Exhibit 4.1
EXECUTION COPY
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2005
----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-NCA
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS....................................................... 1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES...... 43
SECTION 2.01. Conveyance of Mortgage Loans................................. 43
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.............. 46
SECTION 2.03. Representations, Warranties and Covenants of the Depositor... 47
SECTION 2.04. Representations and Warranties of the Servicer............... 52
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that are not
"Qualified Mortgages"........................................ 55
SECTION 2.06. Authentication and Delivery of Certificates.................. 56
SECTION 2.07. REMIC Elections.............................................. 56
SECTION 2.08. [RESERVED]................................................... 60
SECTION 2.09. Covenants of the Servicer.................................... 60
SECTION 2.10. [RESERVED]................................................... 60
SECTION 2.11. Permitted Activities of the Trust............................ 60
SECTION 2.12. Qualifying Special Purpose Entity............................ 60
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................... 60
SECTION 3.01. Servicer to Service Mortgage Loans........................... 60
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer..................................................... 62
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer..................................................... 63
SECTION 3.04. [RESERVED]................................................... 63
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.......................................... 64
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts..................................................... 67
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans............................................... 68
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.......................................... 68
SECTION 3.09. [RESERVED]................................................... 70
-i-
TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 3.10. [RESERVED]................................................... 70
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.... 71
SECTION 3.13. Release of Mortgage Files.................................... 76
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee......................................... 77
SECTION 3.15. Servicing Compensation....................................... 77
SECTION 3.16. Access to Certain Documentation.............................. 78
SECTION 3.17. Annual Statement as to Compliance............................ 78
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements......................................... 79
SECTION 3.19. Periodic Filings............................................. 79
SECTION 3.20. Annual Certificate by Trustee................................ 79
SECTION 3.21. [RESERVED]................................................... 79
SECTION 3.22. Annual Certificate by Servicer............................... 79
SECTION 3.23. Prepayment Charge Reporting Requirements..................... 80
SECTION 3.24. Information to the Trustee................................... 80
SECTION 3.25. Indemnification.............................................. 81
SECTION 3.26. Nonsolicitation.............................................. 82
SECTION 3.27. High Cost Mortgage Loans..................................... 83
ARTICLE IV DISTRIBUTIONS..................................................... 83
SECTION 4.01. Advances..................................................... 83
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls............................... 84
SECTION 4.03. Distributions on the REMIC Interests......................... 85
SECTION 4.04. Distributions................................................ 85
SECTION 4.05. Monthly Statements to Certificateholders..................... 89
ARTICLE V THE CERTIFICATES.................................................. 92
SECTION 5.01. The Certificates............................................. 92
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.............................................. 93
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates............ 97
-ii-
TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 5.04. Persons Deemed Owners........................................ 97
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.... 97
SECTION 5.06. Book-Entry Certificates...................................... 98
SECTION 5.07. Notices to Depository........................................ 99
SECTION 5.08. Definitive Certificates...................................... 99
SECTION 5.09. Maintenance of Office or Agency.............................. 100
SECTION 5.10. Authenticating Agents........................................ 100
ARTICLE VI THE DEPOSITOR AND THE SERVICER.................................... 101
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer..... 101
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer..... 101
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and
Others....................................................... 101
SECTION 6.04. Limitation on Resignation of Servicer........................ 103
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds............... 103
ARTICLE VII DEFAULT; TERMINATION OF SERVICER.................................. 104
SECTION 7.01. Events of Default............................................ 104
SECTION 7.02. Trustee to Act; Appointment of Successor..................... 106
SECTION 7.03. Notification to Certificateholders........................... 107
ARTICLE VIII CONCERNING THE TRUSTEE............................................ 107
SECTION 8.01. Duties of the Trustee........................................ 107
SECTION 8.02. Certain Matters Affecting the Trustee........................ 109
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans........ 110
SECTION 8.04. Trustee May Own Certificates................................. 110
SECTION 8.05. Trustee's Fees and Expenses.................................. 111
SECTION 8.06. Indemnification and Expenses of Trustee...................... 111
SECTION 8.07. Eligibility Requirements for Trustee......................... 112
SECTION 8.08. Resignation and Removal of Trustee........................... 112
SECTION 8.09. Successor Trustee............................................ 113
SECTION 8.10. Merger or Consolidation of Trustee........................... 114
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee................ 114
-iii-
TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 8.12. Tax Matters.................................................. 115
ARTICLE IX TERMINATION....................................................... 117
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans........................................................ 117
SECTION 9.02. Final Distribution on the Certificates....................... 119
SECTION 9.03. Additional Termination Requirements.......................... 120
ARTICLE X MISCELLANEOUS PROVISIONS.......................................... 122
SECTION 10.01. Amendment.................................................... 122
SECTION 10.02. Counterparts................................................. 123
SECTION 10.03. Governing Law................................................ 123
SECTION 10.04. Intention of Parties......................................... 124
SECTION 10.05. Notices...................................................... 124
SECTION 10.06. Severability of Provisions................................... 125
SECTION 10.07. Assignment................................................... 125
SECTION 10.08. Limitation on Rights of Certificateholders................... 127
SECTION 10.09. Inspection and Audit Rights.................................. 127
SECTION 10.10. Certificates Nonassessable and Fully Paid.................... 128
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER
EXHIBIT H FORM OF RULE 144A LETTER
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF DELINQUENCY REPORT
EXHIBIT M-2 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT N FORM OF AUCTION PROCEDURES
EXHIBIT O FORM OF TRANSFEROR REPRESENTATION LETTER FOR TRANSFER TO
REGULATION S BOOK-ENTRY CERTIFICATE
-iv-
TABLE OF CONTENTS
(continued)
PAGE
----
FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE OR
DEFINITIVE CERTIFICATE
EXHIBIT P FORM OF TRANSFEROR REPRESENTATION LETTER FOR TRANSFER
PURSUANT TO RULE 144A FROM A HOLDER OF A REGULATION S
BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
-v-
POOLING AND SERVICING AGREEMENT, dated as of August 1, 2005, among ▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor (the
"Depositor"), WILSHIRE CREDIT CORPORATION, a Nevada corporation, as servicer
(the "Servicer") and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking
association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to the
Trustee in return for the Certificates. The Trust Fund for federal income tax
purposes will consist of two (i) two real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof and (iii) the grantor trusts described in
Section 2.07 hereof. The Lower Tier REMIC will consist of all of the assets
constituting the Trust Fund (other than the assets described in clauses (ii) and
(iii) above and the Lower Tier REMIC Regular Interests) and will be evidenced by
the Lower Tier REMIC Regular Interests (which will be uncertificated and will
represent the "regular interests" in the Lower Tier REMIC) and the Class LTR
Interest as the single "residual interest" in the Lower Tier REMIC. The Trustee
will hold the Lower Tier REMIC Regular Interests. The Upper Tier REMIC will
consist of the Lower Tier REMIC Regular Interests and will be evidenced by the
REMIC Regular Interests (which will represent the "regular interests" in the
Upper Tier REMIC) and the Residual Interest as the single "residual interest" in
the Upper Tier REMIC. The Class R Certificate will represent beneficial
ownership of the Class LTR Interest and the Residual Interest. The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the Latest Possible Maturity Date.
All covenants and agreements made by the Seller in the Sale Agreement and
by the Depositor and the Trustee herein with respect to the Mortgage Loans and
the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates.
In consideration of the mutual agreements herein contained, the Depositor,
the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions that service for their own account mortgage loans of the
same type as the Mortgages Loans in the jurisdictions in which the related
Mortgaged Properties are located.
Accrual Period: With respect to the Class A, Class R and Class M
Certificates and the Lower Tier REMIC Interests and any Distribution Date, the
period from and including the preceding Distribution Date (or from the Closing
Date in the case of the first Distribution Date) to and including the day prior
to such Distribution Date and with respect to the Class B
Certificates and a Distribution Date, the calendar month preceding the month in
which such Distribution Date occurs. All calculations of interest on each Class
of Class A and Class M Certificates and the Lower Tier REMIC Interests will be
made on the basis of the actual number of days elapsed in the related Accrual
Period and a 360 day year and all calculations of interest on each Class of
Class B Certificates will be made on the basis of a 360 day year consisting of
twelve 30-day months.
Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate of payments of
principal and interest (net of the Servicing Fees) on the Mortgage Loans that
were due during the applicable Due Period and not received as of the close of
business on the related Determination Date, less the aggregate amount of any
such Delinquent payments that the Servicer has determined would constitute a
Non-Recoverable Advance were an advance to be made with respect thereto;
provided, however, that with respect to any Mortgage Loan that is 150 days
delinquent or more (whether or not the Mortgage Loan has been converted to an
REO Property), there will be no obligation to make Advances and, provided
further, however, that with respect to any Mortgage Loan that has been converted
to an REO Property which is less than 150 days delinquent, the obligation to
make Advances shall only be to payments of interest.
Advance Facility: A financing or other facility as described in Section
10.07.
Advancing Person: The Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination, the
sum of the Class A Certificate Principal Balance, the Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance, the Class B-1 Certificate Principal Balance, the
Class B-2 Certificate Principal Balance, the Class B-3 Certificate Principal
Balance, the Class B-4 Certificate Principal Balance and the Class B-5
Certificate Principal Balance, in each case as of such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
-2-
Appraised Value: With respect to a Mortgage Loan the proceeds of which were
used to purchase the related Mortgaged Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for the Seller by an independent fee appraiser at the time of the
origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Mortgage Loan to the Trustee, which
assignment, notice of transfer or equivalent instrument may, if permitted by
law, be in the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county.
Auction: The one-time auction conducted by the Trustee, as described in
Section 9.01(b) hereof.
Auction Agent: Any nationally recognized dealer in mortgage securities,
which may include an affiliate of the Seller, chosen by the Trustee and the
Seller in consultation.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: With respect to any Distribution Date for the Class A,
Class R and Class M Certificates, the per annum rate equal to 12 times the
quotient of (x) the total scheduled interest on the Mortgage Loans based on the
Net Mortgage Rates in effect on the related Due Date, divided by (y) the
aggregate principal balance of the Offered Certificates and the Class B-5
Certificates immediately prior to such Distribution Date with such rate being
multiplied by 30 and divided by the actual number of days in the related Accrual
Period; and with respect to any Distribution Date for the Class B Certificates,
the per annum rate equal to 12 times the quotient of (x) the total scheduled
interest on the Mortgage Loans based on the Net Mortgage Rates in effect on the
related Due Date, divided by (y) the aggregate principal balance of the Offered
Certificates and the Class B-5 Certificates immediately prior to such
Distribution Date.
Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 15 years or 20 years which provides for level monthly payments of
principal and interest based on a 30-year amortization schedule, with a balloon
payment of the remaining outstanding principal balance due on such Mortgage Loan
at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A
-3-
(other than the Class R), Class M and Class B Certificates constitutes a Class
of Book-Entry Certificates.
Bring Down Letter: That certain letter agreement, dated as of August 30,
2005 between the Seller and the Transferors.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Oregon and in
the City of New York, New York are authorized or obligated by law or executive
order to be closed.
Certificate: Any one of the certificates of any Class executed by the
Trustee and authenticated by the Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(e) in the name of the Trustee for the
benefit of the Certificateholders and designated "Deutsche Bank National Trust
Company, as trustee, in trust for registered holders of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-NCA."
Funds in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced by the
amount of the increase in the Certificate Principal Balance of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any
-4-
Class of Regular Certificates or the Class R Certificate, except that solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any Affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
Affiliate of the Depositor in determining which Certificates are registered in
the name of an Affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set forth in
Section 5.01 hereof.
Class A Certificate: Any Certificate designated as a "Class A Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class A Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class A Certificates.
Class A Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class A Pass-Through Rate on the Class
A Certificate Principal Balance as of such Distribution Date plus the Current
Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class A Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.
Class A Interest Carry Forward Amount: As of any Distribution Date, the sum
of (1) the excess of (A) the Class A Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class A
Certificates with respect to interest on such prior Distribution Dates and (2)
interest on such excess (to the extent permitted by applicable law) at the Class
A Pass-Through Rate for the related Accrual Period.
Class A Margin: As of any Distribution Date up to and including the Initial
Optional Termination Date, 0.260% per annum and, as of any Distribution Date
after the Initial Optional Termination Date, 0.520% per annum.
Class A Pass-Through Rate: For the first Distribution Date, 3.929% per
annum. As of any Distribution Date thereafter, the lesser of (1) One-Month LIBOR
plus the Class A Margin and (2) the Available Funds Cap for such Distribution
Date.
Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Trigger
Event exists, 100% of the Principal Distribution Amount for such Distribution
Date and (2) on or after the Stepdown Date
-5-
where a Trigger Event does not exist, the excess of (A) the sum of the Class A
Certificate Principal Balance and the Class R Certificate Principal Balance
immediately prior to such Distribution Date over (B) the lesser of (i) 28.20% of
the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period and (ii) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount; provided,
however, that in no event will the Class A Principal Distribution Amount with
respect to any Distribution Date exceed the aggregate Certificate Principal
Balance of the Class A and Class R Certificates.
Class B Certificates: The Class B-1 Certificates, Class B-2 Certificates,
Class B-3 Certificates, Class B-4 Certificates and Class B-5 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Pass-Through Rate: As of any Distribution Date on or before the
Initial Optional Termination Date, the lesser of (1) 5.9926% and (2) the
Available Funds Cap; and as of any Distribution Date after the Initial Optional
Termination Date, the lesser of (1) 6.4926% and (2) the Available Funds Cap.
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance and the Class M-2 Certificate Principal Balance have been reduced to
zero and a Trigger Event exists, or as long as a Trigger Event does not exist,
the excess of (1) the sum of (A) the sum of the Class A Certificate Principal
Balance and the Class R
-6-
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 78.20% of the aggregate Stated
Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period and (B) the excess of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period over the
Minimum Required Overcollateralization Amount, provided, however, that on any
Distribution Date prior to the Stepdown Date on which the Class A Certificate
Principal Balance, the Class R Certificate Principal Balance, the Class M-1
Certificate Principal Balance and the Class M-2 Certificate Principal Balance
have been reduced to zero, the Class B-1 Principal Distribution Amount for such
Distribution Date will equal the lesser of (A) the outstanding Class B-1
Certificate Principal Balance and (B) 100% of the Principal Distribution Amount
remaining after any distributions on such Class A, Class R, Class M-1 and Class
M-2 Certificates; and provided further, however, that in no event will the Class
B-1 Principal Distribution Amount with respect to any Distribution Date exceed
the Class B-1 Certificate Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.
Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior
-7-
Distribution Dates and (2) interest on such excess (to the extent permitted by
applicable law) at the Class B-2 Pass-Through Rate for the related Accrual
Period.
Class B-2 Pass-Through Rate: As of any Distribution Date on or before the
Initial Optional Termination Date, the lesser of (1) 6.0416% and (2) the
Available Funds Cap; and as of any Distribution Date after the Initial Optional
Termination Date, the lesser of (1) 6.5416% and (2) the Available Funds Cap.
Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance and the Class B-1
Certificate Principal Balance have been reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the sum of the Class A Certificate Principal Balance and the Class R
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class B-1 Certificate Principal Balance (after taking into account
distributions of the Class B-1 Principal Distribution Amount on such
Distribution Date) and (E) the Class B-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 76.10% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the aggregate Stated
Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount;
provided, however, that on any Distribution Date prior to the Stepdown Date on
which the Class A Certificate Principal Balance, the Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
have been reduced to zero, the Class B-2 Principal Distribution Amount for such
Distribution Date will equal the lesser of (A) the outstanding Class B-2
Principal Distribution Amount and (B) 100% of the Principal Distribution Amount
remaining after any distributions on such Class A, Class R, Class M-1, Class M-2
and Class B-1 Certificates; and provided further, however, that in no event will
the Class B-2 Principal Distribution Amount with respect to any Distribution
Date exceed the Class B-2 Certificate Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance".
Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
-8-
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.
Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-3 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Pass-Through Rate: As of any Distribution Date on or before the
Initial Optional Termination Date, the lesser of (1) 6.4391% and (2) the
Available Funds Cap; and as of any Distribution Date after the Initial Optional
Termination Date, the lesser of (1) 6.9391% and (2) the Available Funds Cap.
Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class B-1 Certificate
Principal Balance and the Class B-2 Certificate Principal Balance have been
reduced to zero and a Trigger Event exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum of (A) the sum of the Class A Certificate
Principal Balance and the Class R Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date), (E) the Class B-2 Certificate
Principal Balance (after taking into account distributions of the Class B-2
Principal Distribution Amount on such Distribution Date) and (F) the Class B-3
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 79.60% of the aggregate Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount; provided, however, that on any Distribution Date
prior to the Stepdown Date on which the Class A Certificate Principal
-9-
Balance, the Class R Certificate Principal Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class B-1
Certificate Principal Balance and the Class B-2 Certificate Principal Balance
have been reduced to zero, the Class B-3 Principal Distribution Amount for such
Distribution Date will equal the lesser of (A) the outstanding Class B-3
Certificate Principal Balance and (B) 100% of the Principal Distribution Amount
remaining after any distributions on such Class A, Class R, Class M-1, Class
M-2, Class B-1 and Class B-2 Certificates; and provided further, however, that
in no event will the Class B-3 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-3 Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-4 Certificates.
Class B-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-4 Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-4 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.
Class B-4 Pass-Through Rate: As of any Distribution Date on or before the
Initial Optional Termination Date, the lesser of (1) 7.5000% and (2) the
Available Funds Cap; and as of any Distribution Date after the Initial Optional
Termination Date, the lesser of (1) 8.0000% and (2) the Available Funds Cap.
Class B-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date
-10-
if the Class A Certificate Principal Balance, the Class R Certificate Principal
Balance, the Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal Balance and the Class B-3 Certificate Principal Balance
have been reduced to zero and a Trigger Event exists, or as long as a Trigger
Event does not exist, the excess of (1) the sum of (A) the sum of the Class A
Certificate Principal Balance and the Class R Certificate Principal Balance
(after taking into account distributions of the Class A Principal Distribution
Amount on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance (after taking into account distributions of the Class M-1 Principal
Distribution Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal Balance (after taking into account distributions of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class B-1
Certificate Principal Balance (after taking into account distributions of the
Class B-1 Principal Distribution Amount on such Distribution Date), (E) the
Class B-2 Certificate Principal Balance (after taking into account distributions
of the Class B-2 Principal Distribution Amount on such Distribution Date), (F)
the Class B-3 Certificate Principal Balance (after taking into account
distributions of the Class B-3 Principal Distribution Amount on such
Distribution Date) and (G) the Class B-4 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 83.60% of
the aggregate Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount; provided,
however, that on any Distribution Date prior to the Stepdown Date on which the
Class A Certificate Principal Balance, the Class R Certificate Principal
Balance, the Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal Balance and the Class B-3 Certificate Principal Balance
have been reduced to zero, the Class B-4 Principal Distribution Amount for such
Distribution Date will equal the lesser of (A) the outstanding Class B-4
Certificate Principal Balance and (B) 100% of the Principal Distribution Amount
remaining after any distributions on such Class A, Class R, Class M-1, Class
M-2, Class B-1, Class B-2 and Class B-3 Certificates; and provided further,
however, that in no event will the Class B-4 Principal Distribution Amount with
respect to any Distribution Date exceed the Class B-4 Certificate Principal
Balance.
Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-5 Certificates.
Class B-5 Certificate: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-5 Certificates.
-11-
Class B-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-5 Pass-Through Rate on
the Class B-5 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-5 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-5 Pass-Through Rate for the related Accrual Period.
Class B-5 Pass-Through Rate: As of any Distribution Date on or before the
Initial Optional Termination Date, the lesser of (1) 7.5000% and (2) the
Available Funds Cap; and as of any Distribution Date after the Initial Optional
Termination Date, the lesser of (1) 8.000% and (2) the Available Funds Cap.
Class B-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class B-1 Certificate
Principal Balance, the Class B-2 Certificate Principal Balance, the Class B-3
Certificate Principal Balance and the Class B-4 Certificate Principal Balance
have been reduced to zero and a Trigger Event exists, or as long as a Trigger
Event does not exist, the excess of (1) the sum of (A) the sum of the Class A
Certificate Principal Balance and the Class R Certificate Principal Balance
(after taking into account distributions of the Class A Principal Distribution
Amount on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance (after taking into account distributions of the Class M-1 Principal
Distribution Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal Balance (after taking into account distributions of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class B-1
Certificate Principal Balance (after taking into account distributions of the
Class B-1 Principal Distribution Amount on such Distribution Date), (E) the
Class B-2 Certificate Principal Balance (after taking into account distributions
of the Class B-2 Principal Distribution Amount on such Distribution Date), (F)
the Class B-3 Certificate Principal Balance (after taking into account
distributions of the Class B-3 Principal Distribution Amount on such
Distribution Date), (G) the Class B-4 Certificate Principal Balance (after
taking into account distributions of the Class B-4 Principal Distribution Amount
on such Distribution Date) and (H) the Class B-5 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 87.50% of
the aggregate Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount; provided,
however, that on any Distribution Date prior to the Stepdown Date on which the
Class A Certificate Principal Balance, the Class R Certificate Principal
Balance, the Class M-1 Certificate Principal Balance, the Class M-2 Certificate
-12-
Principal Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal Balance, the Class B-3 Certificate Principal Balance and
the Class B-4 Certificate Principal Balance have been reduced to zero, the Class
B-5 Principal Distribution Amount for such Distribution Date will equal the
lesser of (A) the outstanding Class B-5 Certificate Principal Balance and (B)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class R, Class M-1, Class M-2, Class B-1, Class B-2, Class B-3 and
Class B-4 Certificates; and provided further, however, that in no event will the
Class B-5 Principal Distribution Amount with respect to any Distribution Date
exceed the Class B-5 Certificate Principal Balance.
Class B-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class C Certificates.
Class C Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class C Distributable Interest Rate on
a notional amount equal to the aggregate principal balance of the Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date, plus the
interest portion of any previous distributions on such Class that is recovered
as a voidable preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC Regular Interests (treating for purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker Classes as being capped at the
interest rate of its Related Certificates (as adjusted for the length of the
Accrual Period) and treating the Class LTX Interest as being capped at zero).
The averages described in the preceding sentence shall be weighted on the basis
of the respective principal balances of the Lower Tier REMIC Regular Interests
immediately prior to any date of determination.
Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.
-13-
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class LTA Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificates and an interest rate equal to the Net Rate.
Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower Tier
REMIC.
Class LTX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes and an interest
rate equal to the Net Rate.
Class M Certificates: The Class M-1 Certificates and Class M-2
Certificates.
