Exhibit 4.1
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WACHOVIA MORTGAGE LOAN TRUST, LLC,
as Depositor,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Certificate Administrator
▇▇▇▇▇ FARGO BANK, N.A. and NATIONAL CITY MORTGAGE CO.,
as Servicers
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
POOLING AND SERVICING AGREEMENT
Dated August 24, 2005
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Mortgage Pass-Through Certificates
Series 2005-A
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT........................................................1
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. ...............................................4
Section 1.02 Interest Calculations. .....................................33
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans..................................34
Section 2.02 Acceptance by the Custodian of the Mortgage Loans. ..........37
Section 2.03 Representations, Warranties and Covenants of the Servicers....39
Section 2.04 Assignment of Interest in the Mortgage Loan Purchase Agreement;
Depositor Representations and Warranties.....................41
Section 2.05 Intent of Parties and Protection of Title.....................43
Section 2.06 Designation of Interests in the REMIC.........................44
Section 2.07 Designation of Start-up Day...................................44
Section 2.08 REMIC Certificate Maturity Date...............................45
Section 2.09 Execution and Delivery of Certificates........................45
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. ........................45
Section 3.02 Subservicing; Enforcement of the Obligations of Servicers.....46
Section 3.03 Fidelity Bond; Errors and Omissions Insurance.................47
Section 3.04 Access to Certain Documentation...............................48
Section 3.05 Maintenance of Primary Insurance Policy; Claims...............48
Section 3.06 Rights of the Depositor, the Certificate Administrator
and the Trustee in Respect of the Servicers..................49
Section 3.07 Trustee to Act as Servicer....................................49
Section 3.08 Collection of Mortgage Loan Payments; Servicer Custodial
Accounts; Certificate Account; and Upper-Tier Certificate
Account......................................................50
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.....................................................53
Section 3.10 Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................54
Section 3.11 Permitted Withdrawals from the Servicer Custodial Accounts;
Certificate Account and Upper-Tier Certificate Account.......55
Section 3.12 Maintenance of Hazard Insurance...............................56
Section 3.13 Enforcement of Due-On-Sale Clauses; Assumption Agreements.....57
Section 3.14 Realization Upon Defaulted Mortgage Loans; REO Property.......58
Section 3.15 Custodian to Cooperate; Release of Mortgage Files.............60
Section 3.16 Documents, Records and Funds in Possession of the Servicers
to be Held for the Trustee...................................61
Section 3.17 Servicing Compensation........................................61
Section 3.18 Annual Statement as to Compliance.............................62
Section 3.19 Annual Independent Public Accountants' Servicing
Statement; Financial Statements..............................62
Section 3.20 Advances......................................................62
Section 3.21 Modifications, Waivers, Amendments and Consents...............63
Section 3.22 Reports to the Securities and Exchange Commission.............64
Section 3.23 Annual Certification..........................................64
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01 Servicer's Certificates.......................................65
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01 Distributions. ..............................................66
Section 5.02 Priorities of Distributions...................................66
Section 5.03 Allocation of Losses..........................................70
Section 5.04 Statements to Certificateholders..............................72
Section 5.05 Tax Returns and Reports to Certificateholders.................74
Section 5.06 Tax Matters Person............................................75
Section 5.07 Rights of the Tax Matters Person in Respect of
the Certificate Administrator................................75
Section 5.08 REMIC Related Covenants.......................................75
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. ...........................................77
Section 6.02 Registration of Transfer and Exchange of Certificates.........77
Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates. ..........82
Section 6.04 Persons Deemed Owners. ......................................82
ARTICLE VII
THE DEPOSITOR and THE SERVICERs
Section 7.01 Respective Liabilities of the Depositor and the Servicers......82
Section 7.02 Merger or Consolidation of the Depositor or a Servicer.........82
Section 7.03 Limitation on Liability of the Depositor, the Servicers
and Others; Liability of Servicers...........................83
Section 7.04 Depositor and Servicers Not to Resign. ......................84
ARTICLE VIII
DEFAULT
Section 8.01 Events of Default. ..........................................84
Section 8.02 Remedies of Trustee. ........................................86
Section 8.03 Directions by Certificateholders and Duties of Trustee
During Event of Default......................................86
Section 8.04 Action upon Certain Failures of a Servicer and upon
Event of Default.............................................87
Section 8.05 Trustee to Act; Appointment of Successor......................87
Section 8.06 Notification to Certificateholders. .........................88
ARTICLE IX
THE TRUSTEE AND CERTIFICATE ADMINISTRATOR
Section 9.01 Duties of Trustee and the Certificate Administrator...........88
Section 9.02 Certain Matters Affecting the Trustee and Certificate
Administrator................................................90
Section 9.03 Neither Trustee nor Certificate Administrator Liable for
Certificates or Mortgage Loans...............................92
Section 9.04 Trustee and Certificate Administrator May Own Certificates....93
Section 9.05 Eligibility Requirements for Trustee and Certificate
Administrator................................................93
Section 9.06 Resignation and Removal of Trustee and the Certificate
Administrator................................................94
Section 9.07 Successor Trustee or Certificate Administrator................95
Section 9.08 Merger or Consolidation of Trustee or the Certificate
Administrator................................................95
Section 9.09 Appointment of Co-Trustee or Separate Trustee.................96
Section 9.10 Authenticating Agents. ......................................97
Section 9.11 Trustee's Fees and Expenses and Certificate
Administrator's Fees and Expenses............................97
Section 9.12 [Reserved]....................................................98
Section 9.13 Paying Agents. ..............................................98
Section 9.14 Limitation of Liability. ....................................99
Section 9.15 Trustee May Enforce Claims Without Possession
of Certificates..............................................99
Section 9.16 Suits for Enforcement. ......................................99
Section 9.17 Waiver of Bond Requirement. ................................100
Section 9.18 Waiver of Inventory, Accounting and Appraisal Requirement....100
ARTICLE X
TERMINATION
Section 10.01 Termination upon Purchase by the Depositor or
Liquidation of All Mortgage Loans...........................100
Section 10.02 Additional Termination Requirements..........................102
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. .................................................102
Section 11.02 Recordation of Agreement. ..................................104
Section 11.03 Limitation on Rights of Certificateholders. ................104
Section 11.04 Governing Law. .............................................105
Section 11.05 Notices......................................................105
Section 11.06 Severability of Provisions. ................................105
Section 11.07 Certificates Nonassessable and Fully Paid. .................105
Section 11.08 Access to List of Certificateholders.........................106
APPENDICES
Appendix 1 Calculation of Uncertificated Lower-Tier Regular
Interest Y Principal Reduction Amounts
EXHIBITS
Exhibit 1-A-1 - Form of Face of Class 1-A-1 Certificate
Exhibit 1-A-R - Form of Face of Class 1-A-R Certificate
Exhibit 2-A-1 - Form of Face of Class 2-A-1 Certificate
Exhibit 2-A-2 - Form of Face of Class 2-A-2 Certificate
Exhibit 3-A-1 - Form of Face of Class 3-A-1 Certificate
Exhibit 3-A-2 - Form of Face of Class 3-A-2 Certificate
Exhibit 4-A-1 - Form of Face of Class 4-A-1 Certificate
Exhibit 4-A-2 - Form of Face of Class 4-A-2 Certificate
Exhibit B-1 - Form of Face of Class B-1 Certificate
Exhibit B-2 - Form of Face of Class B-2 Certificate
Exhibit B-3 - Form of Face of Class B-3 Certificate
Exhibit B-4 - Form of Face of Class B-4 Certificate
Exhibit B-5 - Form of Face of Class B-5 Certificate
Exhibit B-6 - Form of Face of Class B-6 Certificate
Exhibit C Form of Reverse of all Certificates......................C-1
Exhibit D-1 Mortgage Loan Schedule (Loan Group 1)..................D-1-1
Exhibit D-2 Mortgage Loan Schedule (Loan Group 2)..................D-2-1
Exhibit D-3 Mortgage Loan Schedule (Loan Group 3)..................D-3-1
Exhibit D-4 Mortgage Loan Schedule (Loan Group 4)..................D-4-1
Exhibit E Request for Release of Documents.........................E-1
Exhibit F Form of Certification of Establishment of Account........F-1
Exhibit G-1 Form of Transferor's Certificate.......................G-1-1
Exhibit G-2A Form 1 of Transferee's Certificate....................G-2A-1
Exhibit G-2B Form 2 of Transferee's Certificate....................G-2B-1
Exhibit H Form of Transferee Representation Letter
for ERISA Restricted Certificates........................H-1
Exhibit I Form of Affidavit Regarding Transfer of Residual
Certificates............................................I-1
Exhibit J Contents of Servicing File...............................J-1
Exhibit K Form of Special Servicing Agreement......................K-1
Exhibit L-1 Form of Servicer's Certificate (▇▇▇▇▇ Fargo)...........L-1-1
Exhibit L-2 Form of Servicer's Certificate (National City).........L-2-1
Exhibit M Form of Lost Note Affidavit..............................M-1
Exhibit N Form of Custodial Agreement..............................N-1
Exhibit O Form of Initial Certification............................O-1
Exhibit P Form of Final Certification..............................P-1
Exhibit Q Form of Certification....................................Q-1
Exhibit R Form of Certification to be Provided to Depositor........R-1
-23-
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated August 24, 2005, is hereby
executed by and among WACHOVIA MORTGAGE LOAN TRUST, LLC, as Depositor, WACHOVIA
BANK, NATIONAL ASSOCIATION, as Certificate Administrator, ▇▇▇▇▇ FARGO BANK, N.A.
("▇▇▇▇▇ Fargo"), as a Servicer, NATIONAL CITY MORTGAGE CO. ("National City"), as
a Servicer, and U.S. BANK NATIONAL ASSOCIATION, as Trustee.
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
In consideration of the mutual agreements herein contained, the Depositor,
the Servicers, the Certificate Administrator and the Trustee agree as follows:
PRELIMINARY STATEMENT
In exchange for the Certificates, the Depositor will convey the Trust
Estate to the Trustee and create the Trust.
Lower-Tier REMIC
As provided herein, the Certificate Administrator, on behalf of the
Trustee, will make an election to treat the entire segregated pool of assets
described in the definition of Trust Estate (including the Mortgage Loans), and
subject to this Agreement, as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes and such segregated pool of assets will
be designated as the "Lower-Tier REMIC." Component I of the Class 1-A-R
Certificates will represent ownership of the sole class of "residual interests"
in the Lower-Tier REMIC for purposes of the REMIC Provisions (as defined
herein).
The following table irrevocably sets forth the designation, Uncertificated
Pass-Through Rate and initial Uncertificated Principal Balance for each of the
"regular interests" in the Lower-Tier REMIC (the "Uncertificated Lower-Tier
Regular Interests") and the designation, Pass-Through Rate and initial Class
Certificate Balance of Component I of the Class 1-A-R Certificates. None of the
Uncertificated Lower-Tier Regular Interests will be certificated. Solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the Uncertificated Lower-Tier
Regular Interests and Component I of the Class 1-A-R Certificates shall be the
REMIC Certificate Maturity Date.
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Designation Uncertificated Initial Uncertificated
Pass-Through Rate (or Principal Balance (or Initial
Pass-Through Rate) Class Certificate Balance)
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Y-1 Variable(1) $57,266.24
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Y-2 Variable(1) $93,786.88
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Y-3 Variable(1) $39,002.06
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Y-4 Variable(1) $34,208.52
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Z-1 Variable(1) $114,475,223.64
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Z-2 Variable(1) $187,479,978.83
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Z-3 Variable(1) $77,974,371.72
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Z-4 Variable(1) $68,390,956.03
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Component I of the Variable(2) $100.00
Class 1-A-R
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(1) Calculated in accordance with the definition of "Uncertificated Pass-Through
Rate" herein.
(2) For each Distribution Date, interest will accrue on Component I of the Class
1-A-R Certificates at a per annum rate equal to the Net WAC for the Group 1
Mortgage Loans.
Upper-Tier REMIC
A segregated pool of assets consisting of the Uncertificated Lower-Tier
Regular Interests will be designated as the "Upper-Tier REMIC" and the
Certificate Administrator will make a separate REMIC election with respect
thereto. Each of the Certificates (other than the Class 1-A-R Certificates) will
be "regular interests" in the Upper-Tier REMIC (referred to collectively as the
"Regular Certificates") and Component II of the Class 1-A-R Certificates will
represent ownership of the sole class of "residual interests" in the Upper-Tier
REMIC for purposes of the REMIC Provisions. Solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date," for each of the Regular Certificates and Component II of the Class 1-A-R
Certificates shall be the REMIC Certificate Maturity Date. The Certificates and
the Uncertificated Lower-Tier Regular Interests will represent the entire
beneficial ownership interest in the Trust.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which the Classes of Certificates shall be issuable (except that one
Certificate of each Class of Certificates may be issued in any amount in excess
of the minimum denomination):
=============== ================== =========== ============= ==============
Classes Initial Class Pass-ThroughMinimum Integral
Multiples
Certificate In Excess
Balance Rate Denomination Of Minimum
--------------- ------------------ ----------- ------------- --------------
Class 1-A-1 $109,664,000.00 (1) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Component II $0.00 (1) (6) N/A
of Class 1-A-R
--------------- ------------------ ----------- ------------- --------------
Class 2-A-1 $171,967,000.00 (2) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class 2-A-2 $7,634,000.00 (2) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class 3-A-1 $71,522,000.00 (3) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class 3-A-2 $3,175,000.00 (3) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class 4-A-1 $62,732,000.00 (4) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class 4-A-2 $2,785,000.00 (4) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class B-1 $8,973,000.00 (5) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class B-2 $3,364,000.00 (5) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class B-3 $2,242,000.00 (5) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class B-4 $2,018,000.00 (5) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class B-5 $1,569,000.00 (5) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
Class B-6 $899,793.92 (5) $ 10,000 $1
--------------- ------------------ ----------- ------------- --------------
---------------
(1) For each Distribution Date, interest will accrue on these Certificates at a
per annum rate equal to the Net WAC for the Group 1 Mortgage Loans.
(2) For each Distribution Date, interest will accrue on these Certificates at a
per annum rate equal to the Net WAC for the Group 2 Mortgage Loans.
(3) For each Distribution Date, interest will accrue on these Certificates at a
per annum rate equal to the Net WAC for the Group 3 Mortgage Loans.
(4) For each Distribution Date, interest will accrue on these Certificates at a
per annum rate equal to the Net WAC for the Group 4 Mortgage Loans.
(5) For each Distribution Date, interest will accrue on these Certificates at a
per annum rate equal to Net WAC for Mortgage Loans in each Loan Group, weighted
on the basis of the aggregate Stated Principal Balances of the Mortgage Loans in
each Loan Group on the Due Date in the month preceding the month of such
Distribution Date minus the Class Certificate Balance of the related Classes of
Class A Certificates.
(6) Other than the 0.01% Percentage Interest in the Class 1-A-R Certificates to
be held by the Seller, the minimum denomination of the Class 1-A-R Certificates
will be 20% of the Percentage Interest of the Class 1-A-R Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
meanings specified in this Article:
1933 Act: The Securities Act of 1933, as amended.
Accrued Certificate Interest: For any Distribution Date and each
interest-bearing Class, one month's interest accrued during the related Interest
Accrual Period at the applicable Pass-Through Rate on the applicable Class
Certificate Balance.
Adjusted Pool Amount: With respect to any Distribution Date and Loan
Group, the Cut-Off Date Pool Principal Balance of the Mortgage Loans in such
Loan Group minus the sum of (i) all amounts in respect of principal received in
respect of the Mortgage Loans in such Loan Group (including, without limitation,
amounts received as Monthly Payments, Periodic Advances, Principal Prepayments,
Liquidation Proceeds and Substitution Adjustment Amounts) and distributed to
Holders of Certificates on such Distribution Date and all prior Distribution
Dates, (ii) the principal portion of all Realized Losses (other than Debt
Service Reductions) incurred on the Mortgage Loans in such Loan Group from the
Cut-Off Date through the end of the month preceding such Distribution Date and
(iii) any amounts capitalized as a result of modifications to such Mortgage
Loans pursuant to Section 3.21.
Advance: A Periodic Advance or a Servicing Advance.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
Aggregate Subordinate Percentage: As to any Distribution Date, the
aggregate Class Certificate Balance of the Subordinate Certificates divided by
the aggregate Pool Stated Principal Balance for all Loan Groups.
Agreement: This Pooling and Servicing Agreement together with all
amendments hereof and supplements hereto.
Amount Held for Future Distribution: As to any Distribution Date and
Loan Group, the total of the amounts held in the related Servicer Custodial
Account at the close of business on the preceding Determination Date on account
of (i) Principal Prepayments and Liquidation Proceeds received or made on the
Mortgage Loans in such Loan Group in the month of such Distribution Date and
(ii) payments which represent receipt of Monthly Payments on the Mortgage Loans
in such Loan Group in respect of a Due Date or Due Dates subsequent to the
related Due Date.
Appraised Value: With respect to any Mortgaged Property, either (i)
the lesser of (a) the appraised value determined in an appraisal obtained by the
originator at origination of such Mortgage Loan and (b) the sales price for such
property, except that, in the case of Mortgage Loans the proceeds of which were
used to refinance an existing mortgage loan, the Appraised Value of the related
Mortgaged Property is the appraised value thereof determined in an appraisal
obtained at the time of refinancing, or (ii) the appraised value determined in
an appraisal made at the request of a Mortgagor subsequent to origination in
order to eliminate the Mortgagor's obligation to keep a Primary Insurance Policy
in force.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to give record notice of the assignment of the Mortgage.
Authenticating Agents: As defined in Section 9.10.
Book-Entry Certificate: All Classes of Certificates other than
the Physical Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the State of North Carolina, Delaware,
the State of New York, each state in which the servicing office of a Servicer is
located or the states in which the Corporate Trust Offices of the Certificate
Administrator and the Trustee are located are required or authorized by law or
executive order to be closed.
Certificate: Any of the Wachovia Mortgage Loan Trust, LLC Mortgage
Pass-Through Certificates, Series 2005-A that are issued pursuant to this
Agreement.
Certificate Account: The separate Eligible Account created and
maintained by the Certificate Administrator pursuant to Section 3.08(c) in the
name of the Certificate Administrator, on behalf of the Trustee, for the benefit
of the Certificateholders and designated "Wachovia Bank, National Association,
in trust for registered holders of Wachovia Mortgage Loan Trust, LLC Mortgage
Pass-Through Certificates, Series 2005-A." Funds in the Certificate Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Certificate Administrator: Wachovia Bank, National Association, a
national banking association, and its successors-in-interest and, if a successor
certificate administrator is appointed hereunder, such successor, as certificate
administrator.
Certificate Administrator Fee: As to any Distribution Date, an
amount equal to one-twelfth of the Certificate Administrator Fee Rate multiplied
by the aggregate Stated Principal Balance of the Mortgage Loans immediately
following the Due Date in the month preceding the month in which such
Distribution Date occurs.
Certificate Administrator Fee Rate: 0.0075% per annum.
Certificate Balance: With respect to any Certificate at any date,
the product of the Percentage Interest of such Certificate and the Class
Certificate Balance of the Class of Certificates of which such Certificate is a
part.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of a Book-Entry Certificate. With respect to
any Definitive Certificate, the Certificateholder of such Certificate.
Certificate Register: The register maintained pursuant to Section
6.02.
Certificate Registrar: The registrar appointed pursuant to Section
6.02.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, either Servicer or any affiliate thereof shall be deemed
not to be outstanding and the Percentage Interest and Voting Rights evidenced
thereby shall not be taken into account in determining whether the requisite
amount of Percentage Interests or Voting Rights, as the case may be, necessary
to effect any such consent has been obtained, provided that none of the
Certificate Registrar, the Certificate Administrator, or the Trustee shall be
responsible for knowing that any Certificate is registered in the name of such
an affiliate unless a Responsible Officer of any such party has actual
knowledge.
Class: The Class 1-A-1, Class 1-A-R, Class 2-A-1, Class 2-A-2, Class
3-A-1, Class 3-A-2, Class 4-A-1, Class 4-A-2, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates, as the case may be.
Class A Certificates: The Class 1-A-1, Class 1-A-R, Class 2-A-1,
Class 2-A-2, Class 3-A-1, Class 3-A-2, Class 4-A-1 and Class 4-A-2 Certificates.
Class B Certificates: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
Class 2-A-2 Loss Allocation Amount: With respect to any
Distribution Date after the Senior Credit Support Depletion Date, the amount, if
any, by which the Class Certificate Balance of the Class 2-A-2 Certificates
would be reduced as a result of the allocation of any Realized Loss pursuant to
Section 5.03(b) to such Class, without regard to the operation of Section
5.03(e).
Class 3-A-2 Loss Allocation Amount: With respect to any Distribution
Date after the Senior Credit Support Depletion Date, the amount, if any, by
which the Class Certificate Balance of the Class 3-A-2 Certificates would be
reduced as a result of the allocation of any Realized Loss pursuant to Section
5.03(b) to such Class, without regard to the operation of Section 5.03(e).
Class 4-A-2 Loss Allocation Amount: With respect to any Distribution
Date after the Senior Credit Support Depletion Date, the amount, if any, by
which the Class Certificate Balance of the Class 4-A-2 Certificates would be
reduced as a result of the allocation of any Realized Loss pursuant to Section
5.03(b) to such Class, without regard to the operation of Section 5.03(e).
Class Certificate Balance: With respect to any Class and any date of
determination, the Initial Class Certificate Balance of such Class minus the sum
of (i) all distributions of principal made with respect thereto, (ii) all
Realized Losses allocated thereto pursuant to Section 5.03(a), and (iii) all
other reductions in Class Certificate Balance previously allocated thereto
pursuant to Section 5.03(b), plus the amount of any Subsequent Recoveries added
to the Class Certificate Balance of such Class pursuant to Section 5.03(f).
Class Interest Shortfall: For any Distribution Date and each
interest-bearing Class, the amount by which Accrued Certificate Interest for
such Class (as reduced pursuant to Section 5.02(c)) exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to clause (i) of the definition of "Interest Distribution Amount."
Class Unpaid Interest Shortfall: As to any Distribution Date and
each interest-bearing Class, the amount by which the aggregate Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the amount of
interest actually distributed on such Class on such prior Distribution Dates
pursuant to clause (ii) of the definition of "Interest Distribution Amount."
Closing Date: August 24, 2005.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest: As defined in Section 3.17.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: With respect to the Certificate
Administrator, the principal office of the Certificate Administrator at which at
any particular time its certificate transfer services are conducted, which
office at the date of the execution of this instrument is located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Structured Finance
Services - Wachovia Mortgage Loan Trust, Series 2005-A. With respect to the
Trustee, the principal office of the Trustee at which at any particular time its
certificate transfer services are conducted, which office at the date of the
execution of this instrument is located at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇▇▇, ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance/WMLT 2005-A.
Custodial Agreement: The Custodial Agreement, dated as of August 24,
2005, among the Depositor, the Custodian, the Servicers and the Trustee, which
is attached hereto as Exhibit N, as the same may be amended or modified from
time to time in accordance with the terms thereof.
Custodian: Wachovia Bank, National Association, or its successor in
interest under the Custodial Agreement.
Customary Servicing Procedures: With respect to a Servicer,
procedures (including collection procedures) that such Servicer customarily
employs and exercises in servicing and administering mortgage loans for its own
account and which are in accordance with accepted mortgage servicing practices
of prudent lending institutions servicing mortgage loans of the same type as the
Mortgage Loans in the jurisdictions in which the related Mortgaged Properties
are located.
Cut-Off Date: August 1, 2005.
Cut-Off Date Pool Principal Balance: For each Loan Group the
aggregate of the Cut-Off Date Principal Balances of the Mortgage Loans in such
Loan Group which is $114,532,589.88 for Loan Group 1, $187,573,765.71 for Loan
Group 2, $78,013,373.78 for Loan Group 3 and $68,425,164.55 for Loan Group 4.
Cut-Off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-Off Date,
reduced by all installments of principal due on or prior thereto whether or not
paid.
Debt Service Reduction: As to any Mortgage Loan and any
Determination Date, the excess of (i) the Monthly Payment due on the related Due
Date under the terms of such Mortgage Loan over (ii) the amount of the monthly
payment of principal and/or interest required to be paid with respect to such
Due Date by the Mortgagor as established by a court of competent jurisdiction
(pursuant to an order which has become final and nonappealable) as a result of a
case initiated by or against the related Mortgagor under the United States
Bankruptcy Code, as amended (Title 11, U.S.C.); provided that no such excess
shall be considered a Debt Service Reduction so long as (a) the Servicer
servicing such Mortgage Loan is pursuing an appeal of the court order giving
rise to any such modification and (b)(1) such Mortgage Loan is not in default
with respect to payment due thereunder in accordance with the terms of such
Mortgage Loan as in effect immediately prior to such bankruptcy case or (2)
Monthly Payments are being advanced by such Servicer in accordance with the
terms of such Mortgage Loan as in effect immediately prior to such bankruptcy
case.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became the subject of a Debt Service Reduction.
Defaulted Mortgage Loan: Any Mortgage Loan as to which (i) any
payment, or part thereof, remains unpaid for 90 days or more after the original
due date for such payment, (ii) the related Mortgagor is subject to any
bankruptcy or insolvency proceeding, (iii) the related Mortgaged Property has
been foreclosed, sold pursuant to a power of sale or trustee's sale or
repossessed, or proceedings for foreclosure, sale or repossession have been
commenced or (iv) the Servicer servicing such Mortgage Loan has determined,
consistent with its Customary Servicing Procedures, that such Mortgage Loan is
not collectible and should be written off in whole or in part.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
cured, repurchased or substituted for pursuant to Sections 2.02 or 2.04.
Deficient Valuation: As to any Mortgage Loan and any Determination
Date, the excess of (i) the then outstanding indebtedness under such Mortgage
Loan over (ii) the value of the related Mortgaged Property established by a
court of competent jurisdiction (pursuant to an order which has become final and
nonappealable) as a result of a case initiated by or against the related
Mortgagor under the United States Bankruptcy Code, as amended (Title 11,
U.S.C.), pursuant to which such Mortgagor retained such Mortgaged Property;
provided that no such excess shall be considered a Deficient Valuation so long
as (a) the Servicer servicing such Mortgage Loan is pursuing an appeal of the
court order giving rise to any such modification and (b)(1) such Mortgage Loan
is not in default with respect to payments due thereunder in accordance with the
terms of such Mortgage Loan as in effect immediately prior to such bankruptcy
case or (2) Monthly Payments are being advanced by such Servicer in accordance
with the terms of such Mortgage Loan as in effect immediately prior to such
bankruptcy case.
Deficient Valuation Mortgage Loan: Any Mortgage Loan that became the
subject of a Deficient Valuation.
Definitive Certificates: As defined in Section 6.02(c)(iii).
Depositor: Wachovia Mortgage Loan Trust, LLC, a Delaware limited
liability company, or its successor in interest, as depositor under this
Agreement.
Depository: The Depository Trust Company, the nominee of which is
Cede & Co., as the registered Holder of the Book-Entry Certificates or any
successor thereto appointed in accordance with this Agreement. The
Depository shall at all times be a "clearing corporation" as defined in
Section 8-102 of the New York Uniform Commercial Code.
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: As to any Distribution Date, the 13th day of the
month of the related Distribution Date or, if such 13th day is not a Business
Day, the Business Day immediately preceding such 13th day.
Distribution Date: The 20th day of each month beginning in September
2005 (or, if such day is not a Business Day, the next Business Day).
Distribution Date Statement: As defined in Section 5.04(b).
Due Date: As to any Distribution Date and each Mortgage Loan, the
first day in the calendar month of such Distribution Date.
Eligible Account: Any of (i) a federal or state chartered depository
institution the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, (ii) an account or accounts in a depository institution in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Certificate
Administrator and the Trustee and to each Rating Agency, the Certificateholders
have a claim with respect to the funds in such account or a perfected first
priority security interest against any collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution in which such
account is maintained, (iii) a trust account or accounts maintained with the
trust department of a federal or state chartered depository institution, acting
in its fiduciary capacity or (iii) any other account acceptable to each Rating
Agency. Eligible Accounts may bear interest and may include, if otherwise
qualified under this definition, accounts maintained with the institutions
acting as Certificate Administrator or Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificates: Any Class B-4, Class B-5 or
Class B-6 Certificate.
Escrow Account: As defined in Section 3.09.
Escrow Payments: The amounts constituting taxes, assessments,
Primary Insurance Policy premiums, fire and hazard insurance premiums and other
payments as may be required to be escrowed by the Mortgagor with the mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Event of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed to the
related Servicer as Nonrecoverable Advances with respect to such Mortgage Loan
pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at
the Mortgage Interest Rate from the Due Date as to which interest was last paid
up to the Due Date applicable to the Distribution Date immediately following the
calendar month during which such liquidation occurred.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to
Section 10.01.
Financial Market Service: Bloomberg Financial Service and any
other financial information provider designated by the Depositor by written
notice to the Certificate Administrator.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
Fitch: Fitch Ratings, and its successors in interest.
FNMA: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
Fractional Interest: As defined in Section 5.02(d).
Gross Margin: As to each Mortgage Loan, the fixed percentage set
forth in the related Mortgage Note and indicated in the Mortgage Loan Schedule
as the "Gross Margin," which percentage is added to the Index on each Rate
Adjustment Date to determine (subject to rounding, the Initial Cap, Periodic Cap
and the Lifetime Cap) the Mortgage Interest Rate on such Mortgage Loan until the
next Rate Adjustment Date.
Group: Any of Group 1, Group 2, Group 3 or Group 4.
Group 1: The Group 1-A Certificates.
Group 1 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-1 hereto.
Group 2: The Group 2-A Certificates.
Group 2 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-2 hereto.
Group 3: The Group 3-A Certificates.
Group 3 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-3 hereto.
Group 4: The Group 4-A Certificates.
Group 4 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-4 hereto.
Group 1-A Certificates: The Class 1-A-1 Certificates and
Class 1-A-R Certificates.
Group 2-A Certificates: The Class 2-A-1 Certificates and
Class 2-A-2 Certificates.
Group 3-A Certificates: The Class 3-A-1 Certificates and
Class 3-A-2 Certificates.
Group 4-A Certificates: The Class 4-A-1 Certificates and
Class 4-A-2 Certificates.
Group Subordinate Amount: With respect to any Distribution Date and
any Loan Group, the excess of the Pool Stated Principal Balance for such Loan
Group over the aggregate Class Certificate Balance of the Senior Certificates of
the Related Group immediately prior to such date.
Holder: A Certificateholder.
Independent: When used with respect to any specified Person means
such a Person who (i) is in fact independent of the Depositor and each Servicer,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Depositor, either Servicer or in an affiliate of any
of them, and (iii) is not connected with the Depositor or either Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Index: As to any Group 1 Mortgage Loan, Group 3 Mortgage Loan or
Group 4 Mortgage Loan and Rate Adjustment Date, a rate per annum that is defined
to be the arithmetic mean of the London interbank offered rate quotations for
one year U.S. Dollar-denominated deposits, as published in The Wall Street
Journal and most recently available either (i) as of the first Business Day in
the month preceding the month of the applicable Rate Adjustment Date or (ii)
forty-five days before the applicable Rate Adjustment Date or, in the event that
such index is no longer available, a substitute index selected by National City,
as the applicable Servicer, in accordance with the terms of the related Mortgage
Note. As to any Group 2 Mortgage Loan and Rate Adjustment Date, a rate per annum
that is defined to be the weekly average yield on U.S. Treasury securities
adjusted to a constant maturity of one year, as reported by the Federal Reserve
Board in statistical Release No. H.15(519), as most recently available either
(i) as of the date forty-five days, thirty-five days or thirty days prior to the
Rate Adjustment Date or (ii) on the Rate Adjustment Date as published in the
place specified in the related Mortgage Note and as made available as of the
date specified in the related Mortgage Note or, in the event that such index is
no longer available, a substitute index selected by ▇▇▇▇▇ Fargo, as the
applicable Servicer, in accordance with the terms of the related Mortgage Note.
Initial Cap: For each Mortgage Loan, the applicable limit on the
adjustment of the Mortgage Interest Rate for the initial Rate Adjustment Date
specified in the applicable Mortgage Note and designated as such in the Mortgage
Loan Schedule.
Initial Class Certificate Balance: As to each Class of Certificates,
the Class Certificate Balance set forth in the Preliminary Statement.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Estate, any related insurance policy, including all riders and
endorsements thereto in effect, including any replacement policy or policies for
any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: As to any Distribution Date and each Class
of Certificates, the immediately preceding calendar month.
Interest Distribution Amount: For any Distribution Date and each
interest-bearing Class, the sum of (i) the Accrued Certificate Interest, subject
to reduction pursuant to Section 5.02(c) and (ii) any Class Unpaid Interest
Shortfall for such Class.
Lifetime Cap: As to any Mortgage Loan, the maximum Mortgage Interest
Rate set forth in the related Mortgage Note and indicated in the Mortgage Loan
Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
Defaulted Mortgage Loan (including any REO Property) that was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
related Servicer has certified (in accordance with this Agreement) that it has
received all proceeds it expects to receive in connection with the liquidation
of such Mortgage Loan including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Servicing Fees and Advances.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 or
Loan Group 4.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 3: The Group 3 Mortgage Loans.
Loan Group 4: The Group 4 Mortgage Loans.
Loan-to-Value Ratio: With respect to any Mortgage Loan and any date
of determination, the fraction, expressed as a percentage, the numerator of
which is the outstanding principal balance of the related Mortgage Loan at the
date of determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
Lost Note Affidavit: With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note, if available, and indemnifying the Depositor and its
assignees against any loss, cost or liability resulting from the failure to
deliver the original Mortgage Note) in the form of Exhibit M hereto.
Lower-Tier Distribution Amount: For any Distribution Date, the Pool
Distribution Amount for each Loan Group shall be deemed distributed to the
Upper-Tier REMIC, as the holder of the Uncertificated Lower-Tier Regular
Interests, and to Holders of the Class 1-A-R Certificates in respect of
Component I thereof, in the following amounts and priority:
(a) To the extent of the Pool Distribution Amount for Loan Group
1:
(i) first, to Uncertificated Lower-Tier Regular Interests Y-1
and Z-1, concurrently, the Uncertificated Accrued Interest for such
regular interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(ii) second, to Uncertificated Lower-Tier Regular Interests
Y-1 and Z-1, concurrently, the Uncertificated Accrued Interest for such
regular interests for the current Distribution Date, pro rata according to
their respective Uncertificated Accrued Interest; and
(iii) third, to Uncertificated Lower-Tier Regular Interests
Y-1 and Z-1, the Uncertificated Lower-Tier Regular Interest Y-1 Principal
Distribution Amount and the Uncertificated Lower-Tier Regular Interest Z-1
Principal Distribution Amount, respectively;
(b) To the extent of the Pool Distribution Amount for Loan Group
2:
(i) first, to Uncertificated Lower-Tier Regular Interests Y-2
and Z-2, concurrently, the Uncertificated Accrued Interest for such
regular interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(ii) second, to Uncertificated Lower-Tier Regular Interests
Y-2 and Z-2, concurrently, the Uncertificated Accrued Interest for such
regular interests for the current Distribution Date, pro rata according to
their respective Uncertificated Accrued Interest; and
(iii) third, to Uncertificated Lower-Tier Regular Interests
Y-2 and Z-2, the Uncertificated Lower-Tier Regular Interest Y-2 Principal
Distribution Amount and the Uncertificated Lower-Tier Regular Interest Z-2
Principal Distribution Amount, respectively;
(c) To the extent of the Pool Distribution Amount for Loan Group
3:
(i) first, to Uncertificated Lower-Tier Regular Interests Y-3
and Z-3, concurrently, the Uncertificated Accrued Interest for such
regular interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(ii) second, to Uncertificated Lower-Tier Regular Interests
Y-3 and Z-3, concurrently, the Uncertificated Accrued Interest for such
regular interests for the current Distribution Date, pro rata according to
their respective Uncertificated Accrued Interest; and
(iii) third, to Uncertificated Lower-Tier Regular Interests
Y-3 and Z-3, the Uncertificated Lower-Tier Regular Interest Y-3 Principal
Distribution Amount and the Uncertificated Lower-Tier Regular Interest Z-3
Principal Distribution Amount, respectively;
(d) To the extent of the Pool Distribution Amount for Loan Group
4:
(i) first, to Uncertificated Lower-Tier Regular Interests Y-4
and Z-4, concurrently, the Uncertificated Accrued Interest for such
regular interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(ii) second, to Uncertificated Lower-Tier Regular Interests
Y-4 and Z-4, concurrently, the Uncertificated Accrued Interest for such
regular interests for the current Distribution Date, pro rata according to
their respective Uncertificated Accrued Interest; and
(iii) third, to Uncertificated Lower-Tier Regular Interests
Y-4 and Z-4, the Uncertificated Lower-Tier Regular Interest Y-4 Principal
Distribution Amount and the Uncertificated Lower-Tier Regular Interest Z-4
Principal Distribution Amount, respectively; and
(e)...To the extent of the Pool Distribution Amount for each Loan
Group for such Distribution Date remaining after payment of the amounts pursuant
to paragraphs (a) through (d) of this definition of "Lower-Tier Distribution
Amount":
(i) first, to each of the Uncertificated Lower-Tier Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such regular
interests; provided, however, that any amounts distributed pursuant to
this paragraph (e)(i) of this definition of "Lower-Tier Distribution
Amount" shall not cause a reduction in the Uncertificated Principal
Balances of any of the Uncertificated Lower-Tier Regular Interests; and
(ii) second, to the Class 1-A-R Certificates in respect of
Component I thereof, any remaining amount.
