EXHIBIT 4
EXECUTION COPY
--------------
SECURITIZED ASSET BACKED RECEIVABLES LLC,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
ENCORE CREDIT CORP.,
Responsible Party,
and
WACHOVIA BANK, N. A.,
Trustee
-----------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
-----------------------------------------------------------
SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2005-EC1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-EC1
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage
Loans.................................
Section 2.02 Acceptance by the Trustee of the
Mortgage Loans..............
Section 2.03 Representations, Warranties and
Covenants of the
Responsible Party and the Servicer; Remedies for
Breaches of Representations and Warranties with Respect
to the Mortgage Loans.......................................
Section 2.04
[Reserved]...................................................
Section 2.05 Execution and Delivery of
Certificates.......................
Section 2.06 REMIC
Matters................................................
Section 2.07 Representations and Warranties of
the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage
Loans...........................
Section 3.02 Subservicing Agreements between
the Servicer and
Subservicers................................................
Section 3.03 Successor
Subservicers.......................................
Section 3.04 Liability of the
Servicer....................................
Section 3.05 No Contractual Relationship
between Subservicers and the
Trustee.....................................................
Section 3.06 Assumption or Termination of
Subservicing Agreements by
Trustee.....................................................
Section 3.07 Collection of Certain Mortgage
Loan Payments.................
Section 3.08 Subservicing
Accounts........................................
Section 3.09 Collection of Taxes, Assessments
and Similar Items;
Escrow Accounts.............................................
Section 3.10 Collection
Account...........................................
Section 3.11 Withdrawals from the Collection
Account......................
Section 3.12 Investment of Funds in the
Collection Account, the Escrow
Account and the Distribution Account........................
Section 3.13 Maintenance of Hazard Insurance
and Errors and Omissions
and Fidelity Coverage.......................................
Section 3.14 Enforcement of Due-On-Sale
Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted
Mortgage Loans....................
Section 3.16 Release of Mortgage
Files....................................
Section 3.17 Title, Conservation and
Disposition of REO Property..........
Section 3.18 Notification of
Adjustments..................................
Section 3.19 Access to Certain Documentation
and Information Regarding
the Mortgage Loans..........................................
Section 3.20 Documents, Records and Funds in
Possession of the
Servicer to Be Held for the Trustee.........................
Section 3.21 Servicing
Compensation.......................................
Section 3.22 Annual Statement as to
Compliance............................
Section 3.23 Annual Independent Public
Accountants' Servicing
Statement; Financial Statements.............................
Section 3.24 Trustee to Act as
Servicer...................................
Section 3.25 Compensating
Interest........................................
Section 3.26 Credit Reporting;
Gramm-Leach-Bliley Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01
Advances.....................................................
Section 4.02 Priorities of
Distribution...................................
Section 4.03 Monthly Statements to
Certificateholders.....................
Section 4.04 Certain Matters Relating to the
Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized
Loss Amounts..................
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates.............................................
Section 5.02 Certificate Register; Registration
of Transfer and
Exchange
of Certificates....................................
Section 5.03 Mutilated, Destroyed, Lost or
Stolen Certificates............
Section 5.04 Persons Deemed
Owners........................................
Section 5.05 Access to List of
Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or
Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the
Depositor and the Servicer.....
Section 6.02 Merger or Consolidation of the
Depositor or the Servicer.....
Section 6.03 Limitation on Liability of the
Depositor, the Servicer
and Others..................................................
Section 6.04 Limitation on Resignation of the
Servicer....................
Section 6.05 Additional Indemnification by the
Servicer; Third Party
Claims......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of
Default............................................
Section 7.02 Trustee to Act; Appointment of
Successor.....................
Section 7.03 Notification to
Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the
Trustee........................................
Section 8.02 Certain Matters Affecting the
Trustee........................
Section 8.03 Trustee Not Liable for
Certificates or Mortgage Loans........
Section 8.04 Trustee May Own
Certificates.................................
Section 8.05 Trustee's Fees and
Expenses..................................
Section 8.06 Eligibility Requirements for the
Trustee.....................
Section 8.07 Resignation and Removal of the
Trustee.......................
Section 8.08 Successor
Trustee............................................
Section 8.09 Merger or Consolidation of the
Trustee.......................
Section 8.10 Appointment of Co-Trustee or
Separate Trustee................
Section 8.11 Tax
Matters..................................................
Section 8.12 Periodic
Filings.............................................
Section 8.13 Tax Classification of the Excess
Reserve Fund Account and
the Cap Agreements..........................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or
Purchase of the Mortgage
Loans.......................................................
Section 9.02 Final Distribution on the
Certificates.......................
Section 9.03 Additional Termination
Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment....................................................
Section 10.02 Recordation of Agreement;
Counterparts.......................
Section 10.03 Governing
Law................................................
Section 10.04 Intention of
Parties.........................................
Section 10.05
Notices......................................................
Section 10.06 Severability of
Provisions...................................
Section 10.07 Limitation on Rights of
Certificateholders...................
Section 10.08 Inspection and Audit
Rights..................................
Section 10.09 Certificates Nonassessable
and Fully Paid....................
Section 10.10 Assignment; Sales; Advances
Facilities.......................
Section 10.11 Rule of
Construction.........................................
Section 10.12 Waiver of Jury
Trial.........................................
<PAGE>
SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule II
Representations and Warranties of the Servicer
Schedule III
Representations and Warranties of the Responsible Party as
to the Individual Mortgage Loans
Schedule IV
Representations and Warranties of the Responsible Party
EXHIBITS
Exhibit A
Form of Class A, Class M and Class B Certificates
Exhibit B
Form of Class P Certificate
Exhibit C
Form of Class R Certificate
Exhibit D
Form of Class X Certificate
Exhibit E
Form of Initial Certification of Trustee
Exhibit F
Form of Document Certification and Exception Report of Trustee
Exhibit G
Form of Residual
Transfer Affidavit
Exhibit H
Form of Transferor Certificate
Exhibit I
Form of Rule 144A Letter
Exhibit J
Form of Request for Release
Exhibit K
Form of Contents for Each Mortgage File
Exhibit L
Form of Certification to be provided with Form 10-K
Exhibit M
Form of Trustee's Certification to be provided to Depositor
Exhibit N
Form of Servicer's Certification to be provided to Depositor
Exhibit O
Form of Servicer's Report
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1,
2005,
among SECURITIZED ASSET BACKED RECEIVABLES
LLC, a Delaware limited liability
company, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership, as servicer (the
"Servicer"), ENCORE CREDIT CORP., a
California corporation, as responsible
party (the "Responsible Party"),and
WACHOVIA BANK N.A., a national banking
association, as trustee (the "Trustee"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within
the
Trust Fund be treated for federal income
tax purposes as comprising two REMICs
(each, a "REMIC" or, in the alternative,
the Lower Tier REMIC and the Upper Tier
REMIC, respectively). Each Class of
Certificates (other than the Class P and
Class R Certificates), other than the right
of each Class of LIBOR Certificates
to receive Basis Risk Carry Forward Amounts
and the right of the Class X
Certificates to receive payments from the
Cap Agreements, represents ownership
of a regular interest in the Upper Tier
REMIC for purposes of the REMIC
Provisions. The Class R Certificate
represents ownership of the sole class of
residual interest in each of the Lower Tier
REMIC and the Upper Tier REMIC for
purposes of the REMIC Provisions. The
Startup Day for each REMIC described
herein is the Closing Date. The latest
possible maturity date for each
Certificate is the latest date referenced
in Section 2.06. The Upper Tier REMIC
shall hold as assets the several classes of
uncertificated Lower Tier REMIC
Regular Interests, set out below. Each such
Lower Tier REMIC Regular Interest is
hereby designated as a regular interest in
the Lower Tier REMIC. The Class
LT-A-1A, Class LT-A-1B, Class LT-A-2A,
Class LT-A-2B, Class LT-A-2C, Class
LT-M-1, Class LT-M-2, Class LT-M-3, Class
LT-M-4, Class LT-B-1, Class LT-B-2,
Class LT-B-3 and Class LT-B-4 interests are
hereby designated the LT Accretion
Directed Classes (the "LT Accretion
Directed Classes"). The Class P Certificates
represent beneficial ownership of the
Prepayment Charges, each Class of LIBOR
Certificates represents beneficial
ownership of a regular interest in the Upper
Tier REMIC and the right to receive Basis
Risk Carry Forward Amounts and the
Class X Certificates represent beneficial
ownership of a regular interest in the
Upper Tier REMIC, the Excess Reserve Fund
Account and the Cap Agreements, which
portions of the Trust Fund shall be treated
as a grantor trust.
Corresponding
Lower Tier
Upper Tier
Lower Tier REMIC
REMIC
Initial Lower Tier
REMIC Regular
Class Designation Interest Rate REMIC Principal
Amount
Interest
----------------- -------------
----------------------
--------------
Class LT-A-1A
(1) 1/4
Corresponding Upper Tier
A-1A
REMIC Regular Interest
initial Class Principal
Balance
Class LT-A-1B
(1) 1/4
Corresponding Upper Tier
A-1B
REMIC Regular Interest
initial Class Principal
Balance
Class LT-A-2A
(1) 1/4
Corresponding Upper Tier
A-2A
REMIC Regular Interest
initial Class Principal
Balance
Class LT-A-2B
(1) 1/4
Corresponding Upper Tier
A-2B
REMIC Regular Interest
initial Class Principal
Balance
Class LT-A-2C
(1) 1/4
Corresponding Upper Tier
A-2C
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-1
(1) 1/4
Corresponding Upper Tier
M-1
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-2
(1)
1/4
Corresponding Upper Tier
M-2
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-3
(1) 1/4
Corresponding Upper Tier
M-3
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-4
(1) 1/4
Corresponding Upper Tier
M-4
REMIC Regular Interest
initial Class Principal
Balance
Class LT-B-1
(1) 1/4
Corresponding Upper Tier
B-1
REMIC Regular Interest
initial Class Principal
Balance
Class LT-B-2
(1) 1/4
Corresponding Upper Tier
B-2
REMIC Regular Interest
initial Class Principal
Balance
Class LT-B-3
(1) 1/4
Corresponding Upper Tier
B-3
REMIC Regular Interest
initial Class Principal
Balance
Class LT-B-4
(1) 1/4
Corresponding Upper Tier
B-4
REMIC Regular Interest
initial Class Principal
Balance
Class LT-Accrual
(1) 1/4
Pool Stated Principal
N/A
Balance plus 1/4 Subordinated
Amount
Class LT-Group I(SUB) (1)
0.01% initial Group
N/A
Subordinate Amount of the
Group I Mortgage Loans
Class LT-Group I
(2)
0.01% initial aggregate
N/A
Stated Principal Balance of
the Group I Mortgage Loans
Class LT-Group II(SUB) (1)
0.01% initial Group
N/A
Subordinate Amount of the
Group II Mortgage Loans
Class LT-Group II
(3)
0.01% initial aggregate
N/A
Stated Principal Balance of
the Group II Mortgage Loans
Class LT-XX
(1) 1/2
initial aggregate Stated
N/A
Principal Balance of the
Mortgage Loans, less
aggregate Initial Lower Tier
REMIC Principal Amounts of
Class LT-Group I(SUB), Class
LT-Group I, Class
LT-Group II(SUB) and Class
LT-Group II Interests
Class LT-R
(4)
(4)
N/A
------------
(1) The interest rate with respect to
any Distribution Date for these interests
is a per annum
variable rate equal to the Lower Tier REMIC WAC Cap.
(2) The interest rate with respect to
any Distribution Date for the Class
LT-Group I
Interest is a per annum variable rate (expressed as a
percentage
rounded to eight
decimal places) equal to the Group I Loan Cap.
(3) The interest rate with respect to
any Distribution Date for the Class
LT-Group II
Interest is a per annum variable rate (expressed as a
percentage
rounded to eight decimal places) equal to the Group II Loan
Cap.
(4) The Class LT-R Interest is the
sole class of residual interest in the Lower
Tier REMIC and
it does not have a principal amount or an interest rate.
The
Lower Tier REMIC shall hold as assets all of the assets
included
in the Trust Fund other than Prepayment
Charges, the Cap Agreements, the Excess
Reserve Fund Account, and the Lower Tier
REMIC Regular Interests.
On each Distribution Date, 25% of the increase in the
Subordinated
Amount will be payable as a reduction of
the Lower Tier REMIC Principal Amount
of the LT Accretion Directed Classes (each
such Class will be reduced by an
amount equal to 25% of any increase in the
Subordinated Amount that is
attributable to a reduction in the Class
Certificate Balance of its
Corresponding Class) and will be accrued
and added to the Lower Tier REMIC
Principal Amount of the Class LT-Accrual
Interest. On each Distribution Date,
the increase in the Lower Tier REMIC
Principal Amount of the Class LT-Accrual
Interest may not exceed interest accruals
for such Distribution Date for the
Class LT-Accrual Interest. All payments of
scheduled principal and prepayments
of principal generated by the Mortgage
Loans shall be allocated (i) 25% to the
Class LT-Accrual Interest, (ii) 25% to the
LT Accretion Directed Classes
(principal payments shall be allocated
among such LT Accretion Directed Classes
in an amount equal to 25% of the principal
amounts allocated to their respective
Corresponding Classes), until paid in full
and (iii) 50% to Class LT-Group
I(SUB) Interest, Class LT-Group I Interest,
Class LT-Group II(SUB) Interest,
Class LT-Group II Interest and Class LT-XX
Interest (and further allocated among
these Lower Tier REMIC Regular Interests in
the manner described in the next
sentence). As among the Class LT-Group
I(SUB) Interest, Class LT-Group I
Interest, Class LT-Group II(SUB) Interest,
Class LT-Group II Interest and Class
LT-XX Interest, all payments of scheduled
principal and prepayments of principal
generated by the Mortgage Loans referred to
in clause (iii) of the previous
sentence shall be allocated (i) first, to
the Class LT-Group I(SUB) Interest and
Class LT-Group II(SUB) Interest, each from
the related Loan Group, so that their
respective Lower Tier REMIC Principal
Amount (computed to at least eight decimal
places) is equal to 0.01% of the related
Group Subordinate Amount (except that
if any such amount is a larger number than
in the preceding distribution period,
the least amount of principal shall be
distributed to the Class LT-Group I(SUB)
Interest and Class LT-Group II(SUB)
Interest, as applicable, such that the Lower
Tier REMIC Subordinated Balance Ratio is
maintained); (ii) second, to the Class
LT-Group I Interest and the Class LT-Group
II Interest, 0.01% of the principal
collected in respect of the related Loan
Group; and (iii) third, any remaining
amounts of principal shall be distributed
to the Class LT-XX Interest.
Notwithstanding the above, principal
payments allocated to the Class X Interest
that result in the reduction in the
Subordinated Amount shall be allocated (i)
50% to the Class LT-Accrual Interest (until
paid in full) and (ii) 50% to the
Class LT-Group I(SUB) Interest, the Class
LT-Group II(SUB) Interest, the Class
LT-Group I Interest, the Class LT-Group II
Interest and the Class LT-XX Interest
(and allocated among these Lower Tier REMIC
Regular Interests in a manner
similar to that described in the
immediately preceding sentence).
