ACE SECURITIES CORP.
Depositor
SAXON MORTGAGE SERVICES, INC.
Servicer
▇▇▇▇▇ FARGO BANK, N.A.
Master Servicer and Securities Administrator
HSBC BANK USA, NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
ACE Securities Corp. Home Equity Loan Trust, Series 2005-RM1
Asset Backed Pass-Through Certificates
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 4
SECTION 1.01. Defined Terms.............................................4
Accepted Master Servicing Practices......................................4
Accepted Servicing Practices.............................................4
Account..................................................................4
Accrued Certificate Interest.............................................4
Adjustable Rate Mortgage Loan............................................4
Adjustment Date..........................................................5
Administration Fees......................................................5
Administration Fee Rate..................................................5
Advance Facility.........................................................5
Advance Financing Person.................................................5
Advance Reimbursement Amounts............................................5
Affiliate................................................................5
Aggregate Loss Severity Percentage.......................................5
Agreement................................................................5
Allocated Realized Loss Amount...........................................5
Amounts Held for Future Distribution.....................................5
Assignment...............................................................5
Assignment Agreements....................................................6
Available Distribution Amount............................................6
Balloon Mortgage Loan....................................................6
Balloon Payment..........................................................6
Bankruptcy Code..........................................................6
Book-Entry Certificates..................................................6
Book-Entry Custodian.....................................................7
Business Day.............................................................7
Cap Contracts............................................................7
Cash-Out Refinancing.....................................................7
Certificate..............................................................7
Certificate Factor.......................................................7
Certificate Margin.......................................................7
Certificateholde.........................................................9
Certificate Owner........................................................9
Certificate Principal Balance............................................9
Certificate Register....................................................10
Class...................................................................10
Class A Certificate.....................................................10
Class A Principal Distribution Amount...................................10
Class A-1 Allocation Percentage.........................................10
Class A-1 Certificate...................................................10
Class A-1 Principal Distribution Amount.................................10
Class A-1A Certificate..................................................10
Class A-1B Certificate..................................................10
Class A-2 Allocation Percentage.........................................11
Class A-2 Certificate...................................................11
Class A-2 Principal Distribution Amount.................................11
Class A-2A Certificate..................................................11
Class A-2B Certificate..................................................11
Class A-2C Certificate..................................................11
Class B Certificate.....................................................11
Class B-1 Certificate...................................................11
Class B-1 Principal Distribution Amount.................................11
Class B-2 Certificate...................................................12
Class B-2 Principal Distribution Amount.................................12
Class B-3 Certificate...................................................13
Class B-3 Principal Distribution Amount.................................13
Class CE Certificate....................................................14
Class M Certificates....................................................14
Class M-1 Certificate...................................................14
Class M-1 Principal Distribution Amount.................................14
Class M-2 Certificate...................................................14
Class M-2 Principal Distribution Amount.................................15
Class M-3 Certificate...................................................15
Class M-3 Principal Distribution Amount.................................15
Class M-4 Certificate...................................................15
Class M-4 Principal Distribution Amount.................................16
Class M-5 Certificate...................................................16
Class M-5 Principal Distribution Amount.................................16
Class M-6 Certificate...................................................17
Class M-6 Principal Distribution Amount.................................17
Class M-7 Certificate...................................................17
Class M-7 Principal Distribution Amount.................................17
Class M-8 Certificate...................................................18
Class M-8 Principal Distribution Amount.................................18
Class M-9 Certificate...................................................19
Class M-9 Principal Distribution Amount.................................19
Class P Certificate.....................................................19
Class R Certificates....................................................20
Class R-I Interest......................................................20
Class R-II Interest.....................................................20
Closing Date............................................................20
Code....................................................................20
Collection Account......................................................20
Commission..............................................................20
Corporate Trust Office..................................................20
Corresponding Certificate...............................................20
Credit Enhancement Percentage...........................................21
Credit Risk Management Agreements.......................................21
Credit Risk Management Fee..............................................21
Credit Risk Management Fee Rate.........................................21
Credit Risk Manager.....................................................21
Custodial Account.......................................................21
ii
Custodial Agreement.....................................................21
Custodian...............................................................21
Cut-off Date............................................................21
DBRS....................................................................21
Debt Service Reduction..................................................22
Deficient Valuation.....................................................22
Definitive Certificates.................................................22
Deleted Mortgage Loan...................................................22
Delinquency Percentage..................................................22
Depositor...............................................................22
Depository..............................................................22
Depository Institution..................................................22
Depository Participant..................................................22
Determination Date......................................................22
Directly Operate........................................................23
Disqualified Organization...............................................23
Distribution Account....................................................23
Distribution Date.......................................................23
Due Date................................................................23
Due Period..............................................................23
Eligible Account........................................................24
ERISA...................................................................24
Estate in Real Property.................................................24
Excess Liquidation Proceeds.............................................24
Expense Adjusted Mortgage Rate..........................................24
Extraordinary Trust Fund Expense........................................24
Extra Principal Distribution Amount.....................................24
▇▇▇▇▇▇ Mae..............................................................24
FDIC....................................................................24
Final Maturity Date.....................................................24
Final Recovery Determination............................................24
▇▇▇▇▇▇▇ Mac.............................................................25
Gross Margin............................................................25
Group I Interest Remittance Amount......................................25
Group I Mortgage Loans..................................................25
Group I Principal Distribution Amount...................................25
Group I Principal Remittance Amount.....................................25
Group II Interest Remittance Amount.....................................25
Group II Mortgage Loans.................................................26
Group II Principal Distribution Amount..................................26
Group II Principal Remittance Amount....................................26
Independent.............................................................26
Independent Contractor..................................................26
Index...................................................................27
Institutional Accredited Investor.......................................27
Insurance Proceeds......................................................27
Interest Accrual Period.................................................27
Interest Carry Forward Amount...........................................27
iii
Interest Determination Date.............................................27
Interest Distribution Amount............................................28
Interim Servicer........................................................28
Interest Remittance Amount..............................................28
Last Scheduled Distribution Date........................................28
Late Collections........................................................28
Liquidation Event.......................................................28
Liquidation Proceeds....................................................28
▇▇▇▇▇▇..................................................................28
▇▇▇▇▇▇ Assignment Agreement.............................................29
▇▇▇▇▇▇ Mortgage Loans...................................................29
▇▇▇▇▇▇ Servicing Agreement..............................................29
Loan-to-Value Ratio.....................................................29
London Business Day.....................................................29
Loss Severity Percentage................................................29
Marker Rate.............................................................29
Master Servicer.........................................................29
Master Servicer Certification...........................................29
Master Servicer Event of Default........................................30
Master Servicer Fee Rate................................................30
Master Servicing Fee....................................................30
Maximum I-LTZZ Uncertificated Interest Deferral Amount..................30
Maximum Mortgage Rate...................................................30
MERS....................................................................30
MERS(R) System..........................................................31
Mezzanine Certificate...................................................31
MIN.....................................................................31
Minimum Mortgage Rate...................................................31
MOM Loan................................................................31
Monthly Payment.........................................................31
▇▇▇▇▇'▇.................................................................31
Mortgage................................................................31
Mortgage File...........................................................31
Mortgage Loan...........................................................31
Mortgage Loan Documents.................................................31
Mortgage Loan Purchase Agreement........................................31
Mortgage Loan Schedule..................................................32
Mortgage Note...........................................................34
Mortgage Rate...........................................................34
Mortgaged Property......................................................34
Mortgagor...............................................................34
Net Monthly Excess Cashflow.............................................34
Net Mortgage Rate.......................................................35
Net WAC Pass-Through Rate...............................................35
Net WAC Rate Carryover Amount...........................................36
New Lease...............................................................36
Nonrecoverable P&I Advance..............................................36
Nonrecoverable Servicing Advance........................................36
iv
Non-United States Person................................................36
Notional Amount.........................................................36
Offered Certificates....................................................36
Officer's Certificate...................................................37
One-Month LIBOR.........................................................37
One-Month LIBOR Pass-Through Rate.......................................37
Opinion of Counsel......................................................39
Optional Termination Date...............................................39
Originators.............................................................39
Overcollateralization Amount............................................39
Overcollateralization Increase Amount...................................39
Overcollateralization Reduction Amount..................................39
Ownership ▇▇▇▇▇▇▇▇......................................................▇▇
▇&▇ Advance.............................................................39
Pass-Through Rate.......................................................40
Percentage Interest.....................................................42
Periodic Rate...........................................................42
Permitted Investments...................................................42
Permitted Transferee....................................................43
Person..................................................................44
Plan....................................................................44
Prepayment Assumption...................................................44
Prepayment Charge.......................................................44
Prepayment Charge Schedule..............................................44
Prepayment Interest Excess..............................................45
Prepayment Interest Shortfall...........................................45
Prepayment Period.......................................................45
Principal Prepayment....................................................45
Principal Distribution Amount...........................................45
Principal Remittance Amount.............................................45
Purchase Price..........................................................45
QIB.....................................................................46
Qualified Substitute Mortgage Loan......................................46
Rate/Term Refinancing...................................................47
Rating Agency or Rating Agencies........................................47
Realized Loss...........................................................47
Record Date.............................................................48
Reference Banks.........................................................49
Refinanced Mortgage Loan................................................49
Regular Certificate.....................................................49
Regular Interest........................................................49
Regulation S Temporary Global Certificate...............................49
Regulation S Permanent Global...........................................49
Release Date............................................................49
Relief Act..............................................................49
Relief Act Interest Shortfall...........................................49
REMIC...................................................................49
REMIC I.................................................................49
v
REMIC I Interest Loss Allocation Amount.................................50
REMIC I Marker Allocation Percentage....................................50
REMIC I Overcollateralization...........................................50
REMIC I Principal Loss Allocation Amount................................50
REMIC I Regular Interest................................................51
REMIC I Regular Interest I-LTAA.........................................51
REMIC I Regular Interest I-LTA1A........................................51
REMIC I Regular Interest I-LTA1B........................................51
REMIC I Regular Interest I-LTA2A........................................51
REMIC I Regular Interest I-LTA2B........................................51
REMIC I Regular Interest I-LTA2C........................................51
REMIC I Regular Interest I-LTB1.........................................52
REMIC I Regular Interest I-LTB2.........................................52
REMIC I Regular Interest I-LTB3.........................................52
REMIC I Regular Interest I-LTM1.........................................52
REMIC I Regular Interest I-LTM2.........................................52
REMIC I Regular Interest I-LTM3.........................................52
REMIC I Regular Interest I-LTM4.........................................52
REMIC I Regular Interest I-LTM5.........................................53
REMIC I Regular Interest I-LTM6.........................................53
REMIC I Regular Interest I-LTM7.........................................53
REMIC I Regular Interest I-LTM8.........................................53
REMIC I Regular Interest I-LTM9.........................................53
REMIC I Regular Interest I-LTP..........................................53
REMIC I Regular Interest I-LTXX.........................................53
REMIC I Regular Interest I-LTZZ.........................................54
REMIC I Regular Interest I-LT1SUB.......................................54
REMIC I Regular Interest I-LT1GRP.......................................54
REMIC I Regular Interest I-LT2SUB.......................................54
REMIC I Regular Interest I-LT2GRP.......................................54
REMIC I Remittance Rate.................................................54
REMIC I Sub WAC Allocation Percentage...................................55
REMIC I Subordinated Balance Ratio......................................55
REMIC I Required Overcollateralization..................................55
REMIC II................................................................55
REMIC II Certificate....................................................55
REMIC II Certificateholder..............................................55
REMIC Provisions........................................................55
REMIC Regular Interest..................................................55
REMIC Remittance Rate...................................................55
Remittance Report.......................................................55
Rents from Real Property................................................55
REO Account.............................................................55
REO Disposition.........................................................56
REO Imputed Interest....................................................56
REO Principal Amortization..............................................56
REO Property............................................................56
Required Overcollateralization..........................................56
vi
Reserve Fund............................................................56
Reserve Interest Rate...................................................56
Residential Dwelling....................................................57
Residual Certificate....................................................57
Residual Interest.......................................................57
ResMae Assignment Agreement.............................................57
ResMae Mortgage Loans...................................................57
Responsible Officer.....................................................57
RMAE....................................................................57
RMC.....................................................................57
Rule....................................................................57
Saxon...................................................................57
Saxon Mortgage Loans....................................................57
S&P.....................................................................57
Scheduled Principal Balance.............................................57
Securities..............................................................58
Securities Administrator................................................58
Seller..................................................................58
Senior Interest Distribution Amount.....................................58
Sequential Trigger Event................................................58
Servicer................................................................58
Servicer Event of Default...............................................58
Servicer Remittance Date................................................59
Servicer Report.........................................................59
Servicing Advance.......................................................59
Servicing Agreement.....................................................59
Servicing Fee...........................................................59
Servicing Fee Rate......................................................59
Servicing Officer.......................................................59
Servicing Transfer Date.................................................60
Single Certificate......................................................60
Startup Day.............................................................60
Stated Principal Balance................................................60
Stepdown Date...........................................................61
Subordinate Certificates................................................61
Subsequent Recoveries...................................................61
Sub-Servicer............................................................61
Sub-Servicing Agreement.................................................61
Substitution Shortfall Amount...........................................61
Tax Returns.............................................................61
Telerate Page...........................................................61
Termination Price.......................................................61
Transfer................................................................61
Transferee..............................................................61
Transferor..............................................................62
Trigger Event...........................................................62
Trust...................................................................62
Trust Fund..............................................................62
vii
Trust REMIC.............................................................62
Trustee.................................................................62
Uncertificated Balance..................................................62
Uncertificated Interest.................................................62
Uninsured Cause.........................................................63
United States Person....................................................63
Value...................................................................63
Verification Report.....................................................64
Voting Rights...........................................................64
▇▇▇▇▇ Fargo.............................................................64
SECTION 1.02. Allocation of Certain Interest Shortfalls................64
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES 66
SECTION 2.01. Conveyance of the Mortgage Loans.........................66
SECTION 2.02. Acceptance of REMIC I by Trustee.........................67
SECTION 2.03. Repurchase or Substitution of Mortgage Loans.............67
SECTION 2.04. Representations and Warranties of the
Master Servicer..........................................70
SECTION 2.05. Representations, Warranties and Covenants
of the Servicer..........................................71
SECTION 2.06. Issuance of the REMIC I Regular Interests and
the Class R-I Interest...................................73
SECTION 2.07. Conveyance of the REMIC I Regular Interests;
Acceptance of REMIC I by the Trustee.....................74
SECTION 2.08. Issuance of Residual Certificates........................74
SECTION 2.09. Establishment of the Trust...............................74
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS 75
SECTION 3.01. Servicer to Act as Servicer..............................75
SECTION 3.02. Sub-Servicing Agreements Between the Servicer
and Sub-Servicers........................................77
SECTION 3.03. Successor Sub-Servicers..................................78
SECTION 3.04. No Contractual Relationship Between Sub-Servicer,
Trustee or the Certificateholders........................78
SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement
by Successor Servicer....................................78
SECTION 3.06. Collection of Certain Mortgage Loan Payments.............79
SECTION 3.07. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.......................................79
SECTION 3.08. Collection Account and Distribution Account..............80
SECTION 3.09. Withdrawals from the Collection Accounts and
Distribution Account.....................................83
SECTION 3.10. Investment of Funds in the Investment Accounts...........84
SECTION 3.11. Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage and Primary Mortgage Insurance.....86
SECTION 3.12. Enforcement of Due-on-Sale Clauses;
Assumption Agreements....................................88
SECTION 3.13. Realization Upon Defaulted Mortgage Loans................89
SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files..........90
SECTION 3.15. Servicing Compensation...................................92
SECTION 3.16. Collection Account Statements............................92
viii
SECTION 3.17. Statement as to Compliance...............................92
SECTION 3.18. Independent Public Accountants' Servicing Report.........93
SECTION 3.19. Annual Certification.....................................93
SECTION 3.20. Access to Certain Documentation..........................94
SECTION 3.21. Title, Management and Disposition of REO Property........94
SECTION 3.22. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls; Relief Act Interest Shortfalls......97
SECTION 3.23. Obligations of the Servicer in Respect of Mortgage Rates
and Monthly Payments.....................................98
SECTION 3.24. Reserve Fund.............................................98
SECTION 3.25. Advance Facility.........................................99
SECTION 3.26. Servicer Indemnification................................101
ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
BY THE MASTER SERVICER 102
SECTION 4.01. Master Servicer.........................................102
SECTION 4.02. REMIC-Related Covenants.................................103
SECTION 4.03. Monitoring of Servicer..................................103
SECTION 4.04. Fidelity Bond...........................................104
SECTION 4.05. Power to Act; Procedures................................105
SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements..............106
SECTION 4.07. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.........................106
SECTION 4.08. Standard Hazard Insurance and Flood Insurance Policies..106
SECTION 4.09. Presentment of Claims and Collection of Proceeds........107
SECTION 4.10. Maintenance of Primary Mortgage Insurance Policies......107
SECTION 4.11. Trustee to Retain Possession of Certain Insurance
Policies and Documents..................................107
SECTION 4.12. Realization Upon Defaulted Mortgage Loans...............108
SECTION 4.13. Compensation for the Master Servicer....................108
SECTION 4.14. REO Property............................................108
SECTION 4.15. Annual Officer's Certificate as to Compliance...........109
SECTION 4.16. Annual Independent Accountant's Servicing Report........109
SECTION 4.17. UCC.....................................................110
SECTION 4.18. Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls..........................110
SECTION 4.19. Prepayment Penalty Verification.........................110
ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS 112
SECTION 5.01. Distributions...........................................112
SECTION 5.02. Statements to Certificateholders........................127
SECTION 5.03. Servicer Reports; P&I Advances..........................131
SECTION 5.04. Allocation of Realized Losses...........................132
SECTION 5.05. Compliance with Withholding Requirements................135
SECTION 5.06. Reports Filed with Securities and Exchange Commission...135
ix
ARTICLE VI THE CERTIFICATES 137
SECTION 6.01. The Certificates........................................137
SECTION 6.02. Registration of Transfer and Exchange of Certificates...139
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.......144
SECTION 6.04. Persons Deemed Owners...................................145
SECTION 6.05. Certain Available Information...........................145
ARTICLE VII THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER 146
SECTION 7.01. Liability of the Depositor, the Servicer and the
Master Servicer.........................................146
SECTION 7.02. Merger or Consolidation of the Depositor, the
Servicer or the Master Servicer.........................146
SECTION 7.03. Limitation on Liability of the Depositor,
the Servicer, the Master Servicer and Others............146
SECTION 7.04. Limitation on Resignation of the Servicer...............147
SECTION 7.05. Limitation on Resignation of the Master Servicer........148
SECTION 7.06. Assignment of Master Servicing..........................149
SECTION 7.07. Rights of the Depositor in Respect of the Servicer
and the Master Servicer.................................149
SECTION 7.08. Duties of the Credit Risk Manager.......................150
SECTION 7.09. Limitation Upon Liability of the Credit Risk Manager....150
SECTION 7.10. Removal of the Credit Risk Manager......................151
ARTICLE VIII DEFAULT 152
SECTION 8.01. Servicer Events of Default..............................152
SECTION 8.02. Master Servicer to Act; Appointment of Successor........156
SECTION 8.03. Notification to Certificateholders......................157
SECTION 8.04. Waiver of Servicer Events of Default....................157
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR 158
SECTION 9.01. Duties of Trustee and Securities Administrator..........158
SECTION 9.02. Certain Matters Affecting Trustee and
Securities Administrator................................159
SECTION 9.03. Trustee and Securities Administrator not Liable
for Certificates or Mortgage Loans......................161
SECTION 9.04. Trustee and Securities Administrator May
Own Certificates........................................161
SECTION 9.05. Fees and Expenses of Trustee and
Securities Administrator................................161
SECTION 9.06. Eligibility Requirements for Trustee and
Securities Administrator................................162
SECTION 9.07. Resignation and Removal of Trustee and
Securities Administrator................................163
SECTION 9.08. Successor Trustee or Securities Administrator...........164
SECTION 9.09. Merger or Consolidation of Trustee or
Securities Administrator................................164
SECTION 9.10. Appointment of Co-Trustee or Separate Trustee...........165
SECTION 9.11. Appointment of Office or Agency.........................165
SECTION 9.12. Representations and Warranties..........................166
ARTICLE X TERMINATION 167
▇▇▇▇▇▇▇ ▇▇.▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Liquidation of
All Mortgage Loans......................................167
x
SECTION 10.02. Additional Termination Requirements.....................169
ARTICLE XI REMIC PROVISIONS 170
SECTION 11.01. REMIC Administration....................................170
SECTION 11.02. Prohibited Transactions and Activities..................172
SECTION 11.03. Indemnification.........................................173
ARTICLE XII MISCELLANEOUS PROVISIONS 174
SECTION 12.01. Amendment...............................................174
SECTION 12.02. Recordation of Agreement; Counterparts..................175
SECTION 12.03. Limitation on Rights of Certificateholders..............175
SECTION 12.04. Governing Law...........................................176
SECTION 12.05. Notices.................................................176
SECTION 12.06. Severability of Provisions..............................177
SECTION 12.07. Notice to Rating Agencies...............................177
SECTION 12.08. Article and Section References..........................178
SECTION 12.09. Grant of Security Interest..............................178
SECTION 12.10. Survival of Indemnification.............................179
SECTION 12.11. Servicing Agreements....................................179
EXHIBITS
Exhibit A-1 Form of Class A Certificate
Exhibit A-2 Form of Class M Certificate
Exhibit A-3 Form of Class B Certificate
Exhibit A-4 Form of Class CE Certificate
Exhibit A-5 Form of Class P Certificate
Exhibit A-6 Form of Class R Certificate
Exhibit B-1 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Class B Certificates, Class P Certificates, Class CE
Certificates and Residual Certificates Pursuant to Rule 144A
Under the 1933 Act
Exhibit B-2 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Class B Certificates, Class P Certificates, Class CE
Certificates and Residual Certificates Pursuant to Rule 501(a)
Under the 1933 Act
Exhibit B-3 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of Residual
Certificates
Exhibit C Form of Servicer Certification
Exhibit D Form of Power of Attorney
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
Schedule 3 Reserved.
Schedule 4 Standard File Layout - Delinquency Reporting
Schedule 5 Standard File Layout - Scheduled/Scheduled
xi
Schedule 6 Servicing Advances Incurred Prior to Cut-off Date
xii
This Pooling and Servicing Agreement, is dated and effective as of
February 1, 2005, among ACE SECURITIES CORP., as Depositor, SAXON MORTGAGE
SERVICES, INC., as Servicer, ▇▇▇▇▇ FARGO BANK, N.A., as Master Servicer and
Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates to be issued
hereunder in multiple classes, which in the aggregate will evidence the entire
beneficial ownership interest of the Trust Fund created hereunder. The Trust
Fund will consist of a segregated pool of assets comprised of the Mortgage Loans
and certain other related assets subject to this Agreement.
REMIC I
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the Mortgage Loans and certain other related assets
subject to this Agreement (other than the Cap Contracts and the Reserve Fund) as
a REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC I". The Class R-I Interest will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, the initial Uncertificated Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests (as defined herein).
None of the REMIC I Regular Interests will be certificated.
REMIC I
REMITTANCE INITIAL LATEST POSSIBLE
DESIGNATION RATE UNCERTIFICATED BALANCE MATURITY DATE (1)
--------------- --------------- ------------------------ -------------------
I-LTAA Variable(2) $ 307,403,452.14 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇ Variable(2) $ 1,518,770.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇ Variable(2) $ 379,695.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇ Variable(2) $ 338,040.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇ Variable(2) $ 107,485.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇ Variable(2) $ 80,735.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 125,470.00 March 25, 2035
I-LTM2 Variable(2) $ 103,515.00 March 25, 2035
I-LTM3 Variable(2) $ 62,735.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 58,030.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 50,190.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 50,190.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 45,485.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 34,505.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇ Variable(2) $ 31,370.00 March 25, 2035
I-LTB1 Variable(2) $ 31,370.00 March 25, 2035
I-LTB2 Variable(2) $ 48,620.00 March 25, 2035
I-LTB3 Variable(2) $ 34,505.00 March 25, 2035
I-LTZZ Variable(2) $ 3,172,829.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 100.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇▇ Variable(2) $ 11,150.00 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇▇ Variable(2) $ 49,119.35 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇▇ Variable(2) $ 3,090.86 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇-▇▇▇▇▇▇ Variable(2) $ 13,616.00 March 25, 2035
I-LTXX Variable(2) $ 313,600,015.67 March 25, 2035
-------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
REMIC II
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC II." The Class R-II Interest will evidence the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions. The following table
irrevocably sets forth the designation, the Pass-Through Rate, the initial
aggregate Certificate Principal Balance and, for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
the indicated Classes of Certificates.
2
INITIAL AGGREGATE
CERTIFICATE PRINCIPAL LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE BALANCE MATURITY DATE (1)
------------- -------------------- ----------------------- --------------------
Class A-1A Variable(2) $ 303,754,000.00 March 25, 2035
Class A-1B Variable(2) $ 75,939,000.00 March 25, 2035
Class A-2A Variable(2) $ 67,608,000.00 March 25, 2035
Class A-2B Variable(2) $ 21,497,000.00 March 25, 2035
Class A-2C Variable(2) $ 16,147,000.00 March 25, 2035
Class M-1 Variable(2) $ 25,094,000.00 March 25, 2035
Class M-2 Variable(2) $ 20,703,000.00 March 25, 2035
Class M-3 Variable(2) $ 12,547,000.00 March 25, 2035
Class M-4 Variable(2) $ 11,606,000.00 March 25, 2035
Class M-5 Variable(2) $ 10,038,000.00 March 25, 2035
Class M-6 Variable(2) $ 10,038,000.00 March 25, 2035
Class M-7 Variable(2) $ 9,097,000.00 March 25, 2035
Class M-8 Variable(2) $ 6,901,000.00 March 25, 2035
Class M-9 Variable(2) $ 6,274,000.00 March 25, 2035
Class B-1 Variable(2) $ 6,274,000.00 March 25, 2035
Class B-2 Variable(2) $ 9,724,000.00 March 25, 2035
Class B-3 Variable(2) $ 6,901,000.00 March 25, 2035
Class P N/A(3) $ 100.00 March 25, 2035
Class CE N/A(4) $ 7,211,983.96 March 25, 2035
-----------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class P Certificates will not accrue interest.
(4) The Class CE Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE Certificates
outstanding from time to time which shall equal the Uncertificated
Balance of the REMIC I Regular Interests (other than REMIC I Regular
Interest I-LTP). The Class CE Certificates will not accrue interest on
their Certificate Principal Balance.
As of the Cut-off Date, the Group I Mortgage Loans had an aggregate
Scheduled Principal Balance equal to approximately $491,193,454 and the Group II
Mortgage Loans had an aggregate Scheduled Principal Balance equal to
approximately $136,160,629.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee agree as follows:
3
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without limitation, in the
Preliminary Statement hereto, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article.
Unless otherwise specified, all calculations described herein shall be made on
the basis of a 360-day year consisting of twelve 30-day months.
"Accepted Master Servicing Practices": With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in Section 3.01 hereof, but in no event below the standard set forth in
clause (x).
"Accepted Servicing Practices": As defined in Section 3.01.
"Account": The Collection Account and the Distribution Account as the
context may require.
"Accrued Certificate Interest": With respect to any Class A Certificate,
Mezzanine Certificate, Class B Certificate or Class CE Certificate and each
Distribution Date, interest accrued during the related Interest Accrual Period
at the Pass-Through Rate for such Certificate for such Distribution Date on the
Certificate Principal Balance, in the case of the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates, or on the Notional Amount
in the case of the Class CE Certificates, of such Certificate immediately prior
to such Distribution Date. The Class P Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
All distributions of interest on the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates will be calculated on the basis of a
360-day year and the actual number of days in the applicable Interest Accrual
Period. All distributions of interest on the Class CE Certificates will be based
on a 360-day year consisting of twelve 30-day months. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate,
Mezzanine Certificate, Class B Certificate or Class CE Certificate shall be
reduced by an amount equal to the portion allocable to such Certificate pursuant
to Section 1.02 hereof, if any, of the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date to the extent not covered
by payments pursuant to Section 3.22 or Section 4.18 of this Agreement or
pursuant to the Servicing Agreements and (b) the aggregate amount of any Relief
Act Interest Shortfall, if any, for such Distribution Date. In addition, Accrued
Certificate Interest with respect to each Distribution Date, as to any Class CE
Certificate, shall be reduced by an amount equal to the portion allocable to
such Class CE Certificate of Realized Losses, if any, pursuant to Section 1.02
and Section 5.04 hereof.
"Adjustable Rate Mortgage Loan": Each of the Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
4
"Adjustment Date": With respect to each Adjustable Rate Mortgage Loan,
the first day of the month in which the Mortgage Rate of an Adjustable Rate
Mortgage Loan changes pursuant to the related Mortgage Note. The first
Adjustment Date following the Cut-off Date as to each Adjustable Rate Mortgage
Loan is set forth in the Mortgage Loan Schedule.
"Administration Fees": The sum of (i) the Servicing Fee, (ii) the Master
Servicing Fee and (iii) the Credit Risk Management Fee.
"Administration Fee Rate": The sum of (i) the Servicing Fee Rate, (ii)
the Master Servicer Fee Rate and (iii) the Credit Risk Management Fee Rate.
"Advance Facility": As defined in Section 3.25(a).
"Advance Financing Person": As defined in Section 3.25(a).
"Advance Reimbursement Amounts": As defined in Section 3.25(b).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred on any Mortgage Loans from the
Cut-off Date to the last day of the preceding calendar month and the denominator
of which is the aggregate principal balance of such Mortgage Loans immediately
prior to the liquidation of such Mortgage Loans.
"Agreement": This Pooling and Servicing Agreement, including all exhibits
and schedules hereto and all amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Class of Mezzanine
Certificates or Class B Certificates and any Distribution Date, an amount equal
to the sum of any Realized Loss allocated to that Class of Certificates on the
Distribution Date and any Allocated Realized Loss Amount for that Class
remaining unpaid from the previous Distribution Date.
"Amounts Held for Future Distribution": As to any Distribution Date, the
aggregate amount held in the Custodial Accounts and the Collection Accounts at
the close of business on the immediately preceding Determination Date on account
of (i) all Monthly Payments or portions thereof received in respect of the
Mortgage Loans due after the related Due Period and (ii) Principal Prepayments
and Liquidation Proceeds received in respect of such Mortgage Loans after the
last day of the related Prepayment Period.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more
5
blanket assignments covering Mortgages secured by Mortgaged Properties located
in the same county, if permitted by law.
"Assignment Agreements": The ResMae Assignment Agreement and the ▇▇▇▇▇▇
Assignment Agreement.
"Available Distribution Amount": With respect to any Distribution Date,
an amount equal to (1) the sum of (a) the aggregate of the amounts on deposit in
the Custodial Accounts, Collection Account and Distribution Account as of the
close of business on the related Servicer Remittance Date, (b) the aggregate of
any amounts deposited in the Distribution Account by the Servicer or the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 3.22 or Section 4.18 of this Agreement or by the related
Interim Servicer pursuant to the related Servicing Agreement, (c) the aggregate
of any P&I Advances for such Distribution Date made by the Servicer pursuant to
Section 5.03 of this Agreement or by the related Interim Servicer pursuant to
the related Servicing Agreement and (d) the aggregate of any P&I Advances made
by a successor Servicer (including the Master Servicer) for such Distribution
Date pursuant to Section 8.02 of this Agreement or pursuant to the Servicing
Agreements reduced (to not less than zero) by (2) the portion of the amount
described in clause (1)(a) above that represents (i) Amounts Held for Future
Distribution, (ii) Principal Prepayments on the Mortgage Loans received after
the related Prepayment Period (together with any interest payments received with
such Principal Prepayments to the extent they represent the payment of interest
accrued on the Mortgage Loans during a period subsequent to the related
Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
in respect of the Mortgage Loans after the related Prepayment Period, (iv)
amounts reimbursable or payable to the Depositor, the Servicer, the Trustee, the
Master Servicer, the Securities Administrator or the Custodian pursuant to
Section 3.09 or 9.05 of this Agreement or otherwise payable in respect of
Extraordinary Trust Fund Expenses or reimbursable or payable to the related
Interim Servicer under the related Servicing Agreement, (v) the Credit Risk
Management Fee, (vi) amounts deposited in a Custodial Account, a Collection
Account or the Distribution Account in error, (vii) the amount of any Prepayment
Charges collected by the Servicer or an Interim Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans and (viii) amounts
reimbursable to a successor Servicer (including the Master Servicer) pursuant to
Section 8.02 of this Agreement or pursuant to the related Servicing Agreement.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the payment of
the unamortized principal balance of such Mortgage Loan in a single payment,
that is substantially greater than the preceding monthly payment at the maturity
of such Mortgage Loan.
"Balloon Payment": A payment of the unamortized principal balance of a
Mortgage Loan in a single payment, that is substantially greater than the
preceding Monthly Payment at the maturity of such Mortgage Loan.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Book-Entry Certificates": The Offered Certificates and Class B
Certificates for so long as the Certificates of such Class shall be registered
in the name of the Depository or its nominee.
6
"Book-Entry Custodian": The custodian appointed pursuant to Section 6.01.
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking or savings and loan institutions in the States of New York, Florida,
Maryland, Texas, Minnesota or in the city in which the Corporate Trust Office of
the Trustee is located, are authorized or obligated by law or executive order to
be closed.
"Cap Contracts": Shall mean (i) the Cap Contract between the Trustee and
the counterparty named thereunder, for the benefit of the Holders of the Class
A-1 Certificates, the Mezzanine Certificates and the Class B Certificates (the
"Group I Cap Contract") and (ii) the Cap Contract between the Trustee and the
counterparty thereunder, for the benefit of the Class A-2 Certificates, the
Mezzanine Certificates and the Class B Certificates (the "Group II Cap
Contract").
"Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of which
are more than a nominal amount in excess of the principal balance of any
existing first mortgage plus any subordinate mortgage on the related Mortgaged
Property and related closing costs.
"Certificate": Any one of ACE Securities Corp., Asset Backed Pass-Through
Certificates, Series 2005-RM1, Class A-1A, Class ▇-▇▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇▇,
Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class B-1, Class B-2, Class B-3, Class P, Class
CE and Class R issued under this Agreement.
"Certificate Factor": With respect to any Class of Certificates (other
than the Residual Certificates) as of any Distribution Date, a fraction,
expressed as a decimal carried to six places, the numerator of which is the
aggregate Certificate Principal Balance (or Notional Amount, in the case of the
Class CE Certificates) of such Class of Certificates on such Distribution Date
(after giving effect to any distributions of principal and allocations of
Realized Losses resulting in reduction of the Certificate Principal Balance (or
Notional Amount, in the case of the Class CE Certificates) of such Class of
Certificates to be made on such Distribution Date), and the denominator of which
is the initial aggregate Certificate Principal Balance (or Notional Amount, in
the case of the Class CE Certificates) of such Class of Certificates as of the
Closing Date.
"Certificate Margin": With respect to the Class A-1A Certificates and,
for purposes of the definition of "Marker Rate", REMIC I Regular Interest
I-LTA1A, 0.24% in the case of each Distribution Date through and including the
Optional Termination Date and 0.48% in the case of each Distribution Date
thereafter.
With respect to the Class A-1B Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA1B, 0.30% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.60% in the case of each Distribution Date thereafter.
With respect to the Class A-2A Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2A, 0.13% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.26% in the case of each Distribution Date thereafter.
7
With respect to the Class A-2B Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2B, 0.27% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.54% in the case of each Distribution Date thereafter.
With respect to the Class A-2C Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2C, 0.37% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.74% in the case of each Distribution Date thereafter.
With respect to the Class M-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM1, 0.46% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.69% in the case of each Distribution Date thereafter.
With respect to the Class M-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 0.50% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.75% in the case of each Distribution Date thereafter.
With respect to the Class M-3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM3, 0.53% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.795% in the case of each Distribution Date thereafter.
With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM4, 0.68% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.02% in the case of each Distribution Date thereafter.
With respect to the Class M-5 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM5, 0.73% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.095% in the case of each Distribution Date thereafter.
With respect to the Class M-6 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM6, 0.80% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.20% in the case of each Distribution Date thereafter.
With respect to the Class M-7 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM7, 1.35% in the case
of each Distribution Date through and including the Optional Termination Date
and 2.025% in the case of each Distribution Date thereafter.
With respect to the Class M-8 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM8, 1.40% in the case
of each Distribution Date through and including the Optional Termination Date
and 2.10% in the case of each Distribution Date thereafter.
8
With respect to the Class M-9 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM9, 2.00% in the case
of each Distribution Date through and including the Optional Termination Date
and 3.00% in the case of each Distribution Date thereafter.
With respect to the Class B-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB1, 3.25% in the case
of each Distribution Date through and including the Optional Termination Date
and 4.875% in the case of each Distribution Date thereafter.
With respect to the Class B2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB2, 3.25% in the case
of each Distribution Date through and including the Optional Termination Date
and 4.875% in the case of each Distribution Date thereafter.
