class A, Class M and Class B Certificates and such shall be accounted for
as property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A (other than the Class R Certificate),
Class M and Class B Certificates and the residual interest in the Upper Tier
REMIC held by the holder of the Class R Certificate. For information reporting
requirements, the rights of the Class A, Class M and Class B Certificates to
receive payments in respect of Excess Interest shall be assumed to have zero or
a de minimis value. This provision is intended to satisfy the requirements of
Treasury Regulations Section 1.860G-2(i) for the treatment of property rights
coupled with REMIC interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that
any of the Class A, Class M and Class B Certificates receive payments in respect
of Excess Interest, such amounts, to the extent not derived from payments on the
Cap Contracts, will be treated as distributed by the Upper Tier REMIC to the
Class C Certificates pro rata in payment of the amounts specified in Section
4.04(g) and then paid to the relevant Class of Certificates pursuant to the
related interest rate cap agreement.
(e) The parties intend that the portion of the Trust
Fund consisting of the Uncertificated Class C Interest, the Cap Contracts, the
Cap Contract Account, and the obligation of the holders of the Class C
Certificates to pay amounts in respect of Excess Interest to the holders of the
Class A, Class M and Class B Certificates shall be treated as a "grantor trust"
under the Code, for the benefit of the holders of the Class C Certificates, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A, Class M, Class B and
Class C Certificates as may be applicable under the Code.
(f) The parties intend that the portion of the Trust
Fund consisting of the right to receive amounts distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof shall be
-57-
treated as a "grantor trust" under the Code, for the benefit of the holders of
the Class P Certificates, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the Trustee
shall (i) furnish or cause to be furnished to the holders of the Class P
Certificates information regarding their allocable share of the income with
respect to such grantor trust and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) and
such other forms as may be applicable.
(g) [RESERVED]
(h) All payments of principal and interest at the Net
Mortgage Rate on each of the Mortgage Loans (other than amounts distributable to
the Class P Certificates pursuant to Section 4.04(b)(i) hereof) received from
the Mortgage Loans shall be paid to the Lower Tier REMIC Regular Interests until
the principal balance of all such interests have been reduced to zero and any
losses allocated to such interests have been reimbursed. Any excess amounts
shall be distributed to the Class LTR Interest. On each Distribution Date,
payments and losses shall be allocated among the Lower Tier REMIC Regular
Interests so that (i) each of the Lower Tier REMIC I Marker Interests shall have
a principal balance equal to 25% of the principal balance of the Corresponding
Certificates, (ii) the Class LTIX Interest has a principal balance equal to the
excess of (x) 50% of the remaining principal balance of the Mortgage Loans over
(y) the aggregate principal balance of the Lower Tier REMIC I Marker Interests
(if necessary to reflect an increase in overcollateralization, accrued and
unpaid interest on the Class LTIX interest may be added to its principal amount
to achieve this result) and (iii) the aggregate principal amount of the Class
LTII1A Interest, Class LTII1B Interest, Class LTII2A Interest, Class LTII2B
Interest and the Class LTIIX Interest shall equal 50% of the remaining principal
balance of the Mortgage Loans. Distributions and losses allocated to the Lower
Tier REMIC Regular Interests described in clause (iii) of the preceding sentence
will be allocated among such Lower Tier REMIC Regular Interests in the following
manner: (x) such distributions shall be deemed made to such Lower Tier REMIC
Regular Interests first, so as to keep the principal balance of the each such
Lower Tier REMIC Regular Interest with "B" at the end of its designation equal
to 0.05% of the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group; second, to such Lower Tier REMIC Regular Interests
with "A" at the end of its designation so that the uncertificated principal
balance of each such Lower Tier REMIC Regular Interest is equal to 0.05% of the
excess of (I) the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group over (II) the aggregate principal balance of
Certificate Group One, in the case of the Class LTII1A Interest, or Certificate
Group Two, in the case of the Class LTII2A Interest (except that if 0.05% of any
such excess is greater than the principal amount of the related Lower Tier REMIC
II Marker Interest with "A" at the end of its designation, the least amount of
principal shall be distributed to each Lower Tier REMIC II Marker Interest with
"A" at the end of its designation such that the Lower Tier REMIC Subordinated
Balance Ratio is maintained) and finally, any remaining distributions of
principal to the Class LTIIX Interest and (y) such losses shall be allocated
among the Lower Tier REMIC Regular Interests described in clause (iii) of the
preceding sentence first, so as to keep the principal balance of the each such
Lower Tier REMIC Regular Interest with "B" at the end of its designation equal
to 0.05% of the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group; second, to such Lower Tier REMIC Regular Interests
with "A" at the end of its designation so that the uncertificated principal
balance of each such Lower Tier REMIC Regular Interest is equal to 0.05% of the
excess of (I) the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group over (II) the aggregate principal balance of
Certificate Group One, in the case of the Class LTII1A Interest, or Certificate
Group Two, in the case of the Class LTII2A Interest (except that if 0.05% of any
such excess is greater than the principal amount of the related Lower Tier REMIC
II Marker Interest with "A" at the end of its designation, the least amount of
losses shall be allocated to each Lower REMIC II Marker Interest with "A" at the
end of its designation such that the Lower Tier REMIC Subordinated Balance Ratio
is maintained) and finally, any remaining losses to the Class LTIIX Interest.
Notwithstanding the
-58-
preceding two sentences, however, losses not allocated to any Class of
Certificates will not be allocated to any Lower Tier REMIC Regular Interests.
All computations with respect to the Lower Tier REMIC Regular Interests shall be
taken out to ten decimal places.
Any available funds remaining in the Lower Tier REMIC on a
Distribution Date after distributions to the Lower Tier REMIC Regular Interests
shall be distributed to the Class R Certificates in respect of the Class LTR
Interest.
If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier REMIC Regular Interests on such
Distribution Date) among the Lower Tier REMIC Regular Interests so that, to the
greatest extent possible, (i) each of the Lower Tier REMIC I Marker Interests
has a principal balance equal to 25% of the principal balance of the
Corresponding Certificates, (ii) the Class LTIX Interest has a principal balance
equal to the excess of (x) 50% of the remaining principal balance of the
Mortgage Loans over (y) the aggregate principal balance of the Lower Tier REMIC
I Marker Interests and (iii) the aggregate principal amount of the Lower Tier
REMIC II Marker Interests and the Class LTIIX Interest shall equal 50% of the
remaining principal balance of the Mortgage Loans. Allocations in connection
with clause (iii) shall be made so that, to the greatest extent possible, (a)
the principal balance of each Lower Tier REMIC II Marker Interest with "B" at
the end of its designation equals 0.05% of the aggregate scheduled principal
balance of the Mortgage Loans in related Mortgage Group, (b) the principal
balance of each Lower Tier REMIC II Marker Interest with "A" at the end of its
designation equals 0.05% of the excess of (x) the aggregate scheduled principal
balance of the Mortgage Loans in related Mortgage Group over (y) the aggregate
principal balance of Certificate Group One in the case of the Class LTII1A
Interest, or Certificate Group Two in the case of the Class LTII2A Interest and
(c) any remaining allocations are made to the Class LTIIX Interest.
For purposes of this Section 2.07, (i) the Class LTII1A Interest and
Class LTII1B Interest shall be related to Group One, and (ii) the Class LTII2A
Interest and Class LTII2B Interest shall be related to Group Two.
(i) In the event that any REMIC provided for herein
fails to qualify as a REMIC, loses its status as a REMIC or incurs federal,
state or local taxes as a result of a prohibited transaction or prohibited
contribution under the REMIC Provisions due to the negligent performance by the
Servicer of its duties and obligations set forth herein, the Servicer shall
indemnify the NIMs Insurer, the Trustee and the Trust Fund against any and all
Losses resulting from such negligence; provided, however, that the Servicer
shall not be liable for any such Losses attributable to the action or inaction
of the Trustee, the Depositor or the Holder of the residual interest in such
REMIC, as applicable, nor for any such Losses resulting from misinformation
provided by the Holder of the residual interest in such REMIC on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of the residual interest in such REMIC now or
hereafter existing at law or in equity. Notwithstanding the foregoing, however,
in no event shall the Servicer have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Servicer of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).
(j) In the event that any REMIC provided for herein
fails to qualify as a REMIC, loses its status as a REMIC, or incurs federal,
state or local taxes as a result of a prohibited transaction or
-59-
prohibited contribution under the REMIC Provisions due to the negligent
performance by the Trustee of its duties and obligations set forth herein, the
Trustee shall indemnify the NIMs Insurer and the Trust Fund against any and all
Losses resulting from such negligence; provided, however, that the Trustee shall
not be liable for any such Losses attributable to the action or inaction of the
Servicer, the Depositor, the Trustee or the Holder of the residual interest in
such REMIC, as applicable, nor for any such Losses resulting from misinformation
provided by the Holder of the residual interest in such REMIC on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of the residual interest in such REMIC now or
hereafter existing at law or in equity. Notwithstanding the foregoing, however,
in no event shall the Trustee have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Trustee of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).
SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy;
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor, the
NIMs Insurer or the Trustee, any affiliate of the Depositor, the NIMs Insurer or
the Trustee and prepared by the Servicer pursuant to this Agreement is
inaccurate in any material respect, provided, however, that the Servicer shall
not be responsible for inaccurate information provided to it by third parties.
SECTION 2.10. [RESERVED].
SECTION 2.11. Permitted Activities of the Trust. The Trust is
created for the object and purpose of engaging in the Permitted Activities. In
furtherance of the foregoing, the Trustee is hereby authorized and directed to
execute and deliver on behalf of the Trust, and to perform the duties and
obligations of the Trustee under, the Cap Contracts, an insurance and indemnity
agreement with a NIMs Insurer and any other agreement or instrument related
thereto, in each case in such form as the Depositor shall direct or shall
approve, the execution and delivery of any such agreement by the Depositor to be
conclusive evidence of its approval thereof.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of
SFAS 140, the parties hereto intend that the Trust Fund shall be treated as a
"qualifying special purpose entity" as such term is used in SFAS 140 and any
successor rule thereto and its power and authority as stated in Section 2.11 of
this Agreement shall be limited in accordance with paragraph 35 thereof.
-60-
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans, including without limitation, any
powers of attorney, in accordance with Accepted Servicing Practices. In
connection with such servicing and administration, the Servicer shall have full
power and authority, acting alone and/or through subservicers as provided in
Section 3.02 hereof, to do or cause to be done any and all things that it may
deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property (or the stock allocated to a dwelling unit related to a Co-op Loan) and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds and (iv) subject to Section 3.12(a), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property (or
the stock allocated to a dwelling unit related to a Co-op Loan) securing any
Mortgage Loan; provided that, subject to Section 6.03, the Servicer shall not
take any action that is inconsistent with or prejudices the interests of the
Trust Fund or the Certificateholders in any Mortgage Loan serviced by it under
this Agreement or the rights and interests of the other parties to this
Agreement except as otherwise required by this Agreement or by law. The Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would cause any of the REMICs provided for herein to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, subordinations and all other comparable instruments, with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, to the extent that the Servicer is
not permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Servicer. For purposes of this
Section 3.01, the Trustee hereby grants to the Servicer a limited power of
attorney to execute and file any and all documents necessary to fulfill the
obligations of the Servicer under this Section 3.01.
The Trustee shall execute any powers of attorney provided by the
Servicer in a form reasonably acceptable to the Trustee, promptly after request
therefor by the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on any Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08.
-61-
All costs incurred by the Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balances under the related Mortgage Loans, notwithstanding that the terms of
such Mortgage Loans so permit.
In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the Servicer shall be entitled to waive any such provisions on behalf of the
Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
The Servicer shall not be required to make any Servicing Advance
with respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall deliver a list of Servicing Officers to the
Trustee by the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 97-02 and that for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of the Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment,
release and other comparable instruments with respect to such assignment,
release or re-recording of a Mortgage in the name of MERS, solely as nominee for
the Trustee and its successors and assigns. Any reasonable expenses incurred in
connection with the actions described in the preceding sentence or as a result
of MERS discontinuing or becoming unable to continue operations in connection
with the MERS System, shall be subject to withdrawal by the Servicer from the
Collection Account (provided that such expenses constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer, which may be an affiliate (each, a
"subservicer") pursuant to a subservicing agreement (each, a "Subservicing
Agreement"); provided, however, that (i) such subservicing arrangement and the
terms of the related Subservicing Agreement must provide for the servicing of
such Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder, (ii) that such agreement would not result in a
withdrawal or downgrading by any Rating Agency rating the Certificates or any of
the NIM Notes evidenced by a letter to that effect delivered by each such Rating
Agency to the Depositor and the NIMs Insurer and (iii) the NIMs Insurer shall
have consented to such Subservicing Agreement, which consent shall not be
unreasonably withheld. Notwithstanding the provisions of any Subservicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a subservicer or reference to actions
taken through a subservicer or otherwise, the Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the subservicer and to
-62-
the same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every Subservicing
Agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement, with the consent of
the NIMs Insurer (which consent shall not be unreasonably withheld), in the
event a successor servicer is appointed. All actions of the each subservicer
performed pursuant to the related Subservicing Agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the NIMs Insurer and the Trustee
copies of all Subservicing Agreements.
(b) For purposes of this Agreement, the Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a subservicer regardless of whether
such payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of
the Servicer.
Neither the Trustee nor the Depositor shall have any responsibility
or liability for any action or failure to act by the Servicer, and neither of
them is obligated to supervise the performance of the Servicer hereunder or
otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall, for any reason, no longer be
the servicer hereunder (including by reason of an Event of Default), the Trustee
or its designee shall, within a period of time not to exceed ninety (90) days
from the date of notice of termination or resignation, thereupon assume all of
the rights and obligations of the Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of the Servicer pursuant to
Section 3.10 hereof or any acts or omissions of any predecessor servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for any expenses of the Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee or its designee, in its capacity as the
successor servicer, shall immediately assume the Servicer's obligation to make
Advances and Servicing Advances). No such termination or resignation shall
affect any obligation of the Servicer to pay amounts owed under this Agreement
and to perform its duties under this Agreement until its successor assumes all
of its rights and obligations hereunder. If the Servicer shall for any reason no
longer be the servicer (including by reason of any Event of Default), the
Trustee (or any other successor servicer) may, at its option, succeed to any
rights and obligations of the Servicer under any subservicing agreement in
accordance with the terms thereof; provided, however, that the Trustee (or any
other successor servicer) shall not incur any liability or have any obligations
in its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to succeed to the rights and
obligations of the Servicer thereunder; and the Servicer shall not thereby be
relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession. To the extent any Servicing
Transfer Costs or expenses are not paid by the Servicer pursuant to this
Agreement, such amounts shall be payable out of the Certificate Account;
provided that the terminated servicer shall reimburse the Trust Fund for any
such expense incurred by the Trust Fund upon receipt of a reasonably detailed
invoice evidencing such expenses. If the Trustee is unwilling or unable to act
as servicer, or if the NIMs Insurer so directs the Trustee, the Trustee shall
seek to appoint a successor servicer that is eligible in accordance with the
criteria specified in this Agreement and reasonably acceptable to the NIMs
Insurer.
-63-
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement and the Mortgage Loans then being
serviced and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Account; Certificate Account.
(a) The Servicer shall make reasonable efforts in
accordance with Accepted Servicing Practices to collect all payments called for
under the terms and provisions of the Mortgage Loans to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any related Required Insurance Policy. Consistent with the foregoing and
subject to Section 3.01, the Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any default interest charge, or (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater than
180 days; provided, however, that any extension pursuant to clause (ii) above
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder, except as provided below; provided, further, that the
NIMs Insurer's prior written consent shall be required for any modification,
waiver or amendment after the Cut-off Date if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans as of the Cut-off Date. In the event of any
such arrangement pursuant to clause (ii) above, subject to Section 4.01, the
Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), provided, however, that in no event shall
the Servicer grant any such forbearance (other than as permitted by the second
sentence of this Section) with respect to any one Mortgage Loan more than once
in any 12 month period or more than three times over the life of such Mortgage
Loan, and provided, further, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01.
(b) The Servicer will not waive any Prepayment Charge or
portion thereof unless, (i) the enforceability thereof shall have been limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally or is otherwise prohibited by law, or
(ii) the collectability thereof shall have been limited due to acceleration in
connection with a foreclosure or other involuntary payment or (iii) in the
Servicer's reasonable judgment as described in Section 3.01 hereof, (x) such
waiver relates to a default or a reasonably foreseeable default, (y) such waiver
would maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and related Mortgage Loan and (z) doing so is standard and
customary in servicing similar Mortgage Loans (including any waiver of a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
related to a default or a reasonably foreseeable default), or (iv) sufficient
information is not made available to enable it to collect the Prepayment Charge,
or (v) the collection of the Prepayment Charge or of a similar type of
prepayment premium would be considered "predatory" or "illegal" pursuant to
written guidance published by any applicable federal, state or local regulatory
authority having jurisdiction over such matters or has been challenged by any
such authority, or (vi)
-64-
there is a certified class action in which a similar type of prepayment premium
is being challenged. Except as provided in the preceding sentence, in no event
will the Servicer waive a Prepayment Charge in connection with a refinancing of
a Mortgage Loan that is not related to a default or a reasonably foreseeable
default. If the Servicer waives or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Servicer, other than as provided above, the
Servicer shall deposit the amount of such Prepayment Charge (or such portion
thereof as had been waived for deposit) into the Collection Account for
distribution in accordance with the terms of this Agreement.
(c) The Servicer shall not be required to institute or
join in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
(d) The Servicer shall establish and initially maintain,
on behalf of the Trustee for the benefit of the Certificateholders, the
Collection Account. The Servicer shall deposit into the Collection Account
daily, within two Business Days of receipt thereof, in immediately available
funds, the following payments and collections received or made by it on and
after the Cut-off Date with respect to the Mortgage Loans:
(i) all payments on account of principal,
including Principal Prepayments, on the Mortgage Loans, other than principal due
on the Mortgage Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on
the Mortgage Loans net of the related Servicing Fee permitted under Section
3.15, other than (x) interest due on the Mortgage Loans on or prior to the
Cut-off Date and (y) Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan) or released to
the Mortgagor on the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan) in accordance with the Servicer's normal servicing
procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by
the Servicer pursuant to Section 3.05(f) in connection with any losses on
Permitted Investments;
(vii) any amounts required to be deposited
by the Servicer pursuant to Section 3.10 hereof;
(viii) all Purchase Prices and Substitution
Adjustment Amounts;
(ix) all Advances made by the Servicer
pursuant to Section 4.01;
(x) all Prepayment Charges;
(xi) all net monthly rental income from REO
Properties required to be deposited by the Servicer pursuant to Section 3.12;
-65-
(xii) any amounts required to be deposited
by the Servicer pursuant to Section 3.27 hereof; and
(xiii) any other amounts required to be
deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing-related fees,
including all late payment charges, insufficient funds charges and payments in
the nature of assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property or stock allocated to a
dwelling unit in the case of a Co-op Loan), modification fees, extension fees
and other similar ancillary fees and charges (other than Prepayment Charges) if
collected, and any Excess Proceeds or Prepayment Interest Excess need not be
remitted by the Servicer. Rather, such fees and charges and similar amounts may
be retained by the Servicer as additional servicing compensation. In the event
that the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the Trustee, or such other institution maintaining the
Collection Account, to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Collection Account at
the direction of the Servicer.