-14-
Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class M-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.500% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.750% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 4.169% per
annum. As of any Distribution Date thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-1 Margin and (2) the Available Funds Cap for such Distribution
Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class R Certificate Principal Balance has been reduced to zero and a Trigger
Event exists, or as long as a Trigger Event does not exist, the excess of (1)
the sum of (A) the sum of the Class A Certificate Principal Balance and the
Class R Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date) and (B)
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 49.50% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the aggregate Stated Principal Balances for the
Mortgage Loans as of the end of the immediately preceding Due Period over the
Minimum Required Overcollateralization Amount; provided, however, that on any
Distribution Date prior to the Stepdown Date on which the Class A Certificate
Principal Balance and the Class R Certificate
-15-
Principal Balance has been reduced to zero, the Class M-1 Principal Distribution
Amount will equal the lesser of (A) the outstanding Class M-1 Certificate
Principal Balance and (B) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A and Class R Certificates; and, provided,
further that in no event will the Class M-1 Principal Distribution Amount with
respect to any Distribution Date exceed the Class M-1 Certificate Principal
Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class M-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.650% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.975% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 4.319% per
annum. As of any Distribution Date thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-2 Margin and (2) the Available Funds Cap for such Distribution
Date.
-16-
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if each of the Class A Certificate Principal Balance,
the Class R Certificate Principal Balance and the Class M-1 Certificate
Principal Balance has been reduced to zero and a Trigger Event exists, or as
long as a Trigger Event does not exist, the excess of (1) the sum of (A) the sum
of the Class A Certificate Principal Balance and the Class R Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 64.60% of the aggregate Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances of the Mortgage Loans
as of the end of the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount; provided, however, that on any Distribution Date
prior to the Stepdown Date on which the Class A Certificate Principal Balance,
the Class R Certificate Principal Balance and the Class M-1 Certificate
Principal Balance have been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (A) the outstanding Class M-2
Certificate Principal Balance and (B) 100% of the Principal Distribution Amount
remaining after any distributions on such Class A, Class R and Class M-1
Certificates; provided, further, however, in no event will the Class M-2
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a "Class P Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class R Certificate: Any Certificate designated as a "Class R Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class R Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class R Certificate.
Class R Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class R Pass-Through Rate on the Class
R Certificate Principal Balance as of such Distribution Date plus the Current
Interest and Interest Carry Forward Amount portions of any previous
distributions on such Class that are recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class R Certificate. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.
-▇▇-
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: As of any Distribution Date, the sum
of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and (2)
interest on such excess (to the extent permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the Initial
Optional Termination Date, 0.260% per annum and, as of any Distribution Date
after the Initial Optional Termination Date, 0.520% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 3.929% per
annum. As of any Distribution Date thereafter, the lesser of (1) One-Month LIBOR
plus the Class R Margin and (2) the Available Funds Cap for such Distribution
Date.
Closing Date: August 30, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Wilshire
Credit Corporation, as servicer for Deutsche Bank, National Trust Company, as
trustee, in trust for registered holders of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-NCA". Funds in the
Collection Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the sum of (1) the original principal balance of the
related Mortgage Loan and (2) any outstanding principal balances of Mortgage
Loans the liens on which are senior to the lien on such related Mortgage Loan
(such sum calculated at the date of origination of such related Mortgage Loan)
and the denominator of which is the lesser of (A) the Appraised Value of the
related Mortgaged Property and (B) the sales price of the related Mortgaged
Property at time of origination.
Compensating Interest: For any Distribution Date and all Principal
Prepayments in full in respect of a Mortgage Loan that are received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by the
Servicer in an amount not to exceed the product of (a) one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, equal to the amount of interest at the Net Mortgage Rate for
that Mortgage Loan from the date of prepayment through the 30th day of such
preceding calendar month.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of
execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Trust Administration - ML05CA.
-18-
Current Interest: Any of the Class A Current Interest, the Class R Current
Interest, the Class M-1 Current Interest, the Class M-2 Current Interest, the
Class B-1 Current Interest, the Class B-2 Current Interest, the Class B-3
Current Interest, the Class B-4 Current Interest, the Class B-5 Current Interest
and the Class C Current Interest.
Cut-off Date: August 1, 2005.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
DBRS: Dominion Bond Rating Service, Inc. or any successor in interest.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
immediately succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Principal Balance of this Certificate."
Depositor: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the initial Depository.
-19-
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in September 2005.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Eligible Account: An account that is (1) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (2) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P, R-1 by DBRS or F1 by Fitch, or (iii) an account or accounts
the deposits in which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable to each Rating Agency without reduction or withdrawal of
the rating of any Class of Certificates, as evidenced in writing, by a
depository institution in which such accounts are insured by the FDIC (to the
limit established by the FDIC), the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
and acceptable to the Trustee and each Rating Agency, the Certificateholders
have a claim with respect to the funds in such account and a perfected first
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (v) maintained at an eligible institution whose commercial paper,
short-term debt or other short-term deposits
-20-
are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi) maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by S&P or Prime-1 by Moody's at the time any
deposits are held on deposit therein, or (vii) otherwise acceptable to each
Rating Agency, as evidenced by a letter from each Rating Agency to the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted by the United States Department of
Labor (or any other applicable underwriter's exemption granted by the United
States Department of Labor), except, in relevant part, for the requirement that
the certificates have received a rating at the time of acquisition that is in
one of the three (or four, in the case of a "designated transaction") highest
generic rating categories by at least one of S&P, Moody's or Fitch.
ERISA Restricted Certificates: The Class C Certificates, Class P
Certificates, Class R Certificate, Class B-5 Certificates and any other
Certificate, unless the acquisition and holding of such other Certificate is
covered by and exempt under an underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for the Class A Certificates,
Class R Certificate, Class M-1 Certificates, Class M-2 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates, Class B-4
Certificates and Class B-5 Certificates, the excess, if any, of (1) the amount
of interest such Class of Certificates is entitled to receive on such
Distribution Date at its Pass-Through Rate over (2) the amount of interest such
Class of Certificates would have been entitled to receive on such Distribution
Date had the Pass-Through Rate for such Class been the REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i) the Aggregate
Certificate Principal Balance immediately preceding such Distribution Date
reduced by the Principal Funds with respect to such Distribution Date and (ii)
$15,296,828 over (B) the Pool Stated Principal Balance of the
-21-
Mortgage Loans as of such Distribution Date and (2) on and after the Stepdown
Date, (A) the sum of (x) the Aggregate Certificate Principal Balance immediately
preceding such Distribution Date, reduced by the Principal Funds with respect to
such Distribution Date and (y) the greater of (a) 12.50% of the Pool Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the Pool Stated Principal Balance of the
Mortgage Loans as of such Distribution Date; provided, however, that if on any
Distribution Date a Trigger Event is in effect, the Extra Principal Distribution
Amount will not be reduced to the applicable percentage of the then-current Pool
Stated Principal Balance of the Mortgage Loans (and will remain fixed at the
applicable percentage of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Due Date immediately prior to the Trigger Event) until the next
Distribution Date on which the Trigger Event is not in effect.
▇▇▇▇▇▇ ▇▇▇: A federally chartered and privately owned corporation organized
and existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fitch: Fitch, Inc., or any successor in interest.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a Class of the Class A, Class R,
Class M or Class B Certificates is based upon the Available Funds Cap, the
excess of (x) the amount of interest that such Class would have been entitled to
receive on such Distribution Date had the Pass-Through Rate for that Class not
been calculated based on the Available Funds Cap over (y) the amount of interest
payable on such Class on such Distribution Date based on the Available Funds
Cap, together with (i) the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate for such Class, without giving effect to the Available Funds
Cap) and (ii) any amount previously distributed with respect to Floating Rate
Certificate Carryover for such Class that is recovered as a voidable preference
by a trustee in bankruptcy.
▇▇▇▇▇▇▇ Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Initial Certificate Principal Balance: With respect to any Class A, Class
M, Class B, Class C or Class R Certificate, the Certificate Principal Balance of
such Certificate or any predecessor Certificate on the Closing Date as set forth
in Section 5.01 hereof.
Initial Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
Institutional Accredited Investors: Institutions that are "accredited
investors" within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated
pursuant to Regulation D.
-22-
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant
to any Insurance Policy or any other insurance policy covering a Mortgage Loan,
to the extent such proceeds are payable to the mortgagee under the Mortgage, the
Servicer or the Trustee under the deed of trust and are not applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, in each case other than any amount
included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: Any of the Class A Interest Carry Forward
Amount, the Class R Interest Carry Forward Amount, the Class M-1 Interest Carry
Forward Amount, the Class M-2 Interest Carry Forward Amount, the Class B-1
Interest Carry Forward Amount, the Class B-2 Interest Carry Forward Amount, the
Class B-3 Interest Carry Forward Amount, the Class B-4 Interest Carry Forward
Amount, the Class B-5 Interest Carry Forward Amount or the Class C Interest
Carry Forward Amount, as the case may be.
Interest Determination Date: With respect to the Class A, Class M and Class
R Certificates, the second LIBOR Business Day preceding the commencement of such
Accrual Period.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee, (2) all Advances
relating to interest with respect to the Mortgage Loans, (3) all Compensating
Interest with respect to the Mortgage Loans, (4) Liquidation Proceeds with
respect to the Mortgage Loans (to the extent such Liquidation Proceeds relate to
interest) collected during the related Prepayment Period, (5) all proceeds of
any purchase pursuant to Section 2.02 or 2.03 during the related Prepayment
Period or pursuant to Section 9.01 not later than the related Determination Date
(to the extent that such proceeds relate to interest) less the Servicing Fee and
(6) all Prepayment Charges received with respect to the Mortgage Loans during
the related Prepayment Period, less (A) all Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable to the Servicer and the Trustee
pursuant to this Agreement.
Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and conducting transactions in foreign
currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the
-23-
related Mortgage and any security agreements and as to which the Servicer has
certified (in accordance with Section 3.12) in the related Prepayment Period
that it has received all amounts it expects to receive in connection with such
liquidation or (b) is delinquent 180 days or longer, as to which the Servicer
has certified in a certificate of an officer of the Servicer delivered to the
Trustee that it does not believe that there is a reasonable likelihood that any
further net proceeds will be received or recovered with respect to such Mortgage
Loan.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of Mortgage Loans, whether
through trustee's sale, foreclosure sale, sale by the Servicer pursuant to this
Agreement or otherwise or amounts received in connection with any condemnation
or partial release of a Mortgaged Property and any other proceeds received in
connection with an REO Property, less the sum of related unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses related to such
Mortgage Loan.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA Interest, the Class LTM-1
Interest, the Class LTM-2 Interest, the Class LTB-1 Interest, the Class LTB-2
Interest, the Class LTB-3 Interest, the Class LTB-4 Interest, the Class LTB-5
Interest, the Class LTX Interest and the Class LTR Interest.
Lower Tier REMIC Marker Classes: Each of the classes of Lower Tier REMIC
Regular Interests other than the Class LTX Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
MIN: The loan number for any MERS Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee, solely
as nominee for the originator of such Mortgage Loan and its successors and
assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
-24-
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a second lien or a second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund and from time to
time subject to this Agreement, attached hereto as Exhibit B, setting forth the
following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Combined Loan-to-Value Ratio
(x) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) location of the related Mortgaged Property;
-25-
(xiii) a code indicating whether a Prepayment Charge is applicable
and, if so,
(A) the period during which such Prepayment Charge is in effect;
(B) the amount of such Prepayment Charge;
(C) any limitations or other conditions on the enforceability of
such Prepayment Charge; and
(D) any other information pertaining to the Prepayment Charge
specified in the related Mortgage Note; and
(xiv) the Credit Score and date obtained.
Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan and all
amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the then current Mortgage Rate less the Servicing Fee Rate.
Net Rate: With respect to any interest in any REMIC and any Distribution
Date, the product of (x) the weighted average Net Mortgage Rate for the Mortgage
Loans calculated based on the respective Net Mortgage Rates and the Stated
Principal Balances of such Mortgage Loans as of the preceding Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off Date) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the related Accrual Period for such interest.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise related to the Mortgage Loans.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise related to the Mortgage
Loans.
-26-
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A, Class M-1, Class M-2, Class B-1, Class
B-2, Class B-3, Class B-4 and Class R Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, or the
Servicer (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with a particular subject) or (2), if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor, the Servicer or the Trustee, as the case may be, as required by
this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of (a) the
offered rates for one-month United States dollar deposits, as such rates appear
on Telerate page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date or (b) if such rate does not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference Banks for
one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the nearest
whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the higher of (i) One-Month LIBOR
as determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, or the Servicer reasonably acceptable to each addressee of such
opinion; provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor or the Servicer (2) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of any
such party, and (3) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the trust hereunder pursuant to
clause (a) of Section 9.01 hereof.
-27-
Optional Termination Amount: The repurchase price received by the Trustee
in connection with any repurchase of all of the Mortgage Loans pursuant to
Section 9.01.
Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee (including any
amounts incurred by the Trustee in connection with conducting the Auction) or
the Servicer and any unpaid or unreimbursed Servicing Fees, Advances and
Servicing Advances, (C) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to any of
the Mortgage Loans of any predatory or abusive lending law and (D) in the event
an Auction has been conducted, all reasonable fees and expenses incurred by the
Trustee to conduct such Auction.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to the Class A Certificates, the Class A
Pass-Through Rate; with respect to the Class M-1 Certificates, the Class M-1
Pass-Through Rate; with respect to the Class M-2 Certificates, the Class M-2
Pass-Through Rate; with respect to the Class B-1 Certificates, the Class B-1
Pass-Through Rate; with respect to the Class B-2 Certificates, the Class B-2
Pass-Through Rate; with respect to the Class B-3 Certificates, the Class B-3
Pass-Through Rate; with respect to the Class B-4 Certificates, the Class B-4
Pass-Through Rate; with respect to the Class B-5 Certificates, the Class B-5
Pass-Through Rate; and with respect to the Class R Certificate, the Class R
Pass-Through Rate.
-28-
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal
to the Certificate Principal Balance of such Class divided by the
aggregate Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of the
related Class shall equal the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of such Class; except that in
the case of any Class P Certificates, the Percentage Interest
with respect to such Certificate shown on the face of such
Certificate.
Permitted Activities: The primary activities of the trust created pursuant
to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor and other
assets of the Trust Fund, including any credit enhancement and
passive derivative financial instruments that pertain to
beneficial interests issued or sold to parties other than the
Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) receiving collections on the Mortgage Loans and making payments
on such Certificates and interests in accordance with the terms
of this Agreement; and
(iv) engaging in other activities that are necessary or incidental to
accomplish these limited purposes, which activities cannot be
contrary to the status of the Trust Fund as a qualified special
purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial or
finance company paper issued by the Depositor or any of its
Affiliates, which is then receiving the highest commercial or
finance company paper rating of each such Rating Agency;
-29-
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial
paper and/or long term unsecured debt obligations of such
depository institution or trust company are then rated one of the
two highest long-term and the highest short-term ratings of each
such Rating Agency for such securities;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in the two highest long-term
or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, incorporated under the laws of the
United States or any state thereof which, at the time of such
investment, have one of the two highest long term ratings of each
Rating Agency;
(ix) interests in any money market fund (including those managed or
advised by the Trustee or their respective Affiliates) which at
the date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund has the
highest applicable long term rating by each Rating Agency rating
such fund; and
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, which on the date of
acquisition has been rated by each such Rating Agency in their
respective highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
-30-
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of the any REMIC provided
for herein as a REMIC under the Code or result in imposition of a tax on the
Trust Fund or any REMIC provided for herein and (II) each such investment must
be a "permitted investment" within the meaning of Section 860G(a)(5) of the
Code. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to a
Certificate, (iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or resident of
the United States, a corporation or partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in or under the laws of the United States or any State
thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI or applicable successor form. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
-31-
Prepayment Assumption: A rate of prepayment, as described in the Prospectus
Supplement in the definition of "Modeling Assumptions," relating to the Offered
Certificates or as described in the Private Placement Memorandum relating to the
Class B-5 Certificates.
Prepayment Charges: Any prepayment premium or charge payable by a Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan pursuant to the
terms of the related Mortgage Note or Mortgage, as applicable.
Prepayment Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the calendar month in which such Servicer Remittance Date occurs and the
last day of the related Prepayment Period, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Servicer Remittance Date occurs and ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a Principal
Prepayment in full on a Mortgage Loan received during the period from and
including the first day to and including the 14th day of the month of such
Distribution Date), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period beginning with
the opening of business on the 15th day of the calendar month preceding the
month in which such Distribution Date occurs (or in the case of the first
Distribution Date, beginning with the opening of business on the Cut-off Date)
and ending on the close of business on the 14th day of the month in which such
Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) the scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) prepayments
collected in the related Prepayment Period, (3) the Stated Principal Balance of
each Mortgage Loan that was purchased by the Depositor or the Servicer during
the related Prepayment Period or, in the case of a purchase pursuant to Section
9.01, on the Business Day prior to such Distribution Date, (4) the amount, if
any, by which the aggregate unpaid principal balance of any Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related Deleted Mortgage
Loans delivered by the Seller in connection with a substitution of a Mortgage
Loan pursuant to Section 2.03(c), (5) all Liquidation Proceeds
-32-
collected during the related Prepayment Period (to the extent such Liquidation
Proceeds related to principal), (6) all Subsequent Recoveries received during
the related Due Period and (7) all other collections and recoveries in respect
of principal during the related Prepayment Period less (A) all Non-Recoverable
Advances relating to principal with respect to the Mortgage Loans and (B) other
amounts reimbursable to the Servicer and the Trustee pursuant to this Agreement
allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03 and 9.01 hereof) that is
received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.
Private Placement Memorandum: The Private Placement Memorandum dated August
30, 2005, relating to the private placement of the Class B-5 Certificates.
Prospectus Supplement: The Prospectus Supplement dated August 26, 2005
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the applicable Transferor pursuant to Section 2.02
or 2.03 hereof, an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Mortgage Loan as of the date of such purchase together with any
unreimbursed Servicing Advances, (ii) accrued interest thereon at the applicable
Mortgage Rate from (a) the date through which interest was last paid by the
Mortgagor to (b) the Due Date in the month in which the Purchase Price is to be
distributed to Certificateholders and (iii) any unreimbursed costs, penalties
and/or damages incurred by the Trust Fund in connection with any violation
relating to such Mortgage Loan of any predatory or abusive lending law.
QIB: A "qualified institutional buyer" within the meaning of Rule 144A.
Rating Agency: Any of Fitch, DBRS or ▇▇▇▇▇'▇. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) with respect to a Mortgage
Loan which is not a Liquidated Loan, any amount of principal that the Mortgagor
is no longer legally required to pay (except for the extinguishment of debt that
results from the exercise of remedies due to default by the Mortgagor).
-33-
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., ▇▇▇▇▇ Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Trustee (in consultation with the Depositor) which are
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, England, (ii) whose
quotations appear on the Reuters Screen LIBO Page on the relevant Interest
Determination Date and (iii) which have been designated as such by the Trustee.
Regular Certificate: Any one of the Class A, Class M and Class B
Certificates.
Regulation S: Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.
Regulation S Book-Entry Certificates: Certificates sold in offshore
transactions in reliance on Regulation S in the form of one or more permanent
global Certificates in definitive, fully registered form without interest
coupons, which shall be deposited on behalf of the subscribers for such
Certificates represented thereby with the Trustee, as custodian for DTC and
registered in the name of a nominee of DTC.
Related Certificates: With respect to the Class LTA Interest, the Class A
and Class R Certificates. With respect to the Class LTB-1 Interest, the Class
B-1 Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates. With respect to the Class LTB-4 Interest, the Class B-4
Certificates. With respect to the Class LTB-5 Interest, the Class B-5
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires, all of) the Lower Tier REMIC and the
Upper Tier REMIC.
REMIC Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing "Available Funds Cap" in such definition
with "Net Rate."
-34-
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.
REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 2.07 and (ii) the Uncertificated Class C Interest.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller for a
Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Mortgage Loan, have a Mortgage Rate not less than or no more
than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan;
(3) have a similar or higher FICO score or credit grade than that of the Deleted
Mortgage Loan; (4) have a Combined Loan-to-Value Ratio no higher than that of
the Deleted Mortgage Loan; (5) have a remaining term to maturity no greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; (6)
provide for a Prepayment Charge on terms substantially similar to those of the
Prepayment Charge, if any, of the Deleted Mortgage Loan; (7) have the same lien
priority as the Deleted Mortgage Loan; (8) constitute the same occupancy type as
the Deleted Mortgage Loan; and (9) comply with each representation and warranty
set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee, substantially in the form of Exhibit I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this Agreement.
Required Loss Percentage: For any Distribution Date, the applicable
percentage for such Distribution Date set forth in the following table:
DISTRIBUTION DATE OCCURRING IN REQUIRED LOSS PERCENTAGE
------------------------------ ------------------------
September 2008 - August 2009 7.00% with respect to September 2008,
plus an additional 1/12th of 2.50% for
each month thereafter
September 2009 - August 2010 9.50% with respect to September 2009,
plus an additional 1/12th of 1.75% for
each month thereafter
-35-
September 2010 - August 2011 11.25% with respect to September 2010,
plus an additional 1/12th of 0.75% for
each month thereafter
September 2011 - August 2012 12.00%
Required Percentage: As of any Distribution Date on or after the Stepdown
Date, the quotient of (1) the excess of (A) the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date, over (B) the
Certificate Principal Balance of the most senior Class of Certificates
outstanding, prior to giving effect to distributions to be made on such
Distribution Date and (2) the Stated Principal Balance of the Mortgage Loans as
of such Distribution Date.
Reserve Interest Rate: With respect to any Interest Determination Date, the
rate per annum that the Trustee determines to be (1) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the
one-month United States dollar lending rates which New York City banks selected
by the Trustee (in consultation with the Depositor) are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (2) in the event that the Trustee can determine
no such arithmetic mean, the lowest one-month United States dollar lending rate
which New York City banks selected by the Trustee (in consultation with the
Depositor) are quoting on such Interest Determination Date to leading European
banks.
Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions to the
extent attributable to an interest rate in excess of the Net Rate.
Responsible Officer: When used with respect to the Servicer, any officer of
the Servicer with direct responsibility for the administration of this Agreement
and also means any other officer to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject. When used with respect to the Trustee, any Managing
Director, any Director, Vice President, any Assistant Vice President, any
Associate, any Assistant Secretary, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers who at such time shall be officers to whom, with respect to
a particular matter, the matter is referred because of the officer's knowledge
of and familiarity with the particular subject and who has direct responsibility
for the administration of this Agreement.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Book-Entry Certificates: Certificates initially offered and sold
in reliance on the exemption from registration under Rule 144A in the form of
one or more permanent global Certificates in definitive, fully registered form
without interest coupons, which shall be deposited
-36-
on behalf of the subscribers for such Certificates represented thereby with the
Trustee, as custodian for DTC and registered in the name of a nominee of DTC.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as of
June 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated pursuant to
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (as such may be amended from time to time).
Securities Act: The Securities Act of 1933, as amended.