Realized Losses shall be applied so that after all
distributions
have been made on each Distribution Date
(i) the Lower Tier REMIC Principal
Amount of each LT Accretion Directed Class
is equal to 25% of the Class
Certificate Balance of its Corresponding
Class, (ii) the Class LT-Accrual
Interest is equal to 25% of the aggregate
Stated Principal Balance of the
Mortgage Loans plus 25% of the Subordinated
Amount, (iii) the Class LT-Group
I(SUB) Interest is equal to 0.01% of the
Group Subordinate Amount of the Group I
Mortgage Loans, (iv) the Class LT-Group
II(SUB) Interest is equal to 0.01% of
the Group Subordinate Amount of the Group
II Mortgage Loans, (v) the Class
LT-Group I Interest is equal to 0.01% of
the aggregate Stated Principal Balance
of the Group I Mortgage Loans, (vi) the
Class LT-Group II Interest is equal to
0.01% of the aggregate Stated Principal
Balance of the Group II Mortgage Loans
and (vii) the remainder shall be applied to
the Class LT-XX Interest.
The Upper Tier REMIC shall issue the following classes of Upper
Tier
REMIC Regular Interests and each such
interest, other than the Class UT-R
Interest, is hereby designated as a regular
interest in the Upper Tier REMIC.
Upper Tier
Initial Upper Tier
REMIC Interest REMIC Principal
Rate and
Amount and
Corresponding
Corresponding
Corresponding
Upper Tier REMIC
Class
Class Certificate Class of
Class Designation Pass-Through Rate
Balance
Certificates
----------------- -----------------
------------------
------------
Class A-1A
(1)
$ 164,150,000
Class A-1(9)
Class A-1B
(2)
$ 41,037,000
Class A-1B
Class A-2A
(3)
$ 43,791,000
Class A-2A(9)
Class A-2B
(4)
$ 17,260,000
Class A-2B(9)
Class A-2C
(5)
$ 15,157,000
Class A-2C(9)
Class M-1
(6)
$ 18,437,000
Class M-1(9)
Class M-2
(6)
$ 11,098,000
Class M-2(9)
Class M-3
(6)
$ 18,437,000
Class M-3(9)
Class M-4
(6)
$
5,549,000
Class M-4(9)
Class B-1
(6)
$
4,833,000
Class B-1(9)
Class B-2
(6)
$
3,580,000
Class B-2(9)
Class B-3
(6)
$ 3,580,000
Class B-3(9)
Class B-4
(6)
$
3,580,000
Class B-4(9)
Class X
(7)
$
7,518,813
Class X(7)
Class UT-R
(8)
$
0
Class R
------------
(1) The Class A-1A Interest will bear
interest during each Interest Accrual
Period at a per
annum rate equal to (a) on or prior to the Optional
Termination
Date, the lesser of (i) LIBOR plus 0.430% and (ii) the Group I
Loan Cap or (b)
after the Optional Termination Date, the lesser of (i)
LIBOR plus
0.860% and (ii) the Group I Loan Cap.
(2) The Class A-1B Interest will bear
interest during each Interest Accrual
Period at a per
annum rate equal to (a) on or prior to the Optional
Termination
Date, the lesser of (i) LIBOR plus 0.430% and (ii) the Group I
Loan Cap or (b)
after the Optional Termination Date, the lesser of (i)
LIBOR plus
0.860% and (ii) the Group I Loan Cap.
(3) The Class A-2A Interest will bear
interest during each Interest Accrual
Period at a per
annum rate equal to (a) on or prior to the Optional
Termination
Date, the lesser of (i) LIBOR plus 0.100% and (ii) the Group II
Loan Cap or (b)
after the Optional Termination Date, the lesser of (i)
LIBOR plus
0.200% and (ii) the Group II Loan Cap.
(4) The Class A-2B Interest will bear
interest during each Interest Accrual
Period at a per
annum rate equal to (a) on or prior to the Optional
Termination
Date, the lesser of (i) LIBOR plus 0.200% and (ii) the Group II
Loan Cap or (b)
after the Optional Termination Date, the lesser of (i)
LIBOR plus
0.400% and (ii) the Group II Loan Cap.
(5) The Class A-2C Interest will bear
interest during each Interest Accrual
Period at a per
annum rate equal to (a) on or prior to the Optional
Termination
Date, the lesser of (i) LIBOR plus 0.300% and (ii) the Group II
Loan Cap or (b)
after the Optional Termination Date, the lesser of (i)
LIBOR plus
0.600% and (ii) the Group II Loan Cap.
(6) The Class M-1, Class M-2, Class
M-3, Class M-4, Class B-1, Class B-2, Class
B-3 and Class
B-4 Interests will bear interest during each Interest Accrual
Period at a per
annum rate equal to (a) on or prior to the Optional
Termination
Date, the lesser of (i) LIBOR plus 0.410%, 0.430%, 0.670%,
0.700%, 1.200%,
1.350%, 1.900%, and 3.250%, respectively, and (ii) the Pool
Cap or (b) after
the Optional Termination Date, the lesser of (i) LIBOR
plus 0.615%,
0.645%, 1.005%, 1.050%, 1.800%, 2.025%, 2.850% and 4.875%,
respectively,
and (ii) the Pool Cap.
(7) The Class X Interest has an
initial principal balance of $7,518,813, but it
will not accrue
interest on such balance but will accrue interest on a
notional
principal balance. As of any Distribution Date, the Class X
Interest shall
have a notional principal balance equal to the aggregate of
the principal
balances of the Lower Tier REMIC Regular Interests as of the
first day of the
related Interest Accrual Period. With respect to any
Interest Accrual
Period, the Class X Interest shall bear interest at a rate
equal to the
excess, if any, of the Lower Tier REMIC WAC Cap over the
product of (i) 2
and (ii) the weighted average Lower Tier REMIC Interest
Rate of the
Lower Tier REMIC Regular Interests (other than Class LT-Group
I(SUB), Class
LT-Group I, Class LT-Group II(SUB), Class LT-Group II and
Class LT-XX
Interests), where the Lower Tier REMIC Interest Rate on the
Class LT-Accrual
Interest is subject to a cap equal to zero and each LT
Accretion
Directed Class is subject to a cap equal to the Pass-Through
Rate
on its
Corresponding Class. With respect to any Distribution Date,
interest
that so accrues
on the notional principal balance of the Class X Interest
shall be
deferred in an amount equal to any increase in the Subordinated
Amount on such
Distribution Date. Such deferred interest shall not itself
bear interest.
The Class X Certificates will represent beneficial ownership
of the Class X
Interest, the Cap Agreements, and amounts in the Excess
Reserve Fund
Account, subject to the obligation to make payments from the
Excess Reserve
Fund Account in respect of Basis Risk Carry Forward Amounts.
For federal
income tax purposes, the Trustee will treat a Class X
Certificateholder's obligation to make payments from the Excess
Reserve
Fund Account as
payments made pursuant to an interest rate cap contract
written by the
Class X Certificateholders in favor of each Class of LIBOR
Certificates.
Such rights of the Class X Certificateholders and LIBOR
Certificateholders shall be treated as held in a portion of the
Trust Fund
that is treated
as a grantor trust under subpart E, Part I of subchapter J
of the Code.
(8) The Class UT-R Interest is the
sole class of residual interest in the Upper
Tier REMIC. The
Class UT-R Interest does not have an interest rate.
(9) Each of these Certificates will
represent not only the ownership of the
Corresponding
Class of Upper Tier REMIC Regular Interest but also the right
to receive
payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry
Forward Amounts. For federal income tax purposes, the
Trustee will
treat a Certificateholder's right to receive payments from the
Excess Reserve
Fund Account as payments made pursuant to an interest rate
cap contract
written by the Class X Certificateholders.
The minimum denomination for each Class of Certificates, other
than
the Class P, Class R and the Class X
Certificates, will be $25,000 with integral
multiples of $1 in excess thereof except
that one Certificate in each Class may
be issued in a different amount. The
minimum denomination for each of the Class
P and Class X Certificates will be a 1%
Percentage Interest in such Class, and
the minimum denomination for the Class R
Certificates shall be 100% Percentage
Interest in such Class.
Set forth below are designations of Classes of Certificates to
the
categories used herein:
Book-Entry Certificates...... All Classes
of Certificates other than the
Physical Certificates.
Class A Certificates......... Class A-1A,
Class A-1B,
Class A-2A, Class A-2B and Class A-2C
Certificates.
Class B Certificates......... Class B-1,
Class B-2,
Class B-3 and Class B-4 Certificates.
Class M Certificates......... Class M-1,
Class M-2,
Class M-3 and Class M-4 Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class
B-4, Class R, Class P and Class X
Certificates; any certificate with a rating below
the lowest applicable permitted rating under the
Underwriters' Exemption.
LIBOR Certificates........... Class A and
Subordinated Certificates.
Non-Delay Certificates....... Class A,
Class X and Subordinated Certificates.
Offered Certificates......... All Classes
of Certificates other than the
Private Certificates.
Physical Certificates........ Class P,
Class X and Class R Certificates.
Private Certificates......... Class A-1A,
Class A-1B, Class B-4,
Class P,
Class X and Class R Certificates.
Rating Agencies.............. Moody's,
Standard & Poor's and DBRS.
Regular Certificates......... All Classes
of Certificates other than the
Class P and Class R Certificates.
Residual Certificates........ Class R
Certificates.
Subordinated Certificates.... Class M-1,
Class M-2, Class M-3, Class M-4,
Class B-1, Class B-2, Class B-3 and Class B-4
Certificates.
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: With respect to any Mortgage
Loan,
those mortgage servicing practices set
forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution
Account,
any Escrow Account or the Excess Reserve
Fund Account. Each Account shall be an
Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect
to
any Distribution Date for each Class of
LIBOR Certificates, the amount of
interest accrued during the related
Interest Accrual Period at the applicable
Pass-Through Rate on the related Class
Certificate Balance immediately prior to
such Distribution Date, as reduced by such
Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest
Shortfalls for such Distribution
Date allocated to such Class pursuant to
Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage
Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the
Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Rate adjusts as
set forth in the related Mortgage
Note and each Due Date thereafter on which
the Mortgage Rate adjusts as set
forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.10.
Advancing Person: The Person to whom the Servicer's rights
under
this Agreement to be reimbursed for any
P&I Advances or Servicing Advances have
been assigned pursuant to Section
10.10.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with
such first Person. For the purposes
of this definition, "control" means the
power to direct the management and
policies of such Person, directly or
indirectly, whether through the ownership
of voting securities, by contract or
otherwise; and the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any
Distribution Date, the aggregate amount
held in the Collection Account at the
close of business on the related
Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans
received after the end of the
related Prepayment Period and (ii) all
Scheduled Payments on the Mortgage Loans
due after the end of the related Due
Period.
Applied Realized Loss Amount: With respect to any Distribution
Date,
the amount, if any, by which the aggregate
Class Certificate Balance of the
LIBOR Certificates after distributions of
principal on such Distribution Date
exceeds the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the
related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in
recordable form (other than the assignee's
name and recording information not yet
returned from the recording office),
reflecting the sale of the Mortgage to the
Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by
the Trustee (x) the sum of (i) all
scheduled installments of interest (net of
the related Expense Fees) and
principal due on the Due Date on such
Mortgage Loans in the related Due Period
and received by the Servicer on or prior to
the related Determination Date,
together with any P&I Advances in
respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds, Liquidation
Proceeds and Subsequent Recoveries
received by the Servicer during the related
Prepayment Period (in each case, net
of unreimbursed expenses incurred in
connection with a liquidation or
foreclosure and unreimbursed Advances, if
any); (iii) all partial or full
prepayments on the Mortgage Loans received
by the Servicer during the related
Prepayment Period together with all
Compensating Interest paid by the Servicer
in connection therewith (excluding any
Prepayment Charges); (iv) all
Substitution Adjustment Amounts with
respect to the substitutions of Mortgage
Loans that occur on or prior to the related
Determination Date; (v) all amounts
received with respect to such Distribution
Date as the purchase price in respect
of a Mortgage Loan repurchased by the
Responsible Party, the Purchaser or the
Depositor on or prior to the related
Determination Date; (vi) the proceeds with
respect to the termination of the Trust
Fund pursuant to clause (a) of Section
9.01; and (vii) the Closing Date Deposit
Amount; reduced by (y) amounts in
reimbursement for Advances previously made
with respect to the Mortgage Loans
and other amounts as to which the Servicer,
the Depositor or the Trustee are
entitled to be paid or reimbursed pursuant
to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of
the Mortgage Loan or Scheduled
Payments of principal (not including the
payment due on its stated maturity
date) that are based on an amortization
schedule that would be insufficient to
fully amortize the principal thereof by the
stated maturity date of the Mortgage
Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
Principal Remittance Amount for such
Distribution Date over (ii) the Excess
Subordinated Amount, if any, for such
Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
LIBOR
Certificates, as of any Distribution Date,
the sum of (A) if on such
Distribution Date the Pass-Through Rate for
any Class of LIBOR Certificates is
based upon a Group Loan Cap or the Pool
Cap, as applicable, the excess of (i)
the amount of interest such Class of
Certificates would otherwise be entitled to
receive on such Distribution Date had such
rate been calculated as the sum of
LIBOR and the applicable Pass-Through
Margin on such Class of Certificates for
such Distribution Date, over (ii) the
amount of interest payable on such Class
of Certificates at, with respect to the
Class A-1A and Class A-1B Certificates,
the Group I Loan Cap, with respect to the
Class A-2A, Class A-2B and Class A-2C
Certificates, the Group II Loan Cap, and
with respect to each other Class of
LIBOR Certificates, the Pool Cap, as
applicable, for such Distribution Date and
(B) the portion of any such excess
described in clause (A) for such Class of
Certificates from all previous Distribution
Dates not previously paid, together
with interest thereon at a rate equal to
the sum of LIBOR and the applicable
Pass-Through Margin for such Class of
Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal
to
the lesser of (i) the aggregate of the
Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class X
Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended
from
time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a
day on which banking and savings and loan
institutions, in (a) the State of New
York, California, New Jersey or Delaware,
(b) the State in which the Servicer's
servicing operations are located, or (c)
any State in which the Trustee's
Corporate Trust Office is located, are
authorized or obligated by law or
executive order to be closed.
Cap Agreements: The Class A-2 Cap Agreement, the Class M Cap
Agreement, the Class B Cap Agreement and
the Class X Cap Agreement.
Cap Provider: Barclays Bank PLC, a bank authorized and regulated
by
the United Kingdom's Financial Services
Authority and a member of the London
Stock Exchange, and its successors in
interest.
Certificate: Any one of the Certificates executed by the Trustee
in
substantially the forms attached hereto as
exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R
Certificates, at any date, the
maximum dollar amount of principal to which
the Holder thereof is then entitled
hereunder, such amount being equal to the
Denomination thereof minus all
distributions of principal previously made
with respect thereto and in the case
of any Certificates, reduced by any Applied
Realized Loss Amounts allocated to
such Class of Certificates pursuant to
Section 4.05; provided, however, that
immediately following the Distribution Date
on which a Subsequent Recovery is
distributed, the Class Certificate Balances
of any Class or Classes of
Certificates that have been previously
reduced by Applied Realized Loss Amounts
will be increased, in order of seniority,
by the amount of the Subsequent
Recovery distributed on such Distribution
Date (up to the amount of Applied
Realized Loss Amounts allocated to such
Class or Classes). The Class P, Class X
and Class R Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such
Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register,
except that, solely for the purpose
of giving any consent pursuant to this
Agreement, any Certificate registered in
the name of the Depositor 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.
Certification: As defined in Section 8.12(b).
Class: All Certificates bearing the same class designation as
set
forth in the Preliminary Statement.