Lower-Tier Realized Losses: Realized Losses on each Loan Group shall
be allocated to the Uncertificated Lower-Tier Regular Interests as follows: (1)
the interest portion of Realized Losses on Group 1 Mortgage Loans, if any, shall
be allocated among Uncertificated Lower-Tier Regular Interests Y-1 and Z-1 pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof; (2) the interest portion of Realized Losses on Group 2
Mortgage Loans, if any, shall be allocated among Uncertificated Lower-Tier
Regular Interests Y-2 and Z-2 pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof; (3) the interest portion of
Realized Losses on Group 3 Mortgage Loans, if any, shall be allocated among
Uncertificated Lower-Tier Regular Interests Y-3 and Z-3 pro rata according to
the amount of interest accrued but unpaid thereon, in reduction thereof; and (4)
the interest portion of Realized Losses on Group 4 Mortgage Loans, if any, shall
be allocated among Uncertificated Lower-Tier Regular Interests Y-4 and Z-4 pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof. Any interest portion of such Realized Losses in excess of the
amount allocated pursuant to the preceding sentence shall be treated as a
principal portion of Realized Losses not attributable to any specific Mortgage
Loan in such Loan Group and allocated pursuant to the succeeding sentences. The
principal portion of Realized Losses with respect to each Loan Group shall be
allocated to the Uncertificated Lower-Tier Regular Interests as follows: (1) the
principal portion of Realized Losses on Group 1 Mortgage Loans shall be
allocated, first, to Uncertificated Lower-Tier Regular Interest Y-1 to the
extent of the Uncertificated Lower-Tier Regular Interest Y-1 Principal Reduction
Amount in reduction of the Uncertificated Principal Balance of such regular
interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to Uncertificated Lower-Tier Regular Interest
Z-1 in reduction of the Uncertificated Principal Balance thereof; (2) the
principal portion of Realized Losses on Group 2 Mortgage Loans shall be
allocated, first, to Uncertificated Lower-Tier Regular Interest Y-2 to the
extent of the Uncertificated Lower-Tier Regular Interest Y-2 Principal Reduction
Amount in reduction of the Uncertificated Principal Balance of such regular
interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to Uncertificated Lower-Tier Regular Interest
Z-2 in reduction of the Uncertificated Principal Balance thereof; (3) the
principal portion of Realized Losses on Group 3 Mortgage Loans shall be
allocated, first, to Uncertificated Lower-Tier Regular Interest Y-3 to the
extent of the Uncertificated Lower-Tier Regular Interest Y-3 Principal Reduction
Amount in reduction of the Uncertificated Principal Balance of such regular
interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to Uncertificated Lower-Tier Regular Interest
Z-3 in reduction of the Uncertificated Principal Balance thereof; and (4) the
principal portion of Realized Losses on Group 4 Mortgage Loans shall be
allocated, first, to Uncertificated Lower-Tier Regular Interest Y-4 to the
extent of the Uncertificated Lower-Tier Regular Interest Y-4 Principal Reduction
Amount in reduction of the Uncertificated Principal Balance of such regular
interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to Uncertificated Lower-Tier Regular Interest
Z-4 in reduction of the Uncertificated Principal Balance thereof.
Lower-Tier REMIC: As defined in the Preliminary Statement.
MERS: As defined in Section 2.01(b)(iii).
Monthly Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument creating a
lien on a Mortgaged Property securing a Mortgage Note or creating a lien on a
leasehold interest.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum rate
of interest at which interest accrues on the principal balance of such Mortgage
Loan, as adjusted from time to time in accordance with the provisions of the
related Mortgage Note, which rate is (a) prior to the first Rate Adjustment Date
for each such Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan
indicated on the Mortgage Loan Schedule and (b) from and after such Rate
Adjustment Date, sum of the Index, as of the Rate Adjustment Date applicable to
such Due Date, and the Gross Margin, rounded as set forth in such Mortgage Note,
subject to the Initial Cap, Periodic Cap and the Lifetime Cap applicable to such
Mortgage Loan at any time during the life of such Mortgage Loan.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated August 24, 2005, between Wachovia Bank, National Association,
as seller, and the Depositor, as purchaser.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the applicable Servicer to reflect the addition of Substitute
Mortgage Loans and the deletion of Defective Mortgage Loans pursuant to the
provisions of this Agreement) attached hereto as Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇,
▇▇▇▇▇▇▇ ▇-▇ and Exhibit D-4. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) a code indicating whether the Mortgaged Property is
owner-occupied; (iii) the property type for each Mortgaged Property; (iv) the
original months to maturity or the remaining months to maturity from the Cut-Off
Date; (v) the Loan-to-Value Ratio as of the Cut-off Date; (vi) the Mortgage
Interest Rate as of the Cut-off Date; (vii) the date on which the first Monthly
Payment was due on the Mortgage Loan, and, if such date is not the Due Date
currently in effect, such Due Date; (viii) the stated maturity date; (ix) the
amount of the Monthly Payment as of the Cut-Off Date; (x) the paid-through date;
(xi) the original principal amount of the Mortgage Loan; (xii) the principal
balance of the Mortgage Loan as of the close of business on the Cut-Off Date,
after application of payments of principal due on or before the Cut-Off Date,
whether or not collected, and after deduction of any payments collected of
scheduled principal due after the Cut-Off Date; (xiii) a code indicating the
purpose of the Mortgage Loan; (xiv) a code indicating the documentation style;
(xv) the Appraised Value; (xvi) the first Rate Adjustment Date; (xvii) the Rate
Ceiling; (xviii) the Initial Cap; (xix) the Periodic Cap; (xx) the Gross Margin;
and (xxi) the closing date of such Mortgage Loan. With respect to the Mortgage
Loans in each Loan Group in the aggregate, the Mortgage Loan Schedule shall set
forth the following information, as of the Cut-Off Date: (i) the number of
Mortgage Loans; (ii) the current aggregate outstanding principal balance of the
Mortgage Loans; (iii) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (iv) the weighted average months to maturity of the Mortgage
Loans.
Mortgage Loans: The mortgage loans identified in the Mortgage
Loan Schedule.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with all riders thereto and amendments thereof.
Mortgaged Property: The underlying property securing a Mortgage
Loan, which may include Co-op Shares or residential long-term leases.
Mortgagor: The obligor on a Mortgage Note.
National City: As defined in the recitals hereto.
Net Mortgage Interest Rate: As to any Mortgage Loan and any
Distribution Date, such Mortgage Loan's Mortgage Interest Rate thereon on the
first day of the month preceding the month of the related Distribution Date
reduced by the Servicing Fee Rate and the Certificate Administrator Fee Rate.
Net WAC: As to any Loan Group and any Distribution Date, the
weighted average of the Net Mortgage Interest Rates of the Mortgage Loans in
such Loan Group (based on Stated Principal Balances of the Mortgage Loans in
such Loan Group on the Due Date in the month preceding the month of such
Distribution Date).
Non-Supported Interest Shortfalls: As to any Distribution Date, the
amount, if any, by which the aggregate of Prepayment Interest Shortfalls exceeds
Compensating Interest for such Distribution Date.
Non-U.S. Person: A Person other than a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made in respect of a Mortgage Loan which has not been previously
reimbursed and which, in the good faith judgment of the Servicer servicing such
Mortgage Loan, will not or, in the case of a proposed Advance, would not be
ultimately recoverable from the related Mortgagor, related Liquidation Proceeds,
or other recoveries in respect of the related Mortgage Loan.
Officer's Certificate: A certificate signed by the Chairman of the
Board, Vice Chairman of the Board, President or a Vice President and by the
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries, or any other duly authorized officer of the Depositor or a
Servicer, as the case may be, and delivered to the Trustee or the Certificate
Administrator, as the case may be.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee if such opinion is delivered to the Trustee or acceptable to the
Certificate Administrator if such opinion is delivered to the Certificate
Administrator, who may be counsel for the Depositor or a Servicer, except that
any opinion of counsel relating to the qualification of the Upper-Tier REMIC or
the Lower-Tier REMIC as a REMIC or compliance with the REMIC Provisions must be
an opinion of Independent counsel.
Original Fractional Interest: With respect to each of the following
Classes of Subordinate Certificates, the corresponding percentage described
below, as of the Closing Date:
Class B-1 2.25%
Class B-2 1.50%
Class B-3 1.00%
Class B-4 0.55%
Class B-5 0.20%
Class B-6 0.00%
Original Subordinate Certificate Balance: $19,065,793.92.
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan which
was not the subject of a Principal Prepayment in Full prior to such Due Date,
which did not become a Liquidated Mortgage Loan prior to such Due Date and which
was not purchased from the Trust prior to such Due Date pursuant to Sections
2.02 or 2.04.
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.
Pass-Through Rate: As to each Class of interest-bearing
Certificates, the per annum rate set forth in the Preliminary Statement.
Paying Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate, the percentage obtained
by dividing the initial Certificate Balance of such Certificate by the Initial
Class Certificate Balance of the Class of which such Certificate is a part.
Periodic Advance: The payment required to be made by a Servicer with
respect to any Distribution Date pursuant to Section 3.20, the amount of any
such payment being equal to the aggregate of Monthly Payments (net of the
Servicing Fee for such Servicer) on the Mortgage Loans serviced by such Servicer
(including any REO Property) that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that such Servicer has
determined would constitute a Nonrecoverable Advance if advanced.
Periodic Cap: For each Mortgage Loan, the applicable limit on
adjustment of the Mortgage Interest Rate for each Rate Adjustment Date (other
than the initial Rate Adjustment Date) specified in the applicable Mortgage Note
and designated as such in the Mortgage Loan Schedule.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United
States, FHLMC, FNMA or any agency or instrumentality of the United States
when such obligations are backed by the full faith and credit of the United
States; provided that such obligations of FHLMC or FNMA shall be limited to
senior debt obligations and mortgage participation certificates other than
investments in mortgage-backed or mortgage participation securities with
yields evidencing extreme sensitivity to the rate of principal payments on
the underlying mortgages, which shall not constitute Permitted Investments
hereunder;
(ii) repurchase agreements on obligations specified in clause (i) maturing not
more than one month from the date of acquisition thereof with a corporation
incorporated under the laws of the United States or any state thereof rated
not lower than "A-1+" by S&P, "F-1" by Fitch and "P-1" by ▇▇▇▇▇'▇;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars of any
U.S. depository institution incorporated under the laws of the United
States or any state thereof, rated not lower than "A-1+" by S&P, "F-1" by
Fitch and "P-1" by ▇▇▇▇▇'▇;
(iv) commercial paper (having original maturities of not more than 365 days) of
any corporation incorporated under the laws of the United States or any
state thereof which is rated not lower than "A-1+" by S&P, "F-1" by Fitch
and "P-1" by ▇▇▇▇▇'▇;
(v) investments in money market funds (including funds of the institutions
acting as Trustee or Certificate Administrator or its affiliates, or funds
for which an affiliate of the institutions acting as Trustee or Certificate
Administrator acts as advisor, as well as funds for which the institutions
acting as Trustee or Certificate Administrator and its respective
affiliates may receive compensation) rated either "AAA" by S&P, "AAA" by
Fitch and "Aaa" by ▇▇▇▇▇'▇ or otherwise approved in writing by each Rating
Agency; and
(vi) other obligations or securities that are acceptable to each Rating Agency
(but which, in no event, are rated below the top two rating categories by
each Rating Agency) and, as evidenced by an Opinion of Counsel obtained by
the Servicers, will not affect the qualification of the Upper-Tier REMIC or
the Lower-Tier REMIC as a REMIC;
provided, however, that no instrument shall be a Permitted Investment if it
represents either (a) the right to receive only interest payments with respect
to the underlying debt instrument or (b) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest with respect to such instrument provide a yield to
maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
Permitted Transferee: Any Person other than (i) the United States,
or any State or any political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
international organization or any agency or instrumentality of either of the
foregoing, (iii) an organization which is exempt from tax imposed by Chapter 1
of the Code (including the tax imposed by Section 511 of the Code on unrelated
business taxable income) (except certain farmers' cooperatives described in Code
Section 521), (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(C), (v) a U.S. Person with respect to whom income is
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of such Person or any other Person
and (vi) any other Person so designated by the Servicer based on an Opinion of
Counsel to the effect that any transfer to such Person may cause the Trust or
any other Holder of a Residual Certificate to incur tax liability that would not
be imposed other than on account of such transfer. The terms "United States,"
"State" and "international organization" shall have the meanings set forth in
Code Section 7701 or successor provisions.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity or organization, whether or not a legal entity.
Physical Certificates: The Class 1-A-R, Class B-4, Class B-5
and Class B-6 Certificates.
Plan: As defined in Section 6.02(e).
Pool Distribution Amount: As to any Distribution Date and Loan
Group, the excess of (a) the sum of (i) the aggregate of (A) the interest
portion of any Monthly Payment on a Mortgage Loan in such Loan Group (net of the
Servicing Fee for the Servicer of such Loan Group) and the principal portion of
any Monthly Payment on a Mortgage Loan in such Loan Group due on the Due Date in
the month in which such Distribution Date occurs and which is received prior to
the related Determination Date and (B) all Periodic Advances and payments of
Compensating Interest made by such Servicer in respect of such Loan Group and
Distribution Date deposited to the Servicer Custodial Account pursuant to
Section 3.08(b)(vii); (ii) all Liquidation Proceeds received on the Mortgage
Loans in such Loan Group during the preceding calendar month and deposited to
the applicable Servicer Custodial Account pursuant to Section 3.08(b)(iii);
(iii) all Principal Prepayments received on the Mortgage Loans in such Loan
Group during the month preceding the month of such Distribution Date and
deposited to the applicable Servicer Custodial Account pursuant to Section
3.08(b)(i) during such period; (iv) in connection with Defective Mortgage Loans
in such Loan Group, as applicable, the aggregate of the Repurchase Prices and
Substitution Adjustment Amounts deposited on the related Remittance Date
pursuant to Section 3.08(b)(vi); (v) any other amounts in the applicable
Servicer Custodial Account deposited therein pursuant to Sections 3.08(b)(iv),
(v) and (viii) in respect of such Distribution Date and such Loan Group; and
(vi) any Subsequent Recovery with respect to such Distribution Date over (b) any
(i) amounts permitted to be withdrawn from the applicable Servicer Custodial
Account pursuant to clauses (i) through (ix), inclusive, of Section 3.11(a) in
respect of such Loan Group and (ii) amounts permitted to be withdrawn from the
Certificate Account pursuant to clauses (i) and (ii) of Section 3.11(b) in
respect of such Loan Group.
Pool Stated Principal Balance: As to any Distribution Date and Loan
Group, the aggregate Stated Principal Balances of all Mortgage Loans in such
Loan Group that were Outstanding Mortgage Loans immediately following the Due
Date in the month preceding the month in which such Distribution Date occurs.
Prepayment Interest Shortfall: As to any Distribution Date and each
Mortgage Loan subject to a Principal Prepayment received during the calendar
month preceding such Distribution Date, the amount, if any, by which one month's
interest at the related Mortgage Interest Rate (net of the Servicing Fee for the
Servicer servicing such Mortgage Loan) on such Principal Prepayment exceeds the
amount of interest paid in connection with such Principal Prepayment.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan,
in each case issued by an insurer acceptable to FNMA or FHLMC.
Principal Amount: As to any Distribution Date and a Loan Group, the
sum of (a) the principal portion of each Monthly Payment due on each Mortgage
Loan in such Loan Group on the related Due Date, (b) the principal portion of
the Repurchase Price of each Mortgage Loan in such Loan Group that was
repurchased by the Depositor pursuant to this Agreement as of such Distribution
Date, (c) any Substitution Adjustment Amount in connection with a Defective
Mortgage Loan in such Loan Group received with respect to such Distribution
Date, (d) any Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans in such Loan Group that are not yet Liquidated Mortgage Loans
received during the calendar month preceding the month of such Distribution
Date, (e) with respect to each Mortgage Loan in such Loan Group that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds (excluding Excess
Proceeds) allocable to principal received with respect to such Mortgage Loan
during the calendar month preceding the month of such Distribution Date, (f) any
Subsequent Recoveries for such Distribution Date, and (g) all Principal
Prepayments on the Mortgage Loans in such Loan Group received during the
calendar month preceding the month of such Distribution Date.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan (other than Liquidation Proceeds) which is received in advance
of its scheduled Due Date and is not accompanied by an amount of interest
representing scheduled interest due on any date in any month subsequent to the
month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the entire
principal balance of a Mortgage Loan.
Private Certificates: The Class B-4, Class B-5 and Class B-6
Certificates.
Pro Rata Share: As to any Distribution Date and any Class of
Subordinate Certificates that is not a Restricted Class, the portion of the
Subordinate Principal Distribution Amount allocable to such Class, equal to the
product of the Subordinate Principal Distribution Amount for such Distribution
Date and a fraction, the numerator of which is the related Class Certificate
Balance thereof and the denominator of which is the aggregate Class Certificate
Balance of the Subordinate Certificates that are not Restricted Classes. Solely
with respect to Unscheduled Principal Payments, the Pro Rata Share of a
Restricted Class shall be 0%. The Pro Rata Share of a Class of Subordinate
Certificates may be computed for each of clause (i) and clause (ii) of the
definition of "Subordinate Principal Distribution Amount" in the event the
Restricted Classes differ with respect to each clause.
Qualified Appraiser: An appraiser of a Mortgaged Property duly
appointed by the originator of the related Mortgage Loan, who had no interest,
direct or indirect, in such Mortgaged Property or in any loan made on the
security thereof, whose compensation is not affected by the approval or
disapproval of the related Mortgage Loan and who met the minimum qualifications
of FNMA or FHLMC.
Rate Adjustment Date: As to each Mortgage Loan, the Due Date on
which an adjustment to the Mortgage Interest Rate of such Mortgage Loan becomes
effective under the related Mortgage Note, which Due Date is the date set forth
in the Mortgage Loan Schedule as the first Rate Adjustment Date and each
subsequent anniversary thereof.
Rate Ceiling: The maximum per annum Mortgage Interest Rate permitted
under the related Mortgage Note.
Rating Agency: Each of S&P and Fitch. If any such organization or a
successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Certificate Administrator and the Trustee. References herein to a given rating
or rating category of a Rating Agency shall mean such rating category without
giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount as of the date of such liquidation, equal to (i) the unpaid principal
balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Net Mortgage Interest Rate from the Due Date as to which
interest was last paid to Certificateholders up to the Due Date in the month in
which Liquidation Proceeds are required to be distributed on the Stated
Principal Balance of such Liquidated Mortgage Loan from time to time, minus
(iii) the Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the Net
Mortgage Interest Rate and to principal of the Liquidated Mortgage Loan. With
respect to each Mortgage Loan that has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage Note has been
reduced, 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 that has become the subject of a Debt Service Reduction
and any Distribution Date, the amount, if any, by which the principal portion of
the related Monthly Payment has been reduced.
Record Date: The last day of the month (or, if such day is not a
Business Day, the preceding Business Day) preceding the month of the related
Distribution Date.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged Property.
Regular Certificates: As defined in the Preliminary Statement
hereto.
Related Group: With respect to Loan Group 1, means Group 1; with
respect to Loan Group 2, means Group 2; with respect to Loan Group 3, means
Group 3; and with respect to Loan Group 4, means Group 4.
Related Loan Group: With respect to the Group 1-A Certificates, Loan
Group 1, with respect to the Group 2-A Certificates, Loan Group 2, with respect
to the Group 3-A Certificates, Loan Group 3, and with respect to the Group 4-A
Certificates, Loan Group 4.
Relief Act: The Servicemembers' Civil Relief Act, as amended.
Relief Act Reduction: With respect to any Distribution Date, for any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act or comparable state legislation, the amount,
if any, by which (i) interest collectible on such Mortgage Loan for the most
recently ended calendar month is less than (ii) interest accrued pursuant to the
terms of the Mortgage Note on the same principal amount and for the same period
as the interest collectible on such Mortgage Loan for the most recently ended
calendar month.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Certificate Maturity Date: The "latest possible maturity date"
of the Regular Certificates as that term is defined in Section 2.08.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time, as well as provisions of applicable state laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m. Eastern
time on the second Business Day immediately preceding such Distribution Date.
REO Proceeds: Proceeds, net of any related expenses of the Servicer,
received in respect of any REO Property (including, without limitation, proceeds
from the rental of the related Mortgaged Property) which are received prior to
the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure in
connection with a Defaulted Mortgage Loan.
Repurchase Price: As to any Defective Mortgage Loan repurchased on
any date pursuant to Sections 2.02 or 2.04, an amount equal to the sum of (i)
the unpaid principal balance thereof, (ii) the unpaid accrued interest thereon
at the applicable Mortgage Interest Rate from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Mortgage Loan became required to be repurchased, and (iii) any costs
and damages incurred by the Trust in connection with a breach of the
representation contained in Section 7(iii) of the Mortgage Loan Purchase
Agreement as a result of any violation of any predatory or abusive lending law
with respect to such Mortgage Loan.
Request for Release: The Request for Release submitted by the
Servicer to the Custodian, substantially in the form of Exhibit E.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement in respect of such Mortgage Loan.
Residual Certificates: The Class 1-A-R Certificates.
Responsible Officer: When used with respect to the Trustee or the
Certificate Administrator, any officer of the Corporate Trust Department of the
Trustee or Certificate Administrator, as the case may be, including any Senior
Vice President, any Vice President, any Assistant Vice President, any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of
the Trustee or Certificate Administrator, as the case may be, customarily
performing functions similar to those performed by any of the above designated
officers and, in each case, having responsibility for the administration of this
Agreement.
Restricted Classes: As defined in Section 5.02(d).
S&P: Standard & Poor's, a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., and its successors in interest.
Seller: Wachovia Bank, National Association, as seller of the
Mortgage Loans under the Mortgage Loan Purchase Agreement.
Senior Certificates: The Class A Certificates.
Senior Credit Support Depletion Date: The date on which the
aggregate Class Certificate Balance of the Subordinate Certificates is reduced
to zero.
Senior Percentage: With respect to any Distribution Date and a Loan
Group, the percentage, carried six places rounded up, obtained by dividing the
aggregate Class Certificate Balance of the Senior Certificates of the Related
Loan Group immediately prior to such Distribution Date by the Pool Stated
Principal Balance of such Loan Group immediately prior to such Distribution
Date.
Senior Prepayment Percentage: For any Distribution Date and a Loan
Group during the seven years beginning on the first Distribution Date, 100%. The
Senior Prepayment Percentage for any Distribution Date and a Loan Group
occurring on or after the seven year anniversary of the first Distribution Date
will, except as provided herein, be as follows: for any Distribution Date in the
first year thereafter, the Senior Percentage for such Loan Group plus 70% of the
Subordinate Percentage for such Loan Group for such Distribution Date; for any
Distribution Date in the second year thereafter, the Senior Percentage for such
Loan Group plus 60% of the Subordinate Percentage for such Loan Group for such
Distribution Date; for any Distribution Date in the third year thereafter, the
Senior Percentage for such Loan Group plus 40% of the Subordinate Percentage for
such Loan Group for such Distribution Date; for any Distribution Date in the
fourth year thereafter, the Senior Percentage for such Loan Group plus 20% of
the Subordinate Percentage for such Loan Group for such Distribution Date; and
for any Distribution Date in the fifth or later years thereafter, the Senior
Percentage for such Loan Group for such Distribution Date (unless on any of the
foregoing Distribution Dates the Total Senior Percentage exceeds the initial
Total Senior Percentage, in which case the Senior Prepayment Percentage for Loan
Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 for such Distribution Date
will once again equal 100%); provided, however, if on any Distribution Date
prior to the September 2008 Distribution Date, prior to giving effect to any
distributions, the Aggregate Subordinate Percentage is greater than or equal to
twice such percentage calculated as of the Closing Date, then the Senior
Prepayment Percentage for each Loan Group for such Distribution Date will equal
the Senior Percentage for such Loan Group plus 50% of the Subordinate Percentage
for such Loan Group; provided further, however, if on or after the September
2008 Distribution Date, prior to giving effect to any distributions, the
Aggregate Subordinate Percentage is greater than or equal to twice such
percentage calculated as of the Closing Date, then the Senior Prepayment
Percentage for each Loan Group for such Distribution Date will equal the Senior
Percentage for such Loan Group. Notwithstanding the foregoing, no decrease in
the Senior Prepayment Percentage for any Loan Group will occur unless both of
the Senior Step Down Conditions are satisfied.
Senior Principal Distribution Amount: As to any Distribution Date
and Loan Group, the sum of (i) the Senior Percentage for such Loan Group of the
amounts described in clauses (a) through (d) of the definition of "Principal
Amount" for such Distribution Date and Loan Group and (ii) the Senior Prepayment
Percentage for such Loan Group of the amounts described in clauses (e), (f) and
(g) of the definition of "Principal Amount" for such Distribution Date and Loan
Group.
Senior Step Down Conditions: As of any Distribution Date as to which
any decrease in the Senior Prepayment Percentage for any Loan Group applies, (i)
the outstanding principal balance of all Mortgage Loans (including, for this
purpose, any Mortgage Loans in foreclosure or any REO Property) delinquent 60
days or more (averaged over the preceding six month period), as a percentage of
the aggregate Class Certificate Balance of the Subordinate Certificates, is not
equal to or greater than 50% or (ii) cumulative Realized Losses with respect to
the Mortgage Loans as of the applicable Distribution Date do not exceed the
percentages of the Original Subordinate Certificate Balance set forth below:
Percentage of
Original Subordinate
Distribution Date Occurring Certificate Balance
September 2005 through August 2008 20%
September 2008 through August 2013 30%
September 2013 through August 2014 35%
September 2014 through August 2015 40%
September 2015 through August 2016 45%
September 2016 and thereafter 50%
Servicers: ▇▇▇▇▇ Fargo, with respect to the Loan Group 2, and
National City, with respect to Loan Group 1, Loan Group 3 and Loan Group 4, or,
in either case, its successor in interest, in its capacity as servicer of the
related Loan Group, or any successor servicer appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30 a.m.,
Eastern time, on the Business Day immediately preceding such Distribution Date.
Servicer Custodial Account: Each separate Eligible Account or
Accounts created and maintained by the Servicers pursuant to Section 3.08(b).
Servicer's Certificate: The Monthly Report required by
Section 4.01.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by a Servicer of its
servicing obligations, including, but not limited to (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) expenses reimbursable
to such Servicer pursuant to Section 3.14 and any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of any
REO Property and (iv) compliance with the obligations under Section 3.12.
Servicing Fee: With respect to each Mortgage Loan and Distribution
Date, the amount of the fee payable to the Servicer servicing such Mortgage
Loan, which shall, for such Distribution Date, be equal to one-twelfth of the
product of the Servicing Fee Rate with respect to such Mortgage Loan and the
Stated Principal Balance of such Mortgage Loan, subject to reduction as provided
in Section 3.17. Such fee shall be payable monthly, computed on the basis of the
same Stated Principal Balance and period respecting which any related interest
payment on a Mortgage Loan is computed. A Servicer's right to receive the
Servicing Fee for Mortgage Loans serviced by such Servicer is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 3.11) of related Monthly Payments collected by such Servicer, or as
otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.25% per
annum with respect to any Mortgage Loan.
Servicing File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit J hereto, and any additional documents required to be
added to the Servicing File pursuant to the Agreement.
Servicing Officer: Any officer of a Servicer involved in, or
responsible for, the administration and servicing of the related Mortgage Loans
whose name appears on a list of servicing officers furnished to the Certificate
Administrator and the Trustee by such Servicer as such list may from time to
time be amended.
Similar Law: As defined in Section 6.02(e).
Stated Principal Balance: As to any Mortgage Loan and date, the
unpaid principal balance of such Mortgage Loan as of the Due Date immediately
preceding such date as specified in the amortization schedule at the time
relating thereto (before any adjustment to such amortization schedule by reason
of any moratorium or similar waiver or grace period) after giving effect to any
previous partial Principal Prepayments and Liquidation Proceeds allocable to
principal (other than with respect to any Liquidated Mortgage Loan) and to the
payment of principal due on such Due Date and irrespective of any delinquency in
payment by the related Mortgagor, and after giving effect to any Deficient
Valuation, plus any amounts capitalized as a result of modifications to such
Mortgage Loan pursuant to Section 3.21.
Subordinate Certificates: The Class B Certificates.
Subordinate Percentage: As of any Distribution Date and Loan
Group, 100% minus the Senior Percentage for such Loan Group for such
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date and
Loan Group, 100% minus the Senior Prepayment Percentage for such Loan Group for
such Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount equal to the sum of (i) the
Subordinate Percentage for such Loan Group of all amounts described in clauses
(a) through (d) of the definition of "Principal Amount" for such Distribution
Date and Loan Group and (ii) the Subordinate Prepayment Percentage of the
amounts described in clauses (e), (f) and (g) of the definition of "Principal
Amount" for such Distribution Date and Loan Group.
Subsequent Recovery: As to any Distribution Date and Loan Group, the
sum of all amounts received during the calendar month preceding the month of
such Distribution Date on each Mortgage Loan in such Loan Group subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subservicer: Any Person with which a Servicer has entered into a
Subservicing Agreement and which satisfies the requirements set forth therein.
Subservicing Agreement: Any subservicing agreement (which, in the
event the Subservicer is an affiliate of the related Servicer, need not be in
writing) between a Servicer and any Subservicer relating to servicing and/or
administration of certain Mortgage Loans as provided in Section 3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a
Defective Mortgage Loan which must, on the date of such substitution (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Monthly Payment due in the month of substitution, not in excess of, and not more
than 10% less than, the Stated Principal Balance of the Defective Mortgage Loan;
(ii) have a Net Mortgage Interest Rate equal to that of the Defective Mortgage
Loan; (iii) have a Loan-to-Value Ratio not higher than that of the Defective
Mortgage Loan; (iv) have a Gross Margin equal to that of the Defective Mortgage
Loan; (v) have an Initial Cap, a Periodic Cap and Rate Ceiling equal to that of
the Defective Mortgage Loan; (vi) have the same Index and frequency of mortgage
interest rate adjustment as 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 Defective Mortgage Loan; and (viii) comply, as of the date of substitution,
with each Mortgage Loan representation and warranty set forth in this Agreement
relating to the Defective Mortgage Loan. More than one Substitute Mortgage Loan
may be substituted for a Defective Mortgage Loan if such Substitute Mortgage
Loans meet the foregoing attributes in the aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
Tax Matters Person: Any person designated as "tax matters person" in
accordance with Section 5.06 and the manner provided under Treasury Regulation
ss. 1.860F-4(d) and Treasury Regulation ss. 301.6231(a)(7)-1.
Total Senior Percentage: With respect to any Distribution Date, the
percentage, carried six places rounded up, obtained by dividing the aggregate
Class Certificate Balance of the Class A Certificates immediately prior to such
Distribution Date by the aggregate Pool Stated Principal Balance of all Loan
Groups immediately prior to such Distribution Date.
Treasury Regulations: The final and temporary regulations
promulgated under the Code by the U.S. Department of the Treasury.
Trust: The trust created by this Agreement.
Trust Estate: The Mortgage Loans, such assets as shall from time to
time be identified as deposited in the Servicer Custodial Account or the
Certificate Account, in accordance with this Agreement, REO Property, the
Primary Insurance Policies and any other Required Insurance Policy.
Trustee: U.S. Bank National Association, and its successors-in-
interest and, if a successor trustee is appointed hereunder, such successor, as
trustee.
Uncertificated Accrued Interest: With respect to any Uncertificated
Lower-Tier Regular Interest for any Distribution Date, one month's interest at
the related Uncertificated Pass-Through Rate for such Distribution Date, accrued
on the Uncertificated Principal Balance immediately prior to such Distribution
Date. Uncertificated Accrued Interest for the Uncertificated Lower-Tier Regular
Interests shall accrue on the basis of a 360-day year consisting of twelve
30-day months. For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated Lower-Tier Regular Interests for any
Distribution Date, any Prepayment Interest Shortfalls or Relief Act Reduction
(to the extent not covered by Compensating Interest) shall be allocated among
the Uncertificated Lower-Tier Regular Interests, pro rata, based on, and to the
extent of, Uncertificated Accrued Interest, as calculated without application of
this sentence.
Uncertificated Lower-Tier Regular Interests: As defined in the
Preliminary Statement.
Uncertificated Lower-Tier Regular Interest Y Principal Reduction
Amounts: For any Distribution Date, the amounts by which the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interests Y-1, Y-2, Y-3
and Y-4 will be reduced on such Distribution Date by the allocation of Realized
Losses and the distribution of principal, determined as described in Appendix 1.
Uncertificated Lower-Tier Regular Interest Y-1: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Y-1 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Y-1 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Y-1 on such Distribution Date in reduction of the
Uncertificated Principal Balance thereof.
Uncertificated Lower-Tier Regular Interest Y-1 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Y Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Y-1 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Regular Interest Y-2: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Y-2 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Y-2 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Y-2 on such Distribution Date in reduction of the
Uncertificated Principal Balance thereof.
Uncertificated Lower-Tier Regular Interest Y-2 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Y Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Y-2 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Regular Interest Y-3: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Y-3 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Y-3 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Y-3 on such Distribution Date in reduction of the
Uncertificated Principal Balance thereof.
Uncertificated Lower-Tier Regular Interest Y-3 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Y Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Y-3 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Regular Interest Y-4: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Y-4 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Y-4 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Y-4 on such Distribution Date in reduction of the
Uncertificated Principal Balance thereof.
Uncertificated Lower-Tier Regular Interest Y-4 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Y Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Y-4 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Y Regular Interests: Uncertificated
Lower-Tier Regular Interests Y-1, Y-2, Y-3 and Y-4.