Seller: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc., a Delaware corporation, or its
successors in interest.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date, the later
of (i) two Business Days after the 15th day of the month in which such
Distribution Date occurs and (ii) the 18th day (or if such day is not a Business
Day, the next preceding Business Day) of the month in which such Distribution
Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, inspection, restoration and protection of a Mortgaged Property,
including without limitation advances in respect of real estate taxes and
assessments, (2) any collection, enforcement or judicial proceedings, including
without limitation foreclosures, collections and liquidations, (3) the
conservation, management, sale and liquidation of any REO Property, (4)
executing and recording instruments of satisfaction, deeds of reconveyance,
substitutions of trustees on deeds of trust or Assignments of Mortgage to the
extent not otherwise recovered from the related Mortgagors or payable under this
Agreement, (5) correcting errors of prior servicers; costs and expenses charged
to the Servicer by the Trustee; tax tracking; title research; flood
certifications; lender paid mortgage insurance, (6) obtaining or correcting any
legal documentation required to be included in the Mortgage Files and reasonably
necessary for the Servicer to perform its obligations under this Agreement and
(7) compliance with the obligations under Sections 3.01 and 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that
-37-
accompanies a Principal Prepayment in full made by the Mortgagor, interest at
the Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan as
of the preceding Distribution Date for the period covered by such payment of
interest.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
facsimile signature appear on a list of servicing officers furnished to the
Trustee by the Servicer on the Closing Date pursuant to this Agreement, as such
lists may from time to time be amended.
SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x) due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the Servicer as of the close of
business on the Determination Date related to such Distribution Date or with
respect to which Advances were made on the Servicer Advance Date prior to such
Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
Stepdown Date: The later to occur of (1) the Distribution Date in September
2008 or (2) the first Distribution Date on which (A) the sum of the Class A
Certificate Principal Balance and the Class R Certificate Principal Balance
(reduced by the Principal Funds with respect to such Distribution Date) is less
than or equal to (B) 28.20% of the Stated Principal Balances of the Mortgage
Loans as of such Distribution Date.
Subordinated Certificates: The Class M and Class B Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of amounts
to be reimbursed to the Servicer related to such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
-38-
Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Transfer Agreement: The Master Mortgage Loan Purchase and Interim Servicing
Agreement, dated as of August 1, 2004, by and between the Seller and the
Transferors.
Transferor: Each of NC Capital Corporation and New Century Mortgage
Corporation.
Trigger Event: The situation that exists with respect to any Distribution
Date on and after the Stepdown Date, if (a) the quotient of (1) the aggregate
Stated Principal Balance of all Mortgage Loans 60 or more days delinquent,
measured on a rolling three-month basis (including Mortgage Loans in
foreclosure, REO Properties and Mortgage Loans with respect to which the
applicable mortgagor is in bankruptcy) and (2) the Stated Principal Balance of
all of the Mortgage Loans as of the preceding Servicer Remittance Date, equals
or exceeds the product of (i) 10% and (ii) the Required Percentage or (b) the
quotient (expressed as a percentage) of (1) the aggregate Realized Losses
incurred from the Cut-off Date through the last day of the calendar month
preceding such Distribution Date and (2) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date exceeds the Required Loss Percentage.
Trust Fund: The corpus of the trust (the "▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors
Trust, Series 2005-NCA") created hereunder consisting of (i) the Mortgage Loans
and all interest and principal received on or with respect thereto on and after
the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof, exclusive of interest not required to be deposited in
the Collection Account; (ii) the Collection Account and the Certificate Account
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; and (v)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.
Trustee: Deutsche Bank National Trust Company, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Uncertificated Class C Interest: An uncertificated interest having (i) the
same rights to payments as the Class C Certificates, and (ii) the rights to the
payments treated as distributed to the Class C Certificates under Section
2.07(d), provided, however, that such interest shall have no obligation to make
any payments treated as paid by the Class C Certificates pursuant to interest
rate cap agreements under Section 2.07(d).
-39-
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in gross income for United States tax
purposes regardless of its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Persons.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized Loss Amount,
Class B-4 Realized Loss Amount, Class B-5 Realized Loss Amount and Class C
Unpaid Realized Loss Amount, collectively.
Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M-1, Class M-2,
Class R, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates,
with the allocation among such Certificates to be in proportion to the Class
Certificate Principal Balance of each Class relative to the Class Certificate
Principal Balance of all other Classes and (2) each Class of the Class C and
Class P will be allocated 1% of the Voting Rights Certificates. Voting Rights
will be allocated among the Certificates of each such Class in accordance with
their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
It is agreed and understood by the Depositor, the Servicer and the Trustee
that it is not intended that any Mortgage Loan be included in the Trust that is,
without limitation, a "High-
-40-
Cost Home Loans" as defined by the Home Ownership and Equity Protection Act of
1994 or any other applicable anti-predatory lending laws, including but not
limited to (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004;
(iii) a "High-Cost Home Mortgage Loan" as defined in the Massachusetts Predatory
Home Loan Practices Act effective November 7, 2004; (iv) a "High-Cost Home Loan"
as defined by the Indiana High Cost Home Loan Law effective January 1, 2005 or
(v) a "High-Cost Home Loan" as defined by the Illinois High Risk Home Loan Act
effective January 1, 2004.
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with, the Trustee, the following documents or instruments with
respect to each Mortgage Loan:
(A) The Original Mortgage Note endorsed in blank or, "Pay to the order
of Deutsche Bank National Trust Company, as trustee, without recourse"
together with all riders thereto. The Mortgage Note shall include all
intervening endorsements showing a complete chain of the title from the
Transferor to [_______________].
(B) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage together with all riders thereto,
with evidence of recording thereon, or, if the original Mortgage has not
yet been returned from the recording office, a copy of the original
Mortgage together with all riders thereto certified to be a true copy of
the original of the Mortgage that has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged
Property is located and in the case of each MERS Loan, the original
Mortgage together with all riders thereto, noting the presence of the MIN
of the Loan and either language indicating that the Mortgage Loan is a MOM
Loan or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage in blank or, to "Deutsche Bank
National Trust Company, as trustee."
(D) The original policy of title insurance (or a preliminary title
report, commitment or binder if the original title insurance policy has not
been received from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located.
(F) Originals of all assumption and modification agreements, if any.
-41-
(G) If in connection with any Mortgage Loan, the Depositor cannot
deliver the Mortgage, Assignments of Mortgage or assumption, consolidation
or modification, as the case may be, with evidence of recording thereon, if
applicable, concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Trustee written
notice stating that such Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered to the appropriate
public recording office for recordation. Thereafter, the Depositor shall
deliver or cause to be delivered to the Trustee such Mortgage, Assignments
of Mortgage or assumption, consolidation or modification, as the case may
be, with evidence of recording indicated thereon, if applicable, upon
receipt thereof from the public recording office. To the extent any
required endorsement is not contained on a Mortgage Note or an Assignment
of Mortgage, the Depositor shall make or cause to be made such endorsement.
(H) With respect to any Mortgage Loan, none of the Depositor, the
Servicer or the Trustee shall be obligated to cause to be recorded the
Assignment of Mortgage referred to in this Section 2.01. In the event an
Assignment of Mortgage is not recorded, the Servicer shall have no
liability for its failure to receive and act on notices related to such
Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor, nor the Servicer shall take any
action inconsistent with such ownership and shall not claim any ownership
interest therein. The Depositor and the Servicer shall respond to any third
party inquiries with respect to ownership of the Mortgage Loans by stating that
such ownership is held by the Trustee on behalf of the Certificateholders.
Mortgage documents relating to the Mortgage Loans shall be held in trust by the
Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's possession of the contents of each Mortgage File so retained is for
the sole purpose of servicing the related Mortgage Loan, and such retention and
possession by the Servicer, is in a custodial capacity only. The Depositor
agrees to take no action inconsistent with the Trustee's ownership of the
Mortgage Loans, to promptly indicate to all inquiring parties that the Mortgage
Loans have been sold and to claim no ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge. If the conveyance
of the Mortgage Loans from the Depositor to the Trustee is characterized as a
pledge, it is the intention of this Agreement that this Agreement shall
constitute a security agreement under applicable law, and that the Depositor
shall be deemed to have granted to the Trustee a first priority security
interest in all of the
-42-
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreements described therein, and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Seller, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto.
The parties hereto acknowledge and agree that it is the policy and
intention of the Trust Fund to acquire only Mortgage Loans meeting the
requirements set forth in this Agreement, including without limitation, the
representations and warranties set forth in the Sale Agreement.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
Except as set forth in the exception report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it in trust for the use and benefit of all present
and future Certificateholders. The Depositor will cause the Seller to repurchase
any Mortgage Loan to which a material exception was taken in the Exception
Report unless such exception is cured to the satisfaction of the Trustee within
45 Business Days of the Closing Date.
The Trustee agrees, for the benefit of Certificateholders, to review each
Mortgage File delivered to it within 60 days after the Closing Date to ascertain
and to certify, within 70 days of the Closing Date, to the Depositor and the
Servicer that all documents required by Section 2.01 (A)-(B), (C) (if
applicable), and (D)-(E), and the documents if actually received by it, under
Section 2.01(F), have been executed and received, and that such documents relate
to the Mortgage Loans identified in Exhibit B-1 that have been conveyed to it.
The Trustee shall have no obligation to verify whether the documents under
Section 2.01(F) exist. If the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective (that is,
mutilated, damaged, defaced or unexecuted) in any material respect, the Trustee
shall promptly (and in any event within no more than five Business Days) after
such finding so notify
-43-
the Servicer, the Seller and the Depositor. In addition, the Trustee shall also
notify the Servicer, the Seller and the Depositor if the original Mortgage with
evidence of recording thereon with respect to a Mortgage Loan is not received
within 70 days of the Closing Date; if it has not been received because of a
delay caused by the public recording office where such Mortgage has been
delivered for recordation, the Depositor shall deliver or cause to be delivered
to the Trustee written notice stating that such Mortgage has been delivered to
the appropriate public recording office for recordation and thereafter the
Depositor shall deliver or cause to be delivered such Mortgage with evidence of
recording thereon upon receipt thereof from the public recording office. The
Trustee shall request that the Seller correct or cure such omission, defect or
other irregularity, or substitute a Mortgage Loan pursuant to the provisions of
Section 2.03(c), within 90 days from the date the Seller was notified of such
omission or defect and, if the Seller does not correct or cure such omission or
defect within such period, that the Seller purchase such Mortgage Loan from the
Trust Fund within 90 days from the date the Trustee notified the Seller of such
omission, defect or other irregularity at the Purchase Price of such Mortgage
Loan. The Purchase Price for any Mortgage Loan purchased pursuant to this
Section 2.02 shall be paid to the Servicer and deposited by the Servicer in the
Certificate Account or Collection Account, as appropriate, promptly upon
receipt, and the Trustee, upon receipt of a Request for Release, shall promptly
release to the Seller the related Mortgage File and shall execute and deliver
such instruments of transfer or assignment, without recourse, as shall be
requested by the Seller and necessary to vest in the Seller or its designee, as
the case may be, any Mortgage Loan released pursuant hereto, and the Trustee
shall have no further responsibility with regard to such Mortgage Loan. It is
understood and agreed that the obligation of the Seller to purchase, cure or
substitute any Mortgage Loan as to which a material defect in or omission of a
constituent document exists shall constitute the sole remedy respecting such
defect or omission available to the Trustee on behalf of Certificateholders. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor or the Trustee pursuant to the Sale Agreement,
Transfer Agreement or any Bring Down Letter. The Trustee shall be under no duty
or obligation to inspect, review and examine such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable,
recordable, duly authorized, sufficient, legal, valid or appropriate to the
represented purpose, or that they have actually been recorded, or that they are
other than what they purport to be on their face. The Servicer and the Trustee
shall keep confidential the name of each Mortgagor except as required by this
Agreement and the Servicer and the Trustee shall not solicit any such Mortgagor
for the purpose of refinancing the related Mortgage Loan; notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or becomes publicly
known, or information obtained by the Trustee or the Servicer from sources other
than the other parties hereto, (ii) disclosure of any and all information (A) if
required to do so by any applicable law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee any aspects of the business of the Trustee, the Servicer or that of any
affiliate, (C) pursuant to any subpoena, civil investigation demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which the Trustee or the Servicer or any affiliate or an officer, director,
employer or shareholder thereof is a party or (D) to any affiliate, independent
or internal auditor, agent, employee or attorney of the Trustee or the Servicer
having a need to know the same, provided that the Trustee or the Servicer, as
applicable, advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Depositor.
-44-
Within 70 days of the Closing Date, the Trustee shall deliver to the
Depositor and the Servicer the Certification, substantially in the form of
Exhibit D attached hereto, evidencing the completeness of the Mortgage Files,
with any exceptions noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.
(a) The Depositor hereby represents and warrants to the Servicer and
the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement and the Sale
Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and the Sale Agreement and has
duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the Sale
Agreement; and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject, as
to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and the Sale Agreement, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Depositor and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it
may be bound or (C) constitute a material violation of any statute, order
or regulation applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Depositor; and the Depositor is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or meet
any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and the Sale Agreement or the
-45-
ability of the Depositor to perform its obligations under this Agreement
and the Sale Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement and the Sale Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each Mortgage
Loan as of the Closing Date, and following the transfer of the Mortgage
Loans to it by the Seller, the Depositor had good title to the Mortgage
Loans and the Mortgage Notes were subject to no offsets, claims, liens,
mortgage, pledge, charge, security interest, defenses or counterclaims.
(b) The representations and warranties of each Transferor with respect
to the related Mortgage Loans in the applicable Transfer Agreement, which have
been assigned to the Trustee hereunder, were made as of the date specified in
the applicable Transfer Agreement and brought forward to the Closing Date
pursuant to the Bring Down Letter. The representations and warranties of each
Transferor with respect to the Mortgage Loans contained in the Bring Down Letter
were made as of the Closing Date. The representations and warranties of the
Seller with respect to the Mortgage Loans contained in the Sale Agreement were
made as of the Closing Date. To the extent that any fact, condition or event
with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of the applicable Transferor under the applicable
Transfer Agreement and (ii) a representation or warranty of the Seller under the
Sale Agreement, the obligations of the Seller under the Sale Agreement shall be
enforced against the Transferor or the Seller, as applicable, as set forth in
the Sale Agreement. The Trustee acknowledges that the Seller shall have no
obligation or liability with respect to any breach of a representation or
warranty made by it with respect to the Mortgage Loans, except as otherwise set
forth in the Sale Agreement, if the fact, condition or event constituting such
breach also constitutes a breach of a representation or warranty made by the
Transferors in the Transfer Agreement, without regard to whether the Transferors
fulfill their contractual obligations in respect of such representation or
warranty. The Trustee also acknowledges that the Seller shall have no obligation
or liability with respect to any breach of a representation or warranty made
solely by the Transferors with respect to the Mortgage Loans, without regard to
whether the Transferors fulfill their contractual obligations in respect of such
representation or warranty. The Trustee further acknowledges that the Depositor
shall have no obligation or liability with respect to any breach of any
representation or warranty with respect to the Mortgage Loans (except as set
forth in Section 2.03(a)(v)) under any circumstances.
In addition to the representations and warranties of the Transferors in the
Transfer Agreement that were brought forward to the Closing Date pursuant to the
Bring Down Letter, with respect to each Mortgage Loan, the Transferors made
certain additional covenants regarding such Mortgage Loan, as set forth in the
Transfer Agreement. With respect to any breach of such additional covenants that
materially and adversely affects the interests of the Certificateholders in such
Mortgage Loan, the Seller shall (1) use reasonable efforts to enforce such
covenant against the Transferors and (2) if the Seller successfully enforces any
obligation of the Transferors to repurchase such Mortgage Loan, the Seller shall
repurchase such Mortgage Loan
-46-
in accordance with this Section 2.03. If the Seller does not successfully
enforce the obligation, if any, of the Transferors to repurchase a Mortgage Loan
with respect to any breach of any such additional covenants, the Seller shall
have no obligation or right to repurchase or cure such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Servicer or the
Trustee of a breach of any of such representations and warranties that adversely
and materially affects the value of the related Mortgage Loan, Prepayment
Charges or the interests of the Certificateholders, the party discovering such
breach shall give prompt written notice to the other parties. Within 90 days of
the discovery of such breach of any representation or warranty, the Transferors
or the Seller, as applicable, shall either (a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan or any property acquired in respect
thereof from the Trustee at the Purchase Price or (c) within the two year period
following the Closing Date, substitute a Replacement Mortgage Loan for the
affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of the Transferors or the Seller, the Trustee's
rights shall be enforced under the applicable Transfer Agreement and the Sale
Agreement for the benefit of Certificateholders. If a breach of the
representations and warranties set forth in the Transfer Agreement hereof exists
solely due to the unenforceability of a Prepayment Charge, the Trustee or the
other party having notice thereof shall notify the Servicer thereof and not seek
to enforce the repurchase remedy provided for herein unless such Mortgage Loan
is not current. In the event of a breach of the representations and warranties
with respect to the Mortgage Loans set forth in a Transfer Agreement, the
Trustee shall enforce the right of the Trust Fund to be indemnified for such
breach of representation and warranty. In the event that such breach relates
solely to the unenforceability of a Prepayment Charge, amounts received in
respect of such indemnity up to the amount of such Prepayment Charge shall be
distributed pursuant to Section 4.04(b)(i). As provided in the Sale Agreement,
if the Seller substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the related Transfer Agreement which adversely
and materially affects the value of such Mortgage Loan and such substitute
mortgage loan is not a Replacement Mortgage Loan, under the terms of the Sale
Agreement, the Seller will, in exchange for such substitute Mortgage Loan, (i)
provide the applicable Purchase Price for the affected Mortgage Loan or (ii)
within two years of the Closing Date, substitute such affected Mortgage Loan
with a Replacement Mortgage Loan. Any such substitution shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit I and shall not be effected unless it is
within two years of the Startup Day. The Seller indemnifies and holds the Trust
Fund, the Trustee, the Depositor, the Servicer and each Certificateholder
harmless against any and all taxes, claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trust Fund, the Trustee, the Depositor, the
Servicer and any Certificateholder may sustain in connection with any actions of
the Seller relating to a repurchase of a Mortgage Loan other than in compliance
with the terms of this Section 2.03 and the Sale Agreement, to the extent that
any such action causes (i) any federal or state tax to be imposed on the Trust
Fund or any REMIC provided for herein, including without limitation, any federal
tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or
on "contributions after the startup day" under Section 860G(d)(1) of the Code,
or (ii) any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding. In furtherance of the foregoing, if the
Transferor or the Seller, as applicable, is not a member of MERS and repurchases
a Mortgage
-47-
Loan which is registered on the MERS System, the Transferor or the Seller, as
applicable, at its own expense and without any right of reimbursement, shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to the Transferor or the Seller, as
applicable, and shall cause such Mortgage to be removed from registration on the
MERS System in accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Seller pursuant to the
Sale Agreement or by either Transferor pursuant to the Transfer Agreement, the
principal portion of the funds received by the Servicer in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and
shall be deposited in the Certificate Account pursuant to Section 3.05. Upon
receipt by the Trustee of notice from the Servicer of receipt by the Servicer of
the full amount of the Purchase Price for a Deleted Mortgage Loan, and upon
receipt by the Trustee of the Substitution Adjustment Amount, if applicable, and
the Mortgage File for a Replacement Mortgage Loan substituted for a Deleted
Mortgage Loan, the Trustee shall release and reassign to the Seller or the
applicable Transferor, as applicable, the related Mortgage File for the Deleted
Mortgage Loan and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be necessary to vest in such party or its designee or
assignee title to any Deleted Mortgage Loan released pursuant hereto, free and
clear of all security interests, liens and other encumbrances created by this
Agreement, which instruments shall be prepared by the Depositor, the Seller or
the Transferors, and the Trustee shall have no further responsibility with
respect to the Mortgage File relating to such Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Trustee pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the Transferors or the Seller, as applicable, must deliver to
the Trustee the Mortgage File for the Replacement Mortgage Loan containing the
documents set forth in Section 2.01 along with a written certification
certifying as to the Mortgage Loan satisfying all requirements under the
definition of Replacement Mortgage Loan and the delivery of such Mortgage File
and containing the granting language set forth in Section 2.01; and (ii) the
Depositor will be deemed to have made, with respect to such Replacement Mortgage
Loan, each of the representations and warranties made by it with respect to the
related Deleted Mortgage Loan. The Trustee shall review the Mortgage File with
respect to each Replacement Mortgage Loan and certify to the Depositor that all
documents required by Section 2.01(A)-(B), (C) (if applicable), and (D)-(E) have
been executed and received.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Seller to the Trustee for deposit into the
-48-
Certificate Account by the Seller on the Determination Date for the Distribution
Date relating to the Prepayment Period during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.
The Depositor shall amend the Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
Upon such substitution by the Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the Sale
Agreement, including all applicable representations and warranties thereof
included in the Sale Agreement as of the date of substitution.
(d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the Seller and
the Depositor set forth in the Sale Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of each Transferor, assigned by the Seller to the
Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the Servicer on the Closing Date.
SECTION 2.04. Representations and Warranties of the Servicer.
(a) The Servicer hereby represents and warrants to the Depositor and
the Trustee as follows, as of the date hereof:
(i) The Servicer is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by the Servicer in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to ensure its ability to enforce
each Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
-49-
(ii) The Servicer has the corporate power and authority and to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Servicer and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Servicer or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Servicer's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
▇▇▇▇▇▇ ▇▇▇ and is an approved servicer of mortgage loans for ▇▇▇▇▇▇▇ Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Servicer to service the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for the period it serviced the Mortgage Loans), in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
-50-
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that are not
"Qualified Mortgages".
Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of such discovery in the same manner as it would a Mortgage Loan
for a breach of representation or warranty contained in Section 2.03. The
Trustee, upon the written direction of the Depositor, shall reconvey to the
Depositor the Mortgage Loan to be released pursuant hereto in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan repurchased
for breach of a representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Trustee has caused
to be authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform its duties set forth in this Agreement in
accordance with the provisions hereof.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Upper Tier REMIC and the Lower Tier
REMIC as a REMIC. The Trustee shall sign the returns providing for such
elections and such other tax or information returns that are required to be
signed by the Trustee under applicable law. This Agreement shall be construed so
as to carry out the intention of the parties that each of the Upper Tier REMIC
and the Lower Tier REMIC be treated as a REMIC at all times prior to the date on
which the Trust Fund is terminated.
(b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar year.
The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund (other than (i) amounts distributable to the Class P Certificates pursuant
to Section 4.04(b)(i) hereof, (ii) the interests issued by the Lower Tier REMIC
and (iii) the grantor trusts described in Section 2.07 hereof. The Lower Tier
REMIC shall issue the Class LTA Interest, Class LTB-1 Interest, Class LTB-2
Interest, Class LTB-3 Interest, Class LTB-4 Interest, Class LTB-5 Interest,
Class LTM-1 Interest, Class LTM-2 Interest and Class LTX Interest, which shall
be designated as
-51-
regular interests of such REMIC and shall issue the Class LTR Interest that
shall be designated as the sole class of residual interest in the Lower Tier
REMIC. Each of the Lower Tier REMIC Regular Interests shall have the
characteristics set forth in its definition.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC. For
federal income tax purposes, the pass-through rate on each REMIC Regular
Interest (other than the Uncertificated Class C Interest) and on the sole class
of residual interest in the Upper Tier REMIC shall be subject to a cap equal to
the Net Rate.