With respect to the Class B3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB3, 3.25% in the case
of each Distribution Date through and including the Optional Termination Date
and 4.825% in the case of each Distribution Date thereafter.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or a Non-United States Person shall not be a Holder of a Residual
Certificate for any purposes hereof, and solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the name of or
beneficially owned by the Depositor, the Seller, the Servicer, the Master
Servicer, the Securities Administrator, the Trustee or any Affiliate thereof
shall be deemed not to be outstanding and the Voting Rights to which it is
entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01. The Trustee and the
Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or the
Servicer in determining whether a Certificate is held by an Affiliate thereof.
All references herein to "Holders" or "Certificateholders" shall reflect the
rights of Certificate Owners as they may indirectly exercise such rights through
the Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Securities Administrator
shall be required to recognize as a "Holder" or "Certificateholder" only the
Person in whose name a Certificate is registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Depository Participant or on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class P Certificate
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 5.04, minus all distributions
allocable to principal made thereon and Realized Losses allocated thereto, if
any, on such immediately prior
9
Distribution Date (or, in the case of any date of determination up to and
including the first Distribution Date, the initial Certificate Principal Balance
of such Certificate, as stated on the face thereof). With respect to each Class
CE Certificate as of any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times the excess, if any, of
(A) the then aggregate Uncertificated Balances of the REMIC I Regular Interests
over (B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
P Certificates then outstanding. The aggregate initial Certificate Principal
Balance of each Class of Regular Certificates is set forth in the Preliminary
Statement hereto.
"Certificate Register": The register maintained pursuant to Section 6.02.
"Class": Collectively, all of the Certificates bearing the same class
designation.
"Class A Certificate": Any Class A-1A, Class ▇-▇▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇▇
or Class A-2C Certificate.
"Class A Principal Distribution Amount": The Class A Principal
Distribution Amount is an amount equal to the sum of: (i) the Class A-1
Principal Distribution Amount and (ii) the Class A-2 Principal Distribution
Amount.
"Class A-1 Allocation Percentage": With respect to any Distribution Date
is the percentage equivalent of a fraction, the numerator of which is (x) the
Group I Principal Remittance Amount for such Distribution Date and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Class A-1 Certificate": Any Class A-1A Certificate or Class A-1B
Certificate.
"Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-1A Certificates and Class A-1B Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 54.60% and
(ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Group I Mortgage Loans as of the Cut-off
Date.
"Class A-1A Certificate": Any one of the Class A-1A Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-1B Certificate": Any one of the Class A-1B Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the
10
form annexed hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class A-2 Allocation Percentage": With respect to any Distribution Date
is the percentage equivalent of a fraction, the numerator of which is (x) the
Group II Principal Remittance Amount for such Distribution Date and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Class A-2 Certificate": Any Class A-2A, Class A-2B or Class A-2C
Certificate.
"Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-2A, Class A-2B and Class A-2C Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 54.60% and
(ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group
II Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) minus the product of (i) 0.50%
and (ii) the aggregate principal balance of the Group II Mortgage Loans as of
the Cut-off Date.
"Class A-2A Certificate": Any one of the Class A-2A Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-2B Certificate": Any one of the Class A-2B Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-2C Certificate": Any one of the Class A-2C Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class B Certificate": Any Class B-1, Class B-2 or Class B-3 Certificate.
"Class B-1 Certificate": Any one of the Class B-1 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-3 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking
11
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment of
the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the
Certificate Principal Balance of the Class M-9 Certificates (after taking into
account the payment of the Class M-9 Principal Distribution Amount on such
Distribution Date) and (xi) the Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 92.40% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.
"Class B-2 Certificate": Any one of the Class B-2 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-3 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the
12
Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the
Certificate Principal Balance of the Class M-6 Certificates (after taking into
account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment of
the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the
Certificate Principal Balance of the Class M-9 Certificates (after taking into
account the payment of the Class M-9 Principal Distribution Amount on such
Distribution Date), (xi) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account the payment of the Class B-1 Principal
Distribution Amount on such Distribution Date) and (xii) the Certificate
Principal Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
"Class B-3 Certificate": Any one of the Class B-3 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-3 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9
13
Principal Distribution Amount on such Distribution Date), (xi) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date), (xii) the Certificate Principal Balance of the Class B-2 Certificates
(after taking into account the payment of the Class B-2 Principal Distribution
Amount on such Distribution Date) and (xiii) the Certificate Principal Balance
of the Class B-3 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 97.70% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.
"Class CE Certificate": Any one of the Class CE Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-4 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M Certificates": The Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates.
"Class M-1 Certificate": Any one of the Class M-1 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 62.60% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.
"Class M-2 Certificate": Any one of the Class M-2 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the
14
form annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 69.20% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.
"Class M-3 Certificate": Any one of the Class M-3 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 73.20% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
"Class M-4 Certificate": Any one of the Class M-4 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the
15
form annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 76.90% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.
"Class M-5 Certificate": Any one of the Class M-5 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 80.10% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the
16
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
"Class M-6 Certificate": Any one of the Class M-6 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date) and (vii) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 83.30% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
"Class M-7 Certificate": Any one of the Class M-7 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such
17
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account the payment of
the Class M-6 Principal Distribution Amount on such Distribution Date) and
(viii) the Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 86.20% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.
"Class M-8 Certificate": Any one of the Class M-8 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balance of
the Class M-8 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 88.40% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
18
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
"Class M-9 Certificate": Any one of the Class M-9 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date). (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date) and (vii) the
Certificate Principal Balance of the Class M-9 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 90.40% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
"Class P Certificate": Any one of the Class P Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the
19
form annexed hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class R Certificates": Any one of the Class R Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-6, and evidencing the
Class R-I Interest and the Class R-II Interest.
"Class R-I Interest": The uncertificated residual interest in REMIC I.
"Class R-II Interest": The uncertificated residual interest in REMIC II.
"Closing Date": February 28, 2005
"Code": The Internal Revenue Code of 1986 as amended from time to time.
"Collection Account": The account or accounts created and maintained, or
caused to be created and maintained, by the Servicer pursuant to Section 3.08(a)
of this Agreement, which shall be entitled "Saxon Mortgage Services, Inc., as
Servicer for HSBC Bank USA, National Association as Trustee, in trust for the
registered holders of ACE Securities Corp., Home Equity Loan Trust, Series
2005-RM1, Asset Backed Pass-Through Certificates". The Collection Accounts must
be Eligible Accounts.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": The principal corporate trust office of the
Trustee which office at the date of the execution of this instrument is located
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ACE Securities Corp.,
2005-RM1, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicer. The office of the Securities
Administrator, which for purposes of Certificate transfers and surrender is
located at ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust (ACE 2005-RM1), and for
all other purposes is located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust (ACE 2005-RM1) (or for overnight
deliveries, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust (ACE 2005-RM1)).
"Corresponding Certificate": With respect to each REMIC I Regular
Interest, as follows:
REMIC I Regular Interest Class
-------------------------------- --------
REMIC I Regular Interest I-LTA1A A-1A
REMIC I Regular Interest I-LTA1B A-1B
REMIC I Regular Interest I-LTA2A A-2A
REMIC I Regular Interest I-LTA2B A-2B
REMIC I Regular Interest I-LTA2C A-2C
REMIC I Regular Interest I-LTM1 M-1
REMIC I Regular Interest I-LTM2 M-2
REMIC I Regular Interest I-LTM3 M-3
REMIC I Regular Interest I-LTM4 M-4
REMIC I Regular Interest I-LTM5 M-5
REMIC I Regular Interest I-LTM6 M-6
20
REMIC I Regular Interest I-LTM7 M-7
REMIC I Regular Interest I-LTM8 M-8
REMIC I Regular Interest I-LTM9 M-9
REMIC I Regular Interest I-LTB1 B-1
REMIC I Regular Interest I-LTB2 B-2
REMIC I Regular Interest I-LTB3 B-3
REMIC I Regular Interest I-LTP P
"Credit Enhancement Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates, the
Class B Certificates and the Class CE Certificates, and the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans, calculated
after taking into account distributions of principal on the Mortgage Loans and
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date.
"Credit Risk Management Agreements": The agreements between the Credit
Risk Manager and the Servicer and/or Master Servicer, regarding the loss
mitigation and advisory services to be provided by the Credit Risk Manager.
"Credit Risk Management Fee": The amount payable to the Credit Risk
Manager on each Distribution Date as compensation for all services rendered by
it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under the Credit Risk Management Agreements, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Stated Principal Balance of the Mortgage Loans and
any related REO Properties as of the first day of the related Due Period.
"Credit Risk Management Fee Rate": 0.015% per annum.
"Credit Risk Manager": The Murrayhill Company, a Colorado corporation,
and its successors and assigns.
"Custodial Account": Shall mean each account maintained by an Interim
Servicer under the related Servicing Agreement.
"Custodial Agreement": The Custodial Agreement dated as of February 1,
2005, among the Trustee, the Custodian and the Servicer as such agreement may be
amended or supplemented from time to time, or any other custodial agreement
entered into after the date hereof with respect to any Mortgage Loan subject to
this Agreement.
"Custodian": ▇▇▇▇▇ Fargo or any other custodian appointed under any
custodial agreement entered into after the date of this Agreement.
"Cut-off Date": With respect to each Mortgage Loan, February 1, 2005.
With respect to all Qualified Substitute Mortgage Loans, their respective dates
of substitution. References herein to the "Cut-off Date," when used with respect
to more than one Mortgage Loan, shall be to the respective Cut-off Dates for
such Mortgage Loans.
"DBRS": Dominion Bond Rating Service, or any successor in interest.
21
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 6.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related Due Period,
the percentage equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of all Mortgage Loans that, as of the last day of the
previous calendar month, are 60 or more days delinquent, are in foreclosure,
have been converted to REO Properties or have been discharged by reason of
bankruptcy, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans and REO Properties as of the last day of the
previous calendar month.
"Depositor": ACE Securities Corp., a Delaware corporation, or its
successor in interest.
"Depository": The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is CEDE &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1+ by S&P, F-1+
by Fitch and P-1 by ▇▇▇▇▇'▇ (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).
"Depository Participant": A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to each Distribution Date and (i) the
Servicer, the 15th day of the calendar month in which such Distribution Date
occurs, or if such 15th day is
22
not a Business Day, the Business Day immediately preceding such 15th day (ii)
each Interim Servicer, as set forth in the related Servicing Agreement.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by REMIC I other than through an
Independent Contractor; provided, however, that the Servicer, on behalf of the
Trustee, shall not be considered to Directly Operate an REO Property solely
because the Servicer establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for ▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not
selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any Trust REMIC or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Account": The trust account or accounts created and
maintained by the Securities Administrator pursuant to Section 3.08(b) in the
name of the Securities Administrator for the benefit of the Certificateholders
and designated "▇▇▇▇▇ Fargo Bank, N.A., in trust for registered holders of ACE
Securities Corp. Home Equity Loan Trust, Series 2005-RM1". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement. The Distribution Account must be
an Eligible Account.
"Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in March 2005.
"Due Date": With respect to each Distribution Date, the day of the month
on which the Monthly Payment is due on a Mortgage Loan during the related Due
Period, exclusive of any days of grace.
"Due Period": With respect to any Distribution Date and the Saxon
Mortgage Loans, the period commencing on the second day of the month immediately
preceding the month
23
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs. With respect to any Distribution Date
and each Interim Servicer, the period as set forth in the related Servicing
Agreement.
"Eligible Account": Any of (i) an account or accounts maintained with a
Depository Institution, (ii) an account or accounts the deposits in which are
fully insured by the FDIC or (iii) a trust account or accounts maintained with a
federal depository institution or state chartered depository institution acting
in its fiduciary capacity. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Estate in Real Property": A fee simple estate in a parcel of land.
"Excess Liquidation Proceeds": To the extent that such amount is not
required by law to be paid to the related mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a liquidated Mortgage Loan exceed the
sum of (i) the outstanding principal balance of such Mortgage Loan and accrued
but unpaid interest at the related Net Mortgage Rate through the last day of the
month in which the related Liquidation Event occurs, plus (ii) related
liquidation expenses or other amounts to which the Servicer or the related
Interim Servicer is entitled to be reimbursed from Liquidation Proceeds with
respect to such liquidated Mortgage Loan pursuant to Section 3.09 of this
Agreement or pursuant to the related Servicing Agreement.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage Loan or
REO Property, the then applicable Mortgage Rate thereon minus the Administration
Fee Rate.
"Extraordinary Trust Fund Expense": Any amounts payable or reimbursable
to the Trustee, the Master Servicer, the Securities Administrator, the Custodian
or any director, officer, employee or agent of any such Person from the Trust
Fund pursuant to the terms of this Agreement and any amounts payable from the
Distribution Account in respect of taxes pursuant to Section 11.01(g)(v).
"Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (i) the Net Monthly Excess Cashflow for such Distribution
Date and (ii) the Overcollateralization Increase Amount for such Distribution
Date.
"▇▇▇▇▇▇ ▇▇▇": ▇▇▇▇▇▇ ▇▇▇, formerly known as the Federal National Mortgage
Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Final Maturity Date": The Distribution Date occurring in March 2035.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by an Originator, the Seller or the Master Servicer pursuant to or as
contemplated by Section 2.03, 3.13(c) or Section 10.01), a determination made by
the Servicer or the related Interim Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer
24
or related Interim Servicer, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered, which
determination shall be evidenced by a certificate of a Servicing Officer
delivered to the Master Servicer and maintained in its records.
"▇▇▇▇▇▇▇ Mac": ▇▇▇▇▇▇▇ Mac, formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Adjustable Rate
Mortgage Loan.
"Group I Interest Remittance Amount": With respect to any Distribution
Date is that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Group I Mortgage Loans
(net of the Administration Fees and any Prepayment Charges and after taking into
account amounts payable or reimbursable to the Trustee, the Custodian, the
Securities Administrator, the Master Servicer or the Servicer pursuant to this
Agreement or the Custodial Agreement or the Interim Servicers pursuant to the
Servicing Agreements.
"Group I Mortgage Loans": Those Mortgage Loans identified on the Mortgage
Loan Schedule as Group I Mortgage Loans.
"Group I Principal Distribution Amount": With respect to any Distribution
Date will be the sum of (i) the principal portion of all Monthly Payments on the
Group I Mortgage Loans due during the related Due Period, whether or not
received on or prior to the related Determination Date; (ii) the principal
portion of all proceeds received in respect of the repurchase of a Group I
Mortgage Loan or, in the case of a substitution, certain amounts representing a
principal adjustment, during the related Prepayment Period pursuant to or as
contemplated by Section 2.03, Section 3.13(c) and Section 10.01 of this
Agreement or the Servicing Agreements (iii) the principal portion of all other
unscheduled collections, including Insurance Proceeds, Liquidation Proceeds and
all Principal Prepayments in full and in part, received during the related
Prepayment Period, to the extent applied as recoveries of principal on the Group
I Mortgage Loans, net in each case of payments or reimbursements to the Trustee,
the Custodian, the Master Servicer, the Securities Administrator, the Servicer
or the Interim Servicers and (iv) the Class A-1 Allocation Percentage of the
amount of any Overcollateralization Increase Amount for such Distribution Date
MINUS (v) the Class A-1 Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Distribution Date.
"Group I Principal Remittance Amount": With respect to any Distribution
Date will be the sum of the amounts described in clauses (i) through (iii) of
the definition of Group I Principal Distribution Amount.
"Group II Interest Remittance Amount": With respect to any Distribution
Date is that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Group II Mortgage
Loans (net of the Administration Fees and any Prepayment Charges and after
taking into account amounts payable or reimbursable to
25
the Trustee, the Custodian, the Securities Administrator, the Master Servicer or
the Servicer pursuant to this Agreement or the Custodial Agreement or payable or
reimbursable to the Interim Servicers pursuant to the Servicing Agreements.
"Group II Mortgage Loans": Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
"Group II Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group II Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group II Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodian, the
Master Servicer, the Securities Administrator, the Servicer or the Interim
Servicers and (iv) the Class A-2 Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class A-2 Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.
"Group II Principal Remittance Amount": With respect to any Distribution
Date will be the sum of the amounts described in clauses (i) through (iii) of
the definition of Group II Principal Distribution Amount.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer, the Seller, any Originator and their
respective Affiliates, (b) does not have any direct financial interest in or any
material indirect financial interest in the Depositor, the Master Servicer, the
Securities Administrator, the Servicer, the Seller, any Originator or any
Affiliate thereof, and (c) is not connected with the Depositor, the Master
Servicer, the Securities Administrator, the Servicer, the Seller, any Originator
or any Affiliate thereof as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions; provided,
however, that a Person shall not fail to be Independent of the Depositor, the
Master Servicer, the Securities Administrator, the Servicer, the Seller, any
Originator or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor, the
Master Servicer, the Securities Administrator, the Servicer, the Seller, any
Originator or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the Servicer)
that would be an "independent contractor" with respect to REMIC I within the
meaning of Section 856(d)(3) of the Code if REMIC I were a real estate
investment trust (except that the ownership tests set forth in that section
shall be considered to be met by any Person that owns, directly or indirectly,
35% or more of any Class of Certificates), so long as REMIC I does not receive
or derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-
26
4(b)(5), or (ii) any other Person (including the Servicer) if the Trustee has
received an Opinion of Counsel to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (determined
without regard to the exception applicable for purposes of Section 860D(a) of
the Code), or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Index": As of any Adjustment Date, the index applicable to the
determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan will
generally be the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in THE WALL STREET
JOURNAL and as most recently available either (a) as of the first Business Day
45 days prior to such Adjustment Date or (b) as of the first Business Day of the
month preceding the month of such Adjustment Date, as specified in the related
Mortgage Note.
"Institutional Accredited Investor": As defined in Section 6.01(c).
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy, covering a Mortgage Loan or the related Mortgaged
Property, to the extent such proceeds are not to be applied to the restoration
of the related Mortgaged Property or released to the Mortgagor or a senior
lienholder in accordance with Accepted Servicing Practices, subject to the terms
and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and the
Class A Certificates, the Mezzanine Certificate and the Class B Certificates,
the period commencing on the Distribution Date of the month immediately
preceding the month in which such Distribution Date occurs (or, in the case of
the first Distribution Date, commencing on the Closing Date) and ending on the
day preceding such Distribution Date. With respect to any Distribution Date and
the Class CE Certificates and the REMIC I Regular Interests, the one-month
period ending on the last day of the calendar month immediately preceding the
month in which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any Distribution Date
and any Class A Certificate, Mezzanine Certificate or Class B Certificate, the
sum of (i) the amount, if any, by which (a) the Interest Distribution Amount for
such Class as of the immediately preceding Distribution Date exceeded (b) the
actual amount distributed on such Class in respect of interest on such
immediately preceding Distribution Date and (ii) the amount of any Interest
Carry Forward Amount for such Class remaining unpaid from the previous
Distribution Date, plus accrued interest on such sum calculated at the related
Pass-Through Rate for the most recently ended Interest Accrual Period.
"Interest Determination Date": With respect to the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates, REMIC I Regular Interest
I-LTA1 A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-
27
LTM9, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I
Regular Interest I-LTB3, and any Interest Accrual Period therefor, the second
London Business Day preceding the commencement of such Interest Accrual Period.
"Interest Distribution Amount": With respect to any Distribution Date and
any Class A Certificates, any Mezzanine Certificates, any Class B Certificates
and any Class CE Certificates, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.
"Interim Servicer" Any of RMC, RMAE or ▇▇▇▇▇▇.
"Interest Remittance Amount": With respect to any Distribution Date, the
sum of: (i) the Group I Interest Remittance Amount and (ii) the Group II
Interest Remittance Amount.
"Last Scheduled Distribution Date": The Distribution Date in [March]
2035, which is the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date.
"Late Collections": With respect to any Mortgage Loan and any Due Period,
all amounts received subsequent to the Determination Date immediately following
such Due Period with respect to such Mortgage Loan, whether as late payments of
Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise,
which represent late payments or collections of principal and/or interest due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is
removed from REMIC I by reason of its being purchased, sold or replaced pursuant
to or as contemplated by Section 2.03, Section 3.13(c) or Section 10.01. With
respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property or (ii) such REO Property
is removed from REMIC I by reason of its being purchased pursuant to Section
10.01.
"Liquidation Proceeds": The amount (other than Insurance Proceeds,
amounts received in respect of the rental of any REO Property prior to REO
Disposition, or required to be released to a Mortgagor or a senior lienholder in
accordance with applicable law or the terms of the related Mortgage Loan
Documents) received by the Servicer or the related Interim Servicer in
connection with (i) the taking of all or a part of a Mortgaged Property by
exercise of the power of eminent domain or condemnation (other than amounts
required to be released to the Mortgagor or a senior lienholder), (ii) the
liquidation of a defaulted Mortgage Loan through a trustee's sale, foreclosure
sale or otherwise, (iii) the repurchase, substitution or sale of a Mortgage Loan
or an REO Property pursuant to or as contemplated by Section 2.03, Section
3.13(c), Section 3.21 or Section 10.01 of this Agreement or (iv) any Subsequent
Recoveries.
"▇▇▇▇▇▇": ▇▇▇▇▇▇ Loan Servicing LP.
28
"▇▇▇▇▇▇ Assignment Agreement": The Assignment, Assumption and Recognition
Agreement, dated as of February 28, 2005, by and among the Seller, the Depositor
and ▇▇▇▇▇▇ evidencing the assignment of the ▇▇▇▇▇▇ Servicing Agreement to the
Depositor.
"▇▇▇▇▇▇ Mortgage Loans": The Mortgage Loans being serviced by ▇▇▇▇▇▇ as
of the Closing Date.
"▇▇▇▇▇▇ Servicing Agreement: The Sub-Servicing Agreement, dated as of
December 1, 2004 by and between DB Structured Products Inc. and ▇▇▇▇▇▇.
"Loan-to-Value Ratio": As of any date of determination, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at such date and the denominator of which is the Value
of the related Mortgaged Property.
"London Business Day": Any day on which banks in the Cities of London and
New York are open and conducting transactions in United States dollars.
"Loss Severity Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
principal balance of such Mortgage Loan immediately prior to the liquidation of
such Mortgage Loan.
"Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC I Remittance Rate for each of REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTB1,REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ, with the rate on each such REMIC I Regular
Interest (other than REMIC I Regular Interest I-LTZZ) subject to a cap equal to
the lesser of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the
related Net WAC Pass-Through Rate for the Corresponding Certificate for the
purpose of this calculation for such Distribution Date and with the rate on
REMIC I Regular Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation; provided however, each such cap for each REMIC I Regular Interest
shall be multiplied by a fraction the numerator of which is the actual number of
days in the related Interest Accrual Period and the denominator of which is 30.
"Master Servicer": As of the Closing Date, ▇▇▇▇▇ Fargo Bank, N.A. and
thereafter, its respective successors in interest who meet the qualifications of
this Agreement. The Master Servicer and the Securities Administrator shall at
all times be the same Person.
"Master Servicer Certification": A written certification covering
servicing of the Mortgage Loans by the Servicer and signed by an officer of the
Master Servicer that complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act
29
Rules 13a-14 and 15d-14, as in effect from time to time; provided that if, after
the Closing Date (a) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superseded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
"Master Servicer Event of Default": One or more of the events described
in Section 8.01(b).
"Master Servicer Fee Rate": 0.0075% per annum.
"Master Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one twelfth of the product of the Master
Servicer Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With respect to
any Distribution Date, the excess of (i) accrued interest at the REMIC I
Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest
I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC
I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2 and REMIC I Regular
Interest I-LTB3 for such Distribution Date, with the rate on each such REMIC I
Regular Interest subject to a cap equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate
for the corresponding Certificate for the purpose of this calculation for such
Distribution Date; provided however, each such cap for each REMIC I Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
30
"MERS(R) System": The system of recording transfers of mortgages
electronically maintained by MERS.
"Mezzanine Certificate": Any Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 or Class M-9 Certificate.
"MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
"Minimum Mortgage Rate": With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01 of this Agreement
or by the related Interim Servicer pursuant to the related Servicing Agreement;
and (c) on the assumption that all other amounts, if any, due under such
Mortgage Loan are paid when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. or any successor interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on, or first or second priority security interest in, a
Mortgaged Property securing a Mortgage Note.
"Mortgage File": The Mortgage Loan Documents pertaining to a particular
Mortgage Loan.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee and the Mortgage Loan Documents for which have been delivered to the
Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
Custodial Agreement, as held from time to time as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Documents": The documents evidencing or relating to each
Mortgage Loan delivered to the Custodian under the Custodial Agreement on behalf
of the Trustee.
"Mortgage Loan Purchase Agreement": Shall mean the Mortgage Loan Purchase
Agreement dated as of Febraury 28, 2005, between the Depositor and the Seller.
31
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC I on such date, separately identifying the Group I Mortgage
Loans and the Group II Mortgage Loans, attached hereto as Schedule 1. The
Depositor shall deliver or cause the delivery of the initial Mortgage Loan
Schedule to the Servicer, the Master Servicer, the Custodian and the Trustee on
the Closing Date. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the original date of the Mortgage Loan and the remaining
months to maturity from the Cut-off Date, based on the
original amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the Cut-off
Date;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment as of the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvii) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date;
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(xviii) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(xix) a code indicating the purpose of the loan (i.e., purchase
financing, rate/term refinancing, cash-out refinancing);
(xx) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Rate under the terms of the Mortgage Note;
(xxi) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Rate under the terms of the Mortgage Note;
(xxii) the Mortgage Rate at origination;
(xxiii) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap;
(xxiv) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(xxv) with respect to each Adjustable Rate Mortgage Loan, the Index;
(xxvi) the date on which the first Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due
Date currently in effect, such Due Date;
(xxvii) a code indicating whether the Mortgage Loan is an Adjustable
Rate Mortgage Loan or a fixed rate Mortgage Loan;
(xxviii) a code indicating the documentation style (i.e., full, stated
or limited);
(xxix) a code indicating if the Mortgage Loan is subject to a primary
insurance policy or lender paid mortgage insurance policy and
the name of the insurer;
(xxx) the Appraised Value of the Mortgaged Property;
(xxxi) the sale price of the Mortgaged Property, if applicable;
(xxxii) a code indicating whether the Mortgage Loan is subject to a
Prepayment Charge, the term of such Prepayment Charge and the
amount of such Prepayment Charge;
(xxxiii) the product type (e.g., 2/28, 15 year fixed, 30 year fixed,
15/30 balloon, etc.);
(xxxiv) the Mortgagor's debt to income ratio;
(xxxv) the FICO score at origination; and
33
(xxxvi) the Interim Servicer, if applicable.
The Mortgage Loan Schedule shall set forth the following information with
respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Depositor in accordance with the
provisions of this Agreement. With respect to any Qualified Substitute Mortgage
Loan, the Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate with respect to
each Adjustable Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to
the nearest 0.125% as provided in the Mortgage Note, of the Index, as most
recently available as of a date prior to the Adjustment Date as set forth in the
related Mortgage Note, plus the related Gross Margin; provided that the Mortgage
Rate on such Adjustable Rate Mortgage Loan on any Adjustment Date shall never be
more than the lesser of (i) the sum of the Mortgage Rate in effect immediately
prior to the Adjustment Date plus the related Periodic Rate Cap, if any, and
(ii) the related Maximum Mortgage Rate, and shall never be less than the greater
of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less
the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any Distribution Date, the
sum of (i) any Overcollateralization Reduction Amount for such Distribution Date
and (ii) the excess of (x) the Available Distribution Amount for such
Distribution Date over (y) the sum for such Distribution Date of (A) the
aggregate Senior Interest Distribution Amounts payable to the Holders of the
Class A Certificates, (B) the aggregate Interest Distribution Amounts payable to
the holders of the Mezzanine Certificates and the Class B Certificates and (C)
the Principal Remittance Amount.
34
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property) as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Administration Fee Rate.
"Net WAC Pass-Through Rate": With respect to the Class A-1 Certificates
and any Distribution Date, a rate per annum equal to the product of (x) the
weighted average of the Expense Adjusted Mortgage Rates on the then outstanding
Group I Mortgage Loans, weighted based on their Stated Principal Balances as of
the first day of the calendar month preceding the month in which the
Distribution Date occurs and (y) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC I Remittance Rate on REMIC I Regular Interest I-LT1GRP, weighted on
the basis of the Uncertificated Balance of such REMIC I Regular Interest.
With respect to the Class A-2 Certificates and any Distribution Date, a
rate per annum equal to the product of (x) the weighted average of the Expense
Adjusted Mortgage Rates on the then outstanding Group II Mortgage Loans,
weighted based on their Stated Principal Balances as of the first day of the
calendar month preceding the month in which the Distribution Date occurs and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rate on
REMIC I Regular Interest I-LT2GRP, weighted on the basis of the Uncertificated
Balance of such REMIC I Regular Interest.
With respect to the Mezzanine Certificates and any Distribution Date, a
rate per annum equal to the product of (x) the weighted average of the Expense
Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted in
proporation to the results of subtracting from the aggregate Stated Principal
Balance of each of the Group I Mortgage Loans and the Group II Mortgage Loans,
as of the first day of the calendar month preceding the month in which the
Distribution Date occurs, the Certificate Principal Balance of the related Class
A Certificates and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC I Remittance Rates on (a) REMIC I Regular Interest I-LT1SUB, subject
to a cap and a floor equal to the REMIC I Remittance Rate on REMIC I Regular
Interest I-LT1GRP, and (b) REMIC I Regular Interest I-LT2SUB, subject to a cap
and a floor equal to the REMIC I Remittance Rate on REMIC I Regular Interest
I-LT2GRP, weighted on the basis of the Uncertificated Balance of each such REMIC
I Regular Interest.
With respect to the Class B Certificates and any Distribution Date, a
rate per annum equal to the product of (x) the weighted average of the Expense
Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted in
proporation to the results of subtracting from the aggregate Stated Principal
Balance of the Group I Mortgage Loans and the Group II Mortgage Loans, as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs, the Certificate Principal Balance of the related Class A
Certificates and
35
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1SUB, subject to a cap and a floor equal to the
REMIC I Remittance Rate on REMIC I Regular Interest I-LT1GRP, and (b) REMIC I
Regular Interest I-LT2SUB, subject to a cap and a floor equal to the REMIC I
Remittance Rate on REMIC I Regular Interest I-LT2GRP, weighted on the basis of
the Uncertificated Balance of each such REMIC I Regular Interest.
"Net WAC Rate Carryover Amount": With respect to any Class A Certificate,
Mezzanine Certificate or Class B Certificate and any Distribution Date on which
the Pass-Through Rate is limited to the applicable Net WAC Pass-Through Rate, an
amount equal to the sum of (i) the excess of (x) the amount of interest such
Class would have been entitled to receive on such Distribution Date if the
applicable Net WAC Pass-Through Rate would not have been applicable to such
Class on such Distribution Date over (y) the amount of interest paid to such
Class on such Distribution Date at the applicable Net WAC Pass-Through Rate plus
(ii) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously distributed to such Class together with interest thereon at
a rate equal to the Pass-Through Rate for such Class for the most recently ended
Interest Accrual Period without taking into account the applicable Net WAC
Pass-Through Rate.
"New Lease": Any lease of REO Property entered into on behalf of REMIC I,
including any lease renewed or extended on behalf of REMIC I, if REMIC I has the
right to renegotiate the terms of such lease.
"Nonrecoverable P&I Advance": Any P&I Advance previously made or proposed
to be made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Servicer, the related Interim Servicer or a successor
to the Servicer or the related Interim Servicer (including the Master Servicer)
will not or, in the case of a proposed P&I Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Nonrecoverable Servicing Advance": Any Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Servicer or the related Interim
Servicer, will not or, in the case of a proposed Servicing Advance, would not be
ultimately recoverable from related Late Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein or
in the related Servicing Agreement.
"Non-United States Person": Any Person other than a United States Person.
"Notional Amount": With respect to the Class CE Certificates and any
Distribution Date, the Uncertificated Balance of the REMIC I Regular Interests
(other than REMIC I Regular Interest I-LTP) for such Distribution Date. As of
the Closing Date, the Notional Amount of the Class CE Certificates is equal to
$627,354,083.96.
"Offered Certificates": The Class A Certificates and the Mezzanine
Certificates, collectively.
36
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"One-Month LIBOR" : With respect to the Class A Certificates, the
Mezzanine Certificates, the Class B Certificates, REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2 and REMIC I Regular Interest
I-LTB3 and any Interest Accrual Period therefor, the rate determined by the
Securities Administrator on the related Interest Determination Date on the basis
of the offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Securities
Administrator will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If on such Interest Determination
Date, two or more Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.
"One-Month LIBOR Pass-Through Rate": With respect to the Class A-1A
Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1A, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.
With respect to the Class A-1B Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA1B, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class A-2A Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2A, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
37
With respect to the Class A-2B Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2B, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class A-2C Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2C, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM1, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM2, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM3, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM4, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-5 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM5, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-6 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM6, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-7 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM7, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-8 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM8, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-9 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM9, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class B-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB1, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
38
With respect to the Class B-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB2, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class B-3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB3, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, the Servicer, the Securities
Administrator or the Master Servicer, acceptable to the Trustee, except that any
opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or
(b) compliance with the REMIC Provisions must be an opinion of Independent
counsel.
"Optional Termination Date": The Distribution Date on which the aggregate
principal balance of the Mortgage Loans (and properties acquired in respect
thereof) remaining in the Trust Fund is reduced to less than or equal to 10% of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
"Originators": RMC and RMAE (each, an "Originator").
"Overcollateralization Amount": With respect to any Distribution Date,
the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
over (b) the sum of the aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
P Certificates as of such Distribution Date (after taking into account the
payment of the Principal Remittance Amount on such Distribution Date).
"Overcollateralization Increase Amount": With respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates and any
Distribution Date is any amount of Net Monthly Excess Cashflow actually applied
as an accelerated payment of principal to the extent the Required
Overcollateralization Amount exceeds the Overcollateralization Amount.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, is the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided however that on any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"P&I Advance": As to any Mortgage Loan or REO Property, any advance made
by the Servicer in respect of any Determination Date pursuant to Section 5.03 of
this Agreement, an Advance Financing Person pursuant to Section 3.25 of this
Agreement or in respect of any Distribution Date by a successor Servicer
(including the Master Servicer) pursuant to Section 8.02 of this Agreement, or
the related Interim Servicer pursuant to the related Servicing
39
Agreement (which advances shall not include principal or interest shortfalls due
to bankruptcy proceedings or application of the Relief Act or similar state or
local laws.)
"Pass-Through Rate": With respect to the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates, and any Distribution Date,
a rate per annum equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate for such Distribution Date and (ii) the related Net WAC
Pass-Through Rate for such Distribution Date.
With respect to the Class CE Certificates and any Distribution Date, a
rate per annum equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (i) through
(xx) below, and the denominator of which is the aggregate Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ. For purposes of calculating the Pass-Through
Rate for the Class CE Certificates, the numerator is equal to the sum of the
following components:
(i) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTAA;
(ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA1A;
(iii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1B minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA1B;
(iv) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA2A minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA2A;
(v) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA2B minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA2B;
(vi) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA2C minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA2C;
(vii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM1;
40
(viii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM2;
(ix) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM3;
(x) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM4;
(xi) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM5;
(xii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM6;
(xiii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM7;
(xiv) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM8 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM8;
(xv) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM9 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM9;
(xvi) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTB1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTB1;
(xvii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTB2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTB2;
(xviii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTB3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTB3;
(xix) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and
(xx) 100% of the interest on REMIC I Regular Interest I-LTP.
41
"Percentage Interest": With respect to any Class of Certificates (other
than the Residual Certificates), the undivided percentage ownership in such
Class evidenced by such Certificate, expressed as a percentage, the numerator of
which is the initial Certificate Principal Balance represented by such
Certificate and the denominator of which is the aggregate initial Certificate
Principal Balance or Notional Amount of all of the Certificates of such Class.
The Class A Certificates, the Mezzanine Certificates and the Class B
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $25,000 and integral multiples
of $1.00 in excess thereof. The Class P Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances of
$20 and integral multiples thereof. The Class CE Certificates are issuable only
in minimum Percentage Interests corresponding to minimum initial Notional
Balances of $10,000 and integral multiples of $1.00 in excess thereof; provided,
however, that a single Certificate of each such Class of Certificates may be
issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Notional Balance of such Class or to an otherwise authorized
denomination for such Class plus such remainder. With respect to any Residual
Certificate, the undivided percentage ownership in such Class evidenced by such
Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 5% in excess thereof.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Adjustable Rate Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued by the Depositor, the Servicer, the Master Servicer, the Trustee
or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution or
trust company (or, if the only Rating Agency is S&P, in the case of the
principal depository institution in a depository institution holding
company, debt obligations of the depository institution holding company)
or its ultimate parent has a short-term uninsured debt rating in the
highest available rating category of ▇▇▇▇▇'▇, Fitch and S&P and provided
that each such investment has an original maturity of no more than 365
days; and provided further that, if the only Rating Agency is S&P and if
the depository or trust company is a principal subsidiary of a bank
holding
42
company and the debt obligations of such subsidiary are not separately
rated, the applicable rating shall be that of the bank holding company;
and, provided further that, if the original maturity of such short-term
obligations of a domestic branch of a foreign depository institution or
trust company shall exceed 30 days, the short-term rating of such
institution shall be A-1+ in the case of S&P if S&P is the Rating Agency;
and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as principal)
rated A-1+ or higher by S&P, F-1 or higher by Fitch and A2 or higher by
Moody's, provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market prices plus accrued
interest, (B) pursuant to such valuation, be equal, at all times, to 105%
of the cash transferred by a party in exchange for such collateral and
(C) be delivered to such party or, if such party is supplying the
collateral, an agent for such party, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each Rating
Agency that rates such securities in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that rates such
securities in its highest short-term unsecured debt rating available at
the time of such investment;
(vi) units of money market funds that have been rated "AAA" by
Fitch (if rated by Fitch), "AAAm" by S&P or "Aaa" by Moody's including
any such money market fund managed or advised by the Master Servicer, the
Trustee or any of their Affiliates; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies as a
permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual Certificate other
than a Disqualified Organization or Non-United States Person.