The Servicer shall give notice to the NIMs Insurer and the Trustee
of the location of the Collection Account maintained by it when established and
prior to any change thereof. Not later than twenty days after each Distribution
Date, the Servicer shall forward to the NIMs Insurer, and upon request, to the
Trustee and the Depositor the most current available bank statement for the
Collection Account. Copies of such statement shall be provided by the Trustee to
any Certificateholder and to any Person identified to the Trustee as a
prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Servicer to the
Trustee.
(e) The Trustee shall establish and maintain, on behalf
of the Certificateholders, the Certificate Account. The Trustee shall, promptly
upon receipt, deposit or cause to be deposited in the Certificate Account and
retain therein the following:
(i) the aggregate amount withdrawn by the
Servicer from the Collection Account and required to be deposited in the
Certificate Account;
(ii) any amount required to be deposited by
the Trustee pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iii) the Optional Termination Amount paid
by the winning bidder at the Auction or by the NIMs Insurer or the Servicer
pursuant to Section 9.01.
Any amounts received by the Trustee prior to 3:00 p.m.
New York City
time (or such earlier deadline for investment in the Permitted Investments
designated by the Trustee) which are required to be deposited in the Certificate
Account by the Servicer shall be invested in Permitted Investments on the
Business Day on which they were received. The foregoing requirements for
remittance by the Servicer and deposit by the Servicer into the Certificate
Account shall be exclusive. In the event that the Servicer shall remit any
amount not required to be remitted and not otherwise subject to withdrawal
pursuant to Section 3.08 hereof, it may at any time withdraw such amount from
the Certificate Account, any provision herein to the contrary notwithstanding.
All funds deposited in the Certificate Account shall be
-66-
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Certificate
Account at the direction of the Servicer. The Trustee shall give notice to the
NIMs Insurer and the Servicer of the location of the Certificate Account
maintained by it when established and prior to any change thereof.
(f) Each institution that maintains the Collection
Account or the Certificate Account shall invest the funds in each such account
as directed by the Servicer or the Trustee, as applicable, in writing, in
Permitted Investments, which shall mature not later than (i) in the case of the
Collection Account the Business Day preceding the related Servicer Remittance
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Servicer Remittance Date) and (ii) in the case of the Certificate Account, the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains such Certificate Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Servicer or the Trustee, as applicable, for the benefit of
the Certificateholders. All income and gain net of any losses realized from
amounts on deposit in the Collection Account shall be for the benefit of the
Servicer as servicing compensation and shall be remitted to it or withdrawn by
it monthly as provided herein. The amount of any losses incurred in the
Collection Account in respect of any such investments shall be deposited by the
Servicer in the Collection Account out of the Servicer's own funds immediately
as realized.
(g) All income and gain net of any losses realized from
amounts on deposit in the Certificate Account shall be for the benefit of the
Trustee and shall be remitted to or withdrawn by it monthly as provided herein.
The amount of any losses incurred in the Certificate Account in respect of any
such investments shall be deposited by the Trustee, in the Certificate Account
out of the Trustee's own funds immediately as realized.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Servicer
shall establish and maintain one or more accounts (each, an "Escrow Account")
and deposit and retain therein all collections from the Mortgagors (or advances
by the Servicer) for the payment of taxes, assessments, hazard insurance
premiums or comparable items for the account of the Mortgagors. Nothing herein
shall require the Servicer to compel a Mortgagor to establish an Escrow Account
in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes, assessments, dues or comparable
items and insurance premiums) and 3.10 hereof (with respect to hazard
insurance), to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required by law or the terms of the related
Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow Account to
withdraw funds deposited in error or amounts previously deposited but returned
as unpaid due to a "not sufficient funds" or other denial by the related
Mortgagor's banking institution or to clear and terminate the Escrow Account at
the termination of this Agreement in accordance with Section 9.01 hereof. The
Escrow Accounts shall not be a part of the Trust Fund.
-67-
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.
(a) The Servicer may from time to time, make withdrawals
from the Collection Account for the following purposes (the order below not
constituting an order of priority):
(i) to pay to the Servicer (to the extent
not previously paid to or withheld by the Servicer), as servicing compensation
in accordance with Section 3.15, that portion of any payment or recovery of
interest on a Mortgage Loan that equals the Servicing Fee for the period with
respect to which such interest payment or recovery was made or allocated, and,
as additional servicing compensation, those other amounts set forth in Section
3.15;
(ii) to reimburse the Servicer for Advances
made by it (or to reimburse the Advancing Person for Advances made by it) with
respect to the Mortgage Loans, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on particular Mortgage Loan(s)
(including, for this purpose, Condemnation Proceeds, Insurance Proceeds,
Liquidation Proceeds) that represent late recoveries of payments of principal
and/or interest on such particular Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse the Servicer for any
Non-Recoverable Advance previously made and any Non-Recoverable Servicing
Advances previously made to the extent that, in the case of Non-Recoverable
Servicing Advances, reimbursement therefor constitutes "unanticipated expenses"
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or
investment income with respect to funds in or credited to the Collection
Account;
(v) to reimburse the Servicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance Policy;
(vi) to pay the Servicer any unpaid
Servicing Fees and to reimburse it for any unreimbursed Servicing Advances (to
the extent that reimbursement for Servicing Advances would constitute an
"unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)), the Servicer's right to reimbursement of Servicing Advances
pursuant to this subclause (vi) with respect to any Mortgage Loan being limited
to amounts received on particular Mortgage Loan(s)(including, for this purpose,
Liquidation Proceeds and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant to Section
3.01 or Section 3.06;
(vii) to pay to the Servicer any unpaid
Servicing Fees for any Mortgage Loan upon such Mortgage Loan being charged off
and upon termination of the obligations of the Servicer;
-68-
(viii) to pay to the Depositor, with respect
to each Mortgage Loan or property acquired in respect thereof that has been
purchased pursuant to Section 2.02 or 2.03, all amounts received thereon and not
taken into account in determining the related Stated Principal Balance of such
repurchased Mortgage Loan;
(ix) to reimburse the Servicer or the
Depositor for expenses incurred by any of them in connection with the Mortgage
Loans or the Certificates and reimbursable pursuant to Section 3.25 or Section
6.03 hereof;
(x) to reimburse the Trustee for enforcement
expenses reasonably incurred in respect of a breach or defect giving rise to the
purchase obligation in Section 2.03 including any expenses arising out of the
enforcement of the purchase obligation; provided that any such expenses will be
reimbursable under this subclause (ix) only to the extent that such expenses
would constitute "unanticipated expenses" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for
herein;
(xi) to withdraw any amount deposited in the
Collection Account and not required to be deposited therein;
(xii) to withdraw funds deposited in error
or amounts previously deposited but returned as unpaid due to a "not sufficient
funds" or other denial by the related Mortgagor's banking institution;
(xiii) to clear and terminate the Collection
Account upon termination of this Agreement pursuant to Section 9.01 hereof;
(xiv) to reimburse itself for Advances or
Servicing Advances from amounts in the Collection Account held for future
distributions that were not included in Available Funds for the preceding
Distribution Date. An amount equal to the amount withdrawn from the Collection
Account pursuant to this subclause (xiv) shall be deposited in the Collection
Account by the Servicer on the next succeeding Distribution Date on which funds
are to be distributed to Certificateholders; and
(xv) to reimburse itself from any amounts in
the Collection Account for any prior Advances which have not otherwise been
reimbursed at the time a Mortgage Loan is modified.
In addition, no later than 3:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds to the extent on deposit, and
such amount shall be deposited in the Certificate Account; provided, however, if
the Trustee does not receive such Interest Funds and Principal Funds by 4:00
p.m. Eastern Time, such Interest Funds and Principal Funds shall be deposited in
the Certificate Account on the next Business Day.
With respect to any Mortgage Loan-specific withdrawal, the Servicer
shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan
basis, for the purpose of justifying any withdrawal from the Collection Account.
The Servicer shall provide written notification to the Trustee and
the NIMs Insurer on or prior to the next succeeding Servicer Remittance Date
upon making any withdrawals from the Collection Account pursuant to subclauses
(iii) and (viii) above.
-69-
In the event of any failure by the Servicer to remit to the Trustee
for deposit into the Certificate Account any amounts (including any Advance)
required to be so remitted by the Servicer on the Servicer Remittance Date, the
Servicer shall pay to the Trustee, for its own account, interest on such amounts
at the "prime rate" (as specified in the
New York edition of The Wall Street
Journal) until such failure is remedied.
Unless otherwise specified, any amounts reimbursable to the Servicer
or the Trustee from amounts on deposit in the Collection Account or the
Certificate Accounts shall be deemed to come from first, Interest Funds, and
thereafter, Principal Funds for the related Distribution Date.
(b) The Trustee shall withdraw funds from the
Certificate Account for distribution to the Certificateholders in the manner
specified in this Agreement (and shall withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to retain pursuant to this
Agreement). In addition, the Trustee shall from time to time make withdrawals
from the Certificate Account for the following purposes (the order below not
constituting an order of priority):
(i) to withdraw any amount deposited in the
Certificate Account and not required to be deposited therein;
(ii) to clear and terminate the Certificate
Account upon termination of the Agreement pursuant to Section 9.01 hereof (after
paying all amounts necessary to the Trustee or the Servicer in connection with
any such termination);
(iii) to reimburse the Trustee for expenses
incurred by the Trustee reimbursable pursuant to Section 8.06 hereof; and
(iv) to pay to the Trustee earnings on or
investment income with respect to funds in or credited to the Certificate
Account.
SECTION 3.09. [RESERVED]
SECTION 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each Mortgage Loan
(other than a Co-op Loan), fire and hazard insurance with extended coverage in
an amount, to the extent permitted by law, that is at least equal to the lesser
of (i) the replacement value of the improvements that are part of such Mortgaged
Property, or (ii) the greater of (a) the outstanding principal balance of the
Mortgage Loan and (b) an amount such that the proceeds of such policy shall be
sufficient to prevent the related Mortgagor and/or mortgagee from becoming a
co-insurer or (iii) the amount required under applicable HUD/FHA regulations.
Each policy of standard hazard insurance shall contain, or have an accompanying
endorsement that contains, a standard mortgagee clause. The Servicer shall also
cause flood insurance to be maintained on property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, to the extent described below.
Pursuant to Section 3.05 hereof, any amounts collected by the Servicer under any
such policies (other than the amounts to be applied to the restoration or repair
of the related Mortgaged Property or property thus acquired or amounts released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of late payments by the related Mortgagor or
out of Liquidation Proceeds to the extent and as otherwise permitted by Section
3.08 hereof. It is
-70-
understood and agreed that no earthquake or other additional insurance is to be
required of any Mortgagor or maintained on property acquired in respect of a
Mortgage other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance. If a
Mortgaged Property is located at the time of origination of the Mortgage Loan in
a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
Flood Disaster Protection Act of 1973, as amended.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause which amount shall be deemed to be that in
excess of $1500 not payable under the blanket policy (i.e. the amount deemed
deductible under an individual policy). In connection with its activities as
servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of
itself, the Depositor and the Trustee for the benefit of the Certificateholders,
claims under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
When a Mortgaged Property has been or is about to be conveyed by
the Mortgagor, the Servicer shall, except as set forth below, to the extent it
has knowledge of such conveyance or prospective conveyance, exercise its rights
to accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which expense shall constitute a Servicing
Advance) delivered to the Trustee and the Depositor shall conclusively establish
the reasonableness of the Servicer's belief that any "due-on-sale" clause is not
enforceable under applicable law, but such Opinion of Counsel shall not be
required. In such event, the Servicer shall make reasonable efforts to enter
into an assumption and modification agreement with the Person to whom such
property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Servicer is authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Note. In addition to the foregoing, the
Servicer shall not be required to enforce any "due-on-sale" clause if in the
reasonable judgment of the Servicer, entering into an assumption and
modification agreement with a Person to whom such property shall be conveyed and
releasing the original Mortgagor from liability would be in the best interests
of the Certificateholders. The Mortgage Loan, as assumed, shall conform in all
respects to the requirements, representations and warranties of this Agreement.
The Servicer shall notify the Trustee and the NIMs Insurer that any such
assumption or substitution agreement has been completed by forwarding to the
Trustee (with a copy to the NIMs
-71-
Insurer) the original copy of such assumption or substitution agreement
(indicating the Mortgage File to which it relates) which copy shall be added by
the Trustee to the related Mortgage File and which shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. The Servicer shall be
responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, no material term
of the Mortgage Note (including, but not limited to, the Mortgage Rate, the
amount of Scheduled Payment, the Maximum Rate, the Minimum Rate, the Gross
Margin, the Periodic Rate Cap, the Adjustment Date, a Prepayment Charge or any
other term affecting the amount or timing of payment) shall be changed nor shall
any required monthly payments of principal or interest be deferred or forgiven.
Any fee collected by the Servicer for consenting to any such conveyance or
entering into an assumption or substitution agreement shall be retained by or
paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds.
(a) The Servicer shall use reasonable efforts consistent
with the servicing standard set forth in Section 3.01 to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of Delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) and if applicable, as a Non-Recoverable Servicing Advance,
as contemplated in Section 3.08 hereof. Any Mortgage Loan that is charged off
may be sold to the majority Certificateholder of the Class C Certificates, at
its option, at its fair market value after the time period specified in (e)
below. If the Servicer has knowledge that a Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) that the Servicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Servicer, the Servicer will, prior to acquiring the
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan), consider such risks and only take action in accordance with
Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee or its nominee. Pursuant to its
efforts to sell such REO Property, the Servicer shall either itself or through
an agent selected by the Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part
-72-
thereof, as the Servicer deems to be in the best interest of the Servicer and
the Certificateholders for the period prior to the sale of such REO Property.
The Servicer shall prepare a statement with respect to each REO Property that
has been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Servicer to comply with the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Collection Account no
later than the close of business on the Determination Date immediately following
the month concerned. The Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, obtain, in accordance with applicable procedures for
obtaining an automatic extension of the grace period, more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period, in which case such property must be disposed of
prior to the end of such extension, unless the Trustee and the NIMs Insurer
shall have been supplied with an Opinion of Counsel (such Opinion of Counsel not
to be an expense of the Trustee or the NIMs Insurer), to the effect that the
holding by the Trust Fund of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) subsequent to such three-year period
or extension will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund or any of the REMICs provided for herein as
defined in section 860F of the Code or cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
(subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) acquired by the
Trust Fund shall be held, rented (or allowed to continue to be rented) or
otherwise used for the production of income by or on behalf of the Trust Fund in
such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) to
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund or any REMIC provided for
herein to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Servicer that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any Mortgaged Properties
acquired through foreclosure or other judicial proceeding, net of reimbursement
to the Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of Co-op Loan), shall be applied for the purpose of
the Trust Fund to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such net income shall be deemed, for all purposes
and as between the parties to this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited into
the Collection Account. To the extent that any such net income
-73-
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan,
net of any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds, will be applied as
between the parties in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and unpaid Servicing
Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse
the Servicer for any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or
this Section 3.12; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan, at the applicable
Net Mortgage Rate to the Due Date occurring in the month in which such amounts
are required to be distributed; and fourth, as a recovery of principal of the
Mortgage Loan, and fifth to any Prepayment Charges.
The proceeds of any net income from an REO Property will be applied
as between the parties in the following order of priority: first, to reimburse
the Servicer for any related unreimbursed Servicing Advances and unpaid
Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, as a recovery of principal; fourth, to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the related REO Property, at the applicable Net Mortgage Rate to the
Due Date occurring in the month in which such amounts are required to be
distributed.
(b) On each Determination Date, the Servicer shall
determine the respective aggregate amounts of Excess Proceeds, if any, that
occurred in the related Prepayment Period.
(c) [RESERVED]
(d) With respect to such of the Mortgage Loans as come
into and continue in default, the Servicer will decide, in its reasonable
business judgment, whether to (i) foreclose upon the Mortgaged Properties
securing those Mortgage Loans pursuant to Section 3.12(a), (ii) write off the
unpaid principal balance of the Mortgage Loans as bad debt (unless the Servicer,
after making a reasonable estimate of the expected recovery, determines that
foreclosure proceedings or other liquidation of the related Mortgaged Property
would yield a net recovery), (iii) take a deed in lieu of foreclosure, (iv)
accept a short sale or short refinance; (v) arrange for a repayment plan, or
(vi) agree to a modification of such Mortgage Loan. As to any Mortgage Loan that
becomes 120 days delinquent, the Servicer shall obtain a broker's price opinion,
the cost of which will be reimbursable as a Servicing Advance. After obtaining
the broker's price opinion, the Servicer will determine, in its reasonable
business judgment, whether foreclosure proceedings or other liquidation of the
related Mortgage Property would yield a net recovery. The Servicer may charge
off the related Mortgage Loan at the time it becomes 180 days delinquent (unless
the Servicer, after making a reasonable estimate of the expected recovery,
determines that foreclosure proceedings or other liquidation of the related
Mortgaged Property would yield a net recovery). Once a Mortgage Loan has been
charged off, the Servicer will discontinue making Advances, the Servicer will
not be entitled to Servicing Fees with respect to such Mortgage Loan, and the
Mortgage Loan will be treated as a Liquidated Loan. If the Servicer determines
that foreclosure proceedings or other liquidation of the related Mortgaged
Property would yield a net recovery on a Mortgage Loan that becomes 180 days
delinquent, the Servicer may continue making Advances, and the Servicer will be
required to notify the Trustee of such decision.