Class A Certificate
Group: The Group I Class A Certificates or the
Group II Class A Certificates, as
applicable.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage
equivalent of a fraction, determined as
follows: (A) with respect to the Group I
Class A Certificates, a fraction, the
numerator of which is (x) the portion of
the Principal Remittance Amount for
such Distribution Date that is attributable
to the principal received or
advanced on the Group I Mortgage Loans and
the denominator of which is (y) the
Principal Remittance Amount for such
Distribution Date; and (B) with respect to
the Group II Class A Certificates, a
fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount
for such Distribution Date that is
attributable to the principal received or
advanced on the Group II Mortgage
Loans and the denominator of which is (y)
the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
aggregate Class Certificate Balances of
the Class A Certificates immediately prior
to such Distribution Date over (ii)
the lesser of (A) 57.20% of the aggregate
Stated Principal Balance of the
Mortgage Loans for such Distribution Date
and (B) the excess, if any, of the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution
Date over $1,790,039.
Class A-1A Certificates: All Certificates bearing the class
designation of "Class A-1A".
Class A-1B Certificates: All Certificates bearing the class
designation of "Class A-1B".
Class A-2 Cap Agreement: The interest rate cap agreement, dated
March 30, 2005, between the Cap Provider
and the Trustee, relating to the Class
A-2A, Class A-2B and Class A-2C
Certificates.
Class A-2 Certificates: The Class A-2A, Class A-2B and Class
A-2C
Certificates, collectively.
Class A-2A Certificates: All Certificates bearing the class
designation of "Class A-2A".
Class A-2B Certificates: All Certificates bearing the class
designation of "Class A-2B".
Class A-2C
Certificates:
All Certificates
bearing the class
designation of "Class A-2C".
Class B Cap Agreement: The interest rate cap agreement, dated
March
30, 2005, between the Cap Provider and the
Trustee, relating to the Class B
Certificates.
Class B Certificates: As specified in the Preliminary
Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class
Certificate Balance of the Class M-3
Certificates (after taking into account the
distribution of the Class M-3 Principal
Distribution Amount for such
Distribution Date), (E) the Class
Certificate Balance of the Class M-4
Certificates (after taking into account the
distribution of the Class M-4
Principal Distribution Amount for such
Distribution Date) and (F) the Class
Certificate Balance of the Class B-1
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) 89.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the
excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date over
$1,790,039.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class
Certificate Balance of the Class M-3
Certificates (after taking into account the
distribution of the Class M-3 Principal
Distribution Amount for such
Distribution Date), (E) the Class
Certificate Balance of the Class M-4
Certificates (after taking into account the
distribution of the Class M-4
Principal Distribution Amount for such
Distribution Date), (F) the Class
Certificate Balance of the Class B-1
Certificates (after taking into account the
distribution of the Class B-1 Principal
Distribution Amount for such
Distribution Date) and (G) the Class
Certificate Balance of the Class B-2
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) 91.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess,
if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date over
$1,790,039.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class
Certificate Balance of the Class M-3
Certificates (after taking into account the
distribution of the Class M-3 Principal
Distribution Amount for such
Distribution Date), (E) the Class
Certificate Balance of the Class M-4
Certificates (after taking into account the
distribution of the Class M-4
Principal Distribution Amount for such
Distribution Date), (F) the Class
Certificate Balance of the Class B-1
Certificates (after taking into account the
distribution of the Class B-1 Principal
Distribution Amount for such
Distribution Date), (G) the Class
Certificate Balance of the Class B-2
Certificates (after taking into account the
distribution of the Class B-2
Principal Distribution Amount for such
Distribution Date) and (H) the Class
Certificate Balance of the Class B-3
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) 93.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the
excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date over
$1,790,039.
Class B-4 Certificates: All Certificates bearing the class
designation of "Class B-4".
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class
Certificate Balance of the Class M-3
Certificates (after taking into account the
distribution of the Class M-3 Principal
Distribution Amount for such
Distribution Date), (E) the Class
Certificate Balance of the Class M-4
Certificates (after taking into account the
distribution of the Class M-4
Principal Distribution Amount for such
Distribution Date), (F) the Class
Certificate Balance of the Class B-1
Certificates (after taking into account the
distribution of the Class B-1 Principal
Distribution Amount for such
Distribution Date), (G) the Class
Certificate Balance of the Class B-2
Certificates (after taking into account the
distribution of the Class B-2
Principal Distribution Amount for such
Distribution Date), (H) the Class
Certificate Balance of the Class B-3
Certificates (after taking into account the
distribution of the Class B-3 Principal
Distribution Amount for such
Distribution Date) and (I) the Class
Certificate Balance of the Class B-4
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) 95.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess,
if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date over
$1,790,039.
Class Certificate Balance: With respect to any Class and as to
any
date of determination, the aggregate of the
Certificate Balances of all
Certificates of such Class as of such
date.
Class LT-R Interest: The sole class of "residual interest" in
the
Lower Tier REMIC evidenced by the Class R
Certificates.
Class M Cap Agreement: The interest rate cap agreement, dated
March
30, 2005, between the Cap Provider and the
Trustee, relating to the Class M
Certificates.
Class M Certificates: As specified in the Preliminary
Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date) and (B) the Class Certificate Balance
of the Class M-1 Certificates
immediately prior to such Distribution Date
over (ii) the lesser of (A) 67.50%
of the aggregate Stated Principal Balance
of the Mortgage Loans for such
Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date over $1,790,039.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date) and (C)
the Class Certificate Balance of the
Class M-2 Certificates immediately prior to
such Distribution Date over (ii) the
lesser of (A) 73.70% of the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B)
the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date over
$1,790,039.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount for such
Distribution Date) and (D) the Class
Certificate Balance of the Class M-3
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) 84.00% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the
excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date over
$1,790,039.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class
Certificate Balance of the Class M-3
Certificates (after taking into account the
distribution of the Class M-3 Principal
Distribution Amount for such
Distribution Date) and (E) the Class
Certificate Balance of the Class M-4
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) 87.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess,
if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date over
$1,790,039.
Class P Certificates: All Certificates bearing the class
designation
of "Class P".
Class R Certificates: All Certificates bearing the class
designation
of "Class R".
Class UT-R
Interest: The sole class of "residual interest" in the
Upper Tier REMIC evidenced by the Class R
Certificate.
Class X Cap Agreement: The interest rate cap agreement, dated
March
30, 2005, between the Cap Provider and the
Trustee, relating to the Class X
Certificates.
Class X Certificates: All Certificates bearing the class
designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum
of
(i) as a distribution in respect of
interest, the amount of interest that has
accrued on the Class X Interest (as set
forth in the Preliminary Statement) and
not applied as an Extra Principal
Distribution Amount on such Distribution Date,
plus any such accrued interest remaining
undistributed from prior Distribution
Dates, plus (without duplication) (ii) as a
distribution in respect of
principal, any portion of the principal
balance of the Class X Interest which is
distributable as a Subordination Reduction
Amount, minus (iii) any amounts paid
as a Basis Risk Payment.
Class X Interest: The Upper Tier REMIC Regular Interest
represented
by the Class X Certificates as specified
and described in the Preliminary
Statement and the related footnote
thereto.
Closing Date: March 30, 2005.
Closing Date Deposit Amount: $1,291,752.91 (all of which is
allocable to principal) deposited by the
Depositor into the Distribution Account
on the Closing Date. $952,936.08 of the
Closing Date Deposit Amount shall be
attributable to the Group I Mortgage Loans,
and $338,816.83 of the Closing Date
Deposit Amount shall be attributable to the
Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of any date and as to
any
Second-Lien Mortgage Loan, the ratio
(expressed as a percentage) of the (a) sum
of (i) the outstanding principal balance of
the Second-Lien Mortgage Loan and
(ii) the outstanding principal balance as
of such date of any mortgage loan or
mortgage loans that are senior or equal in
priority to the Second-Lien Mortgage
Loan and which are secured by the same
Mortgaged Property to (b) (i) in the case
of a purchase, the lesser of (A) the sale
price of the Mortgaged Property and
(B) the lesser of (y) its appraised value
at the time of sale or (z) the
appraised value determined by a review
appraisal conducted by the Responsible
Party, or (ii) in the case of a refinancing
or modification, the lesser of (A)
the appraised value of the Mortgaged
property at the time of the refinancing or
modification or (B) the appraised value
determined by a review appraisal
conducted by the Responsible Party.
Compensating Interest: For any Distribution Date, the lesser of
(a)
the amount, if any, by which the Prepayment
Interest Shortfall, if any, for such
Distribution Date, with respect to
voluntary Principal Prepayments in Full
(excluding any payments made upon
liquidation of any Mortgage Loan) exceeds all
Prepayment Interest Excesses for such
Distribution Date, and (b) the amount of
the Servicing Fee payable to the Servicer
for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of
a
Mortgaged Property, whether permanent or
temporary, partial or entire, by
exercise of the power of eminent domain or
condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage
Loan purchased pursuant to this Agreement
which contains a provision whereby the
Mortgagor is permitted to convert the
Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the
terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee at
which at any particular time its corporate
trust business with respect to this
Agreement is administered, which office at
the date of the execution of this
Agreement is located at 401 South Tryon
Street, 12th Floor, Charlotte, North
Carolina 28288-1179, Attention: Structured
Finance Trust Services - Securitized
Asset Backed Receivables LLC Trust
2005-EC1, facsimile no. (704) 383-6039, and
which is the address to which notices to
and correspondence with the Trustee
should be directed.
Corresponding Class: The class of interests in either REMIC
created
under this Agreement that corresponds to
the Class of interests in the other
such REMIC or to a Class of Certificates in
the manner set out below:
Corresponding
Corresponding
Lower Tier REMIC
Upper Tier REMIC
Corresponding Class of
Class
Designation Regular
Interest
Certificates
------------------------- ------------------
----------------------
Class LT-A-1A
Class A-1A
Class A-1A
Class LT-A-1B
Class A-1B
Class A-1B
Class LT-A-2A
Class A-2A
Class A-2A
Class LT-A-2B
Class A-2B
Class A-2B
Class LT-A-2C
Class A-2C
Class A-2C
Class LT-M-1
Class M-1
Class M-1
Class LT-M-2
Class M-2
Class M-2
Class LT-M-3
Class M-3
Class M-3
Class LT-M-4
Class M-3
Class M-4
Class LT-B-1
Class B-1
Class B-1
Class LT-B-2
Class B-2
Class B-2
Class LT-B-3
Class B-3
Class B-3
Class LT-B-4
Class B-4
Class B-4
N/A
Class X
Class X
Corresponding Upper Tier REMIC Regular Interest: As defined in
the
Preliminary Statement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's
Glossary.
Cumulative Loss Percentage: With respect to any Distribution
Date,
the percentage equivalent of a fraction,
the numerator of which is the aggregate
amount of Realized Losses incurred from the
Cut-off Date to the last day of the
calendar month preceding the month in which
such Distribution Date occurs and
the denominator of which is the Cut-off
Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: If, with respect to any
Distribution
Date, the quotient (expressed as a
percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off
Date through the last day of the
related Due Period, divided by (y) the
Cut-off Date Pool Principal Balance,
exceeds the applicable Cumulative Loss
Percentages set forth below with respect
to such Distribution Date:
Distribution Date Occurring In
Cumulative Loss Percentage
------------------------------
--------------------------
April 2008 through March 2009
3.000% for the first month, plus an
additional 1/12th of 1.750% for each
month thereafter (e.g., 3.875% in
September 2008)
April 2009 through March 2010
4.750% for the first month, plus an
additional 1/12th of 1.500% for each
month thereafter (e.g., 5.500% in
September 2009)
April 2010 through March 2011
6.250% for the first month, plus an
additional 1/12th of 0.750% for each
month thereafter (e.g., 6.625% in
September 2010)
April 2011 and thereafter
7.000%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items
(a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: March 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal
Balances of all Mortgage Loans as of the
Cut-off Date plus the portion of the
Closing Date Deposit Amount allocable to
principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close
of business on the Cut-off Date.
Data Tape Information: With respect to each Mortgage Loan, the
following information as of the applicable
Original Sale Date (except for the
information in items (5), (12), (13), (14),
(20), (21) and (31) below, which
information was provided as of the Cut-off
Date) provided by the Responsible
Party to the Purchaser pursuant to the
Purchase Agreement: (1) the Responsible
Party's Mortgage Loan identifying number;
(2) the Mortgagor's name; (3) the
street address of the Mortgaged Property
including the city, state and zip code;
(4) a code indicating whether the Mortgagor
is self-employed; (5) as to each
Mortgage Loan, the Stated Principal Balance
as of the Cut-off Date; (6) the
Index; (7) a code indicating whether the
Mortgaged Property is owner-occupied;
(8) the number and type of residential
units constituting the Mortgaged
Property; (9) the original stated months to
maturity; (10) the original
amortization months to maturity; (11) the
stated maturity date; (12) the amount
of the Scheduled Payment as of the Cut-off
Date; (13) the first date on which
the Scheduled Payment was due on the
Mortgage Loan and, if such date is not
consistent with the Due Date currently in
effect, such Due Date; (14) the "paid
through date" based on payments received
from the related Mortgagor; (15) the
original principal amount of the Mortgage
Loan; (16) with respect to each
Adjustable Rate Mortgage Loan, the Minimum
Mortgage Rate; (17) with respect to
each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Rate; (18) with respect
to each Adjustable Rate Mortgage Loan, the
initial Periodic Mortgage Rate Cap;
(19) with respect to each Adjustable Rate
Mortgage Loan, the subsequent Periodic
Mortgage Rate Cap; (20) with respect to
each Adjustable Rate Mortgage Loan, the
first payment Adjustment Date immediately
following the Cut-off Date; (21) with
respect to each Adjustable Rate Mortgage
Loan, the first Interest Rate
Adjustment Date immediately following the
Cut-off Date; (22) with respect to
each Adjustable Rate Mortgage Loan, the
Gross Margin; (23) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage
Rate adjustment period; (24) the
type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan); (25)
lien position (ie. First-Lien or
Second-Lien Mortgage Loan); (26) a code
indicating the purpose of the loan (i.e.,
purchase, rate and term refinance,
equity take-out refinance); (27) a code
indicating the documentation style
(i.e., full, asset verification, income
verification and no documentation); (28)
the credit risk score (FICO score); (29)
the loan credit grade classification
(as described in the underwriting
guidelines); (30) the Mortgage Rate at
origination; (31) the Mortgage Rate as of
the Cut-off Date; (32) the value of
the Mortgaged Property; (33) a code
indicating the term and amount of Prepayment
Charges applicable to such Mortgage Loan
(including any prepayment penalty
term), if any; (34) with respect to each
First-Lien Mortgage Loan, the
Loan-to-Value Ratio at origination, and
with respect to each Second-Lien
Mortgage Loan, the Combined Loan-to-Value
Ratio at origination; (35) a code
indicating the documentation style, as
required by Standard & Poor's criteria;
(36) asset verification (Y/N); (37) the
date of origination; (38) a code
indicating whether the Mortgage Loan is a
Balloon Loan; (39) the Due Date for
the first Scheduled Payment; (40) the
original Scheduled Payment due; (41) the
debt-to-income ratio with respect to the
Mortgage Loan; (42) the Mortgage Rate
calculation method (i.e., 30/360, simple
interest, other); (43) a code
indicating whether the Mortgage Loan is
Home Loan; (44) appraisal verification
(Y/N); (45) type of appraisal verification,
if any; and (46) with respect to
Second-Lien Mortgage Loans, the outstanding
principal balance of the superior
lien at origination. With respect to the
Mortgage Loans in the aggregate, the
Data Tape Information shall set forth the
following information, as of the
Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate
outstanding principal balance of the
Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and
(4) the weighted average maturity of
the Mortgage Loans.