43
"Person": Any individual, limited liability company, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, ▇▇▇▇▇
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Prepayment Assumption": A prepayment rate for the Adjustable Rate
Mortgage Loans of 28% CPR and a prepayment rate of 100% PPC for the fixed rate
Mortgage Loans. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool. A 100% PPC
represents (i) a per annum prepayment rate of 4% of the then outstanding
principal balance of the fixed rate Mortgage Loans in the first month of the
life of such Mortgage Loans, (ii) an additional 1.72727% per annum in each month
thereafter through the eleventh month and (iii) a constant prepayment rate of
23% per annum beginning in the twelfth month and in each month thereafter during
the life of the fixed rate Mortgage Loans.
"Prepayment Charge": With respect to any Principal Prepayment, any
prepayment premium, penalty or charge payable by a Mortgagor in connection with
any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note.
"Prepayment Charge Schedule": As of any date, the list of Mortgage Loans
providing for a Prepayment Charge included in the Trust Fund on such date,
attached hereto as Schedule 2 (including the prepayment charge summary attached
thereto). The Depositor shall deliver or cause the delivery of the Prepayment
Charge Schedule to the Servicer, the Master Servicer and the Trustee on the
Closing Date. The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on the
related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related
Mortgage Loan; and
(vi) the Stated Principal Balance of the related Mortgage Loan
as of the Cut-off Date.
44
"Prepayment Interest Excess": With respect to each Mortgage Loan that was
the subject of a Principal Prepayment in full during the portion of the related
Prepayment Period occurring between the first day of the calendar month in which
such Distribution Date occurs and the Determination Date of the calendar month
in which such Distribution Date occurs, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Distribution Date occurs and ending on the last
date through which interest is collected from the related Mortgagor. The
Servicer may withdraw such Prepayment Interest Excess from the related
Collection Account in accordance with Section 3.09(a)(x).
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each such Mortgage Loan that was the subject of a Principal Prepayment in
full or in part during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs that
was applied by the Servicer or the related Interim Servicer to reduce the
outstanding principal balance of such Mortgage Loan on a date preceding the Due
Date in the succeeding Prepayment Period, an amount equal to interest at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
number of days commencing on the date on which the prepayment is applied and
ending on the last day of the calendar month preceding such Distribution Date.
The obligations of the Servicer and the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 3.22 and Section 4.18,
respectively of this Agreement. The obligations of the Interim Servicers in
respect of any Prepayment Interest Shortfalls are set forth in the Servicing
Agreements
"Prepayment Period": (i) With respect to the Servicer and any
Distribution Date, the calendar month preceding the month in which the related
Distribution Date occurs with respect to prepayments in part, and the period
beginning on the 16th day of the month preceding the related Distribution Date
(or, the period commencing on the Cut-off Date, in connection with the first
Prepayment Period) and ending on the 15th day of the month in which such
Distribution Date occurs with respect to prepayments in full and (ii) with
respect to the Interim Servicers, as set forth in the Servicing Agreements
"Principal Prepayment": Any voluntary payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Distribution Amount": With respect to any Distribution Date is
the sum of the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount.
"Principal Remittance Amount": With respect to any Distribution Date is
the sum of the Group I Principal Remittance Amount and the Group II Principal
Remittance Amount.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03, Section 3.13(c) or
Section 10.01, and as confirmed by a certification of a Servicing Officer to the
Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance
thereof as of the date of purchase (or such other price
45
as provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or a P&I Advance by the Servicer or the related
Interim Servicer, which payment or P&I Advance had as of the date of purchase
been distributed pursuant to Section 5.01, through the end of the calendar month
in which the purchase is to be effected and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Net Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or a P&I Advance by the Servicer or the
related Interim Servicer through the end of the calendar month immediately
preceding the calendar month in which such REO Property was acquired, plus (2)
REO Imputed Interest for such REO Property for each calendar month commencing
with the calendar month in which such REO Property was acquired and ending with
the calendar month in which such purchase is to be effected, net of the total of
all net rental income, Insurance Proceeds, Liquidation Proceeds and P&I Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 5.01, (iii) any unreimbursed Servicing Advances and
P&I Advances (including Nonrecoverable P&I Advances and Nonrecoverable Servicing
Advances) and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the Collection Account
pursuant to Section 3.09(a)(ix) and Section 3.13(b) and (v) in the case of a
Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the related Interim Servicer, the
Servicer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation and any costs and damages incurred by the Trust Fund and the
Trustee in connection with any violation by any such Mortgage Loan of any
predatory or abusive lending law.
"QIB": As defined in Section 6.01(c).
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the Scheduled Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less than
(and not more than one percentage point in excess of) the Mortgage Rate of the
Deleted Mortgage Loan, (iii) if the mortgage loan is an Adjustable Rate Mortgage
Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on
the Deleted Mortgage Loan, (iv) if the mortgage loan is an Adjustable Rate
Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage
Rate of the Deleted Mortgage Loan, (v) if the mortgage loan is an Adjustable
Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin of the Deleted
Mortgage Loan, (vi) if the mortgage loan is an Adjustable Rate Mortgage Loan,
have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) be secured by the same lien priority on the
related Mortgaged Property as the Deleted Loan, (xi) have a credit grade at
least equal to the credit grading assigned on the Deleted Mortgage Loan, (xii)
be a "qualified mortgage" as defined in the REMIC Provisions and
46
(xiii) conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the terms described in clause (vii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such mortgage
loan, the credit grades described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the proceeds of
which are not more than a nominal amount in excess of the existing first
mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.
"Rating Agency or Rating Agencies": Fitch, Moody's, DBRS and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer.
"Realized Loss": With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero), as
reported by the Servicer to the Master Servicer (in substantially the form of
Schedule 4 hereto) or by the related Interim Servicer to the Master Servicer
pursuant to the related Servicing Agreement equal to (i) the unpaid principal
balance of such Mortgage Loan as of the commencement of the calendar month in
which the Final Recovery Determination was made, plus (ii) accrued interest from
the Due Date as to which interest was last paid by the Mortgagor through the end
of the calendar month in which such Final Recovery Determination was made,
calculated in the case of each calendar month during such period (A) at an
annual rate equal to the annual rate at which interest was then accruing on such
Mortgage Loan and (B) on a principal amount equal to the Stated Principal
Balance of such Mortgage Loan as of the close of business on the Distribution
Date during such calendar month, plus (iii) any amounts previously withdrawn
from the Collection Account or Custodial Account in respect of such Mortgage
Loan pursuant to Section 3.09(a)(ix) and Section 3.13(b) of this Agreement or
pursuant to the Servicing Agreements minus (iv) the proceeds, if any, received
in respect of such Mortgage Loan during the calendar month in which such Final
Recovery Determination was made, net of amounts that are payable therefrom to
the Servicer or the related Interim Servicer with respect to such Mortgage Loan
pursuant to Section 3.09(a)(iii) of this Agreement or pursuant to the related
Servicing Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I,
47
plus (ii) accrued interest from the Due Date as to which interest was last paid
by the Mortgagor in respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, calculated in the case of each calendar month during such
period (A) at an annual rate equal to the annual rate at which interest was then
accruing on the related Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) REO
Imputed Interest for such REO Property for each calendar month commencing with
the calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account or Custodial
Account in respect of the related Mortgage Loan pursuant to Section 3.09(a)(ix)
and Section 3.13(b) of this Agreement or pursuant to the related Servicing
Agreement, minus (v) the aggregate of all P&I Advances and Servicing Advances
(in the case of Servicing Advances, without duplication of amounts netted out of
the rental income, Insurance Proceeds and Liquidation Proceeds described in
clause (vi) below) made by the Servicer or the related Interim Servicer in
respect of such REO Property or the related Mortgage Loan for which the Servicer
or the related Interim Servicer has been or, in connection with such Final
Recovery Determination, will be reimbursed pursuant to Section 3.21 of this
Agreement or pursuant to the related Servicing Agreement out of rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property, minus (vi) the total of all net rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property that has been, or
in connection with such Final Recovery Determination, will be transferred to the
Distribution Account pursuant to Section 3.21 of this Agreement or pursuant to
the related Servicing Agreement.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
To the extent the Servicer or the related Interim Servicer receives
Subsequent Recoveries, with respect to any Mortgage Loan, the amount of Realized
Loss with respect to that Mortgage Loan will be reduced to the extent such
recoveries are applied to reduce the Certificate Principal Balance of any Class
on any Distribution Date.
"Record Date": With respect to each Distribution Date and the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, the
Business Day immediately preceding such Distribution Date for so long as such
Certificates are Book-Entry Certificates. With respect to each Distribution Date
and any other Class of Certificates, including any Definitive Certificates, the
last day of the calendar month immediately preceding the month in which such
Distribution Date occurs.
48
"Reference Banks": ▇▇▇▇▇▇▇'▇ Bank PLC, The Tokyo Mitsubishi Bank and
National Westminster Bank PLC and their successors in interest; provided,
however, that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Securities Administrator
which are engaged in transactions in Eurodollar deposits in the International
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Depositor
or any Affiliate thereof and (iii) which have been designated as such by the
Securities Administrator.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine Certificate,
Class B Certificate, Class CE Certificate or Class P Certificate.
"Regular Interest": A "regular interest" in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
"Regulation S Temporary Global Certificate": As defined in Section
6.01(c).
"Regulation S Permanent Global Certificate": As defined in Section
6.01(c).
"Release Date": The 40th day after the later of (i) commencement of the
offering of the Class B Certificates and (ii) the Closing Date.
"Relief Act": The Servicemembers Civil Relief Act, as amended, or similar
state or local laws.
"Relief Act Interest Shortfall" : With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of: (i) such Mortgage Loans and
Prepayment Charges as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto, and together with all collections
thereon and proceeds thereof; (ii) any REO Property, together with all
collections thereon and proceeds thereof; (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby), the Assignment Agreements and the Servicing
Agreements and (v) the Custodial Accounts, Collection Account, the Distribution
Account and any REO Account, and such assets that are deposited therein from
time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, REMIC I specifically excludes (i) all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date
and all Prepayment Charges payable in connection with
49
Principal Prepayments made before the Cut-off Date; (ii) the Reserve Fund and
any amounts on deposit therein from time to time and any proceeds thereof and
(iii) the Cap Contracts.
"REMIC I Interest Loss Allocation Amount" : With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, divided by (b) 12.
"REMIC I Marker Allocation Percentage": 0.50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest
I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest I-LTB1, REMIC
I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I Regular
Interest I-LTZZ and REMIC I Regular Interest I-LTP.
"REMIC I Overcollateralization Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Balances of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular Interest I-LTB3, and REMIC I Regular Interest I-LTP, in each case as
of such date of determination.
"REMIC I Principal Loss Allocation Amount" : With respect to any
Distribution Date, an amount equal to (a) the product of (i) 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2 and REMIC I Regular Interest I-LTB3 and
the denominator of which is the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-
50
LTM9, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I
Regular Interest I-LTB3 and REMIC I Regular Interest I-LTZZ.
"REMIC I Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto. The designations for
the respective REMIC I Regular Interests are set forth in the Preliminary
Statement hereto.
"REMIC I Regular Interest I-LTAA": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTAA shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA1A": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1A shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA1B": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1B shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA2A": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2A shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA2B": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2B shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA2C": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest
51
in REMIC I. REMIC I Regular Interest I-LTA2C shall accrue interest at the
related REMIC I Remittance Rate in effect from time to time, and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTB1": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTB1 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTB2": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTB2 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTB3": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTB3 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM1": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM2": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM3": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM4": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest
52
in REMIC I. REMIC I Regular Interest I-LTM4 shall accrue interest at the related
REMIC I Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM5": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM6": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM6 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM7": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM7 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM8": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM8 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM9": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM9 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTP" : One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTP shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTXX": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest
53
in REMIC I. REMIC I Regular Interest I-LTXX shall accrue interest at the related
REMIC I Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest I-LTZZ": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTZZ shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT1SUB": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT1SUB shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT1GRP": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT1GRP shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT2SUB": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT2SUB shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT2GRP": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT2GRP shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B,
REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I
Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest
I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I Regular Interest I-LTZZ, REMIC
I Regular Interest I-LTP, REMIC I Regular Interest I-LT1SUB, REMIC I
54
Regular Interest I-LT2SUB and REMIC I Regular Interest I-LTXX, the weighted
average of the Expense Adjusted Mortgage Rates of the Mortgage Loans. With
respect to REMIC I Regular Interest I-LT1GRP, the weighted average of the
Expense Adjusted Mortgage Rates of the Group I Mortgage Loans. With respect to
REMIC I Regular Interest I-LT2GRP, the weighted average of the Expense Adjusted
Mortgage Rates of the Group II Mortgage Loans.
"REMIC I Sub WAC Allocation Percentage": 0.50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular
Interest I-LT2SUB, REMIC I Regular Interest I-LT2GRP and REMIC I Regular
Interest I-LTXX.
"REMIC I Subordinated Balance Ratio": The ratio among the Uncertificated
Balances of each REMIC I Regular Interest ending with the designation "SUB,",
equal to the ratio between, with respect to each such REMIC I Regular Interest,
the excess of (x) the aggregate Stated Principal Balance of the Group I Mortgage
Loans or Group II Mortgage Loans, as applicable over (y) the current Certificate
Principal Balance of related Class A Certificates.
"REMIC I Required Overcollateralization Amount": 1% of the Required
Overcollateralization Amount.
"REMIC II": The segregated pool of assets consisting of all of the REMIC
I Regular Interests conveyed in trust to the Trustee, for the benefit of the
REMIC II Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
"REMIC II Certificate": Any Regular Certificate or Class R Certificate.
"REMIC II Certificateholder": The Holder of any REMIC II Certificate.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of the Code, and related provisions, and proposed, temporary and final
regulations and published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time.
"REMIC Regular Interest": Any REMIC I Regular Interest.
"REMIC Remittance Rate": The REMIC I Remittance Rate.
"Remittance Report": A report by the Servicer pursuant to Section 5.03(a)
of this Agreement or the related Interim Servicer pursuant to the related
Servicing Agreement.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": The account or accounts maintained, or caused to be
maintained, by the Servicer in respect of an REO Property pursuant to Section
3.21 of this Agreement or by the related Interim Servicer pursuant to the
related Servicing Agreement.
55
"REO Disposition": The sale or other disposition of an REO Property on
behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 of this Agreement that is
allocable to such REO Property) or otherwise, net of any portion of such amounts
(i) payable in respect of the proper operation, management and maintenance of
such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.21(d) of this Agreement or related Interim Servicer pursuant to the
related Servicing Agreement for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and P&I Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer or its
nominee on behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.21 of this Agreement or the related Interim Servicer
pursuant to the related Interrim Servicing Agreement.
"Required Overcollateralization Amount" : With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 1.15% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 2.30% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date. Notwithstanding the foregoing,
on and after any Distribution Date following the reduction of the aggregate
Certificate Principal Balance of the Class A Certificates, Mezzanine
Certificates and Class B Certificates to zero, the Required
Overcollateralization Amount shall be zero.
"Reserve Fund": A fund created pursuant to Section 3.24 which shall be an
asset of the Trust Fund but which shall not be an asset of any Trust REMIC.
"Reserve Interest Rate": With respect to any Interest Determination Date,
the rate per annum that the Securities Administrator determines to be either (i)
the arithmetic mean (rounded upwards if necessary to the nearest whole multiple
of 1/16%) of the one-month U.S. dollar lending rates which New York City banks
selected by the Securities Administrator, after consultation with the Depositor,
are quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in the event
that the Securities Administrator can determine no such arithmetic mean, the
lowest one-month U.S.
56
dollar lending rate which New York City banks selected by the Securities
Administrator are quoting on such Interest Determination Date to leading
European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Certificate": Any one of the Class R Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"ResMae Assignment Agreement": The Assignment, Assumption and Recognition
Agreement, dated as of February 28, 2005, by and among the Seller, the
Depositor, RMC and RMAE evidencing the assignment of the ResMae Servicing
Agreement to the Depositor.
"ResMae Mortgage Loans": The Mortgage Loans being serviced by RMC or RMAE
as of the Closing Date.
"Responsible Officer": When used with respect to the Trustee, any officer
of the Trustee having direct responsibility for the administration of this
Agreement and, with respect to a particular matter, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"RMAE": Residential Mortgage Assistance Enterprise, LLC.
"RMC": ResMae Mortgage Corporation.
"Rule 144A": As defined in Section 6.01(c).
"Saxon": Saxon Mortgage Services, Inc. or any successor thereto appointed
hereunder in connection with the servicing and administration of the Saxon
Mortgage Loans.
"Saxon Mortgage Loans": Those Mortgage Loans serviced by Saxon pursuant
to the terms of this Agreement as specified on the Mortgage Loan Schedule and
from and after the related Servicing Transfer Date, the RMC Mortgage Loans and
▇▇▇▇▇▇ Mortgage Loans transferred to Saxon on such Servicing Transfer Date.
"S&P": Standard and Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Scheduled Principal Balance": With respect to any Mortgage Loan: (a) as
of the Cut-off Date, the outstanding principal balance of such Mortgage Loan as
of such date, net of the principal portion of all unpaid Monthly Payments, if
any, due on or before such date; (b) as of any Due Date subsequent to the
Cut-off Date up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such Mortgage Loan, the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, minus the sum of
(i) the principal portion of each Monthly Payment due on or before such Due Date
but subsequent to the
57
Cut-off Date, whether or not received, (ii) all Principal Prepayments received
before such Due Date but after the Cut-off Date, (iii) the principal portion of
all Liquidation Proceeds and Insurance Proceeds received before such Due Date
but after the Cut-off Date, net of any portion thereof that represents principal
due (without regard to any acceleration of payments under the related Mortgage
and Mortgage Note) on a Due Date occurring on or before the date on which such
proceeds were received and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation occurring before such Due Date, but only to
the extent such Realized Loss represents a reduction in the portion of principal
of such Mortgage Loan not yet due (without regard to any acceleration of
payments under the related Mortgage and Mortgage Note) as of the date of such
Deficient Valuation; and (c) as of any Due Date subsequent to the occurrence of
a Liquidation Event with respect to such Mortgage Loan, zero. With respect to
any REO Property: (a) as of any Due Date subsequent to the date of its
acquisition on behalf of the Trust Fund up to and including the Due Date in the
calendar month in which a Liquidation Event occurs with respect to such REO
Property, an amount (not less than zero) equal to the Scheduled Principal
Balance of the related Mortgage Loan as of the Due Date in the calendar month in
which such REO Property was acquired, minus the aggregate amount of REO
Principal Amortization, if any, in respect of REO Property for all previously
ended calendar months; and (b) as of any Due Date subsequent to the occurrence
of a Liquidation Event with respect to such REO Property, zero.
"Securities Act": The Securities Act of 1933, as amended.
"Securities Administrator": As of the Closing Date, ▇▇▇▇▇ Fargo Bank,
N.A. and thereafter, its respective successors in interest that meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person.
"Seller": DB Structured Products, Inc. or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Interest Distribution Amount": With respect to any Distribution
Date, an amount equal to the sum of (i) the Interest Distribution Amount for
such Distribution Date for the Class A Certificates and (ii) the Interest Carry
Forward Amount, if any, for such Distribution Date for the Class A Certificates.
"Sequential Trigger Event": With respect to any Distribution Date, a
Sequential Trigger Event is in effect if, before the 37th Distribution Date, the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Due Period (after giving effect to scheduled payments
received or advanced on or before the related Determination Date and principal
prepayments received during the related Prepayment Period) divided by the sum of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date
exceeds 3.10%, or if, on or after the 37th Distribution Date, a Trigger Event is
in effect.
"Servicer": Saxon, or any successor thereto appointed hereunder in
connection with the servicing and administration of the Mortgage Loans.
"Servicer Event of Default": One or more of the events described in
Section 8.01(a).
58
"Servicer Remittance Date": With respect to any Distribution Date, by
12:00 p.m. on the 21st day of each month; provided that if the 21st day of a
given month is a Saturday, the Servicer Remittance Date shall be the immediately
preceding Business Day and if the 21st day of a given month is a Sunday or a
Monday (which is not a Business Day), the Servicer Remittance Date shall be the
next Business Day.
"Servicer Report": A report (substantially in the form of Schedule 5
hereto) or otherwise in form and substance acceptable to the Master Servicer and
Securities Administrator on an electronic data file or tape prepared by the
Servicer or the related Interim Servicer pursuant to Section 5.03(a) of this
Agreement or pursuant to the related Servicing Agreement, as applicable, with
such additions, deletions and modifications as agreed to by the Master Servicer,
the Securities Administrator and the Servicer or the related Interim Servicer.
"Servicing Advances": The customary and reasonable "out-of-pocket" costs
and expenses incurred prior to or on or after the Cut-off Date (the amounts
incurred prior to the Cut-off Date are identified on Schedule 6 hereto) by the
Servicer or the related Interim Servicer in connection with a default,
delinquency or other unanticipated event by the Servicer or the related Interim
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including but
not limited to foreclosures, in respect of a particular Mortgage Loan, including
any expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS(R) System, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Section 3.01, Section
3.07, Section 3.11, Section 3.13 and Section 3.21 of this Agreement or under the
related Servicing Agreement. Servicing Advances also include any reasonable
"out-of-pocket" cost and expenses (including legal fees) incurred by the
Servicer or the related Interim Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement or the related Servicing Agreement. Neither the Servicer nor the
related Interim Servicer shall be required to make any Nonrecoverable Servicing
Advances.
"Servicing Agreement": The ResMae Servicing Agreement or the ▇▇▇▇▇▇
Servicing Agreement, as applicable.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one-twelfth of the product of the Servicing Fee Rate
multiplied by the Scheduled Principal Balance of the Mortgage Loans as of the
Due Date in the preceding calendar month. The Servicing Fee is payable solely
from collections of interest on the Mortgage Loans.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer or the related Interim
Servicer involved in, or responsible for, the administration and servicing of
Mortgage Loans, whose name and specimen signature appear on a list of Servicing
Officers furnished by the Servicer or the related Interim Servicer to the
Trustee, the Master Servicer, the Securities Administrator and the Depositor on
the Closing Date, as such list may from time to time be amended.
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"Servicing Transfer Date": With respect to the ▇▇▇▇▇▇ Mortgage Loans,
March 31, 2005 (a schedule of the ▇▇▇▇▇▇ Mortgage Loans transferring on such
Servicing Transfer Date will be provided to the Master Servicer by the Seller on
or prior to such Servicing Transfer Date). With respect to the ResMae Mortgage
Loans, March 31, 2005, April 30, 2005 and May 31, 2005 (a schedule of the ResMae
Mortgage Loans transferring on each such Servicing Transfer Date will be
provided to the Master Servicer by RMC or RMAE on or prior to each such
Servicing Transfer Date).
"Single Certificate": With respect to any Class of Certificates (other
than the Residual Certificates), a hypothetical Certificate of such Class
evidencing a Percentage Interest for such Class corresponding to an initial
Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.
"Startup Day": With respect to each Trust REMIC, the day designated as
such pursuant to Section 11.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as of
any date of determination up to but not including the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, the Scheduled Principal Balance of such Mortgage Loan as
of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of
(i) the principal portion of each Monthly Payment due on a Due Date subsequent
to the Cut-off Date, to the extent received from the Mortgagor or advanced by
the Servicer or the related Interim Servicer or a successor to the Servicer or
such Interim Servicer (including the Master Servicer) and distributed pursuant
to Section 5.01 of this Agreement on or before such date of determination, (ii)
all Principal Prepayments received after the Cut-off Date, to the extent
distributed pursuant to Section 5.01 of this Agreement on or before such date of
determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by
the Servicer or the related Interim Servicer as recoveries of principal in
accordance with the provisions of Section 3.13 of this Agreement or pursuant to
the related Servicing Agreement, to the extent distributed pursuant to Section
5.01 of this Agreement on or before such date of determination, and (iv) any
Realized Loss incurred with respect thereto as a result of a Deficient Valuation
made during or prior to the Prepayment Period for the most recent Distribution
Date coinciding with or preceding such date of determination; and (b) as of any
date of determination coinciding with or subsequent to the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, zero. With respect to any REO Property: (a) as of any
date of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Servicer, the related Interim
Servicer or a successor to the Servicer or such Interim Servicer (including the
Master Servicer) and distributed pursuant to Section 5.01 of this Agreement, on
or before such date of determination and (ii) the aggregate amount of REO
Principal Amortization in respect of such REO Property for all previously ended
calendar months, to the extent distributed pursuant to Section 4.01 of this
Agreement on or before such date of determination; and (b) as of any date of
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determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the later to occur of (a)
the Distribution Date occurring in March 2008 and (b) the first Distribution
Date on which the Credit Enhancement Percentage (calculated for this purpose
only after taking into account distributions of principal on the Mortgage Loans
but prior to any distribution of the Principal Distribution Amount to the
Certificates then entitled to distributions of principal on such Distribution
Date) is equal to or greater than 45.40% and (ii) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero.
"Subordinate Certificates" : Collectively, the Mezzanine Certificates,
the Class B Certificates and the Class CE Certificates.
"Subsequent Recoveries": As of any Distribution Date, amounts received
during the related Prepayment Period by the Servicer or the related Interim
Servicer specifically related to a defaulted Mortgage Loan or disposition of an
REO Property prior to the related Prepayment Period that resulted in a Realized
Loss, after the liquidation or disposition of such defaulted Mortgage Loan.
"Sub-Servicer": Any Person with which the Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicers
pursuant to Section 3.02 of this Agreement.
"Sub-Servicing Agreement": The written contract between the Servicer and
a Sub-Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02 of this Agreement.
"Substitution Shortfall Amount": As defined in Section 2.03.
"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of the Trust REMICs under the REMIC Provisions, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on the Dow
▇▇▇▇▇ Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).
"Termination Price": As defined in Section 10.01.
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation,
or other form of assignment of any Ownership Interest in a Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
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"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if either (x) the Delinquency Percentage exceeds 35.00% of the
Credit Enhancement Percentage with respect to such Distribution Date or (y) the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Due Period divided by the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set
forth below with respect to such Distribution Date:
DISTRIBUTION DATE PERCENTAGE
----------------- ----------
March 2008 to February 2009 3.10%, plus 1/12 of 1.75% for each month thereafter
March 2009 to February 2010 4.85%, plus 1/12 of 1.40% for each month thereafter
March 2010 to February 2011 6.25%, plus 1/12 of 0.75% for each month thereafter
March 2011 and thereafter 7.00%
"Trust": ACE Securities Corp., Home Equity Loan Trust, Series 2005-RM1,
the trust created hereunder.
"Trust Fund": Collectively, all of the assets of REMIC I, REMIC II and
the Reserve Fund and any amounts on deposit therein and any proceeds thereof and
the Cap Contracts.
"Trust REMIC": REMIC I or REMIC II.
"Trustee": HSBC Bank USA, National Association a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.
"Uncertificated Balance": The amount of the REMIC I Regular Interests
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC I Regular Interest shall equal the amount
set forth in the Preliminary Statement hereto as its initial uncertificated
balance. On each Distribution Date, the Uncertificated Balance of the REMIC I
Regular Interest shall be reduced by all distributions of principal made on such
REMIC I Regular Interest on such Distribution Date pursuant to Section 5.01 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 5.04 and the
Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be increased by
interest deferrals as provided in Section 5.01(a)(1)(i). The Uncertificated
Balance of each REMIC I Regular Interest shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC I Regular Interest
for any Distribution Date, one month's interest at the REMIC I Remittance Rate
applicable to such REMIC I Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of the REMIC I Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest, shall be reduced by an amount equal to the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 3.22 or Section 4.18 of
this Agreement or pursuant to the Servicing Agreements and (b) the aggregate
amount of any Relief Act Interest Shortfall, if any allocated, in
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each case, to such REMIC I Regular Interest or REMIC I Regular Interest pursuant
to Section 1.02. In addition, Uncertificated Interest with respect to each
Distribution Date, as to any Uncertificated REMIC Regular Interest, shall be
reduced by Realized Losses, if any, allocated to such Uncertificated REMIC
Regular Interest pursuant to Section 1.02 and Section 5.04.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.11.
"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof (except, in the
case of a partnership, to the extent provided in regulations) provided that, for
purposes solely of the restrictions on the transfer of any Class R Certificate,
no partnership or other entity treated as a partnership for United States
federal income tax purposes shall be treated as a United States Person unless
all persons that own an interest in such partnership either directly or through
any entity that is not a corporation for United States federal income tax
purposes are required to be United States Persons, or an estate whose income is
subject to United States federal income tax regardless of its source, or a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, a trust which was in
existence on August 20, 1996 (other than a trust treated as owned by the grantor
under subpart E of part I of subchapter J of chapter I of the Code), and which
was treated as a United States person on August 20, 1996 may elect to continue
to be treated as a United States person notwithstanding the previous sentence.
The term "United States" shall have the meaning set forth in Section 7701 of the
Code.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
lesser of (a) the value thereof as determined by an appraisal made for the
related Originator of the Mortgage Loan at the time of origination of the
Mortgage Loan by an appraiser who met the minimum requirements of ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac and (b) the value thereof as determined by a review appraisal
conducted by the related Originator of the Mortgage Loan in accordance with the
related Originator's underwriting guidelines, and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan; provided, however, (A) in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the related Originator of the Mortgage
Loan of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and (2) the value thereof as determined by a review
appraisal conducted by the related Originator of the Mortgage Loan in accordance
with the related Originator's underwriting guidelines, and (B) in the case of a
Mortgage Loan originated in connection with a "lease-option purchase," such
value of the Mortgaged Property is based on the lower of the value determined by
an appraisal made for the Originator of such Mortgage Loan at the time of
origination or the sale price of such Mortgaged Property if the "lease option
purchase price" was set less than 12 months prior to origination, and is based
on the value determined by an appraisal made for the related Originator of such
Mortgage Loan at the time of origination if the "lease option purchase price"
was set 12 months or more prior to origination.
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"Verification Report": As defined in Section 4.19.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any such Certificate. With respect to any
date of determination, 98% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.
"▇▇▇▇▇ Fargo": ▇▇▇▇▇ Fargo Bank, N.A. or any successor thereto.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate Interest
and the amount of the Interest Distribution Amount for the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates and the Class CE
Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Servicer pursuant to Section 3.22 of this Agreement or by the Master Servicer
pursuant to Section 4.18 of this Agreement or by the Interim Servicers pursuant
to the Servicing Agreements) and any Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, to the Class CE Certificates, second, to the Class B-3 Certificates,
third, to the Class B-2 Certificates, fourth, to the Class B-1 Certificates,
fifth, to the Class M-9 Certificates, sixth, to the Class M-8 Certificates,
seventh, to the Class M-7 Certificates, eighth, to the Class M-6 Certificates,
ninth, to the Class M-5 Certificates, tenth, to the Class M-4 Certificates,
eleventh, to the Class M-3 Certificates, twelfth, to the Class M-2 Certificates,
thirteenth, to the Class M-1 Certificates and fourteenth, to the Class A
Certificates, on a PRO RATA basis, in each case based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount, as applicable, of
each such Certificate and (2) the aggregate amount of any Realized Losses
allocated to the Class B Certificates, the Mezzanine Certificates and Net WAC
Rate Carryover Amounts paid to the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates incurred for any Distribution Date
shall be allocated to the Class CE Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance or Notional
Amount thereof, as applicable.
For purposes of calculating the amount of
Uncertificated Interest for the REMIC I Regular Interests
for any Distribution Date:
(A) The REMIC I Marker Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Servicer pursuant
to Section 3.22 of this Agreement or the Master Servicer
pursuant to Section 4.18 or by the Interim Servicers
pursuant to the Servicing Agreements) and the REMIC I
Marker Allocation Percentage of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for
any
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Distribution Date shall be allocated among REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1A REMIC I
Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest
I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5,
REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest I-LTB1, REMIC I
Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3
and REMIC I Regular Interest I-LTZZ PRO RATA based on, and
to the extent of, one month's interest at the then
applicable respective REMIC I Remittance Rate on the
respective Uncertificated Balance of each such REMIC I
Regular Interest; and
(B) The REMIC I Sub WAC Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Servicer pursuant
to Section 3.22 of this Agreement or by the Master Servicer
pursuant to Section 4.18 of this Agreement or by the
Interim Servicers pursuant to the Servicing Agreements) and
the REMIC I Sub WAC Allocation Percentage of any Relief Act
Interest Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated to
Uncertificated Interest payable to REMIC I Regular Interest
I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I
Regular Interest I-LT2SUB, REMIC I Regular Interest
I-LT2GRP and REMIC I Regular Interest I-LTXX, PRO RATA
based on, and to the extent of, one month's interest at the
then applicable respective REMIC I Remittance Rate on the
respective Uncertificated Balance of each such REMIC I
Regular Interest.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of the Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf
of the Trust, without recourse, for the benefit of the Certificateholders, all
the right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (including, without limitation the right to
enforce the obligations of the other parties thereto thereunder), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor, the Servicer and the Interim
Servicers on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Trustee and the Servicer an
executed copy of the Mortgage Loan Purchase Agreement.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the Custodian pursuant to the Custodial
Agreement the documents with respect to each Mortgage Loan as described under
Section 2 of the Custodial Agreement (the "Mortgage Loan Documents"). In
connection with such delivery and as further described in the Custodial
Agreement, the Custodian will be required to review such Mortgage Loan Documents
and deliver to the Trustee, the Depositor, the Servicer and the Seller
certifications (in the forms attached to the Custodial Agreement) with respect
to such review with exceptions noted thereon. In addition, under the Custodial
Agreement the Depositor will be required to cure certain defects with respect to
the Mortgage Loan Documents for the related Mortgage Loans after the delivery
thereof by the Depositor to the Custodian as more particularly set forth
therein.
Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.11, and preparation and delivery of the certifications shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement.
The Depositor shall deliver or cause the related Originator to deliver to
the Servicer copies of all trailing documents required to be included in the
Mortgage File at the same time the originals or certified copies thereof are
delivered to the Trustee or Custodian, such documents including the mortgagee
policy of title insurance and any Mortgage Loan Documents upon return from the
recording office. The Servicer shall not be responsible for any custodian fees
or other costs incurred in obtaining such documents and the Depositor shall
cause the Servicer to be reimbursed for any such costs the Servicer may incur in
connection with performing its obligations under this Agreement.
The Mortgage Loans permitted by the terms of this Agreement to be
included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and
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warranties, a representation and warranty of the Seller that no Mortgage Loan is
a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Act
effective November 27, 2003 or as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004) and (ii) Qualified Substitute Mortgage Loans
(which, by definition as set forth herein and referred to in the Mortgage Loan
Purchase Agreement, are required to conform to, among other representations and
warranties, the representation and warranty of the Seller that no Qualified
Substitute Mortgage Loan is a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership Act effective November 27, 2003 or as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004. The Depositor and the
Trustee on behalf of the Trust understand and agree that it is not intended that
any Mortgage Loan be included in the Trust that is a "High-Cost Home Loan" as
defined in HOEPA or any other applicable predatory or abusive lending law.
SECTION 2.02. Acceptance of REMIC I by Trustee.
The Trustee acknowledges receipt, subject to the provisions of Section
2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage Loan
Documents and all other assets included in the definition of "REMIC I" under
clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into the
Distribution Account) and declares that it holds (or the Custodian on its behalf
holds) and will hold such documents and the other documents delivered to it
constituting a Mortgage Loan Document, and that it holds (or the Custodian on
its behalf holds) or will hold all such assets and such other assets included in
the definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of a breach
by the Seller of any representation, warranty or covenant under the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan that materially and
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Seller and the
Servicer of such defect, missing document or breach and request that the Seller
deliver such missing document, cure such defect or breach within 60 days from
the date the Seller was notified of such missing document, defect or breach, and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Trustee shall enforce
the obligations of the Seller under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date on which the Seller was notified of such missing document, defect
or breach, if and to the extent that the Seller is obligated to do so under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be remitted to the Servicer for deposit in the Collection
Account and the Trustee, upon receipt of written certification from the Servicer
of such deposit, shall release or cause the Custodian (upon receipt of a request
for release in the form attached to the Custodial Agreement) to release to the
Seller the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Seller shall furnish to it and as shall be
necessary to vest in the Seller any Mortgage Loan released pursuant hereto, and
the Trustee shall not have any further responsibility with regard to such
Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided above,
if so provided in the Mortgage Loan Purchase
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Agreement, the Seller may cause such Mortgage Loan to be removed from REMIC I
(in which case it shall become a Deleted Mortgage Loan) and substitute one or
more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(b). It is understood and agreed that the
obligation of the Seller to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Trustee and the Certificateholders.