The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class LTR Interest
shall not have a principal balance or bear interest.
(c) The "tax matters person" with respect to each REMIC for purposes
of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of a Class R Certificate, by its
acceptance thereof, irrevocably appoints the Trustee as its agent and
attorney-in-fact to act as "tax matters person" with respect to each REMIC for
purposes of the REMIC Provisions. If there is more than one beneficial owner of
the Class R Certificate, the "tax matters person" shall be the Person with the
greatest percentage interest in the Class R Certificate and, if there is more
than one such Person, shall be determined under Treasury regulation Section
1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the Class A, Class
R, Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class R, Class M and Class B Certificates and such shall be accounted
for as property held separate and apart from the regular interests in the Upper
Tier REMIC held by the holders of the Class A (other than the Class R
Certificate), Class M and Class B Certificates and the residual interest in the
Upper Tier REMIC held by the holder of the Class R Certificate. For information
reporting requirements, the rights of the Class A, Class R, Class M and Class B
Certificates to receive payments in respect of Excess Interest shall be assumed
to have zero value or a de minimis value. This provision is intended to satisfy
the requirements of Treasury Regulations Section 1.860G-2(i) for the treatment
of property rights coupled with REMIC interests to be separately respected and
shall be interpreted consistently with such regulation. On each Distribution
Date, to the extent that any of the Class A, Class R, Class M and Class B
Certificates receive payments of Excess Interest, such amounts will be treated
as distributed by the Upper-Tier REMIC to the Class C Certificates pro rata in
payment of the amounts specified in Section 4.04(g) and then paid to the
relevant Class of Certificates pursuant to the related interest rate cap
agreement.
(e) The parties intend that the portion of the Trust Fund consisting
of the Uncertificated Class C Interest and the obligation of the holders of the
Class C Certificates to pay amounts of Excess Interest to the holders of the
Class A, Class R, Class M and Class B Certificates shall be treated as a
"grantor trust" under the Code, and the provisions hereof shall
-52-
be interpreted consistently with this intention. In furtherance of such
intention, the Trustee shall (i) furnish or cause to be furnished to the holders
of the Class C Certificates information regarding their allocable share, if any,
of the income with respect to such grantor trust, (ii) file or cause to be filed
with the Internal Revenue Service Form 1041 (together with any necessary
attachments) and such other forms as may be applicable and (iii) comply with
such information reporting obligations with respect to payments from such
grantor trust to the holders of Class A, Class R, Class M, Class B and Class C
Certificates as may be applicable under the Code.
(f) The parties intend that the portion of the Trust Fund consisting
of the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the Code, and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall (i) furnish
or cause to be furnished to the holders of the Class P Certificates information
regarding their allocable share of the income with respect to such grantor trust
and (ii) file or cause to be filed with the Internal Revenue Service Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.
(g) Reserved.
(h) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than payments distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received from the Mortgage
Loans shall be paid to the Lower Tier REMIC Regular Interests until the
principal balance of all such interests have been reduced to zero and any losses
allocated to such interests have been reimbursed. Any excess amounts shall be
distributed to the Class LTR Interest. On each Distribution Date, an amount
equal to 50% of the increase in the Overcollateralization Amount shall be
payable as a reduction of the principal amounts of the Lower Tier REMIC Marker
Classes (with such amount allocated among the Lower Tier REMIC Marker Classes so
that each Lower Tier REMIC Marker Class will have its principal reduced by an
amount equal to 50% of any increase in the Overcollateralization Amount that
results in a reduction in the principal balance of its Related Certificates) and
will be accrued and added to the principal balance of the Class LTX Interest.
All payments of scheduled principal and prepayments of principal on the Mortgage
Loans shall be allocated 50% to the Class LTX Interest and 50% to the Lower Tier
REMIC Marker Classes (with principal payments allocated to each of the Lower
Tier REMIC Marker Classes in an amount equal to 50% of the principal amounts
distributed to the Related Certificates in reduction of their principal
amounts). Notwithstanding the preceding sentence, an amount equal to the
principal payments that result in a reduction in the Overcollateralization
Amount shall be treated as payable entirely to the Class LTX Interest. Realized
Losses that are allocated to the Certificates shall be applied to the Lower Tier
REMIC Marker Classes and the Class LTX Interest so that after all distributions
have been made on each Distribution Date (i) the principal balance of each of
the Lower Tier REMIC Marker Classes is equal to 50% of the principal balance of
the Related Certificates and (ii) the principal balance of the Class LTX
Interest is equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.
Each Lower Tier REMIC Marker Class shall be entitled to receive an amount equal
to 50% of all amounts distributed to the Related Certificates in respect of
unreimbursed amounts of Realized Losses. The Class
-53-
LTX Interest shall be entitled to receive all other amounts distributed to the
Certificates in respect of unreimbursed amounts of Realized Losses.
If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier REMIC Regular Interests on such
Distribution Date) among the Lower Tier REMIC Regular Interests so that (i) each
of the Lower Tier Marker Classes has a principal balance equal to 50% of the
principal balance of the Related Certificates, (ii) the Class LTX Interest has a
principal balance equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.
(i) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify the Trustee and
the Trust Fund against any and all Losses resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of a Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Class R Certificate now
or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Servicer have any liability (1) for any action or
omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement, (2)
for any Losses other than those arising out of a negligent performance by the
Servicer of its duties and obligations set forth herein, and (3) for any special
or consequential damages to Certificateholders (in addition to payment of
principal and interest on the Certificates).
(j) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Trustee of its duties
and obligations set forth herein, the Trustee shall indemnify the Servicer and
the Trust Fund against any and all Losses resulting from such negligence;
provided, however, that the Trustee shall not be liable for any such Losses
attributable to the action or inaction of the Servicer, the Depositor, the
Trustee or the Holder of a Class R Certificate, as applicable, nor for any such
Losses resulting from misinformation provided by the Holder of such Class R
Certificate on which the Trustee has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Holder of such Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Trustee have any liability (1) for any
action or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than those arising out of a negligent
performance by the Trustee of its duties and obligations set forth
-54-
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy;
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor or the
Trustee, any affiliate of the Depositor or the Trustee and prepared by the
Servicer pursuant to this Agreement will be inaccurate in any material respect,
provided, however, that the Servicer shall not be responsible for inaccurate
information provided to it by third parties.
SECTION 2.10. [RESERVED]
SECTION 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of SFAS 140,
the parties hereto intend that the Trust Fund shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 or SFAS 140.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service and
administer the Mortgage Loans in accordance with Accepted Servicing Practices.
In connection with such servicing and administration, the Servicer shall have
full power and authority, acting alone and/or through subservicers as provided
in Section 3.02 hereof, to do or cause to be done any and all things that it may
deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the
-55-
ownership of the Mortgaged Property securing any Mortgage Loan; provided that,
subject to Section 6.03, the Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan serviced by it under this Agreement or
the rights and interests of the other parties to this Agreement except as
otherwise required by this Agreement or by law. Notwithstanding anything in this
Agreement to the contrary, the Servicer shall not make or permit any
modification, waiver or amendment of any term of any Mortgage Loan which would
cause any of the REMICs provided for herein to fail to qualify as a REMIC or
result in the imposition of any tax under Section 860G(a) or 860G(d) of the
Code. The Servicer shall represent and protect the interest of the Trust Fund in
the same manner as it currently protects its own interest in mortgage loans in
its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, subordinations and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by any or all
of them as are necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans, to the extent that the Servicer is not permitted
to execute and deliver such documents pursuant to the preceding sentence. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Servicer. For purposes of this Section 3.01,
the Trustee hereby grants to the Servicer a limited power of attorney to execute
and file any and all documents necessary to fulfill the obligations of the
Servicer under this Section 3.01.
The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall deliver a list of Servicing Officers to the Trustee by
the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 97-02 and, for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a
-56-
result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS System, shall be subject to withdrawal by the Servicer
from the Collection Account.
With respect to any Mortgage Loan, the Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
and
(b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and
(c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer, which may be an affiliate (each, a "subservicer") pursuant to
a subservicing agreement (each, a "Subservicing Agreement") including, at the
Servicer's option, if requested to do so by the Holder of the Class C
Certificate; provided, however, that (i) such subservicing arrangement and the
terms of the related subservicing agreement must provide for the servicing of
such Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder and (ii) that such agreement would not result in a
withdrawal or downgrading by any Rating Agency of the ratings of any
Certificates evidenced by a letter to that effect delivered by each Rating
Agency to the Depositor. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a subservicer or reference to actions
taken through a subservicer or otherwise, the Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such subservicing agreements or arrangements or by virtue of
indemnification from the subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. Every subservicing agreement entered into by the Servicer
shall contain a provision giving any successor servicer the option to terminate
such agreement in the event a successor servicer is appointed. All actions of
the each subservicer performed pursuant to the related subservicing agreement
shall be performed as an agent of the Servicer with the same force and effect as
if performed directly by the Servicer. The Servicer shall deliver to the Trustee
copies of all subservicing agreements. The Trustee shall have no obligations,
duties or liabilities with respect to a subservicer, including without
limitation, any obligation, duty or liability to monitor such subservicer or to
pay a subservicer's fees and expenses.
-57-
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither of them
is obligated to supervise the performance of the Servicer hereunder or
otherwise.
SECTION 3.04. [RESERVED]
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any default
interest charge, or (ii) subject to Section 3.01, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, subject to Section 4.01, the Servicer
shall make any Advances on the related Mortgage Loan during the scheduled period
in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01. The Servicer's analysis supporting any forbearance
and the conclusion that any forbearance meets the standards of Section 3.01
shall be reflected in writing in the Mortgage File.
(b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to
-58-
acceleration in connection with a foreclosure or other involuntary payment, or
(iii) the Servicer has not been provided with information sufficient to enable
it to collect the Prepayment Charge, or (iv) in the Servicer's reasonable
judgment as described in Section 3.01 hereof, (x) such waiver relates to a
default or a reasonably foreseeable default and (y) such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and related Mortgage Loan or (v) the collection of the Prepayment Charge
or of a similar type of prepayment premium would be considered "predatory" or
"illegal" pursuant to written guidance published by any applicable federal,
state or local regulatory authority having jurisdiction over such matters or has
been challenged by any such authority, or (vi) there is a certified class action
in which a similar type of prepayment premium is being challenged. Except as
provided in the preceding sentence, in no event will the Servicer waive a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If the Servicer
waives or does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full or in part due to any action or omission of the
Servicer, other than as provided above, the Servicer shall deposit the amount of
such Prepayment Charge (or such portion thereof as had been waived for deposit)
into the Collection Account for distribution in accordance with the terms of
this Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(d) The Servicer shall establish and initially maintain, on behalf of
the Certificateholders, the Collection Account. The Servicer shall deposit into
the Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-Off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the Mortgage
Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other than (x)
interest due on the Mortgage Loans on or prior to the Cut-off Date and (y)
Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied
to the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer pursuant
to Section 3.05(g) in connection with any losses on Permitted Investments;
-59-
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Advances made by the Servicer pursuant to Section
4.01;
(ix) all Prepayment Charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property and other similar ancillary fees (other than
Prepayment Charges) if collected, and any Prepayment Interest Excess need not be
remitted by the Servicer. Rather, such fees and charges may be retained by the
Servicer as additional servicing compensation. In the event that the Servicer
shall remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding. The Servicer shall maintain adequate records with respect to
all withdrawals made pursuant to this Section. All funds deposited in the
Collection Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Collection Account at the direction of the
Servicer.
The Servicer shall give notice to the Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. Not later than twenty days after each Distribution Date, the Servicer
shall forward to the Trustee and the Depositor the most current available bank
statement for the Collection Account. Copies of such statement shall be provided
by the Trustee to any Certificateholder and to any Person identified to the
Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee.
(e) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly upon
receipt, deposit or cause to be deposited in the Certificate Account and retain
therein the following:
(i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate Account;
(ii) the Purchase Price and any Substitution Adjustment Amount;
and
(iii) the Optional Termination Amount paid by the winning bidder
at the Auction or by the Servicer pursuant to Section 9.01.
Any amounts received by the Trustee prior to 1:00 p.m. New York City time
that are required to be deposited in the Certificate Account by the Servicer
shall be held uninvested. The foregoing requirements for remittance by the
Servicer and deposit by the Servicer into the Certificate Account shall be
exclusive. If the Servicer fails to remit any funds due by the time
-60-
designated herein, the Servicer shall pay to the Trustee, for its own account,
interest accrued on such funds at the prime rate as set forth in The Wall Street
Journal from and including the applicable due date, to but excluding the day
such funds are paid to the Trustee. In the event that the Servicer shall remit
any amount not required to be remitted and not otherwise subject to withdrawal
pursuant to Section 3.08 hereof, it may at any time withdraw such amount from
the Certificate Account, any provision herein to the contrary notwithstanding.
All funds deposited in the Certificate Account shall be held by the Trustee in
trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.08. In no event shall the
Trustee incur liability for withdrawals from the Certificate Account at the
direction of the Servicer. The Trustee shall give notice to the Servicer of the
location of the Certificate Account maintained by it when established and prior
to any change thereof.
(f) Each institution that maintains the Collection Account shall
invest the funds in each such account, as directed by the Servicer, in writing,
in Permitted Investments, which shall mature not later than in the case of the
Collection Account the Business Day preceding the related Servicer Remittance
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Servicer Remittance Date) and 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 and gain net of
any losses realized from amounts on deposit in the Collection Account shall be
for the benefit of the Servicer as servicing compensation and shall be remitted
to it monthly as provided herein. The amount of any losses incurred in the
Collection Account in respect of any such investments shall be deposited by the
Servicer in the Collection Account out of the Servicer's own funds immediately
as realized. Funds in the Certificate Account shall remain uninvested and the
Trustee shall direct each institution that maintains the Certificate Account to
hold the funds in a non-interest bearing account.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes and assessments and insurance premiums) and
3.10 hereof (with respect to hazard insurance), to refund to any Mortgagors any
sums as may be determined to be overages, to pay interest, if required by law or
the terms of the related Mortgage or Mortgage Note, to Mortgagors on balances in
the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 9.01 hereof. The Escrow
Accounts shall not be a part of the Trust Fund.
-61-
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access. The Servicer may from time to
time provide the Depositor, and any Person designated by the Depositor, with
certain reports and reasonable access to information and documentation regarding
the Mortgage Loans.
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.
(a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously paid to
or withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment of interest that equals the Servicing
Fee for the period with respect to which such interest payment was made, and, as
additional servicing compensation, those other amounts set forth in Section
3.15;
(ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it) with respect to
the Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in respect of
which any such Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made to
the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income with
respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(vi) reserved;
(vii) to pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing
-62-
Advances would constitute an "unanticipated expense" within the meaning of
Treasury Regulation Section 1.860-1(b)(3)(ii)), the Servicer's right to
reimbursement of Servicing Advances pursuant to this subclause (vi) with respect
to any Mortgage Loan being limited to amounts received on particular Mortgage
Loan(s)(including, for this purpose, Liquidation Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments for which
such advances were made pursuant to Section 3.01 or Section 3.06;
(viii) to pay to the Depositor or the Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(ix) to reimburse the Servicer or the Depositor for expenses
incurred by any of them in connection with the Mortgage Loans or Certificates
and reimbursable pursuant to Section 3.25 or Section 6.03 hereof provided that
reimbursement therefor would constitute "unanticipated" expenses within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(x) to reimburse the Trustee for enforcement expenses reasonably
incurred in respect of a breach or defect giving rise to the purchase obligation
in Section 2.03 that were incurred in the Purchase Price of the Mortgage Loans
including any expenses arising out of the enforcement of the purchase
obligation; provided that any such expenses will be reimbursable under this
subclause (x) only to the that such expenses would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)
if paid by one of the REMICs provided for herein;
(xi) to pay the Servicer any unpaid Servicing Fees for any
Mortgage Loan upon such Mortgage Loan being charged off and upon termination of
the obligations of the Servicer;
(xii) to withdraw pursuant to Section 3.05 any amount deposited
in the Collection Account and not required to be deposited therein; and
(xiii) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 4:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds (other than amounts payable
to the Trustee), to the extent on deposit, and such amount shall be deposited in
the Certificate Account; provided, however, if the Trustee does not receive such
Interest Funds and Principal Funds on the Servicer Remittance Date, the Servicer
shall pay, out of its own funds, interest on such amount at a rate equal to the
"prime rate" as published by ▇▇▇▇▇ Fargo Bank, N.A. at such time for each date
or part thereof.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.
-63-
The Servicer shall provide written notification to the Trustee on or prior
to the next succeeding Servicer Remittance Date upon making any withdrawals from
the Collection Account pursuant to subclauses (iii) and (vii) above.
Unless otherwise specified, any amounts reimbursable to the Servicer or the
Trustee from amounts on deposit in the Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.
(b) The Trustee shall withdraw funds from the Certificate Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and shall withhold from the amounts so withdrawn, the amount of any taxes that
it is authorized to retain pursuant to this Agreement). In addition, the Trustee
may from time to time make withdrawals from the Certificate Account for the
following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in
the Certificate Account and not required to be deposited therein;
(ii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof (after paying all
amounts necessary to the Trustee or the Servicer in connection with any such
termination); and
(iii) to pay to and reimburse the Trustee for any fees, expenses
and indemnification reimbursable pursuant to this Agreement, including without
limitation Sections 6.03, 8.05, 8.06 and 11.02 hereof.
SECTION 3.09. [RESERVED]
SECTION 3.10. [RESERVED]
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which the expense shall constitute a Servicing
Advance) delivered to the Trustee and the Depositor shall conclusively establish
the reasonableness of the Servicer's belief that any "due-on-sale" clause is not
enforceable under applicable law. In such event, the Servicer shall make
reasonable efforts to enter into an assumption and modification agreement with
the Person to whom such property has been or is about to be conveyed, pursuant
to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is
-64-
released from liability and such Person is substituted as Mortgagor and becomes
liable under the Note. In addition to the foregoing, the Servicer shall not be
required to enforce any "due-on-sale" clause if in the reasonable judgment of
the Servicer, entering into an assumption and modification agreement with a
Person to whom such property shall be conveyed and releasing the original
Mortgagor from liability would be in the best interests of the
Certificateholders. The Mortgage Loan, as assumed, shall conform in all respects
to the requirements, representations and warranties of this Agreement. The
Servicer shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original copy of
such assumption or substitution agreement (indicating the Mortgage File to which
it relates) which copy shall be added by the Trustee to the related Mortgage
File and which shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption or
substitution agreement, the Monthly Payment on the related Mortgage Loan shall
not be changed but shall remain as in effect immediately prior to the assumption
or substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Servicer
for consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Servicer as
additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Special Loss Mitigation.
(a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Collection Account pursuant to Section 3.08
hereof). The Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Servicer has knowledge that a Mortgaged Property
-65-
that the Servicer is contemplating acquiring in foreclosure or by deed-in-lieu
of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer or an affiliate may
receive usual and customary real estate referral fees for real estate brokers in
connection with the listing and disposition of REO Property. The Servicer shall
prepare a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Servicer to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Trust Fund or, at the expense of the Trust Fund, obtain, in accordance with
applicable procedures for obtaining an automatic extension of the grace period,
more than 60 days prior to the day on which such three-year period would
otherwise expire, an extension of the three-year grace period, in which case
such property must be disposed of prior to the end of such extension, unless the
Trustee shall have been supplied with an Opinion of Counsel (such Opinion of
Counsel not to be an expense of the Trustee), to the effect that the holding by
the Trust Fund of such Mortgaged Property subsequent to such three-year period
or extension will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund or any of the REMICs provided for herein as
defined in section 860F of the Code or cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be held, rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund or any
REMIC provided for herein to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged under section 860G(c) of
the Code or otherwise, unless the Servicer or the Depositor has agreed
-66-
to indemnify and hold harmless the Trustee and the Trust Fund with respect to
the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such 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 Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting from
a partial collection of Liquidation Proceeds or any income from an REO Property,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and Servicing Fees,
pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse the
Servicer for any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this
Section 3.12; third, to any Prepayment Charges and then to accrued and unpaid
interest (to the extent no Advance has been made for such amount) on the
Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) Reserved.
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (provided that the Servicer has
determined that no net recovery is possible through foreclosure proceedings or
other liquidation of the related Mortgaged Property), (iii) take a deed in lieu
of foreclosure, (iv) accept a short sale or short refinance; (v) arrange for a
repayment plan, or (vi) agree to a
-67-
modification of such Mortgage Loan. As to any Mortgage Loan that becomes 120
days delinquent, the Servicer will be required to obtain a broker's price
opinion, the cost of which will be reimbursable as a Servicing Advance. After
obtaining the broker's price opinion, the Servicer will determine, in its
reasonable business judgment, whether a net recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgage Property.
If the Servicer determines that no such recovery is possible, it must charge off
the related Mortgage Loan at the time it becomes 180 days delinquent. Once a
Mortgage Loan has been charged off, the Servicer will discontinue making
Advances, the Servicer will not be entitled to Servicing Fees (except as
provided below) with respect to such Mortgage Loan, and the Mortgage Loan will
be treated as a Liquidated Mortgage Loan. If the Servicer determines that such
net recovery is possible through foreclosure proceedings or other liquidation of
the related Mortgaged Property on a Mortgage Loan that becomes 180 days
delinquent, the Servicer may continue making Advances, and the Servicer will be
required to notify the Trustee of such decision.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above, may
continue to be serviced by the Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, only to the
extent of funds available from any recoveries on any such Mortgage Loans. Any
such Mortgage Loans serviced in accordance with the specialized collection
procedures shall be serviced for approximately six months. Any net recoveries
received on such Mortgage Loans during such six month period will be treated as
Subsequent Recoveries. On the date which is six months after the date on which
the Servicer begins servicing such Mortgage Loans using the specialized
collection procedures, unless specific net recoveries are anticipated by the
Servicer on a particular Mortgage Loan, such charged off loan will be released
to the majority holder of the Class C Certificates and thereafter, (i) the
majority holder of the Class C Certificates will be entitled to any amounts
subsequently received in respect of any such released loans, (ii) the majority
holder of the Class C Certificates may designate any servicer to service any
such released loan and (iii) the majority holder of the Class C Certificates may
sell any such released loan to a third party.
SECTION 3.13. Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of a copy of such request, the Trustee shall promptly
release the related Mortgage File to the Servicer, the cost of which may be
charged to the Servicer by the Trustee, and the Servicer is authorized to cause
the removal from the registration on the MERS System of any such Mortgage if
applicable, and the Servicer, on behalf of the Trustee, shall execute and
deliver the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
together with the Mortgage Note with written evidence of cancellation thereon.
Expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Mortgagor to the extent permitted by
law, and otherwise to the Trust Fund to the extent such expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulations
-68-
Section 1.860G-(1)(b)(3)(ii). From time to time and as shall be appropriate for
the servicing or foreclosure of any Mortgage Loan, including for collection
under any policy of flood insurance, any fidelity bond or errors or omissions
policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to it of a Request for Release
in the form of Exhibit I signed by a Servicing Officer, release the Mortgage
File to the Servicer, the cost of which action may be charged to the Servicer by
the Trustee. Subject to the further limitations set forth below, the Servicer
shall cause the Mortgage File or documents so released to be returned to the
Trustee when the need therefor by the Servicer no longer exists, unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account.