DBRS: Dominion Bond Rating Service, Inc. If DBRS is designated as
a
Rating Agency in the Preliminary Statement,
for purposes of Section 10.05(c) the
address for notices to DBRS shall be
Dominion Bond Rating Service, Inc., 55
Broadway, 15th Floor, New York, New York
10006, Attention: Quincy Tang, or such
other address as DBRS may hereafter furnish
to the Depositor and the Servicer.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent
jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled
Payment for such Mortgage Loan which
became final and non-appealable, except
such a reduction resulting from a
Deficient Valuation or any reduction that
results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
of the related Mortgaged Property by a
court of competent jurisdiction in an
amount less than the then outstanding
principal balance of the Mortgage Loan,
which valuation results from a proceeding
initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in
lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution
Date
means the circumstances in which the
quotient (expressed as a percentage) of (x)
the rolling three month average of the
Stated Principal Balances of 60+ Day
Delinquent Mortgage Loans, divided by (y)
the aggregate Stated Principal Balance
of the Mortgage Loans, as of the last day
of the related Due Period, equals or
exceeds 38.00% of the prior period's Senior
Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial
Certificate Balance of this Certificate" or
the Percentage Interest appearing on the
face thereof.
Depositor: Securitized Asset Backed Receivables LLC, a Delaware
limited liability company, and its
successors in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is CEDE &
Co., as the registered Holder of the
Book-Entry Certificates. The Depository
shall at all times be a "clearing
corporation" as defined in Section
8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company,
including the Trustee, that (a) is
incorporated under the laws of the United
States of America or any State thereof, (b)
is subject to supervision and
examination by federal or state banking
authorities and (c) has outstanding
unsecured commercial paper or other
short-term unsecured debt obligations that
are rated P-1 by Moody's, F1+ by Fitch, A-1
by Standard & Poor's and R-1 by DBRS
(in each case, to the extent they are
designated as Rating Agencies in the
Preliminary Statement).
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
Determination Date: With respect to each Remittance Date, the
18th
day (or if such day is not a Business Day,
the immediately preceding Business
Day) in the calendar month in which such
Remittance Date occurs.
Disqualified Non-U.S. Person: With respect to a Class R
Certificate,
any Non-U.S. Person or agent thereof other
than (i) a Non-U.S. Person that holds
the Class R or Class LR Certificate in
connection with the conduct of a trade or
business within the United States and has
furnished the transferor and the
Trustee with an effective IRS Form W-8ECI
or (ii) a Non-U.S. Person that has
delivered to both the transferor and the
Trustee an opinion of a nationally
recognized tax counsel to the effect that
the transfer of the Class R
Certificate to it is in accordance with the
requirements of the Code and the
regulations promulgated thereunder and that
such transfer of the Class R
Certificate will not be disregarded for
federal income tax purposes.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to
Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders
and designated "Wachovia Bank N.A. in
trust for registered holders of Securitized
Asset Backed Receivables LLC Trust
2005-EC1 Mortgage Pass-Through
Certificates, Series 2005-EC1". Funds in the
Distribution Account shall be held in trust
for the Certificateholders for the
uses and purposes set forth in this
Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the third
Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if
such day is not a Business Day, the
next succeeding Business Day, commencing in
April 2005.
Document Certification and Exception Report: The report attached
to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due
on a Mortgage Loan, exclusive of any days
of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the
calendar month preceding the month in which
such Distribution Date occurs and ending on
the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or
state chartered depository institution or
trust company the short-term unsecured
debt obligations of which (or, in the case
of a depository institution or trust
company that is a subsidiary of a holding
company, the short-term unsecured debt
obligations of such holding company) are
rated "A-1" by Standard & Poor's, "P-1"
by Moody's, "F1+" by Fitch and "R-1" by
DBRS (in each case, to the extent they
are designated as Rating Agencies in the
Preliminary Statement) (or a comparable
rating if another Rating Agency is
specified by the Depositor by written notice
to the Servicer) at the time any amounts
are held on deposit therein, (ii) an
account or accounts the deposits in which
are fully insured by the FDIC, (iii) a
trust account or accounts maintained with a
federal or state chartered
depository institution or trust company
acting in its fiduciary capacity or (iv)
any other account acceptable to each Rating
Agency. Eligible Accounts may bear
interest, and may include, if otherwise
qualified under this definition,
accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that
meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67
Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially
similar administrative exemption
granted by the U.S. Department of
Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created
and maintained by the Trustee pursuant to
Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the
Regular Certificateholders and
designated "Wachovia Bank N.A. in trust for
registered holders of Securitized
Asset Backed Receivables LLC Trust
2005-EC1, Mortgage Pass-Through Certificates,
Series 2005-EC1". Funds in the Excess
Reserve Fund Account shall be held in
trust for the Regular Certificateholders
for the uses and purposes set forth in
this Agreement. Amounts on deposit in the
Excess Reserve Fund Account shall not
be invested.
Excess Subordinated Amount: With respect to any Distribution
Date,
the excess, if any, of (a) the Subordinated
Amount on such Distribution Date
over (b) the Specified Subordinated Amount
for such Distribution Date.
Exchange Act: As defined in Section 8.12(a).
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal
to the sum of the Servicing Fee Rate and
the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee
and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution
Date,
the lesser of (x) the related Total Monthly
Excess Spread for such Distribution
Date and (y) the related Subordination
Deficiency for such Distribution Date.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide and all amendments or
additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased
by the Responsible Party as contemplated by
this Agreement), a determination
made by the Servicer that all Insurance
Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or
recoveries which the Servicer, in its
reasonable good faith judgment, expects to
be finally recoverable in respect
thereof have been so recovered. The
Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution
Date for each Class of Certificates is the
Distribution Date occurring in
January 2035.
First-Lien Mortgage Loan: A Mortgage Loan secured by a
first-lien
Mortgage on the related Mortgaged
Property.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is
designated
as a Rating Agency in the Preliminary
Statement, for purposes of Section
10.05(c) the address for notices to Fitch
shall be Fitch, Inc., One State Street
Plaza, New York, New York 10004, Attention:
MBS Monitoring - Securitized Asset
Backed Receivables LLC Trust 2005-EC1, or
such other address as Fitch may
hereafter furnish to the Depositor and the
Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States
created and existing under Title III of the
Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in
the related Mortgage Note to be added
to the applicable Index to determine the
Mortgage Rate.
Group I Class A Certificates: The Class A-1A Certificates and
the
Class A-1B Certificates, collectively.
Group I Loan Cap: With respect to the Group I Mortgage Loans as
of
any Distribution Date, the product of (i)
the weighted average of the Adjusted
Net Mortgage Rates then in effect on the
beginning of the related Due Period on
the Group I Mortgage Loans and (ii) a
fraction, the numerator of which is 30 and
the denominator of which is the actual
number of days in the Interest Accrual
Period related to such Distribution
Date.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage
Loans.
Group I Sequential Trigger Event: With respect to any
Distribution
Date exists if (i) for any Distribution
Date prior to April 2008, the aggregate
amount of Realized Losses incurred since
the Cut-off Date through the last day
of the related Due Period divided by the
aggregate Stated Principal Balance of
the Mortgage Loans as of the Cut-off Date
exceeds 3.00%, or (ii) for any
Distribution Date in or after April 2008, a
Trigger Event exists.
Group II Class A Certificates: The Class A-2A Certificates, the
Class A-2B Certificates and the Class A-2C
Certificates, collectively.
Group II Loan Cap: With respect to the Group II Mortgage Loans as
of
any Distribution Date, the product of (i)
the weighted average of the Adjusted
Net Mortgage Rates then in effect on the
beginning of the related Due Period on
the Group II Mortgage Loans and (ii) a
fraction, the numerator of which is 30
and the denominator of which is the actual
number of days in the Interest
Accrual Period related to such Distribution
Date.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage
Loans.
Group Loan Cap: The Group I Loan Cap or the Group II Loan Cap,
as
applicable.
Group Subordinate Amount: For any Distribution Date and (i) for
the
Group I Mortgage Loans, the excess of the
aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the
beginning of the related Due Period over
the aggregate Class Certificate Balance of
the Class A-1A and Class A-1B
Certificates immediately prior to the
current Distribution Date and (ii) for the
Group II Mortgage Loans, the excess of the
aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the
beginning of the related Due Period over
the aggregate Class Certificate Balance of
the Class A-2A, Class A-2B and Class
A-2C Certificates immediately prior to such
Distribution Date.
Home Loan: A Mortgage Loan categorized as "Home Loan" pursuant
to
Appendix E of Standard & Poor's
Glossary.
Indenture Trustee: The trustee for the NIM Securities.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time
to time in effect for the adjustment of the
Mortgage Rate set forth as such on
the related Mortgage Note.
Initial Certification: As defined in Section 2.02.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including
all riders and endorsements thereto
in effect, including any replacement policy
or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage
Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of
Non-Delay
Certificates and the Corresponding Class of
Lower Tier REMIC Regular Interests
and any Distribution Date, the period
commencing on the Distribution Date
occurring in the month preceding the month
in which the current Distribution
Date occurs and ending on the day
immediately preceding the current Distribution
Date (or, in the case of the first
Distribution Date, the period from and
including the Closing Date to but excluding
such first Distribution Date). For
purposes of computing interest accruals on
each Class of Non-Delay Certificates,
each Interest Accrual Period has the actual
number of days in such month and
each year is assumed to have 360 days.
Interest
Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the
related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate
is adjusted.
Interest Rate Cap Payment: (a) With respect to the Class A-2
Certificates, for the first 26 Distribution
Dates, the amount, if any, equal to
the product of (i) the excess, if any, of
the lesser of (A) the one-month LIBOR
rate as of the related reset date under the
Class A-2 Cap Agreement and (B) the
applicable cap ceiling rate set forth on
Schedule A to such Cap Agreement for
such Distribution Date, over the applicable
cap strike rate set forth on
Schedule A to such Cap Agreement for such
Distribution Date, calculated on an
"actual/360" basis, (ii) the applicable
Class A-2 cap notional amount set forth
on Schedule A to such Cap Agreement for
such Distribution Date, and (iii) the
multiplier set forth on Schedule A to such
Cap Agreement; (b) with respect to
the Class M Certificates, for the first 26
Distribution Dates, the amount, if
any, equal to the product of (i) the
excess, if any, of the lesser of (A) the
one-month LIBOR rate as of the related
reset date under the Class M Cap
Agreement and (B) the applicable cap
ceiling rate set forth on Schedule A to
such Cap Agreement for such Distribution
Date, over the applicable cap strike
rate set forth on Schedule A to such Cap
Agreement for such Distribution Date,
calculated on an "actual/360" basis, (ii)
the applicable Class M cap notional
amount set forth on Schedule A to such Cap
Agreement for such Distribution Date
and (iii) the multiplier set forth on
Schedule A to such Cap Agreement; and (c)
with respect to the Class B Certificates,
for the first 26 Distribution Dates,
the amount, if any, equal to the product of
(i) the excess, if any, of the
lesser of (A) the one-month LIBOR rate as
of the related reset date under the
Class B Cap Agreement and (B) the
applicable cap ceiling rate set forth on
Schedule A to such Cap Agreement for such
Distribution Date, over the applicable
cap strike rate set forth on Schedule A to
such Cap Agreement for such
Distribution Date, calculated on an
"actual/360" basis, (ii) the applicable
Class B cap notional amount set forth on
Schedule A to such Cap Agreement for
such Distribution Date and (iii) the
multiplier set forth on Schedule A to such
Cap Agreement; and (d) with respect to the
Class X Certificates, for the first
24 Distribution Dates, the amount, if any,
equal to the product of (i) the
excess, if any, of the lesser of (A) the
one-month LIBOR rate as of the related
reset date under the Class X Cap Agreement
and (B) the applicable cap ceiling
rate set forth on Schedule A to such Cap
Agreement for such Distribution Date,
over the applicable cap strike rate set
forth on Schedule A to such Cap
Agreement for such Distribution Date,
calculated on an "actual/360" basis, (ii)
the applicable notional amount set forth on
Schedule A to such Cap Agreement for
such Distribution Date and (iii) the
multiplier set forth on Schedule A to such
Cap Agreement.
Interest Remittance Amount: With respect to any Distribution
Date
and the Mortgage Loans in a Loan Group,
that portion of Available Funds
attributable to interest relating to
Mortgage Loans in that Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the
investor pursuant to the MERS Procedures
Manual.
IRS: The Internal Revenue Service.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the
Determination Date immediately following
such Due Period, whether as late payments
of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds,
Liquidation Proceeds, Subsequent Recoveries or
otherwise, which represent late payments or
collections of principal and/or
interest due (without regard to any
acceleration of payments under the related
Mortgage and Mortgage Note) but delinquent
for such Due Period and not
previously recovered.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR
Certificates, the rate determined by the
Trustee on the related LIBOR
Determination Date on the basis of the
offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate
Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such
rate does not appear on Telerate Page
3750, the rate for such date will be
determined on the basis of the rates at
which one-month U.S. dollar deposits are
offered by the Reference Banks at
approximately 11:00 a.m. (London time) on
such date to prime banks in the London
interbank market. In such event, the
Trustee shall request the principal London
office of each of the Reference Banks to
provide a quotation of its rate. If at
least two such quotations are provided, the
rate for that date will be the
arithmetic mean of the quotations (rounded
upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two
quotations are provided as
requested, the rate for that date will be
the arithmetic mean of the rates
quoted by major banks in New York City,
selected by the Trustee (after
consultation with the Depositor), at
approximately 11:00 a.m. (New York City
time) on such date for one-month U.S.
dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the
second London Business Day preceding the
commencement of such Interest Accrual
Period.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO
Property) which was liquidated in the
calendar month preceding the month of such
Distribution Date and as to which the
Servicer has certified to the Trustee that
it has received all amounts it
expects to receive in connection with the
liquidation of such Mortgage Loan
including the final disposition of an REO
Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan,
whether through a trustee's sale,
foreclosure sale or otherwise.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the
ratio (expressed as a percentage) of the
original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date
(unless otherwise indicated), to the
lesser of (a) the Appraised Value of the
Mortgaged Property at origination, and
(b) if the Mortgage Loan was made to
finance the acquisition of the related
Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United
States dollars are transacted in the London
interbank market.
Lower Tier REMIC Interest Rate: As described in the Preliminary
Statement.
Lower Tier REMIC Regular Interest: Each of the Class LT-A-1A,
Class
LT-A-1B, Class LT-A-2A, Class LT-A-2B,
Class LT-A-2C, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class
LT-B-1, Class LT-B-2, Class LT-B-3,
Class LT-B-4 Class LT-Group I(SUB), Class
LT-Group I, Class LT-Group II(SUB),
Class LT-Group II, Class LT-XX and Class
LT-Accrual Interests as described in
the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Lower Tier REMIC Principal Amount: The principal balance of
each
Lower Tier REMIC Regular Interest,
determined as set forth in the Preliminary
Statement. The Lower Tier REMIC Principal
Amount shall be computed to at least
eight (8) decimal places.
Lower Tier REMIC Subordinated Balance Ratio: The ratio between
the
Lower Tier REMIC Principal Amounts of the
Class LT-Group I(SUB) Interest and
Class LT-Group II(SUB) Interest equal to
the ratio between the Group Subordinate
Amount of the Group I Mortgage Loans and
the Group Subordinate Amount of the
Group II Mortgage Loans, respectively.
Lower Tier REMIC WAC Cap: With respect to the Mortgage Loans as
of
any Distribution Date, the product of (i)
the weighted average of the Adjusted
Net Mortgage Rates then in effect on the
beginning of the related Due Period on
the Mortgage Loans and (ii) a fraction, the
numerator of which is 30 and the
denominator of which is the actual number
of days in the Interest Accrual Period
related to such Distribution Date.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the
Data Tape Information and in the
related Mortgage Note and (ii) is the
maximum interest rate to which the
Mortgage Rate on such Adjustable Rate
Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage
Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in
interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Responsible Party has designated or will
designate MERS as, and has taken or
will take such action as is necessary to
cause MERS to be, the mortgagee of
record, as nominee for the Responsible
Party, in accordance with the MERS
Procedure Manual and (b) the Responsible
Party has designated or will designate
the Purchaser as the Investor on the MERS
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified
from time to time.