In addition, promptly upon the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of the representation or
covenant of the Seller set forth in Section 5(xiv) of the Mortgage Loan Purchase
Agreement which materially and adversely affects the interests of the Holders of
the Class P Certificates in any Prepayment Charge, such Servicer shall promptly
notify the Seller and the Trustee of such breach. The Trustee shall enforce the
obligations of the Seller under the Mortgage Loan Purchase Agreement to remedy
such breach to the extent and in the manner set forth in the Mortgage Loan
Purchase Agreement.
(b) Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the date which is two years after the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by the Seller delivering to the Trustee or the Custodian on behalf of the
Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2 of the Custodial Agreement, as applicable, together with an Officers'
Certificate providing that each such Qualified Substitute Mortgage Loan
satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Custodian on behalf of the Trustee shall acknowledge receipt of such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, an
initial certification pursuant to the Custodial Agreement, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian on behalf of the Trustee shall deliver to the Depositor, the Trustee
and the Servicer a final certification pursuant to the Custodial Agreement with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of REMIC I
and will be retained by the Seller. For the month of substitution, distributions
to Certificateholders will reflect the Monthly Payment due on such Deleted
Mortgage Loan on or before the Due Date in the month of substitution, and the
Seller shall thereafter be entitled to retain all amounts subsequently received
in respect of such Deleted Mortgage Loan. The Depositor shall give or cause to
be given written notice to the Certificateholders that such substitution has
taken place, shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of
such amended Mortgage Loan Schedule to the Trustee and the Servicer. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Trust Fund and shall be subject in
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all respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement, including all applicable representations and warranties thereof
included herein or in the Mortgage Loan Purchase Agreement.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the related
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled Principal Balance at the applicable
Net Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, the Seller will deliver or
cause to be delivered to the related Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if any, and the
Trustee or the Custodian on behalf of the Trustee, upon receipt of the related
Qualified Substitute Mortgage Loan or Loans, upon receipt of a request for
release in the form attached to the Custodial Agreement and certification by the
related Servicer of such deposit, shall release to the Seller the related
Mortgage File or Files and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Seller shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on any Trust REMIC, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding.
(c) Upon discovery by the Depositor, the Seller, 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 within two Business Days give written notice thereof to the other parties.
In connection therewith, the Seller shall repurchase or substitute one or more
Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 90
days of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. Such repurchase or substitution shall be made by (i) the
Seller if the affected Mortgage Loan's status as a non-qualified mortgage is or
results from a breach of any representation, warranty or covenant made by the
Seller under the Mortgage Loan Purchase Agreement or (ii) the Depositor, if the
affected Mortgage Loan's status as a non-qualified mortgage is a breach of no
representation or warranty. Any such repurchase or substitution shall be made in
the same manner as set forth in Section 2.03(a). The Trustee shall reconvey to
the Seller the Mortgage Loan to be released pursuant hereto in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan repurchased
for breach of a representation or warranty.
(d) With respect to a breach of the representations made pursuant to
Section 5(xiv) of the Mortgage Loan Purchase Agreement that materially and
adversely affects the value
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of such Mortgage Loan or the interest therein of the Certificateholders, the
Seller shall be required to take the actions set forth in this Section 2.03.
(e) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan
or Prepayment Charge, the Servicer shall cure such breach in all material
respects.
SECTION 2.04. Representations and Warranties of the Master Servicer.
The Master Servicer hereby represents, warrants and covenants to the
Servicer, the Depositor and the Trustee, for the benefit of each of the Trustee
and the Certificateholders, that as of the Closing Date or as of such date
specifically provided herein:
(i) The Master Servicer is a national banking association duly
formed, validly existing and in good standing under the laws of the
United States of America and is duly authorized and qualified to transact
any and all business contemplated by this Agreement to be conducted by
the Master Servicer;
(ii) The Master Servicer has the full power and authority to
conduct its business as presently conducted by it and to execute, deliver
and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly authorized
the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the Master
Servicer, the consummation by the Master Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Master Servicer and will not (A) result in a breach of any term or
provision of charter and by-laws of the Master Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument to
which the Master Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it, which materially and
adversely affects or, to the Master Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the Master
Servicer to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Master Servicer taken as a whole;
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(iv) The Master Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant made by it and contained in this Agreement;
(v) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer to
perform any of its other obligations hereunder in accordance with the
terms hereof,
(vi) There are no actions or proceedings against, or
investigations known to it of, the Master Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Master Servicer of
its obligations under, or validity or enforceability of, this Agreement;
and
(vii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive the resignation or
termination of the parties hereto and the termination of this Agreement and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.
SECTION 2.05. Representations, Warranties and Covenants of the
Servicer.
(a) Saxon hereby represents, warrants and covenants to the Master
Servicer, the Securities Administrator, the Depositor and the Trustee, for the
benefit of each of such Persons and the Certificateholders that as of the
Closing Date or as of such date specifically provided herein:
(i) Saxon is a corporation organized and validly existing under
the laws of the State of its incorporation and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be conducted by the Servicer in any state in which a Mortgaged
Property related to a Saxon Mortgage Loan is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State,
to the extent necessary to ensure its ability to enforce each Saxon
Mortgage Loan and to service the Saxon Mortgage Loans in accordance with
the terms of this Agreement;
(ii) Saxon has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated
by this Agreement. Saxon has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization,
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execution and delivery by the other parties hereto, constitutes a legal,
valid and binding obligation of Saxon, enforceable against it in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity;
(iii) The execution and delivery of this Agreement by Saxon, the
servicing of the Saxon Mortgage Loans by Saxon hereunder, the
consummation by Saxon of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of Saxon and will not (A) result
in a breach of any term or provision of the charter or by-laws of Saxon
or (B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material agreement
or instrument to which Saxon is a party or by which it may be bound, or
any statute, order or regulation applicable to Saxon of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Saxon; and Saxon is not a party to, bound by, or in
breach or violation of any indenture or other material agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to Saxon's knowledge, would in the future
materially and adversely affect, (x) the ability of Saxon to perform its
obligations under this Agreement, (y) the business, operations, financial
condition, properties or assets of Saxon taken as a whole or (z) the
legality, validity or enforceability of this Agreement;
(iv) Saxon does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made by
it and contained in this Agreement;
(v) No litigation is pending against Saxon that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of Saxon to service the Saxon Mortgage
Loans or to perform any of its other obligations hereunder in accordance
with the terms hereof;
(vi) There are no actions or proceedings against, or
investigations known to it of, Saxon before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement,
(B) seeking to prevent the consummation of the transactions contemplated
by this Agreement or (C) that might prohibit or materially and adversely
affect the performance by Saxon of its obligations under, or the validity
or enforceability of, this Agreement;
(vii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Saxon of, or compliance by Saxon with, this Agreement
or the consummation by it of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders,
if any, that have been obtained prior to the Closing Date;
(viii) Saxon has fully furnished and will continue to fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to
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Equifax, Experian and Trans Union Credit Information Company or their
successors on a monthly basis; and
(ix) Saxon will not waive any Prepayment Charge related to a
Saxon Mortgage Loan other than in accordance with the standard set forth
in Section 3.01.
Notwithstanding anything to the contrary contained in this Agreement, if
the covenant of the Servicer set forth in Section 2.05(a)(ix) above is breached,
the related Servicer will pay the amount of such waived Prepayment Charge, from
its own funds without any right of reimbursement, for the benefit of the Holders
of the Class P Certificates, by depositing such amount into the Collection
Account within 90 days of the earlier of discovery by the Servicer or receipt of
notice by the Servicer of such breach. Furthermore, notwithstanding any other
provisions of this Agreement, any payments made by the Servicer in respect of
any waived Prepayment Charges pursuant to this paragraph shall be deemed to be
paid outside of the Trust Fund.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive the resignation or
termination of the parties hereto, the termination of this Agreement and the
delivery of the Mortgage Files to the Custodian and shall inure to the benefit
of the Trustee, the Master Servicer, the Securities Administrator, the
Depositor, the Certificateholders. Upon discovery by any such Person or the
related Servicer of a breach of any of the foregoing representations, warranties
and covenants which materially and adversely affects the value of any Mortgage
Loan, Prepayment Charge or the interests therein of the Certificateholders, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the Trustee. Subject
to Section 8.01, unless such breach shall not be susceptible of cure within 90
days, the obligation of the Servicer set forth in Section 2.03(e) to cure
breaches shall constitute the sole remedy against the related Servicer available
to the Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders respecting a breach of the representations, warranties and
covenants contained in this Section 2.05.
SECTION 2.06. Issuance of the REMIC I Regular Interests and the
Class R-I Interest.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to the Custodian on its behalf of the Mortgage Loan Documents,
subject to the provisions of Section 2.01 and Section 2.02 hereof and Section 2
of the Custodial Agreement, together with the assignment to it of all other
assets included in REMIC I, the receipt of which is hereby acknowledged. The
interests evidenced by the Class R-I Interest, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC I. The
rights of the Holders of the Class R-I Interest and REMIC I (as holder of the
REMIC I Regular Interests) to receive distributions from the proceeds of REMIC I
in respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.
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SECTION 2.07. Conveyance of the REMIC I Regular Interests; Acceptance
of REMIC I by the Trustee.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee, without
recourse all the right, title and interest of the Depositor in and to the REMIC
I Regular Interests for the benefit of the Class R-II Interest and REMIC II (as
holder of the REMIC I Regular Interests). The Trustee acknowledges receipt of
the REMIC I Regular Interests and declares that it holds and will hold the same
in trust for the exclusive use and benefit of all present and future Holders of
the Class R-II Interest and REMIC II (as holder of the REMIC I Regular
Interests). The rights of the Holder of the Class R-II Interest and REMIC II (as
holder of the REMIC I Regular Interests) to receive distributions from the
proceeds of REMIC II in respect of the Class R-II Interest and Regular
Certificate, respectively, and all ownership interests evidenced or constituted
by the Class R-II Interest and the Regular Certificates, shall be as set forth
in this Agreement. The Class R-II Interest and the Regular Certificates shall
constitute the entire beneficial ownership interest in REMIC II.
SECTION 2.08. Issuance of Residual Certificates.
The Trustee acknowledges the assignment to it of the REMIC I Regular
Interests and, concurrently therewith and in exchange therefor, pursuant to the
written request of the Depositor executed by an officer of the Depositor, the
Securities Administrator has executed and authenticated and the Trustee has
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations. The Class R Certificates evidence ownership in the
Class R-I Interest and the Class R-II Interest.
SECTION 2.09. Establishment of the Trust.
The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "ACE Securities Corp., Home Equity Loan Trust, Series
2005-RM1" and does hereby appoint HSBC Bank USA, National Association as Trustee
in accordance with the provisions of this Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS; ACCOUNTS
SECTION 3.01. Servicer to Act as Servicer.
From and after the Closing Date to the related Servicing Transfer Date,
the ResMae Mortgage Loans will be serviced and administered by RMC and RMAE
pursuant to the ResMae Servicing Agreement and the ▇▇▇▇▇▇ Mortgage Loans will be
serviced and administered by ▇▇▇▇▇▇ pursuant to the ▇▇▇▇▇▇ Servicing Agreement,
and the Servicer will have no responsibility to service or administer the ResMae
Mortgage Loans or the ▇▇▇▇▇▇ Mortgage Loans or have any other obligation with
respect to the ResMae Mortgage Loans or the ▇▇▇▇▇▇ Mortgage Loans (including
reporting or remitting funds to the Trustee) during that period. In addition,
all liabilities of the Interim Servicers incurred prior to the related Servicing
Transfer Date shall remain with the Interim Servicers. On and after the Closing
Date with respect to the Saxon Mortgage Loans and on and after the related
Servicing Transfer Date with respect to the ResMae Mortgage Loans and ▇▇▇▇▇▇
Mortgage Loans, the Servicer shall service and administer the Mortgage Loans on
behalf of the Trust Fund and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the respective Mortgage Loans
and all applicable law and regulations and, to the extent consistent with such
terms, in the same manner in which it services and administers similar mortgage
loans for its own portfolio, giving due consideration to customary and usual
standards of practice of prudent mortgage lenders and loan servicers
administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer or any Affiliate of the
Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Servicer or any
Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's right to receive compensation for its
services hereunder.
To the extent consistent with the foregoing, the Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes and shall waive (or permit a Sub-Servicer to waive) a Prepayment
Charge only under the following circumstances: (i) such waiver is standard and
customary in servicing similar Mortgage Loans and such waiver is related to a
default or reasonably foreseeable default and would, in the reasonable judgment
of such Servicer, maximize recovery of total proceeds taking into account the
value of such Prepayment Charge and the related Mortgage Loan and, if such
waiver is made in connection with a refinancing of the related Mortgage Loan,
such refinancing is related to a default or a reasonably foreseeable default,
(ii) such Prepayment Charge is unenforceable in accordance with applicable law
or the collection of such related Prepayment Charge would otherwise violate
applicable law or (iii) the collection of such Prepayment Charge would be
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considered "predatory" pursuant to written guidance published or issued by any
applicable federal, state or local regulatory authority acting in its official
capacity and having jurisdiction over such matters. Notwithstanding any
provision in this Agreement to the contrary, in the event the Prepayment Charge
payable under the terms of the Mortgage Note is less than the amount of the
Prepayment Charge set forth in the Prepayment Charge Schedule or other
information provided to the Servicer, the Servicer shall not have any liability
or obligation with respect to such difference, and in addition shall not have
any liability or obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Prepayment Charge Schedule.
Subject only to the above-described servicing standards (the "Accepted
Servicing Practices") and the terms of this Agreement and of the Mortgage Loans,
the Servicer shall have full power and authority, to do or cause to be done any
and all things in connection with such servicing and administration which it may
deem necessary or desirable with the goal of maximizing proceeds of the Mortgage
Loan. Without limiting the generality of the foregoing, the Servicer in its own
name is hereby authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment, to execute and deliver, on behalf
of the Trust Fund, the Certificateholders and the Trustee or any of them, and
upon written notice to the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge or subordination, and
all other comparable instruments, with respect to the related Mortgage Loans and
the related Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee, for the benefit of the Trust Fund and the Certificateholders.
The Servicer shall service and administer the related Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.14, the Trustee shall execute, at the written request of
the Servicer, and furnish to the Servicer a power of attorney in the form of
Exhibit D hereto and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder and
furnished to the Trustee by the Servicer, and the Trustee shall not be liable
for the actions of the Servicer under such powers of attorney and shall be
indemnified by the Servicer for any cost, liability or expense incurred by the
Trustee in connection with the Servicer's use or misuse of any such power of
attorney.
In accordance with Accepted Servicing Practices, the Servicer shall make
or cause to be made Servicing Advances as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties, which
Servicing Advances shall be reimbursable in the first instance from related
collections from the related Mortgagors pursuant to Section 3.07, and further as
provided in Section 3.09; provided, however, the Servicer shall only make such
Servicing Advance if the related Mortgagor has not made such payment and if the
failure to make such Servicing Advance would result in the loss of the related
Mortgaged Property due to a tax sale or foreclosure as result of a tax lien. Any
cost incurred by the Servicer in effecting the payment of taxes and assessments
on a Mortgaged Property shall not, for the purpose of calculating the Stated
Principal Balance of such Mortgage Loan or distributions to Certificateholders,
be added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit. The parties to
this Agreement acknowledge that Servicing Advances shall be reimbursable
pursuant to Section 3.09 of this
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Agreement, and agree that no Servicing Advance shall be rejected or disallowed
by any party unless it has been shown that such Servicing Advance was not made
in accordance with the terms of this Agreement.
Notwithstanding anything in this Agreement to the contrary, the Servicer
may not make any future advances with respect to a Mortgage Loan and the
Servicer shall not permit any modification with respect to any related Mortgage
Loan that would change the Mortgage Rate, reduce or increase the principal
balance (except for reductions resulting from actual payments of principal) or
change the final maturity date on such related Mortgage Loan (unless, as
provided in Section 3.06, the related Mortgagor is in default with respect to
the related Mortgage Loan or such default is, in the judgment of the Servicer,
reasonably foreseeable) or any modification, waiver or amendment of any term of
any related Mortgage Loan that would both (A) effect an exchange or reissuance
of such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause any Trust
REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions.
In the event that the Mortgage Loan Documents relating to a Mortgage Loan
contain provisions requiring the related Mortgagor to arbitrate disputes (at the
option of the Trustee, on behalf of the Trust), the Trustee hereby authorizes
the Servicer to waive the Trustee's right or option to arbitrate disputes and to
send written notice of such waiver to the Mortgagor, although the Mortgagor may
still require arbitration at its option.
From and after the Servicing Transfer Date, the Servicer will fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company or their successors on a monthly basis.
SECTION 3.02. Sub-Servicing Agreements Between the Servicer and
Sub-Servicers.
The Servicer may arrange for the subservicing of any Mortgage Loan by a
Sub-Servicer pursuant to a Sub-Servicing Agreement; provided that such
sub-servicing arrangement and the terms of the related Sub-Servicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Each Sub-Servicer shall
be (i) authorized to transact business in the state or states where the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Sub-Servicer to perform its obligations
hereunder and under the Sub-Servicing Agreement and (ii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇
Mae approved mortgage servicer. Notwithstanding the provisions of any
Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer or a Sub-Servicer or reference
to actions taken through the Servicer 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 Sub-Servicing Agreements or arrangements or by
virtue of indemnification from the Sub-Servicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering
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the Mortgage Loans. Every Sub-Servicing Agreement entered into by the Servicer
shall contain a provision giving the successor Servicer the option to terminate
such agreement in the event a successor Servicer is appointed. All actions of
each Sub-Servicer performed pursuant to the related Sub-Servicing Agreement
shall be performed as an agent of the Servicer with the same force and effect as
if performed directly by the Servicer.
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 Sub-Servicer regardless of whether such payments
are remitted by the Sub-Servicer to the Servicer.
SECTION 3.03. Successor Sub-Servicers.
Any Sub-Servicing Agreement shall provide that the Servicer shall be
entitled to terminate any Sub-Servicing Agreement and to either itself directly
service the related Mortgage Loans or enter into a Sub-Servicing Agreement with
a successor Sub-Servicer which qualifies under Section 3.02. Any Sub-Servicing
Agreement shall include the provision that such agreement may be immediately
terminated by any successor to the Servicer (which may be the Trustee or the
Master Servicer) without fee, in accordance with the terms of this Agreement, in
the event that the Servicer (or any successor to the Servicer) shall, for any
reason, no longer be the Servicer of the related Mortgage Loans (including
termination due to a Servicer Event of Default).
SECTION 3.04. No Contractual Relationship Between Sub-Servicer,
Trustee or the Certificateholders.
Any Sub-Servicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Sub-Servicer shall be deemed to be
between the Sub-Servicer and the Servicer alone and the Master Servicer, Trustee
and the Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to any
Sub-Servicer except as set forth in Section 3.05.
SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement
by Successor Servicer.
In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Servicer hereunder by
a successor Servicer (which may be the Trustee or the Master Servicer) pursuant
to Section 8.02, it is understood and agreed that the Servicer's rights and
obligations under any Sub-Servicing Agreement then in force between the Servicer
and a Sub-Servicer shall be assumed simultaneously by such successor Servicer
without act or deed on the part of such successor Servicer; provided, however,
that any successor Servicer may terminate the Sub-Servicer.
The Servicer shall, upon the reasonable request of the Master Servicer,
but at its own expense, deliver to the assuming party documents and records
relating to each Sub-Servicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreements to the assuming party.
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The Servicing Fee payable to any such successor Servicer shall be payable
from payments received on the Mortgage Loans in the amount and in the manner set
forth in this Agreement.
SECTION 3.06. Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the related Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and Accepted
Servicing Practices, follow such collection procedures as it would follow with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Consistent with the foregoing, the Servicer may in its discretion (i)
waive any late payment charge or, if applicable, penalty interest or (ii) extend
the due dates for the Monthly Payments due on a Mortgage Note related to a
Mortgage Loan for a period of not greater than 180 days; provided that any
extension pursuant to this clause shall not affect the amortization schedule of
any Mortgage Loan for purposes of any computation hereunder. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with Accepted Servicing Practices may waive, modify or vary any term
of such Mortgage Loan (including modifications that change the Mortgage Rate,
forgive the payment of principal or interest or extend the final maturity date
of such Mortgage Loan), accept payment from the related Mortgagor of an amount
less than the 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 if in the Servicer's determination
such waiver, modification, postponement or indulgence is not materially adverse
to the interests of the Certificateholders (taking into account any estimated
Realized Loss that might result absent such action).
SECTION 3.07. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
To the extent the terms of a Mortgage provide for Escrow Payments, the
Servicer shall establish and maintain one or more accounts (the "Servicing
Accounts"), into which all collections from the Mortgagors (or related advances
from Sub-Servicers) for the payment of taxes, assessments, fire, flood, and
hazard insurance premiums, and comparable items for the account of the
Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, all Escrow Payments collected on account of the Mortgage Loans and
shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no
event later than the second Business Day after the deposit of good funds into
the clearing account, and retain therein, all Escrow Payments collected on
account of the Mortgage Loans, for the purpose of effecting the timely payment
of any such items as required under the terms of this Agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect timely payment
of taxes, assessments, fire, flood, and hazard insurance premiums, and
comparable items; (ii) reimburse itself out of related collections for any
Servicing Advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.11 (with respect to fire, flood and hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
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overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Servicing Account; or (v) clear and terminate the Servicing
Account at the termination of the Servicer's obligations and responsibilities in
respect of the Mortgage Loans under this Agreement in accordance with Article X.
As part of its servicing duties, the Servicer shall pay to the Mortgagors
interest on funds in Servicing Accounts, to the extent required by law and, to
the extent that interest earned on funds in the Servicing Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. Notwithstanding the foregoing, the Servicer shall not be
obligated to collect Escrow Payments if the related Mortgage Loan does not
require such payments but the Servicer shall nevertheless be obligated to make
Servicing Advances as provided in Section 3.01 and Section 3.11. In the event
the Servicer shall deposit in the Servicing Accounts any amount not required to
be deposited therein, it may at any time withdraw such amount from the Servicing
Accounts, any provision to the contrary notwithstanding.
To the extent that a Mortgage does not provide for Escrow Payments, the
Servicer (i) shall determine whether any such payments are made by the Mortgagor
in a manner and at a time that is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien and (ii)
shall ensure that all insurance required to be maintained on the Mortgaged
Property pursuant to this Agreement is maintained. If any such payment has not
been made and the Servicer receives notice of a tax lien with respect to the
Mortgage Loan being imposed, the Servicer shall, promptly and to the extent
required to avoid loss of the Mortgaged Property, advance or cause to be
advanced funds necessary to discharge such lien on the Mortgaged Property unless
the Servicer determines the advance to be nonrecoverable. The Servicer assumes
full responsibility for the payment of all such bills and shall effect payments
of all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make Servicing
Advances to effect such payments subject to its determination of recoverability.
SECTION 3.08. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall establish and
maintain one or more "Collection Accounts", held in trust for the benefit of the
Trustee and the Certificateholders. On behalf of the Trust Fund, the Servicer
shall deposit or cause to be deposited in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event later than two
Business Days after the deposit of good funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date other
than amounts attributable to a Due Date on or prior to the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the related Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee and any Prepayment Interest Excess) on each related
Mortgage Loan;
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(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property) and all
Subsequent Recoveries with respect to the related Mortgage Loans;
(iv) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 in connection with any losses realized on
Permitted Investments with respect to funds held in the Collection
Account;
(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.11(a) in respect of any
blanket policy deductibles;
(vi) any Purchase Price or Substitution Shortfall Amount
delivered to the Servicer and all proceeds (net of amounts payable or
reimbursable to the Servicer, the Master Servicer, the Trustee, the
Custodian or the Securities Administrator) of Mortgage Loans purchased in
accordance with Section 2.03, Section 3.13 or Section 10.01; and
(vii) any Prepayment Charges collected by the Servicer in
connection with the Principal Prepayment of any of the Mortgage Loans or
amounts required to be deposited by the Servicer in connection with a
breach of its obligations under Section 2.05.
The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, assumption
fees or other similar fees need not be deposited by the Servicer in the
Collection Account and may be retained by the Servicer as additional
compensation. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) On behalf of the Trust Fund, the Securities Administrator shall
establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee, the Trust
Fund and the Certificateholders. On behalf of the Trust Fund, the Servicer shall
deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before 12:00 noon New York time on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account and the
amount of all Prepayment Charges collected by the Servicer in connection with
the Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advance
Financing Person pursuant to Section 3.25. If the balance on deposit in the
Collection Account exceeds $100,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Servicer
shall, on or before 5:00 p.m. New York time on such Business Day, withdraw from
the Collection Account any and all amounts payable or reimbursable to the
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Seller pursuant to Section 3.09 and shall pay such amounts
to the Persons entitled thereto or shall establish a separate Collection Account
(which shall also be an Eligible Account) and withdraw from the existing
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Collection Account the amount on deposit therein in excess of $100,000 and
deposit such excess in the newly created Collection Account.
With respect to any remittance received by the Securities Administrator
on or after the first Business Day following the Business Day on which such
payment was due, the Securities Administrator shall send written notice thereof
to the related Servicer. The Servicer shall pay to the Securities Administrator
interest on any such late payment by the Servicer at an annual rate equal to
Prime Rate (as defined in The Wall Street Journal) plus one percentage point,
but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be paid by the Servicer to the Securities Administrator on
the date such late payment is made and shall cover the period commencing with
the day following such first Business Day and ending with the Business Day on
which such payment is made, both inclusive. The payment by the Servicer of any
such interest, or the failure of the Securities Administrator to notify the
Servicer of such interest, shall not be deemed an extension of time for payment
or a waiver of any Event of Default by the Servicer.
(c) Funds in the Collection Accounts and funds in the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.10. The Servicer shall give notice to the
Trustee, the Securities Administrator and the Master Servicer of the location of
the Collection Account maintained by it when established and prior to any change
thereof. The Securities Administrator shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Servicer in immediately available funds to the Securities Administrator
for deposit in the Distribution Account. In the event the Servicer shall deliver
to the Securities Administrator for deposit in the Distribution Account any
amount not required to be deposited therein, it may at any time request that the
Securities Administrator withdraw such amount from the Distribution Account and
remit to it any such amount, any provision herein to the contrary
notwithstanding. In no event shall the Securities Administrator incur liability
as a result of withdrawals from the Distribution Account at the direction of the
Servicer in accordance with the immediately preceding sentence. In addition, the
Servicer shall deliver to the Securities Administrator no later than the
Servicer Remittance Date the amounts set forth in clauses (i) through (iv)
below:
(i) any P&I Advances, as required pursuant to Section 5.03;
(ii) any amounts required to be deposited pursuant to Section
3.21(d) or 3.21(f) in connection with any related REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01; and
(iv) any amounts required to be deposited pursuant to Section
3.22 in connection with any Prepayment Interest Shortfalls.
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SECTION 3.09. Withdrawals from the Collection Accounts and
Distribution Account.
(a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
5.03:
(i) to remit to the Securities Administrator for deposit in the
Distribution Account the amounts required to be so remitted pursuant to
Section 3.08(b) or permitted to be so remitted pursuant to the first
sentence of Section 3.08(d);
(ii) subject to Section 3.13(d), to reimburse itself (including
any successor Servicer) for P&I Advances made by it, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Monthly Payments on related Mortgage Loans
with respect to which such P&I Advances were made in accordance with the
provisions of Section 5.03;
(iii) subject to Section 3.13(d), to pay itself any unpaid
Servicing Fees and reimburse itself any unreimbursed Servicing Advances
with respect to each related Mortgage Loan, but only to the extent of any
Liquidation Proceeds and Insurance Proceeds received with respect to such
related Mortgage Loan;
(iv) to pay to itself as servicing compensation (in addition to
the Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;
(v) to pay to itself or the Seller, as the case may be, with
respect to each related Mortgage Loan that has previously been purchased
or replaced pursuant to Section 2.03 or Section 3.13(c) all amounts
received thereon not included in the Purchase Price or the Substitution
Shortfall Amount;
(vi) to reimburse itself (including any successor to the
Servicer) for
(A) any P&I Advance or Servicing Advance previously made by
it which the Servicer has determined to be a Nonrecoverable
P&I Advance or a Nonrecoverable Servicing Advance in
accordance with the provisions of Section 5.03 provided
however, that the Servicer shall not be entitled to
reimbursement for any Servicing Advance made prior to the
Cut-off Date if such Servicer determines that such
Servicing Advance constitutes a Nonrecoverable Servicing
Advance; or
(B) any unpaid Servicing Fees to the extent not recoverable
from Liquidation Proceeds, Insurance Proceeds or other
amounts received with respect to the related Mortgage Loan
under Section 3.06(a)(iii);
(vii) to reimburse itself or the Depositor for expenses incurred
by or reimbursable to itself or the Depositor, as the case may be,
pursuant to Section 3.01 or Section 7.03;
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(viii) to reimburse itself or the Trustee, as the case may be, for
expenses reasonably incurred in respect of the breach or defect giving
rise to the purchase obligation under Section 2.03 of this Agreement that
were included in the Purchase Price of the related Mortgage Loan,
including any expenses arising out of the enforcement of the purchase
obligation;
(ix) to pay, or to reimburse itself for advances in respect of,
expenses incurred in connection with any related Mortgage Loan pursuant
to Section 3.13(b);
(x) to pay to itself any Prepayment Interest Excess on the
related Mortgage Loans to the extent not retained pursuant to Section
3.08(a)(ii)); and
(xi) to clear and terminate the Collection Account pursuant to
Section 10.01.
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 related Collection Account, to the extent held by or on behalf of it,
pursuant to subclauses (ii), (iii), (v), (vi), (vii), (viii), (ix) and (x)
above.
(b) The Securities Administrator shall, from time to time, make
withdrawals from the Distribution Account, for any of the following purposes,
without priority:
(i) to make distributions to Certificateholders in accordance
with Section 5.01;
(ii) to pay to itself, the Custodian and the Master Servicer
amounts to which it is entitled pursuant to Section 9.05 or any other
provision of this Agreement and any Extraordinary Trust Fund Expenses;
(iii) to reimburse itself or the Master Servicer pursuant to
Section 8.02;
(iv) reserved;
(v) to pay any amounts in respect of taxes pursuant to Section
11.01(g)(v);
(vi) to pay the Master Servicing Fee to the Master Servicer;
(vii) to pay the Credit Risk Management Fee to the Credit Risk
Manager; and
(viii) to clear and terminate the Distribution Account pursuant to
Section 10.01.
SECTION 3.10. Investment of Funds in the Investment Accounts.
(a) The Servicer may direct, by means of written directions (which may
be standing directions), any depository institution maintaining the Collection
Account to invest the
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funds in the Collection Account (for purposes of this Section 3.10, an
"Investment Account") in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Securities Administrator is the obligor thereon, and (ii) no later than
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Securities Administrator is the obligor on
such Permitted Investment. Amounts in the Distribution Account may be invested
in Permitted Investments as directed in writing by the Master Servicer and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the
Securities Administrator is the obligor thereon, and (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if the Securities Administrator is the obligor thereon. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds shall be made in the name of the Trustee (in its capacity as
such) or in the name of a nominee of the Trustee. The Securities Administrator
shall be entitled to sole possession over each such investment in the
Distribution Account and, subject to subsection (b) below, the income thereon,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Securities Administrator or its agent, together with
any document of transfer necessary to transfer title to such investment to the
Trustee or its nominee. In the event amounts on deposit in the Collection
Account are at any time invested in a Permitted Investment payable on demand,
the party with investment discretion over such Investment Account shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last
day such Permitted Investment may otherwise mature hereunder
in an amount equal to the lesser of (1) all amounts then
payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder promptly upon
receipt by such party of written notice from the related
Servicer that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on deposit
in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account shall be for the benefit of the Servicer and
shall be subject to its withdrawal in accordance with Section 3.09. The Servicer
shall deposit in the Collection Account the amount of any loss incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss. All earnings and gain realized from
the investment of funds deposited in the Distribution Account shall be for the
benefit of the Master Servicer. The Master Servicer shall remit from its own
funds for deposit into the Distribution Account the amount of any loss incurred
on Permitted Investments in the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 9.01 and Section 9.02(a)(v),
shall, at the written direction of the Servicer, take such
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action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
(d) The Trustee, the Master Servicer or their respective Affiliates
are permitted to receive additional compensation that could be deemed to be in
the Trustee's or the Master Servicer's economic self-interest for (i) serving as
investment adviser, administrator, shareholder servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in certain Permitted Investments. Such compensation shall
not be considered an amount that is reimbursable or payable to the Trustee or
the Master Servicer pursuant to Section 3.09 or 3.10 or otherwise payable in
respect of Extraordinary Trust Fund Expenses. Such additional compensation shall
not be an expense of the Trust Fund.
SECTION 3.11. Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage and Primary Mortgage Insurance.
(a) The terms of each Mortgage Note require the related Mortgagor to
maintain fire, flood and hazard insurance policies. To the extent such policies
are not maintained, the Servicer shall cause to be maintained for each Mortgaged
Property fire and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of the current principal balance of the related Mortgage
Loan and the amount necessary to compensate fully for any damage or loss to the
improvements which are a part of such property on a replacement cost basis, in
each case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire and hazard insurance
on each REO Property with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the maximum insurable value of the improvements which are a part
of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property. Theh Servicer will comply
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under any such hazard policies. Any amounts to be collected by
the Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with Accepted Servicing Practices,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.09, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.21, if received in respect of an REO
Property. Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Mortgaged Property or REO Property is at any time in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, the Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid principal balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the
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related Mortgaged Property under the national flood insurance program (assuming
that the area in which such Mortgaged Property is located is participating in
such program).
In the event that the Servicer shall obtain and maintain a blanket policy
with an insurer having a General Policy Rating of B:VI or better in Best's Key
Rating Guide or otherwise acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac insuring
against hazard losses on all of the related Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations to cause fire and
hazard insurance to be maintained on the Mortgaged Properties, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with the
first two sentences of this Section 3.11, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the related Mortgage Loans, the Servicer agrees to
prepare and present, on behalf of itself, the Trustee, the Trust Fund, the
Certificateholders, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.
(b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of its respective obligations under this Agreement, which policy
or policies shall be in such form and amount that would meet the requirements of
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the related Mortgage
Loans, unless the Servicer, has obtained a waiver of such requirements from
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a fidelity bond in
the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, unless the Servicer, has obtained a waiver of such requirements from ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall be deemed to have complied with this
provision if an Affiliate of the Servicer, has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days' prior written notice to the Trustee.
(c) The Servicer shall not take any action that would result in
noncoverage under any applicable primary mortgage insurance policy of any loss
which, but for the actions of the Servicer would have been covered thereunder.
The Servicer shall use its best efforts to keep in force and effect any
applicable primary mortgage insurance policy and, to the extent that the related
Mortgage Loan requires the Mortgagor to maintain such insurance, any other
primary mortgage insurance applicable to any Mortgage Loan. Except as required
by applicable law or the related Mortgage Loan Documents, the Servicer shall not
cancel or refuse to renew any such primary mortgage insurance policy that is in
effect at the date of the initial issuance of the related Mortgage Note and is
required to be kept in force hereunder.
The Servicer agrees to present on behalf of the Trustee and the
Certificateholders claims to the applicable insurer under any primary mortgage
insurance policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any primary mortgage insurance policies
respecting defaulted Mortgage Loans. Pursuant to Section 3.08, any amounts
collected by the Servicer under any primary mortgage insurance policies shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.09.
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Notwithstanding any provision to the contrary, the Servicer shall not have any
responsibility with respect to a primary mortgage insurance policy unless the
Servicer has been made aware of such policy, as reflected on the Mortgage Loan
Schedule or otherwise and have been provided with adequate information to
administer such policy.
SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption
Agreements
The Servicer shall, to the extent it has knowledge of any conveyance of
any related Mortgaged Property by any related Mortgagor (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise its
rights to accelerate the maturity of such Mortgage Loan under the "due-on-sale"
clause, if any, applicable thereto; provided, however, that the Servicer shall
not exercise any such rights if prohibited by law from doing so. If the Servicer
reasonably believes that it is unable under applicable law to enforce such
"due-on-sale" clause, or if any of the other conditions set forth in the proviso
to the preceding sentence apply, the Servicer shall enter into an assumption and
modification agreement from or with the person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. The Servicer is also authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the then current underwriting criteria of the Servicer for mortgage
loans similar to the related Mortgage Loans. In connection with any assumption
or substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption or substitution of liability agreement
will be retained by such Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Servicer shall notify the Trustee (or the
Custodian) that any such substitution or assumption agreement has been completed
by forwarding to the Trustee the executed original of such substitution or
assumption agreement, which document shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.12, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
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SECTION 3.13. Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall use its best efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.06. The Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Servicer as contemplated in Sections 3.09 and 3.21.
The foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its discretion that such restoration will increase
the proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.13 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trust Fund, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trust Fund, the Trustee or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Servicer has also previously
determined, based on its reasonable judgment and a prudent report prepared by an
Independent Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as are
necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if
any such materials are present for which such action could be
required, that it would be in the best economic interest of the
Trust Fund to take such actions with respect to the affected
Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
3.13 shall be advanced by the Servicer, subject to the related Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.09(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
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If the Servicer determines, as described above, that it is in the best
economic interest of the Trust Fund to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund. The cost of any such compliance, containment, cleanup or
remediation shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Sections
3.09(a)(iii) or 3.09(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The Servicer shall have the right to purchase from REMIC I any
defaulted Mortgage Loan serviced by it that is 90 days or more delinquent, which
the Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee, in form and substance satisfactory to the Servicer and
the Trustee prior to purchase), at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Collection Account, and the Trustee, upon receipt of written certification
from the Servicer of such deposit, shall release or cause to be released to the
Servicer the related Mortgage File and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Servicer shall furnish and as shall be
necessary to vest in the Servicer title to any Mortgage Loan released pursuant
hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and P&I Advances,
pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued and unpaid
interest on the Mortgage Loan, to the date of the Final Recovery Determination,
or to the Due Date prior to the Distribution Date on which such amounts are to
be distributed if not in connection with a Final Recovery Determination; and
third, as a recovery of principal of the Mortgage Loan. If the amount of the
recovery so allocated to interest is less than the full amount of accrued and
unpaid interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Servicer as follows: first, to unpaid Servicing Fees; and
second, to the balance of the interest then due and owing. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer pursuant to Section 3.09(a)(iii). The portion of the recovery allocated
to interest (net of unpaid Servicing Fees) and the portion of the recovery
allocated to principal of the Mortgage Loan shall be applied as follows: first,
to reimburse the Servicer for any related unreimbursed Servicing or P&I Advances
in accordance with Section 3.09(a)(ii) and any other amounts reimbursable to the
related Servicer pursuant to Section 3.09, and second, as part of the amounts to
be transferred to the Distribution Account in accordance with Section 3.08(b).
SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan,
or the receipt by the Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the
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Servicer will promptly furnish to the Custodian, on behalf of the Trustee, two
copies of a request for release substantially in the form attached to the
Custodial Agreement signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Collection Account have been or will be so deposited) and
shall request that the Custodian, on behalf of the Trustee, deliver to the
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall within five (5) Business
Days release the related Mortgage File to the Servicer and the Trustee and
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the Servicer is authorized, to give, as
agent for the Trustee, as the mortgagee under the Mortgage that secured the
Mortgage Loan, an instrument of satisfaction (or assignment of mortgage without
recourse) regarding the Mortgaged Property subject to the Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of such
payment, it being understood and agreed that no expenses incurred in connection
with such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of the Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release within five (5) Business Days the
related Mortgage File held in its possession or control to the Servicer. Such
trust receipt shall obligate the Servicer to return the Mortgage File to the
Custodian on behalf of the Trustee, when the need therefor by the Servicer no
longer exists unless the Mortgage Loan shall be liquidated, in which case, upon
receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the Mortgage File shall be released by the Custodian, on behalf of
the Trustee, to the Servicer.
Notwithstanding the foregoing, in connection with a Principal Prepayment
in full of any Mortgage Loan, the Master Servicer may request release of the
related Mortgage File from the Custodian, in accordance with the provisions of
the Custodial Agreement, in the event the Servicer fails to do so.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer, any court pleadings, requests for trustee's
sale or other documents prepared and delivered to the Trustee and reasonably
acceptable to it and necessary to the foreclosure or trustee's sale in respect
of a Mortgaged Property or to any legal action brought to obtain judgment
against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the
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termination of such a lien upon completion of the foreclosure or trustee's sale.
So long as no Servicer Event of Default shall have occurred and be continuing,
the Servicer shall have the right to execute any and all such court pleadings,
requests and other documents as attorney-in-fact for, and on behalf of the
Trustee.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to the Servicing Fee with respect to each Mortgage Loan serviced by it
payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.22. In addition, the Servicer shall be entitled to recover
unpaid Servicing Fees out of Insurance Proceeds or Liquidation Proceeds to the
extent permitted by Section 3.09(a)(iii) and out of amounts derived from the
operation and sale of an REO Property to the extent permitted by Section 3.21.
The right to receive the Servicing Fee may not be transferred in whole or in
part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement to the extent permitted
herein.
Additional servicing compensation in the form of assumption fees, late
payment charges and other miscellaneous fees (other than Prepayment Charges)
shall be retained by the Servicer only to the extent such fees or charges are
received by the Servicer. The Servicer shall also be entitled pursuant to
Section 3.09(a)(iv) to withdraw from the Collection Account and pursuant to
Section 3.21(b) to withdraw from any REO Account, as additional servicing
compensation, interest or other income earned on deposits therein, subject to
Section 3.10. In addition, the Servicer shall be entitled to retain or withdraw
from the Collection Account, pursuant to Section 3.09(a)(x), any Prepayment
Interest Excess with respect to the Mortgage Loans serviced by it as additional
servicing compensation. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.16. Collection Account Statements.
Upon request, not later than fifteen days after each Distribution Date,
the Servicer shall forward to the Master Servicer, the Securities Administrator,
the Trustee and the Depositor a statement prepared by the institution at which
the Collection Account is maintained setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.08(a) and each category of withdrawal specified in Section 3.09.
Copies of such statement and any similar statements provided by the Servicer
shall be provided by the Securities Administrator to any Certificateholder and
to any Person identified to the Securities Administrator as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Securities
Administrator.
SECTION 3.17. Statement as to Compliance.
Not later than March 15th of each calendar year commencing in 2006, the
Servicer shall deliver to the Trustee, the Master Servicer and the Depositor an
Officers' Certificate in a form acceptable for filing with the Securities and
Exchange Commission as an exhibit to Form 8-K or other required form (upon which
the Master Servicer can conclusively
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rely in connection with its obligations under Section 5.06) stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during
the preceding year and of performance under this Agreement has been made under
such officers' supervision and (ii) to the best of such officer's knowledge,
based on such review, the 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
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder, upon request at the expense of
the requesting party, provided such statement is delivered by the Servicer to
the Trustee.
SECTION 3.18. Independent Public Accountants' Servicing Report.
Not later than March 15th of each calendar year commencing in 2006, the
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report in
a form acceptable for filing with the Securities and Exchange Commission as an
exhibit to Form 10-K or other required form stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Servicer which includes an assertion that the Servicer has complied with certain
minimum residential mortgage loan servicing standards, identified in the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated and such firm has determined that the Servicer
has complied in all material respects, subject to such exceptions and other
qualifications that may be appropriate. Immediately upon receipt of such report,
the Servicer shall furnish a copy of such report to the Master Servicer, the
Trustee and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the expense of the
requesting party, provided that such statement is delivered by the Servicer to
the Trustee.
SECTION 3.19. Annual Certification.
(a) The Servicer shall deliver to the Master Servicer, on or before
March 15th of each calendar year beginning in 2006 (or, if any such day is not a
Business Day, the immediately preceding Business Day) or such alternative date
reasonably specified by the Master Servicer which shall occur not later than 15
days prior to the date any Form 10-K is required to be filed with the Commission
in connection with the transactions contemplated by this Agreement, a
certification in the form attached hereto as Exhibit C. Such certification shall
be signed by the senior officer in charge of servicing of the Servicer. In
addition, the Servicer shall provide such other information with respect to the
related Mortgage Loans and the servicing and administration thereof within the
control of the Servicer which shall be required to enable the Master Servicer to
comply with the reporting requirements of the Securities and Exchange Act of
1934, as amended, pursuant to Section 5.06 hereof.
(b) The Servicer shall indemnify and hold harmless the Master
Servicer, the Securities Administrator, the Trustee, the Depositor and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or
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based upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.19 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith. Such
indemnity shall survive the termination or resignation of the parties hereto or
the termination of this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator, the Trustee and the Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer, the
Securities Administrator, the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor in such proportion as is
appropriate to reflect the relative fault of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor on the one hand and the Servicer on
the other in connection with a breach of the Servicer's obligations under this
Section 3.19.
SECTION 3.20. Access to Certain Documentation.
The Servicer shall provide to the Office of Thrift Supervision, the FDIC,
and any other federal or state banking or insurance regulatory authority that
may exercise authority over any Certificate Owner, access to the documentation
regarding the related Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it. Nothing in this Section 3.20 shall limit the
obligation of the Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section. Nothing in this
Section 3.20 shall require the Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual course of
business. The Servicer shall not be required to make copies of or ship documents
to any Person unless provisions have been made for the reimbursement of the
costs thereof.
SECTION 3.21. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property related to a
Mortgage Loan shall be taken in the name of the Trustee, or its nominee, on
behalf of the Trust Fund and for the benefit of the Certificateholders. The
Servicer, on behalf of REMIC I, shall either sell any REO Property by the close
of the third calendar year following the calendar year in which REMIC I acquires
ownership of such REO Property for purposes of Section 860(a)(8) of the Code or
request from the Internal Revenue Service, no later than 60 days before the day
on which the three-year grace period would otherwise expire an extension of the
three-year grace period, unless the Servicer had delivered to the Trustee an
Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by REMIC I of such REO Property subsequent to three years after
its acquisition will not result in the imposition on any Trust REMIC created
hereunder of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause any Trust REMIC hereunder to fail to qualify as a
REMIC under Federal law at any time that any Certificates are outstanding. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC created hereunder of any "income from
non-permitted assets"
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within the meaning of Section 860F(a)(2)(B) of the Code, or any "net income from
foreclosure property" which is subject to taxation under the REMIC Provisions.
(b) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain with
respect to REO Properties an account held in trust for the Trustee, on behalf of
the Trust Fund and for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. The Servicer shall be permitted
to allow the Collection Account to serve as the REO Account, subject to the
maintenance of separate ledgers for each REO Property. The Servicer shall be
entitled to retain or withdraw any interest income paid on funds deposited in
the related REO Account.
(c) The Servicer shall have full power and authority, subject only to
the specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property related to a Mortgage Loan serviced
by it as are consistent with the manner in which the Servicer manages and
operates similar property owned by it or any of its Affiliates, all on such
terms and for such period as the Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Servicer shall deposit, or
cause to be deposited in the clearing account in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage loan
servicing activities on a daily basis, and in no event more than one Business
Day after the Servicer's receipt thereof, and shall thereafter deposit in the
REO Account, in no event more than two Business Days after the deposit of good
funds into the clearing account, all revenues received by it with respect to an
REO Property related to a Mortgage Loan serviced by it and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to
an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Servicer shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, the Servicer would make such advances if the Servicer owned the REO
Property and if in the Servicer's judgment, the payment of such amounts will be
recoverable from the rental or sale of the REO Property.
Subject to compliance with applicable laws and regulations as shall at
any time be in force, and notwithstanding the foregoing, the Servicer, on behalf
of the Trust Fund, shall not:
(iv) enter into, renew or extend any New Lease with respect to
any REO Property, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
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(v) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(vi) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such building
or other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of Section 856(e)(4)(B) of
the Code; or
(vii) allow any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust
Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Servicer and the Trustee, to the effect that such action will
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code at any time that it is held by
REMIC I, in which case the Servicer may take such actions as are specified in
such Opinion of Counsel.
The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(viii) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ix) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Servicer as soon as practicable,
but in no event later than thirty days following the receipt thereof by
such Independent Contractor;
(x) none of the provisions of this Section 3.21(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Servicer of any of its duties
and obligations to the Trustee on behalf of the Trust Fund and for the
benefit of the Certificateholders with respect to the operation and
management of any such REO Property; and
(xi) the Servicer shall be obligated with respect thereto to the
same extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. The Servicer shall be solely liable for all fees owed by
it to any such Independent Contractor, irrespective of whether the Servicer's
compensation pursuant to Section 3.15 is sufficient to pay such fees. Any such
agreement shall include a provision that such agreement may be immediately
terminated by the Trustee (as successor Servicer) or any other successor
Servicer (including the Master Servicer) without fee,
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in the event the Servicer shall for any reason, no longer be the Servicer of the
related Mortgage Loans (including termination due to a Servicer Event of
Default).
(d) In addition to the withdrawals permitted under Section 3.21(c),
the Servicer may from time to time make withdrawals from the REO Account for any
REO Property: (i) to pay itself unpaid Servicing Fees in respect of the related
Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer for unreimbursed
Servicing Advances and Advances made in respect of such REO Property or the
related Mortgage Loan. On the Servicer Remittance Date, the Servicer shall
withdraw from each REO Account maintained by it and deposit into the
Distribution Account in accordance with Section 3.08(d)(ii), for distribution on
the related Distribution Date in accordance with Section 5.01, the income from
the related REO Property received during the prior calendar month, net of any
withdrawals made pursuant to Section 3.21(c) or this Section 3.21(d).
(e) Subject to the time constraints set forth in Section 3.21(a), each
REO Disposition shall be carried out by the Servicer at such price and upon such
terms and conditions as the Servicer shall deem necessary or advisable, as shall
be normal and usual in accordance with Accepted Servicing Practices.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Servicer as provided above, shall be
deposited in the Distribution Account in accordance with Section 3.08(d)(ii) on
the Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance with Section 5.01.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Servicer shall file information returns (and shall provide a
certification of a Servicing Officer to the Master Servicer that such filings
have been made) with respect to the receipt of mortgage interest received in a
trade or business, reports of foreclosures and abandonments of any Mortgaged
Property and cancellation of indebtedness income with respect to any Mortgaged
Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
SECTION 3.22. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls; Relief Act Interest Shortfalls.
The Servicer shall deliver to the Securities Administrator for deposit
into the Distribution Account on or before 12:00 noon New York time on the
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate amount of the Prepayment Interest Shortfalls attributable to
prepayments in full on the related Mortgage Loans for the related Distribution
Date resulting solely from voluntary Principal Prepayments received by the
Servicer during the related Prepayment Period and (ii) the aggregate amount of
the related Servicing Fees payable to the Servicer on such Distribution Date
with respect to the related Mortgage Loans. The Servicer shall not have the
right to reimbursement for any amounts remitted to the Securities Administrator
in respect of this Section 3.22. The Servicer shall not be obligated to pay the
amounts set forth in this Section 3.22 with respect to shortfalls resulting from
the application of the Relief Act.
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SECTION 3.23. Obligations of the Servicer in Respect of Mortgage Rates
and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Servicer in a manner not consistent with the terms of the related Mortgage
Note and this Agreement, the related Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Securities Administrator for
deposit in the Distribution Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee, the
Securities Administrator, the Master Servicer, the Depositor and any successor
Servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement. Notwithstanding the foregoing, this
Section 3.23 shall not limit the ability of the Servicer to seek recovery of any
such amounts from the related Mortgagor under the terms of the related Mortgage
Note and Mortgage, to the extent permitted by applicable law.
SECTION 3.24. Reserve Fund.
(a) No later than the Closing Date, the Securities Administrator shall
establish and maintain a separate, segregated trust account entitled, "Reserve
Fund, ▇▇▇▇▇ Fargo Bank, N.A., in trust for the registered holders of ACE
Securities Corp. Home Equity Loan Trust, Series 2005-RM1, Asset Backed
Pass-Through Certificates." On the Closing Date, the Depositor will deposit, or
cause to be deposited, into the Reserve Fund $1,000. In addition, the amount
deposited in the Reserve Fund shall be increased by any payments received by the
Securities Administrator under the Group I Cap Contract and deposited into
Reserve Fund for the benefit of the Class A-1 Certificates, Mezzanine
Certificates and the Class B Certificates and under the Group II Cap Contract
and deposited in the Reserve Fund for the benefit of the Class A-2 Certificates,
the Mezzanine Certificates and the Class B Certificates.
(b) On each Distribution Date, the Securities Administrator shall
deposit into the Reserve Fund the amounts described in Section 5.01(a)(7)(vi),
rather than distributing such amounts to the Class CE Certificateholders, and
Section 5.01(a)(7)(vii). On each such Distribution Date, the Securities
Administrator shall hold all such amounts for the benefit of the Holders of the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates
and will distribute such amounts to the Holders of the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates, in the amounts and
priorities set forth in Section 5.01(a). If no Net WAC Rate Carryover Amounts
are payable on a Distribution Date, the Securities Administrator shall deposit,
into the Reserve Fund on behalf of the Class CE Certificateholders, from amounts
otherwise distributable to the Class CE Certificateholders, an amount such that
when added to other amounts already on deposit in the Reserve Fund, the
aggregate amount on deposit therein is equal to $1,000.
(c) For federal and state income tax purposes, the Class CE
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000) and any amounts paid to the Reserve Fund from the Cap Contracts shall
be treated as amounts distributed by REMIC II to the Holders of the Class CE
Certificates. Upon the termination of the Trust Fund, or the payment in full of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, all amounts
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remaining on deposit in the Reserve Fund will be released by the Trust Fund and
distributed to the Class CE Certificateholders or their designees. The Reserve
Fund will be part of the Trust Fund but not part of any REMIC and any payments
to the Holders of the Class A Certificates, the Mezzanine Certificates or the
Class B Certificates of Net WAC Rate Carryover Amounts will not be payments with
respect to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).
(d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that its agreement to such action by the Securities Administrator is given for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by such acceptance.
(e) At the direction of the Holders of a majority in Percentage
Interest in the Class CE Certificates, the Securities Administrator shall direct
any depository institution maintaining the Reserve Fund to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Securities Administrator or an Affiliate manages or advises such investment,
and (ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the Reserve Fund. In no event shall the
Securities Administrator be liable for any investments made pursuant to this
clause (e). If the Holders of a majority in Percentage Interest in the Class CE
Certificates fail to provide investment instructions, funds on deposit in the
Reserve Fund shall be held uninvested by the Securities Administrator without
liability for interest or compensation.
(f) For federal tax return and information reporting, the right of the
Class A Certificateholders, the Mezzanine Certificateholders and Class B
Certificateholders to receive payments from the Reserve Fund in respect of any
Net WAC Rate Carryover Amount shall be assigned a value of $80,000 with respect
to Certificates covered by the Group I Cap Contract and $32,000 with respect to
Certificates covered by the Group II Cap Contract.
SECTION 3.25. Advance Facility.
(a) Notwithstanding anything to the contrary contained herein, (i) the
Servicer is hereby authorized to enter into an advance facility ("Advance
Facility") but no more than two Advance Facilities without the prior written
consent of the Trustee, which consent shall not be unreasonably withheld, under
which (A) the related Servicer sells, assigns or pledges to an advancing person
(an "Advance Financing Person") its rights under this Agreement to be reimbursed
for any P&I Advances or Servicing Advances and/or (B) an Advance Financing
Person agrees to finance some or all P&I Advances or Servicing Advances required
to be made by the Servicer pursuant to this Agreement and (ii) the Servicer is
hereby authorized to assign its rights to the Servicing Fee (which rights shall
terminate upon the resignation, termination or removal of the Servicer pursuant
to the terms of this Agreement); it being understood that neither
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the Trust Fund nor any party hereto shall have a right or claim (including
without limitation any right of offset) to any amounts for reimbursement of P&I
Advances or Servicing Advances so assigned or to the portion of the Servicing
Fee so assigned. Subject to the provisions of the first sentence of this Section
3.25(a), no consent of the Depositor, Trustee, Master Servicer,
Certificateholders or any other party is required before the Servicer may enter
into an Advance Facility, but the Servicer shall provide notice to the
Depositor, Master Servicer and the Trustee of the existence of any such Advance
Facility promptly upon the consummation thereof stating (a) the identity of the
Advance Financing Person and (b) the identity of any Person ("Servicer's
Assignee") who has the right to receive amounts in reimbursement of previously
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances. Notwithstanding the existence
of any Advance Facility under which an advancing person agrees to finance P&I
Advances and/or Servicing Advances on the Servicer's behalf, such Servicer shall
remain obligated pursuant to this Agreement to make P&I Advances and Servicing
Advances pursuant to and as required by this Agreement, and shall not be
relieved of such obligations by virtue of such Advance Facility.
(b) Reimbursement amounts ("Advance Reimbursement Amounts") shall
consist solely of amounts in respect of P&I Advances and/or Servicing Advances
made with respect to the related Mortgage Loans for which the Servicer would be
permitted to reimburse itself in accordance with this Agreement, assuming the
Servicer had made the related P&I Advance(s) and/or Servicing Advance(s).
(c) The Servicer shall maintain and provide to any successor Servicer
(with, upon request, a copy to the Trustee) a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any advancing person. The successor Servicer shall be entitled to
rely on any such information provided by the predecessor Servicer, and the
successor Servicer shall not be liable for any errors in such information.
(d) Reimbursement amounts distributed with respect to each Mortgage
Loan shall be allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" (FIFO) basis. The documentation establishing any Advance
Facility shall require the Servicer to provide to the related advancing person
or its designee loan-by-loan information with respect to each such reimbursement
amount distributed to such advancing person or Advance Facility trustee on each
Distribution Date, to enable the advancing person or Advance Facility trustee to
make the FIFO allocation of each such reimbursement amount with respect to each
Mortgage Loan. The Servicer shall remain entitled to be reimbursed by the
advancing person or Advance Facility trustee for all P&I Advances and Servicing
Advances funded by the Servicer to the extent the related rights to be
reimbursed therefor have not been sold, assigned or pledged to an advancing
person.
(e) Any amendment to this Section 3.25 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.25, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, and the related Servicer without the consent
of any Certificateholder, notwithstanding anything to the contrary in this
Agreement, provided, that the Trustee has been provided an Opinion of Counsel
that such amendment is authorized hereunder and has no material adverse effect
on the Certificateholders, which opinion shall be an expense of the party
requesting such opinion but in any case shall not
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be an expense of the Trustee or the Trust Fund; provided, further, that the
amendment shall not be deemed to adversely affect in any material respect the
interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency (instead of obtaining an Opinion of
Counsel to such effect) stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such rating letter in and
of itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Prior to entering into an Advance Facility, the
Servicer shall notify the lender under such facility in writing that: (a) the
P&I Advances and/or Servicing Advances financed by and/or pledged to the lender
are obligations owed to the Servicer on a non-recourse basis payable only from
the cash flows and proceeds received under this Agreement for reimbursement of
P&I Advances and/or Servicing Advances only to the extent provided herein, and
neither the Master Servicer, the Securities Administrator, the Trustee nor the
Trust are otherwise obligated or liable to repay any P&I Advances and/or
Servicing Advances financed by the lender; (b) the Servicer will be responsible
for remitting to the lender the applicable amounts collected by it as Servicing
Fees and as reimbursement for P&I Advances and/or Servicing Advances funded by
the lender, as applicable, subject to the restrictions and priorities created in
this Agreement; and (c) neither the Master Servicer, the Securities
Administrator nor the Trustee shall have any responsibility to calculate any
amount payable under an Advance Facility or to track or monitor the
administration of the financing arrangement between the Servicer and the lender
or the payment of any amount under an Advance Facility.
(f) The Servicer shall indemnify the Master Servicer, the Securities
Administrator, the Trustee and the Trust Fund for any cost, liability or expense
relating to the Advance Facility including, without limitation, a claim, pending
or threatened, by an Advance Financing Person.
SECTION 3.26. Servicer Indemnification.
The Servicer agrees to indemnify the Trustee, Master Servicer and the
Securities Administrator, from, and hold the Trustee, Master Servicer and the
Securities Administrator harmless against, any loss, liability or expense
(including reasonable attorney's fees and expenses) incurred by any such Person
by reason of the Servicer's willful misfeasance, bad faith or gross negligence
in the performance of its duties under this Agreement or by reason of the
Servicer's reckless disregard of its obligations and duties under this
Agreement. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of Servicer, the Trustee, the Master
Servicer and the Securities Administrator. Any payment hereunder made by the
Servicer to any such Person shall be from the Servicer's own funds, without
reimbursement from REMIC I therefor.
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ARTICLE IV
ADMINISTRATION AND MASTER SERVICING
OF THE MORTGAGE LOANS BY THE MASTER SERVICER
SECTION 4.01. Master Servicer.
The Master Servicer shall, from and after the Closing Date supervise,
monitor and oversee the obligations of the Servicer under this Agreement and the
Interim Servicers under the Servicing Agreements to service and administer the
related Mortgage Loans in accordance with the terms of this Agreement and the
Servicing Agreements and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with the
Servicer and the Interim Servicers as necessary from time-to-time to carry out
the Master Servicer's obligations hereunder, shall receive, review and evaluate
all reports, information and other data provided to the Master Servicer by the
Servicer and the Interim Servicers and shall cause the Servicer and the Interim
Servicers to perform and observe the covenants, obligations and conditions to be
performed or observed by the Servicer under this Agreement or the Interim
Servicers under the Servicing Agreements. The Master Servicer shall
independently and separately monitor the Servicer's and the Interim Servicers'
servicing activities with respect to each related Mortgage Loan, reconcile the
results of such monitoring with such information provided in the previous
sentence on a monthly basis and coordinate corrective adjustments to the
Servicer's or the Interim Servicers' and Master Servicer's records, and based on
such reconciled and corrected information, prepare the statements specified in
Section 5.03 and any other information and statements required to be provided by
the Master Servicer hereunder. The Master Servicer shall reconcile the results
of its Mortgage Loan monitoring with the actual remittances of the Servicer or
the Interim Servicers to the Distribution Account pursuant to the terms hereof
based on information provided to the Master Servicer by the Servicer and the
Interim Servicers. Notwithstanding anything to the contrary herein, the Master
Servicer shall have no obligation to supervise, monitor or oversee the
performance of the Interim Servicers under the Servicing Agreements on or after
the related Servicing Transfer Date.
The Trustee shall furnish the Servicer, the related Interim Servicer and
the Master Servicer with any limited powers of attorney and other documents in
form as provided to it necessary or appropriate to enable the Servicer, the
related Interim Servicer and the Master Servicer to service and administer the
related Mortgage Loans and REO Property. The Trustee shall have no
responsibility for any action of the Master Servicer, the Servicer or the
related Interim Servicer pursuant to any such limited power of attorney and
shall be indemnified by the Master Servicer, the Servicer or the related Interim
Servicer, as applicable, for any cost, liability or expense incurred by the
Trustee in connection with such Person's misuse of any such power of attorney.
The Trustee, the Custodian and the Securities Administrator shall provide
access to the records and documentation in possession of the Trustee, the
Custodian or the Securities Administrator regarding the related Mortgage Loans
and REO Property and the servicing thereof to the Certificateholders, the FDIC,
and the supervisory agents and examiners of the FDIC, such
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access being afforded only upon reasonable prior written request and during
normal business hours at the office of the Trustee, the Custodian or the
Securities Administrator; provided, however, that, unless otherwise required by
law, none of the Trustee, the Custodian or the Securities Administrator shall be
required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Trustee,
the Custodian and the Securities Administrator shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's, the
Custodian's or the Securities Administrator's actual costs.
The Trustee shall execute and deliver to the Servicer, the related
Interim Servicer or the Master Servicer upon request any court pleadings,
requests for trustee's sale or other documents necessary or desirable to (i) the
foreclosure or trustee's sale with respect to a Mortgaged Property; (ii) any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or any other Mortgage Loan Document; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or any other Mortgage Loan Document or otherwise available at
law or equity.
SECTION 4.02. REMIC-Related Covenants.
For as long as each REMIC shall exist, the Trustee and the Securities
Administrator shall act in accordance herewith to treat such REMIC as a REMIC,
and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the Servicer, the related Interim Servicer or the
Master Servicer to assure such continuing treatment. In particular, the Trustee
shall not (a) sell or permit the sale of all or any portion of the Mortgage
Loans or of any investment of deposits in an Account unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received a REMIC Opinion prepared at the expense of the Trust Fund;
and (b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.03 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a Opinion of
Counsel stating that such contribution will not result in an Adverse REMIC Event
as defined in Section 11.01(f).
SECTION 4.03. Monitoring of Servicer.
(a) The Master Servicer shall be responsible for monitoring the
compliance by the Servicer with their respective duties under this Agreement and
the Interim Servicers with their respective duties under the Servicing
Agreements. In the review of the Servicer's or the related Interim Servicer's
activities, the Master Servicer may rely upon an officer's certificate of the
Servicer or the related Interim Servicer with regard to the Servicer's or
Interim Servicer's compliance with the terms of this Agreement or the related
Servicing Agreement, as applicable. In the event that the Master Servicer, in
its judgment, determines that the Servicer or the related Interim Servicer
should be terminated in accordance with the terms hereof or the terms of the
related Servicing Agreement or that a notice should be sent pursuant to the
terms hereof or the terms of the related Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute a Servicer Event of
Default, or an event of default under the related Servicing Agreement, the
Master Servicer shall notify the Servicer, the related Interim Servicer, the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.
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(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under this
Agreement and the Interim Servicers under the Servicing Agreements and shall, in
the event that the Servicer fails to perform its obligations in accordance with
this Agreement, subject to this Section and Article VIII, the Trustee shall
terminate the rights and obligations of the Servicer hereunder in accordance
with the provisions of Article VIII. In the event that an Interim Servicer fails
to perform its obligations in accordance with the related Servicing Agreement,
the Master Servicer shall terminate the rights and obligations of the Interim
Servicer, as servicer, in accordance with the related Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) The Master Servicer shall be entitled to be reimbursed by the
Servicer or the related Interim Servicer, as applicable (or from amounts on
deposit in the Distribution Account if the Servicer or the related Interim
Servicer is unable to fulfill its obligations hereunder or under the related
Servicing Agreement) for all reasonable out-of-pocket or third party costs
associated with the transfer of servicing from the predecessor Servicer (or if
the predecessor Servicer is the Master Servicer, from the Servicer immediately
preceding the Master Servicer) or the related Interim Servicer, including
without limitation, any reasonable out-of-pocket or third party costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer to service the related Mortgage
Loans properly and effectively, upon presentation of reasonable documentation of
such costs and expenses.
(d) The Master Servicer shall require the Servicer and the Interim
Servicers to comply with the remittance requirements and other obligations set
forth in this Agreement and the Servicing Agreements.
(e) If the Master Servicer acts as successor to the Servicer or an
Interim Servicer, it will not assume liability for the representations and
warranties of the terminated Servicer or Interim Servicer.
SECTION 4.04. Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
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SECTION 4.05. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the Servicer or the related Interim
Servicer to) knowingly or intentionally take any action, or fail to take (or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause REMIC I or
REMIC II to fail to qualify as a REMIC or result in the imposition of a tax upon
the Trust Fund (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action will not cause REMIC I or REMIC II to
fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I or
REMIC II, as the case may be. The Trustee shall furnish the Master Servicer,
upon written request from a Servicing Officer, with any powers of attorney
prepared and delivered to it and reasonably acceptable to it by empowering the
Master Servicer, the Servicer or the related Interim Servicer to execute and
deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with this Agreement or
the Servicing Agreements, and the Trustee shall execute and deliver such other
documents prepared and delivered to it and reasonably acceptable to it, as the
Master Servicer, the Servicer or the related Interim Servicer may request, to
enable the Master Servicer to master service and administer the related Mortgage
Loans and carry out its duties hereunder, in each case in accordance with
Accepted Master Servicing Practices (and the Trustee shall have no liability for
misuse of any such powers of attorney by the Master Servicer, the Servicer or
the related Interim Servicer and shall be indemnified by the Master Servicer,
the Servicer or the related Interim Servicer, as applicable, for any cost,
liability or expense incurred by the Trustee in connection with such Person's
use or misuse of any such power of attorney). If the Master Servicer or the
Trustee has been advised that it is likely that the laws of the state in which
action is to be taken prohibit such action if taken in the name of the Trustee
or that the Trustee would be adversely affected under the "doing business" or
tax laws of such state if such action is taken in its name, the Master Servicer
shall join with the Trustee in the appointment of a co-trustee pursuant to
Section 9.10. In the performance of its duties hereunder, the Master Servicer
shall be an independent contractor and shall not, except in those instances
where it is taking action in the name of the Trustee, be deemed to be the agent
of the Trustee.
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SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements.
To the extent Mortgage Loans contain enforceable due-on-sale clauses, the
Master Servicer shall cause the Servicer or the related Interim Servicer, as
applicable, to enforce such clauses in accordance with this Agreement or the
related Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement or the related Servicing Agreement and, as a consequence, a
Mortgage Loan is assumed, the original Mortgagor may be released from liability
in accordance with this Agreement or the related Servicing Agreement.
SECTION 4.07. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit to the Trustee or Custodian
such documents and instruments coming into the possession of the Master Servicer
from time to time as are required by the terms hereof to be delivered to the
Trustee or Custodian. Any funds received by the Master Servicer in respect of
any Mortgage Loan or which otherwise are collected by the Master Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall
be remitted to the Securities Administrator for deposit in the Distribution
Account. The Master Servicer shall, and, subject to Section 3.20 of this
Agreement or, to the extent provided therein, the related Servicing Agreement,
shall cause the Servicer or the related Interim Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Trustee, its
agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be remitted to the Trustee for deposit in the
Distribution Account.
SECTION 4.08. Standard Hazard Insurance and Flood Insurance Policies.
For each Mortgage Loan, the Master Servicer shall enforce the obligation
of the Servicer under this Agreement or each Interim Servicer under the
Servicing Agreements to maintain or cause to be maintained standard fire and
casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement or the Servicing Agreements. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in Section 3.11 of the Agreement or the
eligibility requirements set forth in the Servicing Agreements and that no
earthquake or other additional insurance is to be required of any Mortgagor or
to be maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
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SECTION 4.09. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall enforce the Servicer's obligations under this
Agreement or each Interim Servicer's obligations under the Servicing Agreements
to prepare and present on behalf of the Trustee and the Certificateholders all
claims under the Insurance Policies and take such actions (including the
negotiation, settlement, compromise or enforcement of the insured's claim) as
shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the Master Servicer in respect of such policies, bonds or contracts
shall be promptly remitted to the Trustee for deposit in the Distribution
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable insurance policy need not be so or remitted.
SECTION 4.10. Maintenance of Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit the Servicer or the
related Interim Servicer to take (to the extent such action is prohibited by
this Agreement or the related Servicing Agreement), any action that would result
in noncoverage under any primary mortgage insurance policy of any loss which,
but for the actions of the Master Servicer, the Servicer or the related Interim
Servicer, as applicable, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause the Servicer or the related
Interim Servicer to keep in force and effect (to the extent that the Mortgage
Loan requires the Mortgagor to maintain such insurance), primary mortgage
insurance applicable to each Mortgage Loan in accordance with the provisions of
this Agreement or the related Servicing Agreement. The Master Servicer shall
not, and shall not permit the Servicer or the related Interim Servicer to,
cancel or refuse to renew any primary mortgage insurance policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement or the related Servicing Agreement.
(b) The Master Servicer agrees to cause the Servicer or the related
Interim Servicer to present, on behalf of the Trustee and the
Certificateholders, claims to the insurer under any primary mortgage insurance
policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any primary mortgage insurance policies
respecting defaulted Mortgage Loans.
SECTION 4.11. Trustee to Retain Possession of Certain Insurance
Policies and Documents.
The Trustee or the applicable Custodian, shall retain possession and
custody of the originals (to the extent available) of any primary mortgage
insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
Servicer and the related Interim Servicer have otherwise fulfilled their
respective obligations under this Agreement and the related Servicing Agreement
the Trustee or the Custodian shall also retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions of this
Agreement and the Custodial Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee or the Custodian, upon the
execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and
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such other documents or instruments that constitute Mortgage Loan Documents that
come into the possession of the Master Servicer from time to time.
SECTION 4.12. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall cause the Servicer or the related Interim
Servicer to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments, all in accordance with this
Agreement or the related Servicing Agreement.
SECTION 4.13. Compensation for the Master Servicer.
As compensation for the activities of the Master Servicer hereunder, the
Master Servicer shall be entitled to the Master Servicing Fee and the income
from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The Master Servicing Fee
payable to the Master Servicer in respect of any Distribution Date shall be
reduced in accordance with Section 4.18. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.
SECTION 4.14. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause the Servicer or the related
Interim Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement or the related Servicing
Agreement. Further, the Master Servicer shall cause the Servicer or the related
Interim Servicer to sell any REO Property prior to three years after the end of
the calendar year of its acquisition by REMIC I unless (i) the Trustee shall
have been supplied by the Servicer or the related Interim Servicer with an
Opinion of Counsel to the effect that the holding by the Trust Fund of such REO
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of any REMIC hereunder as defined in
section 860F of the Code or cause any REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel) or (ii) the Servicer or the related
Interim Servicer shall have applied for, prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the Servicer or the related Interim Servicer to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement or the related Servicing Agreement in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall cause the Servicer or the related
Interim Servicer to deposit all funds collected and received in connection with
the operation of any REO
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Property in the REO Account or in the account delegated for such amounts under
the related Servicing Agreement.