Each Request for Release may be delivered to the Trustee (i) via mail or
courier, (ii) via facsimile or (iii) by such other means, including, without
limitation, electronic or computer readable medium, as the Servicer and the
Trustee shall mutually agree. The Trustee shall release the related Mortgage
File(s) within five (5) Business Days of receipt of a properly completed Request
for Release pursuant to clauses (i), (ii) or (iii) above. Receipt of a properly
completed Request for Release shall be authorization to the Trustee to release
such Mortgage Files, provided the Trustee has determined that such Request for
Release has been executed, with respect to clauses (i) or (ii) above, or
approved, with respect to clause (iii) above, by an authorized Servicing Officer
of the Servicer, and so long as the Trustee complies with its duties and
obligations under this Agreement. If the Trustee is unable to release the
Mortgage Files within the period previously specified, the Trustee shall
immediately notify the Servicer indicating the reason for such delay. The
Servicer shall not pay penalties or damages due to the Trustee's or its
designee's negligent failure to release the related Mortgage File or the
Trustee's or its designee's negligent failure to execute and release documents
in a timely manner, and such amounts shall be Servicer Advances.
On each day that the Servicer remits to the Trustee Requests for Releases
pursuant to clauses (ii) or (iii) above, the Servicer shall also submit to the
Trustee a summary of the total number of such Requests for Releases requested on
such day by the same method as described in such clauses (ii) and (iii).
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Servicer
may deliver or cause to be delivered to the Trustee or its designee, for
signature, as appropriate or on behalf of the Trustee, execute any court
pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, the Servicer shall cause possession of any
Mortgage File or of the documents therein that shall have been released by the
Trustee to be returned to the Trustee promptly after possession thereof shall
have been released by the Trustee unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account, and the Servicer shall have delivered to
the Trustee a Request for Release in the form of Exhibit I or (ii) the Mortgage
File or document shall have been delivered to an attorney or to a public trustee
or other public official as required by
-69-
law for purposes of initiating or pursuing legal action or other proceedings for
the foreclosure of the Mortgaged Property and the Servicer shall have delivered
to the Trustee an Officer's Certificate of a Servicing Officer certifying as to
the name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control of,
the Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Collection Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trust Fund, subject to the applicable provisions of
this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or in any Escrow Account, or any funds that otherwise are or may become
due or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property) and similar fees
payable by the Mortgagor, Prepayment Interest Excess, and all income and gain
net of any losses realized from Permitted Investments in the Collection Account
shall be retained by the Servicer to the extent not required to be deposited in
the Collection Account pursuant to Sections 3.05, or 3.12(a) hereof. The
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement. In no event shall
the Trustee be liable for any Servicing Fee or for any differential between the
Servicing Fee and the amount necessary to induce a successor servicer to act as
successor servicer under this Agreement.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of
-70-
the OTS, the FDIC and such other authorities, access to the documentation
regarding the Mortgage Loans required by applicable regulations of the OTS and
the FDIC. Such access shall be afforded without charge, but only upon reasonable
and prior written request and during normal business hours at the offices of the
Servicer designated by it provided, that the Servicer shall be entitled to be
reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access. Nothing in this Section shall
limit the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
The Servicer may from time to time provide the Depositor, and any Person
designated by the Depositor, with reports and information regarding the Mortgage
Loans, including without limitation, information requested by the Depositor or
an originator of the Mortgage Loans for required institutional risk control.
SECTION 3.17. Annual Statement as to Compliance.
Pursuant to this Agreement, the Servicer shall deliver to the Depositor and
the Trustee on or before March 15 of each year beginning in 2006 (or such other
date as to which the Depositor gives the Servicer at least 30 days prior notice)
in order to remain in compliance with the Section 302 Requirements, an Officer's
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement or a similar agreement has been made under such officer's
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Servicer shall forward a copy of each such
statement received by it to each Rating Agency. Copies of such statement shall
be provided by the Trustee to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement has been delivered by the
Servicer to the Trustee.
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement.
On or before March 15 of each year, beginning in 2006 or such other date in
order to remain in compliance with the Section 302 Requirements, the Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Trustee and the Depositor. Copies of
the USAP Report shall be provided by the Trustee to any Certificateholder upon
request at the Certificateholder's expense, provided such report has been
delivered by the Servicer to the Trustee.
SECTION 3.19. Periodic Filings.
(a) Promptly upon receipt of (i) any report of the independent public
accountants required pursuant to Section 3.18, and (ii) the Officer's
Certificate delivered by the Servicer pursuant to Section 3.17 relating to the
Servicer's performance of its obligations under this
-71-
Agreement, the Trustee shall include such report and such certificate as part of
the Form 10-K required to be filed pursuant to the terms of this Agreement.
(b) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Exchange Act. The Trustee shall prepare for filing, on behalf of the
Trust Fund, and file with the Securities and Exchange Commission, (i) within 15
days after each Distribution Date in each month, each Monthly Statement on Form
8-K under the Exchange Act and (ii) on or before March 31 of each year beginning
in 2006 or such other date in order to remain in compliance with the Section 302
Requirements, a Form 10-K under the Exchange Act executed by the Depositor,
including any certification (the "Certification") required by the Section 302
Requirements. The Certification shall be executed by a senior officer of the
Depositor. Upon such filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
filing. Prior to making any such filings, the Trustee shall comply with the
provisions set forth in this Section. If permitted by applicable law and unless
the Depositor otherwise directs, the Trustee shall file a Form 15 under the
Exchange Act on or before January 30, 2006 or as soon as it is able to do so
pursuant to applicable law. The Depositor hereby grants to the Trustee a limited
power of attorney to execute the Form 8-K and file each such document on behalf
of the Depositor. Such power of attorney shall continue until either the earlier
of (i) receipt by the Trustee from the Depositor of written termination of such
power of attorney and (ii) the termination of the Trust Fund. The Depositor
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports, and financial statements within its control
related to this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file such Forms 8-K and 10-K with the Commission. The
Trustee shall have no responsibility to file any items other than those
specified in this section.
(c) The obligations set forth in paragraphs (a) and (b) of this Section
shall only apply with respect to periods for which the Trustee is obligated to
file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this Section. In the event
a Form 15 is properly filed pursuant to paragraph (b) of this Section, there
shall be no further obligations under paragraphs (a) and (b) of this Section
commencing with the fiscal year in which the Form 15 is filed (other than the
obligations in paragraphs (a) and (b) of this Section to be performed in such
fiscal year that relate back to the prior fiscal year).
(d) The Trustee shall prepare such Form 10-K and provide the Depositor with
such Form 10-K not later than March 20th of each year, subject to this Section
3.19(c). Following its receipt thereof, the Depositor shall execute such Form
10-K and provide the original of such Form 10-K to the Trustee not later than
March 25th (or, if the applicable March 25th is not a Business Day, the next
succeeding Business Day) of each year; provided, however, that if the filing of
such Form 10-K shall be required to occur on a date earlier than March 30th of
each year as may be required by the Exchange Act and the Rules and Regulations
of the Securities and Exchange Commission, then the time periods for preparation
and execution of such Form 10-K set forth in this sentence shall be adjusted
accordingly. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
-72-
SECTION 3.20. Annual Certificate by Trustee.
(a) Within 15 days prior to the date on which a Form 10-K is to be filed
with a Certification by the Depositor, an officer of the Trustee shall execute
and deliver an Officer's Certificate, signed by a Responsible Officer of the
Trustee or any officer to whom that officer reports, to the Depositor for the
benefit of such Depositor and its officers, directors and affiliates, certifying
as to the matters described in the Officer's Certificate attached hereto as
Exhibit K, provided, however, that the Trustee shall not undertake an analysis
of the accountant's report attached as an exhibit to the Form 10-K.
(b) The Trustee shall indemnify and hold harmless the Depositor and its
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Trustee or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.20, any material misstatement or omission in
the Officer's Certificate required under this Section or the gross negligence,
bad faith or willful misconduct of the Trustee in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Trustee agrees that it shall contribute to the
amount paid or payable by the Depositor as a result of the losses, claims,
damages or liabilities of the Depositor in such proportion as is appropriate to
reflect the relative fault and relative benefit of the Trustee on the one hand
and the Depositor on the other in connection with a breach of the Trustee's
obligations under this Section 3.20, any material misstatement or omission in
the Officer's Certificate required under this Section or the Trustee's gross
negligence, bad faith or willful misconduct in connection therewith.
SECTION 3.21. [RESERVED]
SECTION 3.22. Annual Certificate by Servicer.
(a) Within 15 days prior to the date on which a Form 10-K is required
to be filed with a Certification by the Depositor, the Servicer shall execute
and deliver an Officer's Certificate in the form of Exhibit L attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the Depositor for the benefit of the
Depositor and its officers, directors and affiliates.
(b) The Servicer shall indemnify and hold harmless the Trustee and the
Depositor and their respective officers, directors, agents and affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under Section 3.17, Section 3.18 and this Section
3.22, any material misstatement or omission in the Officer's Certificate
required under this Section or the negligence, bad faith or willful misconduct
of the Servicer in connection therewith. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Depositor, then the
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 the Servicer on the other in connection with a
breach of the Servicer's obligations
-73-
under this Section 3.22, any material misstatement or omission in the Officer's
Certificate required under this Section or the Servicer's negligence, bad faith
or willful misconduct in connection therewith.
SECTION 3.23. Prepayment Charge Reporting Requirements.
Promptly after each Distribution Date, the Servicer shall provide to the
Depositor the following information with regard to each Mortgage Loan that has
prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) original principal balance;
(v) Prepayment Charge amount due; and
(vi) Prepayment Charge amount collected.
SECTION 3.24. Information to the Trustee.
Two Business Days after the 15th day of each month, but not later than the
18th day of each month, the Servicer shall furnish to the Trustee a delinquency
report in the form set forth in Exhibit M-1 and a monthly remittance advice in
the form set forth in Exhibit M-2 (or such other form or forms as the Trustee
and the Servicer may from time to time agree) for the period ending on the last
Business Day of the preceding month; provided, however, that in the event the
18th day is not a Business Day, the aforementioned reports shall be furnished by
the Servicer to the Trustee on the next Business Day; and provided, further,
that in the event there are three non-Business Days preceding the 18th day, the
Servicer will (a) furnish to the Trustee, on or before the 18th day of the
month, the aforementioned reports, which will not include information arising
from the related Prepayment Period, and (b) furnish to the Trustee, by 3:00
P.M., EST on the next succeeding Business Day after the 18th day, a cumulative
version of the aforementioned reports which includes such information arising
from the related Prepayment Period. The Trustee shall have no obligation or duty
to review, verify or recalculate the information provided by the Servicer in
such reports.
SECTION 3.25. Indemnification.
The Servicer shall indemnify the Seller, the Trustee, the Trust Fund, the
Depositor and their officers, directors, employees and agents and hold each of
them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Servicer to perform its duties including,
without limitation, its duties under Section 3.17 and 3.18
-74-
and service the Mortgage Loans in compliance with the terms of this agreement,
by reason of negligence, willful misfeasance or bad faith in the performance of
its duties or by reason of reckless disregard of obligations and duties
hereunder. The Servicer immediately shall notify the Seller, the Trustee and the
Depositor or any other relevant party if a claim is made by a third party with
respect to such party and this Agreement or the related Mortgage Loans and, if
subject to this indemnification obligation, assume (with the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld or delayed) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any of such
parties in respect of such claim. The Servicer shall follow any reasonable
written instructions received from the Trustee in connection with such claim, it
being understood that the Trustee shall have no duty to monitor or give
instructions with respect to such claims. The Servicer shall provide the
Depositor with a written report of all expenses and advances incurred by the
Servicer pursuant to this Section 3.25, and the Servicer shall promptly
reimburse itself from the assets of the Trust Fund in the Collection Account for
all amounts advanced by it pursuant to the preceding sentence except when the
claim in any way relates to the gross negligence, bad faith or willful
misconduct of the Servicer. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
SECTION 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
SECTION 3.27. High Cost Mortgage Loans.
In the event that the Servicer reasonably determines that a Mortgage Loan
may be a "high cost mortgage loan", "high cost home", "covered", "high cost",
"high risk home", "predatory" or similarly classified loan under any applicable
state, federal or local law, the Servicer may notify the Depositor and Trustee
thereof; the Servicer may terminate its servicing thereof; and such
determination shall be deemed to materially and adversely affect the interests
of the Certificateholders in such Mortgage Loan and the Transferors, or the
Seller, in event the Transferors do not do so, will repurchase the Mortgage Loan
within a 30 day period from the date of the notice in the manner described in
Section 2.05.
ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Advances.
-75-
(a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 4:00 p.m. Eastern time on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders, funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor and each Rating Agency an
Officer's Certificate setting forth the basis for such determination. The
Servicer may, in its sole discretion, make an Advance with respect to the
principal portion of the final Scheduled Payment on a Balloon Loan, but the
Servicer is under no obligation to do so; provided, however, that nothing in
this sentence shall affect the Servicer's obligation under this Section 4.01 to
Advance the interest portion of the final Scheduled Payment with respect to a
Balloon Loan as if such Balloon Loan were a fully amortizing Mortgage Loan. If a
Mortgagor does not pay its final Scheduled Payment on a Balloon Loan when due,
the Servicer shall Advance (unless it determines in its good faith judgment that
such amounts would constitute a Non-Recoverable Advance) a full month of
interest (net of the Servicing Fee) on the Stated Principal Balance thereof each
month until its Stated Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
In addition, the Servicer shall have the right to reimburse itself for any such
Advance from amounts held from time to time in the Collection Account to the
extent such amounts are not then required to be distributed. Any funds so
applied and transferred pursuant to the previous two sentences shall be replaced
by the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled to be
reimbursed from the Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until the earlier of
(i) such Mortgage Loan is paid in full, (ii) the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01, (iii) the Servicer determines in its good faith judgment that such
amounts would constitute a Non-Recoverable Advance as provided in the preceding
paragraph or (iv) the date on which such Mortgage Loan becomes 150 days
delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
-76-
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor. In addition, the Servicer shall not be
required to advance any Relief Act Shortfalls.
(c) Notwithstanding the foregoing, the Servicer shall not be required
to make any Advances for any Mortgage Loan after such Mortgage Loan becomes 150
days delinquent. The Servicer shall identify such delinquent Mortgage Loans in
the Servicer Statement referenced in Section 3.24. In addition, the Servicer
shall provide the Trustee with an Officer's Certificate listing such delinquent
Mortgage Loans and certifying that such loans are 150 days or more delinquent.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment Interest
Shortfall, the Servicer shall, from amounts in respect of the Servicing Fee for
such Distribution Date, deposit into the Collection Account, as a reduction of
the Servicing Fee for such Distribution Date, no later than the Servicer Advance
Date immediately preceding such Distribution Date, an amount up to the
Prepayment Interest Shortfall. In case of such deposit, the Servicer shall not
be entitled to any recovery or reimbursement from the Depositor, the Trustee,
the Trust Fund or the Certificateholders. With respect to any Distribution Date,
to the extent that the Prepayment Interest Shortfall exceeds Compensating
Interest (such excess, a "Non-Supported Interest Shortfall"), such Non-Supported
Interest Shortfall shall reduce the Current Interest with respect to each Class
of Certificates, pro rata based upon the amount of interest each such Class
would otherwise be entitled to receive on such Distribution Date.
SECTION 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in the Lower Tier REMIC in an amount sufficient to make the
distributions on the respective Certificates on such Distribution Date in
accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) Reserved.
(b) On each Distribution Date, the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Interest
Funds in the following order of priority:
(i) to the Class P Certificates, an amount equal to any
Prepayment Charges collected on the Mortgage Loans during the related Prepayment
Period and all amounts paid by the Servicer, the Seller or the Transferors in
respect of Prepayment Charges pursuant to this Agreement or the Transfer
Agreement, as applicable, and all amounts received in respect of any
indemnification paid as a result of a Prepayment Charge being unenforceable in
breach of the representations and warranties set forth in the Sale Agreement or
the related Transfer Agreement, in each case for the related Prepayment Period;
-77-
(ii) to the Class A and Class R Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such Class;
provided, however, if such amount is not sufficient to make a full distribution
of the Current Interest and any Interest Carry Forward Amount with respect to
the Class A and Class R Certificates, such amount will be distributed pro rata
among each Class of the Class A and Class R Certificates based on the ratio of
(x) the Current Interest and Interest Carry Forward Amount for each of the Class
A and Class R Certificates to (y) the total amount of Current Interest and any
Interest Carry Forward Amount for the Class A and Class R Certificates;
(iii) to the Class M-1 Certificates, the Class M-1 Current
Interest and any Class M-1 Interest Carry Forward Amount;
(iv) to the Class M-2 Certificates, the Class M-2 Current
Interest and any Class M-2 Interest Carry Forward Amount;
(v) to the Class B-1 Certificates, the Class B-1 Current Interest
and any Class B-1 Interest Carry Forward Amount;
(vi) to the Class B-2 Certificates, the Class B-2 Current
Interest and any Class B-2 Interest Carry Forward Amount;
(vii) to the Class B-3 Certificates, the Class B-3 Current
Interest and any Class B-3 Interest Carry Forward Amount;
(viii) to the Class B-4 Certificates, the Class B-4 Current
Interest and any Class B-4 Interest Carry Forward Amount;
(ix) to the Class B-5 Certificates, the Class B-5 Current
Interest and any Class B-5 Interest Carry Forward Amount; and
(x) any remainder pursuant to Section 4.04(f) hereof.
(c) Reserved.
(d) On each Distribution Date, the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Principal
Distribution Amount in the following order of priority, and each such
distribution shall be made only after all distributions pursuant to Section
4.04(b) above shall have been made until such amount shall have been fully
distributed for such Distribution Date:
(i) to the Class R Certificate and the Class A Certificates,
sequentially, the Class A Principal Distribution Amount, until the Certificate
Principal Balances thereof have been reduced to zero;
(ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
-78-
(iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
(iv) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;
(v) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;
(vi) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount;
(vii) to the Class B-4 Certificates, the Class B-4 Principal
Distribution Amount;
(viii) to the Class B-5 Certificates, the Class B-5 Principal
Distribution Amount; and
(ix) any remainder pursuant to Section 4.04(f) hereof.
(e) Reserved.
(f) On each Distribution Date, the Trustee shall make the following
distributions up to the following amounts from the Certificate Account of the
remainders pursuant to Section 4.04(b)(x) and (d)(ix) hereof and each such
distribution shall be made only after all distributions pursuant to Sections
4.04(b) and (d) above shall have been made until such remainders shall have been
fully distributed for such Distribution Date:
(i) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the Class M-1 Unpaid Realized
Loss Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Unpaid
Realized Loss Amount;
(iv) to the Class B-1 Certificates, the Class B-1 Unpaid Realized
Loss Amount;
(v) to the Class B-2 Certificates, the Class B-2 Unpaid Realized
Loss Amount;
(vi) to the Class B-3 Certificates, the Class B-3 Unpaid Realized
Loss Amount;
(vii) to the Class B-4 Certificates, the Class B-4 Unpaid
Realized Loss Amount;
-79-
(viii) to the Class B-5 Certificates, the Class B-5 Unpaid
Realized Loss Amount;
(ix) to the Class A, Class R, Class M and Class B Certificates,
on a pro rata basis, based upon outstanding Floating Rate Certificate Carryover
for each such Class, the Floating Rate Certificate Carryover for each Class; and
(x) the remainder pursuant to Section 4.04(g) hereof.
(g) on each Distribution Date, the Trustee shall allocate the
remainders pursuant to Section 4.04(f)(x) as follows:
(i) to the Class C Certificates in the following order of
priority, (I) the Class C Current Interest, (II) the Class C Interest Carry
Forward Amount, (III) as principal on the Class C Certificate until the
Certificate Principal Balance of the Class C Certificates has been reduced to
zero and (IV) the Class C Unpaid Realized Loss Amount; and
(ii) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Trustee shall allocate the
remainder pursuant to Section 4.04(g)(ii) hereof (i) to the Trustee to reimburse
any indemnification amounts owing to the Trustee from the Trust Fund and (ii) to
the Class R Certificate and such distributions shall be made only after all
preceding distributions shall have been made until such remainder shall have
been fully distributed.
(i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Trustee shall allocate the Applied Realized Loss
Amount for the Certificates to reduce the Certificate Principal Balances of the
Class C Certificates and the Subordinated Certificates in the following order of
priority:
(i) to the Class C Certificates, until the Class C Certificate
Principal Balance is reduced to zero;
(ii) to the Class B-5 Certificates until the Class B-5
Certificate Principal Balance is reduced to zero;
(iii) to the Class B-4 Certificates until the Class B-4
Certificate Principal Balance is reduced to zero;
(iv) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;
(v) to the Class B-2 Certificate until the Class B-2 Principal
Balance is reduced to zero;
(vi) to the Class B-1 Certificate until the Class B-1 Principal
Balance is reduced to zero;
-80-
(vii) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
(viii) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least five (5) Business Days prior to the related Record Date or,
if not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.
In accordance with this Agreement, the Servicer shall prepare and deliver a
report (the "Remittance Report") to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Servicer and the Trustee
may agree from time to time) containing such data and information as to permit
the Trustee to prepare the Monthly Statement to Certificateholders and make the
required distributions for the related Distribution Date. The Trustee will
prepare the Monthly Report based solely upon the information received from the
Servicer. The Trustee shall have no obligation or duty to review, recalculate or
verify information in the Remittance Report.
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on information
provided by the Servicer, the Trustee shall prepare and make available on its
website located at ▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ to each Holder of a Class of
Certificates of the Trust Fund, the Servicer, the Rating Agencies and the
Depositor a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein, (C) the Extra Principal Distribution
Amount, if any, and (D) the aggregate amount of Prepayment Charges, if any;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;
(iii) any Interest Carryforward Amount for each Class of the
Class A, Class M and Class B Certificates;
(iv) the Class Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;
-81-
(v) the Pool Stated Principal Balance for such Distribution Date;
(vi) the amount of the Servicing Fee paid to or retained by the
Servicer, and any amounts constituting reimbursement or indemnification of the
Servicer or Trustee;
(vii) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(viii) the amount of Advances included in the distribution on
such Distribution Date;
(ix) the cumulative amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts to date;
(x) the amount of (A) Realized Losses and (B) Applied Realized
Loss Amounts with respect to such Distribution Date;
(xi) the number and aggregate principal amounts of Mortgage Loans
(A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60 days,
(2) 61 to 90 days and (3) 91 or more days, and (B) in foreclosure and Delinquent
(1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case as of
the close of business on the last day of the calendar month preceding such
Distribution Date;
(xii) the total number and principal balance of any REO
Properties as of the close of business on the last day of the calendar month
preceding such Distribution Date;
(xiii) the aggregate Stated Principal Balance of all Liquidated
Loans as of the preceding Distribution Date;
(xiv) whether a Trigger Event has occurred;
(xv) with respect to each Class of Certificates, any Interest
Carry Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;
(xvi) with respect to each Class of Certificates, any Floating
Rate Certificate Carryover with respect to such Distribution Date for each such
Class, any Floating Rate Certificate Carryover paid for each such Class and any
remaining Floating Rate Certificate Carryover for each such Class;
(xvii) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;
(xviii) the number of Mortgage Loans for which Prepayment Charges
were received during the related Prepayment Period and, for each such Mortgage
Loan, the
-82-
amount of Prepayment Charges received during the related Prepayment Period and
in the aggregate of such amounts for all such Mortgage Loans since the Cut-off
Date;
(xix) Reserved;
(xx) the amount and purpose of any withdrawal from the Collection
Account pursuant to Section 3.08(a)(v); and
(xxi) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC Regular Interest or
REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
Regular Interest or REMIC "residual interest".