-74-
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of two copies of such request, the Trustee or its
designee shall promptly release the related Mortgage File to the Servicer, and
the Servicer is authorized to cause the removal from registration on the MERS
System of any such Mortgage if applicable, and the Servicer, on behalf of the
Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Mortgagor to the
extent permitted by law, and otherwise to the Trust Fund to the extent such
expenses constitute "unanticipated expenses" within the meaning of Treasury
Regulations Section 1.860G-(1)(b)(3)(ii). From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its designee shall, upon
delivery to the Trustee or its designee of a Request for Release in the form of
Exhibit I signed by a Servicing Officer, release the Mortgage File to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
or its designee when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account.
Each Request for Release may be delivered to the Trustee or its
designee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Servicer and the Trustee or its designee shall mutually agree. The Trustee
or its designee shall promptly release the related Mortgage File(s) within five
(5) Business Days of receipt of a properly completed Request for Release
pursuant to clauses (i), (ii) or (iii) above. Receipt of a properly completed
Request for Release shall be authorization to the Trustee or its designee to
release such Mortgage Files, provided the Trustee or its designee has determined
that such Request for Release has been executed, with respect to clauses (i) or
(ii) above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages respectively caused by
it.
On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total number
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii) above.
If the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) as authorized by this Agreement, the
Servicer may deliver or cause to be delivered to the Trustee or its designee,
for signature, as appropriate or on behalf of the Trustee, execute any court
pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against
-75-
the Mortgagor on the Mortgage Note or the Mortgage or to obtain a deficiency
judgment or to enforce any other remedies or rights provided by the Mortgage
Note or the Mortgage or otherwise available at law or in equity. Notwithstanding
the foregoing, the Servicer shall cause possession of any Mortgage File or of
the documents therein that shall have been released by the Trustee or its
designee to be returned to the Trustee promptly after possession thereof shall
have been released by the Trustee or its designee unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Collection Account, and the Servicer shall have
delivered to the Trustee or its designee a Request for Release in the form of
Exhibit I or (ii) the Mortgage File or document shall have been delivered to an
attorney or to a public trustee or other public official as required by law for
purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) and the Servicer shall have delivered to the Trustee
or its designee an Officer's Certificate of a Servicing Officer certifying as to
the name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
SECTION 3.14. Documents, Records and Funds in Possession of Servicer
to be Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the
control of, the Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Collection Account,
shall be held by the Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trust Fund, subject to the
applicable provisions of this Agreement. The Servicer also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the Collection Account or Certificate Account or in any Escrow Account, or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set off against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that the Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to the Servicer under this
Agreement.
The Servicer may from time to time provide the Depositor, and any
Person designated by the Depositor, with certain reports and reasonable access
to information and documentation regarding the Mortgage Loans.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
or recovery of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan as of the immediately preceding
Distribution Date.
Additional servicing compensation in the form of any Excess
Proceeds, late payment fees, assumption fees (i.e. fees related to the
assumption of a Mortgage Loan upon the purchase of the related Mortgaged
Property (or stock allocated to a dwelling unit, in the case of Co-op Loan)),
modification fees, extension fees and similar fees payable by the Mortgagor,
Prepayment Interest Excess, and all income and gain net of any losses realized
from Permitted Investments in the Collection Account shall be retained by the
Servicer to the extent not required to be deposited in the Collection Account
pursuant to Sections 3.05 or 3.12(a) hereof. The Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder (including payment of any premiums for hazard insurance, as required
by
-76-
Section 3.10 hereof and maintenance of the other forms of insurance coverage
required by Section 3.10 hereof) and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it provided, that
the Servicer shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
SECTION 3.17. Annual Statement as to Compliance.
Pursuant to this Agreement, the Servicer shall deliver to the
Depositor, the Trustee and the NIMs Insurer on or before March 15 of each year
beginning in 2006, or such other date in order to remain in compliance with the
Section 302 Requirements, an Officer's Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement has been made
under such officer's supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof. The Trustee shall
forward a copy of each such statement to each Rating Agency rating the
Certificates. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon written request at the Certificateholder's expense,
provided such statement has been delivered by the Servicer to the Trustee.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 15 of each year, beginning in 2006 or such other
date in order to remain in compliance with the Section 302 Requirements, the
Servicer at its expense shall cause a nationally recognized firm of independent
public accountants (who may also render other services to the Servicer or any
Affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a USAP Report to the Trustee and the Depositor.
Copies of the USAP Report shall be provided by the Trustee to any
Certificateholder upon request at the Certificateholder's expense, provided such
report has been delivered by the Servicer to the Trustee. The Trustee shall
deliver to the NIMs Insurer upon written request: (i) a copy of such USAP
Report, and (ii) the Servicer's annual officer's certificate as to compliance
with this Agreement provided by the Servicer to the Trustee pursuant to Section
3.17. In addition, at the NIMs Insurer's written request, the Servicer shall
deliver copies of evidence of the Servicer's fidelity bond or errors and
omissions insurance coverage to the NIMs Insurer.
SECTION 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this Agreement
shall exist so long as the NIM Notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such NIM Notes.
-77-
SECTION 3.20. Periodic Filings.
(a) As part of the Form 10-K required to be filed
pursuant to the terms of this Agreement, the Trustee shall include the
independent public accountants report required pursuant to Section 3.18 as well
as the Officer's Certificate delivered by the Servicer pursuant to Section 3.17
relating to the Servicer's performance of its obligations under this Agreement
and any significant deficiencies relating to the Servicer's compliance set forth
in the report of the Servicer's certified independent accountants described
above.
(b) The Depositor shall prepare and file the initial
report on Form 8-K. The Trustee shall prepare for filing, and execute (other
than the Form 10-Ks and the Certification), on behalf of the Trust Fund, and
file with the Securities and Exchange Commission, (i) within 15 days after each
Distribution Date in each month, each Monthly Statement on Form 8-K under the
Exchange Act executed by the Trustee, (ii) on or before March 31 of each year
beginning in 2006 or such other date in order to remain in compliance with the
Section 302 Requirements, a Form 10-K under the Exchange Act executed by the
Servicer, including any certification (the "Certification") required by the
Section 302 Requirements, and (iii) any and all reports, statements and
information respecting the Trust Fund and/or the Certificates required to be
filed on behalf of the Trust Fund under the Exchange Act executed by the
Trustee. The Certification shall be executed by a senior officer of the
Servicer. Upon such filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information. Prior to making any such filings and
certifications, the Trustee shall comply with the provisions set forth in this
Section. On or prior to January 31st of the first year in which it is able to do
so under applicable law, the Trustee shall file a Form 15 under the Exchange Act
unless instructed otherwise by the Depositor. The Depositor hereby grants to the
Trustee a limited power of attorney to execute (other than the Form 10-Ks and
the Certification) and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Trustee from the Depositor of written termination of such power of attorney and
(ii) the termination of the Trust Fund. The Depositor agrees to promptly furnish
to the Trustee, 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 Trustee reasonably deems appropriate to prepare
and file all necessary reports with the Commission. The Trustee shall have no
responsibility to file any items other than those specified in this Section.
(c) [RESERVED]
(d) The obligations set forth in paragraphs (a) and (b)
of this Section shall only apply with respect to periods for which the Trustee
is obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this
Section. In the event a Form 15 is properly filed pursuant to paragraph (b) of
this Section, there shall be no further obligations under paragraphs (a) and (b)
of this Section commencing with the fiscal year in which the Form 15 is filed
(other than the obligations in paragraphs (a) and (b) of this Section to be
performed in such fiscal year that relate back to the prior fiscal year).
SECTION 3.21. Annual Certificate by Trustee.
(a) Within 15 days prior to the date on which a Form
10-K is to be filed with a Certification by the Depositor, an officer of the
Trustee shall execute and deliver an Officer's Certificate, signed by the senior
officer in charge of the Trustee or any officer to whom that officer reports, to
the Depositor for the benefit of such Depositor and its officers, directors and
affiliates, certifying as to the matters described in the Officer's Certificate
attached hereto as Exhibit K.
-78-
(b) The Trustee shall indemnify and hold harmless the
Depositor and its officers, directors, agents and affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Trustee or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.21 any material misstatement
or omission in the Officer's Certificate required under this Section or the
negligence, bad faith or willful misconduct of the Trustee in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, then the Trustee agrees that it
shall contribute to the amount paid or payable by the Depositor as a result of
the losses, claims, damages or liabilities of the Depositor in such proportion
as is appropriate to reflect the relative fault of the Trustee on the one hand
and the Depositor on the other in connection with a breach of the Trustee's
obligations under this Section 3.21, any material misstatement or omission in
the Officer's Certificate required under this Section or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.
SECTION 3.22. Annual Certificate by Servicer.
(a) Within 15 days prior to the date on which a Form
10-K is required to be filed with a Certification by the Depositor, the Servicer
shall execute and deliver an Officer's Certificate in the form of Exhibit L
attached hereto, signed by the senior officer in charge of servicing of the
Servicer or any officer to whom that officer reports, to the Trustee and
Depositor for the benefit of the Trustee and Depositor and their respective
officers, directors and affiliates, certifying as to the following matters:
(i) I have reviewed the information required to be
delivered to the Trustee pursuant to the
Pooling and Servicing
Agreement (the "Servicing Information");
(ii) Based on my knowledge, the information in the
Annual Statement of Compliance, and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans submitted to the Trustee by the Servicer taken as a
whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made,
not misleading as of the last day of the period covered by the
Annual Statement of Compliance;
(iii) Based on my knowledge, the Servicing Information
required to be provided to the Trustee by the Servicer under this
Agreement has been provided to the Trustee; and
(iv) I am responsible for reviewing the activities
performed by the Servicer under this Agreement and based upon the
review required hereunder, and except as disclosed in the Annual
Statement of Compliance, the Annual Independent Certified Public
Accountant's Servicing Report and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans submitted to the Trustee by the Servicer, the
Servicer has, as of the last day of the period covered by the Annual
Statement of Compliance fulfilled its obligations under this
Agreement.
(b) The Servicer shall indemnify and hold harmless the
Depositor and its officers, directors, agents and affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.22, any material misstatement
or omission in the Officer's Certificate required under this Section or the
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, then
-79-
the Servicer agrees that it shall contribute to the amount paid or payable by
the Trustee and the Depositor as a result of the losses, claims, damages or
liabilities of the Depositor in such proportion as is appropriate to reflect the
relative fault of the Depositor on the one hand and the Servicer on the other in
connection with a breach of the Servicer's obligations under this Section 3.22,
any material misstatement or omission in the Officer's Certificate required
under this Section or the Servicer's negligence, bad faith or willful misconduct
in connection therewith.
SECTION 3.23. Prepayment Charge Reporting Requirements.
Promptly after each Distribution Date, the Servicer shall provide to
the Depositor, the Trustee and the NIMs Insurer the following information with
regard to each Mortgage Loan that has prepaid during the related Prepayment
Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) original principal balance;
(v) Prepayment Charge amount due;
(vi) Prepayment Charge amount collected; and
(vii) reason why full Prepayment Charge amount was not
collected, if applicable.
SECTION 3.24. Statements to Trustee.
Not later than the later of (a) two Business Days after the 15th day
of each month and (b) the 18th day of the month (or if the 18th is not a
Business Day, the next succeeding Business Day), the Servicer shall furnish to
the Trustee and the NIMs Insurer an electronic file providing loan level
accounting data as of the Determination Date for the period ending on the last
Business Day of the preceding month and for the applicable Prepayment Period
with respect to prepayments in the format mutually agreed upon between the
Servicer and the Trustee, including but not limited to information sufficient to
allow the Trustee to prepare the Monthly Statement described in Section 4.05(a).
SECTION 3.25. Indemnification.
The Servicer shall indemnify the Seller, the Trust Fund, the
Trustee, the Depositor, the NIMs Insurer and their officers, directors,
employees and agents and hold each of them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of such parties may sustain in any way related to the negligence, willful
misfeasance or bad faith in the performance of its duties or by reason of
reckless disregard of obligations and duties hereunder. The Servicer promptly
shall notify the Seller, the Trustee, the Depositor and the NIMs Insurer or any
other relevant party if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans as applicable if such claim is made against the
Seller, Trustee, Depositor or NIMs Insurer and, if subject to this
indemnification obligation, assume (with the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld or delayed)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be
-80-
entered against it or any of such parties in respect of such claim. The Servicer
shall follow any reasonable written instructions received from the Trustee and
the NIMs Insurer in connection with such claim and the Servicer will not have
liability for following such instructions. The Servicer shall provide the
Depositor, the Trustee and the NIMs Insurer with a written report of all
expenses and advances incurred by the Servicer pursuant to this Section 3.25,
and the Servicer shall promptly reimburse itself from the assets of the Trust
Fund in the Collection Account for all amounts advanced by it pursuant to the
preceding sentence except when the claim in any way relates to the failure of
the Servicer to service and administer the Mortgage Loans through the
negligence, bad faith or willful misconduct of the Servicer. The provisions of
this paragraph shall survive the termination of this Agreement and the payment
of the outstanding Certificates.
SECTION 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the
Servicer covenants that it will not, and that it will ensure that its affiliates
and agents will not, directly solicit or provide information for any other party
to solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
SECTION 3.27. [RESERVED]
SECTION 3.28. High Cost Mortgage Loans.
In the event that the Servicer reasonably determines
that a Mortgage Loan may be a "high cost mortgage loan", "high cost home",
"covered", "high cost", "high risk home", "predatory" or similarly classified
loan under any applicable state, federal or local law, the Servicer may notify
the Depositor and the Trustee thereof; the Servicer may terminate its servicing
thereof; and such determination shall be deemed to materially and adversely
affect the interests of the Certificateholders in such Mortgage Loan and the
Seller will repurchase the Mortgage Loan within a 30 day period from the date of
such notice in the manner described in Section 2.02.
ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Advances.
(a) Subject to the conditions of this Article IV, the
Servicer, as required below, shall make an Advance and deposit such Advance in
the Collection Account. Each such Advance shall be remitted to the Collection
Account no later than 3:00 p.m. Eastern time on the Servicer Advance Date in
immediately available funds. The Servicer shall be obligated to make any such
Advance only to the extent that such advance would not be a Non-Recoverable
Advance. If the Servicer shall have determined that it has made a
Non-Recoverable Advance or that a proposed Advance or a lesser portion of such
Advance would constitute a Non-Recoverable Advance, the Servicer shall deliver
(i) to the Trustee for the benefit of the Certificateholders, funds constituting
the remaining portion of such Advance, if applicable, and (ii) to the Depositor,
the NIMs Insurer, each Rating Agency rating the Certificates and the Trustee an
Officer's Certificate setting forth the basis for such determination.
In lieu of making all or a portion of such Advance from its own
funds, the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Collection Account that any amount held for
-81-
future distribution has been used by the Servicer in discharge of its obligation
to make any such Advance and (ii) transfer such funds from the Collection
Account to the Certificate Account. In addition, the Servicer shall have the
right to reimburse itself for any such Advance from amounts held from time to
time in the Collection Account to the extent such amounts are not then required
to be distributed. Any funds so applied and transferred pursuant to the previous
two sentences shall be replaced by the Servicer by deposit in the Collection
Account no later than the close of business on the Servicer Advance Date on
which such funds are required to be distributed pursuant to this Agreement. The
Servicer shall be entitled to be reimbursed from the Collection Account for all
Advances of its own funds made pursuant to this Section as provided in Section
3.08. The obligation to make Advances with respect to any Mortgage Loan shall
continue until the earlier of (i) the date such Mortgage Loan is paid in full,
(ii) the date the related Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) or related REO Property has been liquidated
or until the purchase or repurchase thereof (or substitution therefor) from the
Trust Fund pursuant to any applicable provision of this Agreement, except as
otherwise provided in this Section 4.01, or (iii) the date on which such
Mortgage Loan becomes 150 days delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the
contrary (including, but not limited to, Sections 3.01 and 4.01(a) hereof), no
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such Advance or Servicing Advance would, if made, constitute a
Non-Recoverable Advance or a Non-Recoverable Servicing Advance. The
determination by the Servicer that it has made a Non-Recoverable Advance or a
Non-Recoverable Servicing Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Non-Recoverable Advance or a
Non-Recoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Depositor and the
Trustee. In addition, the Servicer shall not be required to advance any Relief
Act Shortfalls.
(c) Notwithstanding the foregoing, the Servicer shall
not be required to make any Advances for any Mortgage Loan after such Mortgage
Loan becomes 150 days delinquent. The Servicer shall identify such delinquent
Mortgage Loans in the Servicer Statement referenced in Section 3.24. In
addition, the Servicer shall provide the Trustee with an Officer's Certificate
listing such delinquent Mortgage Loans and certifying that such loans are 150
days or more delinquent.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall resulting from a Principal Prepayment in full between the
15th day of the month and the last day of such month of the applicable
Prepayment Period, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall; provided that the amount so deposited with
respect to any Distribution Date shall be limited to the product of (x) 0.25%
per annum and (y) the aggregate Stated Principal Balance of the Mortgage Loans.
In case of such deposit, the Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Trustee, the Trust Fund or the
Certificateholders. With respect to any Distribution Date, to the extent that
the Prepayment Interest Shortfall exceeds Compensating Interest (such excess, a
"Non-Supported Interest Shortfall"), such Non-Supported Interest Shortfall shall
reduce the Current Interest with respect to each Class of Certificates, pro
rata, based upon the amount of interest each such Class would otherwise be
entitled to receive on such Distribution Date. Notwithstanding the foregoing,
there shall be no reduction of the Servicing Fee in connection with Prepayment
Interest Shortfalls relating to the Relief Act and the Servicer shall not be
obligated to pay Compensating Interest with respect to Prepayment Interest
Shortfalls related to the Relief Act.