Uncertificated Lower-Tier Regular Interest Z Principal Reduction
Amounts: For any Distribution Date, the amounts by which the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interests ▇-▇, ▇-▇, Z-3
and Z-4 will be reduced on such Distribution Date by the allocation of Realized
Losses and the distribution of principal, which shall be in each case the excess
of (A) the sum of (x) the excess of the Pool Distribution Amount for the related
Loan Group (i.e. the "related Loan Group" for Uncertificated Lower-Tier Regular
Interest Z-1 is Loan Group 1, the "related Loan Group" for Uncertificated
Lower-Tier Regular Interest Z-2 is the Loan Group 2, the "related Loan Group"
for Uncertificated Lower-Tier Regular Interest Z-3 is Loan Group 3 and the
"related Loan Group" for Uncertificated Lower-Tier Regular Interest Z-4 is Loan
Group 4) over the sum of the amounts thereof distributable (i) in respect of
interest on such regular interest and the related Uncertificated Lower-Tier Y
Regular Interest, (ii) to such regular interest and the related Uncertificated
Lower-Tier Y Regular Interest pursuant to clause (e)(i) of the definition of
"Lower-Tier Distribution Amount" and (iii) in the case of the Group 1 Mortgage
Loans, to the Class 1-A-R Certificates in respect of Component I thereof and (y)
the amount of Realized Losses allocable to principal for the related Loan Group
over (B) the related Uncertificated Lower-Tier Regular Interest Y Principal
Reduction Amount.
Uncertificated Lower-Tier Regular Interest Z-1: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Z-1 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Z-1 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Z-1 on such Distribution Date in reduction of the
principal balance thereof.
Uncertificated Lower-Tier Regular Interest Z-1 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Z Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Z-1 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Regular Interest Z-2: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Z-2 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Z-2 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Z-2 on such Distribution Date in reduction of the
principal balance thereof.
Uncertificated Lower-Tier Regular Interest Z-2 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Z Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Z-2 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Regular Interest Z-3: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Z-3 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Z-3 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Z-3 on such Distribution Date in reduction of the
principal balance thereof.
Uncertificated Lower-Tier Regular Interest Z-3 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Z Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Z-3 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Lower-Tier Regular Interest Z-4: A regular interest
in the Lower-Tier REMIC that is held as an asset of the Upper-Tier REMIC, that
has an initial principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated Pass-Through Rate,
and that has such other terms as are described herein.
Uncertificated Lower-Tier Regular Interest Z-4 Principal
Distribution Amount: For any Distribution Date, the excess, if any, of the
Uncertificated Lower-Tier Regular Interest Z-4 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to Uncertificated
Lower-Tier Regular Interest Z-4 on such Distribution Date in reduction of the
principal balance thereof.
Uncertificated Lower-Tier Regular Interest Z-4 Principal Reduction
Amount: The Uncertificated Lower-Tier Regular Interest Z Principal Reduction
Amount for Uncertificated Lower-Tier Regular Interest Z-4 as determined pursuant
to the provisions of Appendix 1.
Uncertificated Pass-Through Rate: With respect to any Distribution
Date and (i) Uncertificated Lower-Tier Regular Interests Y-1 and Z-1, the Net
WAC for Loan Group 1, (ii) Uncertificated Lower-Tier Regular Interests Y-2 and
Z-2, the Net WAC for Loan Group 2, (iii) Uncertificated Lower-Tier Regular
Interests Y-3 and Z-3, the Net WAC for Loan Group 3 and (iv) Uncertificated
Lower-Tier Regular Interests Y-4 and Z-4, the Net WAC for Loan Group 4.
Uncertificated Principal Balance: The principal amount of any
Uncertificated Lower-Tier Regular Interest outstanding as of any date of
determination. The Uncertificated Principal Balance of each Uncertificated
Lower-Tier Regular Interest shall never be less than zero.
Underwriting Guidelines: With respect to Loan Group 1, Loan Group 3
and Loan Group 4, the underwriting guidelines of National City. With respect to
Loan Group 2, the underwriting guidelines of ▇▇▇▇▇ Fargo.
Unscheduled Principal Payments: The amounts described in clauses
(e), (f) and (g) of the definition of Principal Amount.
Upper-Tier REMIC: As defined in the Preliminary Statement.
U.S. Person: A citizen or resident of the United States, a
corporation or partnership (unless, in the case of a partnership, Treasury
Regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any state thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of its source, or a trust if a court within the United States is
able to exercise primary supervision over the administration of such trust, and
one or more such U.S. Persons have the authority to control all substantial
decisions of such trust (or, to the extent provided in applicable Treasury
Regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons).
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Holders of
the Residual Certificates and (b) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
▇▇▇▇▇ Fargo: As defined in the recitals hereto.
Section 1.02 Interest Calculations. All calculations of interest will be
made on a 360-day year consisting of twelve 30-day months. All dollar amounts
calculated hereunder shall be rounded to the nearest ▇▇▇▇▇ with one-half of one
▇▇▇▇▇ being rounded down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
on behalf of the Trust for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the
Mortgage Loans, including all interest and principal received on or with respect
to the Mortgage Loans (other than payments of principal and interest due and
payable on the Mortgage Loans on or before the Cut-Off Date). The foregoing
sale, transfer, assignment and set over does not and is not intended to result
in a creation of an assumption by the Trustee of any obligation of the Depositor
or any other Person in connection with the Mortgage Loans or any agreement or
instrument relating thereto, except as specifically set forth herein.
(b) In connection with such transfer and assignment, the Depositor has
delivered or caused to be delivered to the Custodian, on behalf of the Trustee,
for the benefit of the Certificateholders, the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature either (A) in blank or (B) in the following form: "Pay to the
order of U.S. Bank National Association, as Trustee, without recourse,"
with all necessary intervening endorsements showing a complete chain of
endorsement from the originator to the Trustee (each such endorsement being
sufficient to transfer all right, title and interest of the party so
endorsing in and to that Mortgage Note);
(ii) except as provided below, the original recorded Mortgage with
evidence of a recording thereon, or if any such Mortgage has not been
returned from the applicable recording office or has been lost, or if such
public recording office retains the original recorded Mortgage, a copy of
such Mortgage certified by the Depositor as being a true and correct copy
of the Mortgage, if such copy is available;
(iii) subject to the provisos at the end of this paragraph, a duly
executed Assignment of Mortgage to "U.S. Bank National Association, as
trustee for the holders of the Wachovia Mortgage Loan Trust, LLC Mortgage
Pass-Through Certificates, Series 2005-A Certificates" (which may be
included in a blanket assignment or assignments), together with, except as
provided below, originals of all interim recorded assignments of such
mortgage or copies of such interim assignments certified by the Depositor
as being true and complete copies of the original recorded intervening
assignments of mortgage (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the assignment
of the related Mortgage to the assignee thereof); provided that, if the
related Mortgage has not been returned from the applicable public recording
office, such Assignment of Mortgage may exclude the information to be
provided by the recording office; and provided, further, if the related
Mortgage has been recorded in the name of Mortgage Electronic Registration
Systems, Inc. ("MERS") or its designee, no Assignment of Mortgage in favor
of the Trustee will be required to be prepared or delivered and instead,
the Servicer servicing such Mortgage shall take all actions as are
necessary to cause the Trust or the Trustee to be shown as the owner of the
related Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of mortgages maintained by MERS;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon, if any;
(v) the original or duplicate original mortgagee title insurance
policy and all riders thereto;
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) for each Mortgage Loan, if any, which is secured by a
residential long-term lease, a copy of the lease with evidence of recording
indicated thereon, or, if the lease is in the process of being recorded, a
photocopy of the lease, certified by an officer of the respective prior
owner of such Mortgage Loan or by the applicable title insurance company,
closing/settlement/escrow agent or company or closing attorney to be a true
and correct copy of the lease transmitted for recordation;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) for each Mortgage Loan secured by Co-op Shares, the originals of
the following documents or instruments:
(A) The stock certificate;
(B) The stock power executed in blank;
(C) The executed proprietary lease;
(D) The executed recognition agreement;
(E) The executed assignment of recognition agreement, if any;
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) Executed UCC-3 financing statements or other appropriate UCC
financing statements, evidencing a complete and unbroken line of
assignments from the mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable for recordation).
provided, however, that on the Closing Date, with respect to item (iii), the
Depositor has delivered to the Custodian a copy of such Assignment of Mortgage
in blank and has caused the Servicer servicing the related Mortgage Loan to
retain the completed Assignment of Mortgage for recording as described below,
unless such Mortgage has been recorded in the name of MERS or its designee. In
addition, if the Depositor is unable to deliver or cause the delivery of any
original Mortgage Note due to the loss of such original Mortgage Note, the
Depositor may deliver a Lost Note Affidavit together with a copy of such
Mortgage Note, if a copy is available, and shall thereby be deemed to have
satisfied the document delivery requirements of this Section 2.01(b).
If in connection with any Mortgage Loans, the Depositor cannot
deliver (A) the Mortgage, (B) all interim recorded assignments, (C) all
assumption, modification, consolidation or extension agreements, if any, or (D)
the lender's title policy (together with all riders thereto) satisfying the
requirements of clause (ii), (iii), (iv) or (v) above, respectively,
concurrently with the execution and delivery hereof because such document or
documents have not been returned from the applicable public recording office in
the case of clause (ii), (iii) or (iv) above, or because the title policy has
not been delivered to either the Servicer servicing such Mortgage Loan or the
Depositor by the applicable title insurer in the case of clause (v) above, the
Depositor shall promptly deliver or cause to be delivered to the Custodian, in
the case of clause (ii), (iii) or (iv) above, such Mortgage, such interim
assignment or such assumption, modification, consolidation or extension
agreement, as the case may be, with evidence of recording indicated thereon upon
receipt thereof from the public recording office, but in no event shall any such
delivery of any such documents or instruments be made later than one year
following the Closing Date, unless, in the case of clause (ii), (iii) or (iv)
above, there has been a continuing delay at the applicable recording office or,
in the case of clause (v), there has been a continuing delay at the applicable
insurer and the Depositor has delivered an Officer's Certificate to such effect
to the Custodian. The Depositor shall forward or cause to be forwarded to the
Custodian (1) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (2) any other documents
required to be delivered by the Depositor or the related Servicer to the
Custodian. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Servicer
servicing such Mortgage Loan shall prepare, execute and deliver or cause to be
prepared, executed and delivered, on behalf of the Trust, such a document to the
public recording office.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within 30 days thereafter, the related Servicer
shall (except for any Mortgage which has been recorded in the name of MERS or
its designee) (I) cause each Assignment of Mortgage to be in proper form for
recording in the appropriate public office for real property records within 30
days of the Closing Date and (II) at the Depositor's expense, cause to be
delivered for recording in the appropriate public office for real property
records the Assignments of the Mortgages in favor of the Trustee, except that,
with respect to any Assignment of a Mortgage as to which the Servicer servicing
such Mortgage has not received the information required to prepare such
assignment in recordable form, such Servicer's obligation to do so and to
deliver the same for such recording shall be as soon as practicable after
receipt of such information and in any event within 30 days after the receipt
thereof and, no recording of an Assignment of Mortgage will be required in a
state if recording is not required by the Rating Agencies to obtain the initial
ratings for the Certificates.
In the case of Mortgage Loans that have been prepaid in full as of
the Closing Date, the Depositor, in lieu of delivering the above documents to
the Custodian will cause the Servicer servicing such Mortgage Loan to deposit in
the related Servicer Custodial Account the amount of such payment in full.
It is agreed and understood by the parties to this Agreement that
none of the Mortgage Loans are (a) loans subject to 12 CFR Section 226.31, 12
CFR Section 226.32 or 12 CFR Section 226.34, as amended, or (b) "high cost
home," "covered" (excluding home loans defined as "covered home loans" in the
New Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), "high risk home" or "predatory" loans under
any applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees).
Section 2.02 Acceptance by the Custodian of the Mortgage Loans. Subject to the
provisions of the following paragraph, pursuant to the Custodial Agreement, the
Custodian, on behalf of the Trustee, declares that it will hold the documents
referred to in Section 2.01 and the other documents delivered to it constituting
the Mortgage Files, and that it will hold such other assets as are included in
the Trust Estate, in trust for the exclusive use and benefit of all present and
future Certificateholders. Upon execution of this Agreement, the Custodian will
deliver to the Depositor, the Certificate Administrator and the Trustee an
initial certification in the form of Exhibit O hereto, to the effect that,
except as may be specified in the list of exceptions attached thereto, it has
received the Mortgage File for each Mortgage Loan on the Mortgage Loan Schedule.
Within 90 days after the execution and delivery of this Agreement,
the Custodian shall review the Mortgage Files in its possession and will deliver
to the Depositor, the Certificate Administrator and the Trustee a final
certification in the form of Exhibit P hereto. If, in the course of such review,
the Custodian finds any document described in Section 2.01(b)(i), (ii), (iii),
(v) and (ix)(A), (B), (C), (D), (F) and (G) which does not meet the requirements
of Section 2.01 or is omitted from such Mortgage File, the Custodian shall
promptly so notify the related Servicer and the Depositor. In performing any
such review, the Custodian may conclusively rely on the purported genuineness of
any such document and any signature thereon. It is understood that the scope of
the Custodian's review of the Mortgage Files is limited solely to confirming
that the documents listed in Section 2.01(b)(i), (ii), (iii), (v) and (ix)(A),
(B), (C), (D), (F) and (G) have been received and further confirming that any
and all documents delivered pursuant to Section 2.01 appear on their face to
have been executed and relate to the Mortgage Loans identified in the Mortgage
Loan Schedule. The Custodian shall not have any responsibility for determining
whether any document is valid and binding, whether the text of any assignment or
endorsement is in proper or recordable form, whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction, or
whether a blanket assignment is permitted in any applicable jurisdiction. The
Depositor hereby covenants and agrees that it will promptly correct or cure such
defect within 90 days from the date it was so notified of such defect and, if
the Depositor does not correct or cure such defect within such period, the
Depositor will either (a) substitute for the related Mortgage Loan a Substitute
Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth below or (b) repurchase such Mortgage Loan
from the Trustee at the Repurchase Price for such Mortgage Loan; provided,
however, that in no event shall such a substitution occur more than two years
from the Closing Date; provided, further, that such substitution or repurchase
shall occur within 90 days of when such defect was discovered if such defect
will cause the Mortgage Loan not to be a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code.
With respect to each Substitute Mortgage Loan, the Depositor shall
deliver to the Custodian, on behalf of the Trustee, for the benefit of the
Certificateholders, the Mortgage Note, the Mortgage, the related Assignment of
Mortgage (except for any Mortgage which has been recorded in the name of MERS or
its designee), and such other documents and agreements as are otherwise required
by Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01(b)(i). No substitution is permitted to be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to any such Substitute Mortgage Loan in the month of substitution
shall not be conveyed to the Trust and shall be retained by the Depositor. For
the month of substitution, distributions to Certificateholders will include the
Monthly Payment due for such month on any Defective Mortgage Loan for which the
Depositor has substituted a Substitute Mortgage Loan.
The related Servicer shall amend the Mortgage Loan Schedule to
reflect the removal of each Mortgage Loan that has become a Defective Mortgage
Loan and the substitution of the Substitute Mortgage Loan or Loans and such
Servicer shall deliver the amended Mortgage Loan Schedule to the Custodian and
the Trustee. Upon such substitution, each Substitute Mortgage Loan shall be
subject to the terms of this Agreement in all respects, and the Depositor shall
be deemed to have made to the Trustee and the Certificate Administrator with
respect to such Substitute Mortgage Loan, as of the date of substitution, the
representations and warranties made pursuant to Section 2.04. Upon any such
repurchase or substitution and the deposit to the related Servicer Custodial
Account of any required Repurchase Price or Substitution Adjustment Amount (as
described in the next paragraph), as applicable, and receipt of a Request for
Release, the Custodian shall release the Mortgage File relating to such
Defective Mortgage Loan to the Depositor and shall execute and deliver at the
Depositor's direction such instruments of transfer or assignment prepared by the
Depositor, in each case without recourse, as shall be necessary to transfer to
the Depositor, or its designee, any Defective Mortgage Loan repurchased or
substituted for pursuant to this Section 2.02.
For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the amount
(if any) by which the aggregate principal balance of all such Substitute
Mortgage Loans in a Loan Group as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Defective Mortgage Loans in such
Loan Group (the "Substitution Adjustment Amount" for such Loan Group) plus an
amount equal to the aggregate of any unreimbursed Advances with respect to such
Defective Mortgage Loans shall be deposited into the Certificate Account by the
Depositor on or before the Remittance Date for the Distribution Date in the
month succeeding the calendar month during which the related Mortgage Loan is
required to be repurchased or replaced hereunder.
The Custodian shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth in the
Custodial Agreement. Each Servicer shall promptly deliver to the Custodian, upon
the execution or, in the case of documents requiring recording, receipt thereof,
the originals of such other documents or instruments constituting the Mortgage
File as come into each Servicer's possession from time to time.
It is understood and agreed that the obligation of the Depositor to
substitute for or to repurchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee and any Certificateholder against the Depositor.
None of the Certificate Administrator, the Trustee or the Custodian
shall be under any duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable, or appropriate for the represented purpose or that they
are other than what they purport to be on their face or (ii) to determine
whether any Mortgage File should include any of the documents specified in
Section 2.01(b)(iv), (vi), (vii) and (viii) and (ix)(E).
Section 2.03 Representations, Warranties and Covenants of the Servicers.
(a) ▇▇▇▇▇ Fargo hereby makes the following representations and warranties
to the Depositor, the Certificate Administrator and the Trustee, as of the
Closing Date:
(i) ▇▇▇▇▇ Fargo is a national banking association duly organized,
validly existing, and in good standing under the federal laws of the United
States of America and has all licenses necessary to carry on its business
as now being conducted and is licensed, qualified and in good standing in
each of the states where a Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct business
of the type conducted by ▇▇▇▇▇ Fargo. ▇▇▇▇▇ Fargo has power and authority
to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by ▇▇▇▇▇ Fargo and the consummation of the transactions
contemplated hereby have been duly and validly authorized. This Agreement,
assuming due authorization, execution and delivery by the other parties
hereto, evidences the valid, binding and enforceable obligation of ▇▇▇▇▇
Fargo, except as enforceability may be limited by (A) bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the creditors' rights generally
or creditors of national banks and (B) general principles of equity,
whether enforcement is sought in a proceeding in equity or at law. All
requisite corporate action has been taken by ▇▇▇▇▇ Fargo to make this
Agreement valid and binding upon ▇▇▇▇▇ Fargo in accordance with its terms.
(ii) No consent, approval, authorization or order is required for the
transactions contemplated by this Agreement from any court, governmental
agency or body, or federal or state regulatory authority having
jurisdiction over ▇▇▇▇▇ Fargo or, if required, such consent, approval,
authorization or order has been or will, prior to the Closing Date, be
obtained.
(iii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of ▇▇▇▇▇ Fargo and will
not result in the breach of any term or provision of the charter or by-laws
of ▇▇▇▇▇ Fargo or result in the breach of any term or provision of, or
conflict with or constitute a default under or result in the acceleration
of any obligation under, any agreement, indenture or loan or credit
agreement or other instrument to which ▇▇▇▇▇ Fargo or its property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which ▇▇▇▇▇ Fargo or its property is subject.
(iv) There is no action, suit, proceeding or investigation pending or,
to the best knowledge of ▇▇▇▇▇ Fargo, threatened against ▇▇▇▇▇ Fargo which,
either individually or in the aggregate, would result in any material
adverse change in the business, operations, financial condition, properties
or assets of ▇▇▇▇▇ Fargo, or in any material impairment of the right or
ability of ▇▇▇▇▇ Fargo to carry on its business substantially as now
conducted or which would draw into question the validity of this Agreement
or the Mortgage Loans or of any action taken or to be taken in connection
with the obligations of ▇▇▇▇▇ Fargo contemplated herein, or which would
materially impair the ability of ▇▇▇▇▇ Fargo to perform under the terms of
this Agreement.
(v) Each Mortgage Loan serviced by ▇▇▇▇▇ Fargo was originated (A) by a
savings and loan association, savings bank, commercial bank, credit union,
insurance company or similar institution that is supervised and examined by
a federal or state authority, or (B) by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211
of the National Housing Act, as amended.
The representations and warranties made pursuant to this Section
2.03(a) shall survive delivery of the respective Mortgage Files for Loan Group 2
to the Custodian.
(b) National City hereby makes the following representations and warranties
to the Depositor, the Certificate Administrator and the Trustee, as of the
Closing Date:
(i) National City is a corporation duly organized, validly existing,
and in good standing under the laws of Ohio and has all licenses necessary
to carry on its business as now being conducted and is licensed, qualified
and in good standing in each of the states where a Mortgaged Property is
located if the laws of such state require licensing or qualification in
order to conduct business of the type conducted by National City. National
City has power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by National City and the consummation of the
transactions contemplated hereby have been duly and validly authorized.
This Agreement, assuming due authorization, execution and delivery by the
other parties hereto, evidences the valid, binding and enforceable
obligation of National City, except as enforceability may be limited by
(A) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the
rights of creditors and (B) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All requisite
corporate action has been taken by National City to make this Agreement
valid and binding upon National City in accordance with its terms.
(ii) No consent, approval, authorization or order is required for
the transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory authority
having jurisdiction over National City or, if required, such consent,
approval, authorization or order has been or will, prior to the Closing
Date, be obtained.
(iii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of National City and will
not result in the breach of any term or provision of the charter or
by-laws of National City or result in the breach of any term or provision
of, or conflict with or constitute a default under or result in the
acceleration of any obligation under, any agreement, indenture or loan or
credit agreement or other instrument to which National City or its
property is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which National City or its
property is subject.
(iv) There is no action, suit, proceeding or investigation pending
or, to the best knowledge of National City, threatened against National
City which, either individually or in the aggregate, would result in any
material adverse change in the business, operations, financial condition,
properties or assets of National City, or in any material impairment of
the right or ability of National City to carry on its business
substantially as now conducted or which would draw into question the
validity of this Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of National City
contemplated herein, or which would materially impair the ability of
National City to perform under the terms of this Agreement.
(v) Each Mortgage Loan serviced by National City was originated (A)
by a savings and loan association, savings bank, commercial bank, credit
union, insurance company or similar institution that is supervised and
examined by a federal or state authority, or (B) by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act, as amended.
The representations and warranties made pursuant to this Section
2.03(b) shall survive delivery of the respective Mortgage Files for Loan Group
1, Loan Group 3 or Loan Group 4 to the Custodian.
Section 2.04 Assignment of Interest in the Mortgage Loan Purchase Agreement;
Depositor Representations and Warranties.
(a) The Depositor hereby assigns to the Trustee all of its right, title and
interest in the Mortgage Loan Purchase Agreement, including but not limited to
the representations and warranties of the Seller set forth in Section 7 thereof.
The obligations of the Seller under the Mortgage Loan Purchase Agreement to
substitute or repurchase, as applicable, a Mortgage Loan as to which a
representation set forth in Section 7 thereof is breached shall be the Trustee's
and the Certificateholders' sole remedy for such breach. At the request of the
Trustee, the Depositor shall take such actions as may be necessary to enable the
Trustee to enforce such representations and the obligations of the Seller with
respect thereto and shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
(b) If the Depositor, a Servicer, or the Trustee discovers a breach of any
of the representations and warranties set forth in the Mortgage Loan Purchase
Agreement, which breach materially and adversely affects the value of the
interests of Certificateholders or the Trustee in the related Mortgage Loan, the
party discovering the breach shall give prompt written notice of the breach to
the other parties and the Seller. Upon receipt by the Custodian or the
applicable Servicer of the applicable Substitute Mortgage Loans, Repurchase
Prices, or Substitution Adjustment Amounts (as such terms are defined in the
Mortgage Loan Purchase Agreement) from the Seller as provided in the Mortgage
Loan Purchase Agreement, the Custodian and the applicable Servicer shall notify
the Trustee, the Custodian shall release to the Seller the related Mortgage
File, and the Trustee shall execute and deliver all instruments of transfer or
assignment furnished to it by the Seller, without recourse, representation or
warranty, as are necessary to transfer to the Seller the Mortgage Loan or any
property acquired with respect thereto. The Custodian shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly notify the Trustee
of such amendment. If the Seller delivers a Substitute Mortgage Loan, the
Custodian shall examine the Mortgage File for any Substitute Mortgage Loan in
the manner set forth in Section 2.02(a).
(c) The Depositor makes the following representations and warranties as to
the Mortgage Loans on which the Trustee is deemed to have relied in acquiring
the Mortgage Loans. Such representations and warranties speak as of the Closing
Date, but shall survive until the termination of this Agreement. Such
representations and warranties shall not be waived by any of the parties to this
Agreement:
(i) This Agreement creates a valid and continuing security interest
(as defined in the Uniform Commercial Code as in force in the relevant
jurisdiction) in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such as against
creditors of and purchasers from the Depositor.
(ii) The Mortgage Loans constitute "instruments" within the meaning of
the Uniform Commercial Code as in force in the relevant jurisdiction.
(iii) The Depositor owns and has good and marketable title to the
Mortgage Loans free and clear of any lien, claim or encumbrance of any
Person.
(iv) The Depositor has received all consents and approvals required by
the terms of the Mortgage Loans to the sale of the Mortgage Loans hereunder
to the Trustee.
(v) The Depositor has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Mortgage Loans granted to the Trustee
hereunder.
(vi) Other than the security interest granted to the Trustee pursuant
to this Agreement, the Depositor has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Mortgage Loans. The
Depositor has not authorized the filing of and is not aware of any
financing statements against the Depositor that include a description of
collateral covering the Mortgage Loans other than any financing statement
relating to the security interest granted to the Trustee hereunder or that
has been terminated. Debtor is not aware of any judgment or tax lien
filings against it.
(vii) The Custodian has in its possession all original copies of the
Mortgage Notes that constitute or evidence the Mortgage Loans. The Mortgage
Notes that constitute or evidence the Mortgage Loans do not have any marks
or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Trustee. All financing statements
filed or to be filed against the Depositor in favor of the Trustee in
connection herewith describing the Mortgage Loans contain a statement to
the following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the
secured party as more fully described in, and subject to the terms of, the
related transaction documents."
(d) The Depositor hereby covenants to maintain the perfection and priority
of the security interest of the Trustee created by this Agreement.
Section 2.05 Intent of Parties and Protection of Title.
(a) It is the express intent of the parties hereto that the transfer of the
Mortgage Loans by the Depositor to the Trustee pursuant to Section 2.01(a) be,
and be construed as, an absolute sale of the Mortgage Loans. It is, further, not
the intention of the parties that such transfer be deemed the grant of a
security interest in the Mortgage Loans by the Depositor to the Trustee to
secure a debt or other obligation of the Depositor. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans, then: (1) this
Agreement shall constitute a security agreement, and (2) the transfer of the
Mortgage Loans provided for in Section 2.01(a) shall be deemed to be a grant by
the Depositor to the Trustee of, and the Depositor hereby grants to the Trustee,
to secure all of the Depositor's obligations hereunder, a security interest in
all of the Depositor's right, title, and interest, whether now owned or
hereafter acquired, in and to (i) the Mortgage Loans, (ii) all accounts, chattel
paper, deposit accounts, documents, general intangibles, goods, instruments,
investment property, letter-of-credit rights, letters of credit, money, and oil,
gas, and other minerals, consisting of, arising from, or relating to, any of the
foregoing; and (iii) all proceeds of the foregoing.
(b) The Depositor shall file such financing statements, and the Depositor,
the Servicers, and the Trustee at the direction of the Depositor shall, to the
extent consistent with this Agreement, take such other actions as may be
necessary to ensure that, if this Agreement were found to create a security
interest in the Mortgage Loans, such security interest would be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. In connection herewith, the
Trustee shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code as in force in the relevant jurisdiction.
(c) It is the express intent of the parties hereto that the transfer of the
Uncertificated Lower-Tier Regular Interests by the Depositor to the Trustee
pursuant to this Agreement be, and be construed as, an absolute sale of the
Uncertificated Lower-Tier Regular Interests. It is, further, not the intention
of the parties that such transfer be deemed the grant of a security interest in
the Uncertificated Lower-Tier Regular Interests by the Depositor to the Trustee
to secure a debt or other obligation of the Depositor. However, in the event
that, notwithstanding the intent of the parties, the Uncertificated Lower-Tier
Regular Interests are held to be the property of the Depositor, or if for any
other reason this Agreement is held or deemed to create a security interest in
the Uncertificated Lower-Tier Regular Interests, then: (1) this Agreement shall
constitute a security agreement, and (2) the transfer of the Uncertificated
Lower-Tier Regular Interests provided for in this Agreement shall be deemed to
be a grant by the Depositor to the Trustee of, and the Depositor hereby grants
to the Trustee, to secure all of the Depositor's obligations hereunder, a
security interest in all of the Depositor's right, title, and interest, whether
now owned or hereafter acquired, in and to (i) the Uncertificated Lower-Tier
Regular Interests, including all rights represented thereby in and to the
Mortgage Loans and the proceeds thereof, (ii) all accounts, chattel paper,
deposit accounts, documents, general intangibles, goods, instruments, investment
property, letter-of-credit rights, letters of credit, money, and oil, gas, and
other minerals, consisting of, arising from, or relating to, any of the
foregoing; and (iii) all proceeds of the foregoing.
(d) The Depositor shall file such financing statements, and the Depositor,
the Servicers, and the Trustee at the direction of the Depositor shall, to the
extent consistent with this Agreement, take such other actions as may be
necessary to ensure that, if this Agreement were found to create a security
interest in the Uncertificated Lower-Tier Regular Interests, such security
interest would be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement. In connection herewith, the Trustee shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code as in force in the
relevant jurisdiction.
Section 2.06 Designation of Interests in the REMIC. The Depositor hereby
designates the Classes of Class A Certificates (other than the Class 1-A-R
Certificates) and the Classes of Class B Certificates as classes of "regular
interests" and Component II of the Class 1-A-R Certificates as the single class
of "residual interest" in the Upper-Tier REMIC for the purposes of Code Sections
860G(a)(1) and 860G(a)(2), respectively. The Depositor hereby further designates
each Uncertificated Lower-Tier Regular Interest as classes of "regular
interests" and Component I of the Class 1-A-R Certificates as the single class
of "residual interest" in the Lower-Tier REMIC for the purposes of Code Sections
860G(a)(1) and 860G(a)(2), respectively.
Section 2.07 Designation of Start-up Day. The Closing Date is hereby
designated as the "start-up day" of each of the Upper-Tier REMIC and Lower-Tier
REMIC within the meaning of Section 860G(a)(9) of the Code.
Section 2.08 REMIC Certificate Maturity Date. Solely for purposes of
satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the "latest
possible maturity date" of the regular interests in the Upper-Tier REMIC and
Lower-Tier REMIC is August 1, 2035 (the "REMIC Certificate Maturity Date").
Section 2.09 Execution and Delivery of Certificates. The Trustee (i)
acknowledges the issuance of and hereby declares that it holds the
Uncertificated Lower-Tier Regular Interests on behalf of the Upper-Tier REMIC
and the Certificateholders and (ii) has executed and delivered to or upon the
order of the Depositor, in exchange for the Mortgage Loans and Uncertificated
Lower-Tier Regular Interests together with all other assets included in the
definition of "Trust Estate," receipt of which is hereby acknowledged,
Certificates in authorized denominations which, together with the Uncertificated
Lower-Tier Regular Interests, evidence ownership of the entire Trust Estate.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. For and on behalf of the
Certificateholders, National City (or any successor Servicer thereto) shall
service and administer the Mortgage Loans in Loan Group 1, Loan Group 3 and Loan
Group 4, and ▇▇▇▇▇ Fargo (or any successor Servicer thereto) shall service and
administer the Mortgage Loans in Loan Group 2, in each case in accordance with
the terms of this Agreement, the Customary Servicing Procedures applicable to
such Servicer, applicable law and the terms of the related Mortgage Notes and
Mortgages. In connection with such servicing and administration, each Servicer
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things that it
may deem necessary or desirable in connection with such servicing and
administration including, but not limited to, the power and authority, subject
to the terms hereof, (a) to execute and deliver, on behalf of the
Certificateholders, the Certificate Administrator and the Trustee, customary
consents or waivers and other instruments and documents, (b) to consent, with
respect to the Mortgage Loans it services, to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (c) to collect any Insurance Proceeds
and other Liquidation Proceeds relating to the Mortgage Loans it services, and
(d) to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan it services. Each Servicer shall
represent and protect the interests of the Trust in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Mortgage Loan and shall not make or permit
any modification, waiver or amendment of any term of any Mortgage Loan, except
as provided pursuant to Section 3.21. Without limiting the generality of the
foregoing, each Servicer, in its own name or in the name of any Subservicer or
the Depositor, the Certificate Administrator and the Trustee, is hereby
authorized and empowered by the Depositor, the Certificate Administrator and the
Trustee, when the Servicer or any Subservicer, as the case may be, believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Certificate Administrator, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Mortgage Loans it services, and with respect to the related
Mortgaged Properties held for the benefit of the Certificateholders. Each
Servicer shall prepare and deliver to the Depositor and/or the Trustee and/or
the Certificate Administrator such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable such Servicer to
service and administer the Mortgage Loans it services to the extent that such
Servicer is not permitted to execute and deliver such documents pursuant to the
preceding sentence. Upon receipt of such documents, the Depositor and/or the
Trustee and/or the Certificate Administrator, upon the direction of such
Servicer, shall promptly execute such documents and deliver them to such
Servicer.
In accordance with the standards of the preceding paragraph, each
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Mortgage Loans it services, which Servicing Advances
shall be reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11.
The costs, if any, incurred by a Servicer in effecting the timely payments of
taxes and assessments on the Mortgaged Properties and related insurance premiums
shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balances of the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
However, advances for taxes may be capitalized in accordance with a loan
modification pursuant to Section 3.21.
The relationship of each Servicer (and of any successor to such
Servicer as servicer under this Agreement) to the Trustee, the
Certificateholders and the Certificate Administrator under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
Section 3.02......Subservicing; Enforcement of the Obligations of Servicers.
(a) Each Servicer may arrange for the subservicing of any Mortgage Loan it
services by a Subservicer pursuant to a Subservicing Agreement; provided,
however, that such subservicing arrangement and the terms of the related
Subservicing Agreement must provide for the servicing of such Mortgage Loan in a
manner consistent with the servicing arrangements contemplated hereunder.
Notwithstanding the provisions of any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between a
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the related Servicer shall remain obligated and liable to the
Depositor, the Trustee, the Certificate Administrator and the Certificateholders
for the servicing and administration of the Mortgage Loans it services in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if such Servicer alone
were servicing and administering those Mortgage Loans. All actions of each
Subservicer performed pursuant to the related Subservicing Agreement shall be
performed as agent of the related Servicer with the same force and effect as if
performed directly by such Servicer.
(b) For purposes of this Agreement, each Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans it services that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to such Servicer.
(c) As part of its servicing activities hereunder, each Servicer, for the
benefit of the Certificate Administrator, the Trustee and the
Certificateholders, shall use its best reasonable efforts to enforce the
obligations of each Subservicer engaged by such Servicer under the related
Subservicing Agreement, to the extent that the non-performance of any such
obligation would have a material and adverse effect on a Mortgage Loan. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as such Servicer, in its good faith business judgment, would require were
it the owner of the related Mortgage Loans. Such Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loan or (ii) from a specific recovery of costs, expenses or attorneys fees
against the party against whom such enforcement is directed.
(d) Any Subservicing Agreement entered into by a Servicer shall provide
that it may be assumed or terminated by the Trustee upon 120 days' written
notice, if the Trustee has assumed the duties of a Servicer, or any successor
Servicer, at the Trustee's or successor Servicer's option, as applicable,
without cost or obligation to the assuming or terminating party or the Trust,
upon the assumption by such party of the obligations of the Servicer pursuant to
Section 8.05. Each Servicer shall be solely responsible for any fees and
expenses payable to any Subservicer in connection with the assumption or
termination of any Subservicing Agreement.
Any Subservicing Agreement, and any other transactions or services
relating to the Mortgage Loans involving a Subservicer, shall be deemed to be
between the related Servicer and such Subservicer alone, and the Trustee, the
Certificate Administrator and the Certificateholders shall not be deemed parties
thereto and shall have no obligations, duties or liabilities to or with respect
to the Subservicer or its officers, directors or employees, except as set forth
in Section 3.01.
Section 3.03 Fidelity Bond; Errors and Omissions Insurance.