MERS(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS
Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the
Data Tape Information and in the
related Mortgage Note and (ii) is the
minimum interest rate to which the
Mortgage Rate on such Adjustable Rate
Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage
Loan.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc. If Moody's is designated
as
a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(c)
the address for notices to Moody's shall be
Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007,
Attention: Residential Mortgage
Pass-Through Group, or such other address
as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified
on the Mortgage Loan Schedule as securing a
Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan
contained in either the Servicing File or
Custodial File.
Mortgage Loan: An individual Mortgage Loan that is the subject
of
this Agreement, each Mortgage Loan
originally sold and subject to this Agreement
being identified on the Mortgage Loan
Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the
Scheduled Payments, Principal
Prepayments, Liquidation Proceeds,
Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition
proceeds, Prepayment Charges, and all other
rights, benefits, proceeds and obligations
arising from or in connection with
such Mortgage Loan, excluding replaced or
repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans prepared by
the
Depositor and annexed hereto as Schedule I,
such schedule setting forth, for
each Loan Group, the Data Tape Information
with respect to each Mortgage Loan.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note,
which shall be adjusted from time to time
in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the
Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the
real
property (or leasehold estate, if
applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt
evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date, the
amount
remaining for distribution pursuant to
subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such
subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the
amount by which the sum of the Prepayment
Interest Shortfalls for such
Distribution Date exceeds the sum of (i)
all Prepayment Interest Excesses for
such Distribution Date and (ii)
Compensating Interest payments made with respect
to such Distribution Date.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed
by
some or all of the Class X and Class P
Certificates that are rated by any Rating
Agency.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made
or
proposed to be made in respect of a
Mortgage Loan or REO Property that, in the
good faith business judgment of the
Servicer, will not or, in the case of a
proposed P&I Advance, would not be
ultimately recoverable from related Late
Collections on such Mortgage Loan or REO
Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously
made or proposed to be made in respect of a
Mortgage Loan or REO Property,
which, in accordance with Accepted
Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not
be ultimately recoverable from
related Late Collections.
Non-U.S. Person: A person that is not a U.S. Person.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final
distribution on any of the Certificates
shall be made only upon presentation and
surrender thereof.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
the
Servicer with responsibility for the
servicing of the Mortgage Loans and listed
on a list delivered to the Trustee pursuant
to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or any
Subservicer, reasonably acceptable to
the Trustee; provided, that any Opinion of
Counsel relating to (a) qualification
of either the Lower Tier REMIC or the Upper
Tier REMIC or (b) compliance with
the REMIC Provisions, must be (unless
otherwise stated in such Opinion of
Counsel) an opinion of counsel who (i) is
in fact independent of the Servicer of
the Mortgage Loans, (ii) does not have any
material direct or indirect financial
interest in the Servicer of the Mortgage
Loans or in an affiliate of the
Servicer and (iii) is not connected with
the Servicer of the Mortgage Loans as
an officer, employee, director or person
performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the
Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or
less of the Cut-off Date Pool
Principal Balance.
Original Sale Date: November 17, 2004, November 29, 2004 or
December
14 2004, as applicable.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with
a Stated Principal Balance greater than
zero which was not the subject of a
Principal Prepayment in Full prior to such
Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due
Date.
Ownership Interest: As to any Residual 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.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance
made by the Servicer in respect of any
Remittance Date representing the
aggregate of all payments of principal and
interest, net of the Servicing Fee,
that were due during the related Due Period
on the Mortgage Loans and that were
delinquent on the related Determination
Date, plus certain amounts representing
assumed payments not covered by any current
net income on the Mortgaged
Properties acquired by foreclosure or deed
in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages:
Class A-1A Certificates, 0.430%; Class
A-1B Certificates, 0.430%; Class A-2A
Certificates, 0.100%; Class A-2B
Certificates, 0.200%; Class A-2C
Certificates, 0.300%; Class M-1 Certificates,
0.410%; Class M-2 Certificates, 0.430%;
Class M-3 Certificates, 0.670%; Class
M-4 Certificates, 0.700%; Class B-1
Certificates, 1.200%; Class B-2
Certificates, 1.350%; Class B-3
Certificates, 1.900%; and Class B-4
Certificates, 3.250%. On the first
Distribution Date after the Optional
Termination Date, the Pass-Through Margins
shall increase to: Class A-1A
Certificates, 0.860%; Class A-1B
Certificates, 0.860%; Class A-2A Certificates,
0.200%; Class A-2B Certificates, 0.400%;
Class A-2C Certificates, 0.600%; Class
M-1 Certificates, 0.615%; Class M-2
Certificates, 0.645%; Class M-3
Certificates, 1.005%; Class M-4
Certificates, 1.050%; Class B-1 Certificates,
1.800%; Class B-2 Certificates, 2.025%;
Class B-3 Certificates, 2.850%; and
Class B-4 Certificates, 4.875%.
Pass-Through Rate: For each Class of Certificates, each Class
of
Upper Tier REMIC Regular Interest and each
Class of Lower Tier REMIC Regular
Interest, the per annum rate set forth or
calculated in the manner described in
the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required
to be made on the related Class,
such percentage interest being set forth on
the face thereof or equal to the
percentage obtained by dividing the
Denomination of such Certificate by the
aggregate of the Denominations of all
Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each
Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following
obligations
or securities acquired at a purchase price
of not greater than par, regardless
of whether issued by the Servicer, the
Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States
or
any agency or instrumentality thereof, provided such obligations
are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original
maturity
of not more than 90 days and, in the case of bankers'
acceptances,
shall in no event have an original maturity of more than 365 days
or
a remaining maturity of more than 30 days) denominated in
United
States dollars and issued by, any Depository Institution and
rated
F1+ by Fitch, A-1+ by S&P, P-1 by Moody's and R-1 by DBRS (in
each
case, to the extent they are designated as Rating Agencies in
the
Preliminary Statement);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of
the
United States of America or any state thereof and that are rated
by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such
investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable
on
demand or on a specified date not more than 30 days after the
date
of acquisition thereof) that is rated by each Rating Agency
that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
managed or advised by the Depositor or the Trustee or an
Affiliate
thereof, that have been rated "Aaa" by Moody's, "AAA" by Standard
&
Poor's and, if rated by Fitch, at least "AAA" by Fitch (in each
case, to the extent they are designated as Rating Agencies in
the
Preliminary Statement); and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other
obligation,
security or investment, as may be acceptable to each of the
Rating
Agencies as a permitted investment of funds backing "Aaa" or
"AAA"
rated securities;
provided, however, that no instrument
described hereunder shall evidence either
the right to receive (a) only interest with
respect to the obligations
underlying such instrument or (b) both
principal and interest payments derived
from obligations underlying such instrument
and the interest and principal
payments with respect to such instrument
provide a yield to maturity at par
greater than 120% of the yield to maturity
at par of the underlying obligations.
Permitted Transferee: Any 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)
which is exempt from tax imposed by Chapter
1 of the Code (including the tax
imposed by Section 511 of the Code on
unrelated business taxable income) on any
excess inclusions (as defined in Section
860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural
electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the
Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S.
Person with respect to whom income from a
Residual Certificate is attributable to a
foreign permanent establishment or
fixed base, within the meaning of an
applicable income tax treaty, of such
Person or any other U.S. Person, (vi) an
"electing large partnership" within the
meaning of Section 775 of the Code and
(vii) any other Person so designated by
the Depositor based upon an Opinion of
Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such
Person may cause either the Lower
Tier REMIC or the Upper Tier REMIC to fail
to qualify as a REMIC at any time
that the Certificates are outstanding. The
terms "United States", "State" and
"international organization" shall have the
meanings set forth in Section 7701
of the Code or successor provisions. A
corporation will not be treated as an
instrumentality of the United States or of
any State or political subdivision
thereof for these purposes if all of its
activities are subject to tax and, with
the exception of Freddie Mac, a majority of
its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company,
joint-stock company, trust,
unincorporated organization or government,
or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Cap: With respect to the Mortgage Loans as of any
Distribution
Date, the product of (i) the weighted
average of (x) the Adjusted Net Mortgage
Rates for the Group I Mortgage Loans and
(y) the Adjusted Net Mortgage Rates for
the Group II Mortgage Loans then in effect
on the beginning of the related Due
Period, in each case weighted on the basis
of the related Group Subordinate
Amount, and (ii) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days in the
Interest Accrual Period related to
such Distribution Date. For federal income
tax purposes, the economic equivalent
of the Pool Cap shall be expressed as the
weighted average of the Lower Tier
REMIC Interest Rate on (a) the Class
LT-Group I(SUB), subject to a cap and floor
equal to the Lower Tier REMIC Interest Rate
of the Class LT-Group I Interest and
(b) the Class LT-Group II(SUB), subject to
a cap and floor equal to the Lower
Tier REMIC Interest Rate of the Class
LT-Group II Interest, weighted on the
basis of the respective Lower Tier REMIC
Principal Amounts of the Class LT-Group
I(SUB) and Class LT-Group II(SUB),
respectively.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances
of the Mortgage Loans for such
Distribution Date that were Outstanding
Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a
Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment
pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date,
any interest collected by the Servicer with
respect to any Mortgage Loan
serviced by the Servicer as to which a
Principal Prepayment in Full occurs from
the 1st day of the month through the 15th
day of the month in which such
Distribution Date occurs and that
represents interest that accrues from the 1st
day of such month to the date of such
Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan
that was, during the portion of the
related Prepayment Period from the first
day of such Prepayment Period through
the last day of the month preceding the
month in which such Distribution Date
occurs, the subject of a Principal
Prepayment in Full which is not accompanied
by an amount equal to one month of interest
that would have been due on such
Mortgage Loan on the Due Date that occurs
during such Prepayment Period and
which was applied by the Servicer to reduce
the outstanding principal balance of
such Mortgage Loan on a date preceding such
Due Date, an amount equal to the
product of (a) the Mortgage Rate net of the
Servicing Fee Rate for such Mortgage
Loan, (b) the amount of the Principal
Prepayment for such Mortgage Loan, (c)
1/360 and (d) the number of days commencing
on the date on which such Principal
Prepayment was applied and ending on the
last day of the calendar month in which
the related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and
any
Principal Prepayments (including all
unscheduled receipts of principal on the
Mortgage Loans), the period from and
including the 16th day of the month
preceding the month in which such
Distribution Date occurs (or, in the case of
the first Distribution Date, from the
Cut-off Date) to and including the 15th
day of the month in which such Distribution
Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum
of
(i) the Basic Principal Distribution Amount
for such Distribution Date and (ii)
the Extra Principal Distribution Amount for
such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery
of principal on a Mortgage Loan (including
upon liquidation of a Mortgage Loan)
which is received in advance of its
scheduled Due Date, excluding any Prepayment
Charge thereon and which is not accompanied
by an amount of interest
representing scheduled interest due on any
date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance
of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date,
the amount equal to the sum of the
following amounts (without duplication) with
respect to the related Due Period: (i) each
scheduled payment of principal on a
Mortgage Loan due during such Due Period
and received by the Servicer on or
prior to the related Determination Date or
advanced by the Servicer for the
related Remittance Date, (ii) all Principal
Prepayments received during the
related Prepayment Period; (iii) all net
Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the
Mortgage Loans allocable to principal,
and all Subsequent Recoveries, actually
collected by the Servicer during the
related Prepayment Period; (iv) the portion
of the purchase price allocable to
principal with respect to each Mortgage
Loan repurchased by the Responsible
Party, the Purchaser or the Depositor, the
repurchase obligation for which arose
during the related Prepayment Period, that
was repurchased during the period
from the prior Distribution Date through
the Business Day prior to the current
Distribution Date; (v) all Substitution
Adjustment Amounts allocable to
principal with respect to the substitutions
of Mortgage Loans that occur during
the calendar month in which such
Distribution Date occurs; (vi) the allocable
portion of the proceeds received with
respect to the termination of the Trust
Fund pursuant to clause (a) of Section 9.01
(to the extent such proceeds relate
to principal) and (vii) with respect to the
Distribution Date in April 2005
only, the portion of the Closing Date
Deposit Amount allocable to principal.
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated March
25,
2005, relating to the Offered
Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated
as
of November 1, 2004, by and between the
Purchaser, as purchaser, and the
Responsible Party, as seller.
Purchaser: Barclays Bank PLC, a public limited company registered
in
England and Wales under company number
1026167, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization
or a successor is no longer in
existence, "Rating Agency" shall be such
nationally recognized statistical
rating organization, or other comparable
Person, as is designated by the
Depositor, notice of which designation
shall be given to the Trustee. References
herein to a given rating or rating category
of a Rating Agency shall mean such
rating category without giving effect to
any modifiers. For purposes of Section
10.05(c), the addresses for notices to each
Rating Agency shall be the address
specified therefor in the definition
corresponding to the name of such Rating
Agency, or such other address as either
such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and
any
Liquidated Mortgage Loan, the amount, if
any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan
together with accrued and unpaid
interest thereon exceeds (b) the
Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in
connection with the liquidation of
such Liquidated Mortgage Loan and net of
the amount of unreimbursed Servicing
Advances with respect to such Liquidated
Mortgage Loan.
Record Date: With respect to any Distribution Date, the close
of
business on the Business Day immediately
preceding such Distribution Date;
provided, however, that, for any
Certificate issued in definitive form, the
Record Date shall be the close of business
on the last Business Day of the month
preceding the month in which such
applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Relief Act Interest Shortfall: With respect to any Distribution
Date
and any Mortgage Loan, any reduction in the
amount of interest collectible on
such Mortgage Loan for the most recently
ended Due Period as a result of the
application of the Servicemembers Civil
Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
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 regulations promulgated thereunder, as
the foregoing may be in effect from
time to time as well as provisions of
applicable state laws.
Remittance Date: With respect to any Distribution Date, the
third
Business Day immediately preceding such
Distribution Date.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Imputed Interest: As to any REO Property, for any period,
an
amount equivalent to interest (at the
Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the
related Mortgage Loan had it been
outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is
reduced pursuant to Section 3.17 by
any income from the REO Property treated as
a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the
Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of
foreclosure in connection with a
defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, (a) in the
case
of any Mortgage Loan repurchased by the
Depositor, an amount equal to the sum of
(i) the unpaid principal balance of such
Mortgage Loan as of the date of
repurchase, (ii) interest on such unpaid
principal balance of such Mortgage Loan
at the Mortgage Rate from the last date
through which interest has been paid and
distributed to the Trustee to the date of
repurchase, (iii) all unreimbursed
Servicing Advances and (iv) all expenses
incurred by the Servicer, the Trust or
the Trustee, as the case may be, in respect
of a breach or defect, including,
without limitation, (A) expenses arising
out of the Servicer's or Trustee's, as
the case may be, enforcement of the
Depositor's repurchase obligation, to the
extent not included in clause (iii), and
(B) any costs and damages incurred by
the Trust in connection with any violation
by such Mortgage Loan of any
predatory lending law or abusive lending
law, and (b) in the case of any
Mortgage Loan repurchased by the
Responsible Party or the Purchaser, the
"Repurchase Price" as defined in the
Purchase Agreement.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in
the form of Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee, any
vice
president, any assistant vice president,
any assistant secretary, any assistant
treasurer, any associate, 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, such matter is referred
because of such officer's knowledge
of and familiarity with the particular
subject, in each case having direct
responsibility for the administration of
this Agreement.