SECTION 4.15. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 15 of each year, commencing on March 15, 2006, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Master Servicer has
failed to perform any of its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
SECTION 4.16. Annual Independent Accountant's Servicing Report.
If the Master Servicer has, during the course of any calendar year,
directly serviced any of the Mortgage Loans, then the Master Servicer at its
expense shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Seller on or before March 15 of each year, commencing on March 15, 2006 to the
effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
▇▇▇▇▇▇▇ Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by ▇▇▇▇▇▇▇ Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
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Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.
SECTION 4.17. UCC.
The Depositor agrees to file continuation statements for any Uniform
Commercial Code financing statements which the Seller has informed the Depositor
were filed on the Closing Date in connection with the Trust. The Depositor shall
file any financing statements or amendments thereto required by any change in
the Uniform Commercial Code.
SECTION 4.18. Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
In the event of any Prepayment Interest Shortfalls, the Master Servicer
shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicer or the related Interim Servicer with respect
to Prepayment Interest Shortfalls attributable to Principal Prepayments in full
on the Mortgage Loans for the related Distribution Date, and not so paid by the
Servicer or the related Interim Servicer and (ii) the aggregate amount of the
Master Servicing Fee payable to the Master Servicer for such Distribution Date
in accordance with Secction 4.13, without reimbursement therefor.
SECTION 4.19. Prepayment Penalty Verification.
On or prior to each Servicer Remittance Date, the Servicer shall provide
in an electronic format acceptable to the Master Servicer the data necessary for
the Master Servicer to perform its verification duties set forth in this Section
4.19. The Master Servicer or a third party reasonably acceptable to the Master
Servicer and the Depositor (the "Verification Agent") will perform such
verification duties and will use its best efforts to issue its findings in a
report (the "Verification Report") delivered to the Master Servicer and the
Depositor within ten (10) Business Days following the related Distribution Date;
provided, however, that if the Verification Agent is unable to issue the
Verification Report within ten (10) Business Days following the Distribution
Date, the Verification Agent may issue and deliver to the Master Servicer and
the Depositor the Verification Report upon the completion of its verification
duties. The Master Servicer shall forward the Verification Report to the
Servicer and shall notify the Servicer if the Master Servicer has determined
that the Servicer did not deliver the appropriate Prepayment Charge to the
Securities Administrator in accordance with this Agreement. Such written
notification from the Master Servicer shall include the loan number, prepayment
penalty code and prepayment penalty amount as calculated by the Master Servicer
or the Verification Agent, as applicable, of each Mortgage Loan for which there
is a discrepancy. If the Servicer agrees with the verified amounts, the Servicer
shall adjust the immediately succeeding Servicer Report and the amount remitted
to the Trustee with respect to prepayments accordingly. If the Servicer
disagrees with the determination of the Master Servicer, the Servicer shall,
within five (5) Business Days of its receipt of the Verification Report, notify
the Master Servicer of such disagreement and provide the Master Servicer with
detailed information to support its position. The Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and the Servicer will indicate
the effect of
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such resolution on the related Servicer Report and shall adjust the amount
remitted with respect to prepayments on such Servicer Remittance Date
accordingly.
During such time as the Servicer and the Master Servicer are resolving
discrepancies with respect to the Prepayment Charges, no payments in respect of
any disputed Prepayment Charges will be remitted to the Securities Administrator
for deposit in the Distribution Account and the Master Servicer shall not be
obligated to deposit such payments, unless otherwise required pursuant to
Section 8.01 hereof. In connection with such duties, the Master Servicer shall
be able to rely solely on the information provided to it by the Servicer in
accordance with this Section. The Master Servicer shall not be responsible for
verifying the accuracy of any of the information provided to it by the Servicer.
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ARTICLE V
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 5.01. Distributions.
(a) (1) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates, in respect
of the Class R-I Interest, as the case may be:
(i) to Holders of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I
Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular
Interest I-LTB3, REMIC I Regular Interest I-LTZZ and REMIC I Regular
Interest I-LTP, PRO RATA, in an amount equal to (A) the Uncertificated
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates. Amounts
payable as Uncertificated Interest in respect of REMIC I Regular Interest
I-LTZZ shall be reduced when the REMIC I Overcollateralization Amount is
less than the REMIC I Required Overcollateralization Amount, by the
lesser of (x) the amount of such difference and (y) the Maximum I-LTZZ
Uncertificated Interest Deferral Amount and such amount will be payable
to the Holders of REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest I-LTB1, REMIC I Regular
Interest I-LTB2 and REMIC I Regular Interest I-LTB3 in the same
proportion as the Overcollateralization Increase Amount is allocated to
the Corresponding Certificates and the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ shall be increased by such amount;
(ii) to Holders of REMIC I Regular Interest I-LT1SUB, REMIC I
Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I
Regular Interest I-LT2GRP, and REMIC I Regular Interest I-LTXX, PRO RATA,
in an amount equal to (A) the Uncertificated Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates;
(iii) to the Holders of REMIC I Regular Interests, in an amount
equal to the remainder of the REMIC I Marker Allocation Percentage of the
available funds for such Distribution Date after the distributions made
pursuant to clause (i) above, allocated as follows:
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(A) 98.00% of such remainder to the Holders of REMIC I
Regular Interest I-LTAA, until the Uncertificated Balance of such
Uncertificated REMIC I Regular Interest is reduced to zero;
(B) 2.00% of such remainder, first, to the Holders of
REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest
I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I
Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I
Regular Interest I-LTM9, REMIC I Regular Interest I-LTB1, REMIC I
Regular Interest I-LTB2 and REMIC I Regular Interest I-LTB3, 1% of
and in the same proportion as principal payments are allocated to
the Corresponding Certificates, until the Uncertificated Balances
of such REMIC I Regular Interests are reduced to zero and second
to the Holders of REMIC I Regular Interest I-LTZZ, until the
Uncertificated Balance of such REMIC I Regular Interest is reduced
to zero;
(C) to the Holders of REMIC I Regular Interest I-LTP,
all Prepayment Charges and on the Distribution Date immediately
following the expiration of the latest Prepayment Charge as
identified on the Prepayment Charge Schedule or any Distribution
Date thereafter until $100 has been distributed pursuant to this
clause; then
(D) any remaining amount to the Holders of the Class R-I
Interest, in respect of the Class R-I Interest;
provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ,
respectively.
(iv) to the Holders of REMIC I Regular Interests, in an amount
equal to the remainder of the REMIC I Sub WAC Allocation Percentage of
available funds for such Distribution Date after the distributions made
pursuant to clause (ii) above, such that distributions of interest are
deemed to be made to the Holders of REMIC I Regular Interest I-LTISUB,
REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB,
REMIC I Regular Interest I-LT2GRP and REMIC I Regular Interest I-LTXX,
pro rata, in an amount equal to (A) the Uncertificated Interest for each
such REMIC I Regular Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates and such that distributions of principal shall be deemed to be made
to the REMIC I Regular Interests first, so as to keep the Uncertificated
Balance of each REMIC I Regular Interest ending with the designation
"GRP" equal to 0.01% of the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group; second, to each REMIC I Regular
Interest ending with the designation "SUB," so that the Uncertificated
Balance of each such REMIC I Regular Interest is equal to 0.01% of the
excess of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group over (y) the current Certificate
Principal Balance of the Class A Certificate in the related Loan Group
(except that if any such
113
excess is a larger number than in the preceding distribution period, the
least amount of principal shall be distributed to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC I Regular
Interest I-LTXX.
(v) Notwithstanding the distributions described in Section
5.01(a)(1), distributions of funds shall be made to Certificateholders
only in accordance with Section 5.01(2) through (7) and Section 5.01(b).
(2) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Group I Interest Remittance Amount and make the following
disbursements and transfers in the order of priority described below, in each
case to the extent of the Group I Interest Remittance Amount remaining for such
Distribution Date:
FIRST, concurrently, to the Holders of the Class A-1A Certificates and
Class A-1B Certificates, the Senior Interest Distribution Amount
allocable to each such Class, on a pro rata basis, based on the
entitlement of each such Class; and
SECOND, concurrently, to the Holders of the Class A-2A, Class A-2B and
Class A-2C Certificates, the Senior Interest Distribution Amount
allocable to each such Class, to the extent remaining unpaid after the
distribution of the Group II Interest Remittance Amount as set forth in
Section 5.01(a)(3) below on a pro rata basis, based on the entitlement of
each such Class.
(3) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Group II Interest Remittance Amount and make the following
disbursements and transfers in the order of priority described below, in each
case to the extent of the Group II Interest Remittance Amount remaining for such
Distribution Date:
FIRST, concurrently, to the Holders of the Class A-2A, Class A-2B and
Class A-2C Certificates, the Senior Interest Distribution Amount
allocable to each such Class, on a pro rata basis, based on the
entitlement of each such Class; and
SECOND, concurrently, to the Holders of the Class A-1A Certificates and
Class A-1B Certificates, the Senior Interest Distribution Amount
allocable to each such Class, to the extent remaining unpaid after the
distribution of the Group I Interest Remittance Amount as set forth in
Section 5.01(a)(2) above on a pro rata basis, based on the entitlement of
each such Class.
(4) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Group I Interest Remittance Amount, and the Group II
Interest Remittance Amount remaining after the distributions required by clauses
(2) and (3) above and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Group I
Interest Remittance Amount and Group II Interest Remittance Amount remaining for
such Distribution Date:
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sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8, Class M-9, Class B-1, Class B-2 and Class B-3
Certificates, in that order, the Interest Distribution Amount
allocable to each such Class.
(5) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Securities Administrator shall withdraw
from the Distribution Account to the extent on deposit therein an amount equal
to the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:
(vi) The Group I Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, to the Holders of the Class A-1A Certificates and Class
A-1B Certificates as follows:
(A) for each Distribution Date on which a Sequential Trigger Event
is not in effect for such Distribution Date, concurrently, to the
Holders of the Class A-1A Certificates and Class A-1B
Certificates, on a pro rata basis, based on the Certificate
Principal Balance of each such Class, until the Certificate
Principal Balance of each such Class has been reduced to zero; and
(B) for each Distribution Date on which a Sequential Trigger Event
is in effect for such Distribution Date, sequentially, to the
Holders of the Class A-1A Certificates and Class A-1B
Certificates, in that order, until the Certificate Principal
Balance of each such Class has been reduced to zero;
SECOND, sequentially, to the Holders of the Class A-2A, Class A-2B
and Class A-2C Certificates, in that order, after taking into
account the distribution of the Group II Principal Distribution
Amount as described in Section 5.01(a)(5)(ii) below, until the
Certificate Principal Balance of each such Class has been reduced
to zero.
(vii) The Group II Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, sequentially, to the Holders of the Class A-2A, Class A-2B
and Class A-2C Certificates, in that order, until the Certificate
Principal Balance of each such Class has been reduced to zero; and
SECOND, to the Holders of the Class A-1A Certificates and Class
A-1B Certificates after taking into account the distribution of
the Group I Principal Distribution Amount as described above in
Section 5.01(a)(5)(i) above as follows:
(A) for each Distribution Date on which a Sequential Trigger Event
is not in effect for such Distribution Date, concurrently, to the
Holders of the Class A-1A Certificates and Class A-1B
Certificates, on a pro rata basis, based on the
115
Certificate Principal Balance of each such Class, until the
Certificate Principal Balance of each such class has been reduced
to zero; and
(B) for each Distribution Date on which a Sequential Trigger Event
is in effect for such Distribution Date, sequentially, to the
Holders of the Class A-1A Certificates and Class A-1B
Certificates, in that order, until the Certificate Principal
Balance of each such Class has been reduced to zero.
(viii) The Group I Principal Distribution Amount and Group II
Principal Distribution Amount remaining after distributions pursuant to
Sections 5.01(a)(5)(i) and (ii) above shall be distributed in the
following order of priority:
sequentially, to the Holders of the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class B-1, Class B-2 and Class B-3 Certificates, in that
order, until the Certificate Principal Balance of each such Class
has been reduced to zero.
(6) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, the Securities Administrator
shall withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount and distribute to the Certificateholders the
following amounts, in the following order of priority:
(ix) The Group I Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, concurrenty, to the Holders of the Class A-1A Certificates and
Class A-1B Certificates, the Class A-1 Principal Distribution Amount, on
a pro rata basis, based on the Certificate Principal Balance of each such
Class, until the Certificate Principal Balance of each such Class has
been reduced to zero; and
SECOND, sequentially, to the Holders of the Class A-2A, Class A-2B and
Class A-2C Certificates, in that order, after taking into account the
distribution of the Group II Principal Distribution Amount pursuant to
Section 5.01(a)(6)(ii) below, up to an amount equal to the amount, if
any, of the Class A-2 Principal Distribution Amount remaining unpaid on
such Distribution Date, until the Certificate Principal Balance of each
such Class has been reduced to zero.
(x) The Group II Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, sequentially, to the Holders of the Class A-2A, Class A-2B and
Class A-2C Certificates, in that order, the Class A-2 Principal
Distribution Amount, until the Certificate Principal Balance of each such
Class has been reduced to zero; and
SECOND, concurrently, to the Holders of the Class A-1A Certificates and
Class A-1B Certificates, after taking into account the distribution of
the Group I Principal Distribution Amount pursuant to Section
5.01(a)(6)(i) above, up to an amount
116
equal to the amount, if any, of the Class A-1 Principal Distribution
Amount remaining unpaid on such Distribution Date, until the Certificate
Principal Balance of each such Class has been reduced to zero.
(xi) The Principal Distribution Amount remaining after
distributions pursuant to Sections 5.01(a)(6)(i) and (ii) above shall be
distributed in the following order of priority:
FIRST, to the Holders of the Class M-1 Certificates, the lesser of
(x) the remaining Principal Distribution Amount and (y) the Class
M-1 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-1 Certificates has been reduced to zero;
SECOND, to the Holders of the Class M-2 Certificates, the lesser
of (x) the excess of (i) the remaining Principal Distribution
Amount over (ii) the amounts distributed to the Holders of the
Class M-1 Certificates under clause first above, and (y) the Class
M-2 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-2 Certificates has been reduced to zero;
THIRD, to the Holders of the Class M-3 Certificates, the lesser of
(x) the excess of (i) the remaining Principal Distribution Amount
over (ii) the sum of the amounts distributed to the Holders of the
Class M-1 Certificates under clause first above and to the Holders
of the Class M-2 Certificates under clause second above, and (y)
the Class M-3 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced
to zero;
FOURTH, to the Holders of the Class M-4 Certificates, the lesser
of (x) the excess of (i) the remaining Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders
of the Class M-1 Certificates under clause first above, to the
Holders of the Class M-2 Certificates under clause second above
and to the Holders of the Class M-3 Certificates under clause
third above, and (y) the Class M-4 Principal Distribution Amount,
until the Certificate Principal Balance of the Class M-4
Certificates has been reduced to zero;
FIFTH, to the Holders of the Class M-5 Certificates, the lesser of
(x) the excess of (i) the remaining Principal Distribution Amount
over (ii) the sum of the amounts distributed to the Holders of the
Class M-1 Certificates under clause first above, to the Holders of
the Class M-2 Certificates under clause second above, to the
Holders of the Class M-3 Certificates under clause third above and
to the Holders of the Class M-4 Certificates under clause fourth
above, and (y) the Class M-5 Principal Distribution Amount, until
the Certificate Principal Balance of the Class M-5 Certificates
has been reduced to zero;
SIXTH, to the Holders of the Class M-6 Certificates, the lesser of
(x) the excess of (i) the remaining Principal Distribution Amount
over (ii) the sum of the amounts distributed to the Holders of the
Class M-1 Certificates under clause first above, to the Holders of
the Class M 2 Certificates under clause second above, to the
Holders of the Class M-3 Certificates under clause third above, to
the Holders of the Class M-4 Certificates under clause fourth
above and to the Holders of the
117
Class M-5 Certificates under clause fifth above, and (y) the Class
M-6 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-6 Certificates has been reduced to zero;
SEVENTH, to the Holders of the Class M-7 Certificates, the lesser
of (x) the excess of (i) the remaining Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders
of the Class M-1 Certificates under clause first above, to the
Holders of the Class M 2 Certificates under clause second above,
to the Holders of the Class M-3 Certificates under clause third
above, to the Holders of the Class M-4 Certificates under clause
fourth above, to the Holders of the Class M-5 Certificates under
clause fifth above and to the Holders of the Class M-6
Certificates under clause sixth above, and (y) the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-7 Certificates has been reduced to zero;
EIGHTH, to the Holders of the Class M-8 Certificates, the lesser
of (x) the excess of (i) the remaining Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders
of the Class M-1 Certificates under clause first above, to the
Holders of the Class M 2 Certificates under clause second above,
to the Holders of the Class M-3 Certificates under clause third
above, to the Holders of the Class M-4 Certificates under clause
fourth above, to the Holders of the Class M-5 Certificates under
clause fifth above, to the Holders of the Class M-6 Certificates
under clause sixth above and to the Holders of the Class M-7
Certificates under clause seventh above, and (y) the Class M-8
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-8 Certificates has been reduced to zero;
NINTH, to the Holders of the Class M-9 Certificates, the lesser of
(x) the excess of (i) the remaining Principal Distribution Amount
over (ii) the sum of the amounts distributed to the Holders of the
Class M-1 Certificates under clause first above, to the Holders of
the Class M 2 Certificates under clause second above, to the
Holders of the Class M-3 Certificates under clause third above, to
the Holders of the Class M-4 Certificates under clause fourth
above, to the Holders of the Class M-5 Certificates under clause
fifth above, to the Holders of the Class M-6 Certificates under
clause sixth above, to the Holders of the Class M-7 Certificates
under clause seventh above and to the Holders of the Class M-8
Certificates under clause eighth above, and (y) the Class M-9
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-9 Certificates has been reduced to zero;
TENTH, to the Holders of the Class B-1 Certificates, the lesser of
(x) the excess of (i) the remaining Principal Distribution Amount
over (ii) the sum of the amounts distributed to the Holders of the
Class M-1 Certificates under clause first above, to the Holders of
the Class M 2 Certificates under clause second above, to the
Holders of the Class M-3 Certificates under clause third above, to
the Holders of the Class M-4 Certificates under clause fourth
above, to the Holders of the Class M-5 Certificates under clause
fifth above, to the Holders of the Class M-6 Certificates
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under clause sixth above, to the Holders of the Class M-7
Certificates under clause seventh above, to the Holders of the
Class M-8 Certificates under clause eighth above and to the
Holders of the Class M-9 Certificates under clause ninth above,
and (y) the Class B-1 Principal Distribution Amount, until the
Certificate Principal Balance of the Class B-1 Certificates has
been reduced to zero;
ELEVENTH, to the Holders of the Class B-2 Certificates, the lesser
of (x) the excess of (i) the remaining Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders
of the Class M-1 Certificates under clause first above, to the
Holders of the Class M 2 Certificates under clause second above,
to the Holders of the Class M-3 Certificates under clause third
above, to the Holders of the Class M-4 Certificates under clause
fourth above, to the Holders of the Class M-5 Certificates under
clause fifth above, to the Holders of the Class M-6 Certificates
under clause sixth above, to the Holders of the Class M-7
Certificates under clause seventh above, to the Holders of the
Class M-8 Certificates under clause eighth above, to the Holders
of the Class M-9 Certificates under clause ninth above and to the
Holders of the Class B-1 Certificates under clause tenth above,
and (y) the Class B-2 Principal Distribution Amount, until the
Certificate Principal Balance of the Class B-2 Certificates has
been reduced to zero; and
TWELFTH, to the Holders of the Class B-3 Certificates, the lesser
of (x) the excess of (i) the remaining Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders
of the Class M-1 Certificates under clause first above, to the
Holders of the Class M 2 Certificates under clause second above,
to the Holders of the Class M-3 Certificates under clause third
above, to the Holders of the Class M-4 Certificates under clause
fourth above, to the Holders of the Class M-5 Certificates under
clause fifth above, to the Holders of the Class M-6 Certificates
under clause sixth above, to the Holders of the Class M-7
Certificates under clause seventh above, to the Holders of the
Class M-8 Certificates under clause eighth above, to the Holders
of the Class M-9 Certificates under clause ninth above, to the
Holders of the Class B-1 Certificates under clause tenth above,
and to the Holders of the Class B-2 Certificates under clause
eleventh above (y) the Class B-3 Principal Distribution Amount,
until the Certificate Principal Balance of the Class B-3
Certificates has been reduced to zero.
(7) On each Distribution Date, the Net Monthly Excess Cashflow (or, in
the case of clause (i) below, the Net Monthly Excess Cashflow exclusive of any
Overcollateralization Reduction Amount) shall be distributed as follows:
(xii) to the Holders of the Class or Classes of Certificates then
entitled to receive distributions in respect of principal, in an amount
equal to any Extra Principal Distribution Amount, payable to such Holders
in accordance with the priorities set forth in Section 5.01(b) below;
(xiii) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class B-1, Class B-2 and Class B-3 Certificates, in that order, in
an amount equal to the Interest Carry Forward Amount allocable to each
such Class;
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(xiv) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class B-1, Class B-2 and Class B-3 Certificates, in that order, in
an amount equal to the Allocated Realized Loss Amount allocable to each
such Class;
(xv) concurrently, to the Holders of the Class A Certificates,
in an amount equal to such Certificates' allocated share of any
Prepayment Interest Shortfalls on the related Mortgage Loans to the
extent not covered by payments pursuant to Section 3.22 or 4.18 of this
Agreement or pursuant to the Servicing Agreements and any shortfalls
resulting from the application of the Relief Act or similar state or
local law or the bankruptcy code with respect to the related Mortgage
Loans to the extent not previously reimbursed pursuant to Section 1.02;
(xvi) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class B-1, Class B-2 and Class B-3 Certificates, in that order, in
an amount equal to such certificates' share of any Prepayment Interest
Shortfalls on the Mortgage Loans to the extent not covered by payments
pursuant to Sections 3.22 or Section 4.18 of this Agreement or pursuant
to the Servicing Agreements and any Relief Act Interest Shortfall, in
each case that were allocated to such Class for such Distribution Date
and for any prior Distribution Date, to the extent not previously
reimbursed pursuant to Section 1.02;
(xvii) to the Reserve Fund from amounts otherwise payable to the
Class CE Certificates, and then from the Reserve Fund to the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9, Class B-1, Class B-2 and Class B-3
Certificates in that order, in an amount equal to the unpaid amount of
any Net WAC Rate Carryover Amount for each such Class for such
Distribution Date;
(xviii) to the Reserve Fund, the amount required to be deposited
therein pursuant to Section 3.24(b), after taking into account amounts
received under the Cap Contracts;
(xix) to the Holders of the Class CE Certificates the Interest
Distribution Amount and any Overcollateralization Reduction Amount for
such Distribution Date; and
(xx) to the Holders of the Class R Certificates, in respect of
the Class R-II Interest, any remaining amounts; provided that if such
Distribution Date is the Distribution Date immediately following the
expiration of the latest Prepayment Charge term as identified on the
Mortgage Loan Schedule or any Distribution Date thereafter, then any such
remaining amounts will be distributed first, to the Holders of the Class
P Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; and second, to the Holders of the Class R Certificates.
The Class CE Certificates are intended to receive all principal and
interest received by the Trust on the Mortgage Loans that is not otherwise
distributable to any other Class of Regular Certificates or REMIC Regular
Interests. If the Securities Administrator determines that the Residual
Certificates are entitled to any distributions on any Distribution
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Date other than the final Distribution Date, the Securities Administrator, prior
to any such distribution to any Residual Certificate, shall notify the Depositor
of such impending distribution. Upon such notification, the Depositor will
prepare and request that the other parties hereto enter into an amendment to the
Pooling and Servicing Agreement pursuant to Section 12.01, to revise such
mistake in the distribution provisions.
On each Distribution Date, after making the distributions of the
Available Distribution Amount as set forth above, the Securities Administrator
will first, withdraw from the Reserve Fund all income from the investment of
funds in the Reserve Fund and distribute such amount to the Holders of the Class
CE Certificates, and second, withdraw from the Reserve Fund, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount first, concurrently
to the Class A Certificates, on a PRO RATA basis; second, to the Class M-1
Certificates, third, to the Class M-2 Certificates, fourth, to the Class M-3
Certificates, fifth, to the Class M-4 Certificates, sixth, to the Class M-5
Certificates, seventh, to the Class M-6 Certificates, eighth, to the Class M-7
Certificates, ninth, to the Class M-8 Certificates, tenth, to the Class M-9
Certificates, eleventh, to the Class B-1 Certificates, twelfth, to the Class B-2
Certificates and thirteenth, to the Class B-3 Certificates, in each case to the
extent to the extent any Net WAC Rate Carryover Amount is allocable to each such
Class.
(b) (i) On each Distribution Date (a) prior to the Stepdown Date or
(b) on which a Trigger Event is in effect, the Extra Principal Distribution
Amount shall be distributed in the following order of priority;
FIRST, to the Holders of the Class A Certificates as follows:
(A) for each Distribution Date on which a Sequential Trigger Event is
not in effect for such Distribution Date, concurrently to the Holders of
the Class A Certificates, on a pro rata basis, based on the Certificate
Principal Balance of each such Class, until the Certificate Principal
Balance of each such Class has been reduced to zero; provided, however
that the pro rata allocation to the Class A-2A, Class A-2B and Class A-2C
Certificates pursuant to this clause shall be based on the total
Certificate Principal Balance of the Class A-2A, Class A-2B and Class
A-2C Certificates, but shall be distributed to the Class A-2A, Class A-2B
and Class A-2C Certificates on a sequential basis, in that order, until
the Certificate Principal Balance of each such Class has been reduced to
zero; and
(B) for each Distribution Date on which a Sequential Trigger Event is
in effect for such Distribution Date, concurrently to the Holders of the
Class A Certificates, on a pro rata basis, based on the Certificate
Principal Balance of each such Class, until the Certificate Principal
Balance of each such Class has been reduced to zero; provided, however
that the pro rata allocation to the Class A-1A Certificates and Class
A-1B Certificates pursuant to this clause shall be based on the total
Certificate Principal Balance of the Class A-1A Certificates and Class
A-1B Certificates, but shall be distributed to the Class A-1A
Certificates and the Class A-1B Certificates on a sequential basis, in
that order, until the Certificate Principal Balance of each such Class
has been reduced to zero; provided, further that the pro rata allocation
to the Class A-2A, Class A-2B and Class A-2C
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Certificates pursuant to this clause shall be based on the total
Certificate Principal Balance of the Class A-2A, Class A-2B and Class
A-2C Certificates, but shall be distributed to the Class A-2A, Class A-2B
and Class A-2C Certificates on a sequential basis, in that order, until
the Certificate Principal Balance of each such Class has been reduced to
zero.
SECOND, sequentially, to the Holders of the Class M-1, Class M-2, Class M
3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9,
Class B-1, Class B-2 and Class B-3 Certificates, in that order, until the
Certificate Principal Balance of each such Class has been reduced to
zero.
(ii) On each Distribution Date (a) on or after the Stepdown Date
and (b) on which a Trigger Event is not in effect, distributions of principal to
the extent of the Extra Principal Distribution Amount shall be distributed in
the following order of priority:
FIRST, (a) the lesser of (x) the Group I Principal Distribution Amount
and (y) the Class A-1 Principal Distribution Amount, shall be distributed
concurrently to the Holders of the Class A-1A Certificates and Class A-1B
Certificates, on a pro rata basis, based on the Certificate Princpal
Balance of each such Class, until the Certificate Principal Balance of
each such Class has been reduced to zero and (b) the lesser of (x) the
Group II Principal Distribution Amount and (y) the Class A-2 Principal
Distribution Amount, shall be distributed sequentially to the Holders of
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;
SECOND, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the amount distributed to the Holders of the Class A
Certificates pursuant to clause FIRST of this Section 5.01(b)(ii) and (y)
the Class M-1 Principal Distribution Amount, shall be distributed to the
Holders of the Class M-1 Certificates, until the Certificate Principal
Balance of such Class has been reduced to zero;
THIRD, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section 5.01(b)(ii)
and to the Holders of the Class M-1 Certificates pursuant to clause
second of this Section 5.01(b)(ii) and (y) the Class M-2 Principal
Distribution Amount, shall be distributed to the Holders of the Class M-2
Certificates, until the Certificate Principal Balance of such Class has
been reduced to zero;
FOURTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii) and to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii) and
(y) the Class M-3 Principal Distribution Amount, shall be distributed to
the Holders of the Class M-3 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero;
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FIFTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii) and
to the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii) and (y) the Class M-4 Principal Distribution
Amount, shall be distributed to the Holders of the Class M-4
Certificates, until the Certificate Principal Balance of such Class has
been reduced to zero;
SIXTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii) and to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii) and (y) the Class
M-5 Principal Distribution Amount, shall be distributed to the Holders of
the Class M-5 Certificates, until the Certificate Principal Balance of
such Class has been reduced to zero;
SEVENTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii) and to the Holders
of the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii) and (y) the Class M-6 Principal Distribution Amount, shall be
distributed to the Holders of the Class M-6 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
EIGHTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii), to the Holders of
the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii) and to the Holders of the Class M-6 Certificates pursuant to
clause seventh of this Section 5.01(b)(ii) and (y) the Class M-7
Principal Distribution Amount, shall be distributed to the Holders of the
Class M-7 Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero;
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NINTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii), to the Holders of
the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii), to the Holders of the Class M-6 Certificates pursuant to
clause seventh of this Section 5.01(b)(ii) and to the Holders of the
Class M-7 Certificates pursuant to clause eighth of this Section
5.01(b)(ii) and (y) the Class M-8 Principal Distribution Amount, shall be
distributed to the Holders of the Class M-8 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
TENTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii), to the Holders of
the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii), to the Holders of the Class M-6 Certificates pursuant to
clause seventh of this Section 5.01(b)(ii), to the Holders of the Class
M-7 Certificates pursuant to clause eighth of this Section 5.01(b)(ii)
and to the Holders of the Class M-8 Certificates pursuant to clause ninth
of this Section 5.01(b)(ii) and (y) the Class M-9 Principal Distribution
Amount, shall be distributed to the Holders of the Class M-9
Certificates, until the Certificate Principal Balance of such Class has
been reduced to zero;
ELEVENTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii), to the Holders of
the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii), to the Holders of the Class M-6 Certificates pursuant to
clause seventh of this Section 5.01(b)(ii), to the Holders of the Class
M-7 Certificates pursuant to clause eighth of this Section 5.01(b)(ii),
to the Holders of the Class M-8 Certificates pursuant to clause ninth of
this Section 5.01(b)(ii) and to the Holders of the Class M-9 Certificates
pursuant to clause tenth of this Section 5.01(b)(ii) and (y) the Class
B-1 Principal Distribution Amount, shall be distributed to the Holders of
the Class B-1 Certificates, until the Certificate Principal Balance of
such Class has been reduced to zero;
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TWELFTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii), to the Holders of
the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii), to the Holders of the Class M-6 Certificates pursuant to
clause seventh of this Section 5.01(b)(ii), to the Holders of the Class
M-7 Certificates pursuant to clause eighth of this Section 5.01(b)(ii),
to the Holders of the Class M-8 Certificates pursuant to clause ninth of
this Section 5.01(b)(ii), to the Holders of the Class M-9 Certificates
pursuant to clause tenth of this Section 5.01(b)(ii) and to the Holders
of the Class B-1 Certificates pursuant to clause eleventh of this Section
5.01(b)(ii) and (y) the Class B-2 Principal Distribution Amount, shall be
distributed to the Holders of the Class B-2 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero; and
THITEENTH, the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the sum of the amounts distributed to the Holders of the
Class A Certificates pursuant to clause first of this Section
5.01(b)(ii), to the Holders of the Class M-1 Certificates pursuant to
clause second of this Section 5.01(b)(ii), to the Holders of the Class
M-2 Certificates pursuant to clause third of this Section 5.01(b)(ii), to
the Holders of the Class M-3 Certificates pursuant to clause fourth of
this Section 5.01(b)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause fifth of this Section 5.01(b)(ii), to the Holders of
the Class M-5 Certificates pursuant to clause sixth of this Section
5.01(b)(ii), to the Holders of the Class M-6 Certificates pursuant to
clause seventh of this Section 5.01(b)(ii), to the Holders of the Class
M-7 Certificates pursuant to clause eighth of this Section 5.01(b)(ii),
to the Holders of the Class M-8 Certificates pursuant to clause ninth of
this Section 5.01(b)(ii), to the Holders of the Class M-9 Certificates
pursuant to clause tenth of this Section 5.01(b)(ii), to the Holders of
the Class B-1 Certificates pursuant to clause eleventh of this Section
5.01(b)(ii) and to the Holders of the Class B-2 Certificates pursuant to
clause twelfth of this Section 5.01(b)(ii)and (y) the Class B-3 Principal
Distribution Amount, shall be distributed to the Holders of the Class B-3
Certificates, until the Certificate Principal Balance of such Class has
been reduced to zero.
(c) On each Distribution Date, the Securities Administrator shall
withdraw any amounts then on deposit in the Distribution Account that represent
Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.
(d) All distributions made with respect to each Class of Certificates
on each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates on each Distribution Date will
be made to the Holders of the respective Class of record on the related Record
Date (except as otherwise provided in Section 5.01(f) or Section 10.01
respecting
125
the final distribution on such Class), based on the aggregate Percentage
Interest represented by their respective Certificates, and shall be made by wire
transfer of immediately available funds to the account of any such Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the Record Date immediately prior to such Distribution
Date and is the registered owner of Certificates having an initial aggregate
Certificate Principal Balance that is in excess of the lesser of (i) $5,000,000
or (ii) two-thirds of the initial Certificate Principal Balance of such Class of
Certificates, or otherwise by check mailed by first class mail to the address of
such Holder appearing in the Certificate Register. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office of the Securities
Administrator or such other location specified in the notice to
Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate shall be paid
to the Depository, as Holder thereof, and the Depository shall be responsible
for crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Depositor, the Servicer, the Securities Administrator or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(e) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. None of the Holders of
any Class of Certificates, the Trustee, the Servicer, the Securities
Administrator or the Master Servicer shall in any way be responsible or liable
to the Holders of any other Class of Certificates in respect of amounts properly
previously distributed on the Certificates.
(f) Except as otherwise provided in Section 10.01, whenever the
Securities Administrator expects that the final distribution with respect to any
Class of Certificates will be made on the next Distribution Date, the Securities
Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:
(i) the Securities Administrator expects that the final
distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Securities Administrator therein
specified, and
(ii) no interest shall accrue on such Certificates from and
after the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust by the Securities Administrator and
126
credited to the account of the appropriate non-tendering Holder or Holders. If
any Certificates as to which notice has been given pursuant to this Section
5.01(f) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Securities Administrator shall mail a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates but shall continue to hold any remaining funds for the benefit of
non-tendering Certificateholders. The costs and expenses of maintaining the
funds in trust and of contacting such Certificateholders shall be paid out of
the assets remaining in such trust fund. If within one year after the final
notice any such Certificates shall not have been surrendered for cancellation,
the Securities Administrator shall pay to the Depositor all such amounts, and
all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Securities Administrator as a result of such
Certificateholder's failure to surrender its Certificate(s) on the final
Distribution Date for final payment thereof in accordance with this Section
5.01(f). Any such amounts held in trust by the Securities Administrator shall be
held uninvested in an Eligible Account.
(g) Notwithstanding anything to the contrary herein, (i) in no event
shall the Certificate Principal Balance of a Class A Certificate, a Mezzanine
Certificate or a Class B Certificate be reduced more than once in respect of any
particular amount both (a) allocated to such Certificate in respect of Realized
Losses pursuant to Section 5.04 and (b) distributed to the Holder of such
Certificate in reduction of the Certificate Principal Balance thereof pursuant
to this Section 5.01 from Net Monthly Excess Cashflow and (ii) in no event shall
the Uncertificated Balance of a REMIC Regular Interest be reduced more than once
in respect of any particular amount both (a) allocated to such REMIC Regular
Interest in respect of Realized Losses pursuant to Section 5.04 and (b)
distributed on such REMIC Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 5.01.
SECTION 5.02. Statements to Certificateholders.