(b) The Trustee will make the Monthly Statement (and, at its option,
any additional files containing the same information in an alternative format)
available each month to Certificateholders, other parties to this Agreement and
any other interested parties via the Trustee's Internet website. The Trustee's
Internet website shall initially be located at ▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇.
Assistance in using the website can be obtained by calling the Trustee's
customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the
website are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The Trustee shall have
the right to change the way the monthly statements to Certificateholders are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes.
The Trustee shall also be entitled to rely on but shall not be responsible
for the content or accuracy of any information provided by third parties for
purposes of preparing the monthly statement and may affix thereto any disclaimer
it deems appropriate in its reasonable discretion (without suggesting liability
on the part of any other party hereto).
As a condition to access the Trustee's internet website, the Trustee may
require registration and the acceptance of a disclaimer. The Trustee will not be
liable for the dissemination of information in accordance with this Agreement.
(c) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Trustee shall make available on its
website or cause to be furnished to each Person who at any time during the
calendar year was a Certificateholder of record, a statement containing the
information set forth in clauses (a)(i) and (a)(ii) of this Section 4.05
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as are from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificate the Form 1066 and each Form
1066Q and shall respond promptly and, if necessary, with the cooperation of the
Servicer, to written requests made not more frequently than quarterly by any
Holder of Class R Certificate with respect to the following matters: The
original projected principal and interest cash flows on the Closing
-83-
Date on each Class of regular and residual interests created hereunder and on
the Mortgage Loans, based on the Prepayment Assumption;
(i) The projected remaining principal and interest cash flows as
of the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The Prepayment Assumption and any interest rate assumptions
used in determining the projected principal and interest cash flows described
above;
(iii) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through the end
of such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(iv) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the REMICs with respect
to such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;
(v) The amount and timing of any non-interest expenses of the
REMICs; and
(vi) Any taxes (including penalties and interest) imposed on the
REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Original Certificate
Integral Multiples in Principal Balance or Notional
Class Minimum Denomination Excess of Minimum Amount
----- -------------------- --------------------- -----------------------------
A $25,000.00 $1.00 $167,775,000
M-1 $25,000.00 $1.00 $ 26,065,000
-84-
M-2 $25,000.00 $1.00 $ 18,478,000
B-1 $25,000.00 $1.00 $ 10,034,000
B-2 $25,000.00 $1.00 $ 4,038,000
B-3 $25,000.00 $1.00 $ 4,283,000
B-4 $25,000.00 $1.00 $ 4,894,000
B-5 $25,000.00 $1.00 $ 4,773,000
C (1) (1) 100%
P (2) (2) (2)
R $ 100.00 N/A $ 100.00
----------
(1) The Class C Certificates shall not have minimum dollar denominations or
certificate notional amount and shall be issued in a minimum percentage
interest of 25%. The initial Overcollateralization Amount is $4,409,152.03.
(2) The Class P Certificates shall not have a minimum dollar denomination or
Certificate Principal Balance and shall be issued in a minimum percentage
interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust Fund, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Authenticating Agent by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Authenticating Agent shall authenticate
the Certificates to be issued at the written direction of the Depositor, or any
Affiliate thereof.
The Class B-5 Certificates sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global certificates in definitive, fully registered form without interest
coupons with the applicable legends set forth in Exhibit A hereto added to the
form of each such Certificate (each, a "Regulation S Book-Entry Certificate"),
which shall be deposited on behalf of the Holders of such Certificates
represented thereby with the Trustee, as custodian for DTC and registered in the
name of a nominee of DTC, duly executed and authenticated by the Trustee and the
Authenticating Agent as hereinafter provided. The aggregate principal amounts of
the Regulation S Book-Entry Certificate may from time to time be increased or
decreased by adjustments made on the records of the Trustee or DTC or its
nominee, as the case may be, as hereinafter provided.
The Class B-5 Certificates sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global certificates in
definitive, fully registered form without interest coupons with the applicable
legends set forth in Exhibit A hereto added to the form of each such Certificate
(each, a "Rule 144A Book-Entry Certificate), which shall be deposited on
-85-
behalf of the Holders of such Certificates represented thereby with the Trustee,
as custodian for DTC and registered in the name of a nominee of DTC duly
executed and authenticated by the Trustee and the Authenticating Agent as
hereinafter provided. The aggregate principal amount of the Rule 144A Book-Entry
Certificates may from time to time be increased or decreased by adjustments made
on the records of the Trustee or DTC or its nominee, as the case may be, as
hereinafter provided.
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency designated by the Trustee. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and the
Authenticating Agent shall authenticate and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for registration of Transfer or exchange shall be
accompanied by a written instrument of Transfer in form satisfactory to the
Trustee duly executed by the holder thereof or his attorney duly authorized in
writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Trustee in accordance with the
Trustee's customary procedures.
No Transfer of a Class B-5, Class C or Class P Certificate shall be made
unless such Transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under the Securities Act and such state
securities laws. In the event that a Transfer is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such Transfer and such Certificateholder's prospective transferee shall (except
with respect to the initial transfer of a Class B-5, Class C or Class P
Certificate by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.) each certify to the Trustee in writing the
facts surrounding the Transfer in substantially the form set forth in Exhibit F
and (i) deliver a letter in substantially the form of either Exhibit G or
Exhibit H or (ii) there shall be delivered to the Trustee an Opinion of Counsel
that such Transfer may be made pursuant to an
-86-
exemption from the Securities Act, which Opinion of Counsel shall not be an
expense of the Depositor or the Trustee. The Depositor shall provide to any
Holder of a Class B-5, Class C or Class P Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information in the possession of the Trustee regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Class B-5, Class C or Class P Certificate
desiring to effect such Transfer shall, and does hereby agree to, indemnify the
Depositor and the Trustee against any liability that may result if the Transfer
is not so exempt or is not made in accordance with such federal and state laws.
By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Depositor, the Trustee and any of their
respective successors that: (i) such Person is not a "U.S. person" within the
meaning of Regulation S and was, at the time the buy order was originated,
outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule 144A or (B) in an offshore
transaction (as defined in Regulation S) in compliance with the provisions of
Regulation S, in each case in compliance with the requirements of this
Agreement; and it will notify such transferee of the transfer restrictions
specified in this Section.
No transfer of an ERISA Restricted Certificate that is a Class R
Certificate may be made to any Person unless the Trustee has received a
representation that such Person is not an employee benefit plan subject to Title
I of ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law"), or to any Person
directly or indirectly acquiring such Certificate by, on behalf of, or with any
assets of any such plan (collectively, "Plan"). Each Person to whom a Class R
Certificate is to be transferred shall be required or deemed to represent that
it is not a Plan.
No transfer of an ERISA-Restricted Certificate (other than the Class R
Certificate) shall be made to any Person unless the Trustee has received (A) a
representation that such transferee is
-87-
not a Plan, or (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that such transferee is an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(C) solely in the case of any such Certificate that is a Definitive Certificate,
an Opinion of Counsel satisfactory to the Trustee, and upon which the Trustee
shall be entitled to rely, to the effect that the acquisition and holding of
such Certificate will not constitute or result in a nonexempt prohibited
transaction under Title I of ERISA or Section 4975 of the Code, or a violation
of Similar Law, and will not subject the Trustee, the Servicer or the Depositor
to any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the Servicer or
the Depositor.
For purposes of the two immediately preceding paragraphs of this Subsection
5.02(a), other than clause (C) in the immediately preceding paragraph, the
representations as set forth therein shall be deemed to have been made to the
Trustee by the transferee's acceptance of an ERISA Restricted Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in any Class of
ERISA Restricted Certificates). Notwithstanding any other provision herein to
the contrary, any purported transfer of an ERISA Restricted Certificate to or on
behalf of a Plan without the delivery to the Trustee of a representation or an
Opinion of Counsel satisfactory to the Trustee as described above shall be void
and of no effect. The Trustee shall not be under any liability to any Person for
any registration or transfer of any ERISA Restricted Certificate that is in fact
not permitted by this Section 5.02(a), nor shall the Trustee be under any
liability for making any payments due on such Certificate to the Holder thereof
or taking any other action with respect to such Holder under the provisions of
this Agreement so long as the transfer was registered by the Trustee in
accordance with the foregoing requirements. The Trustee shall be entitled, but
not obligated, to recover from any Holder of any ERISA Restricted Certificate
that was in fact a Plan and that held such Certificate in violation of this
Section 5.02(a) all payments made on such ERISA Restricted Certificate at and
after the time it commenced such holding. Any such payments so recovered shall
be paid and delivered to the last preceding Holder of such Certificate that is
not a Plan.
(b) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class R Certificate unless, in addition
to the certificates required to be delivered to the Trustee under subparagraph
(a) above,
-88-
the Trustee shall have been furnished with an affidavit (a "Transfer Affidavit")
of the initial owner or the proposed transferee in the form attached hereto as
Exhibit E-1 and an affidavit of the proposed transferor in the form attached
hereto as Exhibit E-2. In the absence of a contrary instruction from the
transferor of a Class R Certificate, declaration (11) in Appendix A of the
Transfer Affidavit may be left blank. If the transferor requests by written
notice to the Trustee prior to the date of the proposed transfer that one of the
two other forms of declaration (11) in Appendix A of the Transfer Affidavit be
used, then the requirements of this Section 5.02(b)(ii) shall not have been
satisfied unless the Transfer Affidavit includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership Interest
in a Class R Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee. Further, no transfer, sale or other
disposition of any Ownership Interest in a Class R Certificate may be made to a
person who is not a U.S. Person (within the meaning of section 7701 of the Code)
unless such person furnishes the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI (or any successor
thereto).
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(b), then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not permitted
by Section 5.02(a) and this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the Transfer
was registered after receipt of the related Transfer Affidavit. The Trustee
shall be entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R Certificate at and after either
such time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of such
Certificate.
(v) At the option of the Holder of the Class R Certificate, the
Class LTR Interest and the residual interest in the Upper Tier REMIC may be
severed and represented by separate certificates (with the separate certificate
that represents the Residual Interest also representing all rights of the Class
R Certificate to distributions attributable to a Pass-Through Rate on the Class
R Certificate in excess of the Net Rate); provided, however, that such separate
certification may not occur until the Trustee receives an Opinion of Counsel to
the effect that separate certification in the form and manner proposed would not
result in the imposition of federal tax upon the Trust Fund or any of the REMICs
provided for herein or cause any of the
-89-
REMICs provided for herein to fail to qualify as a REMIC; and provided further,
that the provisions of Sections 5.02(a) and (b) will apply to each such separate
certificate as if the separate certificate were a Class R Certificate. If, as
evidenced by an Opinion of Counsel, it is necessary to preserve the REMIC status
of any of the REMICs provided for herein, the Class LTR Interest and the
Residual Interest in the Upper Tier REMIC shall be severed and represented by
separate certificates (with the separate certificate that represents the
Residual Interest also representing all rights of the Class R Certificate to
distributions attributable to a Pass-Through Rate on the Class R Certificate in
excess of the Net Rate).
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(b) shall cease to apply (and the applicable portions of the legend
on a Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trustee or the Depositor, to the effect that the
elimination of such restrictions will not cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the imposition of any tax on the Trust Fund, any REMIC
provided for herein, a Certificateholder or another Person. Each Person holding
or acquiring any Ownership Interest in a Class R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Class R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(c) The transferor of the Class R Certificate shall notify the Trustee
in writing upon the transfer of the Class R Certificate.
(d) Additional Restrictions on Class B-5 Certificates.
The Class B-5 Certificates may not be offered or sold except to (i) QIBs in
reliance on the exemption from the registration requirements of the Securities
Act provided by Rule 144A that are "United States Persons" for purposes of the
Code, (ii) Institutional Accredited Investors that are United States Persons (as
defined by Regulation S) for purposes of the Code or (iii) outside the United
States, persons who are not U.S. persons (as defined by Regulation S) in
offshore transactions in compliance with Regulation S.
To permit compliance with the foregoing in connection with any proposed
transfer of the Class B-5 Certificates, the Trustee shall cooperate with the
Depositor in furnishing, upon the request of any Certificateholder, to such
Certificateholder or Certificate Owner and a prospective transferee designated
by such Certificateholder, the information required to be delivered under Rule
144A(d)(4).
Each Certificateholder, by its acceptance of a Class B-5 Certificate, will
be deemed to have represented and agreed as follows (terms used in this section
that are defined in Rule 144A are used herein as defined therein):
-90-
(1) It (A)(i) is a QIB, (ii) is aware that the sale of the Class B-5
Certificates, as applicable, is being made in reliance on Rule 144A and
(iii) is acquiring such Certificates for its own account or for the account
of a QIB, as the case may be, (B)(i) is an Institutional Accredited
Investor, (ii) is purchasing the Class B-5 Certificates being sold to it
for its own account or for certain qualified institutional accounts and
(iii) is not acquiring such Class B-5 Certificates with a view to any
resale or distribution thereof other than in accordance with the
restrictions set forth below or (C)(i) is not a U.S. person (as defined by
Regulation S), (ii) was at the time the buy order was originated outside
the United States and (iii) until the expiration of the 40-day distribution
compliance period (within the meaning of Regulation S), no offer, sale,
pledge or other transfer of such Certificates or any interest thereon shall
be made in the United States or to or for the account or benefit of a U.S.
person (as defined by Regulation S).
(2) It understands that the Class B-5 Certificates have not been and
will not be registered under the Securities Act and may not be reoffered,
resold, pledged or otherwise transferred except (A)(i) to a Person whom it
reasonably believes is a QIB in a transaction meeting the requirements of
Rule 144A, (ii) to an Institutional Accredited Investor in a transaction
exempt from the registration requirements of the Securities Act, or (iii)
outside the United States, to Persons who are not U.S. Persons (as defined
by Regulation S) in offshore transactions in compliance with Regulation S
and (B) in accordance with all applicable securities laws of the states of
the United States.
(3) It understands that any Class B-5 Certificates acquired by it
pursuant to clause (1)(B) above will be in the form of definitive physical
certificates ("Certificates") bearing the legend set forth in paragraph (4)
below.
(4) The Class B-5 Certificates will bear a legend to the following
effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED,
OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO
REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. IF
THIS CERTIFICATE IS A DEFINITIVE CERTIFICATE, NO TRANSFER OF THIS
CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE HAS RECEIVED IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRUSTEE (A) AN INVESTMENT LETTER FROM
THE PROSPECTIVE INVESTOR, AND (B) REPRESENTATIONS FROM THE TRANSFEROR
REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.
-91-
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL ACCREDITED
INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇, ▇▇ (▇) ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ TO A PERSON WHO IS NOT A U.S.
PERSON (AS DEFINED BY REGULATION S OF THE ACT ("REGULATION S")) IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S, AND IN EACH CASE
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES
AND SUBJECT TO THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING IN THE POOLING AND SERVICING AGREEMENT.
Any Class B-5 Certificate acquired pursuant to Regulation S will bear the
following two legends in replacement of the legends above:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES. NEITHER THIS
CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF WITHIN THE UNITED STATES (AS DEFINED IN RULES 901 THROUGH 905 OF
THE ACT ("REGULATION S")) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A
U.S. PERSON (AS DEFINED IN REGULATION S), IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO REGISTRATION.
THE HOLDER OF THIS CERTIFICATE BY HIS ACCEPTANCE HEREOF AGREES (A)
THAT, UNTIL THE EXPIRATION OF THE APPLICABLE "DISTRIBUTION COMPLIANCE
PERIOD" WITHIN THE MEANING OF REGULATION S, ANY OFFER, SALE, PLEDGE OR
OTHER TRANSFER OF THIS CERTIFICATE SHALL NOT BE MADE IN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON (EACH
AS DEFINED IN REGULATION S) AND (B) TO OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS CERTIFICATE WITHIN THE
-92-
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON
(EACH AS DEFINED IN REGULATION S) ONLY (1) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE ACT, (2) TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3)
TO AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D, OR (4) OUTSIDE THE UNITED STATES TO A
PERSON WHO IS NOT A U.S. PERSON (AS DEFINED BY REGULATION S OF THE ACT
("REGULATION S")) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S, AND IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE UNITED STATES AND SUBJECT TO THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE
POOLING AND SERVICING AGREEMENT.
(5) Any information the purchaser desires concerning the Class B-5
Certificates or any other matter relevant to its decision to purchase the
Class B-5 Certificates is or has been made available to it.
The transferor of a Class B-5 Certificate or a beneficial interest in a
Class B-5 Certificate (except in the case of the transfer of (i) a beneficial
interest in a Rule 144A Book-Entry Certificate for a beneficial interest in a
Rule 144A Book-Entry Certificate or (ii) a beneficial interest in a Regulation S
Book-Entry Certificate for a beneficial interest in a Regulation S Book-Entry
Certificate) shall be required to provide to the Trustee (i) in the case of a
transferor holding a Definitive Certificate or a beneficial interest in a
Regulation S Book-Entry Certificate and wishing to transfer to a Person in the
form of a beneficial interest in a Rule 144A Book-Entry Certificate, a
transferor letter substantially in the form attached as Exhibit O and a
transferee letter substantially in the form attached as Exhibit H or (ii) in the
case of a transferor holding a Definitive Certificate or a beneficial interest
in a Rule 144A Book-Entry Certificate and wishing to transfer to a Person in the
form of a beneficial interest in a Regulation S Book-Entry Certificate, a
transferor letter substantially in the form attached as Exhibit N.
No transfer of a Certificate to a transferee in the form of a Definitive
Certificate shall be registered unless such transfer is (i) to a QIB and a
transferor letter substantially in the form attached as Exhibit O and a
transferee letter substantially in the form attached as Exhibit H are delivered
to the Trustee, (ii) outside the United States, to a person who is not a U.S.
Person (as defined by Regulation S) in an offshore transaction in compliance
with Regulation S and a transferor letter substantially in the form attached as
Exhibit N is delivered to the Trustee or (iii) to an "accredited investor" under
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and a
-93-
transferor letter substantially in the form attached as Exhibit F and a
transferor letter substantially in the form attached as Exhibit G are delivered
to the Trustee.
The Trustee may conclusively rely on any such transferor letter and
representation letter as sufficient to confirm that the proposed transfer is
being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and other applicable laws.
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor or the Trustee.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee and its counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The Trustee and any agent of the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions as provided in this Agreement and for all other
purposes whatsoever, and neither the Trustee nor any agent of the Trustee shall
be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in writing
from the Trustee, (b) state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, and (c) provide a copy of the communication that such
Certificateholders propose to transmit or if the Depositor shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the
-94-
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Class C, Class P and Class R Certificates shall be definitive
certificates. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08(a):
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of the
Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
-95-
In the event that Definitive Certificates are issued pursuant to Section
5.08(b), clauses (a) through (g) of this Section 5.06 shall continue to be
applicable with respect to all remaining Book-Entry Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
(a) If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depository or the Depositor advises the Trustee that
the Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor notifies the Trustee and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Book-Entry Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners of such Class requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Authenticating Agent
shall authenticate and the Trustee shall deliver such Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in delivery
of such instructions and each may conclusively rely on, and shall be protected
in relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.
(b) Any Class B-5 Certificates sold to an "accredited investor" under
Rule 501(a)(1), (2), (3) or (7) under the Securities Act shall be issued in the
form of one or more Definitive Certificates. The Trustee will effect such
transfer in accordance with this Agreement.
SECTION 5.09. Maintenance of Office or Agency.
-96-
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at DB Services Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Transfer Unit as offices for such purposes. The Trustee
will give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
SECTION 5.10. Authenticating Agents.
(a) One or more Authenticating Agents (each, an "Authenticating
Agent") may be appointed hereunder each of which shall be authorized to act on
behalf of the Trustee in authenticating the Certificates. Wherever reference is
made in this Agreement to the authentication of Certificates by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or any state
thereof, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to operate a trust business and subject to
supervision or examination by federal or state authorities. If the
Authenticating Agent is a party other than the Trustee, the Trustee shall have
no liability in connection with the performance or failure of performance of the
Authenticating Agent. The Trustee shall be the Authenticating Agent during any
such time as no other Authenticating Agent has been appointed and has not
resigned.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 5.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 5.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
-97-
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed upon
and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.
Except as provided in the next paragraph, the Depositor and the Servicer
will each keep in full effect its existence, rights and franchises as a
corporation or banking association under the laws of the United States or under
the laws of one of the States thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (except for the
execution of an assumption agreement where such succession is not effected by
operation of law); provided, however, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and
Others.
None of the Depositor or the Servicer or any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor or the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense, incurred in connection with the performance of their duties under this
Agreement or incurred in connection with any audit, controversy or judicial
proceeding
-98-
relating to a governmental taxing authority or any legal action relating to this
Agreement or the Certificates, other than (i) any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder or (ii) which does not constitute an
"unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). Neither the Depositor nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that either of the
Depositor or the Servicer in its discretion may undertake any such action that
it may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and the interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor and the Servicer shall be
entitled to be reimbursed therefor out of the Collection Account as provided by
Section 3.08 hereof.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until Trustee or a successor servicer reasonably acceptable to Trustee is
appointed and has assumed the Servicer's responsibilities, duties, liabilities
and obligations hereunder. Any such resignation shall not relieve the Servicer
of any of the obligations specified in Section 7.01 and 7.02 as obligations that
survive the resignation or termination of the Servicer.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for Persons
performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
The Servicer shall provide the Trustee, upon request, with copies of such
policies and fidelity bond or a certification from the insurance provider
evidencing such policies and fidelity bond. In the event that any such policy or
bond ceases to be in effect, the Servicer shall use its reasonable best efforts
to obtain a comparable replacement policy or bond from an insurer or issuer
meeting the requirements set forth above as of the date of such replacement. Any
such policy or fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee.