Responsible Party: Encore Credit Corp., a California
corporation,
and its successors in interest.
Rule 144A Letter: As defined in Section 5.02(b).
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
which, unless otherwise specified herein,
shall give effect to any related Debt
Service Reduction and any Deficient
Valuation that affects the amount of the
monthly payment due on such Mortgage
Loan.
Second-Lien Mortgage Loan: A Mortgage Loan secured by a
second-lien
Mortgage on the related Mortgaged
Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing
(x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated
Certificates and (ii) the Subordinated
Amount (in each case after taking into
account the distributions of the
Principal Distribution Amount for such
Distribution Date) by (y) the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 42.80%.
Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors in
interest, and if a successor servicer is
appointed hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by
the Servicer in the performance of
its servicing obligations in connection
with a default, delinquency or other
unanticipated event, including, but not
limited to, the cost of (i) the
preservation, restoration, inspection and
protection of a Mortgaged Property,
(ii) any enforcement or judicial
proceedings, including foreclosures and
litigation, in respect of a particular
Mortgage Loan, (iii) the management
(including reasonable fees in connection
therewith) and liquidation of any REO
Property and (iv) the performance of its
obligations under Sections 3.01, 3.09,
3.13 and 3.15. The Servicing Advances shall
also include any reasonable
"out-of-pocket" costs and expenses
(including legal fees) incurred by the
Servicer in connection with executing and
recording instruments of satisfaction,
deeds of reconveyance or Assignments of
Mortgage in connection with any
satisfaction or foreclosure in respect of
any Mortgage Loan to the extent not
recovered from the Mortgagor or otherwise
payable under this Agreement. The
Servicer shall not be required to make any
Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one
month's interest (or in the event of any
payment of interest which accompanies a
Principal Prepayment in Full made by the
Mortgagor during such calendar month,
interest for the number of days covered by
such payment of interest) at the Servicing
Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan as
of the first day of such calendar
month. Such fee shall be payable monthly,
and shall be prorated for any portion
of a month during which the Mortgage Loan
is serviced by the Servicer under this
Agreement. The Servicing Fee is payable
solely from, the interest portion
(including recoveries with respect to
interest from Liquidation Proceeds,
Subsequent Recoveries, Insurance Proceeds,
Condemnation Proceeds and proceeds
received with respect to REO Properties) of
such Scheduled Payment collected by
the Servicer, or as otherwise provided
under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of
originals or copies of all documents in
the Mortgage File which are not delivered
to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents
set forth in Exhibit K hereto.
Servicing Officer: Any employee or 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 list may from time to
time be amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect
to
which any portion of a Scheduled Payment
is, as of the last day of the prior Due
Period, two months or more past due
(without giving effect to any grace period),
each Mortgage Loan in foreclosure, each
Mortgage Loan related to REO Property
and each Mortgage Loan where the related
Mortgagor has filed for bankruptcy.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount
equal to 2.10% of the Cut-off Date Pool
Principal Balance. On and after the
Stepdown Date, an amount equal to 4.20% of
the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date, subject, until the
Class Certificate Balance of each Class of
LIBOR Certificates has been reduced
to zero, to a minimum amount equal to 0.50%
of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date; provided, however, that
if, on any Distribution Date, a Trigger
Event exists, the Specified Subordinated
Amount shall not be reduced to the
applicable percentage of the then current
aggregate Stated Principal Balance of the
Mortgage Loans until the Distribution
Date on which a Trigger Event no longer
exists. When the Class Certificate
Balance of each Class of LIBOR Certificates
has been reduced to zero, the
Specified Subordinated Amount will
thereafter equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies, Inc. If Standard
& Poor's is designated as a Rating
Agency in the Preliminary Statement, for
purposes of Section 10.05(c) the
address for notices to Standard &
Poor's shall be Standard & Poor's, 55 Water
Street, New York, New York 10041,
Attention: Residential Mortgage Surveillance
Group - Securitized Asset Backed
Receivables LLC Trust 2005-EC1, or such other
address as Standard & Poor's may
hereafter furnish to the Depositor and the
Servicer.
Standard & Poor's Glossary: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to
time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of
any
date of determination, (i) the principal
balance of the Mortgage Loan at the
Cut-off Date after giving effect to
payments of principal due on or before such
date (whether or not received), minus (ii)
all amounts previously remitted to
the Trustee with respect to the related
Mortgage Loan representing payments or
recoveries of principal including advances
in respect of scheduled payments of
principal. For purposes of any Distribution
Date, the Stated Principal Balance
of any Mortgage Loan will give effect to
any scheduled payments of principal
received by the Servicer on or prior to the
related Determination Date or
advanced by the Servicer for the related
Remittance Date and any unscheduled
principal payments and other unscheduled
principal collections received during
the related Prepayment Period, and the
Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has been
liquidated during the related
Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of
(a)
the Distribution Date in April 2008 and (b)
the Distribution Date following the
Distribution Date on which the aggregate
Class Certificate Balances of the Class
A Certificates have been reduced to zero
and (ii) the first Distribution Date on
which the Senior Enhancement Percentage
(calculated for this purpose only after
taking into account payments of principal
on the Mortgage Loans applied to
reduce the Stated Principal Balance of the
Mortgage Loans for the applicable
Distribution Date but prior to any
applications of Principal Distribution Amount
to the Certificates on such Distribution
Date) is greater than or equal to the
Senior Specified Enhancement
Percentage.
Subordinated Amount: As of any Distribution Date, the excess,
if
any, of (a) the aggregate Stated Principal
Balance of the Mortgage Loans for
such Distribution Date over (b) the
aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such
Distribution Date (after giving effect to
the payment of the Principal Remittance
Amount on such Certificates on such
Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date,
the
excess, if any, of (a) the Specified
Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated
Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (a)
the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or
related
Mortgaged Property that became a Liquidated
Mortgage Loan or was otherwise
disposed of, all amounts received in
respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount
related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class
Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent
Recovery that is received during a
Prepayment Period will be included as part
of the Principal Remittance Amount
for the related Distribution Date.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by
the
Responsible Party or the Purchaser for a
Deleted Mortgage Loan pursuant to the
terms of the Purchase Agreement or the
Assignment Agreement and that satisfies
the criteria set forth in the definition of
"Qualified Substitute Mortgage Loan"
in the Purchase Agreement or (ii)
substituted by the Depositor for a Deleted
Mortgage Loan, which, if substituted by the
Depositor, must, on the date of such
substitution, as confirmed in a Request for
Release, substantially in the form
of Exhibit J, (A) 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 the Stated Principal Balance
of the Deleted Mortgage Loan; (B) be
accruing interest at a rate not lower than
and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan;
(C) have a remaining term to maturity
not greater than (and not more than one
year less than) that of the Deleted
Mortgage Loan; (D) be of the same type
(i.e., fixed rate or adjustable rate) as
the Deleted Mortgage Loan; and (E) comply
with each representation and warranty
set forth in this Agreement.
Substitution Adjustment Amount: As defined in Section 2.03.
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of the
Lower Tier REMIC and the Upper Tier
REMIC, respectively, in the manner provided
under Treasury Regulations Section
1.860F-4(d) and Treasury Regulations
Section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on
the
Bridge Telerate Service (or such other page
as may replace that page on that
service for displaying comparable rates or
prices).
Termination Price: As defined in Section 9.01.
Total Monthly Excess Spread: As to any Distribution Date, an
amount
equal to the excess, if any, of (i) the
interest on the Mortgage Loans (other
than Prepayment Interest Excesses) received
by the Servicer on or prior to the
related Determination Date or advanced by
the Servicer for the related
Remittance Date (net of Expense Fees) over
(ii) the sum of the amounts payable
to the Certificates pursuant to Section
4.02(a)(i) on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and
principal with respect thereto
received on or after the related Cut-off
Date, other than such amounts which
were due on the Mortgage Loans on or prior
to the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund
Account, the Distribution 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 Cap Agreements;
(v) the Closing Date Deposit Amount; and
(vi) all proceeds of the conversion,
voluntary or involuntary, of any of the
foregoing.
Trustee: Wachovia Bank N.A., and its successors in interest and,
if
a successor trustee is appointed hereunder,
such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
the
product of (a) one-twelfth of the Trustee
Fee Rate and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the first day of such calendar
month.
Trustee Fee Rate: With respect to each Mortgage Loan, .002% per
annum.
Underwriters' Exemption: Any exemption listed under footnote 1
of,
and amended by, Prohibited Transaction
Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the
Purchase Agreement.
Unpaid Interest Amount: As of any Distribution Date and any Class
of
Certificates, the sum of (a) the portion of
the Accrued Certificate Interest
Distribution Amount from Distribution Dates
prior to the current Distribution
Date remaining unpaid immediately prior to
the current Distribution Date and (b)
interest on the amount in clause (a) above
at the applicable Pass-Through Rate
(to the extent permitted by applicable
law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any
Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect
to such Class over (ii) the sum of
(a) all distributions in reduction of such
Applied Realized Loss Amounts on all
previous Distribution Dates, and (b) the
amount by which the Class Certificate
Balance of such Class has been increased
due to the distribution of any
Subsequent Recovery on all previous
Distribution Dates. Any amounts distributed
to a Class of Subordinated Certificates in
respect of any Unpaid Realized Loss
Amount will not be applied to reduce the
Class Certificate Balance of such
Class.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: As described in the
Preliminary
Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a
corporation (or entity treated as a
corporation for tax purposes) created or
organized in the United States or under the
laws of the United States or of any
State thereof, including, for this purpose,
the District of Columbia; (iii) a
partnership (or entity treated as a
partnership for tax purposes) organized in
the United States or under the laws of the
United States or of any State
thereof, including, for this purpose, the
District of Columbia (unless provided
otherwise by future Treasury regulations);
(iv) an estate whose income is
includible in gross income for United
States income tax purposes regardless of
its source; or (v) a trust, if a court
within the United States is able to
exercise primary supervision over the
administration of the trust and one or
more U.S. Persons have authority to control
substantial decisions of the trust.
Notwithstanding the last clause of the
preceding sentence, to the extent
provided in Treasury regulations, certain
trusts in existence on August 20,
1996, and treated as U.S. Persons prior to
such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any
Certificate. As of any date of
determination, (a) 1% of all Voting Rights
shall be allocated to the Class X
Certificates, if any (such Voting Rights to
be allocated among the holders of
Certificates of each such Class in
accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights
shall be allocated to the Class P
Certificates, if any, and (c) the remaining
Voting Rights shall be allocated
among Holders of the remaining Classes of
Certificates in proportion to the
Certificate Balances of their respective
Certificates on such date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and
delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to
the Trustee for the benefit of the
Certificateholders, without recourse, all
the right, title and interest of the
Depositor in and to the Trust Fund and the
Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage
Loan, the Depositor has delivered or caused
to be delivered to the Trustee for
the benefit of the Certificateholders the
following documents or instruments
with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening
endorsements
showing a
complete chain of endorsement from the originator to the last
endorsee,
endorsed "Pay to the order of _____________, without recourse"
and signed
(which may be by facsimile signature) in the name of the last
endorsee
by an authorized officer. To the extent that there is no room
on
the face
of the Mortgage Notes for endorsements, the endorsement may be
contained
on an allonge, if state law so allows and the Trustee is so
advised in
writing by the Depositor that state law so allows;
(ii) the original of any guaranty executed in connection with
the
Mortgage
Note;
(iii) the original Mortgage with evidence of recording thereon.
If,
in
connection with any Mortgage Loan, the original Mortgage cannot
be
delivered
with evidence of recording thereon on or prior to the Closing
Date
because of a delay caused by the public recording office where
such
Mortgage
has been delivered for recordation or because such Mortgage has
been lost
or because such public recording office retains the original
recorded
Mortgage, the Depositor shall cause to be delivered to the
Trustee a
photocopy of such Mortgage, together with (A) in the case of a
delay
caused by the public recording office, an Officer's Certificate
of
the
Responsible Party (or certified by the title company, escrow agent,
or
closing
attorney) stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the
original
recorded
Mortgage or a copy of such Mortgage certified by such public
recording
office to be a true and complete copy of the original recorded
Mortgage
will be promptly delivered to the Trustee upon receipt thereof
by
the
Responsible Party; or (B) in the case of a Mortgage where a
public
recording
office retains the original recorded Mortgage or in the case
where a
Mortgage is lost after recordation in a public recording office,
a
copy of
such Mortgage certified by such public recording office to be a
true and
complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification,
consolidation
and
extension agreements (if provided) with evidence of recording
thereon;
(v) the original
Assignment of Mortgage for each Mortgage Loan in
form and
substance acceptable for recording (except with respect to MERS
Designated
Loans);
(vi) the originals of all intervening assignments of Mortgage
(if
any)
evidencing a complete chain of assignment from the applicable
originator
to the last endorsee (or, in the case of a MERS Designated
Loan,
MERS) with evidence of recording thereon, or if any such
intervening
assignment
has not been returned from the applicable recording office or
has been
lost or if such public recording office retains the original
recorded
assignments of Mortgage, the Depositor shall cause to be
delivered
a photocopy of such intervening assignment, together with (A)
in
the case
of a delay caused by the public recording office, an Officer's
Certificate of the Responsible Party (or certified by the title
company,
escrow
agent, or closing attorney) stating that such intervening
assignment
of Mortgage has been dispatched to the appropriate public
recording
office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such
intervening
assignment
of mortgage certified by the appropriate public recording
office to
be a true and complete copy of the original recorded
intervening
assignment
of mortgage will be promptly delivered to the Trustee upon
receipt
thereof by the Responsible Party; or (B) in the case of an
intervening assignment where a public recording office retains
the
original
recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public
recording
office, a
copy of such intervening assignment certified by such public
recording
office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original mortgagee title insurance policy or, in the
event
such
original title policy is unavailable, a certified true copy of
the
related
policy binder or commitment for title certified to be true and
complete
by the title insurance company;
(viii) the original or, if unavailable, a copy of any security
agreement,
chattel mortgage or equivalent document executed in connection
with the
Mortgage (if provided); and
(ix) if any of the above documents has been executed by a
person
holding a
power of attorney, an original or photocopy of such power
certified
by the Responsible Party to be a true and correct copy of the
original.
The Depositor shall use reasonable efforts to cause the
Responsible
Party to deliver to the Trustee the
applicable recorded document promptly upon
receipt from the respective recording
office but in no event later than 270 days
from the Closing Date.
The Depositor shall use reasonable efforts to cause the
Responsible
Party to forward to the Trustee additional
original documents, additional
documents evidencing an assumption,
modification, consolidation or extension of
a Mortgage Loan approved by the Responsible
Party in accordance with the terms
of this Agreement. All such mortgage
documents held by the Trustee as to each
Mortgage Loan shall constitute the
"Custodial File."