-82-
SECTION 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Certificate
Account shall be treated for federal income tax purposes as applied to
distributions on the interests in the Lower Tier REMIC in an amount sufficient
to make the distributions on the respective Certificates on such Distribution
Date in accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) [RESERVED]
(b) On each Distribution Date, the Trustee shall make
the following distributions from funds then available in the Certificate
Account, of an amount equal to the Interest Funds (less amounts distributed
pursuant to Section 4.04(a) on such Distribution Date) in the following order of
priority:
(i) to the Class P Certificates, any
Prepayment Charges received with respect to the Mortgage Loans during the
related Prepayment Period and all amounts paid by the Servicer, the Seller in
respect of Prepayment Charges pursuant to this Agreement and all amounts
received in respect of any indemnification paid as a result of a Prepayment
Charge being unenforceable in breach of the representations and warranties set
forth in the Sale Agreement for the related Prepayment Period;
(ii) to each class of the Class A
Certificates, the Current Interest and any Interest Carry Forward Amount with
respect to such Class; provided, however, if such amount is not sufficient to
make a full distribution of the Current Interest and any Interest Carry Forward
Amount with respect to the Class A Certificates, such amount will be distributed
pro rata among each Class of the Class A Certificates based on the ratio of (x)
the Current Interest and Interest Carry Forward Amount for each class of the
Class A Certificates to (y) the total amount of Current Interest and any
Interest Carry Forward Amount for the Class A Certificates;
(iii) to the Class M-1 Certificates, the
Class M-1 Current Interest and any Class M-1 Interest Carry Forward Amount;
(iv) to the Class M-2 Certificates, the
Class M-2 Current Interest and any Class M-2 Interest Carry Forward Amount;
(v) to the Class M-3 Certificates, the Class
M-3 Current Interest and any Class M-3 Interest Carry Forward Amount;
(vi) to the Class M-4 Certificates, the
Class M-4 Current Interest and any Class M-4 Interest Carry Forward Amount;
(vii) to the Class M-5 Certificates, the
Class M-5 Current Interest and any Class M-5 Interest Carry Forward Amount;
(viii) to the Class B-1 Certificates, the
Class B-1 Current Interest and any Class B-1 Interest Carry Forward Amount;
(ix) to the Class B-2 Certificates, the
Class B-2 Current Interest and any Class B-2 Interest Carry Forward Amount;
-83-
(x) to the Class B-3 Certificates, the Class
B-3 Current Interest and any Class B-3 Interest Carry Forward Amount;
(xi) to the Class B-4 Certificates, the
Class B-4 Current Interest and any Class B-4 Interest Carry Forward Amount; and
(xii) any remainder pursuant to Section
4.04(f) hereof.
On each Distribution Date, subject to the proviso in (ii) above,
Interest Funds received on the Group One Mortgage Loans will be deemed to be
distributed to the Class R and Class A-1 Certificates and Interest Funds
received on the Group Two Mortgage Loans will be deemed to be distributed to the
Class A-2 Certificates, in each case, until the related Current Interest and
Interest Carry Forward Amount of each such class of Certificates for such
Distribution Date has been paid in full. Thereafter, Interest Funds not required
for such distributions are available to be applied to if necessary, to the class
or classes of Certificates that are not related to such group of Mortgage Loans.
(c) [RESERVED]
(d) On each Distribution Date, the Trustee shall make
the following distributions from the Certificate Account of an amount equal to
the Principal Distribution Amount in the following order of priority, and each
such distribution shall be made only after all distributions pursuant to Section
4.04(b) above shall have been made until such amount shall have been fully
distributed for such Distribution Date:
(i) to the Class A Certificates, the Class A
Principal Distribution Amount shall be distributed as follows:
(a) the Group One Principal Distribution Amount shall be
distributed as follows: (I) if no Class A-1 Trigger Event has
occurred, the Group One Principal Distribution Amount will be
distributed as follows: first, to the Class R Certificate until its
Certificate Principal Balance has been reduced to zero, and second,
pro rata to the Class A-1A and Class A-1B Certificates, based on
their relative Certificate Principal Balances, until the Certificate
Principal Balance of each such Class has been reduced to zero and
(II) if a Class A-1 Trigger Event has occurred, the Group One
Principal Distribution Amount shall be distributed sequentially to
the Class R, Class A-1A and Class A-1B Certificates, until the
Certificate Principal Balance of each such Class has been reduced to
zero;
(b) the Group Two Principal Distribution Amount will be
distributed sequentially to the Class A-2A, Class A-2B and Class
A-2C Certificates until the Certificate Principal Balance of each
such Class has been reduced to zero; provided, however, that on and
after the Distribution Date on which the aggregate Certificate
Principal Balance of the Class M, Class B and Class C Certificates
have been reduced to zero, any principal distributions allocated to
the Class A-2A, Class A-2B and Class A-2C Certificates are required
to be allocated pro rata among such Classes of Certificates, based
on their respective Certificate Principal Balances, until their
Certificate Principal Balances have been reduced to zero;
(ii) to the Class M-1 Certificates, the
Class M-1 Principal Distribution Amount;
(iii) to the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount;
-84-
(iv) to the Class M-3 Certificates, the
Class M-3 Principal Distribution Amount;
(v) to the Class M-4 Certificates, the Class
M-4 Principal Distribution Amount;
(vi) to the Class M-5 Certificates, the
Class M-5 Principal Distribution Amount;
(vii) to the Class B-1 Certificates, the
Class B-1 Principal Distribution Amount;
(viii) to the Class B-2 Certificates, the
Class B-2 Principal Distribution Amount;
(ix) to the Class B-3 Certificates, the
Class B-3 Principal Distribution Amount;
(x) to the Class B-4 Certificates, the Class
B-4 Principal Distribution Amount; and
(xi) any remainder pursuant to Section
4.04(f) hereof.
(e) [RESERVED]
(f) On each Distribution Date, the Trustee shall make
the following distributions up to the following amounts from the Certificate
Account of the remainders pursuant to Section 4.04(b)(xii) and (d)(xi) hereof
and each such distribution shall be made only after all distributions pursuant
to Sections 4.04(b) and (d) above shall have been made until such remainders
shall have been fully distributed for such Distribution Date:
(i) for distribution as part of the
Principal Distribution Amount, the Extra Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the
Class M-1 Unpaid Realized Loss Amount;
(iii) to the Class M-2 Certificates, the
Class M-2 Unpaid Realized Loss Amount;
(iv) to the Class M-3 Certificates, the
Class M-3 Unpaid Realized Loss Amount;
(v) to the Class M-4 Certificates, the Class
M-4 Unpaid Realized Loss Amount;
(vi) to the Class M-5 Certificates, the
Class M-5 Unpaid Realized Loss Amount;
(vii) to the Class B-1 Certificates, the
Class B-1 Unpaid Realized Loss Amount;
-85-
(viii) to the Class B-2 Certificates, the
Class B-2 Unpaid Realized Loss Amount;
(ix) to the Class B-3 Certificates, the
Class B-3 Unpaid Realized Loss Amount;
(x) to the Class B-4 Certificates, the Class
B-4 Unpaid Realized Loss Amount;
(xi) to the Class R Certificate, the
Residual Excess Interest Amount;
(xii) to the Class A, Class M and Class B
Certificates, on a pro rata basis, based upon outstanding Floating Rate
Certificate Carryover for each such Class, the Floating Rate Certificate
Carryover for each Class; and
(xiii) the remainder pursuant to Section
4.04(g) hereof.
(g) on each Distribution Date, the Trustee shall
allocate the remainders pursuant to Section 4.04(f)(xiii) as follows:
(i) to the Class C Certificates in the
following order of priority, (I) the Class C Current Interest, (II) the Class C
Interest Carry Forward Amount, (III) as principal on the Class C Certificate
until the Certificate Principal Balance of the Class C Certificates has been
reduced to zero and (IV) the Class C Unpaid Realized Loss Amount; and
(ii) the remainder pursuant to Section
4.04(h) hereof.
(h) On each Distribution Date, the Trustee shall
allocate the remainder pursuant to Section 4.04(g)(ii) hereof (i) to the Trustee
to reimburse amounts or pay indemnification amounts owing to the Trustee from
the Trust Fund pursuant to Section 8.06 to the extent such amounts shall have
exceeded the cap set forth in Section 8.06(c), and (ii) thereafter, to the Class
R Certificate and such distributions shall be made only after all preceding
distributions shall have been made until such remainder shall have been fully
distributed.
(i) On each Distribution Date, after giving effect to
distributions on such Distribution Date, the Trustee shall allocate the Applied
Realized Loss Amount for the Certificates to reduce the Certificate Principal
Balances of the Class C Certificates and the Subordinated Certificates in the
following order of priority:
(i) to the Class C Certificates, until the
Class C Certificate Principal Balance is reduced to zero;
(ii) to the Class B-4 Certificates until the
Class B-4 Certificate Principal Balance is reduced to zero;
(iii) to the Class B-3 Certificates until
the Class B-3 Certificate Principal Balance is reduced to zero;
(iv) to the Class B-2 Certificates until the
Class B-2 Certificate Principal Balance is reduced to zero;
-86-
(v) to the Class B-1 Certificates until the
Class B-1 Certificate Principal Balance is reduced to zero;
(vi) to the Class M-5 Certificates until the
Class M-5 Certificate Principal Balance is reduced to zero;
(vii) to the Class M-4 Certificates until
the Class M-4 Certificate Principal Balance is reduced to zero;
(viii) to the Class M-3 Certificates until
the Class M-3 Certificate Principal Balance is reduced to zero;
(ix) to the Class M-2 Certificates until the
Class M-2 Certificate Principal Balance is reduced to zero; and
(x) to the Class M-1 Certificates until the
Class M-1 Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five (5) Business Days prior to the related Record
Date or, if not, by check mailed by first class mail to such Certificateholder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 9.02 hereof respecting the
final distribution, distributions with respect to Certificates registered in the
name of a Depository shall be made to such Depository in immediately available
funds.
In accordance with this Agreement, the Servicer shall prepare and
deliver a report (the "Remittance Report") to the Trustee and the NIMs Insurer
in the form of a computer readable magnetic tape (or by such other means as the
Servicer, the Trustee and the NIMs Insurer may agree from time to time)
containing such data and information such as to permit the Trustee to prepare
the Monthly Statement to Certificateholders and make the required distributions
for the related Distribution Date.
The Trustee shall promptly notify the NIMs Insurer of any proceeding
or the institution of any action, of which a Responsible Officer of the Trustee
has actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or the
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates and the Trustee hereby agree
that the NIMs Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to such Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMs Insurer shall be subrogated to the rights
of the Trustee and each Holder of the Class C Certificates and the Class P
Certificates in the conduct of any such Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim;
provided, however, that the NIMs Insurer will not have any rights with respect
to any Preference Claim set forth in this paragraph unless the indenture trustee
with respect to the NIM Notes or the holder of any NIMs Notes has been required
to relinquish a distribution made on the Class C Certificates, the Class P
Certificates or the NIM Notes, as applicable, and the NIMs Insurer made a
payment in respect of such relinquished amount.
-87-
(k) The Trustee is hereby directed by the Depositor to
execute the Cap Contracts on behalf of the Trust Fund in the form presented to
it by the Depositor and shall have no responsibility for the contents, adequacy
or sufficiency of such Cap Contracts, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Trustee under the Cap Contracts at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in any Cap
Contract, the Trustee shall not be required to make any payments to the
counterparty under any Cap Contract. Any payments received under the terms of
the Class A-1 Cap Contract will be available to pay the holders of the Class A-1
and Class R Certificates up to the amount of any Floating Rate Certificate
Carryovers remaining after all other distributions required under this Section
4.04 are made on such Distribution Date, other than Floating Rate Certificate
Carryovers attributable to the fact that Applied Realized Loss Amounts are not
allocated to the Class A Certificates. Any payments received under the terms of
the Class A-2 Cap Contract will be available to pay the holders of the Class A-2
Certificates up to the amount of any Floating Rate Certificate Carryovers
remaining after all other distributions required under this Section 4.04 are
made on such Distribution Date, other than Floating Rate Certificate Carryovers
attributable to the fact that Applied Realized Loss Amounts are not allocated to
the Class A Certificates. Any payments received under the terms of the
Subordinated Certificate Cap Contract will be available to pay the holders of
the related Subordinated Certificates up to the amount of any Floating Rate
Certificate Carryovers remaining after all other distributions required under
this Section 4.04 are made on such Distribution Date. Any amounts received under
the terms of any Cap Contract on a Distribution Date that are not used to pay
such Floating Rate Certificate Carryovers will be distributed to the holders of
the Class C Certificates. Payments in respect of such Floating Rate Certificate
Carryovers from proceeds of a Cap Contract shall be paid to the related Classes
of Offered Certificates and Class B-4 Certificates, pro rata based upon such
Floating Rate Certificate Carryovers for each such class of Offered Certificates
and Class B-4 Certificates.
(i) The Trustee shall establish and
maintain, for the benefit of the Trust Fund and the Certificateholders, the Cap
Contract Account. On or prior to the related Cap Contract Termination Date,
amounts, if any, received by the Trustee for the benefit of the Trust Fund in
respect of the related Cap Contract shall be deposited by the Trustee into the
Cap Contract Account and will be used to pay Floating Rate Certificate
Carryovers on the related Offered Certificates to the extent provided in the
immediately preceding paragraph. With respect to any Distribution Date on or
prior to the related Cap Contract Termination Date, the amount, if any, payable
by the Cap Contract Counterparty under the related Cap Contract will equal the
product of (i) the excess of (x) One-Month LIBOR (as determined by the Cap
Contract Counterparty and subject to a cap equal to the rate with respect to
such Distribution Date as shown under the heading "1ML Upper Collar" in the
schedule to the related Cap Contract), over (y) the rate with respect to such
Distribution Date as shown under the heading "1ML Strike Lower Collar" in the
schedule to the related Cap Contract, (ii) an amount equal to the related Cap
Contract Notional Balance and (iii) the number of days in such Accrual Period,
divided by 360. If a payment is made to the Trust Fund under a Cap Contract and
the Trustee is required to distribute excess amounts to the holders of the Class
C Certificates as described above, the Trustee shall send a notice on the
Business Day prior to the related Distribution Date, stating the amount received
on the related Cap Contract, the amounts paid with respect to Floating Rate
Certificate Carryovers and the amount due to the holders of the Class C
Certificates. Such notice shall be sent by the Trustee via facsimile to the
holders of the Class C Certificates.
(ii) Amounts on deposit in the Cap Contract
Account will remain uninvested pending distribution to Certificateholders.
(iii) Each Cap Contract is scheduled to
remain in effect until the related Cap Contract Termination Date and will be
subject to early termination only in limited circumstances. Such
-88-
circumstances include certain insolvency or bankruptcy events in relation to the
Cap Contract Counterparty (after a grace period of three Local Business Days, as
defined in the related Cap Contract, after notice of such failure is received by
the Cap Contract Counterparty) to make a payment due under the related Cap
Contract, the failure by the Cap Contract Counterparty or the Trustee (after a
cure period of 20 days after notice of such failure is received) to perform any
other agreement made by it under the related Cap Contract, the termination of
the Trust Fund and the related Cap Contract becoming illegal or subject to
certain kinds of taxation.
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based on
information provided by the Servicer, the Trustee shall prepare and make
available on its website located at xxx.xxxxxxx.xxx to each Holder of a Class of
Certificates of the Trust Fund, the Servicer, the NIMs Insurer, the Rating
Agencies rating the Certificates and the Depositor a statement setting forth for
the Certificates:
(i) the amount of the related distribution
to Holders of each Class allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein, (B) the
aggregate of all scheduled payments of principal included therein, (C) the Extra
Principal Distribution Amount, if any, and (D) the aggregate amount of
Prepayment Charges, if any;
(ii) the amount of such distribution to
Holders of each Class allocable to interest, together with any Non-Supported
Interest Shortfalls allocated to each Class;
(iii) the Certificate Principal Balance of
each Class after giving effect (i) to all distributions allocable to principal
on such Distribution Date and (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date;
(iv) the Pool Stated Principal Balance for
such Distribution Date;
(v) the related amount of the Servicing Fee
paid to or retained by the Servicer;
(vi) the Pass-Through Rate for each Class of
Certificates for such Distribution Date;
(vii) the amount of Advances included in the
distribution on such Distribution Date;
(viii) the cumulative amount of (A) Realized
Losses and (B) Applied Realized Loss Amounts to date, in the aggregate and with
respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(ix) the amount of (A) Realized Losses and
(B) Applied Realized Loss Amounts with respect to such Distribution Date, in the
aggregate and with respect to the Group One Mortgage Loans and Group Two
Mortgage Loans;
(x) the number and aggregate principal
amounts of Mortgage Loans (A) Delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, and
(B) in foreclosure and Delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3)
91 or more days, in each case as of the close of business on the last day of the
calendar month preceding such
-89-
Distribution Date, in the aggregate and with respect to the Group One Mortgage
Loans and Group Two Mortgage Loans;
(xi) with respect to any Mortgage Loan that
became an REO Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close of business on
the last day of the calendar month preceding such Distribution Date and the date
of acquisition thereof, in the aggregate and with respect to the Group One
Mortgage Loans and Group Two Mortgage Loans;
(xii) the total number and principal balance
of any REO Properties as of the close of business on the last day of the
calendar month preceding such Distribution Date, in the aggregate and with
respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(xiii) the aggregate Stated Principal
Balance of all Liquidated Loans as of the preceding Distribution Date, in the
aggregate and with respect to the Group One Mortgage Loans and Group Two
Mortgage Loans;
(xiv) whether a Stepdown Trigger Event or a
Class A-1 Trigger Event has occurred and is in effect;
(xv) with respect to each Class of
Certificates, any Interest Carry Forward Amount with respect to such
Distribution Date for each such Class, any Interest Carry Forward Amount paid
for each such Class and any remaining Interest Carry Forward Amount for each
such Class;
(xvi) the number and Stated Principal
Balance (as of the preceding Distribution Date) of any Mortgage Loans which were
purchased or repurchased during the preceding Due Period and since the Cut-off
Date;
(xvii) the number of Mortgage Loans for
which Prepayment Charges were received during the related Prepayment Period and,
for each such Mortgage Loan, the amount of Prepayment Charges received during
the related Prepayment Period and in the aggregate of such amounts for all such
Mortgage Loans since the Cut-off Date;
(xviii) the amount and purpose of any
withdrawal from the Collection Account pursuant to Section 3.08(a)(ix);
(xix) the amount of any payments to each
Class of Certificates that are treated as payments received in respect of a
REMIC "regular interest" or REMIC "residual interest" and the amount of any
payments to each Class of Certificates that are not treated as payments received
in respect of a REMIC "regular interest" or REMIC "residual interest";
(xx) as of each Distribution Date, the
amount, if any, to be deposited in the Cap Contract Account pursuant to the
related Cap Contract as described in Section 4.04(k) and the amount thereof to
be paid to the Class A, Class M, Class B and Class C Certificates described in
Section 4.04(k) hereof; and
(xxi) any Floating Rate Certificate
Carryover paid and all Floating Rate Certificate Carryover remaining on each
class of the Offered Certificates and Class B-4 Certificates on such
Distribution Date.