Each Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage on all
officers, employees or other persons acting in any capacity requiring such
persons to handle funds, money, documents or papers relating to the Mortgage
Loans it services. These policies must insure the related Servicer against
losses resulting from dishonest or fraudulent acts committed by such Servicer's
personnel, any employees of outside firms that provide data processing services
for such Servicer, and temporary contract employees or student interns. Such
fidelity bond shall also protect and insure such Servicer against losses in
connection with the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No provision of
this Section 3.03 requiring such fidelity bond and errors and omissions
insurance shall diminish or relieve a Servicer from its duties and obligations
as set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by FNMA in the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers' &
Servicers' Guide, as amended or restated from time to time, or in an amount as
may be permitted to the Servicer by express waiver of FNMA or FHLMC.
Section 3.04 Access to Certain Documentation.
Each Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinate
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation required by applicable
regulations of the OTS and the FDIC with respect to the Mortgage Loans. Such
access shall be afforded without charge, but only upon reasonable and prior
written request and during normal business hours at the offices designated by
each Servicer. Nothing in this Section 3.04 shall limit the obligation of a
Servicer to observe any applicable law and the failure of such Servicer to
provide access as provided in this Section 3.04 as a result of such obligation
shall not constitute a breach of this Section 3.04.
Section 3.05 Maintenance of Primary Insurance Policy; Claims.
With respect to each Mortgage Loan which was covered by a Primary
Insurance Policy on the Cut-off Date, or the date that such Mortgage Loan is
transferred to the Trustee, the Servicer servicing such Mortgage Loan shall,
without any cost to the Trust Estate, maintain or cause the Mortgagor to
maintain in full force and effect a Primary Insurance Policy insuring that
portion of the Mortgage Loan in excess of a percentage in conformity with FNMA
requirements. Each Servicer shall pay or shall cause the Mortgagor to pay the
premium thereon on a timely basis, at least until the Loan-to-Value Ratio of
such Mortgage Loan is reduced to 80% or such other Loan-to-Value Ratio as may be
required by law. If such Primary Insurance Policy is terminated, the related
Servicer shall obtain from another insurer a comparable replacement policy, with
a total coverage equal to the remaining coverage of such terminated Primary
Insurance Policy. If the insurer shall cease to be an insurer acceptable to
FNMA, such Servicer shall notify the Certificate Administrator and the Trustee
in writing, it being understood that such Servicer shall not have any
responsibility or liability for any failure to recover under the Primary
Insurance Policy for such reason. If the related Servicer determines that
recoveries under the Primary Insurance Policy are jeopardized by the financial
condition of the insurer, such Servicer shall obtain from another insurer which
meets the requirements of this Section 3.05 a replacement insurance policy. No
Servicer shall take any action that would result in noncoverage under any
applicable Primary Insurance Policy of any loss that, but for the actions of the
related Servicer, would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into pursuant
to Section 3.13, the related Servicer shall promptly notify the insurer under
the related Primary Insurance Policy, if any, of such assumption or substitution
of liability in accordance with the terms of such Primary Insurance Policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under such Primary Insurance Policy. If such
Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, such Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
In connection with its activities as servicer, each Servicer agrees
to prepare and present, on behalf of itself, the Trustee, and the
Certificateholders, claims to the insurer under any Primary Insurance Policy in
a timely fashion in accordance with the terms of such Primary Insurance Policy
and, in this regard, to take such action as shall be necessary to permit
recovery under any Primary Insurance Policy respecting a Defaulted Mortgage
Loan. Pursuant to Section 3.08(b)(iii), any amounts collected by a Servicer
under any Primary Insurance Policy shall be deposited in the related Servicer
Custodial Account, subject to withdrawal pursuant to Section 3.11.
Each Servicer will comply with all provisions of applicable state
and federal law relating to the cancellation of, or collection of premiums with
respect to, Primary Insurance Policies, including, but not limited to, the
provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time.
Section 3.06 Rights of the Depositor, the Certificate Administrator and the
Trustee in Respect of the Servicers.
The Depositor may, but is not obligated to, enforce the obligations
of either Servicer hereunder and may, but is not obligated to, perform, or cause
a designee to perform, any defaulted obligation of a Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
a Servicer hereunder; provided that no Servicer shall be relieved of any of its
obligations hereunder by virtue of such performance by the Depositor or its
designee. Neither the Trustee, the Certificate Administrator nor the Depositor
shall have any responsibility or liability for any action or failure to act by a
Servicer nor shall the Trustee, the Certificate Administrator or the Depositor
be obligated to supervise the performance of a Servicer hereunder or otherwise.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Certificate Administrator, the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.07. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.07 Trustee to Act as Servicer.
If a Servicer shall for any reason no longer be a Servicer hereunder
(including by reason of an Event of Default), the Trustee shall thereupon
assume, if it so elects, or shall appoint a successor Servicer to assume, all of
the rights and obligations of such Servicer hereunder arising thereafter (except
that the Trustee shall not be (a) liable for losses of a Servicer pursuant to
Section 3.12 or any acts or omissions of such predecessor Servicer hereunder,
(b) obligated to make Advances if it is prohibited from doing so by applicable
law, (c) deemed to have made any representations and warranties of such Servicer
hereunder), (d) be required or obligated, in its capacity as successor Servicer,
to purchase, repurchase or substitute any Mortgage Loan, or (e) fund any losses
on any Permitted Investment directed by any other Servicer). Any such assumption
shall be subject to Section 8.05. If a Servicer shall for any reason no longer
be a Servicer (including by reason of any Event of Default), the Trustee or the
successor Servicer may elect to succeed to any rights and obligations of such
Servicer under each Subservicing Agreement or may terminate each Subservicing
Agreement to which such Servicer is a party. If it has elected to assume the
Subservicing Agreement, the Trustee or the successor Servicer shall be deemed to
have assumed all of the related Servicer's interest therein and to have replaced
such Servicer as a party to any Subservicing Agreement entered into by such
Servicer as contemplated by Section 3.02 to the same extent as if the
Subservicing Agreement had been assigned to the assuming party except that such
Servicer shall not be relieved of any liability or obligations under any such
Subservicing Agreement.
Other than as set forth below with respect to the Trustee acting as
Servicer, a Servicer that is no longer a Servicer hereunder shall, upon request
of the Trustee, but at the expense of such Servicer, deliver to the assuming
party all documents and records relating to each Subservicing Agreement or
substitute servicing agreement and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected or held by it and otherwise
use its best efforts to effect the orderly and efficient transfer of such
substitute Subservicing Agreement to the assuming party. All costs incurred in
connection with the transition of the servicing to the Trustee or the successor
Servicer shall be paid by the predecessor Servicer and if not so paid shall be
reimbursed to the Trustee by the Trust. If the Trustee is acting as Servicer
pursuant to either Section 7.05 or Section 8.05, all costs incurred by the
Trustee, acting as Servicer, in connection with the transition of the servicing
from the Trustee to a successor Servicer shall be paid by the predecessor
Servicer from which the Trustee took over as Servicer pursuant to either Section
7.05 or Section 8.05, and if not so paid shall be reimbursed to the Trustee by
the Trust.
Section 3.08......Collection of Mortgage Loan Payments; Servicer Custodial
Accounts; Certificate Account; and Upper-Tier Certificate Account.
(a) Each Servicer will proceed diligently, in accordance with this
Agreement, to collect all payments due under each of the Mortgage Loans it
services when the same shall become due and payable. Further, each Servicer will
in accordance with all applicable law, the terms of the Mortgage Loans, and
Customary Servicing Procedures applicable thereto ascertain and estimate taxes,
assessments, fire and hazard insurance premiums, mortgage insurance premiums and
all other charges with respect to the Mortgage Loans it services that, as
provided in any Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable. Consistent with the foregoing, each
Servicer may in its discretion (i) waive any late payment charge or any
prepayment charge or penalty interest in connection with the prepayment of a
Mortgage Loan it services and (ii) extend the due dates for payments due on a
Mortgage Note for a period not greater than 120 days; provided, however, that
such Servicer cannot extend the maturity of any such Mortgage Loan past the date
on which the final payment is due on the latest maturing Mortgage Loan as of the
Cut-Off Date. In the event of any such arrangement, such Servicer shall make
Periodic Advances on the related Mortgage Loan in accordance with the provisions
of Section 3.20 during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. No Servicer shall be required to institute or join in litigation
with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment is
required is prohibited by applicable law.
(b) Each Servicer shall establish and maintain a Servicer Custodial
Account. Each Servicer shall deposit or cause to be deposited into the related
Servicer Custodial Account, all on a daily basis within one Business Day of
receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by the related Subservicers or received by
such Servicer in respect of the Mortgage Loans it services subsequent to the
Cut-Off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-Off Date) and the following amounts required
to be deposited hereunder with respect to the Mortgage Loans it services:
(i) all payments on account of principal of the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans, net of
the Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds, other than
Insurance Proceeds to be (1) applied to the restoration or repair of the
Mortgaged Property, (2) released to the Mortgagor in accordance with
Customary Servicing Procedures, the terms of the Mortgage Loan, or
applicable law or (3) required to be deposited to an Escrow Account
pursuant to Section 3.09(a) and (B) any Insurance Proceeds released from an
Escrow Account pursuant to Section 3.09(b)(iv);
(iv) any amount required to be deposited by such Servicer pursuant to
Section 3.08(d) in connection with any losses on Permitted Investments with
respect to the related Servicer Custodial Account;
(v) any amounts required to be deposited by such Servicer pursuant to
Section 3.14;
(vi) all Repurchase Prices, all Substitution Adjustment Amounts and
all Subsequent Recoveries received by such Servicer;
(vii) Periodic Advances made by such Servicer pursuant to Section 3.20
and any payments of Compensating Interest; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to a Servicer Custodial
Account by the related Servicer shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of prepayment penalties, late payment charges or assumption fees, if
collected, need not be deposited by such Servicer. If a Servicer shall deposit
in the related Servicer Custodial Account any amount not required to be
deposited, it may at any time withdraw or direct the institution maintaining
such Servicer Custodial Account to withdraw such amount from such Servicer
Custodial Account, any provision herein to the contrary notwithstanding. A
Servicer Custodial Account may contain funds that belong to one or more trust
funds created for mortgage pass-through certificates of other series and may
contain other funds respecting payments on mortgage loans belonging to such
Servicer or serviced by such Servicer on behalf of others; provided that such
commingling of funds shall not be permitted at any time during which Fitch's
senior long-term unsecured debt rating of such Servicer is below "A."
Notwithstanding such commingling of funds, each Servicer shall keep records that
accurately reflect the funds on deposit in the related Servicer Custodial
Account that have been identified by it as being attributable to the Mortgage
Loans it services. Each Servicer shall maintain adequate records with respect to
all withdrawals made pursuant to this Section 3.08. All funds required to be
deposited in a Servicer Custodial Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.11.
(c) The Certificate Administrator shall establish and maintain, on behalf
of the Certificateholders, the Certificate Account. The Certificate
Administrator shall, promptly upon receipt, deposit in the Certificate Account
and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Certificate
Administrator pursuant to Section 3.11(a)(ix);
(ii) any amount paid by the Certificate Administrator pursuant to
Section 3.08(d) in connection with any losses on Permitted Investments with
respect to the Certificate Account; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Certificate Account.
If a Servicer shall remit any amount not required to be remitted, it
may at any time direct the Certificate Administrator to withdraw such amount
from the Certificate Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Certificate Administrator which describes the amounts
deposited in error in the Certificate Account. All funds required to be
deposited in the Certificate Account shall be held by the Certificate
Administrator in trust for the Certificateholders until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 3.11. In no event
shall the Certificate Administrator incur liability for withdrawals from the
Certificate Account at the direction of a Servicer.
(d) Each institution at which a Servicer Custodial Account or the
Certificate Account is maintained shall invest the funds therein as directed in
writing by the related Servicer or as set forth herein, respectively, in
Permitted Investments, which shall mature not later than (i) in the case of a
Servicer Custodial Account, the Business Day next preceding the related
Remittance Date (except that if such Permitted Investment is an obligation of
the institution that maintains such account, then such Permitted Investment
shall mature not later than such Remittance Date) and (ii) in the case of the
Certificate Account, the Business Day next preceding the Distribution Date
(except that if such Permitted Investment is an obligation of the institution
that maintains such account, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Trustee, for the benefit of the Certificateholders. All
income or gain (net of any losses) realized from any such investment of funds on
deposit in a Servicer Custodial Account shall be for the benefit of the related
Servicer as servicing compensation and shall be retained by it monthly as
provided herein. All income or gain (net of any losses) realized from any such
investment of funds on deposit in the Certificate Account shall be for the
benefit of the Certificate Administrator as additional compensation and shall be
retained by it monthly as provided herein. Any and all amounts on deposit in the
Certificate Account will be in invested in (i) ▇▇▇▇▇▇▇▇▇ CUSIP for Delaware
Money Market, (ii) to the extent the investment listed in (i) is unavailable for
any reason, Evergreen Prime Cash Management Money Market Fund - Fund number 494
- Symbol EPRXX or (iii) to the extent the investments listed in (i) and (ii)
above are unavailable for any reason, such amount will be held uninvested. The
amount of any losses realized in a Servicer Custodial Account or the Certificate
Account in respect of any such investments shall promptly be deposited by the
related Servicer in such Servicer Custodial Account or by the Certificate
Administrator in the Certificate Account, as applicable.
(e) Each Servicer shall give notice to the Trustee of any proposed change
of the location of the related Servicer Custodial Account maintained by such
Servicer not later than 30 days and not more than 45 days prior to any change
thereof. The Certificate Administrator shall give notice to the Trustee, each
Servicer, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account not later than 30 days and not more than 45
days prior to any change thereof. The creation of a Servicer Custodial Account
shall be evidenced by a certification substantially in the form of Exhibit F
hereto. A copy of such certification shall be furnished to the Certificate
Administrator.
(f) The Certificate Administrator shall establish and maintain the
Upper-Tier Certificate Account. On each Distribution Date (other than the Final
Distribution Date, if such Final Distribution Date is in connection with a
purchase of the assets of the Trust Estate by the Depositor), the Certificate
Administrator shall, from funds available on deposit in the Certificate Account,
deposit, in immediately available funds, by wire transfer or otherwise, into the
Upper-Tier Certificate Account, the Lower-Tier Distribution Amount.
Section
3.09......Collection of Taxes, Assessments and Similar Items; Escrow Accounts.
(a) To the extent required by the related Mortgage Note and not violative
of current law, each Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments in
trust separate and apart from any of its own funds and general assets and for
such purpose shall establish and maintain one or more escrow accounts
(collectively, the "Escrow Accounts"), in each case titled "[Insert name of
Servicer], in trust for registered holders of Wachovia Mortgage Loan Trust, LLC
Mortgage Pass-Through Certificates, Series 2005-A and various Mortgagors." Each
Escrow Account shall be established with a commercial bank, a savings bank or a
savings and loan association that meets the guidelines set forth by FNMA or
FHLMC as an eligible institution for escrow accounts and which is a member of
the Automated Clearing House. In any case, each Escrow Account shall be insured
by the FDIC to the fullest extent permitted by law. Each Servicer shall deposit
in the appropriate Escrow Account on a daily basis, and retain therein: (i) all
Escrow Payments collected on account of the Mortgage Loans, (ii) all amounts
representing proceeds of any hazard insurance policy which are to be applied to
the restoration or repair of any related Mortgaged Property and (iii) all
amounts representing proceeds of any Primary Insurance Policy. Nothing herein
shall require a Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law or the terms of the related Mortgage Loan.
(b) Withdrawals of amounts so collected from the Escrow Accounts may be
made by a Servicer only (i) to effect timely payment of taxes, assessments,
mortgage insurance premiums, fire and hazard insurance premiums, condominium or
PUD association dues, or comparable items constituting Escrow Payments for the
related Mortgage, (ii) to reimburse the Servicer out of related Escrow Payments
made with respect to a Mortgage Loan for any Servicing Advance made by the
Servicer pursuant to Section 3.09(c) with respect to such Mortgage Loan, (iii)
to refund to any Mortgagor any sums determined to be overages, (iv) for transfer
to a Servicer Custodial Account upon default of a Mortgagor or in accordance
with the terms of the related Mortgage Loan and if permitted by applicable law,
(v) for application to restore or repair the Mortgaged Property, (vi) to pay to
the Mortgagor, to the extent required by law or the terms of the Mortgage Loan,
any interest paid on the funds deposited in the applicable Escrow Account, (vii)
to pay to itself any interest earned on funds deposited in the applicable Escrow
Accounts (and not required to be paid to the Mortgagor), (viii) to the extent
permitted under the terms of the related Mortgage Note and applicable law, to
pay late fees with respect to any Monthly Payment which is received after the
applicable grace period, (ix) to withdraw suspense payments that are deposited
into an Escrow Account, (x) to withdraw any amounts inadvertently deposited in
and Escrow Account or (xi) to clear and terminate any Escrow Account upon the
termination of this Agreement in accordance with Section 10.01. Any Escrow
Account shall not be a part of the Trust Estate.
(c) With respect to each Mortgage Loan, each Servicer shall maintain
accurate records reflecting the status of taxes, assessments and other charges
which are or may become a lien upon the Mortgaged Property and the status of
Primary Insurance Policy premiums and fire and hazard insurance coverage. Each
Servicer shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account, if any, which shall have been estimated and
accumulated by such Servicer in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage Loan. To the extent that a Mortgage Loan does
not provide for Escrow Payments, such Servicer shall determine whether any such
payments are made by the Mortgagor. Each Servicer assumes full responsibility
for the timely payment of all such bills and shall effect timely payments of all
such bills irrespective of each Mortgagor's faithful performance in the payment
of same or the making of the Escrow Payments. Each Servicer shall advance any
such payments that are not timely paid, but each Servicer shall be required so
to advance only to the extent that such Servicing Advances, in the good faith
judgment of the related Servicer, will be recoverable by such Servicer out of
Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.10 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
Each Servicer shall afford the Certificate Administrator and the
Trustee reasonable access to all records and documentation in its possession
regarding the Mortgage Loans it services and all accounts, insurance information
and other matters relating to this Agreement, such access being afforded without
charge, but only upon reasonable request and during normal business hours at the
office designated by each Servicer.
Upon reasonable advance notice in writing, each Servicer will
provide to each Certificateholder which is a savings and loan association, bank
or insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans it services sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that each Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by such Servicer in providing
such reports and access.
Section 3.11 Permitted Withdrawals from the Servicer Custodial
Accounts; Certificate Account and Upper-Tier Certificate Account.
(a) Each Servicer may from time to time make withdrawals from the related
Servicer Custodial Account, for the following purposes:
(i) to pay to such Servicer (to the extent not previously retained),
the servicing compensation to which it is entitled pursuant to Section
3.17, and to pay to such Servicer, as additional servicing compensation,
earnings on or investment income with respect to funds in or credited to
such Servicer Custodial Account;
(ii) to reimburse such Servicer for unreimbursed Advances made by it,
such right of reimbursement pursuant to this clause (ii) being limited to
amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse such Servicer for any Nonrecoverable Advance
previously made or any Advances capitalized in accordance with Section
3.21(c);
(iv) to reimburse such Servicer for Insured Expenses from the related
Insurance Proceeds; (v) to pay to the purchaser, with respect to each
Mortgage Loan or REO Property that has been purchased pursuant to Section
2.02 or 2.04, all amounts received thereon after the date of such purchase;
(vi) to reimburse the Trustee and the Certificate Administrator for,
or to pay, expenses incurred by either such party which are reimbursable or
payable pursuant to Section 3.07, Section 8.01, Section 9.07 or Section
9.11 of this Agreement;
(vii) to reimburse such Servicer or the Depositor for expenses
incurred by any of them and reimbursable pursuant to Section 7.03;
(viii) to withdraw any amount deposited in such Servicer Custodial
Account and not required to be deposited therein;
(ix) on or prior to the Remittance Date, to withdraw an amount equal
to the related Pool Distribution Amount, the related Certificate
Administrator Fee for such Distribution Date and any other amounts due to
the Certificate Administrator and the Trustee under this Agreement, and
remit such amount in immediately available funds to the Certificate
Administrator for deposit in the Certificate Account; and
(x) to clear and terminate such Servicer Custodial Account upon
termination of this Agreement pursuant to Section 10.01.
Each Servicer shall keep and maintain separate accounting records,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Servicer Custodial Account pursuant to clauses (i),
(ii), (iv) and (v). Prior to making any withdrawal from the Servicer Custodial
Account pursuant to clause (iii), each Servicer shall deliver to the Certificate
Administrator an Officer's Certificate of a Servicing Officer indicating the
amount of any previous Advance determined by such Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loan(s) and their
respective portions of such Nonrecoverable Advance.
(b) The Certificate Administrator shall withdraw funds from the Certificate
Account for distributions to Certificateholders in the manner specified in this
Agreement. In addition, the Certificate Administrator may from time to time make
withdrawals from the Certificate Account for the following purposes:
(i) to pay to itself the Certificate Administrator Fee for the related
Distribution Date;
(ii) to pay to itself as additional compensation earnings on or
investment income with respect to funds in the Certificate Account;
(iii) to withdraw and return to the related Servicer any amount
deposited in the Certificate Account and not required to be deposited
therein; and
(iv) to clear and terminate the Certificate Account upon termination
of the Agreement pursuant to Section 10.01.
(c) Notwithstanding anything herein to the contrary, the Regular
Certificates and the Class 1-A-R Certificates shall not receive
distributions directly from the Certificate Account. On each Distribution
Date, funds on deposit in the Upper-Tier Certificate Account shall be used
to make payments on the Regular Certificates and the Class 1-A-R
Certificates as provided in Sections 5.01 and 5.02. The Upper-Tier
Certificate Account shall be cleared and terminated upon termination of
this Agreement pursuant to Section 10.01.
Section 3.12 Maintenance of Hazard Insurance.
Each Servicer shall cause to be maintained for each Mortgage Loan it
services, fire and hazard insurance with extended coverage customary in the area
where the Mortgaged Property is located in an amount which is at least equal to
the lesser of (a) the full insurable value of the Mortgaged Property or (b) the
greater of (i) the outstanding principal balance owing on the Mortgage Loan and
(ii) an amount such that the proceeds of such insurance shall be sufficient to
avoid the application to the Mortgagor or loss payee of any coinsurance clause
under the policy. If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) the Servicer
servicing the related Mortgage Loan will cause to be maintained a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration and the requirements of FNMA or FHLMC. Each
Servicer shall also maintain on REO Property, fire and hazard insurance with
extended coverage in an amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required, flood insurance in an amount required above. Any
amounts collected by a Servicer under any such policies (other than amounts to
be deposited in an Escrow Account and applied to the restoration or repair of
the property subject to the related Mortgage or property acquired in liquidation
of the Mortgage Loan, or to be released to the Mortgagor in accordance with the
terms of the Mortgage Loan, applicable law, or applicable Customary Servicing
Procedures) shall be deposited in the related Servicer Custodial Account,
subject to withdrawal pursuant to Section 3.11(a). It is understood and agreed
that no earthquake or other additional insurance need be required by a Servicer
of any Mortgagor or maintained on REO Property, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. All policies required hereunder shall be
endorsed with standard mortgagee clauses with loss payable to the related
Servicer, and shall provide for at least 30 days prior written notice of any
cancellation, reduction in amount or material change in coverage to such
Servicer.
The hazard insurance policies for each Mortgage Loan secured by a
unit in a condominium development or planned unit development shall be
maintained with respect to such Mortgage Loan and the related development in a
manner which is consistent with FNMA requirements.
Notwithstanding the foregoing, each Servicer may maintain a blanket
policy insuring against hazard losses on all of the Mortgaged Properties
relating to the Mortgage Loans in lieu of maintaining the required hazard
insurance policies for each Mortgage Loan and may maintain a blanket policy
insuring against special flood hazards in lieu of maintaining any required flood
insurance. Any such blanket policies shall (A) be consistent with prudent
industry standards, (B) name the related Servicer as loss payee, (C) provide
coverage in an amount equal to the aggregate unpaid principal balance on the
related Mortgage Loans without co-insurance, and (D) otherwise comply with the
requirements of this Section 3.12. Any such blanket policy may contain a
deductible clause; provided that if any Mortgaged Property is not covered by a
separate policy otherwise complying with this Section 3.12 and a loss occurs
with respect to such Mortgaged Property which loss would have been covered by
such a policy, the related Servicer shall deposit in the related Servicer
Custodial Account the difference, if any, between the amount that would have
been payable under a separate policy complying with this Section 3.12 and the
amount paid under such blanket policy.
Section 3.13 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. Each Servicer shall, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that no Servicer shall exercise any such rights if prohibited by law from doing
so.
Section 3.14 Realization Upon Defaulted Mortgage Loans; REO Property.
(a) Each Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of Mortgaged Properties securing such
of the Mortgage Loans (but shall not sell or convey such Mortgage Loan, except
as required pursuant to Section 2.02, 2.04 or 10.01 of this Agreement) as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments. In connection with such foreclosure
or other conversion, each Servicer shall follow the Customary Servicing
Procedures applicable to it and shall meet the requirements of the insurer under
any Required Insurance Policy; provided, however, that a Servicer may enter into
a special servicing agreement with an unaffiliated Holder of 100% Percentage
Interest of a Class of Class B Certificates or a holder of a class of securities
representing interests in the Class B Certificates alone or together with other
subordinated mortgage pass-through certificates. Such agreement shall be
substantially in the form attached hereto as Exhibit K or subject to each Rating
Agency's acknowledgment that the ratings of the Certificates in effect
immediately prior to the entering into such agreement would not be qualified,
downgraded or withdrawn and the Certificates would not be placed on credit
review status (except for possible upgrading) as a result of such agreement. Any
such agreement may contain provisions whereby such holder may instruct the
related Servicer to commence or delay foreclosure proceedings with respect to
delinquent Mortgage Loans and will contain provisions for the deposit of cash by
the holder that would be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had such
Servicer acted in accordance with its normal procedures. Notwithstanding the
foregoing, no Servicer shall be required to expend its own funds in connection
with any foreclosure or towards the restoration of any Mortgaged Property unless
it shall determine (i) that such restoration and/or foreclosure will increase
the proceeds of liquidation of the Mortgage Loan after reimbursement to itself
of such expenses and (ii) that such expenses will be recoverable to it through
proceeds of the liquidation of the Mortgage Loan (respecting which it shall have
priority for purposes of withdrawals from the related Servicer Custodial
Account). Any such expenditures shall constitute Servicing Advances for purposes
of this Agreement.
The decision of a Servicer to foreclose on a Defaulted Mortgage Loan
shall be subject to a determination by such Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer servicing the
related Mortgage Loan shall ensure that the title to such REO Property
references this Agreement and the Trustee's capacity hereunder. Pursuant to its
efforts to sell such REO Property, such Servicer shall either itself or through
an agent selected by the Servicer manage, conserve, protect and operate such REO
Property in the same manner that it manages, conserves, protects and operates
other foreclosed property for its own account and in the same manner that
similar property in the same locality as the REO Property is managed. Incident
to its conservation and protection of the interests of the Certificateholders,
such Servicer may rent the same, or any part thereof, as such Servicer deems to
be in the best interest of the Certificateholders for the period prior to the
sale of such REO Property. Each Servicer shall prepare for and deliver to the
Certificate Administrator and the Trustee a statement with respect to each REO
Property that has been rented, if any, showing the aggregate rental income
received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Certificate Administrator to comply with the reporting requirements of the REMIC
Provisions; provided, however, that no Servicer shall have a duty to rent any
REO Property on behalf of the Trust. The net monthly rental income, if any, from
such REO Property shall be deposited in the related Servicer Custodial Account
no later than the close of business on each Determination Date. Each Servicer
shall perform, with respect to the Mortgage Loans, the tax reporting and
withholding required by Sections 1445 and 6050J of the Code with respect to
foreclosures and abandonments, the tax reporting required by Section 6050H of
the Code with respect to the receipt of mortgage interest from individuals and,
if required by Section 6050P of the Code, with respect to the cancellation of
indebtedness by certain financial entities, by preparing such tax and
information returns as may be required, in the form required. Each Servicer
shall deliver copies of such reports to the Certificate Administrator and the
Trustee.
The income earned from the management of any REO Properties, net of
reimbursement to a Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Periodic Advances and Servicing Advances applicable to such
Servicer, shall be applied to the payment of principal of and interest on the
related Defaulted Mortgage Loans (solely for the purposes of allocating
principal and interest, interest shall be treated as accruing as though such
Mortgage Loans were still current) and all such income shall be deemed, for all
purposes in this Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the related Servicer
Custodial Account. To the extent the net income received during any calendar
month is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Interest Rate on the related Mortgage
Loan for such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Servicer servicing such Mortgage Loan for any related
unreimbursed Servicing Advances and Servicing Fees; second, to reimburse such
Servicer for any unreimbursed Periodic Advances and to reimburse the related
Servicer Custodial Account for any Nonrecoverable Advances (or portions thereof)
that were previously withdrawn by the Servicer pursuant to Section 3.11(a)(ii)
that related to such Mortgage Loan; third, to reimburse the Certificate
Administrator and the Trustee for any amounts incurred by them in connection
with such Mortgage Loan; fourth, to accrued and unpaid interest (to the extent
no Periodic Advance has been made for such amount or any such Periodic Advance
has been reimbursed) on the Mortgage Loan or related REO Property, at the
Mortgage Interest Rate to the Due Date occurring in the month in which such
amounts are required to be distributed; and fifth, as a recovery of principal of
the Mortgage Loan. Excess Proceeds, if any, from the liquidation of a Liquidated
Mortgage Loan will be retained by the Servicer as additional servicing
compensation pursuant to Section 3.17.
(b) When a Mortgage Loan becomes a Defaulted Mortgage Loan, the related
Servicer shall promptly notify the Certificate Administrator of such occurrence.
Section 3.15 Custodian to Cooperate; Release of Mortgage Files. Upon
the payment in full of any Mortgage Loan, or the receipt by the Servicer
servicing such Mortgage Loan of a notification that payment in full will be
escrowed in a manner customary for such purposes, such Servicer will immediately
notify the Custodian by delivering, or causing to be delivered, two copies (one
of which will be returned to such Servicer with the Mortgage File) of a Request
for Release (which may be delivered in an electronic format acceptable to the
Custodian and such Servicer). Upon receipt of such request, the Custodian shall
within seven Business Days release the related Mortgage File to or at the
direction of such Servicer. The Trustee shall at such Servicer's direction
execute and deliver to such Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage, in each case provided by such Servicer, together with
the Mortgage Note with written evidence of cancellation thereon. If the Mortgage
has been recorded in the name of MERS or its designee, such Servicer shall take
all necessary action to reflect the release of the Mortgage on the records of
MERS. To the extent permitted by the terms of the Mortgage Loan and applicable
law, expenses incurred in connection with any instrument of satisfaction or deed
of reconveyance shall be chargeable to the related Mortgagor. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose collection under any policy of flood insurance,
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Custodian
shall, upon delivery to the Custodian of a Request for Release signed by a
Servicing Officer, release the Mortgage File within seven Business Days to the
Servicer servicing such Mortgage Loan. Such Servicer shall cause the Mortgage
File so released to be returned to the Custodian when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the related Servicer Custodial Account, in
which case such Servicer shall deliver to the Custodian a Request for Release,
signed by a Servicing Officer.
The Trustee shall execute and deliver to each Servicer any powers of
attorney and other documents prepared by such Servicer that are reasonably
necessary or appropriate to enable such Servicer to carry out its servicing and
administrative duties under this Agreement, upon the request of such Servicer.
In addition, upon prepayment in full of any Mortgage Loan or the receipt of
notice that funds for such purpose have been placed in escrow, each Servicer is
authorized to give, as attorney-in-fact for the Trustee and the mortgagee under
the Mortgage, an instrument of satisfaction (or Assignment of Mortgage without
recourse) regarding the Mortgaged Property relating to such Mortgage Loan, which
instrument of satisfaction or Assignment of Mortgage, as the case may be, shall
be delivered to the Person entitled thereto against receipt of the prepayment in
full. If the Mortgage is registered in the name of MERS or its designee, such
Servicer shall take all necessary action to reflect the release on the records
of MERS. Such Servicer may deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate any foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage otherwise available at law
or in equity.
Section 3.16 Documents, Records and Funds in Possession of the Servicers to
be Held for the Trustee.
Each Servicer shall transmit to the Custodian all documents and
instruments in respect of a Mortgage Loan coming into the possession of such
Servicer from time to time and shall account fully to the Certificate
Administrator and the Trustee for any funds received by such Servicer or which
otherwise are collected by such Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. The documents constituting the
Servicing File shall be held by the Servicer servicing the related Mortgage Loan
as custodian and bailee for the Trustee. All Mortgage Files and funds collected
or held by, or under the control of, a Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
related Servicer Custodial Account, shall be held by such Servicer for and on
behalf of the Trustee and shall be and remain the sole and exclusive property of
the Trustee, subject to the applicable provisions of this Agreement. Each
Servicer also agrees that it shall not knowingly create, incur or subject any
Mortgage File or any funds that are deposited in the related Servicer Custodial
Account, Certificate Account or any Escrow Account, or any funds that otherwise
are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance created by such Servicer, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that each Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to such Servicer under this
Agreement. Section 3.17......Servicing Compensation.
Each Servicer shall be entitled out of each payment of interest (or
portion thereof) on a Mortgage Loan it services to retain or withdraw from the
related Servicer Custodial Account an amount equal to the Servicing Fee for such
Distribution Date.
Additional servicing compensation in the form of Excess Proceeds,
prepayment penalties, assumption fees, late payment charges and all income and
gain net of any losses realized from Permitted Investments and all other
customary and ancillary income and fees shall be retained by a Servicer to the
extent not required to be deposited in the related Servicer Custodial Account
pursuant to Section 3.08(b). Each Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided in
this Agreement.
Notwithstanding the foregoing, with respect to the payment of the
Servicing Fee on any Distribution Date, the aggregate Servicing Fee for a
Servicer for such Distribution Date shall be reduced (but not below zero) by an
amount equal to the lesser of (a) the Prepayment Interest Shortfall for such
Distribution Date relating to the Mortgage Loans it services and (b) one-twelfth
of 0.25% of the aggregate Stated Principal Balance of such Mortgage Loans for
such Distribution Date (any such reduction, "Compensating Interest").
Section 3.18 Annual Statement as to Compliance.
Commencing in the calendar year following the date of this
Agreement, each Servicer shall deliver to the Depositor on or before the 30th
day (or if not a Business Day, the immediately preceding Business Day) preceding
the latest day in each year on which an annual report on Form 10-K may be timely
filed with the Securities and Exchange Commission (without regard to any
extension), an Officer's Certificate stating, as to the signer thereof, that (a)
a review of the activities of such Servicer during the preceding calendar year
and of the performance of such Servicer under this Agreement has been made under
such officer's supervision, and (b) to the best of such officer's knowledge,
based on such review, such Servicer has fulfilled all 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.
Section 3.19 Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
Commencing in the calendar year following the date of this
Agreement, each Servicer shall, at its own expense, on or before the 30th day
(or if not a Business Day, the immediately preceding Business Day) preceding the
latest day in each year on which an annual report on Form 10-K may be timely
filed with the Securities and Exchange Commission (without regard to any
extension), cause a firm of independent public accountants (who may also render
other services to such Servicer or any affiliate thereof) which is a member of
the American Institute of Certified Public Accountants to furnish a statement to
the Depositor to the effect that such firm has with respect to such Servicer's
overall servicing operations, examined such operations in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers,
stating such firm's conclusions relating thereto.
Section 3.20 Advances.