On each Distribution Date, the Securities Administrator (based on the
information set forth in the Servicer Reports for such Distribution Date and
information provided by the Trustee or the counterparty to the Cap Contracts
with respect to payments made pursuant to the Cap Contracts) shall make
available to each Holder of the Certificates, a statement as to the
distributions made on such Distribution Date setting forth:
(i) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
principal, and the amount of the distribution made on such Distribution
Date to the Holders of the Class P Certificates allocable to Prepayment
Charges;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
interest;
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(iii) the aggregate Servicing Fee received by the Servicer and
the Interim Servicers and the aggregate Master Servicing Fee received by
the Master Servicer during the related Due Period;
(iv) the aggregate amount of P&I Advances for such Distribution
Date;
(v) Reserved;
(vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) delinquent 30 to 59 days, (b) delinquent 60 to 89
days, (c) delinquent 90 or more days, in each case, as of the last day of
the preceding calendar month, (d) as to which foreclosure proceedings
have been commenced and (e) with respect to which the related Mortgagor
has filed for protection under applicable bankruptcy laws, with respect
to whom bankruptcy proceedings are pending or with respect to whom
bankruptcy protection is in force;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid principal balance and the Scheduled Principal
Balance of such Mortgage Loan;
(ix) if available, the book value of any REO Property as of the
close of business on the last Business Day of the calendar month
preceding the Distribution Date;
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period and the aggregate amount of any Prepayment
Charges received in respect thereof;
(xi) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the aggregate amount of Realized Losses
incurred since the Closing Date;
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Distribution Account for such Distribution Date;
(xiii) the aggregate Certificate Principal Balance of each Class
of Certificates, after giving effect to the distributions, and
allocations of Realized Losses, made on such Distribution Date,
separately identifying any reduction thereof due to allocations of
Realized Losses;
(xiv) the Certificate Factor for each such Class of Certificates
applicable to such Distribution Date;
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(xv) the Interest Distribution Amount in respect of the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates, and
the Class CE Certificates for such Distribution Date and the Interest
Carry Forward Amount, if any, with respect to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates on such
Distribution Date, and in the case of the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates separately
identifying any reduction thereof due to allocations of Realized Losses,
Prepayment Interest Shortfalls, Relief Act Interest Shortfalls and Net
WAC Rate Carryover Amounts;
(xvi) the aggregate amount of any Prepayment Interest Shortfall
for such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.22 of this Agreement or the Master
Servicer pursuant to Section 4.18 of this Agreement or the Interim
Servicers pursuant to the Servicing Agreements;
(xvii) the aggregate amount of Relief Act Interest Shortfalls for
such Distribution Date;
(xviii) the Required Overcollateralization Amount and the Credit
Enhancement Percentage for such Distribution Date;
(xix) the Overcollateralization Increase Amount, if any, for such
Distribution Date;
(xx) the Overcollateralization Reduction Amount, if any, for
such Distribution Date;
(xxi) the Net WAC Rate Carryover Amount, if any, for such
Distribution Date;
(xxii) the Net WAC Rate Carryover Amount, if any, outstanding
after reimbursements therefor on such Distribution Date and any amounts
received under the Cap Contracts;
(xxiii) the respective Pass-Through Rates applicable to the Class
A Certificates, the Mezzanine Certificates, the Class B Certificates, and
the Class CE Certificates for such Distribution Date;
(xxiv) the amount of any deposit to the Reserve Fund contemplated
by Section 3.24(b);
(xxv) the balance of the Reserve Fund prior to the deposit or
withdrawal of any amounts on such Distribution Date;
(xxvi) the amount of any deposit to the Reserve Fund pursuant to
Section 5.01(a)(7)(vi);
(xxvii)the balance of the Reserve Fund after all deposits and
withdrawals on such Distribution Date;
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(xxviii) the Loss Severity Percentage with respect to each
Mortgage Loan; and
(xxix) the Aggregate Loss Severity Percentage; and
The Securities Administrator will make such statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to the Certificateholders and the Rating Agencies
via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at
http:\\▇▇▇.▇▇▇▇▇▇▇.▇▇▇ and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at ▇-▇▇▇-▇▇▇-▇▇▇▇.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes.
In the case of information furnished pursuant to subclauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Single Certificate
of the relevant Class.
Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish upon request to each Person who at
any time during the calendar year was a Holder of a Regular Certificate a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.
Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish upon request to each Person who at
any time during the calendar year was a Holder of a Residual Certificate a
statement setting forth the amount, if any, actually distributed with respect to
the Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
The Securities Administrator shall, upon request, furnish to each
Certificateholder during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, as applicable, or otherwise
with respect to the purposes of this Agreement, all such reports or information
to be provided at the expense of the Certificateholder, in accordance with such
reasonable and explicit instructions and directions as the Certificateholder may
provide.
On each Distribution Date the Securities Administrator shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Certificates as of such Distribution Date, using a format and media
mutually acceptable to the Securities Administrator and Bloomberg.
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SECTION 5.03. Servicer Reports; P&I Advances.
(a) On or before 12:00 noon New York time on the 18th calendar day of
each month, and if the 18th calendar day is not a Business Day, the immediately
following Business Day, the Servicer shall deliver to the Master Servicer and
the Securities Administrator by telecopy or electronic mail (or by such other
means as the Servicer, the Master Servicer and the Securities Administrator may
agree from time to time) a remittance report containing such information with
respect to the related Mortgage Loans and the related Distribution Date as is
reasonably available to the Servicer as the Master Servicer or the Securities
Administrator may reasonably require so as to enable the Master Servicer to
master service the related Mortgage Loans and oversee the servicing by the
Servicer and the Securities Administrator to fulfill its obligations hereunder
with respect to securities and tax reporting.
(b) The amount of P&I Advances to be made by the Servicer or the
related Interim Servicer on any Distribution Date shall equal, subject to
Section 5.03(d), (i) the aggregate amount of Monthly Payments (net of the
related Servicing Fees), due during the related Due Period in respect of the
Mortgage Loans serviced by the Servicer or Interim Servicer, which Monthly
Payments were delinquent as of the close of business on the related
Determination Date and (ii) with respect to each REO Property, which was
acquired during or prior to the related Prepayment Period and as to which an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the REO Imputed Interest on such REO Property for the
most recently ended calendar month, over the net income from such REO Property
deposited in the Collection Account or Custodial Acount pursuant to Section 3.21
of this Agreement or pursuant the related Servicing Agreement for distribution
on such Distribution Date; provided, however, neither the Servicer nor any
Interim Servicer shall be required to make P&I Advances with respect to Relief
Act Interest Shortfalls, or with respect to Prepayment Interest Shortfalls in
excess of its obligations under Section 3.22 or under the related Servicing
Agreement. For purposes of the preceding sentence, the Monthly Payment on each
Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the assumed
monthly payment that would have been due on the related Due Date based on the
original principal amortization schedule for such Balloon Mortgage Loan.
By 12:00 noon New York time on the Servicer Remittance Date, the Servicer
shall remit in immediately available funds to the Securities Administrator for
deposit in the Distribution Account an amount equal to the aggregate amount of
P&I Advances, if any, to be made in respect of the related Mortgage Loans for
the related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of any Amounts Held For Future Distribution on
deposit therein (in which case it will cause to be made an appropriate entry in
the records of the Collection Account that Amounts Held For Future Distribution
have been, as permitted by this Section 5.03, used by the Servicer in discharge
of any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by the Servicer with
respect to the related Mortgage Loans. In addition, the Servicer shall have the
right to reimburse itself for any outstanding P&I Advance made from its own
funds from Amounts Held for Future Distribution. Any Amounts Held For Future
Distribution used by the Servicer to make P&I Advances or to reimburse itself
for outstanding P&I Advances shall be appropriately reflected in the Servicer's
records and replaced by the Servicer by deposit in the Collection Account no
later than the close of business on the Servicer Remittance Date immediately
following the Due Period or Prepayment Period for which such amounts relate. The
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Securities Administrator will notify the Servicer and the Master Servicer by the
close of business on the Business Day prior to the Distribution Date in the
event that the amount remitted by the Servicer to the Securities Administrator
on such date is less than the P&I Advances required to be made by the Servicer
for the related Distribution Date.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any related Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance or
Servicing Advance shall be required to be made hereunder or under the related
Servicing Agreement by the Servicer or the related Interim Servicer if such P&I
Advance or Servicing Advance would, if made, constitute a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, respectively. The determination by
the Servicer or the related Interim Servicer that it has made a Nonrecoverable
P&I Advance or a Nonrecoverable Servicing Advance or that any proposed P&I
Advance or Servicing Advance, if made, would constitute a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, respectively, shall be evidenced by
a certification of a Servicing Officer delivered to the Master Servicer.
(e) Subject to and in accordance with the provisions of Article VIII,
in the event the Servicer fails to make any required P&I Advance, then the
Master Servicer (in its capacity as successor servicer) or any other successor
Servicer shall be required to make such P&I Advance on the Distribution Date on
which the Servicer was required to make such Advance, subject to its
determination of recoverability. In addition, in the event that the related
Interim Servicer fails to make a required P&I Advance under the related
Servicing Agreement, the Master Servicer will be required to make such P&I
Advance, subject to its determination of recoverability.
SECTION 5.04. Allocation of Realized Losses.
(a) Prior to the Determination Date, the Servicer and each Interim
Servicer shall determine as to each Mortgage Loan serviced by the Servicer or
such Interim Servicer and any related REO Property and include in the monthly
remittance report provided to the Master Servicer and the Securities
Administrator (substantially in the form of Schedule 4 hereto) such information
as is reasonably available to the Servicer and the Interim Servicers as the
Master Servicer or the Securities Administrator may reasonably require so as to
enable the Master Servicer to master service the Mortgage Loans and oversee the
servicing by the Servicer and the Interim Servicers and the Securities
Administrator to fulfill its obligations hereunder with respect to securities
and tax reporting, which shall include, but not be limited to: (i) the total
amount of Realized Losses, if any, incurred in connection with any Final
Recovery Determinations made during the related Prepayment Period; and (ii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal. Prior to each Determination Date, the Servicer and each Interim
Servicer shall also determine as to each Mortgage Loan: (i) the total amount of
Realized Losses, if any, incurred in
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connection with any Deficient Valuations made during the related Prepayment
Period; and (ii) the total amount of Realized Losses, if any, incurred in
connection with Debt Service Reductions in respect of Monthly Payments due
during the related Due Period.
(b) All Realized Losses on the Mortgage Loans allocated to any REMIC I
Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans shall be
allocated by the Securities Administrator on each Distribution Date as follows:
first, to Net Monthly Excess Cashflow; second, to the Class CE Certificates;
third, to the Class B-3 Certificates until the Certificate Principal Balance of
the Class B-3 Certificates has been reduced to zero, fourth, to the Class B-2
Certificates until the Certificate Principal Balance of the Class B-2
Certificates has been reduced to zero, fifth, to the Class B-1 Certificates
until the Certificate Principal Balance of the Class B-1 Certificates has been
reduced to zero, sixth, to the Class M-9 Certificates, until the Certificate
Principal Balance of the Class M-9 Certificates has been reduced to zero;
seventh, to the Class M-8 Certificates, until the Certificate Principal Balance
of the Class M-8 Certificates has been reduced to zero; eighth, to the Class M-7
Certificates, until the Certificate Principal Balance of the Class M-7
Certificates has been reduced to zero; ninth, to the Class M-6 Certificates,
until the Certificate Principal Balance of the Class M-6 Certificates has been
reduced to zero; tenth, to the Class M-5 Certificates, until the Certificate
Principal Balance of the Class M-5 Certificates has been reduced to zero;
eleventh, to the Class M-4 Certificates, until the Certificate Principal Balance
of the Class M-4 Certificates has been reduced to zero; twelfth, to the Class
M-3 Certificates, until the Certificate Principal Balance of the Class M-3
Certificates has been reduced to zero; thirteenth, to the Class M-2
Certificates, until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero; and fourteenth, to the Class M-1
Certificates, until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero. All Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate or Class B
Certificate on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated; any allocation of Realized
Losses to a Class CE Certificates shall be made by reducing the amount otherwise
payable in respect thereof pursuant to Section 5.01(a)(7)(viii). No allocations
of any Realized Losses shall be made to the Certificate Principal Balances of
the Class A Certificates or Class P Certificates.
As used herein, an allocation of a Realized Loss on a "PRO RATA basis"
among two or more specified Classes of Certificates means an allocation on a PRO
RATA basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the, Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
In addition, in the event that the Servicer receives any Subsequent
Recoveries with respect to a Mortgage Loan, the Servicer shall deposit such
funds into the Collection Account pursuant to Section 3.08. If, after taking
into account such Subsequent Recoveries and
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any Subsequent Recoveries received by the Interim Servicers, the amount of a
Realized Loss is reduced, the amount of such Subsequent Recoveries will be
applied to increase the Certificate Principal Balance of the Class of
Subordinate Certificates with the highest payment priority to which Realized
Losses have been allocated, but not by more than the amount of Realized Losses
previously allocated to that Class of Subordinate Certificates pursuant to this
Section 5.04 and not previously reimbursed to such Class of Subordinate
Certificates with Net Monthly Excess Cashflow pursuant to Section 5.01(a)(7).
The amount of any remaining Subsequent Recoveries will be applied to
sequentially increase the Certificate Principal Balance of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Realized Losses previously
allocated to such Class of Subordinate Certificates pursuant to this Section
5.04 and not previously reimbursed to such Class of Subordinate Certificates
with Net Monthly Excess Cashflow pursuant to Section 5.01(a)(7)(iii). Holders of
such Certificates will not be entitled to any payment in respect of current
interest on the amount of such increases for any Interest Accrual Period
preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Certificate Principal Balance of each
Subordinate Certificate of such Class in accordance with its respective
Percentage Interest.
(c) (i) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee, based solely on the
instructions of the Securities Administrator, on each Distribution Date to the
following REMIC I Regular Interests in the specified percentages, as follows:
first, to Uncertificated Interest payable to the REMIC I Regular Interest I-LTAA
and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC
I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; second, to
the Uncertificated Balances of the REMIC I Regular Interest I-LTAA and REMIC I
Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I Principal
Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTB3 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTB3 has been reduced to zero; fourth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTB2 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTB2 has been reduced to zero; fifth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTB1 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTB1 has been reduced to zero; sixth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM9 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM9 has been reduced to zero; seventh, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM8 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM8 has been reduced to zero; eighth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM7 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM7 has been reduced to zero; ninth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM6 has been reduced to zero; tenth, to
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the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM5 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM5 has been reduced to zero; eleventh, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM4 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM4 has been reduced to
zero; twelfth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM3 has been reduced to zero; thirteenth, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero; and fourteenth, to the Uncertificated Balances
of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM1 has been reduced to
zero.
(ii) The REMIC I Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Balance of each
REMIC I Regular Interest ending with the designation "GRP" equal to 0.01%
of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group; second, to each REMIC I Regular Interest ending with
the designation "SUB," so that the Uncertificated Balance of each such
REMIC I Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related
Loan Group over (y) the current Certificate Principal Balance of the
Class A Certificate in the related Loan Group (except that if any such
excess is a larger number than in the preceding distribution period, the
least amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses shall be allocated
to REMIC I Regular Interest I-LTXX.
SECTION 5.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount that the Trustee reasonably believes are applicable under the
Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Securities Administrator does withhold any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Securities
Administrator shall indicate the amount withheld to such Certificateholders.
SECTION 5.06. Reports Filed with Securities and Exchange Commission.
The Depositor shall prepare or cause to be prepared the initial current
report on Form 8-K. Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, file with the
Commission via the Electronic Data Gathering and Retrieval System ("▇▇▇▇▇"), a
Form 8-K (or other comparable Form containing the same
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or comparable information or other information mutually agreed upon) with a copy
of the statement to be furnished to the Certificateholders for such Distribution
Date as an exhibit thereto. Prior to January 30, 2006, the Securities
Administrator shall, in accordance with industry standards, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 20, 2006 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 20th of each year thereafter, the Master Servicer
shall provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of the Servicer to be delivered pursuant to this
Agreement and, if applicable, the annual independent accountant's servicing
report and annual statement of compliance to be delivered by the Master Servicer
pursuant to Sections 4.15 and 4.16. Prior to (i) March 31, 2006 and (ii) unless
and until a Form 15 Suspension Notice shall have been filed, March 31 of each
year thereafter, the Securities Administrator shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust. Such Form
10-K shall include the Master Servicer Certification and other documentation
provided by the Master Servicer pursuant to the second preceding sentence. The
Depositor hereby grants to the Securities Administrator a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
5.06; provided, however, the Securities Administrator will cooperate with the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 5.06 shall not be reimbursable
from the Trust Fund.
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ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates.
(a) The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I.
The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-6. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed and authenticated
by the Securities Administrator and delivered by the Trustee to and upon the
written order of the Depositor. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trust by the Securities Administrator by an
authorized signatory. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Securities
Administrator shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided herein
executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates held by the Book-Entry Custodian
or, if appointed to hold such Certificates as provided below, the Depository and
registered in the name of the Depository or its nominee and, except as provided
below, registration of such Certificates may not be transferred by the
Securities Administrator except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Securities Administrator
is hereby initially appointed as the Book-Entry Custodian and hereby agrees to
act as such in accordance herewith and in accordance with the agreement that it
has with the Depository authorizing it to act as such. The Book-Entry Custodian
may, and, if it is no longer qualified to act as such, the Book-Entry Custodian
shall, appoint, by a written instrument delivered to the Depositor, the Servicer
and, if the Trustee is not the Book-Entry Custodian, the Trustee, any other
transfer agent (including the
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Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.
(c) The Class B Certificates initially offered and sold in offshore
transactions in reliance on Regulation S shall be issued in the form of a
temporary global certificate in definitive, fully registered form (each, a
"Regulation S Temporary Global Certificate"), which shall be deposited with the
Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository for the account of designated agents holding on behalf of
Euroclear or Clearstream. Beneficial interests in each Regulation S Temporary
Global Certificate may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 6.02. After
the expiration of the Release Date, a beneficial interest in a Regulation S
Temporary Global Certificate may be exchanged for a beneficial interest in the
related permanent global certificate of the same Class (each, a "Regulation S
Permanent Global Certificate"), in accordance with the procedures set forth in
Section 6.02. Each Regulation S Permanent Global Certificate shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.
The Class B Certificates offered and sold to Qualified Institutional
Buyers ("QIBs") in reliance on Rule 144A under the Securities Act ("Rule 144A")
or institutional investors that are accredited investors within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
("Institutional Accredited Investors") will be issued in the form of Book-Entry
Certificates.
(d) The Class CE Certificates and Class P Certificates offered and
sold to QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A")
will be issued in the form of Definitive Certificates.
(e) The Trustee, the Servicer, the Securities Administrator, the
Master Servicer and the Depositor may for all purposes (including the making of
payments due on the Book-Entry Certificates and Global Certificates) deal with
the Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates and Global Certificates for the purposes
of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates and Global
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates and Global
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities
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Administrator may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Depositor advises the Securities Administrator in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Securities
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Default, Certificate Owners representing in the aggregate not less than 51% of
the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than
$10,000 immediately prior to the issuance of a Definitive Certificate shall be
issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate or a Global Certificate, as applicable. None of the
Depositor, the Servicer, the Master Servicer, the Securities Administrator or
the Trustee shall be liable for any delay in the delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
SECTION 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Securities Administrator shall cause to be kept at one of the
offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) No transfer of any Class B Certificate, Class CE Certificate,
Class P Certificate or Residual Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the "1933 Act"), and effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class B Certificate, Class CE Certificate, Class
P Certificate or Residual Certificate is to be made without registration or
qualification (other than in connection with the initial
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transfer of any such Certificate by the Depositor), the Securities Administrator
shall require receipt of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-1; (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-2; (iii) if such transfer is purportedly being made in
reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-1 and (iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or the Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the 1933 Act or any other securities laws or to take any action not otherwise
required under this Agreement to permit the transfer of such Certificates
without registration or qualification. Any Certificateholder desiring to effect
the transfer of any such Certificate shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer, the Securities Administrator
and the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
A holder of a beneficial interest in a Regulation S Temporary Global
Certificate must provide Euroclear or Clearstream, as the case may be, with a
certificate in the form of Annex A to Exhibit B-1 hereto certifying that the
beneficial owner of the interest in such Global Certificate is not a U.S. Person
(as defined in Regulation S), and Euroclear or Clearstream, as the case may be,
must provide to the Trustee and Securities Administrator a certificate in the
form of Exhibit B-1 hereto prior to (i) the payment of interest or principal
with respect to such holder's beneficial interest in the Regulation S Temporary
Global Certificate and (ii) any exchange of such beneficial interest for a
beneficial interest in a Regulation S Permanent Global Certificate.
(c) No transfer of a Class CE, Class P or Residual Certificate or any
interest therein shall be made to any Plan subject to ERISA or Section 4975 of
the Code, any Person acting, directly or indirectly, on behalf of any such Plan
or any Person acquiring such Certificates with "Plan Assets" of a Plan within
the meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101 ("Plan Assets") unless the Securities Administrator is provided with
an Opinion of Counsel on which the Depositor, the Master Servicer, the
Securities Administrator, the Trustee and the Servicer may rely, which
establishes to the satisfaction of the Securities Administrator that the
purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Servicer, the Trustee, the
Master Servicer, the Securities Administrator or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Servicer,
the Trustee, the Master Servicer, the Securities Administrator, the Trust Fund.
An Opinion of Counsel will not be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or
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any affiliate thereof shall have deemed to have represented that such affiliate
is not a Plan or a Person investing Plan Assets) and the Securities
Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Securities Administrator, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate or Class B Certificate will be
deemed to have represented by virtue of its purchase or holding of such
Certificate (or interest therein) that either (a) such Transferee is not a Plan
or purchasing such Certificate with Plan Assets, (b) in the case of a Mezzanine
Certificate or Class B-1 Certificate, it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 94-84 or FAN
97-03E, as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE
2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41, 67 Fed. Reg.
54487 (August 22, 2002) (the "Exemption"), and that it understands that there
are certain conditions to the availability of the Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by a Rating Agency and in the case of a Class B-1 Certificate
that it will obtain a representation from any transferee that such transferee is
an accredited investor so long as it is required to obtain a representation
regarding compliance with the Securities Act or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in PTCE 95-60, and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied.
If any Certificate or any interest therein is acquired or held in
violation of the conditions described in this Section 6.02(c), the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicer, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.
(d) (i) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Securities Administrator or its designee under
clause (iii)(A) below to deliver payments to a Person other than such Person and
to negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of Transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall require delivery to
it, and shall
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not register the Transfer of any Residual Certificate until its receipt
of, an affidavit and agreement (a "Transfer Affidavit and Agreement," in
the form attached hereto as Exhibit B-3) from the proposed Transferee, in
form and substance satisfactory to the Securities Administrator,
representing and warranting, among other things, that such Transferee is
a Permitted Transferee, that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the proposed Transfer
as a nominee, trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Residual Certificate, it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 6.02(d) and
agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if an
authorized officer of the Securities Administrator who is assigned to
this transaction has actual knowledge that the proposed Transferee is not
a Permitted Transferee, no Transfer of an Ownership Interest in a
Residual Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Residual Certificate and (Y) not to
transfer its Ownership Interest unless it provides a Transferor Affidavit
(in the form attached hereto as Exhibit B-2) to the Securities
Administrator stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Securities Administrator written notice
that it is a "pass-through interest holder" within the meaning of
temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring an Ownership Interest in a Residual Certificate, if it is,
or is holding an Ownership Interest in a Residual Certificate on behalf
of, a "pass-through interest holder."
(ii) The Securities Administrator will register the Transfer of
any Residual Certificate only if it shall have received the Transfer Affidavit
and Agreement and all of such other documents as shall have been reasonably
required by the Securities Administrator as a condition to such registration. In
addition, no Transfer of a Residual Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
Transferee of such Certificate to the effect that such Transferee is a Permitted
Transferee.
(iii) (A) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this Section 6.02(d),
then the last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. The Securities
Administrator shall be under no liability to any
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Person for any registration of Transfer of a Residual Certificate that is in
fact not permitted by this Section 6.02(d) or for making any payments due on
such Certificate to the holder thereof or for taking any other action with
respect to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a holder of a
Residual Certificate in violation of the restrictions in this Section
6.02(d) and to the extent that the retroactive restoration of the rights
of the holder of such Residual Certificate as described in clause
(iii)(A) above shall be invalid, illegal or unenforceable, then the
Securities Administrator shall have the right, without notice to the
holder or any prior holder of such Residual Certificate, to sell such
Residual Certificate to a purchaser selected by the Securities
Administrator on such terms as the Securities Administrator may choose.
Such purported Transferee shall promptly endorse and deliver each
Residual Certificate in accordance with the instructions of the
Securities Administrator. Such purchaser may be the Securities
Administrator itself or any Affiliate of the Securities Administrator.
The proceeds of such sale, net of the commissions (which may include
commissions payable to the Securities Administrator or its Affiliates),
expenses and taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and conditions of
any sale under this clause (iii)(B) shall be determined in the sole
discretion of the Securities Administrator, and the Securities
Administrator shall not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result of its exercise of such
discretion.
(iv) The Securities Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC Provisions all
information necessary to compute any tax imposed (A) as a result of the Transfer
of an Ownership Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described in Treasury
regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the
"excess inclusions" of such Residual Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Residual Certificate having as among its
record holders at any time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be charged or
collected by the Securities Administrator.
(v) The provisions of this Section 6.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Securities Administrator at the expense of the
party seeking to modify, add to or eliminate any such provision the following:
(A) written notification from each Rating Agency to the effect
that the modification, addition to or elimination of such provisions will
not cause such Rating Agency to downgrade its then-current ratings of any
Class of Certificates; and
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(B) an Opinion of Counsel, in form and substance satisfactory
to the Securities Administrator, to the effect that such modification of,
addition to or elimination of such provisions will not cause any Trust
REMIC to cease to qualify as a REMIC and will not cause any Trust REMIC,
as the case may be, to be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person that is not a Permitted
Transferee or a Person other than the prospective transferee to be
subject to a REMIC-tax caused by the Transfer of a Residual Certificate
to a Person that is not a Permitted Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing.
(g) No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Securities Administrator in accordance with its
customary procedures.
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Securities
Administrator, or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected purchaser, the Securities
Administrator, shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC
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created hereunder, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 6.04. Persons Deemed Owners.
The Depositor, the Servicer, the Trustee, the Master Servicer, the
Securities Administrator and any agent of any of them may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01 and for all
other purposes whatsoever, and none of the Depositor, the Servicer, the Trustee,
the Master Servicer, the Securities Administrator or any agent of any of them
shall be affected by notice to the contrary.
SECTION 6.05. Certain Available Information.
On or prior to the date of the first sale of any Class B Certificate,
Class CE Certificate, Class P Certificate or Residual Certificate to an
Independent third party, the Depositor shall provide to the Securities
Administrator ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of such
Certificate. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Securities Administrator, the Depositor promptly shall inform the
Securities Administrator of such event and shall deliver to the Securities
Administrator ten copies of the private placement memorandum or disclosure
document, as revised, amended or supplemented. The Securities Administrator
shall maintain at its office as set forth in Section 12.05 hereof and shall make
available free of charge during normal business hours for review by any Holder
of a Certificate or any Person identified to the Securities Administrator as a
prospective transferee of a Certificate, originals or copies of the following
items: (i) in the case of a Holder or prospective transferee of a Class B
Certificate, Class CE Certificate, Class P Certificate or Residual Certificate,
the related private placement memorandum or other disclosure document relating
to such Class of Certificates, in the form most recently provided to the
Securities Administrator; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date and (C) any
copies of all Officers' Certificates of the Servicer since the Closing Date
delivered to the Master Servicer to evidence such Person's determination that
any P&I Advance or Servicing Advance was, or if made, would be a Nonrecoverable
P&I Advance or Nonrecoverable Servicing Advance. Copies and mailing of any and
all of the foregoing items will be available from the Securities Administrator
upon request at the expense of the Person requesting the same.
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ARTICLE VII
THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER
SECTION 7.01. Liability of the Depositor, the Servicer and the Master
Servicer.
The Depositor, the Servicer and the Master Servicer each shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement upon them in their respective capacities as Depositor,
the Servicer and Master Servicer and undertaken hereunder by the Depositor, the
Servicer and the Master Servicer herein.
SECTION 7.02. Merger or Consolidation of the Depositor, the Servicer
or the Master Servicer.
Subject to the following paragraph, the Depositor will keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Servicer will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its incorporation. Subject to
the following paragraph, the Master Servicer will keep in full effect its
existence, rights and franchises as a national banking association. The
Depositor, the Servicer and the Master Servicer each will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor, the Servicer or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor, the Servicer or the Master Servicer shall
be a party, or any Person succeeding to the business of the Depositor, such
Servicer or the Master Servicer, shall be the successor of the Depositor, the
Servicer or the Master Servicer, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that any successor to the Servicer or the Master Servicer shall meet
the eligibility requirements set forth in clauses (i) and (iii) of the last
paragraph of Section 8.02(a) or Section 7.06, as applicable.
SECTION 7.03. Limitation on Liability of the Depositor, the Servicer,
the Master Servicer and Others.
None of the Depositor, the Servicer, the Securities Administrator, the
Master Servicer or any of the directors, officers, employees or agents of the
Depositor, the Servicer or the Master Servicer shall be under any liability to
the Trust Fund or the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer, the Securities Administrator, the Master Servicer or
any such person against any breach of warranties, representations or covenants
made herein or against any specific liability imposed on any such Person
pursuant hereto or against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in
146
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Servicer, the Securities Administrator, the
Master Servicer and any director, officer, employee or agent of the Depositor,
the Servicer, the Securities Administrator and the Master Servicer may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor, the Servicer, the Securities Administrator, the Master Servicer and
any director, officer, employee or agent of the Depositor, the Servicer, the
Securities Administrator or the Master Servicer shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement, the Certificates or
any Credit Risk Management Agreement or any loss, liability or expense incurred
other than by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Servicer, the
Securities Administrator or the Master Servicer shall be under any obligation to
appear in, prosecute or defend any legal action unless such action is related to
its respective duties under this Agreement and, in its opinion, does not involve
it in any expense or liability; provided, however, that each of the Depositor,
the Servicer, the Securities Administrator and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor, the Servicer, the
Securities Administrator and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account or the Distribution Account as
and to the extent provided in Article III and Article IV, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account and the Distribution Account.
Notwithstanding anything to the contrary contained herein, the Servicer
shall not be liable for any actions or inactions prior to the Cut-off Date of
any prior servicer of the related Mortgage Loans and the Master Servicer shall
not be liable for any action or inaction of the Servicer or any Interim
Servicer, except to the extent expressly provided herein, or the Credit Risk
Management Agreement.
SECTION 7.04. Limitation on Resignation of the Servicer.
(a) Except as expressly provided herein, the Servicer shall neither
assign all or substantially all of its rights under this Agreement or the
servicing hereunder nor delegate all or substantially all of its duties
hereunder nor sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Master Servicer, which consent shall not be unreasonably withheld; provided,
that in each case, there must be delivered to the Trustee and the Master
Servicer a letter from each Rating Agency to the effect that such transfer of
servicing or sale or disposition of assets will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates.
Notwithstanding the foregoing, the Servicer, without the consent of the Trustee
or the Master Servicer, may retain third-party contractors to perform certain
servicing and loan administration functions, including without limitation hazard
insurance administration, tax payment and administration, flood certification
and administration, collection services and similar functions, provided,
however,
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that the retention of such contractors by the Servicer shall not limit the
obligation of the Servicer to service the related Mortgage Loans pursuant to the
terms and conditions of this Agreement. The Servicer shall not resign from the
obligations and duties hereby imposed on it except by consent of the Master
Servicer or upon determination that its duties hereunder are no longer
permissible under applicable law or as provided in Section 7.04(c). Any such
determination pursuant to the preceding sentence permitting the resignation
(other than pursuant to Section 7.04(c)) of the Servicer shall be evidenced by
an Opinion of Counsel to such effect obtained at the expense of the Servicer and
delivered to the Trustee and the Rating Agencies. No resignation of the Servicer
shall become effective until the Master Servicer or a successor Servicer shall
have assumed the Servicer's responsibilities, duties, liabilities (other than
those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
(b) Except as expressly provided herein, the Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.02, no Sub-Servicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Sub-Servicer as an indemnitee under this Agreement.
(c) Notwithstanding anything to the contrary herein, the Servicer may
pledge or assign as collateral all its rights, title and interest under this
Agreement to a lender (the "Lender"), provided, that:
(1) upon a Servicer Event of Default and receipt of a notice of
termination by the Servicer, the Lender may direct the Servicer or its
designee to appoint a successor Servicer pursuant to the provisions, and
subject to the conditions, set forth in Section 8.02 regarding the
Servicer's appointment of a successor Servicer;
(2) the Lender's rights are subject to this Agreement; and
(3) the Servicer shall remain subject to termination as servicer under
this Agreement pursuant to the terms hereof.
SECTION 7.05. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer meeting the criteria specified in Section 7.06 shall
have assumed the Master Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
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SECTION 7.06. Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accept in writing such
assignment and delegation and assume the obligations of the Master Servicer
hereunder (a) shall have a net worth of not less than $15,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (b)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (c) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an officer's certificate and an Opinion of Independent
counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising out of acts or omissions prior to the
effective date thereof.
SECTION 7.07. Rights of the Depositor in Respect of the Servicer and
the Master Servicer.
Each of the Master Servicer and the Servicer shall afford (and any
Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford) the
Depositor and the Trustee, upon reasonable notice, during normal business hours,
access to all records maintained by the Master Servicer or the Servicer (and any
such Sub-Servicer) in respect of the Servicer's rights and obligations hereunder
and access to officers of the Master Servicer or the Servicer (and those of any
such Sub-Servicer) responsible for such obligations, and the Master Servicer
shall have access to all such records maintained by the Servicer and any
Sub-Servicers. Upon request, each of the Master Servicer and the Servicer shall
furnish to the Depositor and the Trustee its (and any such Sub-Servicer's) most
recent financial statements and such other information relating to the Master
Servicer's or the Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any such Sub-Servicer possesses). To the
extent such information is not otherwise available to the public, the Depositor
and the Trustee shall not disseminate any information obtained pursuant to the
preceding two sentences without the Master Servicer's or the Servicer's written
consent, except as required pursuant to this Agreement or to the extent that it
is appropriate to do so (i) to its legal counsel, auditors, taxing authorities
or other governmental agencies and the Certificateholders, (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor and the Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor, the
Servicer or the Master Servicer, (iv) disclosure as required pursuant to this
Agreement or (v) disclosure of any and all information (A)
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in any preliminary or final offering circular, registration statement or
contract or other document pertaining to the transactions contemplated by the
Agreement approved in advance by the Depositor, the Servicer or the Master
Servicer or (B) to any affiliate, independent or internal auditor, agent,
employee or attorney of the Trustee having a need to know the same, provided
that the Trustee advises such recipient of the confidential nature of the
information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing in this
Section 7.07 shall limit the obligation of the Servicer to comply with any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the Servicer to provide access as provided in this Section
7.07 as a result of such obligation shall not constitute a breach of this
Section. Nothing in this Section 7.07 shall require the Servicer to collect,
create, collate or otherwise generate any information that it does not generate
in its usual course of business. The Servicer shall not be required to make
copies of or ship documents to any party unless provisions have been made for
the reimbursement of the costs thereof. The Depositor may, but is not obligated
to, enforce the obligations of the Master Servicer and the Servicer under this
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer or the Servicer under
this Agreement or exercise the rights of the Master Servicer or any Servicer
under this Agreement; provided that neither the Master Servicer nor the Servicer
shall be relieved of any of its obligations under this Agreement by virtue of
such performance by the Depositor or its designee. The Depositor shall not have
any responsibility or liability for any action or failure to act by the Master
Servicer or the Servicer and is not obligated to supervise the performance of
the Master Servicer or the Servicer under this Agreement or otherwise.
SECTION 7.08. Duties of the Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager will provide
reports and recommendations concerning certain delinquent and defaulted Mortgage
Loans, and as to the collection of any Prepayment Charges with respect to the
Mortgage Loans. Such reports and recommendations will be based upon information
provided to the Credit Risk Manager pursuant to the Credit Risk Management
Agreements, and the Credit Risk Manager shall look solely to the Servicer and/or
Master Servicer for all information and data (including loss and delinquency
information and data) relating to the servicing of the related Mortgage Loans.
Upon any termination of the Credit Risk Manager or the appointment of a
successor Credit Risk Manager, the Depositor shall give written notice thereof
to the Servicer, the Master Servicer, the Securities Administrator, the Trustee,
and each Rating Agency. Notwithstanding the foregoing, the termination of the
Credit Risk Manager pursuant to this Section shall not become effective until
the appointment of a successor Credit Risk Manager.
SECTION 7.09. Limitation Upon Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance or
bad faith in its performance of its duties. The Credit Risk Manager and any
director, officer, employee, or agent of the Credit Risk Manager
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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, and may
rely in good faith upon the accuracy of information furnished by the Servicer
pursuant to the Credit Risk Management Agreement in the performance of its
duties thereunder and hereunder.
SECTION 7.10. Removal of the Credit Risk Manager.
The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager, with a copy to
the Securities Administrator and the Master Servicer.
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ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Events of Default.