-90-
(b) The Trustee will make the Monthly Statement (and, at
its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders, other parties to
this Agreement and any other interested parties via the Trustee'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
Trustee's customer service desk at (000) 000-0000. 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 Trustee shall
have the right to change the way the monthly statements to Certificateholders
are distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes.
The Trustee shall also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement and may affix thereto
any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).
As a condition to access the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement.
(c) The Servicer shall deliver to the NIMs Insurer a
copy of any report delivered by the Servicer to the Trustee.
(d) Within a reasonable period of time after the end of
each calendar year, the Trustee shall cause to be furnished to each Person who
at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) without regard to
subclauses (A)-(D) thereof and (a)(ii) of this Section 4.05 aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as are from
time to time in effect.
(e) Upon filing with the Internal Revenue Service, the
Trustee shall furnish to the Holders of the Class R Certificate and the NIMs
Insurer each Form 1066 and each Form 1066Q and shall respond promptly to written
requests made not more frequently than quarterly by any Holder of a Class R
Certificate with respect to the following matters:
(i) The original projected principal and
interest cash flows on the Closing Date on each Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(ii) The projected remaining principal and
interest cash flows as of the end of any calendar quarter with respect to each
Class of regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(iii) The Prepayment Assumption and any
interest rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the
case of the Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect
-91-
to each Class of regular or residual interests created hereunder and to the
Mortgage Loans, together with each constant yield to maturity used in computing
the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the REMICs with respect
to such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;
(vi) The amount and timing of any non-interest expenses
of the REMICs; and
(vii) Any taxes (including penalties and interest)
imposed on the REMICs, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure property" or
state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.12.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
A-1A $25,000.00 $1.00 $452,428,000.00
A-1B $25,000.00 $1.00 $113,107,000.00
A-2A $25,000.00 $1.00 $141,393,000.00
A-2B $25,000.00 $1.00 $150,897,000.00
A-2C $25,000.00 $1.00 $22,586,000.00
M-1 $25,000.00 $1.00 $50,751,000.00
M-2 $25,000.00 $1.00 $30,892,000.00
M-3 $25,000.00 $1.00 $19,859,000.00
M-4 $25,000.00 $1.00 $34,753,000.00
M-5 $25,000.00 $1.00 $15,446,000.00
B-1 $25,000.00 $1.00 $12,688,000.00
B-2 $25,000.00 $1.00 $12,136,000.00
B-3 $25,000.00 $1.00 $8,826,000.00
B-4 $25,000.00 $1.00 $11,033,000.00
C (1) (1) 100%
R $100.00 N/A $100.00
P (2) (2) (2)
-------------------
-92-
(1) The Class C Certificates shall not have minimum dollar denominations
or certificate notional amounts and shall be issued in a minimum
percentage interest of 10%. The initial Overcollateralization Amount
is $26,447,070.86.
(2) The Class P Certificates shall not have minimum dollar denominations
or Certificate Principal Balances and shall be issued in a minimum
percentage interest of 100%.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust Fund, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any Affiliate thereof.
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of Transfer of any Certificate, the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Trustee in accordance with such
Trustee's customary procedures.
(b) No Transfer of a Class C, Class P or Class B-4
Certificate shall be made unless such Transfer is made pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws or is exempt from the registration requirements under the
Securities Act and such state securities laws. In the event that a Transfer is
to be made in reliance upon an exemption from the Securities Act and such laws,
in order to assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall (except with respect to the initial transfer of a
Class C, Class P or Class B-4 Certificate
-93-
by Xxxxxxx Xxxxx & Co. or, in connection with a transfer of a Class C, Class P
or Class B-4 Certificate to the indenture trustee under an Indenture pursuant to
which NIM Notes are issued, whether or not such notes are guaranteed by the NIMs
Insurer) each certify to the Trustee in writing the facts surrounding the
Transfer in substantially the form set forth in Exhibit F (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trustee an Opinion of Counsel that such
Transfer may be made pursuant to an exemption from the Securities Act, which
Opinion of Counsel shall not be an expense of the Depositor or the Trustee. The
Depositor shall provide to any Holder of a Class C, Class P or Class B-4
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for Transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee shall cooperate with the Depositor
in providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information in the possession of the
Trustee regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Class C, Class P or
Class B-4 Certificate desiring to effect such Transfer shall, and does hereby
agree to, indemnify the Depositor and the Trustee against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of an ERISA Restricted Certificate that is a Class R
Certificate may be made to any Person unless the Trustee has received a
representation from the transferee of the Class R Certificate, acceptable to and
in form and substance satisfactory to the Trustee, to the effect that such
transferee is not an employee benefit plan subject to Title I of ERISA, a plan
subject to Section 4975 of the Code or a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") (collectively, a "Plan"), or to any Person
directly or indirectly acquiring such 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) shall be made to any Person unless the Trustee has received (A) a
representation that such transferee is not a Plan and is not directly or
indirectly acquiring the Certificate for, on behalf of, or with the assets of
any such Plan, (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that such transferee is an
insurance company that is acquiring the Certificate with assets 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, and upon which the Trustee and the NIMs Insurer
shall be entitled to rely, to the effect that the acquisition and holding of
such Certificate will not constitute or result in a nonexempt prohibited
transaction under Title I of ERISA or Section 4975 of the Code, or a violation
of Similar Law, and will not subject the Trustee, the Servicer, the NIMs Insurer
or the Depositor to any obligation in addition to those expressly undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trustee,
the Servicer, the NIMs Insurer or the Depositor.
For purposes of the two immediately preceding paragraphs of this
Subsection 5.02(b), other than clause (C) in the immediately preceding
paragraph, the representations as set forth therein shall be deemed to have been
made to the Trustee by the transferee's acceptance of an ERISA Restricted
Certificate (or the acceptance by a Certificate Owner of the beneficial interest
in any Class of ERISA Restricted Certificates). Notwithstanding any other
provision herein to the contrary, any purported transfer of an ERISA Restricted
Certificate to or on behalf of a Plan without the delivery to the Trustee of
-94-
a representation or an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect. The Trustee shall not be under
any liability to any Person for any registration or transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 5.02(b),
nor shall the Trustee be under any liability for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements. The
Trustee shall be entitled, but not obligated, to recover from any Holder of any
ERISA Restricted Certificate that was in fact a Plan and that held such
Certificate in violation of this Section 5.02(b) all payments made on such ERISA
Restricted Certificate at and after the time it commenced such holding. Any such
payments so recovered shall be paid and delivered to the last preceding Holder
of such Certificate that is not a Plan.
(c) Each Person who has or who acquires any Ownership
Interest in a Class R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Class R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any
Ownership Interest in a Class R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R
Certificate may be purchased, transferred or sold, directly or indirectly,
except in accordance with the provisions hereof. No Ownership Interest in a
Class R Certificate may be registered on the Closing Date or thereafter
transferred, and the Trustee shall not register the Transfer of any Class R
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under subparagraph (b) above, the Trustee shall have been furnished
with an affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit E-1 and an affidavit of the
proposed transferor in the form attached hereto as Exhibit E-2. In the absence
of a contrary instruction from the transferor of a Class R Certificate,
declaration (11) in Appendix A of the Transfer Affidavit may be left blank. If
the transferor requests by written notice to the Trustee prior to the date of
the proposed transfer that one of the two other forms of declaration (11) in
Appendix A of the Transfer Affidavit be used, then the requirements of this
Section 5.02(c)(ii) shall not have been satisfied unless the Transfer Affidavit
includes such other form of declaration.
(iii) Each Person holding or acquiring any
Ownership Interest in a Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Class R Certificate and (C) not to Transfer
its Ownership Interest in a Class R Certificate or to cause the Transfer of an
Ownership Interest in a Class R Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee. Further, no transfer,
sale or other disposition of any Ownership Interest in a Class R Certificate may
be made to a person who is not a U.S. Person (within the meaning of Section 7701
of the Code) unless such person furnishes the transferor and the Trustee with a
duly completed and effective Internal Revenue Service Form W-8ECI (or any
successor thereto) and the Trustee consents to such transfer, sale or other
disposition in writing.
(iv) Any attempted or purported Transfer of
any Ownership Interest in a Class R Certificate in violation of the provisions
of this Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall become a
Holder of a Class R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to all
rights as Holder thereof retroactive to the date of registration
-95-
of Transfer of such Class R Certificate. The Trustee shall be under no liability
to any Person for any registration of Transfer of a Class R Certificate that is
in fact not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related Transfer
Affidavit. The Trustee shall be entitled but not obligated to recover from any
Holder of a Class R Certificate that was in fact not a Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became other than
a Permitted Transferee, all payments made on such Class R Certificate at and
after either such time. Any such payments so recovered by the Trustee shall be
paid and delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(v) At the option of the Holder of the Class
R Certificate, the Class LTR Interest and the residual interest in the Upper
Tier REMIC may be severed and represented by separate certificates (with the
certificate that represents the Residual Interest also representing all rights
of the Class R Certificate to distributions attributable to a Pass-Through Rate
on the Class R Certificate in excess of the Net Rate); provided, however, that
such separate certification may not occur until the Trustee and the NIMs Insurer
receive an Opinion of Counsel to the effect that separate certification in the
form and manner proposed would not result in the imposition of federal tax upon
the Trust Fund or any of the REMICs provided for herein or cause any of the
REMICs provided for herein to fail to qualify as a REMIC; and provided further,
that the provisions of Sections 5.02(b) and (c) will apply to each such separate
certificate as if the separate certificate were a Class R Certificate. If, as
evidenced by an Opinion of Counsel, it is necessary to preserve the REMIC status
of any of the REMICs provided for herein, the Class LTR Interest and the
residual interest in the Upper Tier REMIC shall be severed and represented by
separate Certificates.
The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee and the NIMs Insurer of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor, to the effect that the elimination of such restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Trust Fund, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Class R Certificate is not transferred, directly or indirectly, to a Person that
is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Class R Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The transferor of the Class R Certificate shall
notify the Trustee in writing upon the transfer of the Class R Certificate.
(e) The preparation and delivery of all certificates,
opinions and other writings referred to above in this Section 5.02 shall not be
an expense of the Trust Fund, the Depositor or the Trustee.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is delivered
to the Trustee and the NIMs Insurer such security or indemnity as may be
required by them to
-96-
save each of them harmless, then, in the absence of notice to the Trustee that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Trustee under the terms of this Section 5.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The NIMs Insurer, the Trustee and any agent of the NIMs Insurer or
the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and none of
the NIMs Insurer or the Trustee, nor any agent of the NIMs Insurer or the
Trustee shall be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the NIMs
Insurer or the Depositor shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the NIMs Insurer or the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full
force and effect;
(b) the Depositor, the NIMs Insurer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of the Book-Entry Certificates;
-97-
(c) registration of the Book-Entry Certificates may not
be transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of
the Book-Entry Certificates shall be exercised only through the Depository and
the Depository Participants and shall be limited to those established by law and
agreements between the Owners of the Book-Entry Certificates and the Depository
and/or the Depository Participants. Pursuant to the Depository Agreement, unless
and until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants and
receive and transmit distributions of principal and interest on the related
Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary
fees, charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions of this
Section shall control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given
to Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners and the Trustee shall give all such
notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depository or the Depositor advises the Trustee that
the Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor notifies the Trustee and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Book-Entry Certificates and the NIMs Insurer, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon surrender to the Trustee of any such Certificates by the
-98-
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall authenticate and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust, Series
2005-FF6 as offices for such purposes. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the
Servicer.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Servicer.
Except as provided in the next paragraph, the Depositor and the
Servicer will each keep in full effect its existence, rights and franchises as a
corporation or banking association under the laws of the United States or under
the laws of one of the States thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor, or the Servicer, shall be the successor of the
Depositor or Servicer, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding (except for the execution of an
assumption agreement where such succession is not effected by operation of law);
provided, however, that the successor or surviving Person to the Servicer shall
be qualified to sell mortgage loans to, and to service mortgage loans on behalf
of, Xxxxxx Xxx or Xxxxxxx Mac.
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer
and Others.
None of the Depositor, the Servicer, nor any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer
-99-
or any such Person against any breach of representations or warranties made by
it herein or protect the Depositor, the Servicer or any such Person from any
liability that would otherwise be imposed by reasons of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor or the Servicer and
any director, officer, employee or agent of the Depositor or the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor
or the Servicer and any director, officer, employee or agent of the Depositor,
or the Servicer shall be indemnified by the Trust Fund and held harmless against
any loss, liability or expense, incurred in connection with the performance of
their duties under this agreement or incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense (i) incurred by reason of willful misfeasance,
bad faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder or (ii) which does not
constitute an "unanticipated expense" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii). Neither the Depositor nor the Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that either the
Depositor or the Servicer in its discretion may undertake any such action that
it may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor and the Servicer shall be
entitled to be reimbursed therefor out of the Collection Account as provided by
Section 3.08 hereof.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the NIMs Insurer. No such resignation shall
become effective until the Trustee or a successor servicer reasonably acceptable
to the Trustee and the NIMs Insurer is appointed and has assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder. Any such
resignation shall not relieve the Servicer of any of the obligations specified
in Section 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for Persons
performing servicing for mortgage loans purchased by Xxxxxx Mae or Xxxxxxx Mac.
The Servicer shall provide the Trustee and the NIMs Insurer, upon request and
reasonable notice, with copies of such policies and fidelity bond or a
certification from the insurance provider evidencing such policies and fidelity
bond. In the event that any such policy or bond ceases to be in effect, the
Servicer shall use its reasonable commercial efforts to obtain a comparable
replacement policy or bond from an insurer or issuer meeting the requirements
set forth above as of the date of such replacement.
-100-
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to make any
Advance, to deposit in the Collection Account or the Certificate Account or
remit to the Trustee any payment (excluding a payment required to be made under
Section 4.01 hereof) required to be made under the terms of this Agreement,
which failure shall continue unremedied for three Business Days and, with
respect to a payment required to be made under Section 4.01 hereof, for one
Business Day, after the date on which written notice of such failure shall have
been given to the Servicer by the Trustee or the Depositor, or to the Trustee
and the Servicer by the NIMs Insurer or the Holders of Certificates evidencing
greater than 50% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Servicer to observe
or perform in any material respect any other of the covenants or agreements on
the part of the Servicer contained in this Agreement or any representation or
warranty shall prove to be untrue, which failure or breach shall continue
unremedied for a period of 60 days after the date on which written notice of
such failure shall have been given to the Servicer by the Trustee or the
Depositor, or to the Trustee by the NIMs Insurer or the Holders of Certificates
evidencing greater than 50% of the Voting Rights evidenced by the Certificates;
or
(iii) a decree or order of a court or agency
or supervisory authority having jurisdiction for the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) consent by the Servicer to the
appointment of a receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or all or substantially all of the property of the Servicer; or
(v) admission by a Servicer in writing of
its inability to pay its debts generally as they become due, file a petition to
take advantage of, or commence a voluntary case under, any applicable insolvency
or reorganization statute, make an assignment for the benefit of its creditors,
or voluntarily suspend payment of its obligations.
If an Event of Default shall occur with respect to the Servicer,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied within the applicable grace period, or solely with
respect to clause (i) above by 5:00p.m. on the Servicer Remittance Date, the
Trustee may (with the written consent of the NIMs Insurer, except after a NIMs
Insurer Default), or at the direction of the NIMs Insurer or the Holders of
Certificates evidencing greater than 50% of the Voting Rights evidenced by the
Certificates (with the written consent of the NIMs Insurer, except after a NIMs
Insurer Default), shall, by notice in writing to the Servicer (with a copy to
each Rating Agency rating the Certificates), terminate all of the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee as
successor servicer. To the extent the Event of Default resulted from the failure
of the Servicer to make a
-101-
required Advance, the Trustee shall thereupon make any Advance described in
Section 4.01 hereof subject to Section 3.04 hereof. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Collection Account, or thereafter be received
with respect to the Mortgage Loans. The Servicer and the Trustee shall promptly
notify the Rating Agencies rating the Certificates of the occurrence of an Event
of Default or an event that, with notice, passage of time, other action or any
combination of the foregoing would be an Event of Default, such notice to be
provided in any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a), and any other amounts payable
to the Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder. Notwithstanding anything herein to the
contrary, upon termination of the Servicer hereunder, any liabilities of the
Servicer which accrued prior to such termination shall survive such termination.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, costs and expenses relating to the
Mortgage Loans that the Servicer would have been entitled to if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which successor shall be approved by the NIMs Insurer and which
does not adversely affect the then current rating of the Certificates by each
Rating Agency rating the Certificates as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Any successor Servicer shall be an
institution that is acceptable to the NIMs Insurer and is a Xxxxxx Xxx and
Xxxxxxx Mac approved seller/servicer in good standing, that has a net worth of
at least $15,000,000, and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01), with like
effect as if originally named as a party to this Agreement; and provided further
that each Rating Agency rating the Certificates acknowledges that its rating of
the Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced as a result of such assignment and delegation.
No appointment of a successor to the Servicer hereunder shall be
-102-
effective until the Trustee and the NIMs Insurer shall have consented thereto,
prior written consent of the NIMs Insurer is obtained and written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Servicer
to deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a
successor to the Servicer, the Trustee shall give prompt written notice thereof
to Certificateholders, the NIMs Insurer and to each Rating Agency rating the
Certificates.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders and the
NIMs Insurer notice of each such Event of Default hereunder known to the
Trustee, unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement and use the same degree of care and skill in their exercise as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. In case an Event of Default or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee
shall, at the direction of the majority of the Certificateholders or the NIMs
Insurer, or may, proceed to protect and enforce its rights and the rights of the
Certificateholders or the NIMs Insurer under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee, the NIMs Insurer and the
Certificateholders.