Each Servicer shall determine on or before each Servicer Advance
Date whether it is required to make a Periodic Advance pursuant to the
definition thereof. If a Servicer determines it is required to make a Periodic
Advance, it shall, on or before the Servicer Advance Date, either (a) deposit
into the related Servicer Custodial Account an amount equal to the Advance
and/or (b) make an appropriate entry in its records relating to the related
Servicer Custodial Account that any portion of the Amount Held for Future
Distribution with respect to a Loan Group in such Servicer Custodial Account has
been used by such Servicer in discharge of its obligation to make any such
Periodic Advance on a Mortgage Loan in such Loan Group. Any funds so applied
shall be replaced by such Servicer by deposit in such Servicer Custodial Account
no later than the close of business on the Business Day preceding the next
Servicer Advance Date. Each Servicer shall be entitled to be reimbursed from the
Servicer Custodial Account for all Advances of its own funds made pursuant to
this Section 3.20 as provided in Section 3.11(a). The obligation to make
Periodic Advances with respect to any Mortgage Loan shall continue until the
ultimate disposition of the REO Property or Mortgaged Property relating to such
Mortgage Loan. Each Servicer shall inform the Certificate Administrator and the
Trustee of the amount of the Periodic Advance to be made by such Servicer with
respect to each Loan Group on each Servicer Advance Date no later than the
related Remittance Date.
Each Servicer shall deliver to the Certificate Administrator on the
related Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Periodic Advance determined by such
Servicer to be a Nonrecoverable Advance. Notwithstanding anything to the
contrary, no Servicer shall be required to make any Periodic Advance or
Servicing Advance that would be a Nonrecoverable Advance.
Section 3.21 Modifications, Waivers, Amendments and Consents.
(a) Except as provided in Section 3.08(a) and this Section 3.21, no
Servicer shall agree to enter into, or shall enter into, any modification,
waiver (other than a waiver referred to in Section 3.13, which waiver, if any,
shall be governed by Section 3.13), forbearance or amendment of any term of any
Mortgage Loan, unless such Mortgage Loan is a Defaulted Mortgage Loan. All
modifications, waivers, forbearances or amendments of any Defaulted Mortgage
Loan shall be in writing and shall be consistent with Customary Servicing
Procedures.
(b) The related Servicer may, with respect to any Defaulted Mortgage Loan,
agree to any modification, waiver, forbearance, or amendment of any term of such
Defaulted Mortgage Loan without the consent of the Depositor, the Trustee, the
Certificate Administrator, the Custodian, the Paying Agent or any
Certificateholder; provided, however, that no Servicer shall agree to enter
into, or shall enter into, any modification, waiver, forbearance or amendment of
any Defaulted Mortgage Loan if such modification, waiver, forbearance, or
amendment would:
(i) affect the amount or timing of any related payment of principal,
interest or other amount payable thereunder; or
(ii) in such Servicer's judgment, materially impair the security for
such Mortgage Loan or reduce the likelihood of timely payment of amounts
due thereon;
unless, in either case, such modification, waiver, forbearance or amendment is,
in such Servicer's judgment, reasonably likely to produce a greater recovery
with respect to such Mortgage Loan than would liquidation. Subject to the
applicable Customary Servicing Procedures, the related Servicer may permit a
forbearance for a Mortgage Loan which such Servicer has been advised would
default if such forbearance is not granted.
(c) Any payment of interest, which is deferred pursuant to any
modification, waiver, forbearance or amendment permitted hereunder, shall not,
for purposes hereof, including, without limitation, calculating monthly
distributions to Certificateholders, be added to the unpaid principal balance of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
or such modification, waiver or amendment so permit. However, interest may be
capitalized in accordance with a loan modification pursuant to Section 3.21(b).
(d) The related Servicer may, to the extent permitted by applicable law or
the terms of the Mortgage Loan, as a condition to granting any request by a
Mortgagor for consent, modification, or amendment, the granting of which is
within such Servicer's discretion pursuant to the Mortgage Loan and is permitted
by the terms of this Agreement, require that such Mortgagor pay to such
Servicer, as additional servicing compensation, a reasonable or customary fee
for the additional services performed in connection with such request, together
with any related costs and expenses incurred by such Servicer, which amount
shall be retained by such Servicer as additional servicing compensation. (e)
Each Servicer shall notify the Depositor, in writing, of any modification or
amendment of any term of any Mortgage Loan it services and the date thereof, and
shall deliver to the Custodian for deposit in the related Mortgage File, an
original counterpart of the agreement relating to such modification or
amendment, promptly (and in any event within ten Business Days) following the
execution thereof; provided, however, that if any such modification or amendment
is required by applicable law to be recorded, such Servicer (i) shall deliver to
the Custodian a copy thereof and (ii) shall deliver to the Custodian such
document, with evidence of notification upon receipt thereof from the public
recording office, if applicable.
Section 3.22 Reports to the Securities and Exchange Commission.
The Depositor shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder, for
so long as any Certificates registered under the 1933 Act are outstanding (other
than the Current Report on Form 8-K to be filed by the Depositor in connection
with computational materials and the initial Current Report on Form 8-K to be
filed by the Depositor in connection with the issuance of the Certificates).
Upon the request of the Depositor, each Servicer, the Certificate Administrator
and the Trustee shall cooperate with the Depositor in the preparation of any
such report and shall provide to the Depositor in a timely manner all such
information or documentation as the Depositor may reasonably request in
connection with the performance of its duties and obligations under this
Section.
Section 3.23 Annual Certification.
(a)...Commencing in the calendar year following the date of this
Agreement, each Servicer shall execute and deliver to the Depositor on or before
the 30th day (or if not a Business Day, the immediately preceding Business Day)
preceding the latest day in each year on which an annual report on Form 10-K may
be timely filed with the Securities and Exchange Commission (without regard to
any extension), an Officer's Certificate for the benefit of the Depositor and
its officers, directors and affiliates, certifying as to the following matters:
(i) Based on such officer's knowledge, the information in the
Officer's Certificates and statements delivered pursuant to Sections 3.18
and 3.19 of this Agreement and all Servicer's Certificates, Officer's
Certificates and other information relating to the servicing of the
Mortgage Loans serviced by such Servicer taken as a whole does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading as of the date of this
certification;
(ii) The servicing information required to be provided to the
Depositor by such Servicer under this Agreement has been provided to the
Depositor;
(iii) Such officer is responsible for reviewing the activities
performed by such Servicer under this Agreement and based upon the review
required by this Agreement, and except as disclosed in the Officer's
Certificates and statements delivered pursuant to Sections 3.18 and 3.19
of this Agreement and all Servicer's Certificates, officer's certificates
and other information relating to the servicing of the Mortgage Loans
serviced by such Servicer, such Servicer has, as of the date of the
certification, fulfilled its obligations under this Agreement; and
(iv) Such officer has disclosed to the Depositor all significant
deficiencies relating to such Servicer's compliance with the servicing
criteria set forth in the Uniform Single Attestation Program for Mortgage
Bankers or in the rules and regulations of the Securities and Exchange
Commission, as applicable.
(b) Each Servicer shall indemnify and hold harmless the Depositor and its
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
such Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.23 or the negligence, bad faith or willful
misconduct of such Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
Depositor, then such Servicer agrees that it shall contribute to the amount paid
or payable by the Depositor as a result of the losses, claims, damages or
liabilities of the Depositor in such proportion as is appropriate to reflect the
relative fault of the Depositor on the one hand and such Servicer on the other
in connection with a breach of such Servicer's obligations under this Section
3.23 or the Servicer's negligence, bad faith or willful misconduct in connection
therewith. The provisions of this Section 3.23 shall survive the termination of
this Agreement.
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01 Servicer's Certificates.
Each month, not later than 12:00 noon Eastern time on the Business
Day following each Determination Date, each Servicer shall deliver to the
Certificate Administrator a Servicer's Certificate (substantially in the form
attached hereto as Exhibit L-1 with respect to ▇▇▇▇▇ Fargo, and Exhibit L-2 with
respect to National City, or, with respect to any successor Servicer, in
substance and format mutually acceptable to such successor Servicer and the
Certificate Administrator) setting forth the information necessary in order for
the Certificate Administrator to perform its obligations under this Agreement.
The Certificate Administrator may conclusively rely upon the information
contained in a Servicer's Certificate for all purposes hereunder and shall have
no duty to verify or re-compute any of the information contained therein. The
Certificate Administrator shall deliver a copy of each Servicer's Certificate to
the Trustee.
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01 Distributions. On each Distribution Date, based solely on
the information in each Servicer's Certificate, the Certificate Administrator
shall distribute out of the Upper-Tier Certificate Account or the Certificate
Account, as applicable (to the extent funds are available therein), to each
Certificateholder of record on the related Record Date (other than as provided
in Section 10.01 respecting the final distribution) by wire transfer to the
account at a bank or other depository institution having appropriate wire
transfer facilities specified in writing by such Certificateholder to the
Certificate Administrator or, if no such prior written wire transfer instruction
has been provided to the Certificate Administrator, by check mailed to such
Certificateholder entitled to receive a distribution on such Distribution Date
at the address appearing in the Certificate Register, or by such other means of
payment as such Certificateholder and the Certificate Administrator shall agree
upon, such Certificateholder's Percentage Interest in the amount to which the
related Class of Certificates is entitled in accordance with the priorities set
forth below in Section 5.02.
None of the Holders of any Class of Certificates, the Depositor, the
Servicers, the Certificate Administrator or the Trustee shall in any way be
responsible or liable to Holders of any Class of Certificates in respect of
amounts properly previously distributed on any such Class.
Section 5.02 Priorities of Distributions.
(a) On each Distribution Date, based solely on the information contained in
each Servicer's Certificate, the Certificate Administrator shall withdraw from
the Certificate Account (to the extent funds are available therein) (1) the
amounts payable to the Certificate Administrator and the Trustee pursuant to
Section 3.11(b)(i) and the amounts payable to the Certificate Administrator
pursuant to Section 3.11(b)(ii) and shall pay such funds to itself and the
Trustee, as applicable, and (2) the Pool Distribution Amount for each Loan
Group, in an amount as specified in the related Servicer's Certificate and shall
apply such funds, first, to distributions in respect of the Uncertificated
Lower-Tier Regular Interests for deposit in the Upper-Tier Certificate Account,
as specified in this Section 5.02(a) and then from the Upper-Tier Certificate
Account to distributions on the Certificates, paying priorities (i) through (ii)
to each Group from the applicable Pool Distribution Amount and priorities (iii)
and (iv) from the remaining combined Pool Distribution Amounts, in the following
order of priority and to the extent of such funds:
(i) to each Class of Senior Certificates of such Loan Group, an amount
allocable to interest equal to the Interest Distribution Amount for such
Class and any shortfall being allocated among such Classes in proportion to
the amount of the Interest Distribution Amount that would have been
distributed in the absence of such shortfall;
(ii) to the Senior Certificates of a Group, in an aggregate amount up
to the Senior Principal Distribution Amount for such Group, such
distribution to be allocated among such Classes in accordance with Section
5.02(b);
(iii) to each Class of Subordinate Certificates, subject to paragraph
(d) below, in the following order of priority:
(A) to the Class B-1 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class for
such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof has been reduced to zero;
(C) to the Class B-2 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class for
such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof has been reduced to zero;
(E) to the Class B-3 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class for
such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof has been reduced to zero;
(G) to the Class B-4 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class for
such Distribution Date;
(H) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof has been reduced to zero;
(I) to the Class B-5 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class for
such Distribution Date;
(J) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof has been reduced to zero;
(K) to the Class B-6 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class for
such Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof has been reduced to zero; and
(iv) to the Holder of the Class 1-A-R Certificates, any amounts
remaining in the Upper-Tier Certificate Account.
No Class of Certificates will be entitled to any distributions with
respect to the amount payable pursuant to clause (ii) of the definition of
"Interest Distribution Amount" after its Class Certificate Balance has been
reduced to zero.
All distributions in respect of the Interest Distribution Amount for
a Class will be applied first with respect to the amount payable pursuant to
clause (i) of the definition of "Interest Distribution Amount," and second with
respect to the amount payable pursuant to clause (ii) of such definition.
Distributions on the Uncertificated Lower-Tier Regular Interests. On each
Distribution Date the Trustee shall be deemed to distribute to itself, as the
holder of the Uncertificated Lower-Tier Regular Interests, the Lower-Tier
Distribution Amount in the amounts and with the priorities set forth in the
definition thereof.
Realized Losses shall be allocated among the Uncertificated Lower-Tier
Regular Interests as specified in the definition of Lower-Tier Realized Losses.
Subsequent Recoveries shall be applied to the Uncertificated Lower-Tier
Regular Interests in a manner analogous to the application of Realized Losses of
the Uncertificated Lower-Tier Regular Interests.
For federal income tax purposes, the Pass-Through Rate for the Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates for any
Distribution Date shall be expressed as a per annum rate equal to the weighted
average of the Uncertificated Pass-Through Rates for Uncertificated Lower-Tier
Regular Interests Y-1, Y-2, Y-3 and Y-4, weighted, for each of the foregoing
determinations, on the basis of the respective Uncertificated Principal Balance
of each such Uncertificated Lower-Tier Regular Interest (computed to eight
decimal places), immediately prior to such Distribution Date.
(b) (i) With respect to the Class A Certificates of Loan Group 1:
On each Distribution Date prior to the Senior Credit Support
Depletion Date, the amount distributable to the Related Group for Loan Group 1
pursuant to Section 5.02(a)(ii) for such Distribution Date, will be distributed
based solely on the information contained in each Servicer's Certificate in the
following order of priority:
first, to the Class 1-A-R Certificates in respect of Component I
thereof until its Class Certificate Balance has been reduced to zero;
second, to the Class 1-A-1 Certificates until its Class Certificate
Balance has been reduced to zero.
(ii) With respect to the Class A Certificates of Loan Group 2:
On each Distribution Date prior to the Senior Credit Support
Depletion Date, the amount distributable to the Related Group for Loan Group 2
pursuant to Section 5.02(a)(ii) for such Distribution Date, will be distributed
to the Class 2-A-1 Certificates and Class 2-A-2 Certificates, pro rata, until
their Class Certificate Balances have been reduced to zero.
(iii) With respect to the Class A Certificates of Loan Group 3:
On each Distribution Date prior to the Senior Credit Support
Depletion Date, the amount distributable to the Related Group for Loan Group 3
pursuant to Section 5.02(a)(ii) for such Distribution Date, will be distributed
to the Class 3-A-1 Certificates and Class 3-A-2 Certificates, pro rata, until
their Class Certificate Balances have been reduced to zero.
(iv) With respect to the Class A Certificates of Loan Group 4:
On each Distribution Date prior to the Senior Credit Support
Depletion Date, the amount distributable to the Related Group for Loan Group 4
pursuant to Section 5.02(a)(ii) for such Distribution Date, will be distributed
to the Class 4-A-1 Certificates and Class 4-A-2 Certificates, pro rata, until
their Class Certificate Balances have been reduced to zero.
(v) Notwithstanding the foregoing, on each Distribution Date prior
to the Senior Credit Support Depletion Date but on or after the date on which
the aggregate Class Certificate Balance of the Class A Certificates of a Group
have been reduced to zero, amounts otherwise distributable from the Unscheduled
Principal Amounts for the Related Loan Group on the Subordinate Certificates
will be paid as principal to the remaining classes of Class A Certificates in
accordance with the priorities set forth for the applicable Group in (i), (ii),
(iii) or (iv) above, provided that on such Distribution Date (a) the Aggregate
Subordinate Percentage for such Distribution Date is less than twice the initial
Aggregate Subordinate Percentage or (b) the outstanding principal balance of all
Mortgage Loans (including, for this purpose, any Mortgage Loans in foreclosure
or any REO Property and any Mortgage Loan for which the mortgagor has filed for
bankruptcy) delinquent 60 days or more (averaged over the preceding six-month
period), as a percentage of the aggregate Class Certificate Balance of the
Subordinate Certificates, is greater than or equal to 50%. If the Class A
Certificates of two or more Groups remain outstanding, the distributions
described above will be made to the Class A Certificates of such Groups, pro
rata, in proportion to the aggregate Class Certificate Balance of the Class A
Certificates of each such Group. In addition, if on any Distribution Date the
aggregate Class Certificate Balance of the Class A Certificates of a Group is
greater than the Adjusted Pool Amount of the related Loan Group (any such Group,
the "Undercollateralized Group" and any such excess, the "Undercollateralized
Amount"), all amounts otherwise distributable as principal on the Subordinate
Certificates pursuant to 5.02(a)(iii)(L), (J), (H), (F), (D) and (B), in that
order, will be paid as principal to the Class A Certificates of the
Undercollateralized Group in accordance with the priorities set forth for the
applicable Group above under (i), (ii), (iii) or (iv) until the aggregate Class
Certificate Balance of the Class A Certificates of the Undercollateralized Group
equals the Adjusted Pool Amount of the related Loan Group. The amount of any
Class Unpaid Interest Shortfalls with respect to the Undercollateralized Group
(including any Class Unpaid Interest Shortfalls for such Distribution Date) will
be paid to the Undercollateralized Group prior to the payment of any
Undercollateralized Amount from amounts otherwise distributable as principal on
the Subordinate Certificates pursuant to Section 5.02(a)(iii)(L), (J), (H), (F),
(D) and (B), in that order: such amount will be paid to such Undercollateralized
Group in accordance with the priorities set forth in Section 5.02(a)(i) up to
their Interest Distribution Amounts for such Distribution Date. If two or more
Groups are Undercollateralized Groups, the distributions described above will be
made, pro rata, in proportion to the amount by which the aggregate Class
Certificate Balance of the Class A Certificates of each such Group exceeds the
Adjusted Pool Amount of the related Loan Group.
On each Distribution Date on or after the Senior Credit Support
Depletion Date, notwithstanding the allocation and priority set forth above, the
portion of the Pool Distribution Amount with respect to a Loan Group available
to be distributed as principal of the Class A Certificates of the Related Group
shall be distributed concurrently, as principal, on such Classes, pro rata, on
the basis of their respective Class Certificate Balances, until the Class
Certificate Balances thereof are reduced to zero.
(c) On each Distribution Date, Accrued Certificate Interest for each Class
of Certificates for such Distribution Date shall be reduced by such Class's pro
rata share, based on such Class's Interest Distribution Amount for such
Distribution Date, without taking into account the allocation made by this
Section 5.02(c), of (A) Non-Supported Interest Shortfalls, and (B) each Relief
Act Reduction incurred during the calendar month preceding the month of such
Distribution Date. In addition, on each Distribution Date on and after the
Senior Credit Support Depletion Date, Accrued Certificate Interest for each
Class of Certificates relating to a Loan Group for such Distribution Date also
shall be reduced by such Class's pro rata share, based on such Class's Interest
Distribution Amount for such Distribution Date, without taking into account the
allocation made by this Section 5.02(c), of any Realized Loss on a Mortgage Loan
in the Related Loan Group allocable to interest.
(d) Notwithstanding the priority and allocation contained in Section
5.02(a)(iii), if with respect to any Class of Subordinate Certificates on any
Distribution Date, (i) the aggregate of the Class Certificate Balances
immediately prior to such Distribution Date of all Classes of Subordinate
Certificates which have a higher numerical Class designation than such Class,
divided by (ii) the aggregate Pool Stated Principal Balance for all Loan Groups
immediately prior to such Distribution Date (the "Fractional Interest") is less
than the Original Fractional Interest for such Class, no Unscheduled Principal
Payments will be made to any Classes junior to such Class (the "Restricted
Classes") and the Class Certificate Balances of the Restricted Classes will not
be used in determining the Pro Rata Share for the Subordinate Certificates that
are not Restricted Classes. Any funds remaining will be distributed in the order
provided in Section 5.02(a)(iii).
Section 5.03 Allocation of Losses.
(a) On or prior to each Determination Date, each Servicer shall inform the
Certificate Administrator in writing with respect to each Mortgage Loan it
services: (1) whether any Realized Loss is a Deficient Valuation or a Debt
Service Reduction, (2) of the amount of such loss or Deficient Valuation, or of
the terms of such Debt Service Reduction and (3) of the total amount of Realized
Losses. Based on such information, the Certificate Administrator shall determine
and allocate the total amount of Realized Losses with respect to the related
Distribution Date. Realized Losses shall be allocated to the Certificates by a
reduction in the Class Certificate Balances of the designated Classes pursuant
to Section 5.03(b) below.
(b) The Class Certificate Balance of the Class of Subordinate Certificates
then outstanding with the highest numerical Class designation shall be reduced
on each Distribution Date by the amount, if any, necessary such that the
aggregate of the Class Certificate Balances of all outstanding Classes of
Certificates (after giving effect to the amount to be distributed as a
distribution of principal and the allocation of Realized Losses on such
Distribution Date) equals the sum of the Adjusted Pool Amounts for such
Distribution Date.
After the Senior Credit Support Depletion Date, the Class
Certificate Balances of the Senior Certificates of the Related Loan Group in the
aggregate shall be reduced on each Distribution Date by the amount, if any, by
which the aggregate of the Class Certificate Balances of all outstanding Senior
Certificates of such Related Loan Group (after giving effect to the amount to be
distributed as a distribution of principal and the allocation of Realized Losses
on the Mortgage Loans in the Related Loan Group on such Distribution Date)
exceeds the Adjusted Pool Amount for such Loan Group and such Distribution Date.
Any such reduction shall be allocated among the Classes of Senior
Certificates of the Related Group pro rata based on the Class Certificate
Balances immediately prior to such Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or any reduction
in the Class Certificate Balance of a Class of Certificates pursuant to Section
5.03(b) above shall be allocated among the Certificates of such Class pro rata
in proportion to their respective Percentage Interests.
(d) The calculation of the amount to be distributed as principal to any
Class of Certificates with respect to a Distribution Date (the "Calculated
Principal Distribution") shall be made prior to the allocation of any Realized
Losses for such Distribution Date; provided, however, that the actual
distribution of principal to the Classes of Certificates shall be made
subsequent to the allocation of Realized Losses for such Distribution Date. In
the event that after the allocation of Realized Losses for a Distribution Date,
the Calculated Principal Distribution for a Class of Subordinated Certificates
is greater than the Class Certificate Balance of such Class, the excess shall be
distributed pro rata to the Classes of Subordinate Certificates in accordance
with their remaining Class Certificate Balances.
(e) After the Senior Credit Support Depletion Date, on any Distribution
Date on which the Class 2-A-2 Loss Allocation Amount is greater than zero, the
Class Certificate Balance of the Class 2-A-2 Certificates will be reduced by the
Class 2-A-2 Loss Allocation Amount and, notwithstanding Section 5.03(b), the
Class Certificate Balance of the Class 2-A-1 Certificates will not be reduced by
the Class 2-A-2 Loss Allocation Amount. After the Senior Credit Support
Depletion Date, on any Distribution Date on which the Class 3-A-2 Loss
Allocation Amount is greater than zero, the Class Certificate Balance of the
Class 3-A-2 Certificates will be reduced by the Class 3-A-2 Loss Allocation
Amount and, notwithstanding Section 5.03(b), the Class Certificate Balance of
the Class 3-A-1 Certificates will not be reduced by the Class 3-A-2 Loss
Allocation Amount. After the Senior Credit Support Depletion Date, on any
Distribution Date on which the Class 4-A-2 Loss Allocation Amount is greater
than zero, the Class Certificate Balance of the Class 4-A-2 Certificates will be
reduced by the Class 4-A-2 Loss Allocation Amount and, notwithstanding Section
5.03(b), the Class Certificate Balance of the Class 4-A-1 Certificates will not
be reduced by the Class 4-A-2 Loss Allocation Amount.
(f) If, after taking into account any Subsequent Recoveries, the amount of
a Realized Loss is reduced, the amount of such Subsequent Recoveries will be
applied to increase the Class Certificate Balance of the Class of 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 Certificates pursuant to this Section 5.03. The amount of any remaining
Subsequent Recoveries will be applied to sequentially increase the Class
Certificate Balance of the Certificates, beginning with the Class of
Certificates with the next highest payment priority, up to the amount of such
Realized Losses previously allocated to such Class or Classes of Certificates
pursuant to this Section 5.03. Holders of such Certificates will not be entitled
to any payments 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 Class Certificate
Balance of each Certificate of such Class in accordance with its respective
Fractional Interest.
(g) Notwithstanding any other provision of this Section 5.03, no Class
Certificate Balance of a Class will be increased on any Distribution Date such
that the Class Certificate Balance of such Class exceeds its Initial Class
Certificate Balance less all distributions of principal previously distributed
in respect of such Class on prior Distribution Dates.
Section 5.04 Statements to Certificateholders.
(a) Prior to the Distribution Date in each month, based solely upon the
information provided to the Certificate Administrator on each Servicer's
Certificate delivered to the Certificate Administrator pursuant to Section 4.01,
the Certificate Administrator shall determine the following information with
respect to such Distribution Date:
(i) for each Loan Group, the amount allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) for each Loan Group, the amount allocable to interest, any Class
Unpaid Interest Shortfall included in such distribution and any remaining
Class Unpaid Interest Shortfall after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of Certificates
is less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the shortfall
and the allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of Certificates after
giving effect to the distribution of principal on such Distribution Date;
(v) for each Loan Group, the Pool Stated Principal Balance for the
following Distribution Date;
(vi) for each Group, the Senior Percentage and the Subordinate
Percentage for the following Distribution Date and the Total Senior
Percentage and Aggregate Subordinate Percentage for the following
Distribution Date;
(vii) the amount of the Servicing Fee paid to or retained by each
Servicer with respect to each Loan Group and such Distribution Date;
(viii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(ix) for each Loan Group, the amount of Periodic Advances included in
the distribution on such Distribution Date and the aggregate amount of
Periodic Advances outstanding as of the close of business on such
Distribution Date;
(x) for each Loan Group, the number and aggregate principal amounts of
Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more
days and (B) in foreclosure, as of the close of business on the last day of
the calendar month preceding such Distribution Date;
(xi) for each Loan Group, with respect to any Mortgage Loan that
became an REO Property during the preceding calendar month, the loan number
and Stated Principal Balance of such Mortgage Loan as of the close of
business on the Determination Date preceding such Distribution Date and the
date of acquisition thereof;
(xii) for each Loan Group, the total number and principal balance of
any REO Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Distribution Date;
(xiii) for each Loan Group, the Senior Prepayment Percentage and the
Subordinate Prepayment Percentage for the following Distribution Date;
(xiv) for each Loan Group, the aggregate amount of Realized Losses
incurred during the preceding calendar month; and
(xv) for each Loan Group, the amount of any Subsequent Recoveries.
(b) No later than each Distribution Date, the Certificate Administrator,
based upon information supplied to it in each Servicer's Certificate, shall make
available on its website at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ a statement (the "Distribution
Date Statement") setting forth the information set forth in Section 5.04(a) and
shall provide a copy of such Distribution Date Statement to the Trustee. Upon
written request, the Certificate Administrator shall mail a paper copy of the
Distribution Date Statement to any Person that is unable to use
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. The Certificate Administrator shall have the right to
change the way statements are distributed in order to make such distribution
more convenient and/or accessible to the Certificateholders and the Rating
Agencies and the Certificate Administrator shall mail timely notice to all
regarding such changes.
In the case of information furnished pursuant to clauses (i), (ii)
and (ix) of Section 5.04(a), the amounts shall be expressed as a dollar amount
per Certificate with a $1,000 denomination.
On each Distribution Date, the Certificate Administrator shall
prepare and furnish to each Financial Market Service, in electronic or such
other format and media mutually agreed upon by the Certificate Administrator,
the Financial Market Service and the Depositor, the information contained in the
statement described in Section 5.04(a) for such Distribution Date.
Within a reasonable period of time after the end of each calendar
year, the Certificate Administrator shall furnish to each Person who at any time
during the calendar year was the Holder of a Certificate, if requested in
writing by such Person, a statement containing the information set forth in
clauses (i), (ii) and (vii) of Section 5.04(a), in each case aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Certificate Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Certificate Administrator pursuant to any
requirements of the Code as from time to time in force.
The Certificate Administrator shall deliver to the Holders of
Certificates and the Trustee any reports or information the Certificate
Administrator is required by this Agreement or the Code, Treasury Regulations or
REMIC Provisions to deliver to the Holders of Certificates, and the Certificate
Administrator shall prepare and provide to the Certificateholders and the
Trustee (by mail, telephone, or publication as may be permitted by applicable
Treasury Regulations) such other reasonable information as the Certificate
Administrator deems necessary or appropriate or is required by the Code,
Treasury Regulations, and the REMIC Provisions including, but not limited to,
(i) information to be reported to the Holders of the Residual Certificates for
quarterly notices on Schedule Q (Form 1066) (which information shall be
forwarded to the Holders of the Residual Certificates by the Certificate
Administrator), (ii) information to be provided to the Holders of Certificates
with respect to amounts which should be included as interest and original issue
discount in such Holders' gross income and (iii) information to be provided to
all Holders of Certificates setting forth the percentage of each REMIC's assets,
determined in accordance with Treasury Regulations using a convention, not
inconsistent with Treasury Regulations, selected by the Certificate
Administrator in its absolute discretion, that constitute real estate assets
under Section 856 of the Code, and assets described in Section 7701(a)(19)(C) of
the Code; provided, however, that in setting forth the percentage of such assets
of each REMIC, nothing contained in this Agreement, including without limitation
Section 7.03 hereof, shall be interpreted to require the Certificate
Administrator periodically to appraise the fair market values of the assets of
the Trust Estate or to indemnify the Trust Estate, any Certificateholders, or
any other Person from any adverse federal, state or local tax consequences
associated with a change subsequently required to be made in the Depositor's
initial good faith determinations of such fair market values (if subsequent
determinations are required pursuant to the REMIC Provisions) made from time to
time.
Section 5.05 Tax Returns and Reports to Certificateholders.
(a) For federal income tax purposes, each REMIC shall have a calendar year
taxable year and shall maintain its books on the accrual method of accounting.
(b) Solely with respect to Definitive Certificates, the Certificate
Administrator shall prepare or cause to be prepared, shall cause to be timely
signed by the Trustee, and shall file or cause to be filed with the Internal
Revenue Service and applicable state or local tax authorities income tax
information returns for each taxable year with respect to each REMIC containing
such information at the times and in the manner as may be required by the Code,
the Treasury Regulations or state or local tax laws, regulations, or rules, and
shall furnish or cause to be furnished to each REMIC and the Certificateholders
the schedules, statements or information at such times and in such manner as may
be required thereby. Within 30 days of the Closing Date, the Certificate
Administrator shall furnish or cause to be furnished to the Internal Revenue
Service, on Form 8811 or as otherwise required by the Code or the Treasury
Regulations, the name, title, address and telephone number of the person that
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information at the time or times and in the manner
required by the Code or the Treasury Regulations. Such federal, state, or local
income tax or information returns shall be signed by the Trustee, or such other
Person as may be required to sign such returns by the Code, the Treasury
Regulations or state or local tax laws, regulations, or rules.
(c) In the first federal income tax return of each of the Upper-Tier and
the Lower-Tier REMIC for its short taxable year ending December 31, 2005, REMIC
status shall be elected for such taxable year and all succeeding taxable years.
(d) The Certificate Administrator will maintain or cause to be maintained
such records relating to each REMIC, including but not limited to records
relating to the income, expenses, assets and liabilities of the Trust Estate,
and the initial fair market value and adjusted basis of the Trust Estate
property and assets determined at such intervals as may be required by the Code
or the Treasury Regulations, as may be necessary to prepare the foregoing
returns, schedules, statements or information.
Section 5.06......Tax Matters Person. The Tax Matters Person shall have the
same duties with respect to each REMIC as those of a "tax matters partner" under
Subchapter C of Chapter 63 of Subtitle F of the Code. The Seller, as Holder of a
Percentage Interest in the Class 1-A-R Certificates, is hereby designated as the
Tax Matters Person for the Upper-Tier REMIC and the Lower-Tier REMIC. By its
acceptance of a Class 1-A-R Certificate, each Holder thereof irrevocably
appoints the Certificate Administrator to act as agent for the Tax Matters
Person for the Upper-Tier REMIC and the Lower-Tier REMIC, except that the
Certificate Administrator shall not be required to pay any taxes.
Section 5.07......Rights of the Tax Matters Person in Respect of the
Certificate Administrator. The Certificate Administrator shall afford the Tax
Matters Person, upon reasonable notice during normal business hours, access to
all records maintained by the Certificate Administrator in respect of its duties
hereunder and access to officers of the Certificate Administrator responsible
for performing such duties. The Certificate Administrator shall make available
to the Tax Matters Person such books, documents or records relating to the
Certificate Administrator's services hereunder as the Tax Matters Person shall
reasonably request. The Tax Matters Person shall not have any responsibility or
liability for any action or failure to act by the Certificate Administrator and
is not obligated to supervise the performance of the Certificate Administrator
under this Agreement or otherwise.
Section 5.08......REMIC Related Covenants. For as long as the Trust shall exist,
the Trustee, the Certificate Administrator, the Depositor and each Servicer
shall act in accordance herewith to assure continuing treatment of the
Upper-Tier REMIC and the Lower-Tier REMIC as REMICs and avoid the imposition of
tax on either REMIC. In particular:
(a) The Trustee shall not create, or permit the creation of, any
"interests" in either REMIC within the meaning of Code Section 860D(a)(2) other
than the interests represented by the Regular Certificates, the Residual
Certificates and the Uncertificated Lower-Tier Regular Interests.
(b) Except as otherwise provided in the Code, (i) the Depositor and each
Servicer shall not contribute to the Trust Estate and the Custodian, on behalf
of the Trustee, and the Trustee shall not accept property unless substantially
all of the property held in each REMIC constitutes either "qualified mortgages"
or "permitted investments" as defined in Code Sections 860G(a)(3) and (5),
respectively, and (ii) no property shall be contributed to each REMIC after the
start-up day unless such contribution would not subject the Trust Estate to the
100% tax on contributions to a REMIC after the start-up day of the REMIC imposed
by Code Section 860G(d).
(c) Neither the Trustee nor the Certificate Administrator shall accept on
behalf of either REMIC any fee or other compensation for services and none of
the Certificate Administrator, the Trustee or any Servicer shall knowingly
accept, on behalf of the Trust Estate any income from assets other than those
permitted to be held by a REMIC.
(d) Neither the Servicers, the Trustee, nor the Certificate Administrator
shall sell or permit the sale of all or any portion of the Mortgage Loans (other
than in accordance with Sections 2.02, 2.04 or 3.14(b)), unless such sale is
pursuant to a "qualified liquidation" of the applicable REMIC as defined in Code
Section 860F(a)(4)(A) and in accordance with Article X.
(e) The Certificate Administrator shall maintain books with respect to the
Trust and each REMIC on a calendar year taxable year and on an accrual basis.
None of the Servicers, the Certificate Administrator or the Trustee
shall engage in a "prohibited transaction" (as defined in Code Section
860F(a)(2)), except that, with the prior written consent of the Servicer and the
Depositor, the Trustee or the Certificate Administrator may engage in the
activities otherwise prohibited by the foregoing paragraphs (b), (c) and (d);
provided that the Servicers shall have delivered to the Trustee and the
Certificate Administrator an Opinion of Counsel to the effect that such
transaction will not result in the imposition of a tax on either the Upper-Tier
REMIC or the Lower-Tier REMIC and will not disqualify either REMIC from
treatment as a REMIC; and, provided further, that the Servicers shall have
demonstrated to the satisfaction of the Trustee and the Certificate
Administrator that such action will not adversely affect the rights of the
Holders of the Certificates, the Certificate Administrator, or the Trustee and
that such action will not adversely impact the rating of the Certificates.
ARTICLE VI
THE CERTIFICATES
Section 6.01......The Certificates. The Classes of Senior Certificates and
the Subordinate Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇-▇-▇, ▇-▇-▇-▇, ▇-▇-▇-▇, ▇-▇-▇-▇, ▇-▇-▇-▇, A-3-A-2, A-4-A-1, ▇-▇-▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, B-6 and C (reverse of all Certificates) and shall, on
original issue, be executed by the Trustee and shall be authenticated and
delivered by the Trustee to or upon the order of the Depositor upon receipt by
the Custodian, on behalf of the Trustee, of the documents specified in Section
2.01. The Senior Certificates (other than the Class 1-A-R Certificates) shall be
available to investors in interests representing minimum dollar Certificate
Balances of $10,000 and integral multiples of $1 in excess thereof. The
Subordinate Certificates shall be available to investors in interests
representing minimum dollar Certificate Balances of $10,000 and integral dollar
multiples of $1 in excess thereof (except one Certificate of such Class may be
issued with a different Certificate Balance). The Class 1-A-R Certificates shall
be in a minimum denomination of $100. The Senior Certificates (other than the
Class 1-A-R Certificates) and the Class B-1, Class B-2 and Class B-3
Certificates shall initially be issued in book-entry form through the Depository
and delivered to the Depository or its designee, and all other Classes of
Certificates shall initially be issued in definitive, fully-registered form.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer or signatory. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the execution and delivery of such
Certificates or did not hold such offices or positions at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless such Certificate shall have been
manually countersigned by the Trustee substantially in the form provided for
herein, and such countersignature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their countersignature.