On or prior to the Closing Date, the Depositor shall use
reasonable
efforts to cause the Responsible Party to
deliver to the Trustee, Assignments of
Mortgages, in blank, for each Mortgage
Loan. The Depositor shall use reasonable
efforts to cause the Responsible Party to
cause the Assignments of Mortgage and
complete recording information to be
provided to the Servicer in a reasonably
acceptable manner. No later than thirty
(30) Business Days following the later
of the Closing Date and the date of receipt
by the Servicer of the fully
completed Assignments of Mortgage in
recordable form, the Servicer shall
promptly submit or cause to be submitted
for recording, at the expense of the
Responsible Party pursuant to the Purchase
Agreement, and at no expense to the
Trust Fund, the Trustee, the Servicer or
the Depositor, in the appropriate
public office for real property records,
each Assignment of Mortgage referred to
in Section 2.01(b)(v). Notwithstanding the
foregoing, however, for
administrative convenience and facilitation
of servicing and to reduce closing
costs, the Assignments of Mortgage shall
not be required to be completed and
submitted for recording with respect to any
Mortgage Loan (i) if the Trustee and
each Rating Agency have received an Opinion
of Counsel, satisfactory in form and
substance to the Trustee and each Rating
Agency to the effect that the
recordation of such Assignments of Mortgage
in any specific jurisdiction is not
necessary to protect the Trustee's interest
in the related Mortgage Note or (ii)
if the Rating Agencies have each notified
the Depositor and the Trustee in
writing that not recording any such
Assignments of Mortgage would not cause the
initial ratings on any LIBOR Certificates
to be downgraded or withdrawn;
provided, however, that the Servicer shall
not be held responsible or liable for
any loss that occurs because an Assignment
of Mortgage was not recorded, but
only to the extent that the Servicer does
not have prior knowledge of the act or
omission that causes such loss. If the
Assignment of Mortgage is to be recorded,
the Depositor shall use reasonable efforts
to cause the Responsible Party to
assign the related Mortgage at the
Responsible Party's expense, pursuant to the
Purchase Agreement, to "Wachovia Bank N.A.,
as trustee under the Pooling and
Servicing Agreement dated as of March 1,
2005, Securitized Asset Backed
Receivables LLC Trust 2005-EC1". In the
event that any such Assignment of
Mortgage is lost or returned unrecorded
because of a defect therein, the
Depositor shall cause the Responsible Party
to deliver, or cause to be
delivered, a substitute Assignment of
Mortgage to cure such defect and to duly
record, or cause to be duly recorded, each
such assignment at no expense to the
Trust Fund.
In the event that such original or copy of any document
submitted
for recordation to the appropriate public
recording office is not so delivered
to the Trustee within 90 days following the
applicable Original Sale Date as
specified in the Purchase Agreement, and in
the event that the Responsible Party
does not cure such failure within 60 days
of discovery or receipt of written
notification of such failure from the
Purchaser, the Trustee shall notify the
Depositor and the Depositor shall take or
cause to be taken such remedial
actions under the Purchase Agreement as may
be permitted to be taken thereunder,
including without limitation, if
applicable, the repurchase by the Responsible
Party of such Mortgage Loan. The foregoing
repurchase remedy shall not apply in
the event that the Responsible Party cannot
deliver such original or copy of any
document submitted for recordation to the
appropriate public recording office
within the specified period due to a delay
caused by the recording office in the
applicable jurisdiction; provided, that the
Responsible Party shall instead
deliver a recording receipt of such
recording office or, if such recording
receipt is not available, an officer's
certificate of an officer of the
Responsible Party, confirming that such
document has been accepted for
recording.
Notwithstanding anything to the contrary contained in this
Section
2.01, in those instances where the public
recording office retains or loses the
original Mortgage or assignment after it
has been recorded, the obligations of
the Responsible Party shall be deemed to
have been satisfied upon delivery by
the Responsible Party to the Trustee, prior
to the Closing Date of a copy of
such Mortgage or assignment, as the case
may be, certified (such certification
to be an original thereof) by the public
recording office to be a true and
complete copy of the recorded original
thereof.
(c) The Depositor does hereby establish, pursuant to the
further
provisions of this Agreement and the laws
of the State of New York, an express
trust (the "Trust") to be known, for
convenience, as "Securitized Asset Backed
Receivables LLC Trust 2005-EC1" and
Wachovia Bank N.A. is hereby appointed as
Trustee in accordance with the provisions
of this Agreement. The parties hereto
acknowledge and agree that it is the policy
and intention of the Trust to
acquire only Mortgage Loans meeting the
requirements set forth in this
Agreement, including without limitation,
the representation and warranty set
forth in paragraph (aaa) of Schedule
III.
(d) The Trust shall have the capacity, power and authority, and
the
Trustee on behalf of the Trust is hereby
authorized, to accept the sale,
transfer, assignment, set over and
conveyance by the Depositor to the Trust of
all the right, title and interest of the
Depositor in and to the Trust Fund
(including, without limitation, the
Mortgage Loans) pursuant to Section 2.01(a).
The Trustee on behalf of the Trust is
hereby authorized to enter into the Cap
Agreements.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The
Trustee shall acknowledge, on the Closing
Date, receipt by the Trustee, of the
documents identified in the Initial
Certification in the form annexed hereto as
Exhibit E ("Initial Certification"), and
declares that it holds and will hold
such documents and the other documents
delivered to it pursuant to Section 2.01,
and that it holds or will hold such other
assets as are included in the Trust
Fund, in trust for the exclusive use and
benefit of all present and future
Certificateholders. The Trustee shall
maintain possession of the related
Mortgage Notes in the States of Texas,
California or New York unless otherwise
permitted by the Rating Agencies.
In connection with the Closing Date, the Trustee shall be
required
to deliver via facsimile (with original to
follow the next Business Day) to the
Depositor and the Servicer an Initial
Certification prior to the Closing Date,
or, as the Depositor agrees to, on the
Closing Date, certifying receipt of a
Mortgage Note and Assignment of Mortgage
for each Mortgage Loan, other than for
those Mortgage Loans listed as exceptions
thereto. The Trustee shall not be
responsible to verify the validity,
sufficiency or genuineness of any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall
ascertain
that all documents identified in the
Document Certification and Exception Report
in the form attached hereto as Exhibit F
are in its possession, and shall
deliver to the Depositor and the Servicer a
Document Certification and Exception
Report, in the form annexed hereto as
Exhibit F, to the effect that, as to each
Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan
specifically identified in such certification
as an exception and not covered by such
certification): (i) all documents
identified in the Document Certification
and Exception Report and required to be
reviewed by it are in its possession; (ii)
such documents have been reviewed by
it and appear regular on their face and
relate to such Mortgage Loan; (iii)
based on its examination and only as to the
foregoing documents, the information
set forth in items (1), (2), (3), (15),
(22) and (30) of the Data Tape
Information respecting such Mortgage Loan
is correct; and (iv) each Mortgage
Note has been endorsed as provided in
Section 2.01 of this Agreement. The
Trustee shall not be responsible to verify
the validity, sufficiency or
genuineness of any document in any
Custodial File.
The Trustee shall retain possession and custody of each
Custodial
File in accordance with and subject to the
terms and conditions set forth
herein. The Servicer shall promptly deliver
to the Trustee, upon the execution
or receipt thereof, the originals of such
other documents or instruments
constituting the Custodial File as come
into the possession of the Servicer from
time to time.
The Responsible Party shall deliver to the Servicer copies of
all
trailing documents required to be included
in the Custodial File at the same
time the original or certified copies
thereof are delivered to the Trustee,
including but not limited to such documents
as the title insurance policy and
any other Mortgage Loan documents upon
return from the public recording office.
Such documents shall be delivered by the
Responsible Party, at the Responsible
Party's expense, to the Servicer.
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer;
Remedies for Breaches of Representations and
Warranties with Respect to the Mortgage
Loans. (a) The Servicer hereby makes the
representations and warranties set forth in
Schedule II hereto to the Depositor
and the Trustee, as of the Closing
Date.
(b) The Responsible Party hereby makes the representations and
warranties set forth in Schedule III and
Schedule IV hereto, to the Depositor
and the Trustee, as of the Closing
Date.
(c) It is understood and agreed by the Servicer and the
Responsible
Party that the representations and
warranties set forth in this Section 2.03
shall survive the transfer of the Mortgage
Loans by the Depositor to the Trustee
on the Closing Date, and shall inure to the
benefit of the Depositor and the
Trustee notwithstanding any restrictive or
qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the
examination or failure to examine any
Mortgage File. Upon discovery by any of the
Responsible Party, the Depositor,
the Trustee or the Servicer of a breach of
any of the foregoing representations
and warranties, the party discovering such
breach shall give prompt written
notice to the others.
(d) Within 30 days of the earlier of either discovery by or
notice
to the Responsible Party that any Mortgage
Loan does not conform to the
requirements as determined in the Trustee's
review of the related Custodial File
or within 60 days of the earlier of either
discovery by or notice to the
Responsible Party of any breach of a
representation or warranty, set forth in
Section 2.03(b), that materially and
adversely affects the value of any Mortgage
Loan or the interest of the Trustee or the
Certificateholders therein, the
Responsible Party shall use its best
efforts to cause to be remedied a material
defect in a document constituting part of a
Mortgage File or promptly to cure
such breach in all material respects and,
if such defect or breach cannot be
remedied, the Responsible Party shall, at
the Depositor's option as specified in
writing and provided to the Responsible
Party and the Trustee, (i) if such 30-
or 60-day period, as applicable, expires
prior to the second anniversary of the
Closing Date, remove such Mortgage Loan (a
"Deleted Mortgage Loan") from the
Trust Fund and substitute in its place a
Substitute Mortgage Loan, in the manner
and subject to the conditions set forth in
this Section 2.03; or (ii) repurchase
such Mortgage Loan at the Repurchase Price;
provided, however, that any such
substitution pursuant to clause (i) above
shall not be effected prior to the
delivery to the Trustee of a Request for
Release substantially in the form of
Exhibit J, and the delivery of the Mortgage
File to the Trustee for any such
Substitute Mortgage Loan. Notwithstanding
the foregoing, a breach (i) which
causes a Mortgage Loan not to constitute a
"qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code
or (ii) by the Responsible Party of
any of the representations and warranties
set forth in clause (zz), (aaa),
(bbb), (ccc), (kkk), (lll), (mmm), (nnn),
(ooo), (ppp), (qqq), (rrr) or (sss) of
Schedule III, in each case, will be deemed
automatically to materially and
adversely affect the value of such Mortgage
Loan and the interests of the
Trustee and Certificateholders in such
Mortgage Loan. In the event that the
Trustee receives notice of a breach by the
Responsible Party of any of the
representations and warranties set forth in
clause (zz), (aaa), (bbb), (ccc),
(kkk), (lll), (mmm), (nnn), (ooo), (ppp),
(qqq), (rrr) or (sss) of Schedule III,
the Trustee shall give notice of such
breach to the Responsible Party and
request the Responsible Party to repurchase
the Mortgage Loan at the Repurchase
Price within sixty (60) days of the
Responsible Party receipt of such notice.
The Responsible Party shall repurchase each
such Mortgage Loan within 60 days of
the earlier of discovery or receipt of
notice with respect to each such Mortgage
Loan.
(e) With respect to any Substitute Mortgage Loan or Loans
substituted by the Depositor or the
Responsible Party, as applicable, the
Depositor or the Responsible Party, as
applicable, shall deliver to the Trustee
for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the
related Assignment of Mortgage, and such
other documents and agreements as are
required by Section 2.01, with the Mortgage
Note endorsed and the Mortgage
assigned as required by Section 2.01. No
substitution is permitted to be made in
any calendar month after the Determination
Date for such month. Scheduled
Payments due with respect to Substitute
Mortgage Loans in the Due Period of
substitution shall not be part of the Trust
Fund and will be retained by the
Depositor or the Responsible Party, as
applicable, on the next succeeding
Distribution Date. For the Due Period of
substitution, distributions to
Certificateholders will include the
Scheduled Payment due on any Deleted
Mortgage Loan for such Due Period and
thereafter the Depositor or the
Responsible Party, shall be entitled to
retain all amounts received in respect
of such Deleted Mortgage Loan.
(f) In connection with any repurchase or substitution of a
Mortgage
Loan, the Servicer shall, based on
information provided by the Depositor or the
Responsible Party, as applicable, amend the
Mortgage Loan Schedule for the
benefit of the Certificateholders to
reflect the removal of such Deleted
Mortgage Loan and the substitution of the
Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended
Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute
Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all
respects, and the Responsible Party or the
Depositor, as applicable, shall be deemed
to have made with respect to such
Substitute Mortgage Loan or Loans, as of
the date of substitution, the
representations and warranties made
pursuant to Section 2.03(b) with respect to
such Mortgage Loan. Upon any such
substitution and the deposit to the Collection
Account of the amount required to be
deposited therein in connection with such
substitution as described in the following
paragraph and receipt by the Trustee
of a Request for Release in the form of
Exhibit J hereto, the Trustee shall
release the Custodial File held for the
benefit of the Certificateholders
relating to such Deleted Mortgage Loan to
the Responsible Party or the
Depositor, as applicable, and shall execute
and deliver at the direction of the
Responsible Party or the Depositor, as
applicable, such instruments of transfer
or assignment prepared by the Responsible
Party or the Depositor, as applicable,
in each case without recourse, as shall be
necessary to vest title in the
Responsible Party or the Depositor, as
applicable, of the Trustee's interest in
any Deleted Mortgage Loan substituted for
pursuant to this Agreement.
(g) For any month in which the Depositor or the Responsible
Party
substitutes one or more Substitute Mortgage
Loans for one or more Deleted
Mortgage Loans, the Servicer will determine
the amount (if any) by which the
aggregate unpaid principal balance of all
such Substitute Mortgage Loans as of
the date of substitution is less than the
aggregate unpaid principal balance of
all such Deleted Mortgage Loans. The amount
of such shortage or the amount of
any similar shortage with respect to a
Substitute Mortgage Loan substituted by
the Responsible Party under this Agreement
plus, with respect to substitutions
by the Depositor, an amount equal to the
sum of (i) any accrued and unpaid
interest on the Deleted Mortgage Loans and
(ii) all unreimbursed Servicing
Advances with respect to such Deleted
Mortgage Loans (collectively, the
"Substitution Adjustment Amount") shall be
deposited into the Collection Account
by the Depositor or the Responsible Party,
as applicable, on or before the
Distribution Account Deposit Date for the
Distribution Date in the month
succeeding the calendar month during which
the related Mortgage Loan became
required to be purchased or replaced
hereunder.
(h) In addition to such repurchase obligation, the Responsible
Party
shall indemnify the Depositor, any of its
Affiliates, and the Trust and hold
such parties harmless against any losses,
damages, penalties, fines,
forfeitures, reasonable and necessary legal
fees and related costs, judgments
and other costs and expenses resulting from
any third party claim, demand,
defense or assertion based on or grounded
upon, or resulting from, a breach by
the Responsible Party of any of its
representations and warranties or
obligations contained in this
Agreement.
(i) In the event that a Mortgage Loan shall have been
repurchased
pursuant to this Agreement, the proceeds
from such repurchase shall be deposited
by the Servicer in the Collection Account
pursuant to Section 3.10 on or before
the next Remittance Date and upon such
deposit of the Repurchase Price and
receipt of a Request for Release in the
form of Exhibit J hereto, the Trustee
shall release the related Custodial File
held for the benefit of the
Certificateholders to such Person as
directed by the Servicer, and the Trustee
shall execute and deliver at such Person's
direction such instruments of
transfer or assignment prepared by such
Person, in each case without recourse,
as shall be necessary to transfer title
from the Trustee.
It is understood and agreed that the obligation under this
Agreement
of any Person to cure, repurchase or
substitute any Mortgage Loan as to which a
breach of a representation and warranty has
occurred and is continuing, together
with any related indemnification
obligations, shall constitute the sole remedies
against such Person respecting such breach
available to Certificateholders, the
Depositor and any of its Affiliates, or the
Trustee on their behalf.
The provisions of this Section 2.03 shall survive delivery of
the
respective Custodial Files to the Trustee
for the benefit of the
Certificateholders.
Section 2.04 [Reserved].