-103-
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected and if the instrument is not corrected to its satisfaction, the
Trustee will provide notice thereof to the NIMs Insurer and the
Certificateholders and take such further action as directed by the NIMs Insurer
and the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided, however, that:
(i) prior to the occurrence of an Event of
Default, and after the curing of all such Events of Default that may have
occurred, the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the Trustee
and, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Agreement that it reasonably believed in good faith to be genuine and to have
been duly executed by the proper authorities respecting any matters arising
hereunder;
(ii) the Trustee shall not be liable,
individually or as Trustee, for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee unless the Trustee
was negligent or acted in bad faith or with willful misfeasance;
(iii) the Trustee shall not be liable,
individually or as Trustee, with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the direction of the
NIMs Insurer or the Holders of each Class of Certificates evidencing not less
than 25% of the Voting Rights of such Class relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement;
and
(iv) except as otherwise expressly provided
in this Agreement, if any default occurs in the making of a payment due under
any Permitted Investment, or if a default occurs in any other performance
required under any Permitted Investment, the Trustee may and, subject to Section
8.01 and Section 8.02, upon the request of the NIMs Insurer or the Holders of
the Certificates representing more than 50% of the Voting Rights allocated to
any Class of Certificates, shall take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate proceedings.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon
and shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other
-104-
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee may consult with counsel of
its choice and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable,
individually or as Trustee, for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of
Default hereunder and after the curing of all Events of Default that may have
occurred, the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by the NIMs Insurer or the
Holders of each Class of Certificates evidencing not less than 25% of the Voting
Rights of such Class;
(v) the Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents, accountants or attorneys;
(vi) the Trustee shall not be required to
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
liability is not assured to it;
(vii) the Trustee shall not be liable,
individually or as Trustee, for any loss on any investment of funds pursuant to
this Agreement (other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to
have knowledge of an Event of Default until a Responsible Officer of the Trustee
shall have received written notice thereof;
(ix) the Trustee shall be under no
obligation to exercise any of the trusts or powers vested in it by this
Agreement or to make any investigation of matters arising hereunder or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the NIMs Insurer or the
Certificateholders, pursuant to the provisions of this Agreement, unless the
NIMs Insurer or such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby;
(x) if requested by the Servicer, the
Trustee shall appoint the Servicer as the Trustee's attorney-in-fact in order to
carry out and perform certain activities that are necessary or appropriate for
the servicing and administration of the Mortgage Loans pursuant to this
Agreement. Such appointment shall be evidenced by powers of attorney in such
form as may be agreed to by the Trustee and the Servicer. The Trustee shall have
no liability for any action or inaction of the Servicer in connection with such
powers of attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and
(xi) the Trustee may rely on the sole
judgment of the Depositor in determining whether "Eligible Collateral" (as
defined in the Cap Contracts) has been delivered in an amount equal to the
"Exposure" (as defined in the Cap Contracts) as contemplated by Section 6 of
each Cap Contract. The Trustee shall not be liable, individually or as Trustee,
for any action relating to the
-105-
determination of whether collateral delivered pursuant to the sentence above
constitutes "Eligible Collateral".
(b) All rights of action under this Agreement or under
any of the Certificates, enforceable by the Trustee, may be enforced by the
Trustee without the possession of any of the Certificates, or the production
thereof at the trial or other proceeding relating thereto, and any such suit,
action or proceeding instituted by the Trustee shall be brought in its name for
the benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
SECTION 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, of any
guarantee of a NIMs Insurer or related document other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Servicer
of any funds paid to the Depositor or the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor or the Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee shall be entitled to all earnings on or investment
income with respect to funds in or credited to the Certificate Account.
SECTION 8.06. Indemnification of Trustee.
(a) The Trustee and its respective directors, officers,
employees and agents shall be entitled to indemnification from the Trust Fund
for any loss, liability or expense incurred in connection with 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, including any applicable fees and expenses payable hereunder, and the
costs and expenses of defending themselves against any claim in connection with
the exercise or performance of any of their powers or duties hereunder, provided
that:
(i) with respect to any such claim, the
Trustee shall have given the Depositor and the Holders written notice thereof
promptly after the Trustee shall have knowledge thereof; provided that failure
to so notify shall not relieve the Trust Fund of the obligation to indemnify the
Trustee; however, any reasonable delay by the Trustee to provide written notice
to the Depositor and the Holders promptly after the Trustee shall have obtained
knowledge of a claim shall not relieve the Trust Fund of the obligation to
indemnify the Trustee under this Section 8.06;
(ii) while maintaining control over its own
defense, the Trustee shall cooperate and consult fully with the Depositor in
preparing such defense;
-106-
(iii) notwithstanding anything to the
contrary in this Section 8.06, the Trust Fund shall not be liable for settlement
of any such claim by the Trustee entered into without the prior consent of the
Depositor, which consent shall not be unreasonably withheld; and
(iv) any such loss, liability or expense to
be indemnified by the Trust Fund must constitute an "unanticipated expense" of
the Trust Fund within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii).
The provisions of this Section 8.06 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.
(b) The Trustee shall be entitled to all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with this Agreement (including fees and expenses of its counsel and
all persons not regularly in its employment), except any such expenses,
disbursements and advances that either (i) arise from its negligence, bad faith
or willful misconduct or (ii) do not constitute "unanticipated expenses" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
(c) The Trustee's right to indemnification and
reimbursement shall be subject to a cap of $300,000 in the aggregate in any
calendar year, excluding (i) any Servicing Transfer Costs and (ii) any costs,
damages or expenses incurred by the Trustee in connection with any "high cost"
home loans or any predatory or abusive lending laws, which amounts shall in no
case be subject to any such limitation; provided, however, that such cap shall
apply only if NIM Notes have been issued and shall cease to apply after the date
on which any NIM Notes are paid in full and all amounts which the NIMs Insurer
is entitled to be paid or reimbursed shall have been paid or reimbursed. Any
amounts not in excess of this cap may be withdrawn by the Trustee from the
Certificate Account at any time
SECTION 8.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies rating the Certificates
to reduce their respective ratings of any Class of Certificates below the
ratings issued on the Closing Date (or having provided such security from time
to time as is sufficient to avoid such reduction) and reasonably acceptable to
the NIMs Insurer. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.07 the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 8.07, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.08 hereof. The corporation or national banking association serving as
Trustee may have normal banking and trust relationships with the Depositor and
the NIMs Insurer and their respective Affiliates; provided, however, that such
corporation cannot be an Affiliate of the Servicer other than the Trustee in its
role as successor to the Servicer.
SECTION 8.08. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Servicer and the NIMs Insurer by mailing notice
-107-
of resignation by first class mail, postage prepaid, to the Certificateholders
at their addresses appearing on the Certificate Register and each Rating Agency
rating the Certificates, not less than 60 days before the date specified in such
notice when, subject to Section 8.09, such resignation is to take effect, and
(2) acceptance of appointment by a successor trustee acceptable to the NIMs
Insurer in accordance with Section 8.09 and meeting the qualifications set forth
in Section 8.07. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.07 hereof and shall fail to resign
after written request thereto by the Depositor or the NIMs Insurer, (ii) the
Trustee shall become incapable of acting, or shall be adjudged as bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or (iii)(A) a tax is imposed with respect to the Trust Fund by any
state in which the Trustee or the Trust Fund is located, (B) the imposition of
such tax would be avoided by the appointment of a different trustee and (C) the
Trustee fails to indemnify the Trust Fund against such tax, then the Depositor
or the NIMs Insurer may remove the Trustee and the Depositor with the consent of
the NIMS insurer shall promptly appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Servicer and one copy
of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all
Classes of Certificates, with the consent of the NIMs Insurer, or the NIMs
Insurer upon failure of the Trustee to perform its obligations hereunder may at
any time remove the Trustee and the Depositor shall appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIMs Insurer), one complete
set of which instruments shall be delivered by the successor Trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
the NIMs Insurer and each Rating Agency rating the Certificates by the successor
trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.09 hereof.
SECTION 8.09. Successor Trustee.
Any successor trustee appointed as provided in Section 8.08 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor trustee, the NIMs Insurer and the
Servicer shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If
-108-
the Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
SECTION 8.10. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and the NIMs Insurer to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
Any such co-trustee or separate trustee shall be subject to the written approval
of the Servicer and the NIMs Insurer. The Trustee shall not be liable for the
actions of any co-trustee; provided the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Servicer and the NIMs
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.07 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and
obligations conferred or imposed upon the Trustee except for the obligation of
the Trustee under this Agreement to advance funds on behalf of the Servicer
shall be conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) No trustee hereunder shall be held
personally liable by reason of any act or omission of any other trustee
hereunder; and
-109-
(iii) The Trustee, with the consent of the
NIMs Insurer, may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer, the NIMs Insurer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.12. Tax Matters.
(a) It is intended that each of the REMICs provided for
herein shall constitute, and that the affairs of the Trust Fund shall be
conducted so as to allow each such REMIC to qualify as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
It is also intended that each of the grantor trusts provided for in Section 2.07
hereof shall constitute, and that the affairs of the Trust Fund shall be
conducted so as to allow each such grantor trust to qualify as, a grantor trust
under the provisions of Subpart E, Part I of Subchapter J of the Code. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
each of the REMICs provided for herein and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, in a timely manner, a U.S.
Real Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file or
cause to be prepared and filed with the Internal Revenue Service and applicable
state or local tax authorities income tax or information returns for each
taxable year with respect to each of the REMICs and grantor trusts provided for
herein, containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for each of the REMICs provided for herein; (c) make or cause to be made
elections, on behalf of each of the REMICs provided for herein to be treated as
a REMIC on the federal tax return of such REMICs for their first taxable years
(and, if necessary, under applicable state law); (d) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions or other applicable law, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Class R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman)
-110-
of a Person that is not a Permitted Transferee, or a pass through entity in
which a Person that is not a Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax); (f) to the extent that they are
under its control conduct the affairs of each of the REMICs and grantor trusts
provided for herein at all times that any Certificates are outstanding so as to
maintain the status of each of the REMICs provided for herein as a REMIC under
the REMIC Provisions and the status of each of the grantor trusts provided for
herein as a grantor trust under Subpart E, Part I of Subchapter J of the Code;
(g) not knowingly or intentionally take any action or omit to take any action
that would cause the termination of the REMIC status of any of the REMICs
provided for herein or result in the imposition of tax upon any such REMIC; (h)
not knowingly or intentionally take any action or omit to take any action that
would cause the termination of the grantor trust status under Subpart E, Part I
of Subchapter J of the Code of any of the grantor trusts provided for herein or
result in the imposition of tax upon any such grantor trust; (i) pay, from the
sources specified in the last paragraph of this Section 8.12, the amount of any
federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (j) sign or cause to be signed federal, state
or local income tax or information returns; (k) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs and grantor trusts
provided for herein, and the fair market value and adjusted basis of the Trust
Fund property determined at such intervals as may be required by the Code, as
may be necessary to prepare the foregoing returns, schedules, statements or
information, in each instance, to the extent provided by the Servicer; and (l)
as and when necessary and appropriate, represent each of the REMICs provided for
herein in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of any of the REMICs provided for herein,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of any of the REMICs provided
for herein, and otherwise act on behalf of each of the REMICs provided for
herein in relation to any tax matter involving any of such REMICs or any
controversy involving the Trust Fund.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
any of the REMICs provided for herein as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, if not paid as otherwise provided for herein, such tax shall be paid
by (i) the Trustee, if any such other tax arises out of or results from a breach
by the Trustee of any of its obligations under this Agreement or as a
-111-
result of the location of the Trustee, (ii) any party hereto (other than the
Trustee) to the extent any such other tax arises out of or results from a breach
by such other party of any of its obligations under this Agreement or as a
result of the location of such other party or (iii) in all other cases, or in
the event that any liable party here fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
(other than amounts received by the Trust Fund pursuant to the Cap Contracts)
otherwise to be distributed to the Class R Certificateholders (pro rata)
pursuant to Section 4.04, and second with amounts (other than amounts received
by the Trust Fund pursuant to the Cap Contracts) otherwise to be distributed to
all other Certificateholders in the following order of priority: first, to the
Class C Certificates (pro rata), second to the Class B-4 Certificates (pro
rata), third to the Class B-3 Certificates (pro rata), fourth, to the Class B-2
Certificates (pro rata), fifth, to the Class B-1 Certificates (pro rata), sixth,
to the Class M-5 Certificates (pro rata), seventh, to the Class M-4 Certificates
(pro rata), eighth, to the Class M-3 Certificates (pro rata), ninth to the Class
M-2 Certificates (pro rata), tenth to the Class M-1 Certificates (pro rata) and
eleventh to the Class A Certificates (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class R
Certificate, the Trustee is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holders of the Class R Certificate
(and, if necessary, from the Holders of all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Trustee agrees to promptly
notify in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.
(b) Each of the Depositor and the Trustee agrees not to
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of a tax upon any of the REMICs provided for
herein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.
(a) Subject to Section 9.03, the obligations and
responsibilities of the Depositor, the Servicer and the Trustee created hereby
with respect to the Trust Fund shall terminate upon the earlier of (a) an
Optional Termination and (b) the later of (i) the maturity or other liquidation
of the last Mortgage Loan remaining in the Trust Fund (or any Advance with
respect thereto) and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement, as applicable. In no event shall the trusts
created hereby continue beyond the earlier of (i) the expiration of 21 years
from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late Ambassador of the United States to the Court of St. James's, living on the
date hereof and (ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the
Initial Optional Termination Date, the Trustee shall attempt to terminate the
Trust Fund by conducting an auction of all of the Mortgage Loans and REO
Properties via a solicitation of bids from at least three (3) bidders, each of
which shall be a nationally recognized participant in mortgage finance (the
"Auction"). The Depositor and the Trustee agree to work in good faith to develop
bid procedures in advance of the Initial Optional Termination Date to govern the
operation of the Auction. The Trustee shall be entitled to retain an investment
banking firm and/or other agents in connection with the Auction, the cost of
which shall be included in the Optional Termination Price (unless an Optional
Termination does not occur in which case such costs shall be an expense of the
Trust Fund). The Trustee shall accept the highest bid received at the Auction;
provided that the amount of such bid equals or exceeds the Optional Termination
Price. The Trustee shall determine the Optional Termination Price based upon
information provided by (i) the Servicer with respect to the amounts described
in clauses (A) and (B) of the definition of "Optional
-112-
Termination Price" (other than Trustee expenses) and (ii) the Depositor with
respect to the information described in clause (C) of the definition of
"Optional Termination Price." The Trustee may conclusively rely upon the
information provided to it in accordance with the immediately preceding sentence
and shall not have any liability for the failure of any party to provide such
information.
If an Optional Termination does not occur as a result of the
Auction's failure to achieve the Optional Termination Price, the NIMs Insurer
(or the Servicer, if there is not a NIMs Insurer at such time) may, on any
Distribution Date following such Auction, at its option, terminate the Trust
Fund by purchasing all of the Mortgage Loans and REO Properties at a price equal
to the Optional Termination Price. In the event that there is a NIMs Insurer at
the time of the Auction, the Auction fails to achieve the Optional Termination
Price and the NIMs Insurer does not exercise its option to terminate the Trust
Fund on the first Distribution Date on which it is able to exercise such option,
the Servicer may, at such time, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. In connection with such termination, the Optional
Termination Price shall be delivered to the Trustee no later than the Business
Day immediately preceding the related Distribution Date. Notwithstanding
anything to the contrary herein, the Optional Termination Amount paid to the
Trustee by the winning bidder at the Auction or by the NIMs Insurer or the
Servicer shall be deposited by the Trustee directly into the Certificate Account
immediately upon receipt. Upon any termination as a result of an Auction, the
Trustee shall, out of the Optional Termination Amount deposited into the
Certificate Account, (x) retain for its own account, its costs and expenses
necessary to conduct the Auction and any other unreimbursed amounts owing to it
(without regard to the limitation contained in Section 8.06(c)) and (y) pay to
the Servicer, the aggregate amount of any unreimbursed out-of-pocket costs and
expenses owed to the Servicer and any unpaid or unreimbursed Servicing Fees,
Advances and Servicing Advances.
(c) Notwithstanding anything to the contrary in clause
(b) above, in the event that the Trustee receives the written opinion of a
nationally recognized participant in mortgage finance acceptable to the Seller
that the Mortgage Loans and REO Properties to be included in the Auction will
not be saleable at a price sufficient to achieve the Optional Termination Price,
the Trustee need not conduct the Auction. In such event, the NIMs Insurer, if
any, and the Servicer in the event the NIMs Insurer declines to exercise its
option, shall have the option to purchase the Mortgage Loans and REO Properties
at the Optional Termination Price as of the Initial Optional Termination Date.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Trustee determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder and the NIMs Insurer or
(ii) the Trustee determines that a Class of Certificates shall be retired after
a final distribution on such Class, the Trustee shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Trustee.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed no later than the last
calendar day of the month immediately preceding the month of such final
distribution (or with respect to an Auction, mailed no later than one Business
Day following completion of such Auction). Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be
-113-
made upon presentation and surrender of Certificates at the office therein
designated, (b) the location of the office or agency at which such presentation
and surrender must be made, and (c) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Trustee will give such notice to the NIMs Insurer and each Rating Agency
rating the Certificates at the time such notice is given to Certificateholders.
In the event such notice is given, the Servicer shall cause all
funds in the Collection Account to be deposited in the Certificate Account on
the Business Day prior to the applicable Distribution Date in an amount equal to
the final distribution in respect of the Certificates. Upon such final deposit
with respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Trustee or the NIMs
Insurer, as applicable, the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all Certificates shall not have been surrendered for cancellation, the
Class R Certificateholders shall be entitled to all unclaimed funds and other
assets of the Trust Fund that remain subject hereto. Upon payment to the Class R
Certificateholders of such funds and assets, the Trustee shall have no further
duties or obligations with respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Trustee, the NIMs Insurer or the
Servicer completes an Optional Termination as provided in Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the Trustee, the NIMs Insurer or the Servicer, as applicable
to the effect that the failure of the Trust Fund to comply with the requirements
of this Section 9.03 will not (i) result in the imposition of taxes on
"prohibited transactions" of any of the REMICs provided for herein as defined in
Section 860F of the Code, or (ii) cause any of the REMICs provided for herein to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the final tax returns of
each of the REMICs provided for herein pursuant to Treasury Regulation Section
1.860F-1. The Depositor shall satisfy all the requirements of a qualified
liquidation under Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel obtained at the expense of the Trustee or the
NIMs Insurer, as applicable;
-114-
(ii) During such 90-day liquidation period,
and at or prior to the time of making the final payment on the Certificates, the
Depositor as agent of the Trustee shall sell all of the assets of the Trust Fund
for cash; and
(iii) At the time of the making of the final
payment on the Certificates, the Trustee shall distribute or credit, or cause to
be distributed or credited, to the Class R Certificateholders all cash on hand
(other than cash retained to meet outstanding claims known to the Trustee), and
the Trust Fund shall terminate at that time, whereupon the Trustee shall have no
further duties or obligations with respect to sums distributed or credited to
the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Depositor to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) Upon the written request of the Depositor, the
Trustee as agent for each REMIC hereby agrees to adopt and sign such a plan of
complete liquidation as provided to it by the Depositor. The Trustee's
obligation to adopt and sign such plan of complete liquidation is subject to the
Trustee's receipt of the Opinion of Counsel referred to in Section 9.03(a)(i).