Section 6.02......Registration of Transfer and Exchange of Certificates.
(a) The Certificate Administrator shall cause to be kept at an office or
agency in the city in which the Corporate Trust Office of the Certificate
Administrator is located a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Administrator shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Certificate Administrator shall initially
serve as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.
(b) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of the same Class and
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute and the Trustee shall
authenticate, countersign and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall be duly endorsed by, or
be accompanied by a written instrument of transfer in form satisfactory to the
Certificate Registrar duly executed by, the Holder thereof or its attorney duly
authorized in writing.
(c)(i) Except as provided in paragraph (c)(iii) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (A) registration of the Certificates may not be
transferred except to another Depository; (B) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (C) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(D) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (E) the Depository shall be the
representative of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of Holders under this Agreement, and requests
and directions for and votes of the Depository shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(F) the Certificate Administrator may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
(ii) All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate
Owner. Each Depository Participant shall only transfer Book-Entry
Certificates of Certificate Owners it represents or of brokerage firms for
which it acts as agent in accordance with the Depository's normal
procedures.
(iii) If (A) (1) the Depositor advises the Certificate Administrator
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (2) the Certificate
Administrator or the Depositor is unable to locate a qualified successor,
or (B) to the extent permitted by law, the Depositor at its option advises
the Certificate Administrator in writing that it elects to terminate the
book-entry system through the Depository, the Certificate Administrator
shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners. Upon surrender to the Certificate Administrator of the
related Class of Certificates by the Depository, accompanied by the
instructions from the Depository for registration, the Trustee shall issue
the Definitive Certificates. None of the Servicers, the Depositor, the
Certificate Administrator or the Trustee shall be liable for any delay in
delivery of such instruction and may conclusively rely on, and shall be
protected in relying on, such instructions. The Depositor shall provide the
Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon the issuance of
Definitive Certificates, the Holders of the Definitive Certificates shall
be recognized as Certificateholders hereunder.
(d) No transfer of a Private Certificate shall be made unless such transfer
is exempt from the registration requirements of the 1933 Act and any applicable
state securities laws or is made in accordance with the 1933 Act and such laws.
In the event of any such transfer, (i) unless such transfer is made in reliance
on Rule 144A under the 1933 Act, the Certificate Administrator or the Depositor
may require a written Opinion of Counsel (which may be in-house counsel)
acceptable to and in form and substance reasonably satisfactory to the
Certificate Administrator and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act and such laws or is being made pursuant to the 1933
Act and such laws, which Opinion of Counsel shall not be an expense of the
Certificate Administrator or the Depositor and (ii) the Certificate
Administrator shall require a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached hereto as Exhibit G-1
and a certificate from such Certificateholder's prospective transferee
substantially in the form attached hereto either as Exhibit G-2A or as Exhibit
G-2B, which certificates shall not be an expense of the Certificate
Administrator or the Depositor; provided that the foregoing requirements under
clauses (i) and (ii) shall not apply to a transfer of a Private Certificate
between or among the Depositor, the Seller, the Servicers, their affiliates or
both. The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferees designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such certificate without registration thereof
under the 1933 Act pursuant to the registration exemption provided by Rule 144A.
The Holder of a Private Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Certificate Administrator, each Servicer,
the Trustee and the Depositor 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.
(e) No transfer of an ERISA Restricted Certificate or a Residual
Certificate shall be made unless the transferee delivers to the Certificate
Administrator either (i) a representation letter in the form of Exhibit H from
the transferee of such Certificate, which representation letter shall not be an
expense of the Depositor, the Certificate Administrator, the Trustee or the
Servicers, or (ii) in the case of any ERISA Restricted Certificate presented for
registration in the name of an employee benefit plan or arrangement, including
an individual retirement account, subject to ERISA, the Code, or any federal,
state or local law ("Similar Law") which is similar to ERISA or the Code
(collectively, a "Plan"), or a trustee or custodian of any of the foregoing, an
Opinion of Counsel for the benefit of the Trustee, Servicers and the Certificate
Administrator upon which they may rely that the purchase of the ERISA Restricted
Certificate is permissible under local law, will not constitute or result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, and will not subject the Certificate Administrator, the Trustee or the
Servicers to any obligation or liability in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Certificate
Administrator, the Trustee or the Servicers. Any transferee of an ERISA
Restricted Certificate that does not comply with either clause (i) or (ii) of
the preceding sentence will be deemed to have made one of the representations
set forth in Exhibit H. Notwithstanding anything else to the contrary herein,
any purported transfer of a Residual Certificate to or on behalf of a Plan shall
be void and of no effect. Notwithstanding anything else to the contrary herein,
any purported transfer of an ERISA Restricted Certificate to or on behalf of a
Plan without the delivery to the Certificate Administrator, the Trustee and the
Servicers of an Opinion of Counsel satisfactory to the Certificate Administrator
and the Servicers as described above shall be void and of no effect.
None of the Trustee, the Certificate Administrator, the Servicers or
the Certificate Registrar shall have any liability for transfers of Book-Entry
Certificates made through the book-entry facilities of the Depository or between
or among any Depository Participants or Certificate Owners, made in violation of
applicable restrictions. The Certificate Administrator and the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and Persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
To the extent permitted under applicable law (including, but not
limited to, ERISA), none of the Depositor, the Certificate Administrator or the
Trustee shall be under any liability to any Person for any registration of
transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 6.02 or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered by the
Certificate Registrar in accordance with the foregoing requirements.
(f) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Administrator of any change or impending change in
its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the proposed transferee shall deliver
to the Certificate Administrator and the Depositor, in form and substance
satisfactory to the Certificate Administrator and the Depositor, an
affidavit in the form of Exhibit I hereto.
(iv) Notwithstanding the delivery of an affidavit by a proposed
transferee under clause (iii) above, if a Responsible Officer of the
Certificate Administrator has actual knowledge that the proposed transferee
is not a Permitted Transferee, no transfer of any Ownership Interest in a
Residual Certificate to such proposed transferee shall be effected by the
Certificate Administrator.
(v) No Ownership Interest in a Residual Certificate may be purchased
by or transferred to any Person that is not a U.S. Person, unless (A) such
Person holds such Residual Certificate in connection with the conduct of a
trade or business within the United States and furnishes the transferor,
the Depositor and the Certificate Administrator with an effective Internal
Revenue Service Form W-8ECI (or successor thereto) or (B) the transferee
delivers to the transferor, the Depositor and the Certificate Administrator
an Opinion of Counsel from a nationally-recognized tax counsel to the
effect that such transfer is in accordance with the requirements of the
Code and the regulations promulgated thereunder and that such transfer of a
Residual Certificate will not be disregarded for federal income tax
purposes.
(vi) Any attempted or purported transfer of any Ownership Interest in
a Residual Certificate in violation of the provisions of this Section 6.02
shall be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the
provisions of this Section 6.02, become a Holder of a Residual Certificate,
then the prior Holder of such Residual Certificate that is a Permitted
Transferee shall, upon discovery that the registration of transfer of such
Residual Certificate was not in fact permitted by this Section 6.02, be
restored to all rights as Holder thereof retroactive to the date of
registration of transfer of such Residual Certificate. The Certificate
Administrator shall be under no liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not
permitted by this Section 6.02 or for making any distributions due on such
Residual Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of the Agreement so long as the
transfer was registered in accordance with this Section 6.02. The
Certificate Administrator and the Depositor shall be entitled to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made
on such Residual Certificate. Any such distributions so recovered by the
Certificate Administrator or the Depositor shall be distributed and
delivered by the Certificate Administrator to the prior Holder of such
Residual Certificate that is a Permitted Transferee.
(vii) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section 6.02, then the Certificate Administrator,
based on information provided to the Certificate Administrator by each
Servicer, will provide to the Internal Revenue Service, and to the Persons
specified in Section 860E(e)(3) and (6) of the Code, information needed to
compute the tax imposed under Section 860E(e) of the Code on transfers of
residual interests to disqualified organizations. The expenses of the
Certificate Administrator under this clause (vii) shall be reimbursable by
the Trust. (viii) No Ownership Interest in a Residual Certificate shall be
acquired by a Plan or any Person acting on behalf of a Plan. (g) [Reserved]
(h) No service charge shall be imposed for any transfer or exchange of
Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(i) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 6.03......Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Certificate Registrar or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (b) there is delivered to the Certificate
Administrator, the Trustee, the Depositor and the Certificate Registrar such
security or indemnity reasonably satisfactory to each, to save each of them
harmless, then, in the absence of actual notice to the Certificate
Administrator, the Trustee or the Certificate Registrar that such Certificate
has been acquired by a protected purchaser, the Trustee shall 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 Percentage Interest
but bearing a number not contemporaneously outstanding. Upon the issuance of any
new Certificate under this Section, the Certificate Registrar 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 Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, 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. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Servicers, the
Certificate Administrator, the Trustee, the Certificate Registrar and any agent
of the Depositor, the Servicers, the Certificate Administrator, the Trustee or
the Certificate Registrar 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 5.01 and for all other purposes whatsoever,
and none of the Depositor, the Servicers, the Certificate Administrator, the
Trustee, the Certificate Registrar or any agent of the Depositor, the Servicers,
the Certificate Administrator, the Trustee or the Certificate Registrar shall be
affected by notice to the contrary.
ARTICLE VII
THE DEPOSITOR AND THE SERVICERS
Section 7.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Depositor and each Servicer herein. By way of
illustration and not limitation, the Depositor is not liable for the servicing
and administration of the Mortgage Loans, nor is it obligated by Section 8.01 to
assume any obligations of either Servicer or to appoint a designee to assume
such obligations, nor is it liable for any other obligation hereunder that it
may, but is not obligated to, assume unless it elects to assume such obligation
in accordance herewith.
Section 7.02 Merger or Consolidation of the Depositor or a Servicer.
The Depositor and each Servicer will each keep in full effect its existence,
rights and franchises as a separate entity under the laws governing its
organization, and will each obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its respective
duties under this Agreement.
Any Person into which the Depositor or either Servicer may be merged
or consolidated, or any corporation resulting from any merger or consolidation
to which the Depositor or such Servicer shall be a party, or any Person
succeeding to the business of the Depositor or such Servicer, shall be the
successor of the Depositor or the applicable Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the applicable Servicer shall be qualified to service mortgage loans on behalf
of FNMA or FHLMC.
Section 7.03 Limitation on Liability of the Depositor, the Servicers
and Others; Liability of Servicers.
(a) None of the Depositor, either Servicer or any of the directors,
officers, employees or agents of the Depositor or of a Servicer shall be under
any liability to the Trust Estate 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 Servicers or any such Person against any
breach of warranties or representations made herein or any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer and any director,
officer, employee or agent of the Depositor or a Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Depositor, each Servicer
and any director, officer, employee or agent of the Depositor or a Servicer
shall be indemnified by the Trust Estate and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor or either Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that the
Depositor or a Servicer may in its discretion undertake any such action which it
may deem necessary or desirable in respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Estate, and the Depositor and each Servicer shall be entitled to be
reimbursed therefor out of amounts attributable to the Mortgage Loans on deposit
in the related Servicer Custodial Account as provided by Section 3.11.
(b) Subject to clause (a) above, each Servicer (except the Trustee if it is
required to succeed the Servicer hereunder) indemnifies and holds the Trustee,
the Certificate Administrator, the Depositor and the Trust harmless against any
and all claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Certificate Administrator, the Depositor and the Trust may sustain
in any way related to the failure of such Servicer to perform its duties and
service the Mortgage Loans in compliance with this Agreement. Each Servicer
shall immediately notify the Trustee, the Certificate Administrator and the
Depositor if a claim is made that may result in such claims, losses, penalties,
fines, forfeitures, legal fees or related costs, judgments, or any other costs,
fees and expenses, and such Servicer shall assume (with the consent of the
Trustee, the Certificate Administrator or the Depositor, as applicable) the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against any Servicer, the Trustee, the
Certificate Administrator, the Depositor and/or the Trust in respect of such
claim. The provisions of this Section 7.03(b) shall survive the resignation or
removal of any Servicer, the termination of this Agreement and the payment of
the outstanding Certificates.
(c) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, a
Servicer shall not be required to investigate or make recommendations concerning
potential liabilities which the Trust might incur as a result of such course of
action by reason of the condition of the Mortgaged Properties but shall give
notice to the Trustee and the Certificate Administrator if it has notice of such
potential liabilities. (d) A Servicer shall not be liable for any acts or
omissions of any other Servicer, except as otherwise expressly provided herein.
Section 7.04 Depositor and Servicers Not to Resign. Subject to the
provisions of Section 7.02, none of the Depositor or any Servicer shall resign
from its respective obligations and duties hereby imposed on it except upon
determination that its duties hereunder are no longer permissible under
applicable law. Any such determination permitting the resignation of the
Depositor or a Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the Certificate Administrator. No such
resignation by a Servicer shall become effective until the Trustee or a
successor Servicer shall have assumed such Servicer's responsibilities and
obligations in accordance with Section 8.05 hereof.
ARTICLE VIII
DEFAULT
Section 8.01......Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:
(a) any failure by a Servicer to deposit amounts in the related Servicer
Custodial Account in the amount and manner provided herein so as to enable the
Certificate Administrator to distribute to Holders of Certificates any payment
required to be made under the terms of such Certificates and this Agreement
(other than the payments required to be made under Section 3.20) which continues
unremedied for a period of five days after the date upon which written notice of
such failure shall have been given to such Servicer; or
(b) failure on the part of a Servicer duly to observe or perform in any
material respect any other covenants or agreements of such Servicer set forth in
the Certificates or in this Agreement, which covenants and agreements continue
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 such
Servicer by the Certificate Administrator, the Trustee or the Depositor, or to
the Servicers, the Depositor, the Certificate Administrator and the Trustee by
the Holders of Certificates evidencing Voting Rights aggregating not less than
25% of all Certificates affected thereby; or
(c) any breach of a representation or warranty made by a Servicer under
this Agreement, which materially and adversely affects the interests of the
Certificateholders, and which breach continues unremedied for a period of 30
days after the date on which written notice of such breach, requiring the same
to be remedied, shall have been given to such Servicer by the Certificate
Administrator, the Trustee or the Depositor, or to the Servicers, the Depositor,
the Certificate Administrator and the Trustee by the Holders of Certificates
evidencing Voting Rights aggregating not less than 25% of all Certificates
affected thereby; or
(d) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings against a Servicer,
or for the winding up or liquidation of a Servicer's affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; or
(e) the consent by a Servicer 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 a Servicer or of
or relating to substantially all of its property; or a Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(f) the failure of a Servicer to remit any Periodic Advance required to be
remitted by such Servicer pursuant to Section 3.20 which failure continues
unremedied at 3:00 p.m. Eastern Time on the related Distribution Date;
then, and in each and every such case (other than an Event of Default described
in clause (f) hereof), so long as an Event of Default shall not have been
remedied by the applicable Servicer, either the Trustee or the Depositor may,
and at the direction of the Holders of Certificates evidencing Voting Rights
aggregating not less than 51% of all Certificates affected thereby shall, by
notice then given in writing to such Servicer (and to the Trustee, if given by
the Depositor, and to the Depositor, if given by the Trustee), terminate all of
the rights and obligations of such Servicer under this Agreement. If an Event of
Default described in clause (f) hereof shall occur, the Trustee shall, by notice
to the related Servicer, terminate all of the rights and obligations of such
Servicer under this Agreement and the Trustee, or a successor Servicer appointed
pursuant to Section 8.05 shall make the Advance which such Servicer failed to
make. On or after the receipt by such Servicer of such written notice, all
authority and power of such Servicer under this Agreement, whether with respect
to the Certificates or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee, subject to Section 8.05 hereof, pursuant to and under
this Section 8.01, unless and until such time as the Trustee shall appoint a
successor Servicer pursuant to Section 8.05, and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
such Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Mortgage Loans and related
documents, or otherwise, including, without limitation, the recordation of the
assignments of the Mortgage Loans to it. Each Servicer agrees to cooperate with
the Trustee in effecting the termination of the responsibilities and rights of
such Servicer hereunder, including, without limitation, the transfer to the
Trustee, for the administration by it, of all cash amounts that have been
deposited by such Servicer in the related Servicer Custodial Account or
thereafter received by such Servicer with respect to the Mortgage Loans. Upon
obtaining notice or knowledge of the occurrence of any Event of Default, the
Person obtaining such notice or knowledge shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and to each Rating Agency. All costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Mortgage Files to the successor Servicer and amending this Agreement to reflect
such succession as Servicer pursuant to this Section 8.01 shall be paid by the
predecessor Servicer (or, if the predecessor Servicer is the Trustee, the
predecessor to such predecessor, or, if not so paid, by the Trust).
Notwithstanding the termination of any Servicer pursuant hereto, each Servicer
shall remain liable for any causes of action arising out of any Event of Default
relating to such Servicer occurring prior to such termination.
The Holders of Certificates entitled to at least 66 2/3% of the
Voting Rights allocated to the Classes of Certificates affected by an Event of
Default may, on behalf of all Certificateholders, waive any events permitting
removal of a Servicer as servicer pursuant to this Article VII, provided,
however, that an Event of Default involving making a required distribution on a
Certificate may only be waived by all Holders of Certificates. Upon any waiver
of a past default, such default shall cease to exist and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto except to the extent expressly so waived.
Notice of any such waiver shall be given by the Certificate Administrator to the
Rating Agencies.
Section 8.02 Remedies of Trustee. During the continuance of any Event
of Default, so long as such Event of Default shall not have been remedied, the
Trustee, in addition to the rights specified in Section 8.01, shall have the
right, in its own name as trustee of an express trust, to take all actions now
or hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect the interests, and enforce the rights and remedies, of
the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of claim
in connection therewith). Except as otherwise expressly provided in this
Agreement, no remedy provided for by this Agreement shall be exclusive of any
other remedy, and each and every remedy shall be cumulative and in addition to
any other remedy and no delay or omission to exercise any right or remedy shall
impair any such right or remedy or shall be deemed to be a waiver of any Event
of Default.
Section 8.03 Directions by Certificateholders and Duties of Trustee
During Event of Default. During the continuance of any Event of Default, Holders
of Certificates evidencing Voting Rights aggregating not less than 25% of each
Class of Certificates affected thereby may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement; provided,
however, that the Trustee shall be under no obligation to pursue any such
remedy, or to exercise any of the trusts or powers vested in it by this
Agreement (including, without limitation, (a) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto, and (b) the
terminating of a Servicer or any successor Servicer from its rights and duties
as servicer hereunder) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby and, provided further,
that, subject to the provisions of Section 9.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee, based upon an
Opinion of Counsel, determines that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the non-assenting Certificateholders.
Section 8.04 Action upon Certain Failures of a Servicer and upon Event
of Default. In the event that a Responsible Officer of the Certificate
Administrator or the Trustee shall have actual knowledge of any failure of a
Servicer specified in Section 8.01(a) or (b) which would become an Event of
Default upon such Servicer's failure to remedy the same after notice, the
Certificate Administrator or the Trustee, as the case may be, shall give notice
thereof to such Servicer. If a Responsible Officer of the Certificate
Administrator or the Trustee shall have knowledge of an Event of Default, the
Certificate Administrator or the Trustee, as the case may be, shall give prompt
written notice thereof to the Certificateholders.
Section 8.05 Trustee to Act; Appointment of Successor.
(a) On and after the time a Servicer receives a notice of termination
pursuant to Section 8.01, the Trustee shall, subject to the provisions of
Section 3.07 hereof, be the successor in all respects to such Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on such Servicer by the terms and provisions
hereof or shall appoint a successor pursuant to Section 3.07. Notwithstanding
anything provided herein to the contrary, under no circumstances shall any
provision of this Agreement be construed to require the Trustee, acting in its
capacity as successor to a Servicer in its obligation to make Advances, to
advance, expend or risk its own funds or otherwise incur any financial liability
in the performance of its duties hereunder if it shall have reasonable grounds
for believing that such funds are non-recoverable. Subject to Section 8.05(b),
as compensation therefor, the Trustee shall be entitled to such compensation as
the terminated Servicer would have been entitled to hereunder if no such notice
of termination had been given. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution having a net worth of not less
than $15,000,000 as the successor to the terminated Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
such Servicer hereunder; provided, however, that any such institution appointed
as successor Servicer shall not, as evidenced in writing by each Rating Agency,
adversely affect the then current rating of any Class of Certificates
immediately prior to the termination of the terminated Servicer. The appointment
of the Trustee or any other successor Servicer shall not affect any liability of
the predecessor Servicer which may have arisen under this Agreement prior to its
termination as a Servicer, nor shall the Trustee or any other successor Servicer
be liable for any acts or omissions of the predecessor Servicer or for any
breach by such predecessor Servicer of any of its representations or warranties
contained herein or in any related document or agreement. Pending appointment of
a successor to the terminated Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
provided above. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
(b) In connection with the appointment of a successor Servicer or the
assumption of the duties of a Servicer, as specified in Section 8.05(a), the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans serviced by the predecessor Servicer as it and such
successor shall agree, not to exceed the Servicing Fee Rate.
(c) Any successor, including the Trustee, to a Servicer as servicer shall
during the term of its service as servicer maintain in force (i) a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as servicer hereunder and (ii) a fidelity bond in respect of its
officers, employees and agents to the same extent as a Servicer is so required
pursuant to Section 3.03.
Section 8.06 Notification to Certificateholders. Upon any termination
or appointment of a successor to the Servicer pursuant to this Article VIII, the
Certificate Administrator shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Rating Agencies.
ARTICLE IX
THE TRUSTEE AND CERTIFICATE ADMINISTRATOR
Section 9.01 Duties of Trustee and the Certificate Administrator.
(a) The Trustee prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred of which a
Responsible Officer of the Trustee shall have actual knowledge (which has not
been cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a reasonably prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. The Certificate
Administrator shall perform such duties and only such duties as are specifically
required of it, as set forth in this Agreement.
The Trustee and the Certificate Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee and the Certificate Administrator
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; provided however that neither the Trustee nor
the Certificate Administrator shall be responsible for the accuracy or content
of any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Servicers or the Depositor hereunder. If any
such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee or the Certificate Administrator, as
the case may be, shall notify the Certificateholders of such instrument in the
event that the Trustee or the Certificate Administrator, as the case may be,
after so requesting, does not receive a satisfactorily corrected instrument.
(b) No provision of this Agreement shall be construed to relieve the
Trustee or the Certificate Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misfeasance;
provided, however, that:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge, and after
the curing or waiver of all such Events of Default which may have occurred,
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
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
Certificate Administrator and, in the absence of bad faith on the part of
the Trustee and the Certificate Administrator, the Trustee and the
Certificate Administrator may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and the Certificate
Administrator by the Depositor or any Servicer and which on their face, do
not contradict the requirements of this Agreement;
(ii) Neither the Trustee (in its individual capacity) nor the
Certificate Administrator (in its individual capacity) shall be personally
liable for an error of judgment made in good faith by any Responsible
Officer or other officers thereof, unless it shall be proved that the
Trustee or the Certificate Administrator, as the case may be, was negligent
in ascertaining the pertinent facts;
(iii) Neither the Trustee (in its individual capacity) nor the
Certificate Administrator (in its individual capacity) shall be personally
liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the direction of Certificateholders as
provided in Section 8.03;
(iv) The Trustee shall not be charged with knowledge of any default or
Event of Default unless a Responsible Officer of the Trustee assigned to
and working in the Corporate Trust Office obtains actual knowledge of such
default or Event of Default or any officer of the Trustee receives written
notice of such default or Event of Default at its Corporate Trust Office.
In the absence of such notice or actual knowledge, the Trustee may
conclusively assume that there is no default or Event of Default; and
(v) The Certificate Administrator shall not be charged with knowledge
of any default (other than a default in payment to the Certificate
Administrator) unless a Responsible Officer of the Certificate
Administrator assigned to working in the Corporate Trust Office obtains
actual knowledge of such failure or event or any officer of the Certificate
Administrator receives written notice of such failure or event at its
Corporate Trust Office and in the absence of receipt of such notice or
actual knowledge, the Certificate Administrator may conclusively assume
that there is no default or Event of Default;
(vi) No provision in this Agreement shall require the Trustee or the
Certificate Administrator to expend or risk its own funds (including,
without limitation, the making of any Advance by the Trustee as a successor
Servicer) or otherwise incur any personal financial liability in the
performance of any of its duties as Trustee or Certificate Administrator
hereunder, or in the exercise of any of its rights or powers, if the
Trustee or the Certificate Administrator shall have reasonable grounds for
believing that repayment of funds or adequate indemnity against such risk
or liability is not reasonably assured to it and none of the provisions
contained in this Agreement shall in any event require the Trustee or the
Certificate Administrator to perform, or be responsible for the manner or
performance of, any of the obligations of a Servicer under this Agreement,
except, with respect to the Trustee, during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, a predecessor Servicer in accordance with the
terms of this Agreement; and
(vii) Neither the Certificate Administrator nor the Trustee shall have
a duty (A) to see to any recording, filing, or depositing of this Agreement
or any agreement referred to herein or any financing statement or
continuation statement, or to see to the maintenance of any such recording
or filing or depositing or to any rerecording, refiling or redepositing of
any thereof, (B) to see to any insurance, (C) to see to the payment or
discharge or any tax, assessment, or other governmental charge or any lien
or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate other than from funds available in
the Certificate Account, or (D) unless required to do so by law or
regulation enacted after the date of this Agreement, file any certificates
required under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
Section 9.02......Certain Matters Affecting the Trustee and Certificate
Administrator.
Except as otherwise provided in Section 9.01:
(i) Each of the Trustee and the Certificate Administrator may request
and rely upon and shall be protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper parties;
(ii) Each of the Trustee and the Certificate Administrator may consult
with counsel and any advice or Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Certificate 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
Certificate Administrator, as the case may be, reasonable security or
indemnity 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 an Event of Default of
which a Responsible Officer shall have actual knowledge (which has not been
cured or waived), to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs;
(iv) Neither the Trustee nor the Certificate Administrator shall be
personally 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 an Event of Default hereunder and after
the curing or waiving of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of
Certificates of any Class evidencing, as to such Class, Percentage
Interests aggregating not less than 50%; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee may
require reasonable indemnity against such expense or liability or payment
of such estimated expenses as a condition to so proceeding;
(vi) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default which may have
occurred, the Certificate Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested
in writing so to do by Holders of Certificates of any Class evidencing, as
to such Class, Percentage Interests aggregating not less than 50%;
provided, however, that if the payment within a reasonable time to the
Certificate 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 Certificate Administrator, not reasonably assured to the Certificate
Administrator by the security afforded to it by the terms of this
Agreement, the Certificate Administrator may require reasonable indemnity
against such expense or liability or payment of such estimated expenses as
a condition to so proceeding; and
(vii) The right of the Trustee and the Certificate Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Certificate Administrator nor the
Trustee shall be answerable for other than it negligence or willful
misconduct in the performance of such act;
(viii) Neither the Trustee nor the Certificate Administrator shall be
required to give any bond or surety in respect of the execution of the
Trust created hereby or the powers granted hereunder; and (ix) The
Certificate Administrator and 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 or the Custodian or any other custodian or
nominee, and neither the Trustee nor the Certificate Administrator shall be
responsible for any misconduct or negligence on the part of (1) any such
agent, attorney or custodian appointed by them with due care, or (2) the
Custodian.
Section 9.03 Neither Trustee nor Certificate Administrator Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the execution of, and the authentication of, the
Certificates by the Trustee) shall not be taken as the statements of the Trustee
or the Certificate Administrator, and neither the Trustee nor the Certificate
Administrator assumes responsibility for their correctness. Neither the Trustee
nor the Certificate Administrator makes any representations as to the validity
or sufficiency of this Agreement or of the Certificates or any Mortgage Loans
save that the Trustee and the Certificate Administrator represent that, assuming
due execution and delivery by the other parties hereto, this Agreement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to applicable insolvency, receivership, moratorium and other laws
affecting the rights of creditors generally, and to general principles of equity
and the discretion of the court (regardless of whether considered in a
proceeding in equity or at law). Neither the Trustee nor the Certificate
Administrator shall be accountable for the use or application by the Depositor
of funds paid to the Depositor in consideration of the assignment of the
Mortgage Loans hereunder by the Depositor, or for the use or application of any
funds paid to Subservicers or any Servicer in respect of the Mortgage Loans or
deposited into a Servicer Custodial Account, or any other account hereunder
(other than the Certificate Account) by a Servicer.
Neither the Trustee nor the Certificate Administrator shall at any
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority or for or with respect to the sufficiency of the Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than if the Trustee shall
assume the duties of a predecessor Servicer pursuant to Section 8.05 and
thereupon only for the acts or omissions of the Trustee as successor Servicer);
the validity of the assignment of any Mortgage Loan to the Trustee or of any
intervening assignment; the completeness of any Mortgage Loan; the performance
or enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of a predecessor Servicer pursuant to Section 8.05 and thereupon only for
the acts or omissions of the Trustee as successor Servicer); the compliance by
the Depositor or the Servicers with any warranty or representation made under
this Agreement or in any related document or the accuracy of any such warranty
or representation; any investment of monies by or at the direction of a Servicer
or any loss resulting therefrom, it being understood that the Trustee and the
Certificate Administrator shall remain responsible for any part of the Trust
Estate that either party may hold in its individual capacity; the acts or
omissions of any of the Depositor, any Servicer (other than if the Trustee shall
assume the duties of a predecessor Servicer pursuant to Section 8.05 and
thereupon only for the acts or omissions of the Trustee as successor Servicer),
any Subservicer or any Mortgagor; any action of any Servicer (other than if the
Trustee shall assume the duties of a predecessor Servicer pursuant to Section
8.05 and thereupon only for the acts or omissions of the Trustee as successor
Servicer) or any Subservicer taken in the name of the Trustee or the Certificate
Administrator; the failure of any Servicer or any Subservicer to act or perform
any duties required of it as agent of the Trustee or the Certificate
Administrator hereunder; or any action by the Trustee or the Certificate
Administrator taken at the instruction of a Servicer (other than if the Trustee
shall assume the duties of a predecessor Servicer pursuant to Section 8.05 and
thereupon only for the acts or omissions of the Trustee as successor Servicer);
provided, however, that the foregoing shall not relieve the Trustee or the
Certificate Administrator of its obligation to perform its duties under this
Agreement.
Section 9.04 Trustee and Certificate Administrator May Own
Certificates. Each of the Trustee and the Certificate Administrator in their
individual or any other capacities may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee or
Certificate Administrator and may otherwise deal with any Servicer, any
Subservicer or any of their respective affiliates with the same right it would
have if it were not the Trustee or the Certificate Administrator.
Section 9.05 Eligibility Requirements for Trustee, Certificate
Administrator. Each of the Trustee and the Certificate Administrator hereunder
shall at all times be (a) an institution the deposits of which are fully insured
by the FDIC and (b) a corporation or banking association organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority and (c) with respect to every
successor trustee or certificate administrator hereunder either an institution
(i) the long-term unsecured debt obligations of which are rated at least "A" by
Fitch and S&P and "A2" by ▇▇▇▇▇'▇ or (ii) whose serving as Trustee or
Certificate Administrator hereunder would not result in the lowering of the
ratings originally assigned to any Class of Certificates. The Trustee shall not
be an affiliate of the Depositor or any Servicer. If such corporation or banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.05, the combined capital and surplus of such
corporation or banking association shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee or the Certificate Administrator shall cease to be
eligible in accordance with the provision of this Section 9.05, the Trustee or
the Certificate Administrator, as the case may be, shall resign immediately in
the manner and with the effect specified in Section 9.06. The Certificate
Administrator and any successor Certificate Administrator may not be the
Depositor or an affiliate of the Depositor, or an originator, Servicer or
subservicer of the Mortgage Loans, unless the Certificate Administrator is an
institutional trust department. Section 9.06......Resignation and Removal of
Trustee and the Certificate Administrator. Either of the Trustee or the
Certificate Administrator may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Servicers and
mailing a copy of such notice to all Holders of record. The Trustee or the
Certificate Administrator, as applicable, shall also mail a copy of such notice
of resignation to each Rating Agency. Upon receiving such notice of resignation,
the Servicers shall use their best efforts to promptly appoint a mutually
acceptable successor Trustee or Certificate Administrator, as applicable, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee or Certificate Administrator, as applicable,
and one copy to the successor Trustee or Certificate Administrator, as
applicable. If no successor Trustee or Certificate Administrator, as the case
may be, shall have been so appointed and shall have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee or
Certificate Administrator may petition any court of competent jurisdiction for
the appointment of a successor Trustee or Certificate Administrator.
If at any time the Trustee or the Certificate Administrator shall
cease to be eligible in accordance with the provisions of Section 9.05 and shall
fail to resign after written request therefor by a Servicer, or if at any time
the Trustee or the Certificate Administrator shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver or conservator of
the Trustee or the Certificate Administrator or of their respective property
shall be appointed, or any public officer shall take charge or control of the
Trustee or the Certificate Administrator or of their respective property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Servicers may remove the Trustee or the Certificate Administrator, as the case
may be, and appoint a successor Trustee or Certificate Administrator by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee or the Certificate Administrator, as applicable, so removed and one copy
to the successor.
The Holders of Certificates evidencing not less than 50% of the
Voting Rights may at any time remove the Trustee or the Certificate
Administrator by written instrument or instruments delivered to the Servicers
and the Trustee or the Certificate Administrator, as applicable; the Servicers
shall thereupon use their best efforts to appoint a mutually acceptable
successor Trustee or Certificate Administrator, as the case may be, in
accordance with this Section 9.06.
Any resignation or removal of the Trustee or Certificate
Administrator and appointment of a successor Trustee or successor Certificate
Administrator pursuant to any of the provisions of this Section 9.06 shall
become effective upon acceptance of appointment by the successor Trustee or
Certificate Administrator, as the case may be, as provided in Section 9.07.
Notwithstanding the foregoing, in the event the Certificate Administrator
advises the Trustee that it is unable to continue to perform its obligations
pursuant to the terms of this Agreement prior to the appointment of a successor,
the Trustee shall be obligated to perform such obligations until a new
Certificate Administrator is appointed. Such performance shall be without
prejudice to any claim by a party hereto or beneficiary hereof resulting from
the Certificate Administrator's breach of its obligations hereunder. As
compensation therefore, the Trustee shall be entitled to all fees the
Certificate Administrator would have been entitled to if it had continued to act
hereunder.
Section 9.07 Successor Trustee or Certificate Administrator. Any
successor Trustee or successor Certificate Administrator appointed as provided
in Section 9.06 shall execute, acknowledge and deliver to the Servicers and to
its predecessor Trustee or Certificate Administrator, as applicable, an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Trustee or Certificate Administrator shall become
effective and such successor Trustee or Certificate Administrator, as the case
may be, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee or Certificate
Administrator, as applicable, herein. The predecessor Trustee or Certificate
Administrator shall duly assign, transfer, deliver and pay over to the successor
Trustee or Certificate Administrator, as the case may be, all Mortgage Files,
related documents and statements, and money and other property held by it
hereunder, together with all instruments of transfer and assignment or other
documents properly executed as may be reasonably required to effect such
transfer and such of the records or copies thereof maintained by the predecessor
Trustee or Certificate Administrator in the administration hereof as may be
reasonably requested by the successor Trustee or Certificate Administrator, as
the case may be, and shall thereupon be discharged from all duties and
responsibilities under this Agreement; provided, however, that if the
predecessor Trustee or Certificate Administrator has been terminated pursuant to
the third paragraph of Section 9.06, all reasonable expenses of the predecessor
Trustee or Certificate Administrator incurred in complying with this Section
9.07 shall be reimbursed by the Trust.