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
-99-
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to make any Advance, to deposit
in the Collection Account or the Certificate Account or remit to the Trustee any
payment (excluding a payment required to be made under Section 4.01 hereof)
required to be made under the terms of this Agreement, which failure shall
continue unremedied for three Business Days and, with respect to a payment
required to be made under Section 4.01 hereof, for one Business Day, after the
date on which written notice of such failure shall have been given to the
Servicer by the Trustee or the Depositor, or to the Trustee and the Servicer by
the Holders of Certificates evidencing greater than 50% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue, which failure or breach shall continue unremedied for a
period of 60 days after the date on which written notice of such failure shall
have been given to the Servicer by the Trustee or the Depositor, or to the
Trustee and the Depositor by the Holders of Certificates evidencing greater than
50% of the Voting Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) consent by the Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or
(v) admission by a Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) any failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
Agreement, which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer any other party to this
Agreement.
If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates, shall, by notice in writing to the
Servicer (with a copy to each Rating Agency), terminate all of the rights and
-100-
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. To the
extent the Event of Default resulted from the failure of the Servicer to make a
required Advance, the Trustee shall terminate the Servicer and thereupon make
any Advance described in Section 4.01 hereof as successor servicer. The Trustee
is hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans. The Servicer and
the Trustee shall promptly notify the Rating Agencies of the occurrence of an
Event of Default or an event that, with notice, passage of time, other action or
any combination of the foregoing would be an Event of Default, such notice to be
provided in any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination.
For purposes of this Section 7.01, the Trustee shall not be deemed to have
knowledge of an Event of Default unless a Responsible Officer of the Trustee
assigned to and working in the Trustee's Corporate Trust Office has actual
knowledge thereof or unless written notice of any event that is in fact such
Event of Default is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall be the successor to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities (other than liabilities incurred by the
predecessor Servicer) relating thereto placed on the Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, subject to the last
paragraph of Section 7.01, the Trustee shall be entitled to all fees,
compensation and reimbursement for costs and expenses that the Servicer would
have been
-101-
entitled to hereunder if the Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Servicer in accordance with Section 7.01 hereof, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Section 4.01 hereof or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which
successor shall not adversely affect the then current rating of the Certificates
by each Rating Agency (as acknowledged by a letter from each Rating Agency, as
described below) as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor Servicer shall be an institution that is a ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, that has a net worth
of at least $15,000,000, and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01), with like
effect as if originally named as a party to this Agreement; and provided further
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced as a result of such assignment and delegation. No appointment of a
successor to the Servicer hereunder shall be effective until the Trustee and the
Depositor shall have consented thereto and written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder.
The Trustee shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer hereunder. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
The Trustee or other successor servicer shall be entitled to be reimbursed
by the Servicer (or by the Trust Fund if the Servicer is unable to fulfill its
obligations hereunder) for all reasonable out-of-pocket costs (such expenses of
the Trustee to be documented by the Trustee to the extent possible) associated
with the transfer of servicing from the predecessor Servicer, including without
limitation any such costs or expenses associated with the complete transfer of
all servicing data and the completion, correction or manipulation of such
servicing data or otherwise to enable the Trustee as successor servicer or other
successor servicer to service the Mortgage Loans properly and effectively.
-102-
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Depositor and each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. In case an Event of Default or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee
shall, at the written direction of the majority of the Certificateholders, or
may, proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders. Any permissive right of the
Trustee enumerated in this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform on their
face to the requirements of this Agreement. If any such instrument is found not
to conform on its face to the requirements of this Agreement in a material
manner, the Trustee shall notify the person providing such Agreement of such
non-conformance, and if the instrument is not corrected to the its satisfaction,
the Trustee will provide notice thereof to the Certificateholders and take such
further action as directed by the Certificateholders.
-103-
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct, its negligent failure to perform its obligations in
compliance with this Agreement, or any liability that would be imposed by reason
of its willful misfeasance or bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable, individually or as Trustee,
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not, individually or as Trustee, be liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee unless the Trustee was negligent or acted in
bad faith or with willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the Holders in accordance with
this Agreement relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and shall
be fully 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 party or parties;
(ii) the Trustee may consult with counsel of its choice 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 Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the Trustee,
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement,
-104-
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by the Holders of
each Class of Certificates evidencing not less than 25% of the Voting Rights of
such Class;
(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
custodians, accountants or attorneys or independent contractors and the Trustee
will not be responsible for any misconduct or negligence on the part of any
agent, custodian, accountant, attorney or independent contractor appointed with
due care by it hereunder;
(vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this Agreement
(other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have received
written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any investigation
of matters arising hereunder or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby;
(x) if requested by the Servicer, the Trustee may appoint the
Servicer as the trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such power of
attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and
(xi) in order to comply with its duties under the U.S.A. Patriot
Act, the Trustee shall obtain and verify certain information and documentation
from the other parties hereto, including but not limited to, such party's name,
address and other identifying information.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
-105-
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. The Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any rerecording, refiling or
redepositing, as applicable, thereof, (B) to see to any insurance or (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, or any
related document other than with respect to the execution and authentication of
the Certificates, if it so executed or authorized the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Servicer of any funds paid to the Depositor or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor or the Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it was not the
Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee shall be entitled to, such compensation as shall be agreed to
in writing by the Trustee (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee.
SECTION 8.06. Indemnification and Expenses of Trustee.
(a) The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Trust Fund for any loss,
liability or expense incurred in connection with (i) any audit, controversy or
judicial proceeding relating to a governmental authority or any default, claim,
pending or threatened claim or legal proceeding incurred without negligence or
willful misconduct on their part, arising out of, or in connection with the
acceptance or administration of the trusts created hereunder and (ii) the
performance of their duties hereunder, including any applicable fees and
expenses payable hereunder, and the costs and expenses of defending themselves
against any claim in connection with the exercise or performance of any of their
powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have given
the Depositor written notice thereof promptly after the Trustee shall have
knowledge thereof; provided that failure to so notify shall not relieve the
Trust Fund of the obligation to indemnify
-106-
the Trustee; however, any reasonable delay by the Trustee to provide written
notice to the Depositor and the Holders promptly after the Trustee shall have
obtained knowledge of a claim shall not relieve the Trust Fund of the obligation
to indemnify the Trustee under this Section 8.06;
(ii) while maintaining control over its own defense, the Trustee
shall reasonably cooperate and consult with the Depositor in preparing such
defense;
(iii) notwithstanding anything to the contrary in this Section
8.06, the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld or delayed; and
(iv) indemnification therefor would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii).
The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
(b) The Trustee shall be entitled to reimbursement by the Trust Fund
of all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with this Agreement (including fees and expenses of its
counsel and all persons not regularly in its employment), except any such
expenses, disbursements and advances that either (i) arise from its negligence,
bad faith or willful misconduct or (ii) do not constitute "unanticipated
expenses" within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
SECTION 8.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a long-term deposit rating of
at least "A2" by ▇▇▇▇▇'▇ and "A" by S&P. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor and its Affiliates; provided, however,
that such corporation cannot be an Affiliate of the Servicer.
SECTION 8.08. Resignation and Removal of Trustee.
-107-
The Trustee may at any time resign and be discharged from the trusts hereby
created by (1) giving written notice of resignation to the Depositor by mailing
notice of resignation by first class mail, postage prepaid, to the
Certificateholders at their addresses appearing on the Certificate Register and
each Rating Agency, not less than 60 days before the date specified in such
notice when, subject to Section 8.09, such resignation is to take effect, and
(2) acceptance of appointment by a successor trustee in accordance with Section
8.09 and meeting the qualifications set forth in Section 8.07. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice or resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and shall promptly appoint a successor trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee and one copy of which shall be delivered to the
successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates may at any time remove the Trustee and the Depositor shall appoint
a successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered by the successor trustee to the Trustee so
removed and one complete set to the successor so appointed. Notice of any
removal of the Trustee shall be given to each Rating Agency by the successor
trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.09 hereof.
SECTION 8.09. Successor Trustee.
Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
-108-
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.10. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.11, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be compensated by the Trust Fund and
subject to the written approval of the Servicer. The Trustee shall not be liable
for the actions of any co-trustee appointed with due care; provided that the
appointment of a co-trustee shall not relieve the Trustee of its obligations
hereunder. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request to do so, or in the case an Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.07 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be
-109-
performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor.
Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.12. Tax Matters.
(a) It is intended that each of the REMICs provided for herein REMIC
shall constitute, and that the affairs of the Trust Fund shall be conducted so
as to allow each such REMIC to qualify as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
each of the REMICs provided for herein and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, in a timely manner, a U.S.
Real Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file or
cause to be prepared and filed with the Internal Revenue Service and applicable
state or local tax authorities income tax or information returns for each
taxable year with respect to each of the REMICs provided for herein, containing
such information and at the times and in the manner as may be required by the
Code or state or local tax laws, regulations, or rules, and furnish or cause to
be furnished to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby; (b) within thirty days
of the Closing Date, furnish or cause to be
-110-
furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be
required by the Code, the name, title, address, and telephone number of the
person that the holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for each of the REMICs provided for herein; (c) make or
cause to be made elections, on behalf of each of the REMICs provided for herein
to be treated as a REMIC on the federal tax return of such REMICs for their
first taxable years (and, if necessary, under applicable state law); (d) prepare
and forward, or cause to be prepared and forwarded, to the Certificateholders
and to the Internal Revenue Service and, if necessary, state tax authorities,
all information returns and reports as and when required to be provided to them
in accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) to the extent that they are under its control conduct the
affairs of each of the REMICs provided for herein at all times that any
Certificates are outstanding so as to maintain the status of each of the REMICs
provided for herein as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of tax upon any such REMIC; (h) pay, from the sources
specified in the last paragraph of this Section 8.12, the amount of any federal,
state and local taxes, including prohibited transaction taxes as described
below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs provided for herein, and
the fair market value and adjusted basis of the Trust Fund property determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent each of the REMICs provided for herein in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within 10
days after the Closing Date all information or data that the Trustee requests in
writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including, without limitation,
-111-
the price, yield, prepayment assumption and projected cash flows of the
Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide to
the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of any of
the REMICs provided for herein as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the any of such REMICs as defined
in Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises out of or results from a breach by
the Trustee of any of its obligations under this Agreement, (ii) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or as a result of the location of such other party (except for
the Trustee) or (iii) in all other cases, or in the event that any liable party
here fails to honor its obligations under the preceding clauses (i) or (ii), any
such tax will be paid first with amounts otherwise to be distributed to the
Class R Certificateholders (pro rata) pursuant to Section 4.04, and second with
amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class C Certificates (pro rata),
second, to the Class B-5 Certificates (pro rata), third, to the Class B-4
Certificates (pro rata), fourth, to the Class B-3 Certificates (pro rata),
fifth, to the Class B-2 Certificates (pro rata), sixth, to the Class B-1
Certificates (pro rata), seventh, to the Class M-2 Certificates (pro rata),
eighth, to the Class M-1 Certificates (pro rata) and ninth, to the Class A
Certificates and Class R Certificate (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class R
Certificate, the Trustee is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holders of the Class R Certificate
(and, if necessary, from the Holders of all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Trustee agrees to promptly
notify in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.
(b) Each of the Depositor and the Trustee agrees not to knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.
-112-
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (i) an Optional Termination and
(ii) the later of (a) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (b) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (x) 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. James's, living on the date hereof and (y) the Latest
Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Trustee shall attempt to terminate the Trust Fund by
conducting an auction by the Trustee of all of the Mortgage Loans and REO
Properties (the "Auction") upon its receipt of bids in accordance with the
auction procedures set forth in Exhibit N, and which bids are solicited by the
Auction Agent or its successor. The Trustee shall be entitled to retain the
Auction Agent in connection with the Auction, the cost of which shall be
included in the Optional Termination Price (unless an Auction does not result in
the termination of the Trust Fund, in which case such costs shall be an expense
of the Trust Fund). The Trustee shall accept the highest bid received at the
Auction; provided that the amount of such bid equals or exceeds the Optional
Termination Price. The Trustee shall determine the Optional Termination Price
based upon information provided by (i) the Servicer with respect to the amounts
described in clauses (A) and (B) of the definition of "Optional Termination
Price", (ii) the Depositor with respect to the information described in clause
(C) of the definition of "Optional Termination Price." The Trustee may
conclusively rely upon the information provided to it in accordance with the
immediately preceding sentence and shall not have any liability for the failure
of any party to provide such information.
If an Optional Termination does not occur as a result of the
Auction's failure to achieve the Optional Termination Price, the Servicer may,
on any Distribution Date following such Auction, at its option, terminate the
Trust Fund by purchasing all of the Mortgage Loans and REO Properties at a price
equal to the Optional Termination Price. In connection with such termination,
the Optional Termination Price shall be delivered to the Trustee no later than
the Servicer Remittance Date immediately preceding the related Distribution
Date. Notwithstanding anything to the contrary herein, the Optional Termination
Amount paid to the Trustee by the winning bidder at the Auction or by the
Servicer shall be deposited by the Trustee directly into the Certificate Account
immediately upon receipt. Upon any termination as a result of an Auction, the
Trustee shall, out of the Optional Termination Amount deposited into the
Certificate Account, (x) reimburse itself for its costs and expenses necessary
to conduct the Auction and any other unreimbursed amounts owing to it and (y)
pay to the Servicer, the
-113-
aggregate amount of any unreimbursed out-of-pocket costs and expenses owed to
the Servicer and any unpaid or unreimbursed Servicing Fees, Advances and
Servicing Advances.
(c) Notwithstanding anything to the contrary in clause (b) above, in
the event that the Trustee receives the written opinion of a nationally
recognized participant in mortgage finance acceptable to the Seller (which may
be the Auction Agent) that the Mortgage Loans and REO Properties to be included
in the Auction will not be saleable at a price sufficient to achieve the
Optional Termination Price, the Trustee need not conduct the Auction. In such
event, the Servicer shall have the option to purchase the Mortgage Loans and REO
Properties at the Optional Termination Price as of the Initial Optional
Termination Date.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder or (ii) the Trustee
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within seven (7) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee
specified in such notice.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed no later than the last calendar day of
the month immediately preceding the month of such final distribution (or with
respect to an Auction, mailed no later than one Business Day following
completion of such Auction). Any such notice shall specify (a) the Distribution
Date upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates at the office therein designated, (b)
the location of the office or agency at which such presentation and surrender
must be made, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Trustee will give such notice to each Rating Agency at the time such notice
is given to Certificateholders.
In the event such notice is given, the Trustee shall cause all funds in the
Collection Account to be deposited in the Certificate Account on the Servicer
Remittance Date prior to the applicable Distribution Date in an amount equal to
the final distribution in respect of the Certificates. Upon such final deposit
with respect to the Trust Fund, the Trustee shall promptly release the Mortgage
Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
-114-
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall not have any further duties or obligations
with respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Trustee or the Servicer completes an Optional
Termination as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Servicer, to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of any of the REMICs provided for herein as defined in section
860F of the Code, or (ii) cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation period and
notify the Trustee thereof, and the Trustee shall in turn specify the first day
of such period in a statement attached to the final tax returns of each of the
REMICs provided for herein pursuant to Treasury Regulation Section 1.860F-1. The
Depositor shall satisfy all the requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Servicer and addressed to and
provided to the Trustee;
(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class R Certificateholders all cash on hand (other than cash
retained to meet outstanding claims), and the Trust Fund shall terminate at that
time, whereupon the Trustee shall not have any further duties or obligations
with respect to sums distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
-115-
(c) The Trustee as agent for each REMIC hereby agrees to adopt and
sign such a plan of complete liquidation prepared and delivered to it by
Depositor upon the written request of the Depositor, and the receipt of the
Opinion of Counsel referred to in Section 9.03(a) and to take such other action
in connection therewith as may be reasonably requested by the Depositor.
(d) Notwithstanding any other terms of this Agreement, prior to any
termination of the Trust Fund, the Servicer may prepare a reconciliation of all
Advances and Servicing Advances made by it for which it has not been reimbursed
and a reasonable estimate of all additional Servicing Advances and other costs
for which it would be entitled to be reimbursed if the Trust Fund were not being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03 (Limitation on Liability of the Depositor, the
Servicer and Others), and the Servicer may recover these Advances, Servicing
Advances and estimated Servicing Advances and other costs from the Collection
Account (to the extent that such recovery of Servicing Advances, estimated
Servicing Advances and other costs constitutes "unanticipated expenses" within
the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
(e) Notwithstanding any other terms of this Agreement, unless the
Servicer previously has notified the Trustee that it has entered into a
servicing agreement for the servicing after the termination date of the Trust
Fund assets, at least 20 days prior to any termination of the Trust Fund, the
Trustee or the Depositor shall notify the Servicer in writing to transfer the
assets of the Trust Fund as of the termination date to the person specified in
the notice, or if such person is not then known, to continue servicing the
assets until the date that is 20 days after the termination date and on the
termination date, the Depositor shall notify the Servicer of the person to whom
the assets should be transferred on that date. In the latter event the Servicer
shall be entitled to recover its servicing fee and any advances made for the
interim servicing period from the collections on the assets which have been
purchased from the Trust and the new owner of the assets, and the agreements for
the new owner to obtain ownership of the assets of the Trust Fund shall so
provide.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor. the
Servicer and the Trustee, without the consent of any of the Certificateholders
to,
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision therein which
may be inconsistent with the Prospectus Supplement or any other provision
herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
-116-
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement, provided, however, that, in the case
of clauses (iii) and (iv), such amendment will not, as evidenced by an Opinion
of Counsel to such effect, adversely affect in any material respect the
interests of any Holder; provided, further, however, that such amendment will be
deemed to not adversely affect in any material respect the interest of any
Holder if the Person requesting such amendment obtains a letter from each Rating
Agency stating that such amendment will not result in a reduction or withdrawal
of its rating of any Class of the Certificates, it being understood and agreed
that any such letter in and of itself will not represent a determination as to
the materiality of any such amendment and will represent a determination only as
to the credit issues affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee shall have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee and the Holders of the Certificates affected thereby
evidencing not less than 66 2/3% of the Voting Rights for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
-117-
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.
SECTION 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
-118-
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Trustee or the
Servicer and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02 and 2.03;
(v) The final payment to Certificateholders; and
(vi) Any change in the location of the Certificate Account.
(b) The Trustee shall promptly furnish or make available to each
Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.05;
(ii) Each annual statement as to compliance described in Section
3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies, (i) Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and (ii) ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (c) in the case of the Servicer,
Wilshire Credit Corporation, ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: VP Client Relations; (d) in the case of the Trustee,
Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇
▇▇▇▇▇, Attention: Trust Administration - ML05CA, and in the case of any of
-119-
the foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Depositor; provided, however,
the Servicer is hereby authorized to enter into an Advance Facility under which
(l) the Servicer sells, assigns or pledges to an Advancing Person the Servicer's
rights under this Agreement to be reimbursed for any Advances or Servicing
Advances and/or (2) an Advancing Person agrees to fund some or all Advances or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before the Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund Advances and/or Servicing Advances on the Servicer's behalf, the Servicer
shall remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement, and shall not be
relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that such
reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with
-120-
respect to that Mortgage Loan on a "first in, first out" (FIFO) basis. Such
documentation shall also require the Servicer to provide to the related
Advancing Person or its designee loan by loan information with respect to each
such reimbursement amount distributed to such Advancing Person or Advance
Facility trustee on each Distribution Date, to enable the Advancing Person or
Advance Facility trustee to make the FIFO allocation of each such reimbursement
amount with respect to each Mortgage Loan. The Servicer shall remain entitled to
be reimbursed by the Advancing Person or Advance Facility trustee for all
Advances and Servicing Advances funded by the Servicer to the extent the related
rights to be reimbursed therefor have not been sold, assigned or pledged to an
Advancing Person.
Any amendment to this Section 10.07 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee and the Servicer, without the consent of any Certificateholder
notwithstanding anything to the contrary in this Agreement, upon receipt by the
Trustee of an Opinion of Counsel that such amendment has no material adverse
effect on the Certificateholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the
Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the
Servicer on a non recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee and the Trust Fund are not otherwise obligated
or liable to repay any Advances financed by the lender; (b) the Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided,
-121-
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such indemnity satisfactory to
it 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
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the party requesting such inspection (except in
the case of the Trustee in which case such expenses shall be borne by the
requesting Certificateholder(s)); all other such expenses shall be borne by the
Servicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Authenticating Agent pursuant to this Agreement, are and shall be deemed fully
paid.
-122-
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WILSHIRE CREDIT CORPORATION,
as Servicer
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT C
[RESERVED]
EXHIBIT D
FORM OF TRUSTEE CERTIFICATION
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of August 1, 2005 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as
depositor, Deutsche Bank National Trust Company, as trustee (the "Trustee") and
Wilshire Credit Corporation, as servicer (the "Pooling and Servicing
Agreement"), the Trustee hereby certifies that [, except as set forth in
Schedule A hereto,] as to each Mortgage Loan listed in the Mortgage Loan
Schedule attached hereto (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond confirming (i) that the Mortgage Loan number, the
name of the Mortgagor, the street address (excluding zip code), the mortgage
interest rate at origination, the gross margin (if applicable), the lifetime
rate cap (if applicable), the periodic rate cap (if applicable), the original
principal balance, the first payment due date and the original maturity date in
each Mortgage File conform to the respective Mortgage Loan number and name
listed on the Mortgage Loan Schedule and (ii) the existence in each Mortgage
File of each of the documents listed in subparagraphs (i)(A) through (E), as
applicable, inclusive, of Section 2.01 in the Agreement. The Trustee makes no
representations or warranties as to the validity, legality, recordability,
sufficiency, enforceability, due authorization or genuineness of any of the
documents contained in each Mortgage Loan or the collectibility, insurability,
effectiveness, priority, perfection or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Pooling and Servicing
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2005-NCA
Ladies and Gentlemen:
We propose to purchase ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-NCA, Class R, described in the
Prospectus Supplement, dated August 26, 2005, and Prospectus, dated August 26,
2005.
1. We certify that (a) we are not a disqualified organization and (b) we
are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they became
due, (b) we intend, and believe that we will be able, to continue to pay our
debts as they become due in the future, (c) we understand that, as beneficial
owner of the Class R Certificate, we may incur tax liabilities in excess of any
cash flows generated by the Class R Certificate, and (d) we intend to pay any
taxes associated with holding the Class R Certificate as they become due and (e)
we will not cause income from the Class R Certificate to be attributable to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)
___________ The Class R Certificate will be registered in our name.
___________ The Class R Certificate will be held in the name of our
nominee,
_________________, which is not a disqualified organization.
4. We certify that we are not an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a
plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code (each, a "Plan"), and are not directly or indirectly
acquiring the Class R Certificate on behalf of or with any assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the Class
R Certificate in connection with the conduct of a trade or business within the
United States and have furnished the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI or successor form
at the time and in the manner required by the Code; for this purpose the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to United States federal income tax regardless
of the source of its income, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more such U.S. persons have the authority to control all substantial
decisions of the trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons. We agree that any breach by us of this
certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to transfer
any interest in the Class R Certificate, we will transfer such interest in the
Class R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person or will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and will furnish us and the Trustee with a duly completed and
effective Internal Revenue Service Form W-8ECI or successor form at the time and
in the manner required by the Code and (iii) has delivered to the Trustee a
letter in the form of this letter (including the affidavit appended hereto) and,
we will provide the Trustee a written statement substantially in the form of
Exhibit E-2 to the Pooling and Servicing Agreement.