In addition, the Trustee shall take such other action in connection therewith as
may be reasonably requested by the Depositor.
(d) Notwithstanding any other terms of this Agreement,
prior to any termination of the Trust Fund, the Servicer may prepare a
reconciliation of all Advances and Servicing Advances made by it for which it
has not been reimbursed and a reasonable estimate of all additional Servicing
Advances and other costs for which it would be entitled to be reimbursed if the
Trust Fund were not being terminated, including without limitation, any
Servicing Advances and other costs arising under Section 6.03 (Limitation on
Liability of the Depositor, the Servicer and Others), and the Servicer may
recover these Advances, Servicing Advances and estimated Servicing Advances and
other costs from the Collection Account (to the extent that such recovery of
Servicing Advances, estimated Servicing Advances and other costs constitutes
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)).
(e) Notwithstanding any other terms of this Agreement,
unless the Servicer previously has notified the Trustee that it has entered into
a servicing agreement for the servicing after the termination date of the Trust
Fund assets, at least 20 days prior to any termination of the Trust Fund, the
Trustee or the Depositor shall notify the Servicer in writing to transfer the
assets of the Trust Fund as of the termination date to the person specified in
the notice, or if such person is not then known, to continue servicing the
assets until the date that is 20 days after the termination date and on the
termination date, the Trustee or the Depositor shall notify the Servicer of the
person to whom the assets should be transferred on that date. In the latter
event the Servicer shall be entitled to recover its servicing fee and any
advances made for the interim servicing period from the collections on the
assets which have been purchased from the Trust and the new owner of the assets,
and the agreements for the new owner to obtain ownership of the assets of the
Trust Fund shall so provide.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor,
the Servicer and the Trustee, with the consent of the NIMs Insurer and without
the consent of any of the Certificateholders to,
-115-
(i) to cure any ambiguity or correct any
mistake,
(ii) to correct, modify or supplement any
provision herein which may be inconsistent with any other provision herein or
with the related Prospectus Supplement,
(iii) to add any other provisions with
respect to matters or questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement, provided,
however, that, in the case of clauses (iii) and (iv), such amendment will not,
as evidenced by an Opinion of Counsel addressed to the Trustee to such effect,
adversely affect in any material respect the interests of any Holder; provided,
further, however, that such amendment will be deemed to not adversely affect in
any material respect the interest of any Holder if the Person requesting such
amendment obtains a letter from each Rating Agency rating the Certificates
stating that such amendment will not result in a reduction or withdrawal of its
rating of any Class of the Certificates, it being understood and agreed that any
such letter in and of itself will not represent a determination as to the
materiality of any such amendment and will represent a determination only as to
the credit issues affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee and the NIMs Insurer shall have been
provided an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee, to the effect that such action is necessary or
appropriate to maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Trustee and the Holders of the Certificates
affected thereby evidencing not less than 66?% of the Voting Rights, with the
consent of the NIMs Insurer, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in (i), without the consent of the Holders
of Certificates of such Class evidencing 66?% or more of the Voting Rights of
such Class or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment without the consent of
the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel addressed to the Trustee, which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Trustee, to the effect that such amendment
is permitted hereunder and will not cause the imposition of any tax on the Trust
Fund, any of the REMICs provided for herein or the Certificateholders or cause
any of the REMICs provided for herein to fail to qualify as a REMIC at any
-116-
time that any Certificates are outstanding. A copy of such Opinion of Counsel
shall be provided to the NIMs Insurer.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee or upon the written
request of the Trustee to the Servicer, the Servicer shall furnish written
notification of the substance of such amendment to each Certificateholder, the
NIMs Insurer and each Rating Agency rating the Certificates.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee or the Servicer
to enter into an amendment without receiving an Opinion of Counsel, satisfactory
to the Trustee or the Servicer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.
The Trustee may, but shall not be obligated to, enter into any
supplement, modification or waiver which affects its rights, duties or
obligations hereunder.
SECTION 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF
NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for
-117-
the benefit of the Certificateholders, of a security interest in all of the
assets that constitute the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly
provide notice to each Rating Agency rating the Certificates and the NIMs
Insurer with respect to each of the following of which a Responsible Officer of
the Trustee has actual knowledge:
(i) Any material change or amendment to this
Agreement;
(ii) The occurrence of any Event of Default
that has not been cured;
(iii) The resignation or termination of the
Trustee or the Servicer and the appointment of any successor;
(iv) The repurchase or substitution of
Mortgage Loans pursuant to Sections 2.02 or 2.03;
(v) The final payment to Certificateholders;
and
(vi) Any change in the location of the
Certificate Account.
(b) The Trustee shall promptly furnish or make available
to each Rating Agency rating the Certificates copies of the following:
(i) Each report to Certificateholders
described in Section 4.05;
(ii) Each annual statement as to compliance
described in Section 3.17; and
(iii) Each annual independent public
accountants' servicing report described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxxx Xxxxx Mortgage Investors, Inc. 000 Xxxxx Xxxxxx, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies rating the Certificates, (i)
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (ii) Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the
case of the Servicer, Wilshire Credit Corporation, 00000 X.X. Xxxxxxxx Xxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000; Attention: Xxx Xxxxxxx (d) in the case of
the Trustee, Xxxxx Fargo Bank, N.A., X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Client Manager -- MLMI Series 2005-FF6, with a copy to Xxxxx Fargo
Bank, N.A. 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
-118-
Client Manager -- MLMI Series 2005-FF6; (e) in the case of the NIMs Insurer, an
address to be specified; and in the case of any of the foregoing persons, such
other addresses as may hereafter be furnished by any such persons to the other
parties to this Agreement. Notices to Certificateholders shall be deemed given
when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment; Advance Facility.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor;
provided, however, the Servicer is hereby authorized to enter into an Advance
Facility under which (l) the Servicer sells, assigns or pledges to an Advancing
Person the Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders, NIMs
Insurer or any other party is required before the Servicer may enter into an
Advance Facility. Notwithstanding the existence of any Advance Facility under
which an Advancing Person agrees to fund Advances and/or Servicing Advances on
the Servicer's behalf, the Servicer shall remain obligated pursuant to this
Agreement to make Advances and Servicing Advances pursuant to and as required by
this Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for Advances and/or Servicing Advances,
and/or whose obligations hereunder are limited to the funding of Advances and/or
Servicing Advances shall not be required to meet the criteria for qualification
of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that such reimbursement amounts distributed with respect to each Mortgage Loan
be allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan by loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO
-119-
allocation of each such reimbursement amount with respect to each Mortgage Loan.
The Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility trustee for all Advances and Servicing Advances funded by the
Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee and the Servicer, without the consent of any
Certificateholder or the NIMs Insurer notwithstanding anything to the contrary
in this Agreement, upon receipt by the Trustee of an Opinion of Counsel that
such amendment has no material adverse effect on the Certificateholders or
written confirmation from the Rating Agencies rating the Certificates that such
amendment will not adversely affect the ratings on the Certificates. Prior to
entering into an Advance Facility, the applicable Servicer shall notify the
lender under such facility in writing that: (a) the Advances financed by and/or
pledged to the lender are obligations owed to the Servicer on a non recourse
basis payable only from the cash flows and proceeds received under this
Agreement for reimbursement of Advances only to the extent provided herein, and
the Trustee and the Trust Fund are not otherwise obligated or liable to repay
any Advances financed by the lender; (b) the Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as reimbursement
for Advances funded by the lender, subject to the restrictions and priorities
created in this Agreement; and (c) the Trustee shall not have any responsibility
to track or monitor the administration of the financing arrangement between the
Servicer and the lender.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates having not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein
-120-
provided and for the common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 10.08, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the NIMs Insurer, the Depositor or the Trustee during the
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Servicer relating to the Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the NIMs Insurer, the Depositor or the
Trustee and to discuss its affairs, finances and accounts relating to the
Mortgage Loans with its officers, employees, agents, counsel and independent
public accountants (and by this provision the Servicer hereby authorizes such
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the NIMs
Insurer, Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall be
borne by the Servicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
SECTION 10.11. Third Party Rights.
The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
SECTION 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and
any successor thereto shall furnish to the NIMs Insurer a copy of any notice,
direction, demand, opinion, schedule, list, certificate, report, statement,
filing, information, data or other communication provided by it or on its behalf
to any other Person pursuant to this Agreement at the same time, in the same
form and in the same manner as such communication is so provided and shall
address or cause such communication to be addressed to the NIMs Insurer in
addition to any other addressee thereof. The Servicer shall cause the NIMs
Insurer to be an addressee of any report furnished pursuant to this Agreement.
With respect to the Trustee, such obligation shall be satisfied with the
provision of access to the NIMs Insurer to the Trustee's website.
(b) Wherever in this Agreement there shall be a
requirement that there be no downgrade, reduction, withdrawal or qualification
of or other effect on the rating of any Class of Certificates by any Rating
Agency rating the Certificates as of any date, there also shall be deemed to be
a requirement that there be no such effect on any class of notes issued pursuant
to the Indenture and guaranteed by the NIMs Insurer as of such date. In
addition, unless there exists a continuance of any failure by the NIMs Insurer
to make a required payment under the policy insuring the NIM Notes (such event,
a "NIMs Insurer Default"), wherever in this Agreement there shall be a
requirement that any Person or any communication, object or other matter be
acceptable or satisfactory to or otherwise receive the consent or other approval
of any other Person (whether as a condition to the eligibility of such Person to
act in any capacity, as a condition to any circumstance or state of affairs
related to such
-121-
matter, or otherwise), there also shall be deemed to be a
requirement that such Person or matter be approved in writing by the NIMs
Insurer, which approval shall not be unreasonably withheld or delayed.
-122-
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:
-----------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.,
as Trustee
By:
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
WILSHIRE CREDIT CORPORATION,
as Servicer
By:
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
EXHIBIT A
FORMS OF CERTIFICATES
[Intentionally Omitted]
A-1
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
[Intentionally Omitted]
B-1-1
EXHIBIT B-2
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
[Intentionally Omitted]
B-2-1
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
[Intentionally Omitted]
X-0-0
XXXXXXX X
XXXXXXXX
X-0
XXXXXXX X
FORM OF TRUSTEE CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilshire Credit Corporation
00000 X.X. Xxxxxxxx Xxx,
Xxxxx 000
Xxxxxxxxx, Xxxxxx 00000
Re:
Pooling and Servicing Agreement dated as of May 1, 2005 among
Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer,
relating to First Franklin Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-FF6
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned
Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to
the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement are
in its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as
to which documentary evidence of recording was not received on the Closing Date,
it has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that each of the Mortgage
Loan Number, the name of the Mortgagor, the street address (excluding zip code),
the Initial Mortgage Rate, the original maturity date, the original principal
balance, and the first payment due date of the Mortgage Loan conform to the
related information listed in the Mortgage Loan Schedule, (ii) with respect to
each Adjustable Rate Mortgage Loan, that each of the related Periodic Rate Cap,
the Gross Margin and the Lifetime Rate Cap conform to the related information
listed in the Mortgage Loan Schedule and (iii) the existence in each Mortgage
File of each of the documents listed in subparagraphs (i)(A) through (F),
inclusive, or (ii)(A) through (K), inclusive, as applicable, of Section 2.01 in
the Agreement. The Trustee makes no representations or warranties as to the
validity, legality, recordability, sufficiency, enforceability or genuineness of
any of the documents
D-1
contained in each Mortgage Loan or the collectibility, insurability,
effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned
Pooling and Servicing
Agreement.
XXXXX FARGO BANK, N.A., as Trustee
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust,
Series 2005-FF6
Ladies and Gentlemen:
We propose to purchase First Franklin Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-FF6, Class R, described in the
Prospectus Supplement, dated May 24, 2005, and Prospectus, dated January 19,
2005. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the
Pooling and Servicing Agreement dated May 1, 2005
relating to this issuance of the First Franklin Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-FF6 (the "
Pooling and Servicing
Agreement").
1. We certify that (a) we are not a disqualified organization and
(b) we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we intend
to pay any taxes associated with holding the Class R Certificate as they become
due and (e) we will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.
3. We acknowledge that we will be the beneficial owner of the Class
R Certificate and:(1)
______ The Class R Certificate will be registered in our name.
______ The Class R Certificate will be held in the name of our
nominee,
____________, which is not a disqualified organization.
-------------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-1
4. We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Code or a plan subject to
federal, state, local, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), and are not directly
or indirectly acquiring the Class R Certificate on behalf of or with any assets
of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and have furnished the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI or successor form
at the time and in the manner required by the Code; for this purpose the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to United States federal income tax regardless
of the source of its income, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more such U.S. persons have the authority to control all substantial
decisions of the trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons. We agree that any breach by us of this
certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Trustee with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Trustee a letter in the form of this letter (including the affidavit
appended hereto) and, we will provide the Trustee a written statement
substantially in the form of Exhibit E-2 to the Pooling and Servicing Agreement.
7. We hereby designate _______________________ as our fiduciary to
act as the tax matters person for each of the REMICs provided for in the Pooling
and Servicing Agreement.
Very truly yours,
[PURCHASER]
By:
--------------------------------
Name:
Title:
Accepted as of __________ __, 200__
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
-------------------------------
Name:
Title:
E-1-2
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4)
of the Internal Revenue Code of 1986, as
amended, and (ii) certain provisions of the
Pooling and Servicing Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________
(the "Transferee"),
2. the Transferee's Employer Identification number is
__________,
3. the Transferee is not a "disqualified organization" (as
defined below), has no plan or intention of becoming a
disqualified organization, and is not acquiring any of
its interest in the First Franklin Mortgage Loan Trust,
Mortgage Loan Asset-Backed Certificates, Series
2005-FF6, Class R Certificate on behalf of a
disqualified organization or any other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc.("MLMI")
has consented to the transfer to the Transferee by
executing the form of Consent affixed as Appendix B to
the Transferee's Letter to which this Certificate is
affixed as Appendix A, the Transferee is a "U.S. person"
(as defined below),
5. that no purpose of the transfer is to avoid or impede
the assessment or collection of tax,
6. the Transferee has historically paid its debts as they
became due,
7. the Transferee intends, and believes that it will be
able, to continue to pay its debts as they become due in
the future,
8. the Transferee understands that, as beneficial owner of
the Class R Certificate, it may incur tax liabilities in
excess of any cash flows generated by the Class R
Certificate,
9. the Transferee intends to pay any taxes associated with
holding the Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling
and Servicing Agreement that shall be deemed necessary
by MLMI (upon advice of counsel) to constitute a
reasonable arrangement to ensure that the Class R
Certificate will not be owned directly or indirectly by
a disqualified organization, and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE
INAPPLICABLE [the transfer is not a direct or indirect
transfer of the Class R Certificate to a foreign
permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the
Transferee, and as to each of the residual interests
represented by the Class R Certificate, the present
value of
E-1-3
the anticipated tax liabilities associated with holding
such residual interest does not exceed the sum of:
A. the present value of any consideration given
to the Transferee to acquire such residual
interest;
B. the present value of the expected future
distributions on such residual interest; and
C. the present value of the anticipated tax
savings associated with holding such
residual interest as the related REMIC
generates losses.
For purposes of this declaration, (i) the Transferee is assumed to
pay tax at a rate equal to the highest rate of tax specified in
Section 11(b)(1) of the Code, but the tax rate specified in Section
55(b)(1)(B) of the Code may be used in lieu of the highest rate
specified in Section 11(b)(1) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code
in the preceding two years and will compute its taxable income in
the current taxable year using the alternative minimum tax rate, and
(ii) present values are computed using a discount rate equal to the
Federal short-term rate prescribed by Section 1274(d) of the Code
for the month of the transfer and the compounding period used by the
Transferee;]
[(11) (A) at the time of the transfer, and at the close of each of
the Transferee's two fiscal years preceding the
Transferee's fiscal year of transfer, the Transferee's
gross assets for financial reporting purposes exceed
$100 million and its net assets for financial reporting
purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in
Treasury regulations Section 1.860E-1(c)(6)(i) and has
agreed in writing that any subsequent transfer of the
Class R Certificate will be to another eligible
corporation in a transaction that satisfies Treasury
regulation Sections 1.860E-1(c)(4)(i),
1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and
1.860E-1(c)(5) and such transfer will not be a direct or
indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty)
of a domestic corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
E-1-4
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
---------------------------------
By:
-----------------------------
-----------------------------
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
-----------------------------
, Secretary
-----------------------------
E-1-5
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this day of ,
200__.
-----------------------------------------
Notary Public
County of
--------------------------------
State of
---------------------------------
My commission expires the day of
-------- --------------
By:
Name:
----------------------
Title:
---------------------
Dated:
--------------------
E-1-6
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust,
Series 2005-FF6
Re: First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-FF6
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
--------------------------------
Name:
Title:
E-2-1
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust,
Series 2005-FF6
RE: First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-FF6
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificate,
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of May 1, 2005,
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo Bank,
N.A., as trustee and Wilshire Credit Corporation, as servicer.
Very truly yours,
--------------------------------
Name of Transferor
By:
----------------------------
Name:
Title
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust,
Series 2005-FF6
Re: First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-FF6
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of First Franklin Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-FF6, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of May 1, 2005
(the "Pooling and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage Investors,
Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as trustee (the
"Trustee") and Wilshire Credit Corporation, as servicer (the "Servicer"). [THE
PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR _________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE
TRANSFERRED, OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT
SUBJECT TO REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY
APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES
WITH THE OTHER PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE
UNLESS THE TRUSTEE SHALL
G-1
HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER
(A) AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE
OF THE CERTIFICATES.
3. The ERISA Restricted Certificates (other than the Class R
Certificates) will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") OR A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR
OTHER LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF
ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH
ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN
SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
95-60 AND THE ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED
AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60, OR (C) SOLELY IN
THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, AND UPON WHICH THE TRUSTEE SHALL BE
ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND HOLDING OF
SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE
OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF
ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAW AND
WILL NOT SUBJECT THE TRUSTEE, THE NIMS INSURER, THE SERVICER OR THE
DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH
ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE NIMS INSURER,
THE SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A
DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE
REPRESENTATION IN (A) OR (B) ABOVE.