No successor Trustee or Certificate Administrator shall accept
appointment as provided in this Section 9.07 unless at the time of such
appointment such successor Trustee or Certificate Administrator, as the case may
be, shall be eligible under the provisions of Section 9.05.
Upon acceptance of appointment by a successor Trustee or Certificate
Administrator, as applicable, as provided in this Section 9.07, each Servicer
shall cooperate to mail notice of the succession of such Trustee or Certificate
Administrator, as the case may be, hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.
If either Servicer fails to mail such notice within ten days after acceptance of
appointment by the successor Trustee or Certificate Administrator, the successor
Trustee or Certificate Administrator, as the case may be, shall cause such
notice to be mailed at the expense of such Servicer.
Section 9.08 Merger or Consolidation of Trustee or the Certificate
Administrator. Any corporation or banking association into which either the
Trustee or the Certificate Administrator may be merged or converted or with
which it may be consolidated, or any corporation or banking association
resulting from any merger, conversion or consolidation to which the Trustee or
the Certificate Administrator shall be a party, or any corporation or banking
association succeeding to all or substantially all of the corporate trust
business of the Trustee or the Certificate Administrator, shall be the successor
of the Trustee or the Certificate Administrator, as applicable, hereunder, if
such corporation or banking association is eligible under the provisions of
Section 9.05, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 9.09 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any of the provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any Mortgaged
Property may at the time be located or for any other reason, the Servicers and
the Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Trustee as
co-trustee or separate trustee of all or any part of the Trust Estate, and to
vest in such Persons, in such capacity, such title to the Trust Estate, or any
part thereof, and, subject to the other provision of this Section 9.09, such
powers, duties, obligations, rights and trusts as the Servicers and the Trustee
may consider necessary or desirable. If the Servicers shall not have joined in
such appointment within ten days after the receipt by it of a request to do so,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor Trustee under Section 9.05 and no notice to Holders of
Certificates of the appointment of a co-trustee or a separate trustee shall be
required under Section 9.07.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.09, 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 acts are to be performed, the Trustee shall be incompetent or
unqualified to perform such acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate 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. No trustee
hereunder shall be held personally liable by reason of any act or omission of
any other trustee hereunder; provided, however, that no appointment of a
co-trustee or separate trustee hereunder shall relieve the Trustee of its
obligations hereunder.
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 trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
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 become incapable of acting, resign or be removed, or shall be adjudged a
bankrupt or insolvent, or a receiver of its property shall be appointed, or any
public officer shall take charge or control of such trustee or co-trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 9.10 Authenticating Agents. The Trustee may appoint one or
more authenticating agents ("Authenticating Agents") which shall be authorized
to act on behalf of the Trustee in authenticating or countersigning
Certificates. Initially, the Authenticating Agent shall be U.S. Bank National
Association. Wherever reference is made in this Agreement to the authentication
or countersigning of Certificates by the Trustee or the Trustee's certificate of
authentication or countersigning, such reference shall be deemed to include
authentication or countersigning on behalf of the Trustee by an Authenticating
Agent and a certificate of authentication or countersignature executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent must be
acceptable to the Servicers and must be a corporation or banking association
organized and doing business under the laws of the United States of America or
of any State, having a principal office and place of business in New York, New
York, having a combined capital and surplus of at least $15,000,000, authorized
under such laws to do a trust business and subject to supervision or examination
by Federal or State authorities.
Any corporation or banking association into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, conversion or
consolidation to which any Authenticating Agent shall be a party, or any
corporation or banking association succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee, the Certificate Administrator and to the
Servicers. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Servicers. Upon receiving a notice of
resignation or upon such a termination, or in case, at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 9.10, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to each
Servicer and the Certificate Administrator and shall mail notice of such
appointment to all Certificateholders. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. Each Authenticating Agent
shall be entitled to the rights and benefits and immunities of this Article IX.
Section 9.11 Trustee's Fees and Expenses and Certificate Administrator's
Fees and Expenses. The Certificate Administrator, as compensation for its
activities hereunder, shall be entitled to receive on each Distribution Date an
amount equal to the Certificate Administrator Fee for such Distribution Date
pursuant to Section 5.02(a) and Section 3.11. The Trustee, as compensation for
its services hereunder, shall be entitled to a fee in an amount agreed upon
between the Trustee and the Certificate Administrator, payable by the
Certificate Administrator out of its own funds and not out of any funds of the
Trust Estate. The Trustee and the Certificate Administrator and any director,
officer, employee or agent of the Trustee and the Certificate Administrator
shall be indemnified by the Trust and held harmless against any loss, liability
or expense (including reasonable attorney's fees) (a) incurred in connection
with any claim or legal action relating to (i) this Agreement, (ii) the
Certificates, or (iii) the performance of any of the Trustee's or the
Certificate Administrator's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of its duties hereunder, (b) resulting from any tax or
information return which was prepared by, or should have been prepared by, the
Servicers or (c) arising out of the transfer of any Private Certificate not in
compliance with ERISA. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee or Certificate
Administrator, as applicable, hereunder. Without limiting the foregoing, except
as otherwise agreed upon in writing by the Depositor and the Trustee or the
Certificate Administrator, as applicable, and except for any such expense,
disbursement or advance as may arise from the Trustee's or the Certificate
Administrator's negligence, bad faith or willful misconduct, the Trust shall
reimburse the Trustee and the Certificate Administrator for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or the
Certificate Administrator, as applicable, in accordance with any of the
provisions of this Agreement to the extent permitted by Treasury Regulations
Section 1.860G-1(b)(3)(ii) and (iii). Except as otherwise provided herein,
neither the Trustee nor the Certificate Administrator shall be entitled to
payment or reimbursement for any routine ongoing expenses incurred by the
Trustee or the Certificate Administrator, as applicable, in the ordinary course
of its duties as Trustee or Certificate Administrator, Certificate Registrar or
Paying Agent hereunder or for any other expenses.
Section 9.12 [Reserved]
Section 9.13 Paying Agents. The Certificate Administrator may appoint
one or more Paying Agents (each, a "Paying Agent") which shall be authorized to
act on behalf of the Certificate Administrator in making withdrawals from the
Certificate Account and distributions to Certificateholders as provided in
Section 3.08 and Section 5.02. Wherever reference is made in this Agreement to
the withdrawal from the Certificate Account by the Certificate Administrator,
such reference shall be deemed to include such a withdrawal on behalf of the
Certificate Administrator by a Paying Agent. Initially, the Paying Agent shall
be the Certificate Administrator. Whenever reference is made in this Agreement
to a distribution by the Certificate Administrator or the furnishing of a
statement to Certificateholders by the Certificate Administrator, such reference
shall be deemed to include such a distribution or furnishing on behalf of the
Certificate Administrator by a Paying Agent. Each Paying Agent shall provide to
the Certificate Administrator such information concerning the Certificate
Account as the Certificate Administrator shall request from time to time. Each
Paying Agent must be reasonably acceptable to the Servicers and must be a
corporation or banking association organized and doing business under the laws
of the United States of America or of any state, having (except in the case of
the Trustee and the Certificate Administrator) a principal office and place of
business in New York, New York, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. Each Paying Agent
shall be entitled to the rights, benefits and immunities of this Article IX.
Any corporation into which any Paying Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Paying Agent shall be
a party, or any corporation succeeding to the corporate agency business of any
Paying Agent, shall continue to be the Paying Agent provided that such
corporation after the consummation of such merger, conversion, consolidation or
succession meets the eligibility requirements of this Section 9.13.
Any Paying Agent may at any time resign by giving written notice of
resignation to the Trustee, the Certificate Administrator and to the Servicers;
provided that the Paying Agent has returned to the Certificate Account or
otherwise accounted, to the reasonable satisfaction of the Certificate
Administrator, for all amounts it has withdrawn from the Certificate Account.
The Certificate Administrator may, upon prior written approval of the Servicers,
at any time terminate the agency of any Paying Agent by giving written notice of
termination to such Paying Agent, the Trustee and the Servicers. Upon receiving
a notice of resignation or upon such a termination, or in case at any time any
Paying Agent shall cease to be eligible in accordance with the provisions of the
first paragraph of this Section 9.13, the Certificate Administrator may appoint,
upon prior written approval of the Servicers and the Trustee, a successor Paying
Agent, shall give written notice of such appointment to the Servicers and shall
mail notice of such appointment to all Certificateholders. Any successor Paying
Agent upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Paying Agent. The Certificate
Administrator shall remain liable for any duties and obligations assumed by its
appointed Paying Agent.
Section 9.14 Limitation of Liability. The Certificates are executed by
the Trustee, not in its individual capacity but solely as Trustee of the Trust,
in the exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee in the Certificates is made and intended not as a personal undertaking
or agreement by the Trustee but is made and intended for the purpose of binding
only the Trust.
Section 9.15 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such preceding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursement and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
Section 9.16 Suits for Enforcement. In case an Event of Default or
other default by any Servicer or the Depositor hereunder shall occur and be
continuing, the Trustee, in its discretion, may proceed to protect and enforce
its rights and the rights of the Holders of Certificates under this Agreement by
a suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or
in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy, as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
Section 9.17 Waiver of Bond Requirement. Each of the Trustee and the
Certificate Administrator shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust Estate, or
any part thereof, may be located that the Trustee or the Certificate
Administrator post a bond or other surety with any court, agency or body
whatsoever.
Section 9.18 Waiver of Inventory, Accounting and Appraisal
Requirement. Each of the Trustee and the Certificate Administrator shall be
relieved of, and each Certificateholder hereby waives, any requirement of any
jurisdiction in which the Trust Estate, or any part thereof, may be located that
the Trustee or the Certificate Administrator file any inventory, accounting or
appraisal of the Trust Estate with any court, agency or body at any time or in
any manner whatsoever.
ARTICLE X
TERMINATION
Section 10.01 Termination upon Purchase by the Depositor or Liquidation
of All Mortgage Loans. Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Servicers, the Certificate Administrator
and the Trustee created hereby (other than the obligation of Certificate
Administrator to make certain payments to Certificateholders after the Final
Distribution Date and to send certain notices as hereinafter set forth and the
obligations of the Certificate Administrator pursuant to Sections 5.04(b) and
5.05(b)) shall terminate upon the last action required to be taken by the
Certificate Administrator on the Final Distribution Date pursuant to this
Article X following the earlier of (a) the purchase by ▇▇▇▇▇ Fargo (or a
successor Servicer thereto) of all Mortgage Loans and all REO Property remaining
in the Trust Estate at a price equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan as to
which REO Property has been acquired and whose fair market value is included
pursuant to clause (ii) below) and (ii) the fair market value of such REO
Property (as determined by such Servicer 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 fourth paragraph
of this Article X), plus any Class Unpaid Interest Shortfall for any Class of
Certificates as well as one month's interest at the related Mortgage Interest
Rate on the Stated Principal Balance of each Mortgage Loan (including any
Mortgage Loan as to which REO Property has been acquired) or (b) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Estate or the disposition of all REO
Property.
Regardless of the foregoing, in no event shall the Trust created
hereby continue beyond 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.
The right of ▇▇▇▇▇ Fargo (or a successor Servicer thereto) to
repurchase all of the Mortgage Loans is conditioned upon the Pool Stated
Principal Balance as of the Final Distribution Date being less than 5% of the
Cut-off Date Pool Principal Balance. If such right is exercised, the Custodian
shall, promptly following payment of the purchase price, release to ▇▇▇▇▇ Fargo
or its designee the Mortgage Files pertaining to the Mortgage Loans being
purchased.
Notice of any termination, specifying the Final Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Certificate
Administrator for payment of the final distribution and for cancellation, shall
be given promptly by ▇▇▇▇▇ Fargo (if exercising its right to purchase the assets
of the Trust) or by the Certificate Administrator (in any other case) by letter
to Certificateholders mailed not earlier than the 15th day and not later than
the 20th day of the month next preceding the month of such final distribution
specifying (1) the Final Distribution Date upon which final payment of the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Certificate Administrator therein designated, (2) the
amount of any such final payment and (3) 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 or agency of
the Certificate Administrator therein specified. If ▇▇▇▇▇ Fargo is obligated to
give notice to Certificateholders as aforesaid, it shall give such notice to the
Trustee, any other Servicer, the Certificate Administrator and the Certificate
Registrar at the time such notice is given to Certificateholders. In the event
such notice is given by ▇▇▇▇▇ Fargo, ▇▇▇▇▇ Fargo shall deposit in the
Certificate Account on or before the Final Distribution Date in immediately
available funds an amount equal to the amount necessary to make the amount, if
any, on deposit in the Certificate Account on the Final Distribution Date equal
to the purchase price for the related assets of the Trust computed as above
provided together with a statement as to the amount to be distributed on each
Class of Certificates pursuant to the next succeeding paragraph.
Upon presentation and surrender of the Certificates, the Certificate
Administrator shall cause to be distributed to Certificateholders of each Class,
to the extent that funds are sufficient therefor, in the order set forth in
Section 5.02 hereof, on the Final Distribution Date and in proportion to their
respective Percentage Interests, with respect to Certificateholders of the same
Class, an amount equal to (I) as to each Class of Certificates, the Class
Certificate Balance thereof plus accrued interest thereon in the case of an
interest bearing Certificate and (II) as to the Class 1-A-R Certificates, the
amounts, if any, which remain on deposit in the Upper-Tier Certificate Account
(other than the amounts retained to meet claims) after application pursuant to
clause (I) above.
If all of the Certificateholders do not surrender their Certificates
for final payment and cancellation on or before the Final Distribution Date, the
Certificate Administrator shall on such date cause all funds in the Certificate
Account not distributed in final distribution to Certificateholders to continue
to be held by the Certificate Administrator in an Eligible Account for the
benefit of such Certificateholders and the Servicers (if it exercised its right
to purchase the assets of the Trust Estate) or the Certificate Administrator (in
any other case) shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within one year after the second
notice all the Certificates shall not have been surrendered for cancellation,
the Certificate Administrator may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds on deposit in such Eligible Account.
Section 10.02 Additional Termination Requirements.
(a) If ▇▇▇▇▇ Fargo exercises its purchase option as provided in Section
10.01, the Trust shall be terminated in accordance with the following additional
requirements, unless the Certificate Administrator and the Trustee have received
an Opinion of Counsel to the effect that the failure of the Trust to comply with
the requirements of this Section 10.02 will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code, or (ii) cause the Trust Estate to fail to qualify as two separate
REMICs at any time that any Certificates are outstanding:
(i) within 90 days prior to the Final Distribution Date set forth in
the notice given by ▇▇▇▇▇ Fargo under Section 10.01, the Trustee shall sell
all of the assets of the Trust Estate to ▇▇▇▇▇ Fargo for cash; and
(ii) the notice given by ▇▇▇▇▇ Fargo or the Certificate Administrator
pursuant to Section 10.01 shall provide that such notice constitutes the
adopting of a plan of complete liquidation of the Upper-Tier REMIC and the
Lower-Tier REMIC as of the date of such notice (or, if earlier, the date on
which such notice was mailed to Certificateholders). The Certificate
Administrator shall also specify such date in the final tax return of the
Upper-Tier REMIC and Lower-Tier REMIC.
(b) By their acceptance of the Residual Certificates, the Holders thereof
hereby agree to take such other action in connection with such plan of complete
liquidation as may be reasonably requested by the Depositor, the Trustee or the
Certificate Administrator.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicers, the Certificate Administrator and the
Trustee without the consent of any of the Certificateholders, but if such
amendment would adversely affect or add to the duties of the Custodian, with the
consent of the Custodian (i) to cure any ambiguity or mistake, (ii) to correct
or supplement any provisions herein or therein which may be inconsistent with
any other provisions of this Agreement, any amendment to this Agreement or the
related Prospectus Supplement, (iii) to modify, eliminate or add to any of its
provisions to such extent as shall be necessary to maintain the qualification of
the Upper-Tier REMIC and the Lower-Tier REMIC as REMICs at all times that any
Certificates are outstanding or to avoid or minimize the risk of the imposition
of any tax on either REMIC pursuant to the Code that would be a claim against
the Trust Estate, provided that (a) the Trustee and the Certificate
Administrator have received an Opinion of Counsel to the effect that such action
is necessary or desirable to maintain such qualification or to avoid or minimize
the risk of the imposition of any such tax and (b) such action shall not, as
evidenced by such Opinion of Counsel, adversely affect in any material respect
the interests of any Certificateholder, (iv) to change the timing and/or nature
of deposits into the Certificate Account provided that (a) such change shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder and (b) such change shall not
adversely affect the then-current rating of the Senior Certificates, the Class
B-1 Certificates, the Class B-2 Certificates, the Class B-3 Certificates, the
Class B-4 Certificates or the Class B-5 Certificates as evidenced by a letter
from any Rating Agency rating such Certificates to such effect, and (v) to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be materially inconsistent with the provisions of this
Agreement, provided that such action pursuant to this clause (v) shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder, provided that the amendment shall not be
deemed to adversely affect in any material respect the interests of the
Certificateholders and no Opinion of Counsel to that effect shall be required if
the Person requesting the amendment obtains a letter from each Rating Agency
stating that the amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Certificate Administrator and the Trustee, with
the consent of the Holders of Certificates of each Class of Certificates which
is affected by such amendment, evidencing, as to each such Class of
Certificates, Percentage Interests aggregating not less than 66-2/3%, 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 such Certificates; provided, however, that no such amendment
shall (A) reduce in any manner the amount of, or delay the timing of,
collections of payments on Mortgage Loans or distributions which are required to
be made on any Certificate without the consent of the Holder of such Certificate
or (B) reduce the aforesaid percentage required to consent to any such
amendment, without the consent of the Holders of all Certificates then
Outstanding.
Prior to the solicitation of consent of Certificateholders in
connection with any such amendment, the party seeking such amendment shall
furnish the Trustee and the Certificate Administrator with an Opinion of Counsel
stating whether such amendment would adversely affect the qualification of the
Upper-Tier REMIC or the Lower-Tier REMIC as REMICs and notice of the conclusion
expressed in such Opinion of Counsel shall be included with any such
solicitation. An amendment made with the consent of all Certificateholders and
executed in accordance with this Section 11.01 shall be permitted or authorized
by this Agreement notwithstanding that such Opinion of Counsel may conclude that
such amendment would adversely affect the qualification of the Upper-Tier REMIC
or the Lower-Tier REMIC as REMICs.
Prior to the execution of any amendment to this Agreement, the
Trustee and the Certificate Administrator shall be entitled to receive and rely
upon an Opinion of Counsel (which shall not be an expense of the Trust Estate)
stating that the execution of such amendment is authorized and permitted by this
Agreement. Each of the Certificate Administrator and the Trustee may, but shall
not be obligated to, enter into any such amendment which adversely affects their
respective own rights, duties and immunities under this Agreement.
Promptly after the execution of any such amendment or consent the
Certificate Administrator shall furnish written notification of the substance of
or a copy of such amendment to each Certificateholder and to each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 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 requirements as the Trustee may prescribe.
Section 11.02 Recordation of Agreement. 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
Servicer servicing the related Mortgage Loans and at its expense on direction by
the Certificate Administrator, who will act solely at the direction of Holders
of Certificates evidencing not less than 50% of all Voting Rights, but only upon
receipt of an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of Certificateholders (which Opinion of
Counsel shall not be at the expense of the Certificate Administrator).
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 11.03 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
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
provided herein) or in any manner otherwise control the operation and management
of the Trust, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Certificate Administrator
and the Trustee a written notice of default and of the continuance thereof, as
provided herein, and unless also the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of each Class of Certificates
affected thereby shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 11.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 11.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
APPLICATION OF THE CONFLICTS OF LAWS PROVISIONS THEREOF, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 11.05.....Notices. All demands, notices, instructions, directions,
requests and communications required to be delivered hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by certified mail, return receipt requested, to (a) in the case of the
Depositor, Wachovia Mortgage Loan Trust, LLC, ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇-▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel and Chief
Financial Officer, (b) in the case of the ▇▇▇▇▇ Fargo, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, MAC
X2401-042, with a copy to ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel, MAC X2401-06T, (c) in the case of
National City, National City Mortgage, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: _______, WMLT 2005-A, (d) in the case of the Certificate
Administrator, at its Corporate Trust Office, (e) in the case of the Trustee, at
its Corporate Trust Office, (f) in the case of Fitch, Fitch Ratings, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: Residential Mortgage Surveillance
Group, and (g) in the case of S&P, Standard and Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn:
Mortgage Surveillance Group; or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
Section 11.06.....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 11.07.....Certificates Nonassessable and Fully Paid. It is intended
that Certificateholders shall not be personally liable for obligations of the
Trust, that the beneficial ownership interests represented by the Certificates
shall be nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and that Certificates upon execution, countersignature and delivery
thereof by the Trustee pursuant to Section 6.01 are and shall be deemed fully
paid.
Section 11.08.....Access to List of Certificateholders. The Certificate
Registrar will furnish or cause to be furnished to the Trustee and the
Certificate Administrator, within 15 days after the receipt of a request by the
Trustee and/or the Certificate Administrator in writing, a list, in such form as
the Trustee and/or the Certificate Administrator may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record Date
for payment of distributions to Certificateholders.
If three or more Certificateholders apply in writing to the Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and is accompanied by a copy of the communication which such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such applicants access during
normal business hours to the most recent list of Certificateholders held by the
Trustee. If such a list is as of a date more than 90 days prior to the date of
receipt of such applicants' request, the Trustee shall promptly request from the
Certificate Registrar a current list as provided above, and shall afford such
applicants access to such list promptly upon receipt.
Every Certificateholder, by receiving and holding such list, agrees
with the Certificate Registrar, the Certificate Administrator and the Trustee
that neither the Certificate Registrar, the Trustee nor the Certificate
Administrator shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders hereunder,
regardless of the source from which such information was derived.
IN WITNESS WHEREOF, the Depositor, the Servicers, the Certificate
Administrator and the Trustee have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized to be hereunto affixed, all
as of the date first above written.
WACHOVIA MORTGAGE LOAN TRUST, LLC,
as Depositor
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A.,
as a Servicer
By:
----------------------------------------
Name:
Title:
NATIONAL CITY MORTGAGE CO.,
as a Servicer
By:
----------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Certificate Administrator
By:
----------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION as Trustee
By:
----------------------------------------
Name:
Title:
STATE OF NEW YORK. )
) ss.:
COUNTY OF NEW YORK )
)
On the __th day of August, 2005, before me, a notary public in and
for the State of New York, personally appeared _________________, known to me
who, being by me duly sworn, did depose and say that s/he is a ________________
of U.S. Bank National Association, a New York banking corporation, one of the
parties that executed the foregoing instrument; and that s/he signed his/her
name thereto by order of the Board of Directors of such corporation.
---------------------------------------
Notary Public
[Notarial Seal]
My commission expires ____________.
STATE OF DELAWARE. )
______...... ) ss.:
COUNTY OF __...... )
______...... )
On the __th day of August, 2005, before me, a notary public in and
for the State of Delaware, personally appeared ___________________, known to me
who, being by me duly sworn, did depose and say that s/he is a
___________________ of Wachovia Mortgage Loan Trust, LLC, a Delaware limited
liability company, one of the parties that executed the foregoing instrument;
and that s/he signed her/his name thereto by order of the Board of Directors of
such corporation.
---------------------------------------
Notary Public
[Notarial Seal]
My commission expires ____________.
STATE OF _________ )
______...... ) ss.:
COUNTY OF __...... )
______...... )
______On the __th day of August, 2005, before me, a notary public in and
for the State of _______, personally appeared ___________________, known to me
who, being by me duly sworn, did depose and say that s/he is a
___________________ of ▇▇▇▇▇ Fargo Bank, N.A., a national banking association,
one of the parties that executed the foregoing instrument; and that s/he signed
her/his name thereto by order of the Board of Directors of such corporation.
---------------------------------------
Notary Public
[Notarial Seal]
My commission expires ____________.
STATE OF ____________ )
______...... ) ss.:
COUNTY OF __...... )
______...... )
______On the __th day of August, 2005, before me, a notary public in and
for the State of ________, personally appeared ___________________, known to me
who, being by me duly sworn, did depose and say that s/he is a
___________________ of National City Mortgage Co., a _______ corporation, one of
the parties that executed the foregoing instrument; and that s/he signed her/his
name thereto by order of the Board of Directors of such corporation.
---------------------------------------
Notary Public
[Notarial Seal]
My commission expires ____________.
STATE OF NORTH CAROLINA )
______...... ) ss.:
COUNTY OF __...... )
______...... )
______On the __th day of August, 2005, before me, a notary public in and
for the State of North Carolina, personally appeared ___________________, known
to me who, being by me duly sworn, did depose and say that s/he is a
___________________ of Wachovia Bank, National Association, a national banking
association, one of the parties that executed the foregoing instrument; and that
s/he signed her/his name thereto by order of the Board of Directors of such
corporation.
---------------------------------------
Notary Public
[Notarial Seal]
My commission expires ____________.
APPENDIX 1
CALCULATION OF UNCERTIFICATED LOWER-TIER REGULAR INTEREST Y PRINCIPAL
REDUCTION AMOUNTS
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts:
For any Distribution Date the amounts by which the Uncertificated Principal
Balances of Uncertificated Lower-Tier Regular Interests Y-1, Y-2, Y-3 and Y-4,
respectively, will be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, determined as follows:
First, for each of Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group
4, determine the Net WAC for the applicable Loan Group for distributions of
interest that will be made on the next succeeding Distribution Date (the "Group
Interest Rate"). The Uncertificated Lower-Tier Regular Interest Y Principal
Reduction Amount for Uncertificated Lower-Tier Regular Interests Y-1, Y-2, Y-3
and Y-4 will be determined pursuant to the "Generic solution for the
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts" set
forth below (the "Generic Solution") by making identifications among the actual
Loan Groups and their related Uncertificated Lower-Tier Regular Interests and
the Net WAC and the Groups named in the Generic Solution and their related
Uncertificated Lower-Tier Regular Interests as follows:
A. Determine which Group has the lowest Group Interest Rate. That Group will be
identified with Group AA and the Uncertificated Lower-Tier Regular Interests
related to that Group will be respectively identified with Uncertificated
Lower-Tier Regular Interests Y-AA and Z-AA. The Group Interest Rate for that
Group will be identified with J%. If two or more Groups have the lowest Group
Interest Rate pick one for this purpose, subject to the restriction that each
Group may be picked only once in the course of any such selections pursuant to
paragraphs A through D of this definition.
B. Determine which Group has the second lowest Group Interest Rate. That Group
will be identified with Group BB and the Uncertificated Lower-Tier Regular
Interests related to that Group will be respectively identified with
Uncertificated Lower-Tier Regular Interests Y-BB and Z-BB. The Group Interest
Rate for that Group will be identified with K%. If two or more Groups have the
second lowest Group Interest Rate pick one for this purpose, subject to the
restriction that each Group may be picked only once in the course of any such
selections pursuant to paragraphs A through D of this definition.
C. Determine which Group has the third lowest Group Interest Rate. That Group
will be identified with Group CC and the Uncertificated Lower-Tier Regular
Interests related to that Group will be respectively identified with
Uncertificated Lower-Tier Regular Interests Y-CC and Z-CC. The Group Interest
Rate for that Group will be identified with L%. If two or more Groups have the
third lowest Group Interest Rate pick one for this purpose, subject to the
restriction that each Group may be picked only once in the course of any such
selections pursuant to paragraphs A through D of this definition.
D. Determine which Group has the fourth lowest Group Interest Rate. That Group
will be identified with Group DD and the Uncertificated Lower-Tier Regular
Interests related to that Group will be respectively identified with
Uncertificated Lower-Tier Regular Interests Y-DD and Z-DD. The Group Interest
Rate for that Group will be identified with M%. If two or more Groups have the
fourth lowest Group Interest Rate pick one for this purpose, subject to the
restriction that each Group may be picked only once in the course of any such
selections pursuant to paragraphs A through D of this definition.
Second, apply the Generic Solution set forth below to determine the
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts for the
Distribution Date using the identifications made above.
______Generic Solution for the Uncertificated Lower-Tier Regular Interest
Y Principal Reduction Amounts: For any Distribution Date, the amounts by which
the Uncertificated Principal Balances of Uncertificated Lower-Tier Regular
Interests Y-AA, Y-BB, Y-CC and Y-DD, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the distribution of
principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have the
meanings set forth below:
J% = the Net WAC for Group AA for interest to be distributed on the next
succeeding Distribution Date.
K% = the Net WAC for Group BB for interest to be distributed on the next
succeeding Distribution Date.
L% = the Net WAC for Group CC for interest to be distributed on the next
succeeding Distribution Date.
M% = the Net WAC for Group DD for interest to be distributed on the next
succeeding Distribution Date.
For purposes of the succeeding definitions and formulas, it is required that
J%<=K%<=L%<=M%.
PJB = the Group AA Subordinate Percentage after the allocation of Realized
Losses and distributions of principal on such Distribution Date.
PKB = the Group BB Subordinate Percentage after the allocation of Realized
Losses and distributions of principal on such Distribution Date.
PLB = the Group CC Subordinate Percentage after the allocation of Realized
Losses and distributions of principal on such Distribution Date.
PMB = the Group DD Subordinate Percentage after the allocation of Realized
Losses and distributions of principal on such Distribution Date.
R = the Class B Pass-Through Rate
= ______(J%PJB + K%PKB + L%PLB + M%PMB)/(PJB + PKB + PLB + PMB)
R11 = the weighted average of the Net WACs for Group AA, Group BB, Group CC
and Group DD after giving effect to the allocation of Realized Losses and
distributions of principal to be made on such Distribution Date
=
{J% (Pj - (DELTA)Pj) + K% (Pk - (DELTA)Pk) + L% (Pl - (DELTA)Pl) + M% (Pm -
(DELTA)Pm)}/
(Pj - (DELTA)Pj + Pk - (DELTA)Pk + Pl - (DELTA)Pl + Pm - (DELTA)Pm)
R21 = the weighted average of the Net WACs for Group AA, Group BB and Group CC
after giving effect to the allocation of Realized Losses and distributions
of principal to be made on such Distribution Date
= _____{J% (Pj - (DELTA)Pj) + K% (Pk - (DELTA)Pk) + L% (Pl - (DELTA)Pl)
}/(Pj - (DELTA)Pj + Pk - (DELTA)Pk + Pl - (DELTA)Pl )
R22 = the Net WAC for Group DD
= _____{ M% (Pm - (DELTA)Pm)}/( Pm - (DELTA)Pm )
R31 = the weighted average of the Net WACs for Group AA and Group BB after
giving effect to the allocation of Realized Losses and distributions of
principal to be made on such Distribution Date
= _____{(J% (Pj - (DELTA)Pj) + K% (Pk - (DELTA)Pk) }/(Pj - (DELTA)Pj + Pk -
(DELTA)Pk)
R32 = the weighted average of the Net WACs for Group CC and Group DD after
giving effect to the allocation of Realized Losses and distributions of
principal to be made on such Distribution Date
= _____{ L% (Pl - (DELTA)Pl) + M% (Pm - (DELTA)Pm)}/( Pl - (DELTA)Pl + Pm -
(DELTA)Pm)
R41 = the Net WAC for Group AA after giving effect to the allocation of
Realized Losses and distributions of principal to be made on such
Distribution Date
= ______J%
R42 = the weighted average of the Net WACs for Group BB, Group CC and Group DD
after giving effect to the allocation of Realized Losses and distributions
of principal to be made on such Distribution Date
= .....{K% (Pk - (DELTA)Pk) + L% (Pl - (DELTA)Pl) + M% (Pm -
(DELTA)Pm)}/
( Pk - (DELTA)Pk + Pl - (DELTA)Pl + Pm - (DELTA)Pm )
r11 = the weighted average of the Uncertificated Pass-Through Rates for
Uncertificated Lower-Tier Regular Interests Y-AA, Y-BB, Y-CC and Y-DD
= _____(J% Yj + K% Yk + L% Yl + M% Ym )/(Yj + Yk + Yl + Ym )
r21 = the weighted average of the Uncertificated Pass-Through Rates for
Uncertificated
Lower-Tier Regular Interests Y-AA, Y-BB and Y-CC
= _____(J% Yj + K% Yk + L% Yl )/(Yj + Yk + Yl )
r22 = the Uncertificated Pass-Through Rate for Uncertificated Lower-Tier Regular
Interest
Y-DD
= _____( M% Ym)/( Ym )
r31 = the weighted average of the Uncertificated Pass-Through Rates for
Uncertificated
Lower-Tier Regular Interests Y-AA and Y-BB
= _____(J% Yj + K% Yk )/(Yj + Yk )
r32 = the weighted average of the Uncertificated Pass-Through Rates for
Uncertificated
Lower-Tier Regular Interests Y-CC and Y-DD
= _____( L% Yl + M% Ym )/( Yl + Ym)
r41 = the Uncertificated Pass-Through Rate for Uncertificated Lower-Tier Regular
Interest
Y-AA
= J%
r42 = the weighted average of the Uncertificated Pass-Through Rates for
Uncertificated
Lower-Tier Regular Interests Y-BB, Y-CC and Y-DD
= _____(K% Yk + L% Yl + M% Ym)/(Yk + Yl + Ym)
Yj = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-AA after distributions on the prior Distribution Date.
Yk = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-BB after distributions on the prior Distribution Date.
Yl = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-CC after distributions on the prior Distribution Date.
Ym = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-DD after distributions on the prior Distribution Date.
(DELTA)Yj = the Uncertificated Lower-Tier Regular Interest Y-AA Principal
Reduction Amount.
(DELTA)Yk = the Uncertificated Lower-Tier Regular Interest Y-BB Principal
Reduction Amount.
(DELTA)Yl = the Uncertificated Lower-Tier Regular Interest Y-CC Principal
Reduction Amount.
(DELTA)Ym = the Uncertificated Lower-Tier Regular Interest Y-DD Principal
Reduction Amount.
Zj = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Z-AA after distributions on the prior Distribution Date.
Zk = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Z-BB after distributions on the prior Distribution Date.
Zl = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Z-CC after distributions on the prior Distribution Date.
Zm = the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Z-DD after distributions on the prior Distribution Date.
(DELTA)Zj = the Uncertificated Lower-Tier Regular Interest Z-AA Principal
Reduction Amount.
(DELTA)Zk = the Uncertificated Lower-Tier Regular Interest Z-BB Principal
Reduction Amount.
(DELTA)Zl = the Uncertificated Lower-Tier Regular Interest Z-CC Principal
Reduction Amount.
(DELTA)Zm = the Uncertificated Lower-Tier Regular Interest Z-DD Principal
Reduction Amount.
Pj = the aggregate Uncertificated Principal Balance of Uncertificated
Lower-Tier Regular Interests Y-AA and Z-AA after distributions on the
prior Distribution Date.
= Yj + Zj
Pk = the aggregate Uncertificated Principal Balance of Uncertificated
Lower-Tier Regular Interests Y-BB and Z-BB after distributions on the
prior Distribution Date.
= Yk + Zk
Pl = the aggregate Uncertificated Principal Balance of Uncertificated
Lower-Tier Regular Interests Y-CC and Z-CC after distributions on the
prior Distribution Date.
= Yl + Zl =
Pm = the aggregate Uncertificated Principal Balance of Uncertificated
Lower-Tier Regular Interests Y-DD and Z-DD after distributions on the
prior Distribution Date.
= Ym + Zm
(DELTA)Pj = the aggregate amount of principal reduction occurring with respect
to Mortgage Loans in Loan Group AA from Realized Losses or payments of
principal to be allocated on such Distribution Date net of any such
amounts allocated to the Class 1-A-R Certificates in respect of Component
I thereof.
= the aggregate of the Uncertificated Lower-Tier Regular Interest Y-AA
Principal Reduction Amount and the Uncertificated Lower-Tier Regular
Interest Z-AA Principal Reduction Amount.