----------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-2
7. We hereby designate _______________________ as our fiduciary to act as
the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of __________ __, 200__
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
E-1-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of
1986, as amended, and (ii) certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________ (the
"Transferee"),
2. the Transferee's Employer Identification number is __________,
3. the Transferee is not a "disqualified organization" (as defined
below), has no plan or intention of becoming a disqualified
organization, and is not acquiring any of its interest in the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-NCA, Class R Certificate
on behalf of a disqualified organization or any other entity,
4. unless ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.("MLMI") has
consented to the transfer to the Transferee by executing the form
of Consent affixed as Appendix B to the Transferee's Letter to
which this Certificate is affixed as Appendix A, the Transferee
is a "U.S. person" (as defined below),
5. that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
6. the Transferee has historically paid its debts as they became
due,
7. the Transferee intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
8. the Transferee understands that, as beneficial owner of the Class
R Certificate, it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificate,
9. the Transferee intends to pay any taxes associated with holding
the Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by MLMI (upon
advice of counsel) to constitute a reasonable arrangement to
ensure that the Class R Certificate will not be owned directly or
indirectly by a disqualified organization, and
E-1-4
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class R
Certificate to a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of the
Transferee, and as to each of the residual interests represented
by the Class R Certificate, the present value of the anticipated
tax liabilities associated with holding such residual interest
does not exceed the sum of:
12. the present value of any consideration given to the Transferee to
acquire such residual interest;
13. the present value of the expected future distributions on such
residual interest; and
14. the present value of the anticipated tax savings associated with
holding such residual interest as the related REMIC generates
losses.
For purposes of this declaration, (i) the Transferee is assumed to pay tax
at a rate equal to the highest rate of tax specified in Section 11(b)(1) of
the Code, but the tax rate specified in Section 55(b)(1)(B) of the Code may
be used in lieu of the highest rate specified in Section 11(b)(1) of the
Code if the Transferee has been subject to the alternative minimum tax
under Section 55 of the Code in the preceding two years and will compute
its taxable income in the current taxable year using the alternative
minimum tax rate, and (ii) present values are computed using a discount
rate equal to the Federal short-term rate prescribed by Section 1274(d) of
the Code for the month of the transfer and the compounding period used by
the Transferee;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year of
transfer, the Transferee's gross assets for financial reporting purposes
exceed $100 million and its net assets for financial reporting purposes
exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class R Certificate will be to another
eligible corporation in a transaction that satisfies Treasury
regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a
direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
E-1-5
(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
-------------------------------------
By:
---------------------------------
---------------------------------
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
---------------------------------
, Secretary
---------------------------------
E-1-6
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this _________ day of _____________,
200_.
-------------------------------------
Notary Public
County of
---------------------------
State of
---------------------------
My commission expires the ________ day of ______________
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated: ___________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Series 2005-NCA
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Investors Trust, Series 2005-NCA
RE: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of August 1,
2005, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Deutsche Bank
National Trust Company, as trustee and Wilshire Credit Corporation, as servicer.
Very truly yours,
----------------------------------------
Name of Transferor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Series 2005-NCA
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-NCA, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of August 1, 2005
(the "Pooling and Servicing Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc., as depositor (the "Depositor"), Deutsche Bank National Trust Company, as
trustee (the "Trustee") and Wilshire Credit Corporation, as servicer (the
"Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT") OR ANY
STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT, DIRECTLY OR
INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR SALE,
UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT, THE
1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
ALSO COMPLIES WITH THE OTHER PROVISIONS OF SECTION 5.02 OF THE POOLING
AND SERVICING AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE
UNLESS THE TRUSTEE SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE (A) AN INVESTMENT LETTER FROM THE
PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS FROM THE TRANSFEROR
REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.
3. The ERISA Restricted Certificates (other than the Class R Certificates)
will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR
A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B)
IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE
COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND
III OF PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, AND
UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT
THE ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED
TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A
G-2
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE
SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE
CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION
IN (A) OR (B) ABOVE.
4. The Class R Certificate will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE
PROSPECTIVE TRANSFEREE PROVIDES THE TRUSTEE WITH A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR
LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE
BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN.
5. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY] * and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
6. The Purchaser (a) is a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters, and in
particular in such matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of investment in the
Certificates, (b) is able to bear the economic risks of such an investment and
(c) is an "accredited investor" within the meaning of Rule 501(a) promulgated
pursuant to the Securities Act.
7. The Purchaser will not nor has it authorized nor will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with
----------
* No required of a broker/dealer purchaser.
G-3
respect to any Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general solicitation by
means of general advertising or in any other manner, or (e) take any other
action, that would constitute a distribution of any Certificate under the
Securities Act or the Investment Company Act of 1940, as amended (the "1940
Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Securities Act or any state securities law, or that would
require registration or qualification pursuant thereto. Neither the Purchaser
nor anyone acting on its behalf has offered the Certificates for sale or made
any general solicitation by means of general advertising or in any other manner
with respect to the Certificates. The Purchaser will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
8. The Purchaser of an ERISA Restricted Certificate (other than the Class R
Certificate) (A) is not an employee benefit plan subject to Title I of ERISA, a
plan subject to Section 4975 of the Code, a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") and is not directly or indirectly acquiring
such Certificates by, on behalf of, or with any assets of any such plan, or (B)
if the Certificate has been the subject of an ERISA-Qualifying Underwriting, is
an insurance company that is acquiring the Certificate with assets of an
"insurance company general account," as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60, and the acquisition and holding of
the Certificate are covered and exempt under Sections I and III of PTCE 95-60,
or (C) solely in the event the Certificate is a Definitive Certificate, herewith
delivers an Opinion of Counsel satisfactory to the Trustee, and upon which the
Trustee shall be entitled to rely, to the effect that the acquisition and
holding of the Certificate will not constitute or result in a nonexempt
prohibited transaction under Title I of ERISA or Section 4975 of the Code, or a
violation of Similar Law, and will not subject the Trustee, the Servicer or the
Depositor to any obligation in addition to those expressly undertaken in the
Pooling and Servicing Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicer or the Depositor.
9. The Purchaser of a Class R Certificate is not an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a plan
subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.
10. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
G-4
11. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-5
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Series 2005-NCA
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-NCA, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of August 1, 2005
(the "Pooling and Servicing Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc., as depositor (the "Depositor"), Deutsche Bank National Trust Company, as
trustee (the "Trustee"), Wilshire Credit Corporation, as servicer (the
"Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d)(A) solely with respect to
ERISA Restricted Certificates, we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), a
plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or
Persons directly or indirectly acting on behalf of or using any assets of any
such plan, or (B) solely with respect to ERISA Restricted Certificates (other
than the Class R Certificates), if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company that is acquiring the
Certificate with assets of an "insurance company general account," as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under Sections
I and III of PTCE 95-60, or (C) solely in the event the Certificate is an ERISA
Restricted Certificate (other than a Class R Certificate) and also a Definitive
Certificate, we will herewith deliver an Opinion of Counsel satisfactory to the
Trustee, and upon which the Trustee shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the Servicer or the Depositor to any obligation in addition to those
expressly undertaken in the Pooling and Servicing Agreement, which Opinion of
Counsel shall not be an expense of the Trustee, the Servicer or the Depositor,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed one of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale of the Transferred Certificates to us is being made in reliance on
Rule 144A. We are acquiring the Transferred Certificates for our own account or
for resale pursuant to Rule 144A and further understand that such Certificates
may be resold, pledged or transferred only (i) to a person reasonably believed
by us, based upon certifications of such purchaser or information we have in our
possession, to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
H-2
We agree to indemnify the Trustee, the Servicer and the Depositor against
any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $____________ * in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
______________ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
______________ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by Federal, State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
______________ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over such
----------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
institution or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
______________ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
______________ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of the State,
territory or the District of Columbia.
______________ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
______________ ERISA Plan. The Buyer is an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974,
as amended.
______________ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
______________ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
______________ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i)
H-5
where the Buyer reports its securities holdings in its financial statements on
the basis of their market value, and (ii) no current information with respect to
the cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities owned
by subsidiaries of the Buyer, but only if such subsidiaries are consolidated
with the Buyer in its financial statements prepared in accordance with generally
accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included
if the Buyer is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities Exchange
Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
______________ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
______________ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii)
securities issued or guaranteed by the U.S. or any instrumentality thereof,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:
----------------------------------
H-8
EXHIBIT I
[RESERVED]
EXHIBIT J
[RESERVED]
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Agreement") dated as of August 1,
2005 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire
Credit Corporation, as servicer and Deutsche Bank National Trust Company,
as trustee, relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-NCA
The Trustee hereby certifies to the Depositor, and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. The Trustee has reviewed the Monthly Statements delivered pursuant to the
Agreement since, for 10K filings other than the initial 10K filing, the
last Officer's Certificate executed pursuant to Section 3.20 of the
Agreement, or in the case of the first certification, since the Cut-off
Date, (the "Trustee Information");
2. Based on the Trustee's knowledge, the information in the Monthly Statement,
taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact required by the Agreement to be included
therein and necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the date hereof; and
3. Based on the Trustee's knowledge, the Monthly Statements required to be
prepared by the Trustee under the Agreement have been prepared and provided
in accordance with the Agreement.
Date:
-----------
Deutsche Bank National Trust Company,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2005-NCA
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
I, [identify the certifying individual], an authorized representative of
Wilshire Credit Corporation, as servicer under the Pooling and Servicing
Agreement dated as of August 1, 2005 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc., as depositor, Deutsche Bank National Trust Company, as trustee and
Wilshire Credit Corporation, as servicer (the "Agreement"), hereby certify to
the Trustee and the Depositor, and each of their respective officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. Based on my knowledge, the information in the annual statement of
compliance identified in Section 3.17 of the Agreement, the annual independent
public accountants' report identified in Section 3.18 of the Agreement and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Trustee 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;
2. The servicing information required to be provided to the Trustee by the
Servicer under the Agreement has been provided to the Trustee;
3. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon the review required hereunder, and except as
disclosed in the annual statement of compliance identified in Section 3.17 of
the Agreement, the annual independent public accountants' report identified in
Section 3.18 of the Agreement and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans submitted
to the Trustee, the Servicer has, as of the date of this certification,
fulfilled its obligations under this Agreement; and
L-2
4. I have disclosed to the Trustee all significant deficiencies relating to
the Servicer's compliance with the minimum servicing standards in accordance
with a review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth under the
Agreement.
Date:
-----------
Wilshire Credit Corporation, as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF DELINQUENCY REPORT
Standard File Layout - Delinquency Reporting
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
--------------------------- ---------------------------------------- ------- ----------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by
the Servicer. This may be different than
the LOAN_NBR
LOAN_NBR A unique identifier assigned to each
loan by the originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by
an external servicer to identify a group
of loans in their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next MM/DD/YYYY
payment is due to the servicer at the
end of processing cycle, as reported by
Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim MM/DD/YYYY
was filed.
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy
was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to
the bankruptcy filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy MM/DD/YYYY
has been approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From MM/DD/YYYY
Bankruptcy. Either by Dismissal,
Discharged and/or a Motion For Relief
Was Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was MM/DD/YYYY
Approved By The Servicer
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For
A Loan Such As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is MM/DD/YYYY
Scheduled To End/Close
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually MM/DD/YYYY
Completed
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the MM/DD/YYYY
servicer with instructions to begin
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
--------------------------- ---------------------------------------- ------- ----------------------
foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to MM/DD/YYYY
Pursue Foreclosure
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney MM/DD/YYYY
in a Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is MM/DD/YYYY
expected to occur.
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the 2 No commas(,) or dollar
foreclosure sale. signs ($)
EVICTION_START_DATE The date the servicer initiates eviction MM/DD/YYYY
of the borrower.
EVICTION_COMPLETED_DATE The date the court revokes legal MM/DD/YYYY
possession of the property from the
borrower.
LIST_PRICE The price at which an REO property is 2 No commas(,) or dollar
marketed. signs ($)
LIST_DATE The date an REO property is listed at a MM/DD/YYYY
particular price.
OFFER_AMT The dollar value of an offer for an REO 2 No commas(,) or dollar
property. signs ($)
OFFER_DATE_TIME The date an offer is received by DA MM/DD/YYYY
Admin or by the Servicer.
REO_CLOSING_DATE The date the REO sale of the property is MM/DD/YYYY
scheduled to close.
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is
occupied.
PROP_CONDITION_CODE A code that indicates the condition of
the property.
PROP_INSPECTION_DATE The date a property inspection is MM/DD/YYYY
performed.
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the 2
property based on brokers price opinion
or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth 2
if repairs are completed pursuant to a
broker's price opinion or appraisal.
If applicable:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a
borrower to stop paying on a loan. Code
indicates the reason why the loan is in
default for this cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed MM/DD/YYYY
With Mortgage Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,) or dollar
signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company MM/DD/YYYY
Disbursed Claim Payment
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company 2 No commas(,) or dollar
M-1-2
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
--------------------------- ---------------------------------------- ------- ----------------------
Paid On Claim signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance MM/DD/YYYY
Company
POOL_CLAIM_AMT Amount of Claim Filed With Pool 2 No commas(,) or dollar
Insurance Company signs ($)
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was MM/DD/YYYY
Issued By The Pool Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance 2 No commas(,) or dollar
Company signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or dollar
signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,) or dollar
signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or dollar
signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,) or dollar
signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the MM/DD/YYYY
Veterans Admin
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim MM/DD/YYYY
Payment
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,) or dollar
signs ($)
M-1-3
STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
- ASUM- Approved Assumption
- BAP- Borrower Assistance Program
- CO- Charge Off
- DIL- Deed-in-Lieu
- FFA- Formal Forbearance Agreement
- MOD- Loan Modification
- PRE- Pre-Sale
- SS- Short Sale
- MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Deutsche Bank National Trust Company will accept alternative Loss
Mitigation Types to those above, provided that they are consistent with industry
standards. If Loss Mitigation Types other than those above are used, the
Servicer must supply Deutsche Bank National Trust Company with a description of
each of the Loss Mitigation Types prior to sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
- Mortgagor
- Tenant
- Unknown
- Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
- Damaged
- Excellent
- Fair
- Gone
- Good
- Poor
- Special Hazard
- Unknown
M-1-4
EXHIBIT M-2
FORM OF MONTHLY REMITTANCE ADVICE
Standard File Layout - Scheduled/Scheduled
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
---------------------- ------------------------------------------ ------- --------------------------------
LOAN_NBR Loan Number assigned by investor Text up to 10 digits
SERVICER LOAN_NBR Servicer Loan Number Text up to 10 digits
SCHED_PMT_AMT P&I constant 2 No commas(,) or dollar signs ($)
NOTE_INT_RATE Gross Interest Rate 4 Max length of 6
NET_RATE Gross Interest Rate less the Service Fee 4 Max length of 6
Rate
SERV_FEE_RATE Service Fee Rate 4 Max length of 6
ARM_INDEX_RATE ARM loan's index Rate used 4 Max length of 6
ACTL_BEG_BAL Beginning Actual Balance 2 No commas(,) or dollar signs ($)
ACTL_END_BAL Ending Actual Balance 2 No commas(,) or dollar signs ($)
NEXT_DUE_DATE Borrower's next due date MM/DD/YYYY
CURT_AMT_1 Curtailment Amount 2 No commas(,) or dollar signs ($)
CURT_DATE_1 Due date Curtailment was applied to MM/DD/YYYY
CURT_ADJ_ AMT_1 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
CURT_AMT_2 Curtailment Amount 2 2 No commas(,) or dollar signs ($)
CURT_DATE_2 Due date Curtailment was applied to MM/DD/YYYY
CURT_ADJ_ AMT2 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
CURT_AMT_3 Curtailment Amount 3 2 No commas(,) or dollar signs ($)
CURT_DATE_3 Due date Curtailment was applied to MM/DD/YYYY
CURT_ADJ_AMT3 Curtailment Interest, if applicable 2 No commas(,) or dollar signs ($)
SCHED_BEG_BAL Beginning Scheduled Balance 2 No commas(,) or dollar signs ($)
SCHED_END_BAL Ending Scheduled Balance 2 No commas(,) or dollar signs ($)
SCHED_PRIN_AMT Scheduled Principal portion of P&I 2 No commas(,) or dollar signs ($)
SCHED_NET_INT Scheduled Net Interest (less Service Fee) 2 No commas(,) or dollar signs ($)
portion of P&I
LIQ_AMT Liquidation Principal Amt to bring balance 2 No commas(,) or dollar signs ($)
to zero
PIF_DATE Liquidation Date MM/DD/YYYY
ACTION_CODE Either 60 for liquidation or 65 for Max length of 2
Repurchase
PRIN_ADJ_AMT Principal Adjustments made to loan, if 2 No commas(,) or dollar signs ($)
applicable
INT_ADJ_AMT Interest Adjustment made to loan, if 2 No commas(,) or dollar signs ($)
applicable
PREPAYMENT PENALTY AMT Prepayment penalty amount, if applicable 2 No commas(,) or dollar signs ($)
SOILDER_SAILOR ADJ AMT Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar signs ($)
applicable
NON ADV LOAN AMT Non Recoverable Loan Amount, if applicable 2 No commas(,) or dollar signs ($)
EXHIBIT N
FORM OF AUCTION PROCEDURES
The following sets forth the auction procedures to be followed in
connection with the Pooling and Servicing Agreement (the "Agreement") among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Deutsche Bank National
Trust Company, as trustee, and Wilshire Credit Corporation, as servicer, dated
August 1, 2005. Capitalized terms used herein that are not otherwise defined
shall have the meanings described thereto in the Agreement.
1. Upon notice that the aggregate Stated Principal Balance of the Mortgage
Loans is equal to ten percent (10%) or less of the Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date (which notice will also be
sent to the Servicer), the Trustee will engage the Auction Agent to
initiate the general auction procedures consisting of the following: (i)
prepare a general solicitation package along with a confidentiality
agreement; (ii) derive a list of bidders which shall include (x) the
Holders of the Class C Certificates (other than the Seller or any Affiliate
of the Seller) and (y) a minimum of three (3) bidders other than the
Holders of the Class C Certificates, each of whom shall be a nationally
recognized participant in mortgage finance; (iii) initiate contact with all
bidders, (iv) send a confidentiality agreement to all bidders; and (v) upon
receipt of a signed confidentiality agreement, send the general bid
solicitation package to all bidders.
2. The general solicitation package will include (i) the Agreement; (ii) a
copy of all monthly trustee reports or electronic access thereto; (iii) a
form of a Mortgage Loan Purchase Agreement acceptable to the Servicer and
Depositor (the Mortgage Loans and other property included in the Trust Fund
will be offered and sold on an "as is, where is" basis, without any
representation or warranty, expressed or implied, of any kind and without
recourse to, or guaranty by, the Trustee); (iv) a description of the
minimum price as set forth in the Agreement; (v) a formal bid sheet as
determined by the Seller and provided to the Trustee; (vi) a detailed
timetable (which shall include, but not be limited to, the provisions and
dates preliminary bids, due diligence and final bids); and (vii) a data
tape of the Mortgage Loans as of the related Remittance Period reflecting
substantially the same data attributes used in the Prospectus Supplement
dated August 26, 2005.
3. A detailed timetable will be determined approximately ten (10) days prior
to the proposed auction sale date and shall be determined by the Seller and
acceptable to the Trustee, which shall not be unreasonably withheld, within
reasonable market conditions at the time of the auction sale.
4. All bids will be submitted directly to the Auction Agent, who shall deliver
the bids to the Trustee. Upon receipt and acceptance of a bid that meets or
exceeds the conditions set forth in Section 9.01, the Trustee will complete
the auction by selling the Mortgage Loans and the other property included
in the Trust Fund and distributing the proceeds from the auction to the
holders of the Certificates on the next succeeding Distribution Date as set
forth in the Agreement. In the event the Trustee receives two (2) or more
bids from bidders above the
Optional Termination Price and at equal bids (a "Tie Event"), the Trustee
shall instruct the Auction Agent to notify such bidders to resubmit a bid
to break the Tie Event.
5. Upon determination that the minimum price was not met, the Trustee shall
cancel such auction sale and notify the Servicer and the Depositor
immediately.
6. The Trustee, the Servicer and the Seller may mutually agree to revise or
supplement these provisions as necessary, provided that the purchase price
is at all times required to be at least the Optional Termination Price.
N-2
EXHIBIT O
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER TO REGULATION S BOOK-ENTRY CERTIFICATE
FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2005-NCA
RE: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
Ladies and Gentlemen:
In connection with our disposition of the Class ___ Certificates,
which are held in the form of Definitive Certificates or in the form of a
beneficial interest in a Rule 144A Book-Entry Certificate, and to effect the
transfer pursuant to Regulation S under the Securities Act of 1933, as amended
("Regulation S") of the above Certificates in exchange for an equivalent
beneficial interest in a Regulation S Book-Entry Certificate, we hereby certify
that such transfer has been effected in accordance with (i) the transfer
restrictions set forth in the Pooling and Servicing Agreement, dated as of
August 1, 2005, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as Depositor,
Deutsche Bank National Trust Company, as Trustee, and Wilshire Credit
Corporation, as Servicer, and in the Certificates and (ii) in accordance with
Regulation S, and that:
a. the offer of the Certificates was not made to a person in the
United States;
b. at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
c. no directed selling efforts have been made in contravention of the
requirements of Rule 903 or 904 of Regulation S, as applicable;
d. the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933, as
amended; and
e. the transferee is not a U.S. Person (as defined by Regulation S).
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal Proceedings or
O-1
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
----------------------------------------
Print Name of Transferor
By:
------------------------------------
Authorized Officer
O-2
EXHIBIT P
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER PURSUANT TO RULE 144A FROM A HOLDER OF
A REGULATION S BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
[DATE]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2005-NCA
RE: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCA
Ladies and Gentlemen:
In connection with our disposition of the Class __ Certificates, which
are held in the form of Definitive Certificates or in the form of a beneficial
interest in a Regulation S Book-Entry Certificate, and to effect the transfer
pursuant to Rule 144A under the Securities Act of 1933, as amended ("Rule 144A")
of the above Certificates in exchange for an equivalent beneficial interest in a
Rule 144A Book-Entry Certificate or a Definitive Note, we hereby certify that
such Certificates are being transferred in accordance with (i) the transfer
restrictions set forth in the Pooling and Servicing Agreement, dated as of
August 1, 2005, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as Depositor,
Deutsche Bank National Trust Company, as Trustee, and Wilshire Credit
Corporation, as Servicer, and in the Certificates and (ii) Rule 144A under the
Securities Act of 1933, as amended, to a transferee that we reasonably believe
is purchasing the Certificates for its own account or an account with respect to
which the transferee exercises sole investment discretion, the transferee and
any such account is a "qualified institutional buyer" within the meaning of Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other jurisdiction.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal Proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
----------------------------------------
Print Name of Transferor
By:
------------------------------------
Authorized Officer
P-1