4. The Class R Certificate will bear a legend to the following
effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE
PROSPECTIVE TRANSFEREE PROVIDES THE TRUSTEE WITH A REPRESENTATION
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE
CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING
THIS CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH
PLAN.
G-2
5. The Purchaser is acquiring the Transferred Certificates for its
own account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
6. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
7. The Purchaser will not nor has it authorized nor will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
8. The Purchaser of an ERISA Restricted Certificate (other than the
Class R Certificate) (A) is not an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code, a plan subject to any state,
local, federal, non-U.S. or other law substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law") and is not directly or
indirectly acquiring such Certificates by, on behalf of, or with any assets of
any such plan, or (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is acquiring the
Certificate with assets of an "insurance company general account," as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under Sections
I and III of PTCE 95-60, or (C) solely in the event the Certificate is a
Definitive Certificate, herewith delivers an Opinion of Counsel satisfactory to
the Trustee, and upon which the Trustee shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the NIMs Insurer, the Servicer or the Depositor to any obligation in
addition to those expressly undertaken in the Pooling and Servicing Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the NIMs
Insurer, the Servicer or the Depositor.
9. The Purchaser of a Class R Certificate is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a
plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
---------------------
* Not required of a broker/dealer purchaser.
G-3
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.
10. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
11. The Purchaser agrees to indemnify the Trustee, the Servicer and
the Depositor against any liability that may result from any misrepresentation
made herein.
Very truly yours,
[PURCHASER]
By:
----------------------------
Name:
Title:
G-4
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust,
Series 2005-FF6
Re: First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-FF6
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of First Franklin Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-FF6, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of May 1, 2005
(the "Pooling and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage Investors,
Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as trustee (the
"Trustee") and Wilshire Credit Corporation, as servicer (the "Servicer"). [THE
PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR _________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates,
(d)(A) solely with respect to ERISA Restricted Certificates, we are not an
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), a plan subject to
any state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law"), or Persons directly
or indirectly acting on behalf of or using any assets of any such plan, or (B)
solely with respect to ERISA Restricted Certificates (other than the Class R
Certificates), if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, we are an insurance company that is acquiring the Certificate with
assets of an "insurance company general account," as defined in Section V(e) of
Prohibited Transaction Class Exemption ("PTCE") 95-60, and the acquisition and
holding of the Certificate are covered and exempt under Sections I and III of
PTCE 95-60, or (C) solely in the event the Certificate is an ERISA Restricted
Certificate (other than a Class R Certificate) and also a Definitive
H-1
Certificate, we will herewith deliver an Opinion of Counsel satisfactory to the
Trustee, and upon which the Trustee shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the NIMs Insurer, the Servicer or the Depositor to any obligation in
addition to those expressly undertaken in the Pooling and Servicing Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the NIMs
Insurer, the Servicer or the Depositor, (e) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
one of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. We are aware that the sale of the Transferred Certificates to us is
being made in reliance on Rule 144A. We are acquiring the Transferred
Certificates for our own account or for resale pursuant to Rule 144A and further
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed by us, based upon certifications of such
purchaser or information we have in our possession, to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
----------------------------
Name:
Title:
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than
------- a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
Bank. The Buyer (a) is a national bank or banking
------- institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by Federal, State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
Savings and Loan. The Buyer (a) is a savings and loan
------- association, building and loan association, cooperative
bank, homestead association or similar institution,
which is supervised and examined by a State or Federal
authority having supervision over such institution or is
a foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached
hereto.
Broker-dealer. The Buyer is a dealer registered pursuant
------- to Section 15 of the Securities Exchange Act of 1934, as
amended.
----------------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
H-3
Insurance Company. The Buyer is an insurance company
------- whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a
similar official or agency of the State, territory or
the District of Columbia.
State or Local Plan. The Buyer is a plan established and
------- maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its
political subdivisions, for the benefit of its
employees.
ERISA Plan. The Buyer is an employee benefit plan
------- subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended.
Investment Advisor. The Buyer is an investment advisor
------- registered under the Investment Advisors Act of 1940, as
amended.
Small Business Investment Company. Buyer is a small
------- business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958, as amended.
Business Development Company. Buyer is a business
------- development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of
the dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
H-4
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:
-----------------------------------
Name:
Title:
Date:
----------------------------------
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
The Buyer owned $___________ in securities (other than
------- the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
The Buyer is part of a Family of Investment Companies
------- which owned in the aggregate $__________ in securities
(other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
H-6
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
By:
-----------------------------------
Name:
Title:
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:
----------------------------------
H-7
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-FF6
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
1. Mortgage Paid in Full
-----------
2. Foreclosure
-----------
3. Substitution
-----------
4. Other Liquidation (Repurchases, etc.)
-----------
5. Nonliquidation
-----------
6. Other Reason:
----------- ----------------------
Address to which the Trustee should deliver the Mortgage File:
By:
---------------------------------
(authorized signer)
Address:
-----------------------------
Date:
--------------------------------
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
I-1
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
Xxxxx Fargo Bank, N.A.,
as Trustee
By:
------------------------------------ -------------------------
Signature Date
Documents returned to Trustee:
By:
------------------------------------ -------------------------
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement dated as of May 1, 2005 among
Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer
(the "Agreement), relating to, First Franklin Mortgage Loan Trust,
Mortgage Loan Asset-Backed Certificates, Series 2005-FF6
I, [identify the certifying individual], a [title] of the Trustee
hereby certify to the Depositor, and its officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the Monthly Statements delivered pursuant to the Agreement
since the last Officer's Certificate executed pursuant to Section 3.21 of
the Agreement [or in the case of the first certification, since the
Cut-off Date] (the "Trustee Information").
2. Based on my knowledge, the information in the Monthly Statement, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading
as of the date hereof;
3. Based on my knowledge, the Monthly Statements required to be prepared by
the Trustee under the Agreement has been prepared and provided in
accordance with the Agreement; and
4. I am responsible for reviewing the activities performed by the Trustee
under the Agreement and the Trustee has, as of the date hereof fulfilled
its obligations under the Agreement and there are no significant
deficiencies relating to the Trustee's compliance with the Agreement.
Date:
Xxxxx Fargo Bank, N.A.,
as Trustee
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
K-1
EXHIBIT L
OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - First Franklin Mortgage Loan Trust,
Series 2005-FF6
Re: Pooling and Servicing Agreement dated as of May 1, 2005 among
Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer
(the "Agreement), relating to, First Franklin Mortgage Loan Trust,
Mortgage Loan Asset-Backed Certificates, Series 2005-FF6
I, [identify the certifying individual], an authorized
representative of the Servicer hereby certify to the Trustee and the Depositor,
and each of their respective officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the information required to be delivered to the Trustee
pursuant to the Agreement (the "Servicing Information").
2. Based on my knowledge, the information in the Annual Statement of
Compliance, and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans submitted to
the Trustee by the Servicer taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by the Annual Statement of Compliance;
3. Based on my knowledge, the Servicing Information required to be provided
to the Trustee by the Servicer under the Agreement has been provided to
the Trustee; and
L-1
4. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon the review required hereunder, and
except as disclosed in the Annual Statement of Compliance, the Annual
Independent Certified Public Accountant's Servicing Report and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans submitted to the Trustee by the
Servicer, the Servicer has, as of the last day of the period covered by
the Annual Statement of Compliance fulfilled its obligations under this
Agreement.
Date:
Wilshire Credit Corporation, as Servicer
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
L-2
EXHIBIT M
[RESERVED]
M-1
EXHIBIT N-1
FORM OF CLASS A-1 CAP CONTRACT
[Intentionally Omitted]
N-1-1
EXHIBIT N-2
FORM OF CLASS A-2 CAP CONTRACT
[Intentionally Omitted]
N-2-1
EXHIBIT N-3
FORM OF SUBORDINATED CERTIFICATE CAP CONTRACT
[Intentionally Omitted]
N-3-1
EXHIBIT O-1
ONE-MONTH LIBOR CAP TABLE - CLASS A-1
1ML STRIKE
BEGINNING ENDING NOTIONAL LOWER COLLAR UPPER COLLAR
PERIOD ACCRUAL ACCRUAL BALANCE($) (%) (1) (%)
------ --------- -------- -------------- ------------ ------------
1 05/26/05 06/25/05 565,535,000.00 6.103 9.740
2 06/25/05 07/25/05 562,564,498.09 6.103 9.740
3 07/25/05 08/25/05 558,069,012.19 5.897 9.740
4 08/25/05 09/25/05 552,030,140.83 5.897 9.740
5 09/25/05 10/25/05 544,450,669.34 6.102 9.740
6 10/25/05 11/25/05 535,331,592.16 5.903 9.740
7 11/25/05 12/25/05 524,695,491.10 6.109 9.740
8 12/25/05 01/25/06 512,563,149.98 5.904 9.740
9 01/25/06 02/25/06 498,977,732.86 5.904 9.740
10 02/25/06 03/25/06 483,980,730.31 6.564 9.740
11 03/25/06 04/25/06 467,793,524.18 5.904 9.740
12 04/25/06 05/25/06 450,477,368.58 6.120 9.740
13 05/25/06 06/25/06 433,657,821.72 5.915 9.740
14 06/25/06 07/25/06 417,320,144.23 6.121 9.740
15 07/25/06 08/25/06 401,450,415.91 5.915 9.740
16 08/25/06 09/25/06 386,035,121.00 5.915 9.740
17 09/25/06 10/25/06 371,061,136.35 6.122 9.740
18 10/25/06 11/25/06 356,515,720.00 5.924 9.740
19 11/25/06 12/25/06 342,386,656.28 6.131 9.740
20 12/25/06 01/25/07 328,661,767.64 5.925 9.740
21 01/25/07 02/25/07 315,329,390.60 5.925 9.740
22 02/25/07 03/25/07 302,342,244.71 6.588 9.740
23 03/25/07 04/25/07 279,424,132.34 5.927 9.740
24 04/25/07 05/25/07 257,755,338.28 7.999 9.740
25 05/25/07 06/25/07 237,303,564.97 7.725 9.740
26 06/25/07 07/25/07 217,961,709.85 7.982 9.740
27 07/25/07 08/25/07 199,689,034.08 7.707 9.740
28 08/25/07 09/25/07 188,397,328.21 7.703 9.740
29 09/25/07 10/25/07 177,488,474.88 7.964 9.740
30 10/25/07 11/25/07 166,949,254.06 8.286 9.740
31 11/25/07 12/25/07 156,773,933.60 8.566 9.740
32 12/25/07 01/25/08 146,942,709.05 8.275 9.740
33 01/25/08 02/25/08 137,443,719.23 8.269 9.740
34 02/25/08 03/25/08 128,265,516.36 8.851 9.740
35 03/25/08 04/25/08 119,397,051.61 8.262 9.740
36 04/25/08 05/25/08 110,827,661.08 9.587 9.740
37 05/25/08 06/25/08 102,558,204.74 9.261 9.740
38 06/25/08 07/25/08 102,558,204.74 9.568 9.740
39 07/25/08 08/25/08 102,558,204.74 9.242 9.740
40 08/25/08 09/25/08 102,558,204.74 9.233 9.740
41 09/25/08 10/25/08 102,558,204.74 9.541 9.740
(1) With respect to any Distribution Date, if One-Month LIBOR (as
determined by the Cap Contract Counterparty and subject to a cap
equal to 9.740%) exceeds the Lower Collar, the Trust Fund will
receive payments pursuant to the Class A-1 Cap Contract.
O-1-1
EXHIBIT O-2
ONE-MONTH LIBOR CAP TABLE - CLASS A-2
BEGINNING ENDING NOTIONAL LOWER COLLAR UPPER COLLAR
PERIOD ACCRUAL ACCRUAL BALANCE($) (%) (1) (%)
------ --------- -------- -------------- ------------ ------------
1 05/26/05 06/25/05 314,876,000.00 5.646 9.310
2 06/25/05 07/25/05 313,271,359.07 5.646 9.310
3 07/25/05 08/25/05 310,808,226.94 5.458 9.310
4 08/25/05 09/25/05 307,475,614.77 5.458 9.310
5 09/25/05 10/25/05 303,274,791.10 5.646 9.310
6 10/25/05 11/25/05 298,205,731.38 5.462 9.310
7 11/25/05 12/25/05 292,280,883.43 5.651 9.310
8 12/25/05 01/25/06 285,511,520.42 5.462 9.310
9 01/25/06 02/25/06 277,921,858.03 5.462 9.310
10 02/25/06 03/25/06 269,534,887.50 6.068 9.310
11 03/25/06 04/25/06 260,438,989.59 5.462 9.310
12 04/25/06 05/25/06 250,666,806.75 5.662 9.310
13 05/25/06 06/25/06 241,177,640.28 5.473 9.310
14 06/25/06 07/25/06 231,962,909.59 5.662 9.310
15 07/25/06 08/25/06 223,014,638.50 5.473 9.310
16 08/25/06 09/25/06 214,325,083.39 5.473 9.310
17 09/25/06 10/25/06 205,886,726.45 5.662 9.310
18 10/25/06 11/25/06 197,692,269.05 5.481 9.310
19 11/25/06 12/25/06 189,734,739.26 5.670 9.310
20 12/25/06 01/25/07 182,007,137.62 5.481 9.310
21 01/25/07 02/25/07 174,502,785.64 5.481 9.310
22 02/25/07 03/25/07 167,215,199.54 6.088 9.310
23 03/25/07 04/25/07 154,048,607.79 5.481 9.310
24 04/25/07 05/25/07 141,608,837.15 7.611 9.310
25 05/25/07 06/25/07 129,865,942.81 7.353 9.310
26 06/25/07 07/25/07 118,769,713.70 7.598 9.310
27 07/25/07 08/25/07 108,284,050.66 7.340 9.310
28 08/25/07 09/25/07 101,918,230.88 7.337 9.310
29 09/25/07 10/25/07 95,771,899.82 7.585 9.310
30 10/25/07 11/25/07 89,837,407.48 7.953 9.310
31 11/25/07 12/25/07 84,109,417.18 8.221 9.310
32 12/25/07 01/25/08 78,578,624.79 7.945 9.310
33 01/25/08 02/25/08 73,238,163.83 7.941 9.310
34 02/25/08 03/25/08 68,081,408.49 8.497 9.310
35 03/25/08 04/25/08 63,101,965.10 7.933 9.310
36 04/25/08 05/25/08 58,293,663.98 9.310 9.310
37 05/25/08 06/25/08 53,655,084.95 9.035 9.310
38 06/25/08 07/25/08 53,655,084.95 9.310 9.310
39 07/25/08 08/25/08 53,655,084.95 9.022 9.310
40 08/25/08 09/25/08 53,655,084.95 9.016 9.310
(1) With respect to any Distribution Date, if One-Month LIBOR (as
determined by the Cap Contract Counterparty and subject to a cap
equal to 9.310%) exceeds the Lower Collar, the Trust Fund will
receive payments pursuant to the Class A-2 Cap Contract.
O-2-2
EXHIBIT O-3
ONE-MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP CONTRACT
BEGINNING ENDING NOTIONAL LOWER COLLAR UPPER COLLAR
PERIOD ACCRUAL ACCRUAL BALANCE($) (%) (1) (%)
------ --------- -------- -------------- ------------ ------------
1 05/26/05 06/25/05 196,384,000.00 5.394 8.720
2 06/25/05 07/25/05 196,384,000.00 5.394 8.720
3 07/25/05 08/25/05 196,384,000.00 5.195 8.720
4 08/25/05 09/25/05 196,384,000.00 5.195 8.720
5 09/25/05 10/25/05 196,384,000.00 5.394 8.720
6 10/25/05 11/25/05 196,384,000.00 5.201 8.720
7 11/25/05 12/25/05 196,384,000.00 5.400 8.720
8 12/25/05 01/25/06 196,384,000.00 5.201 8.720
9 01/25/06 02/25/06 196,384,000.00 5.201 8.720
10 02/25/06 03/25/06 196,384,000.00 5.842 8.720
11 03/25/06 04/25/06 196,384,000.00 5.201 8.720
12 04/25/06 05/25/06 196,384,000.00 5.411 8.720
13 05/25/06 06/25/06 196,384,000.00 5.212 8.720
14 06/25/06 07/25/06 196,384,000.00 5.412 8.720
15 07/25/06 08/25/06 196,384,000.00 5.212 8.720
16 08/25/06 09/25/06 196,384,000.00 5.212 8.720
17 09/25/06 10/25/06 196,384,000.00 5.412 8.720
18 10/25/06 11/25/06 196,384,000.00 5.221 8.720
19 11/25/06 12/25/06 196,384,000.00 5.421 8.720
20 12/25/06 01/25/07 196,384,000.00 5.221 8.720
21 01/25/07 02/25/07 196,384,000.00 5.221 8.720
22 02/25/07 03/25/07 196,384,000.00 5.864 8.720
23 03/25/07 04/25/07 196,384,000.00 5.222 8.720
24 04/25/07 05/25/07 196,384,000.00 7.316 8.720
25 05/25/07 06/25/07 196,384,000.00 7.047 8.720
26 06/25/07 07/25/07 196,384,000.00 7.299 8.720
27 07/25/07 08/25/07 196,384,000.00 7.031 8.720
28 08/25/07 09/25/07 196,384,000.00 7.027 8.720
29 09/25/07 10/25/07 196,384,000.00 7.284 8.720
30 10/25/07 11/25/07 196,384,000.00 7.622 8.720
31 11/25/07 12/25/07 196,384,000.00 7.897 8.720
32 12/25/07 01/25/08 196,384,000.00 7.612 8.720
33 01/25/08 02/25/08 196,384,000.00 7.607 8.720
34 02/25/08 03/25/08 196,384,000.00 8.180 8.720
35 03/25/08 04/25/08 196,384,000.00 7.599 8.720
36 04/25/08 05/25/08 196,384,000.00 8.720 8.720
37 05/25/08 06/25/08 196,384,000.00 8.635 8.720
38 06/25/08 07/25/08 192,794,693.44 8.720 8.720
39 07/25/08 08/25/08 181,324,389.37 8.619 8.720
40 08/25/08 09/25/08 170,242,125.40 8.610 8.720
(1) With respect to any Distribution Date, if One-Month LIBOR (as
determined by the Cap Contract Counterparty and subject to a cap
equal to 8.720%) exceeds the Lower Collar, the Trust Fund will
receive payments pursuant to the Subordinated Certificate Cap
Contract.
O-3-1