(a) "Servicer Event of Default," wherever used herein, means any one
of the following events:
(i) any failure by the Servicer to remit to the Securities
Administrator for distribution to the Certificateholders any payment
(other than a P&I Advance required to be made from its own funds on any
Servicer Remittance Date pursuant to Section 5.03) required to be made by
the Servicer under the terms of the Certificates and this Agreement which
continues unremedied for a period of one Business Day after the date upon
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Depositor or the Trustee (in
which case notice shall be provided by telecopy), or to the Servicer, the
Depositor, the Trustee and by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(ii) any failure on the part of the Servicer duly 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 the material
breach by the Servicer of any representation and warranty contained in
Section 2.05, which continues unremedied for a period of 30 days after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Depositor or
the Trustee or to the Servicer, the Depositor and the Trustee by the
Holders of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that in the case of a failure that cannot be cured
within thirty (30) days, the cure period may be extended for an
additional thirty (30) days if such Servicer can demonstrate to the
reasonable satisfaction of the Trustee that the Servicer is diligently
pursuing remedial action; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceeding, or for the winding-up or liquidation
of its affairs, shall have been entered against the Servicer and such
decree or order shall have remained in force undischarged or unstayed for
a period of 90 days; or
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property; or
(v) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations;
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(vi) failure by the Servicer to duly perform, within the
required time period, its obligations under Section 3.17, 3.18 or 3.19
which failure continues unremedied for a period of ten (10) days after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by any party to this
Agreement; or
(vii) any failure of the Servicer to make any P&I Advance on any
Servicer Remittance Date required to be made from its own funds pursuant
to Section 5.03 which continues unremedied until 3:00 p.m. New York time
on the Business Day immediately following the Servicer Remittance Date;
or
(viii) failure of the Servicer to maintain at least an "average"
rating from the Rating Agencies.
If a Servicer Event of Default described in clauses (i) through (vi) or
(viii) of this Section shall occur, then, and in each and every such case, so
long as such Servicer Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the defaulting Servicer (and to the Depositor if given by
the Trustee or to the Trustee if given by the Depositor) with a copy to the
Master Servicer and each Rating Agency, terminate all of the rights and
obligations of the defaulting Servicer in its capacity as Servicer under this
Agreement, to the extent permitted by law, and in and to the related Mortgage
Loans and the proceeds thereof. If a Servicer Event of Default described in
clause (vii) hereof shall occur, the Trustee shall, by notice in writing to the
defaulting Servicer, the Depositor and the Master Servicer, terminate all of the
rights and obligations of the defaulting Servicer in its capacity as Servicer
under this Agreement and in and to the related Mortgage Loans and the proceeds
thereof. Subject to Section 8.02, on or after the receipt by the defaulting
Servicer of such written notice, all authority and power of the defaulting
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the related Mortgage Loans or otherwise,
shall pass to and be vested in the Master Servicer pursuant to and under this
Section, and, without limitation, the Master Servicer is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the defaulting Servicer, any and all documents and
other instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the related Mortgage
Loans and related documents, or otherwise. The defaulting Servicer agrees
promptly (and in any event no later than ten Business Days subsequent to such
notice) to provide the Master Servicer with all documents and records requested
by it to enable it to assume the defaulting Servicer's functions under this
Agreement, and to cooperate with the Master Servicer in effecting the
termination of the defaulting Servicer's responsibilities and rights under this
Agreement, including, without limitation, the transfer within one Business Day
to the Master Servicer for administration by it of all cash amounts which at the
time shall be or should have been credited by the defaulting Servicer to the
Collection Account held by or on behalf of the defaulting Servicer or thereafter
be received with respect to the related Mortgage Loans or any related REO
Property (provided, however, that the defaulting Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Agreement on
or prior to the date of such termination, whether in respect of P&I Advances,
Servicing Advances, accrued and unpaid Servicing Fees or otherwise, and shall
continue to be entitled to the benefits of Section
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7.03, notwithstanding any such termination, with respect to events occurring
prior to such termination). Reimbursement of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances,
Servicing Advances and accrued and unpaid Servicing Fees shall be made on a
first in, first out ("FIFO") basis no later than the related Servicer Remittance
Date. For purposes of this Section 8.01(a), the Trustee shall not be deemed to
have knowledge of a Servicer Event of Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Servicer Event of Default is received by the Trustee at its Corporate
Trust Office and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Master Servicer and the Rating
Agencies of the occurrence of a Servicer Event of Default of which it has
knowledge as provided above.
The Master Servicer shall be entitled to be reimbursed by the defaulting
Servicer (or from amounts on deposit in the Distribution Account if the
defaulting Servicer is unable to fulfill its obligations hereunder) for all
reasonable out-of-pocket or third party costs associated with the transfer of
servicing from the defaulting Servicer, including without limitation, any
reasonable out-of-pocket or third party costs or expenses associated with the
complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Master Servicer to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Master Servicer to service the related Mortgage Loans properly and
effectively, upon presentation of reasonable documentation of such costs and
expenses.
(b) "Master Servicer Event of Default," wherever used herein, means
any one of the following events:
(i) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in this
Agreement, or the breach by the Master Servicer of any representation and
warranty contained in Section 2.04, which continues unremedied for a
period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer by the Depositor or the Trustee or to the Master Servicer, the
Depositor and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(ii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceeding, or for the winding-up or liquidation
of its affairs, shall have been entered against the Master Servicer and
such decree or order shall have remained in force undischarged or
unstayed for a period of 90 days; or
(iii) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property; or
(iv) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable
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insolvency or reorganization statute, make an assignment for the benefit
of its creditors, or voluntarily suspend payment of its obligations.
If a Master Servicer Event of Default shall occur, then, and in each and
every such case, so long as such Master Servicer Event of Default shall not have
been remedied, the Depositor or the Trustee may, and at the written direction of
the Holders of Certificates entitled to at least 51% of Voting Rights, the
Trustee shall, by notice in writing to the Master Servicer (and to the Depositor
if given by the Trustee or to the Trustee if given by the Depositor) with a copy
to each Rating Agency, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement, to the extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Certificates (other than as a Holder of any Certificate) or the
Mortgage Loans or otherwise including, without limitation, the compensation
payable to the Master Servicer under this Agreement, shall pass to and be vested
in the Trustee pursuant to and under this Section, and, without limitation, the
Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to
execute and deliver, on behalf of and at the expense of the Master Servicer, any
and all documents and other instruments and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees promptly (and in any event no later than ten Business Days subsequent to
such notice) to provide the Trustee with all documents and records requested by
it to enable it to assume the Master Servicer's functions under this Agreement,
and to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights under this Agreement (provided, however,
that the Master Servicer shall continue to be entitled to receive all amounts
accrued or owing to it under this Agreement on or prior to the date of such
termination and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(b), the Trustee shall not
be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default of which it has knowledge as
provided above.
To the extent that the costs and expenses of the Trustee related to the
termination of the Master Servicer, appointment of a successor Master Servicer
or the transfer and assumption of the master servicing by the Trustee
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Event of
Default and (ii) all costs and expenses associated with the complete transfer of
the master servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor Master Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
Master Servicer to master service the Mortgage Loans in accordance with this
Agreement) are not fully and timely reimbursed by the terminated Master
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.
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SECTION 8.02. Master Servicer to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination, the Master Servicer shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and the transactions
set forth or provided for herein, and all the responsibilities, duties and
liabilities relating thereto and arising thereafter shall be assumed by the
Master Servicer (except for any representations or warranties of the Servicer
under this Agreement, the responsibilities, duties and liabilities contained in
Section 2.03 and the obligation to deposit amounts in respect of losses pursuant
to Section 3.10(b)) by the terms and provisions hereof including, without
limitation, the Servicer's obligations to make P&I Advances pursuant to Section
5.03 of this Agreement; provided, however, that if the Master Servicer is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Master Servicer shall not be
obligated to make P&I Advances pursuant to Section 5.03 of this Agreement; and
provided further, that any failure to perform such duties or responsibilities
caused by such Servicer's failure to provide information required by Section
8.01 shall not be considered a default by the Master Servicer as successor to
the Servicer hereunder; provided, however, that (1) it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 120 days) before the actual servicing functions can be fully
transferred to the Master Servicer or any successor Servicer appointed in
accordance with the following provisions and (2) any failure to perform such
duties or responsibilities caused by the Servicer's failure to provide
information required by Section 8.01 of this Agreement shall not be considered a
default by the Master Servicer as successor to the Servicer. As compensation
therefor, the Master Servicer shall be entitled to the Servicing Fee and all
funds relating to the related Mortgage Loans to which the terminated Servicer
would have been entitled if it had continued to act hereunder. Notwithstanding
the above and subject to the immediately following paragraph, the Master
Servicer may, if it shall be unwilling to so act, or shall, if it is unable to
so act promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth below as the
successor to the terminated Servicer under this Agreement in the assumption of
all or any part of the responsibilities, duties or liabilities of the terminated
Servicer under this Agreement.
Notwithstanding anything herein to the contrary, in no event shall the
Trustee or the Master Servicer be liable for any Servicing Fee or for any
differential in the amount of the Servicing Fee paid hereunder and the amount
necessary to induce any successor Servicer to act as successor Servicer under
this Agreement and the transactions set forth or provided for herein.
Any successor Servicer appointed under this Agreement must (i) be an
established mortgage loan servicing institution that is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac approved seller/servicer, (ii) be approved by each Rating Agency by a
written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates, (iii) have a net worth
of not less than $15,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the related Servicer (other than liabilities of the related
Servicer hereunder incurred prior to termination of such Servicer under Section
8.01 herein) under this Agreement as if originally named as a party to this
Agreement.
(b) (1) All servicing transfer costs (including, without limitation,
servicing transfer costs of the type described in Section 8.02(a) and incurred
by the Trustee, the Master
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Servicer and any successor Servicer under paragraph (b)(2) below) shall be paid
by the terminated Servicer upon presentation of reasonable documentation of such
costs, and if such predecessor or initial Servicer, as applicable, defaults in
its obligation to pay such costs, the successor Servicer, the Master Servicer
and the Trustee shall be entitled to reimbursement therefor from the assets of
the Trust Fund.
(2) No appointment of a successor to the Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Servicer under this
Agreement, the Master Servicer shall act in such capacity as hereinabove
provided.
SECTION 8.03. Notification to Certificateholders.
(a) Upon any termination of the Servicer or the Master Servicer
pursuant to Section 8.01(a) or (b) or any appointment of a successor to the
Servicer or the Master Servicer pursuant to Section 8.02, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register.
(b) Not later than the later of 60 days after the occurrence of any
event, which constitutes or which, with notice or lapse of time or both, would
constitute a Servicer Event of Default or a Master Servicer Event of Default or
five days after a Responsible Officer of the Trustee becomes aware of the
occurrence of such an event, the Trustee shall transmit by mail to all Holders
of Certificates notice of each such occurrence, unless such default or Servicer
Event of Default or Master Servicer Event of Default shall have been cured or
waived.
SECTION 8.04. Waiver of Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights evidenced by
all Classes of Certificates affected by any default, Servicer Event of Default
or Master Servicer Event of Default hereunder may waive such default, Servicer
Event of Default or Master Servicer Event of Default; provided, however, that a
Servicer Event of Default under clause (i) or (vii) of Section 8.01(a) may be
waived only by all of the Holders of the Regular Certificates. Upon any such
waiver of a default, Servicer Event of Default or Master Servicer Event of
Default, such default, Servicer Event of Default or Master Servicer Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other
default, Servicer Event of Default or Master Servicer Event of Default or impair
any right consequent thereon except to the extent expressly so waived.
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ARTICLE IX
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 9.01. Duties of Trustee and Securities Administrator.
The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing or waiver of all Master Servicer Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of a Master Servicer Event of Default, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
Each of the Trustee and the Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to it, which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
The Trustee shall promptly remit to the related Servicer any complaint,
claim, demand, notice or other document (collectively, the "Notices") delivered
to the Trustee as a consequence of the assignment of any Mortgage Loan hereunder
and relating to the servicing of the Mortgage Loans; provided than any such
notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.
No provision of this Agreement shall be construed to relieve the Trustee
or the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event of
Default, and after the curing or waiver of all such Master Servicer
Events of Default which may have occurred with respect to the Trustee and
at all times with respect to the Securities Administrator, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the
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absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities Administrator,
respectively, may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee or the Securities
Administrator, respectively, that conform to the requirements of this
Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall
be liable for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee or an officer or officers
of the Securities Administrator, respectively, unless it shall be proved
that the Trustee or the Securities Administrator, respectively, was
negligent in ascertaining the pertinent facts; and
(iii) Neither the Trustee nor the Securities Administrator shall
be liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the Holders
of Certificates entitled to at least 25% of the Voting Rights relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee or the Securities Administrator or exercising
any trust or power conferred upon the Trustee or the Securities
Administrator under this Agreement.
SECTION 9.02. Certain Matters Affecting Trustee and Securities
Administrator.
(a) Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may request
and rely upon and shall be protected in acting or refraining from acting
upon any resolution, Officers' Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel of its selection and any advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall
be under any obligation to exercise any of the trusts or powers vested in
it by this Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any
of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or the
Securities Administrator, as the case may be, reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of a
Master Servicer Event of Default (which has not been cured or waived), to
exercise such of the rights and powers vested in it by this Agreement,
and to
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use the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of
such person's own affairs;
(iv) Neither the Trustee nor the Securities Administrator shall
be liable for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of
Default hereunder and after the curing or waiver of all Master Servicer
Events of Default which may have occurred with respect to the Trustee and
at all times with respect to the Securities Administrator, neither the
Trustee nor the Securities Administrator shall be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Holders of Certificates entitled to
at least 25% of the Voting Rights; provided, however, that if the payment
within a reasonable time to the Trustee or the Securities Administrator
of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee or the
Securities Administrator, as applicable, not reasonably assured to the
Trustee or the Securities Administrator by such Certificateholders, the
Trustee or the Securities Administrator, as applicable, may require
reasonable indemnity satisfactory to it against such expense, or
liability from such Certificateholders as a condition to taking any such
action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(vii) The Trustee shall not be liable for any loss resulting from
the investment of funds held in the Collection Account, for any loss
resulting from the investment of funds held in the Reserve Fund or for
any loss resulting from the redemption or sale of any such investment as
therein authorized;
(viii) The Trustee shall not be deemed to have notice of any
default, Master Servicer Event of Default or Servicer Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by a Responsible Officer of the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Certificates and
this Agreement; and
(ix) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, each
agent, custodian and other Person employed to act hereunder.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any
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such suit, action or proceeding instituted by the Trustee shall be brought in
its name for the benefit of all the Holders of such Certificates, subject to the
provisions of this Agreement.
(c) The Trustee is hereby directed by the Depositor to execute the Cap
Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
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 the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.
(d) None of the Securities Administrator, the Master Servicer, the
Servicer, the Seller, the Depositor, the Custodian or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.
SECTION 9.03. Trustee and Securities Administrator not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgments of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
9.12) shall be taken as the statements of the Depositor and neither the Trustee
nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from any Collection Account
by the related Servicer, other than with respect to the Securities Administrator
any funds held by it or on behalf of the Trustee in accordance with Section 3.23
and 3.24.
SECTION 9.04. Trustee and Securities Administrator May Own
Certificates.
Each of the Trustee and the Securities Administrator in its individual
capacity or any other capacity may become the owner or pledgee of Certificates
and may transact business with other interested parties and their Affiliates
with the same rights it would have if it were not Trustee or the Securities
Administrator.
SECTION 9.05. Fees and Expenses of Trustee and Securities
Administrator.
The fees of the Trustee and the Securities Administrator hereunder and of
▇▇▇▇▇ Fargo under the Custodial Agreement shall be paid in accordance with a
side letter agreement with the Master Servicer and at the sole expense of the
Master Servicer. In addition, the Trustee, the Securities Administrator, the
Custodian and any director, officer, employee or agent of the
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Trustee, the Securities Administrator and the Custodian shall be indemnified by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator in connection with any claim or legal action or
any pending or threatened claim or legal action arising out of or in connection
with the acceptance or administration of its respective obligations and duties
under this Agreement, including the Cap Contracts and any and all other
agreements related hereto, other than any loss, liability or expense (i) for
which the Trustee is indemnified by the Master Servicer or any Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 11.01(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment hereunder made by the Master Servicer to the Trustee shall be from
the Master Servicer's own funds, without reimbursement from REMIC I therefor.
SECTION 9.06. Eligibility Requirements for Trustee and Securities
Administrator.
The Trustee and the Securities Administrator shall at all times be a
corporation or an association (other than the Depositor, the Seller, the Master
Servicer or any Affiliate of the foregoing) organized and doing business under
the laws of any state or the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 (or a member of a bank holding company whose capital and
surplus is at least $50,000,000) and subject to supervision or examination by
federal or state authority. If such corporation or association publishes reports
of conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07.
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SECTION 9.07. Resignation and Removal of Trustee and Securities
Administrator.
The Trustee and the Securities Administrator may at any time resign and
be discharged from the trust hereby created by giving written notice thereof to
the Depositor, to the Master Servicer, to the Securities Administrator (or the
Trustee, if the Securities Administrator resigns) and to the Certificateholders.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor trustee or successor securities administrator by written instrument,
in duplicate, which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee, successor securities
administrator, Trustee or Securities Administrator, as applicable.
If at any time the Trustee or the Securities Administrator shall cease to
be eligible in accordance with the provisions of Section 9.06 and shall fail to
resign after written request therefor by the Depositor, or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee or the Securities Administrator and appoint a
successor trustee or successor securities administrator by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee or the Securities Administrator so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders, the Trustee (in the
case of the removal of the Securities Administrator), the Securities
Administrator (in the case of the removal of the Trustee) and the Master
Servicer by the Depositor.
Any resignation or removal of the Trustee or the Securities Administrator
and appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall not become effective
until acceptance of appointment by the successor trustee or successor securities
administrator, as applicable, as provided in Section 8.08.
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Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.
SECTION 9.08. Successor Trustee or Securities Administrator.
Any successor trustee or successor securities administrator appointed as
provided in Section 9.07 shall execute, acknowledge and deliver to the Depositor
and its predecessor trustee or predecessor securities administrator an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee or predecessor securities administrator
shall become effective and such successor trustee or successor securities
administrator without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or securities
administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Mortgage Loan Documents and related documents and statements
to the extent held by it hereunder, as well as all moneys, held by it hereunder,
and the Depositor and the predecessor trustee or predecessor securities
administrator shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee or successor securities administrator all
such rights, powers, duties and obligations.
No successor trustee or successor securities administrator shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee or successor securities administrator shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
trustee or successor securities administrator shall not result in a downgrading
of any Class of Certificates by any Rating Agency, as evidenced by a letter from
each Rating Agency.
Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Depositor shall mail
notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.
SECTION 9.09. Merger or Consolidation of Trustee or Securities
Administrator.
Any corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 8.06, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
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SECTION 9.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
REMIC I or property securing the same may at the time be located, the Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of REMIC I, and to vest in such Person or Persons, in such capacity,
and for the benefit of the Holders of the Certificates, such title to REMIC I,
or any part thereof, and, subject to the other provisions of this Section 9.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
9.06 hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trust conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee, or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or co-trustee.
SECTION 9.11. Appointment of Office or Agency.
The Certificates may be surrendered for registration of transfer or
exchange at the Securities Administrator's office located at Sixth and
Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and presented for final distribution at
the Corporate Trust Office of the Securities Administrator
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where notices and demands to or upon the Securities Administrator in respect of
the Certificates and this Agreement may be served.
SECTION 9.12. Representations and Warranties.
The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator, the Servicer and the Depositor as applicable, as of
the Closing Date, that:
(i) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United States
of America.
(ii) The execution and delivery of this Agreement by it, and the
performance and compliance with the terms of this Agreement by it, will
not violate its articles of association or bylaws or constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) It is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which
violation, in its good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of it to perform its
obligations under this Agreement or its financial condition.
(vi) No litigation is pending or, to the best of its knowledge,
threatened against it, which would prohibit it from entering into this
Agreement or, in its good faith reasonable judgment, is likely to
materially and adversely affect either the ability of it to perform its
obligations under this Agreement or its financial condition.
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ARTICLE X
TERMINATION
▇▇▇▇▇▇▇ ▇▇.▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Liquidation of All
Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicer to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or the Classes of Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Master Servicer of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St.
▇▇▇▇▇, living on the date hereof and (ii) the Last Scheduled Distribution Date.
The purchase by the Master Servicer of all Mortgage Loans and each REO Property
remaining in REMIC I shall be at a price (the "Termination Price") equal to the
sum of (i) the greater of (A) the aggregate Purchase Price of all the Mortgage
Loans included in REMIC I, plus the appraised value of each REO Property, if
any, included in REMIC I, such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee in their reasonable
discretion and (B) the aggregate fair market value of all of the assets of REMIC
I (as determined by the Master Servicer and the Trustee, as of the close of
business on the third Business Day next preceding the date upon which notice of
any such termination is furnished to Certificateholders pursuant to the third
paragraph of this Section 10.01) plus (ii) any amounts due the Servicer and the
Master Servicer in respect of unpaid Servicing Fees, Master Servicing Fees and
outstanding P&I Advances and Servicing Advances.
(b) The Master Servicer shall have the right to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
of the preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Master Servicer may elect to purchase all
of the Mortgage Loans and each REO Property remaining in REMIC I pursuant to
clause (i) above only if the aggregate Stated Principal Balance of the Mortgage
Loans and each REO Property remaining in the Trust Fund at the time of such
election is reduced to less than or equal to 10% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date. By acceptance of
the Residual Certificates, the Holder of the Residual Certificates agrees, in
connection with any termination hereunder, to assign and transfer any portion of
the Termination Price in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class CE
Certificates.
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(c) Notice of the liquidation of the Certificates shall be given
promptly by the Securities Administrator by letter to the Certificateholders
mailed (a) in the event such notice is given in connection with the purchase of
the Mortgage Loans and each REO Property by the Master Servicer, not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of the final distribution on the Certificates or (b) otherwise during
the month of such final distribution on or before the Determination Date in such
month, in each case specifying (i) the Distribution Date upon which the Trust
Fund will terminate and the final payment in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or the Certificates will be made upon
presentation and surrender of the related Certificates at the office of the
Securities Administrator therein designated, (ii) the amount of any such final
payment, (iii) that no interest shall accrue in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or Certificates from and after the Interest
Accrual Period relating to the final Distribution Date therefor and (iv) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Securities Administrator. In the event such
notice is given in connection with the purchase of all of the Mortgage Loans and
each REO Property remaining in REMIC I by the Master Servicer, the Master
Servicer shall deliver to the Securities Administrator for deposit in the
Distribution Account not later than the Business Day prior to the Distribution
Date on which the final distribution on the Certificates an amount in
immediately available funds equal to the above-described Termination Price. The
Securities Administrator shall remit to the Servicer, the Master Servicer, the
Trustee and the Custodian from such funds deposited in the Distribution Account
(i) any amounts which the Servicer would be permitted to withdraw and retain
from the Collection Account pursuant to Section 3.09 as if such funds had been
deposited therein (including all unpaid Servicing Fees and all outstanding P&I
Advances and Servicing Advances) and (ii) any other amounts otherwise payable by
the Securities Administrator to the Master Servicer, the Trustee, the Custodian
and the Servicer from amounts on deposit in the Distribution Account pursuant to
the terms of this Agreement prior to making any final distributions pursuant to
Section 10.01(d) below. Upon certification to the Trustee by the Securities
Administrator of the making of such final deposit, the Trustee shall promptly
release or cause to be released to the Master Servicer the Mortgage Files for
the remaining Mortgage Loans, and Trustee shall execute all assignments,
endorsements and other instruments delivered to it and necessary to effectuate
such transfer.
(d) Upon presentation of the Certificates by the Certificateholders on
the final Distribution Date, the Securities Administrator shall distribute to
each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 5.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
10.01 shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Securities Administrator shall mail a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and
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expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Securities Administrator shall pay to the
Depositor all such amounts, and all rights of non-tendering Certificateholders
in or to such amounts shall thereupon cease. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust by the Securities
Administrator as a result of such Certificateholder's failure to surrender its
Certificate(s) on the final Distribution Date for final payment thereof in
accordance with this Section 10.01. Any such amounts held in trust by the
Securities Administrator shall be held uninvested in an Eligible Account.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Master Servicer purchases all the Mortgage
Loans and each REO Property or the final payment on or other liquidation of the
last Mortgage Loan or REO Property remaining in REMIC I pursuant to Section
10.01, the Trust Fund shall be terminated in accordance with the following
additional requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to each Trust REMIC's final
Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
satisfy all requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of
Counsel obtained by and at the expense of the Master Servicer;
(ii) During such 90-day liquidation period and, at or prior to
the time of making of the final payment on the Certificates, the Trustee
shall sell all of the assets of REMIC I to the Master Servicer for cash;
and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or
cause to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand in the Trust Fund (other than cash retained
to meet claims), and the Trust Fund shall terminate at that time.
(b) At the expense of the Master Servicer (or, if the Trust Fund is
being terminated as a result of the occurrence of the event described in clause
(ii) of the first paragraph of Section 10.01, at the expense of the Trust Fund),
the Master Servicer shall prepare or cause to be prepared the documentation
required in connection with the adoption of a plan of liquidation of each Trust
REMIC pursuant to this Section 10.02.
(c) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee to specify the 90-day liquidation period for each
Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.
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ARTICLE XI
REMIC PROVISIONS
SECTION 11.01. REMIC Administration.
(a) The Trustee shall elect to treat each Trust REMIC as a REMIC under
the Code and, if necessary, under applicable state law. Each such election will
be made by the Securities Administrator on Form 1066 or other appropriate
federal tax or information return or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. The Class A Certificates, the Mezzanine
Certificates, the Class B Certificates, the Class P Certificates and the Class
CE Certificates (exclusive of any right to receive payments from the Reserve
Fund) shall be designated as the Regular Interests in REMIC II and the Class
R-II Interest shall be designated as the Residual Interests in REMIC II. The
Trustee shall not permit the creation of any "interests" in each Trust REMIC
(within the meaning of Section 860G of the Code) other than the REMIC I Regular
Interests and the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Securities Administrator shall be reimbursed for any and all
expenses relating to any tax audit of the Trust Fund (including, but not limited
to, any professional fees or any administrative or judicial proceedings with
respect to each Trust REMIC that involve the Internal Revenue Service or state
tax authorities), including the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Securities Administrator, as agent for
each Trust REMIC's tax matters person shall (i) act on behalf of the Trust Fund
in relation to any tax matter or controversy involving any Trust REMIC and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.
(d) The Securities Administrator shall prepare and file and the
Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.
(e) The Securities Administrator shall perform on behalf of each Trust
REMIC all reporting and other tax compliance duties that are the responsibility
of such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, as required by the Code, the REMIC Provisions or other
such compliance guidance, the Securities Administrator
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shall provide (i) to any Transferor of a Residual Certificate such information
as is necessary for the application of any tax relating to the transfer of a
Residual Certificate to any Person who is not a Permitted Transferee upon
receipt of additional reasonable compensation, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The
Depositor shall provide or cause to be provided to the Securities Administrator,
within ten (10) days after the Closing Date, all information or data that the
Securities Administrator reasonably determines to be relevant for tax purposes
as to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.
(f) To the extent in the control of the Trustee or the Securities
Administrator, each such Person (i) shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions, (ii) shall
not take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (A) endanger the status of each Trust
REMIC as a REMIC or (B) result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless such action or inaction is permitted under this Agreement or the Trustee
and the Securities Administrator have received an Opinion of Counsel, addressed
to the them (at the expense of the party seeking to take such action but in no
event at the expense of the Trustee or the Securities Administrator) to the
effect that the contemplated action will not, with respect to any Trust REMIC,
endanger such status or result in the imposition of such a tax, nor (iii) shall
the Securities Administrator take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action; provided that the Securities
Administrator may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. In addition, prior to taking any action with respect to any Trust REMIC
or the respective assets of each, or causing any Trust REMIC to take any action,
which is not contemplated under the terms of this Agreement, the Securities
Administrator will consult with the Trustee or its designee, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any Trust REMIC, and the Securities Administrator shall not take any
such action or cause any Trust REMIC to take any such action as to which the
Trustee has advised it in writing that an Adverse REMIC Event could occur. The
Trustee may consult with counsel to make such written advice, and the cost of
same shall be home by the party seeking to take the action not permitted by this
Agreement, but in no event shall such cost be an expense of the Trustee.
(g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local
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tax laws, such tax shall be charged (i) to the Trustee pursuant to Section
11.03, if such tax arises out of or results from a breach by the Trustee of any
of its obligations under this Article XI, (ii) to the Securities Administrator
pursuant to Section 11.03, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article XI,
(iii) to the Master Servicer pursuant to Section 11.03, if such tax arises out
of or results from a breach by the Master Servicer of any of its obligations
under Article IV or under this Article XI, (iv) to the Servicer pursuant to
Section 11.03, if such tax arises out of or results from a breach by the
Servicer of any of its obligations under Article III or under this Article XI,
or (v) in all other cases, against amounts on deposit in the Distribution
Account and shall be paid by withdrawal therefrom.
(h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.
(i) Following the Startup Day, neither the Securities Administrator
nor the Trustee shall accept any contributions of assets to any Trust REMIC
other than in connection with any Qualified Substitute Mortgage Loan delivered
in accordance with Section 2.03 unless it shall have received an Opinion of
Counsel to the effect that the inclusion of such assets in the Trust Fund will
not cause the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.
(j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.
SECTION 11.02. Prohibited Transactions and Activities.
None of the Depositor, the Servicer, the Securities Administrator, the
Master Servicer or the Trustee shall sell, dispose of or substitute for any of
the Mortgage Loans (except in connection with (i) the foreclosure of a Mortgage
Loan, including but not limited to, the acquisition or sale of a Mortgaged
Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy of REMIC
I, (iii) the termination of REMIC I pursuant to Article X of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement or (v) a purchase
of Mortgage Loans pursuant to Article II of this Agreement), nor acquire any
assets for any Trust REMIC (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Securities
Administrator (at the expense of
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the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust REMIC
to be subject to a tax on "prohibited transactions" or "contributions" pursuant
to the REMIC Provisions.
SECTION 11.03. Indemnification.
(a) The Trustee agrees to be liable for any taxes and costs incurred
by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicer including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or the Servicer as a result of the
Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.
(b) The Servicer agrees to indemnify the Trust Fund, the Depositor,
the Master Servicer, the Securities Administrator and the Trustee for any taxes
and costs including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, the Master Servicer, the Securities Administrator or
the Trustee, as a result of the Servicer's failure to perform its covenants set
forth in Article III in accordance with the standard of care of the Servicer set
forth in this Agreement.
(c) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, the Servicer and the Trustee for any taxes and costs including any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicer or the Trustee, as a result of the Master Servicer's
failure to perform its covenants set forth in Article IV in accordance with the
standard of care of the Master Servicer set forth in this Agreement.
(d) The Securities Administrator agrees to be liable for any taxes and
costs incurred by the Trust Fund, the Depositor, the Servicer or the Trustee
including any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor, the Servicer or the Trustee as a result of the Securities
Administrator's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Securities Administrator set forth
in this Agreement.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer, the Master Servicer, the Securities Administrator and the Trustee, but
without the consent of any of the Certificateholders, (i) to cure any ambiguity
or defect, (ii) to correct, modify or supplement any provisions herein
(including to give effect to the expectations of Certificateholders), or (iii)
to make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement and that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Trustee, adversely affect in any material respect the interests
of any Certificateholder; provided that any such amendment shall be deemed not
to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates. No amendment shall be
deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Servicer, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 12.01, Certificates registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be entitled to
Voting Rights with respect to matters affecting such Certificates. Without
limiting the generality of the foregoing, any amendment to this Agreement
required in connection with the compliance with or the clarification of any
reporting obligations described in Section 5.06 hereof shall not require the
consent of any Certificateholder and without the need for any Opinion of Counsel
or Rating Agency confirmation.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment is permitted
hereunder and will not result in the imposition of any tax on any Trust REMIC
pursuant to the REMIC Provisions or cause any Trust
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REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding and that such amendment is authorized or permitted by this
Agreement.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section 12.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to this
Section 12.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.
SECTION 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Depositor at the expense of the Certificateholders, but only upon direction of
the Trustee accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder. and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 12.04. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without regard to
conflicts of laws principles thereof.
SECTION 12.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when received if sent by facsimile,
receipt confirmed, if personally delivered at or mailed by first class mail,
postage prepaid, or by express delivery service or delivered in any other manner
specified herein, to (a) in the case of the Depositor, ACE Securities Corp.,
AMACAR GROUP, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (telecopy number:(▇▇▇) ▇▇▇-▇▇▇▇), or such
other address or telecopy number as may hereafter be furnished to the Servicer,
the Master Servicer, the Securities Administrator and the Trustee in writing by
the Depositor, (b) in the case of the Servicer, Saxon Mortgage Services, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Mr. ▇▇▇▇▇ ▇▇▇▇,
President (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇) or such other address or telecopy
number as may hereafter be furnished to the Trustee, the Master Servicer, the
Securities Administrator and the Depositor in writing by the Servicer, (c) in
the case of the Master Servicer and the Securities Administrator, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and for overnight delivery to ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Ace Securities Corp., 2005-RM1 (telecopy
number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or telecopy number as may
hereafter be furnished to the Trustee, the Depositor and the Servicer in writing
by the Master Servicer or the Securities Administrator and (d) in the case of
the Trustee, at the Corporate Trust Office or such other address or telecopy
number as the Trustee may hereafter be furnish to the Servicer, the Master
Servicer, the Securities Administrator and the Depositor in writing by the
Trustee. Any notice required or permitted to be given to a
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Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.
SECTION 12.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 12.07. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide notice to the
Rating Agencies with respect to each of the following of which a Responsible
Officer has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicer Event of Default or Master
Servicer Event of Default that has not been cured or waived;
3. The resignation or termination of the Servicer, the Master
Servicer or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant
to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Distribution Account; and
7. Any event that would result in the inability of the Trustee
as successor Servicer to make advances regarding delinquent Mortgage
Loans.
In addition, the Securities Administrator shall promptly make available
to each Rating Agency copies of each report to Certificateholders described in
Section 5.02.
The Servicer shall make available to each Rating Agency copies of the
following:
8. Each annual statement as to compliance described in Section
3.17; and
9. Each annual independent public accountants' servicing
report described in Section 3.18.
Any such notice pursuant to this Section 12.07 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage
177
prepaid, or by express delivery service to Standard & Poor's, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; to DBRS,
Dominion Bond Rating Service, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
and to ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ or such other addresses as the Rating Agencies may designate in writing to
the parties hereto.
SECTION 12.08. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 12.09. Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and for
the benefit of the Certificateholders, be, and be construed as, a sale of the
Mortgage Loans by the Depositor and not a pledge of the Mortgage Loans to secure
a debt or other obligation of the Depositor. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans are
held to be property of the Depositor, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, to secure a debt or other obligation of the Depositor and
(b)(1) this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; (2) the conveyance provided for in
Section 2.01 shall be deemed to be a grant by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders, of a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security agreement shall be
deemed to be all of the Depositor's obligations under this Agreement, including
the obligation to provide to the Certificateholders the benefits of this
Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee, on behalf of the Trust and for the
benefit of the Certificateholders, a security interest in the Mortgage Loans and
all other property described in clause (2) of the preceding sentence, for the
purpose of securing to the Trustee the performance by the Depositor of the
obligations described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
to be a true, absolute and unconditional sale of the Mortgage Loans and assets
constituting the Trust Fund by the Depositor to the Trustee, on behalf of the
Trust and for the benefit of the Certificateholders.
178
SECTION 12.10. Survival of Indemnification.
Any and all indemnities to be provided by any party to this Agreement
shall survive the termination and resignation of any party hereto and the
termination of this Agreement.
SECTION 12.11. Servicing Agreements.
With respect to the ResMae Mortgage Loans and ▇▇▇▇▇▇ Mortgage Loans, in
the event of any conflict between the provisions of this Agreement and the
provisions of the related Servicing Agreement, the provisions of the related
Servicing Agreement shall control.
179
IN WITNESS WHEREOF, the Depositor, the Servicer, the Master Servicer, the
Securities Administrator and the Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized, in each case as
of the day and year first above written.
ACE SECURITIES CORP.,
as Depositor
By: __________________________________________
Name:
Title:
By: __________________________________________
Name:
Title:
SAXON MORTGAGE SERVICES, INC.
as Servicer
By: __________________________________________
Name:
Title:
HSBC BANK USA, NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee
By: __________________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A.
as Master Servicer and Securities Administrator
By: __________________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED FOR PURPOSES OF
SECTION 9.05:
DB STRUCTURED PRODUCTS, INC
By: __________________________________________
Name:
Title:
By: __________________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED FOR PURPOSES OF
SECTION 7.08 AND 7.09:
THE MURRAYHILL COMPANY
By: __________________________________________
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of February 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of February 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of February 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of Saxon Mortgage Services, Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of February 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of ▇▇▇▇▇ Fargo Bank, N.A., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal] My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of February 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of HSBC Bank USA, National Association, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal] My commission expires