= (DELTA)Yj + (DELTA)Zj
(DELTA)Pk = the aggregate amount of principal reduction occurring with respect
to Mortgage Loans in Loan Group BB from Realized Losses or payments of
principal to be allocated on such Distribution Date net of any such
amounts allocated to the Class 1-A-R Certificates in respect of Component
I thereof.
= the aggregate of the Uncertificated Lower-Tier Regular Interest Y-BB
Principal Reduction Amount and the Uncertificated Lower-Tier Regular
Interest Z-BB Principal Reduction Amount.
= (DELTA)Yk + (DELTA)Zk
(DELTA)Pl= the aggregate amount of principal reduction occurring with respect to
Mortgage Loans in Loan Group CC from Realized Losses or payments of
principal to be allocated on such Distribution Date net of any such
amounts allocated to the Class 1-A-R Certificates in respect of Component
I thereof.
= the aggregate of the Uncertificated Lower-Tier Regular Interest Y-CC
Principal Reduction Amount and the Uncertificated Lower-Tier Regular
Interest Z-CC Principal Reduction Amount.
= (DELTA)Yl + (DELTA)Zl
(DELTA)Pm = the aggregate amount of principal reduction occurring with respect
to Mortgage Loans in Loan Group DD from Realized Losses or payments of
principal to be allocated on such Distribution Date net of any such
amounts allocated to the Class 1-A-R Certificate in respect of Component I
thereof.
= the aggregate of the Uncertificated Lower-Tier Regular Interest Y-DD
Principal Reduction Amount and the Uncertificated Lower-Tier Regular
Interest Z-DD Principal Reduction Amount.
= (DELTA)Ym + (DELTA)Zm
(alpha) = .0005
(gamma)1 = (R - R11)/(R12 - R). If R=>M%, (gamma)1 is a non-negative number
unless its denominator is zero, in which event it is undefined.
(gamma)2 = (R - R21)/(R22 - R). If R=>L%, (gamma)2 is a non-negative number
unless its denominator is zero, in which event it is undefined.
(gamma)3 = (R - R31)/(R32 - R). If R=>K%, (gamma)3 is a non-negative number
unless its denominator is zero, in which event it is undefined.
(gamma)4 = (R - R41)/(R42 - R). If RM%, make the following additional definitions:
(delta)1Yj = 0, if R11< r11;
(R11- r11)( Yj + Yk + Yl + Ym)Yj/ {(R11 - J%)Yj + (R11 - K%)Yk + (R11 -
L%)Yl +
(R11 - M%)Ym }, if R11=> r11 and R11=>M%;
(R11- r11)( Yj + Yk + Yl + Ym )Yj/
{(R11 - J%)Yj + (R11 - K%)Yk + (R11 - L%)Yl }, if R11=> r11 and
M%>R11=>L%;
(R11- r11)( Yj + Yk + Yl + Ym )Yj/
{(R11 - J%)Yj + (R11 - K%)Yk }, if R11=> r11 and
L%>R11=>K%; and
(R11- r11)( Yj + Yk + Yl + Ym )/(R11 - J%), if R11=> r11 and
K%>R11=>J%.
(delta)1Yk = 0, if R11< r11 and R11=>K%;
(R11- r11)( Yj + Yk + Yl + Ym)Yk/
{ (R11 - K%)Yk + (R11 - L%)Yl + (R11 - M%)Ym }, if R11< r11 and ▇▇▇ ▇▇▇ and R11=>M%;
(R11- r11)( Yj + Yk + Yl + Ym )Yk/
{(R11 - J%)Yj + (R11 - K%)Yk + (R11 - L%)Yl }, if R11=> r11 and
M%>R11=>L%;
(R11- r11)( Yj + Yk + Yl + Ym )Yk/{(R11 - J%)Yj + (R11 - K%)Yk }, if R11=> r11
and L%>R11=>K%; and
0, if R11=> r11 and R11L%;
(R11- r11)( Yj + Yk + Yl + Ym)Yl/
{ (R11 - L%)Yl + (R11 - M%)Ym }, if R11< r11 and
K%<=R11 r11 and R11=>M%;
(R11- r11)( Yj + Yk + Yl + Ym )Yl/
{(R11 - J%)Yj + (R11 - K%)Yk + (R11 - L%)Yl }, if R11=> r11 and
M%>R11=>L%;
0, if R11=> r11 and R11M%;
(R11- r11)( Yj + Yk + Yl + Ym)/(R11 - M%), if R11< r11 and
L%<=R11 r11 and R11=>M%;
0, if R11=> r11 and R11 0, Y11- (alpha)(P11 - (DELTA)P11) => 0,
and (gamma)1(P11 - (DELTA)P11) < (Pn - (DELTA)Pn), then (DELTA)Yn = Yn -
(alpha)(gamma)1(P11 - (DELTA)P11) and (DELTA)Y11 = Y11 - (alpha)(P11 -
(DELTA)P11).
2. If Yn - (alpha)(Pn - (DELTA)Pn) => 0, Y11 - (alpha)(P11 - (DELTA)P11) => 0,
and (gamma)1(P11 - (DELTA)P11) => (Pn - (DELTA)Pn), then (DELTA)Yn = Yn -
(alpha)(Pn - (DELTA)Pn) and (DELTA)Y11 = Y11 - ((alpha)/(gamma)1)(Pn -
(DELTA)Pn).
3. If Yn - (alpha)(Pn - (DELTA)Pn) < 0, Y11 - (alpha)(P11 - (DELTA)P11) => 0,
and Y11 - (alpha)(P11 - (DELTA)P11) => Y11 - (Yn/(gamma)1), then (DELTA)Yn =
Yn - (alpha)(gamma)1(P11 - (DELTA)P11) and (DELTA)Y11 = Y11 - (alpha)(P11 -
(DELTA)P11).
4. If ▇▇ - (▇▇▇▇▇)(▇▇ - (▇▇▇▇▇)▇▇) ▇ ▇, ▇▇▇ - (▇▇/(▇▇▇▇▇)▇) => 0, and Y11 -
(alpha)(P11 - (DELTA)P11) <= Y11 - (Yn/(gamma)1), then (DELTA)Yn = 0 and
(DELTA)Y11 = Y11 - (Yn/(gamma)1).
5. If Y11 - (alpha)(P11 - (DELTA)P11) < 0, Y11 - (Yn/(gamma)1) < 0, and Yn -
(alpha)(Pn - (DELTA)Pn) <= Yn - ((gamma)1Y11), then (DELTA)Yn = Yn -
((gamma)1Y11) and (DELTA)Y11 = 0.
6. If Y11 - (alpha)(P11 - (DELTA)P11) < 0, Yn - (alpha)(Pn - (DELTA)Pn) => 0,
and Yn - (alpha)(Pn - (DELTA)Pn) => Yn - ((gamma)1Y11), then (DELTA)Yn = Yn-
(alpha)(Pn - (DELTA)Pn) and (DELTA)Y11 = Y11 - ((alpha)/(gamma)1)(Pn -
(DELTA)Pn).
AYj = (delta)1Yj + [(Yj - (delta)1Yj )/Y11 ]A ▇▇▇
▇▇▇ = (delta)1Yk + [(Yk - (delta)1Yk )/Y11 ]AY11
AYl = (delta)1Yl + [(Yl - (delta)1Yl )/Y11 ]A Y11
AYm = (delta)1Ym + [(Ym - (delta)1Ym )/Y11 ]AY11
The purpose of the foregoing definitional provisions together with the related
provisions allocating Realized Losses and defining the Principal Distribution
Amounts for the respective Uncertificated Lower-Tier Regular Interests is to
accomplish the following goals in the following order of priority:
1. Making the ratio of (Yn - ▇▇▇ ) to (Y11 - AY11 ) equal to (gamma)1 after
taking account of the allocation Realized Losses and the distributions that
will be made through the end of the Distribution Date to which such
provisions relate and assuring that each of the Uncertificated Lower-Tier
Regular Interest Y Principal Reduction Amounts and Uncertificated Lower-Tier
Regular Interest Z Principal Reduction Amounts is greater than or equal to
zero for such Distribution Date;
2. Making the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-AA less than or equal to 0.0005 of the sum of the
Uncertificated Principal Balances of Uncertificated Lower-Tier Regular
Interest Y-AA and Uncertificated Lower-Tier Regular Interest Z-AA, the
Uncertificated Principal Balance of Uncertificated Lower-Tier Regular
Interest Y-BB less than or equal to 0.0005 of the sum of the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interest Y-BB and
Uncertificated Lower-Tier Regular Interest Z-BB, the Uncertificated Principal
Balance of Uncertificated Lower-Tier Regular Interest Y-CC less than or equal
to 0.0005 of the sum of the Uncertificated Principal Balances of
Uncertificated Lower-Tier Regular Interest Y-CC and Uncertificated Lower-Tier
Regular Interest Z-CC, and the Uncertificated Principal Balance of
Uncertificated Lower-Tier Regular Interest Y-DD less than or equal to 0.0005
of the sum of the Uncertificated Principal Balances of Uncertificated
Lower-Tier Regular Interest Y-DD and Uncertificated Lower-Tier Regular
Interest Z-DD in each case after giving effect to allocations of Realized
Losses and distributions to be made through the end of the Distribution Date
to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Yn - ▇▇▇ ) and
whose denominator is the sum of (Yn - ▇▇▇) and (Zn - AZn) and (b) the
fraction whose numerator is (Y11 - AY11) and whose denominator is the sum of
(Y11 - AY11) and (Z11 - AZ11) as large as possible while remaining less than
or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts to
accomplish both of goals 1 and 2 above, the amounts thereof should be adjusted
to so as to accomplish such goals within the requirement that each
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amount must be
less than or equal to the sum of (a) the Principal Realized Losses to be
allocated on the related Distribution Date for the related Loan Group remaining
after the allocation of such Realized Losses to the related class of ratio-strip
principal only certificates, if any, and (b) the remainder of the Pool
Distribution Amount for the related Loan Group or after reduction thereof by the
distributions to be made on such Distribution Date (i) to the related class of
ratio-strip principal only certificates, if any, (ii) to the related class of
ratio-strip interest only certificates, if any, and (iii) in respect of interest
on the related Uncertificated Lower-Tier Regular Interests, or, if both of such
goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the
event of any conflict among the provisions of the definition of Uncertificated
Lower-Tier Regular Interest Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of AY11 among AYj, AYk, AYl and AYm cannot be achieved because one or
more of AYj, AYk, AYl and AYm, as so defined is greater than the related one of
APj, APk, APl and APm, such an allocation shall be made as close as possible to
the formula allocation within the requirement that AYj < APj, AYk < APk, AYl <
APl, AYm < APm and AYm < APm.
II. If L%<=R<=M%, make the following additional definitions:
(delta)2Yj = 0, if R21< r21;
(R21- r21)( Yj + Yk + Yl )Yj/
{(R21 - J%)Yj + (R21 - K%)Yk }, if R21=> r21 and
L%>R21=>K%; and
(R21- r21)( Yj + Yk + Yl )/(R21 - J%), if R21=> r21 and K%>R21=>J%.
(delta)2Yk = 0, if R21< r21 and R21=>K%;
(R21- r21)( Yj + Yk + Yl )Yk/
{ (R21 - K%)Yk + (R21 - L%)Yl }, if R21< r21 and ▇▇▇ ▇▇▇ and
L%>R21=>K%; and
0, if R21=> r21 and ▇▇▇ ▇▇▇.
(delta)2Ym = 0, if R22< r22;
(R22- r22)( Ym + Yn )/(R22 - M%), if R22=> r22 and R22=>M%;
(delta)2Yn = the greater of 0 and (DELTA)Pn - Zn, if
R22=N%;
(R22- r22)( Ym + Yn)/(R22 - N%), if R22< r22 and
M%<=R22 r22 and R22 0, Y21- (alpha)(P21 - (DELTA)P21) => 0,
and (gamma)2(P21 - (DELTA)P21) < (P22 - (DELTA)P22), then (DELTA)Y22 = Y22 -
(alpha)(gamma)2(P21 - (DELTA)P21) and (DELTA)Y21 = Y21 - (alpha)(P21 -
(DELTA)P21).
2. If Y22 - (alpha)(P22 - (DELTA)P22) => 0, Y21 - (alpha)(P21 - (DELTA)P21) =>
0, and (gamma)2(P21 - (DELTA)P21) => (P22 - (DELTA)P22), then (DELTA)Y22 =
Y22 - (alpha)(P22 - (DELTA)P22) and (DELTA)Y21 = ▇▇▇ -((▇▇▇▇▇)/(▇▇▇▇▇)▇)(▇▇▇
- (DELTA)P22).
3. If Y22 - (alpha)(P22 - (DELTA)P22) < 0, Y21 - (alpha)(P21 -(DELTA)P21) => 0,
and Y21 - (alpha)(P21 - (DELTA)P21) => Y21 - (Y22/(gamma)2), then (DELTA)Y22
= Y22 - (alpha)(gamma)2(P21 - (DELTA)P21) and (DELTA)Y21 = Y21 - (alpha)(P21
- (DELTA)P21).
4. If Y22 - (alpha)(P22 - (DELTA)P22) < 0, Y21 - (Y22/(gamma)2) => 0, and Y21 -
(alpha)(P21 - (DELTA)P21) <= Y21 - (Y22/(gamma)2), then (DELTA)Y22 = 0 and
(DELTA)Y21 = Y21 - (Y22/(gamma)2).
5. If Y21 - (alpha)(P21 - (DELTA)P21) < 0, Y21 - (Y22/(gamma)2) < 0, and Y22 -
(alpha)(P22 - (DELTA)P22) <= Y22 - ((gamma)2Y21), then (DELTA)Y22 = Y22 -
((gamma)2Y21) and (DELTA)Y21 = 0.
6. If Y21 - (alpha)(P21 - (DELTA)P21) < 0, Y22 - (alpha)(P22 -(DELTA)P22) => 0,
and Y22 - (alpha)(P22 - (DELTA)P22) => Y22 - ((gamma)2Y21),then (DELTA)Y22 =
Y22 - (alpha)(P22 - (DELTA)P22) and (DELTA)Y21 = Y21 -((alpha)/(gamma)2)(P22
- (DELTA)P22).
(DELTA)Yj = (delta)2Yj + [(Yj - (delta)2Yj )/Y21 ] (DELTA)Y21
(DELTA)Yk = (delta)2Yk + [(Yk - (delta)2Yk )/Y21 ] (DELTA)Y21
(DELTA)Yl = (delta)2Yl + [(Yl - (delta)2Yl )/Y21 ] (DELTA)Y21
(DELTA)Ym = (delta)2Ym + [(Ym - (delta)2Ym )/Y22 ] (DELTA)Y22
(DELTA)Yn = (delta)2Yn + [(Yn - (delta)2Yn )/Y22 ] (DELTA)Y22
The purpose of the foregoing definitional provisions together with the related
provisions allocating Realized Losses and defining the Principal Distribution
Amounts for the respective Uncertificated Lower-Tier Regular Interests is to
accomplish the following goals in the following order of priority:
1. Making the ratio of (Y22 - (DELTA)Y22 ) to (Y21 - (DELTA)Y21 ) equal to
(gamma)2 after taking account of the allocation Realized Losses and the
distributions that will be made through the end of the Distribution Date to
which such provisions relate and assuring that each of the Uncertificated
Lower-Tier Regular Interest Y Principal Reduction Amounts and Uncertificated
Lower-Tier Regular Interest Z Principal Reduction Amounts is greater than or
equal to zero for such Distribution Date;
2. Making the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-AA less than or equal to 0.0005 of the sum of the
Uncertificated Principal Balances of Uncertificated Lower-Tier Regular
Interests Y-AA and Uncertificated Lower-Tier Regular Interest Z-AA, the
Uncertificated Principal Balance of Uncertificated Lower-Tier Regular
Interest Y-BB less than or equal to 0.0005 of the sum of the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interest Y-BB and
Uncertificated Lower-Tier Regular Interest Z-BB, the Uncertificated Principal
Balance of Uncertificated Lower-Tier Regular Interest Y-CC less than or equal
to 0.0005 of the sum of the Uncertificated Principal Balances of
Uncertificated Lower-Tier Regular Interest Y-CC and Uncertificated Lower-Tier
Regular Interest Z-CC and the Uncertificated Principal Balance of
Uncertificated Lower-Tier Regular Interest Y-DD less than or equal to 0.0005
of the sum of the Uncertificated Principal Balances of Uncertificated
Lower-Tier Regular Interest Y-DD and Uncertificated Lower-Tier Regular
Interest Z-DD, in each case after giving effect to allocations of Realized
Losses and distributions to be made through the end of the Distribution Date
to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Y22 - (DELTA)Y22 )
and whose denominator is the sum of (Y22 - (DELTA)Y22) and (Z22 - (DELTA)Z22)
and (b) the fraction whose numerator is (Y21 - (DELTA)Y21) and whose
denominator is the sum of (Y21 - (DELTA)Y21) and (Z21 - (DELTA)Z21) as large
as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts to
accomplish both of goals 1 and 2 above, the amounts thereof should be adjusted
to so as to accomplish such goals within the requirement that each
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amount must be
less than or equal to the sum of (a) the Principal Realized Losses to be
allocated on the related Distribution Date for the related Loan Group remaining
after the allocation of such Realized Losses to the related class of ratio-strip
principal only certificates, if any, and (b) the remainder of the Pool
Distribution Amount for the related Loan Group or after reduction thereof by the
distributions to be made on such Distribution Date (i) to the related class of
ratio-strip principal only certificates, if any, (ii) to the related class of
ratio-strip interest only certificates, if any, and (iii) in respect of interest
on the related Uncertificated Lower-Tier Regular Interests, or, if both of such
goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the
event of any conflict among the provisions of the definition of the
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts, such
conflict shall be resolved on the basis of the goals and their priorities set
forth above within the requirement set forth in the preceding sentence. If the
formula allocations of (DELTA)Y21 among (DELTA)Yj, (DELTA)Yk and (DELTA)Yl or
(DELTA)Y22 among (DELTA)Ym and (DELTA)Yn cannot be achieved because one or more
of (DELTA)Yj, (DELTA)Yk, (DELTA)Yl, (DELTA)Ym and (DELTA)Yn, as so defined, is
greater than the related one of (DELTA)Pj, (DELTA)Pk, (DELTA)Pl, (DELTA)Pm and
(DELTA)Pn, such an allocation shall be made as close as possible to the formula
allocation within the requirement that (DELTA)Yj < (DELTA)Pj, (DELTA)Yk <
(DELTA)Pk, (DELTA)Yl < (DELTA)Pl, (DELTA)Ym < (DELTA)Pm and (DELTA)Yn <
(DELTA)Pn.
III. If K%<=R<=L%, make the following additional definitions:
(delta)3Yj = 0, if R31< r31; and
(R31- r31)( Yj + Yk )/(R31 - J%), if R31=> r31 and K%>R31=>J%.
(delta)3Yk = (R31- r31)( Yj + Yk )/(R31 - K%), if R31< r31
and ▇▇▇ ▇▇▇ and ▇▇▇ ▇▇▇ and
N%>R32=>M%;
(R32- r32)( Yl + Ym + Yn)/(R32 - L%), if R32=> r32 and M%>R32=>L%;
(delta)3Ym = 0, if R32< r32 and R32=>M%;
(R32- r32)( Yl + Ym + Yn)Ym/
{ (R32 - M%)Ym + (R32 - N%)Yn }, if R32< r32 and
L%<=R32 r32 and
N%>R32=>M%;
0, if R32=> r32 and R32N%;
(R32- r32)( Yl + Ym + Yn)/(R32 - N%), if R32< r32 and
M%<=R32 r32 and R32 0, Y31- (alpha)(P31 - (DELTA)P31) => 0,
and (gamma)3(P31 - (DELTA)P31) < (P32 - (DELTA)P32), then (DELTA)Y32 = Y32 -
(alpha)(gamma)3(P31 - (DELTA)P31) and (DELTA)Y31 = Y31 - (alpha)(P31 -
(DELTA)P31).
2. If Y32 - (alpha)(P32 - (DELTA)P32) => 0, Y31 - (alpha)(P31 - (DELTA)P31) =>
0, and (gamma)3(P31 - (DELTA)P31) => (P32 - (DELTA)P32), then (DELTA)Y32 =
Y32 - (alpha)(P32 - (DELTA)P32) and (DELTA)Y31 = Y31 - ((alpha)/(gamma)3)(P32
- (DELTA)P32).
3. If Y32 - (alpha)(P32 - (DELTA)P32) < 0, Y31 - (alpha)(P31 - (DELTA)P31) => 0,
and Y31 - (alpha)(P31 - (DELTA)P31) => Y31 - (Y32/(gamma)3), then (DELTA)Y32
= Y32 - (alpha)(gamma)3(P31 - (DELTA)P31) and (DELTA)Y31 = Y31 - (alpha)(P31
- (DELTA)P31).
4. If Y32 - (alpha)(P32 - (DELTA)P32) < 0, Y31 - (Y32/(gamma)3) => 0, and Y31 -
(alpha)(P31 - (DELTA)P31) <= Y31 - (Y32/(gamma)3), then (DELTA)Y32 = 0 and
(DELTA)Y31 = Y31 - (Y32/(gamma)3).
5. If Y31 - (alpha)(P31 - (DELTA)P31) < 0, Y31 - (Y32/(gamma)3) < 0, and Y32 -
(alpha)(P32 - (DELTA)P32) <= Y32 - ((gamma)3Y31), then (DELTA)Y32 = Y32 -
((gamma)3Y31) and (DELTA)Y31 = 0.
6. If Y31 - (alpha)(P31 - (DELTA)P31) < 0, Y32 - (alpha)(P32 - (DELTA)P32) => 0,
and Y32 - (alpha)(P32 - (DELTA)P32) => Y32 - ((gamma)3Y31), then (DELTA)Y32 =
Y32 - (alpha)(P32 - (DELTA)P32) and (DELTA)Y31 = Y31 - ((alpha)/(gamma)3)(P32
- (DELTA)P32).
(DELTA)Yj = (delta)3Yj + [(Yj - (delta)3Yj )/Y31 ] (DELTA)Y31
(DELTA)Yk = (delta)3Yk + [(Yk - (delta)3Yk )/Y31 ] (DELTA)Y31
(DELTA)Yl = (delta)3Yl + [(Yl - (delta)3Yl )/Y32 ] (DELTA)Y32
(DELTA)Ym = (delta)3Ym + [(Ym - (delta)3Ym )/Y32 ] (DELTA)Y32
(DELTA)Yn = (delta)3Yn + [(Yn - (delta)3Yn )/Y32 ] (DELTA)Y32
The purpose of the foregoing definitional provisions together with the related
provisions allocating Realized Losses and defining the Principal Distribution
Amounts of the respective Uncertificated Lower-Tier Regular Interests is to
accomplish the following goals in the following order of priority:
1. Making the ratio of (Y32 - (DELTA)Y32 ) to (Y31 - (DELTA)Y31 ) equal to
(gamma)3 after taking account of the allocation Realized Losses and the
distributions that will be made through the end of the Distribution Date to
which such provisions relate and assuring that each of the Uncertificated
Lower-Tier Regular Interest Y Principal Reduction Amounts and
Uncertificated Lower-Tier Regular Interest Z Principal Reduction Amounts is
greater than or equal to zero for such Distribution Date;
2. Making the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-AA less than or equal to 0.0005 of the sum of the
Uncertificated Principal Balances of Uncertificated Lower-Tier Regular
Interests Y-AA and Uncertificated Lower-Tier Regular Interest Z-AA, the
Uncertificated Principal Balance of Uncertificated Lower-Tier Regular
Interest Y-BB less than or equal to 0.0005 of the sum of the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interest Y-BB and
Uncertificated Lower-Tier Regular Interest Z-BB, the Uncertificated
Principal Balance of Uncertificated Lower-Tier Regular Interest Y-CC less
than or equal to 0.0005 of the sum of the Uncertificated Principal Balances
of Uncertificated Lower-Tier Regular Interest Y-CC and Uncertificated
Lower-Tier Regular Interest Z-CC and the Uncertificated Principal Balance
of Uncertificated Lower-Tier Regular Interest Y-DD less than or equal to
0.0005 of the sum of the Uncertificated Principal Balances of
Uncertificated Lower-Tier Regular Interest Y-DD and Uncertificated
Lower-Tier Regular Interest Z-DD, in each case after giving effect to
allocations of Realized Losses and distributions to be made through the end
of the Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Y32 - (DELTA)Y32
) and whose denominator is the sum of (Y32 - (DELTA)Y32) and (Z32 -
(DELTA)Z32) and (b) the fraction whose numerator is (Y31 - (DELTA)Y31) and
whose denominator is the sum of (Y31 - (DELTA)Y31) and (Z31 - (DELTA)Z31)
as large as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts to
accomplish both of goals 1 and 2 above, the amounts thereof should be adjusted
to so as to accomplish such goals within the requirement that each
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amount must be
less than or equal to the sum of (a) the Principal Realized Losses to be
allocated on the related Distribution Date for the related Loan Group remaining
after the allocation of such Realized Losses to the related class of ratio-strip
principal only certificates, if any, and (b) the remainder of the Pool
Distribution Amount for the related Loan Group or after reduction thereof by the
distributions to be made on such Distribution Date (i) to the related class of
ratio-strip principal only certificates, if any, (ii) to the related class of
ratio-strip interest only certificates, if any, and (iii) in respect of interest
on the related Uncertificated Lower-Tier Regular Interests, or, if both of such
goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the
event of any conflict among the provisions of the definition of Uncertificated
Lower-Tier Regular Interest Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocations of (DELTA)Y31 among (DELTA)Yj and (DELTA)Yk or (DELTA)Y32 among
(DELTA)Yl, (DELTA)Ym and (DELTA)Yn cannot be achieved because one or more of
(DELTA)Yj, (DELTA)Yk, (DELTA)Yl, (DELTA)Ym and (DELTA)Yn, as so defined, is
greater than the related one of (DELTA)Pj, (DELTA)Pk, (DELTA)Pl, (DELTA)Pm and
(DELTA)Pn, such an allocation shall be made as close as possible to the formula
allocation within the requirement that (DELTA)Yj < (DELTA)Pj, (DELTA)Yk <
(DELTA)Pk, (DELTA)Yl < (DELTA)Pl, (DELTA)Ym < (DELTA)Pm and (DELTA)Yn <
(DELTA)Pn.
IV. If R<=K%, make the following additional definitions:
(delta)4Yk = 0, if R42< r42;
(R42- r42)( Yk + Yl + Ym + Yn )Yk/
{ (R42 - K%)Yk + (R42 - L%)Yl + (R42 - M%)Ym }, if R42=> r42 and
N%>R42=>M%;
(R42- r42)( Yk + Yl + Ym + Yn )Yk/
{ (R42 - K%)Yk + (R42 - L%)Yl }, if R42=> r42 and
M%>R42=>L%; and
(R42- r42)( Yk + Yl + Ym + Yn )/(R42 - K%), if R42=> r42 and
L%>R42=>K%.
(delta)4Yl = 0, if R42< r42 and R42=>L%;
(R42- r42)( Yk + Yl + Ym + Yn )Yl/ { (R42 - L%)Yl + (R42 - M%)Ym +
(R42 - N%)Yn }, if R42< r42 and L%>R42=>K%;
(R42- r42)( Yk + Yl + Ym + Yn )Yl/
{ (R42 - K%)Yk + (R42 - L%)Yl + (R42 - M%)Ym }, if R42=> r42 and
N%>R42=>M%;
(R42- r42)( Yk + Yl + Ym + Yn )Yl/
{ (R42 - K%)Yk + (R42 - L%)Yl }, if R42=> r42 and
M%>R42=>L%;
0, if R42=> r42 and R42M%;
(R42- r42)( Yk + Yl + Ym + Yn )Ym/
{ (R42 - M%)Ym + (R42 - N%)Yn }, if R42< r42 and
L%<=R42 r42 and
N%>R42=>M%;
0, if R42=> r42 and R42N%;
(R42- r42)( Yk + Yl + Ym + Yn )/ (R42 - N%), if R42< r42 and
M%<=R42 r42 and R42 0, Yj- (alpha)(Pj - (DELTA)Pj) => 0,
and (gamma)4(Pj - (DELTA)Pj) < (P42 - (DELTA)P42), then (DELTA)Y42 = Y42 -
(alpha)(gamma)4(Pj - (DELTA)Pj) and (DELTA)Yj = Yj - (alpha)(Pj - (DELTA)Pj).
2. If Y42 - (alpha)(P42 - (DELTA)P42) => 0, Yj - (alpha)(Pj - (DELTA)Pj) => 0,
and (gamma)4(Pj - (DELTA)Pj) => (P42 - (DELTA)P42), then (DELTA)Y42 = Y42 -
(alpha)(P42 - (DELTA)P42) and (DELTA)Yj = Yj - ((alpha)/(gamma)4)(P42 -
(DELTA)P42).
3. If Y42 - (alpha)(P42 - (DELTA)P42) < 0, Yj - (alpha)(Pj - (DELTA)Pj) => 0,
and Yj - (alpha)(Pj - (DELTA)Pj) => Yj - (Y42/(gamma)4), then (DELTA)Y42 =
Y42 - (alpha)(gamma)4(Pj - (DELTA)Pj) and (DELTA)Yj = Yj - (alpha)(Pj -
(DELTA)Pj).
4. If Y42 - (alpha)(P42 - (DELTA)P42) < 0, Yj - (Y42/(gamma)4) => 0, and Yj -
(alpha)(Pj - (DELTA)Pj) <= Yj - (Y42/(gamma)4), then (DELTA)Y42 = 0 and
(DELTA)Yj = Yj - (Y42/(gamma)4).
5. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Yj - (Y42/(gamma)4) < 0, and Y42 -
(alpha)(P42 - (DELTA)P42) <= Y42 - ((gamma)4Yj), then (DELTA)Y42 = Y42 -
((gamma)4Yj) and (DELTA)Yj = 0.
6. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Y42 - (alpha)(P42 - (DELTA)P42) => 0,
and Y42 - (alpha)(P42 - (DELTA)P42) => Y42 - ((gamma)4Yj), then (DELTA)Y42 =
Y42 - (alpha)(P42 - (DELTA)P42) and (DELTA)Yj = Yj - ((alpha)/(gamma)4)(P42-
(DELTA)P42).
(DELTA)Yk = (delta)4Yk + [(Yk - (delta)4Yk )/Y42 ] (DELTA)Y42
(DELTA)Yl = (delta)4Yl + [(Yl - (delta)4Yl )/Y42 ] (DELTA)Y42
(DELTA)Ym = (delta)4Ym + [(Ym - (delta)4Ym )/Y42 ] (DELTA)Y42
(DELTA)Yn = (delta)4Yn + [(Yn - (delta)4Yn )/Y42 ] (DELTA)Y42
The purpose of the foregoing definitional provisions together with the related
provisions allocating Realized Losses and defining the Principal Distribution
Amounts for the respective Uncertificated Lower-Tier Regular Interests is to
accomplish the following goals in the following order of priority:
1. Making the ratio of (Y42 - (DELTA)Y42 ) to (Yj - (DELTA)Yj ) equal to
(gamma)4 after taking account of the allocation Realized Losses and the
distributions that will be made through the end of the Distribution Date to
which such provisions relate and assuring that each of the Uncertificated
Lower-Tier Regular Interest Y Principal Reduction Amounts and Uncertificated
Lower-Tier Regular Interest Z Principal Reduction Amounts is greater than or
equal to zero for such Distribution Date;
2. Making the Uncertificated Principal Balance of Uncertificated Lower-Tier
Regular Interest Y-AA less than or equal to 0.0005 of the sum of the
Uncertificated Principal Balances of Uncertificated Lower-Tier Regular
Interests Y-AA and Uncertificated Lower-Tier Regular Interest Z-AA, the
Uncertificated Principal Balance of Uncertificated Lower-Tier Regular
Interest Y-BB less than or equal to 0.0005 of the sum of the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interest Y-BB and
Uncertificated Lower-Tier Regular Interest Z-BB, the Uncertificated Principal
Balance of Uncertificated Lower-Tier Regular Interest Y-CC less than or equal
to 0.0005 of the sum of the Uncertificated Principal Balances of
Uncertificated Lower-Tier Regular Interest Y-CC and Uncertificated Lower-Tier
Regular Interest Z-CC and the Uncertificated Principal Balance of
Uncertificated Lower-Tier Regular Interest Y-DD less than or equal to 0.0005
of the sum of the Uncertificated Principal Balances of Uncertificated
Lower-Tier Regular Interest Y-DD and Uncertificated Lower-Tier Regular
Interest Z-DD, in each case after giving effect to allocations of Realized
Losses and distributions to be made through the end of the Distribution Date
to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Y42 - (DELTA)Y42 )
and whose denominator is the sum of (Y42 - (DELTA)Y42) and (Z42 - (DELTA)Z42)
and (b) the fraction whose numerator is (Yj - (DELTA)Yj) and whose
denominator is the sum of (Yj - (DELTA)Yj) and (Zj - (DELTA)Zj) as large as
possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amounts to
accomplish both of goals 1 and 2 above, the amounts thereof should be adjusted
to so as to accomplish such goals within the requirement that each
Uncertificated Lower-Tier Regular Interest Y Principal Reduction Amount must be
less than or equal to the sum of (a) the Principal Realized Losses to be
allocated on the related Distribution Date for the related Loan Group remaining
after the allocation of such Realized Losses to the related class of ratio-strip
principal only certificates, if any, and (b) the remainder of the Pool
Distribution Amount for the related Loan Group or after reduction thereof by the
distributions to be made on such Distribution Date (i) to the related class of
ratio-strip principal only certificates, if any, (ii) to the related class of
ratio-strip interest only certificates, if any, and (iii) in respect of interest
on the related Uncertificated Lower-Tier Regular Interests, or, if both of such
goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the
event of any conflict among the provisions of the definition of Uncertificated
Lower-Tier Regular Interest Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of (DELTA)Y42 among (DELTA)Yk, (DELTA)Yl, (DELTA)Ym and (DELTA)Yn
cannot be achieved because one or more of (DELTA)Yk, (DELTA)Yl, (DELTA)Ym and
(DELTA)Yn, as so defined, is greater than the related one of (DELTA)Pk,
(DELTA)Pl, (DELTA)Pm and (DELTA)Pn, such an allocation shall be made as close as
possible to the formula allocation within the requirement that (DELTA)Yk <
(DELTA)Pk, (DELTA)Yl < (DELTA)Pl, (DELTA)Ym < (DELTA)Pm and (DELTA)Yn <
(DELTA)Pn.
NOTES:
1. Uncertificated Lower-Tier Regular Interests Y-AA and Z-AA are related to Loan
Group AA. The sum of the Uncertificated Principal Balances of Uncertificated
Lower-Tier Regular Interests Y-AA and Z-AA is equal to the aggregate stated
principal balance of the Mortgage Loans in Loan Group AA. Uncertificated
Lower-Tier Regular Interests Y-BB and Z-BB are related to Loan Group BB. The sum
of the Uncertificated Principal Balances of Uncertificated Lower-Tier Regular
Interests Y-BB and Z-BB is equal to the aggregate stated principal balance of
the Mortgage Loans in Loan Group BB. Uncertificated Lower-Tier Regular Interests
Y-CC and Z-CC are related to Loan Group CC. The sum of the Uncertificated
Principal Balances of Uncertificated Lower-Tier Regular Interests Y-CC and Z-C
is equal to the aggregate stated principal balance of the Mortgage Loans in Loan
Group CC. Uncertificated Lower-Tier Regular Interests Y-DD and Z-DD are related
to Loan Group DD. The sum of the Uncertificated Principal Balances of
Uncertificated Lower-Tier Regular Interests Y-DD and Z-D is equal to the
aggregate stated principal balance of the Mortgage Loans in Loan Group DD. The
Uncertificated Lower-Tier Regular Interests will be principal and interest
classes bearing interest at the pass-through rate for the related Loan Group.
2. The Class B pass-through rate is the weighted average of the pass-through
rates on the Uncertificated Lower-Tier Y Regular Interests.