Section 2.05 Execution and Delivery of Certificates. The
Trustee
acknowledges the transfer and assignment to
it of the Trust Fund and,
concurrently with such transfer and
assignment, has executed and delivered to or
upon the order of the Depositor, the
Certificates in authorized denominations
evidencing directly or indirectly the
entire ownership of the 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.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth
the
designations for federal income tax
purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC
Provisions shall be the Closing
Date. The "latest possible maturity date"
is the Distribution Date occurring in
January 2035, which is the Distribution
Date following the latest Mortgage Loan
maturity date.
Section 2.07 Representations and Warranties of the Depositor.
The
Depositor hereby represents, warrants and
covenants to the Trustee and the
Servicer that as of the date of this
Agreement or as of such date specifically
provided herein:
(a) The Depositor is a limited liability company duly
organized,
validly existing and in good standing under
the laws of the State of Delaware;
(b) The Depositor has the power and authority to convey the
Mortgage
Loans and to execute, deliver and perform,
and to enter into and consummate
transactions contemplated by, this
Agreement;
(c) This Agreement has been duly and validly authorized,
executed
and delivered by the Depositor, all
requisite company action having been taken,
and, assuming the due authorization,
execution and delivery hereof by the other
parties hereto, constitutes or will
constitute the legal, valid and binding
agreement of the Depositor, enforceable
against the Depositor in accordance with
its terms, except as such enforcement may
be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar
laws relating to or affecting the
rights of creditors generally, and by
general equity principles (regardless of
whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of, or
registration
or filing with, or notice to, any
governmental authority or court is required
for the execution, delivery and performance
of or compliance by the Depositor
with this Agreement or the consummation by
the Depositor of any of the
transactions contemplated hereby, except as
have been received or obtained on or
prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions
contemplated hereby or thereby, or the
fulfillment of or compliance with the terms
and conditions of this Agreement,
(i) conflicts or will conflict with or
results or will result in a breach of, or
constitutes or will constitute a default or
results or will result in an
acceleration under (A) the certificate of
formation or limited liability company
agreement of the Depositor, or (B) of any
term, condition or provision of any
material indenture, deed of trust, contract
or other agreement or instrument to
which the Depositor or any of its
subsidiaries is a party or by which it or any
of its subsidiaries is bound; (ii) results
or will result in a violation of any
law, rule, regulation, order, judgment or
decree applicable to the Depositor of
any court or governmental authority having
jurisdiction over the Depositor or
its subsidiaries; or (iii) results in the
creation or imposition of any lien,
charge or encumbrance which would have a
material adverse effect upon the
Mortgage Loans or any documents or
instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or
investigations of, the Depositor pending,
or to the knowledge of the Depositor,
threatened, before any court,
administrative agency or other tribunal, and no
notice of any such action, which, in the
Depositor's reasonable judgment, might
materially and adversely affect the
performance by the Depositor of its
obligations under this Agreement, or the
validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order
or
decree of any court or any order,
regulation or demand of any federal, state,
municipal or governmental agency that would
materially and adversely affect its
performance hereunder;
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing
Date, the Depositor had good title to,
and was the sole owner of each Mortgage
Loan, free of any interest of any other
Person, and the Depositor has transferred
all right, title and interest in each
Mortgage Loan to the Trustee. The transfer
of the Mortgage Note and the Mortgage
as and in the manner contemplated by this
Agreement is sufficient either (i)
fully to transfer to the Trustee, for the
benefit of the Certificateholders, all
right, title, and interest of the Depositor
thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the
benefit of the Certificateholders, the
security interest referred to in Section
10.04; and
(i) No Mortgage Loan that is a Group I Mortgage Loan has a
prepayment penalty in excess of three
years.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.07
shall survive delivery of the
respective Mortgage Files to the Trustee
and shall inure to the benefit of the
Trustee.
Within 60 days of the earlier of either discovery by or notice
to
the Depositor of a breach of the
representation and warranty set forth in clause
(i) above that materially and adversely
affects the value of any Mortgage Loan
or the interest of the Trustee or the
Certificateholders therein, the Depositor
shall use its best efforts to promptly cure
such breach in all material respects
and if such defect or breach cannot be
remedied, the Depositor shall repurchase
such Mortgage Loan at the Repurchase Price
or substitute a Substitute Mortgage
Loan for such Mortgage Loan. Any such
repurchase or substitution shall be
conducted in the same manner as set forth
in Section 2.03. The obligations of
the Depositor to cure such breach or to
purchase or substitute any Mortgage Loan
constitute the sole remedies with respect
to a material breach of any such
representation or warranty to the Holders
of the Certificates and the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the
Servicer shall service and administer the
Mortgage Loans in accordance with the terms
of this Agreement and the respective
Mortgage Loans and, to the extent
consistent with such terms, in the same manner
in which it services and administers
similar mortgage loans for its own
portfolio, giving due consideration to
customary and usual standards of practice
of mortgage lenders and loan servicers
administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Servicer shall
seek
to maximize the timely and complete
recovery of principal and interest on the
Mortgage Notes. Subject only to the
above-described servicing standards and the
terms of this Agreement and of the
respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone
or through Subservicers as provided
in Section 3.02, to do or cause to be done
any and all things in connection with
such servicing and administration which it
may deem necessary or desirable.
Without limiting the generality of the
foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby
authorized and empowered when the
Servicer believes it appropriate in its
best judgment in accordance with
Accepted Servicing Practices, to execute
and deliver any and all instruments of
satisfaction or cancellation, or of partial
or full release or discharge, and
all other comparable instruments, with
respect to the Mortgage Loans and the
Mortgaged Properties and to institute
foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to
convert the ownership of such properties,
and to hold or cause to be held title to
such properties, on behalf of the
Trustee. The Servicer shall service and
administer the Mortgage Loans in
accordance with applicable state and
federal law and shall provide to the
Mortgagors any reports required to be
provided to them thereby. The Servicer
shall also comply in the performance of
this Agreement with all reasonable rules
and requirements of each insurer under any
standard hazard insurance policy.
Subject to Section 3.16, the Trustee shall
execute, at the written request of
the Servicer, and furnish to the Servicer
and any Subservicer such documents
provided to the Trustee as are necessary or
appropriate to enable the Servicer
or any Subservicer to carry out their
servicing and administrative duties
hereunder, and the Trustee hereby grants to
the Servicer, and this Agreement
shall constitute, a power of attorney to
carry out such duties including a power
of attorney to take title to Mortgaged
Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a
separate power of attorney, furnished
to it by the Servicer, in favor of the
Servicer for the purposes described
herein to the extent necessary or desirable
to enable the Servicer to perform
its duties hereunder. The Trustee shall not
be liable for the actions of the
Servicer or any Subservicers under such
powers of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards
of
the preceding paragraph, the Servicer shall
advance or cause to be advanced
funds as necessary for the purpose of
effecting the timely payment of taxes and
assessments on the Mortgaged Properties,
which advances shall be Servicing
Advances reimbursable in the first instance
from related collections from the
Mortgagors pursuant to Section 3.09(b), and
further as provided in Section 3.11.
Any cost incurred by the Servicer or by
Subservicers in effecting the timely
payment of taxes and assessments on a
Mortgaged Property shall not be added to
the unpaid principal balance of the related
Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so
permit.
(c)
Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances
with respect to a Mortgage Loan
(except as provided in Section 4.01) and
the Servicer shall not (i) permit any
modification with respect to any Mortgage
Loan that would change the Mortgage
Rate, reduce or increase the principal
balance (except for reductions resulting
from actual payments of principal) or
change the final maturity date on such
Mortgage Loan (except for a reduction of
interest payments resulting from the
application of the Servicemembers Civil
Relief Act or any similar state
statutes) or (ii) permit any modification,
waiver or amendment of any term of
any Mortgage Loan that would both (A)
effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the
Code (or final, temporary or proposed
Treasury regulations promulgated
thereunder) and (B) cause either the Upper Tier
REMIC or the Lower Tier REMIC to fail to
qualify as a REMIC under the Code or
the imposition of any tax on "prohibited
transactions" or "contributions after
the startup day" under the REMIC
Provisions, or (iii) except as provided in
Section 3.07(a), waive any Prepayment
Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such
delegation shall release the Servicer
from the responsibilities or liabilities
arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter
into subservicing agreements with
subservicers (each, a "Subservicer"), for
the servicing and administration of
the Mortgage Loans ("Subservicing
Agreements").
(b) Each Subservicer shall be (i) authorized to transact business
in
the state or states in which the related
Mortgaged Properties it is to service
are situated, if and to the extent required
by applicable law to enable the
Subservicer to perform its obligations
hereunder and under the Subservicing
Agreement, (ii) an institution approved as
a mortgage loan originator by the
Federal Housing Administration or an
institution that has deposit accounts
insured by the FDIC and (iii) a Freddie Mac
or Fannie Mae approved mortgage
servicer. Each Subservicing Agreement must
impose on the Subservicer
requirements conforming to the provisions
set forth in Section 3.08 and provide
for servicing of the Mortgage Loans
consistent with the terms of this Agreement.
The Servicer will examine each Subservicing
Agreement and will be familiar with
the terms thereof. The terms of any
Subservicing Agreement will not be
inconsistent with any of the provisions of
this Agreement. The Servicer and the
Subservicers may enter into and make
amendments to the Subservicing Agreements
or enter into different forms of
Subservicing Agreements; provided, however,
that any such amendments or different forms
shall be consistent with and not
violate the provisions of this Agreement,
and that no such amendment or
different form shall be made or entered
into which could be reasonably expected
to be materially adverse to the interests
of the Trustee, without the consent of
the Trustee. Any variation without the
consent of the Trustee from the
provisions set forth in Section 3.08
relating to insurance or priority
requirements of Subservicing Accounts, or
credits and charges to the
Subservicing Accounts or the timing and
amount of remittances by the
Subservicers to the Servicer, are
conclusively deemed to be inconsistent with
this Agreement and therefore prohibited.
The Servicer shall deliver to the
Trustee and the Depositor copies of all
Subservicing Agreements, and any
amendments or modifications thereof,
promptly upon the Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last
sentence of this paragraph), for the
benefit of the Trustee, shall enforce the
obligations of each Subservicer under
the related Subservicing Agreement,
including, without limitation, any
obligation to make advances in respect of
delinquent payments as required by a
Subservicing Agreement. Such enforcement,
including, without limitation, the
legal prosecution of claims, termination of
Subservicing Agreements, and the
pursuit of other appropriate remedies,
shall be in such form and carried out to
such an extent and at such time as the
Servicer, in its good faith business
judgment, would require were it the owner
of the related Mortgage Loans. The
Servicer shall pay the costs of such
enforcement at its own expense, and shall
be reimbursed therefor only (i) from a
general recovery resulting from such
enforcement, to the extent, if any, that
such recovery exceeds all amounts due
in respect of the related Mortgage Loans or
(ii) from a specific recovery of
costs, expenses or attorneys' fees against
the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. The Servicer shall be
entitled
to terminate any Subservicing Agreement and
the rights and obligations of any
Subservicer pursuant to any Subservicing
Agreement in accordance with the terms
and conditions of such Subservicing
Agreement. In the event of termination of
any Subservicer, all servicing obligations
of such Subservicer shall be assumed
simultaneously by the Servicer without any
act or deed on the part of such
Subservicer or the Servicer, and the
Servicer either shall service directly the
related Mortgage Loans or shall enter into
a Subservicing Agreement with a
successor Subservicer which qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that
such
agreement may be immediately terminated by
the Depositor or the Trustee without
fee, in accordance with the terms of this
Agreement, in the event that the
Servicer shall, for any reason, no longer
be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding 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 primarily liable to the
Trustee for the servicing and
administering of the Mortgage Loans in
accordance with the provisions of Section
3.01 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. The
Servicer shall be entitled to enter into
any agreement with a Subservicer for
indemnification of the Servicer by such
Subservicer and nothing contained in
this Agreement shall be deemed to limit or
modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers
and
the Trustee. Any Subservicing Agreement
that may be entered into and any
transactions or services relating to the
Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to
be between the Subservicer and the
Servicer alone, and the Trustee (or any
successor Servicer) shall not be deemed
a party thereto and shall have no claims,
rights, obligations, duties or
liabilities with respect to the Subservicer
except as set forth in Section 3.06.
The Servicer shall be solely liable for all
fees owed by it to any Subservicer,
irrespective of whether the Servicer's
compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements
by
Trustee. In the event the Servicer at any
time shall for any reason no longer be
the Servicer (including by reason of the
occurrence of an Event of Default), the
Trustee, or its designee or the successor
Servicer if the successor is not the
Trustee, shall thereupon assume all of the
rights and obligations of the
Servicer under each Subservicing Agreement
that the Servicer may have entered
into, with copies thereof provided to the
Trustee or the successor Servicer if
the successor is not the Trustee, prior to
the Trustee or the successor Servicer
if the successor is not the Trustee,
assuming such rights and obligations,
unless the Trustee elects to terminate any
Subservicing Agreement in accordance
with its terms as provided in Section
3.03.
Upon such assumption, the Trustee, its designee or the
successor
servicer shall be deemed, subject to
Section 3.03, to have assumed all of the
Servicer's interest therein and to have
replaced the Servicer as a party to each
Subservicing Agreement to the same extent
as if each Subservicing Agreement had
been assigned to the assuming party, except
that (i) the Servicer shall not
thereby be relieved of any liability or
obligations under any Subservicing
Agreement that arose before it ceased to be
the Servicer and (ii) none of the
Depositor, the Trustee, their designees or
any successor Servicer shall be
deemed to have assumed any liability or
obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
its
designee or the successor Servicer deliver
to the assuming party all documents
and records relating to each Subservicing
Agreement and the Mortgage Loans then
being serviced and an accounting of amounts
collected and held by or on behalf
of it, and otherwise use its best efforts
to effect the orderly and efficient
transfer of the Subservicing Agreements to
the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a)
The
Servicer shall make reasonable efforts to
collect all payments called for under
the terms and provisions of the Mortgage
Loans, and shall, to the extent such
procedures shall be consistent with this
Agreement and the terms and provisions
of any applicable Insurance Policies,
follow such collection procedures as it
would follow with respect to mortgage loans
comparable to the Mortgage Loans and
held for its own account. Consistent with
the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any
late payment charge or, if applicable,
any penalty interest, or (ii) extend the
due dates for the Scheduled Payments
due on a Mortgage Note for a period of not
greater than 180 days; provided, 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, the Servicer shall make timely
advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in
accordance with the amortization
schedule of such Mortgage Loan without
modification thereof by reason of such
arrangements, subject to Section 4.01(d)
pursuant to which the Servicer shall
not be required to make any such advances
that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer
may waive, in whole or in part, a
Prepayment Charge only under the following
circumstances: (i) such waiver
relates to a default or a reasonably
foreseeable default and would, in the
reasonable judgment of the Servicer,
maximize recovery of total proceeds taking
into account the value of such Prepayment
Charge and the related Mortgage Loan
or (ii) such Prepayment Charge is not
permitted to be collected by applicable
law. If a Prepayment Charge is waived other
than as permitted by the prior
sentence, then the Servicer is required to
pay the amount of such waived
Prepayment Charge, for the benefit of the
Holders of the Class P Certificates,
by depositing such amount into the
Collection Account together with and at the
time that the amount prepaid on the related
Mortgage Loan is required to be
deposited into the Collection Account;
provided, however, that the Servicer
shall not have an obligation to pay the
amount of any uncollected Prepayment
Charge if the failure to collect such
amount is the direct result of inaccurate
or incomplete information on the Mortgage
Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve
Fund Account, on behalf of the Class X
Certificateholders, to receive any Basis
Risk Payment and any Interest Rate Cap
Payment and to secure their limited
recourse obligation to pay to the LIBOR
Certificateholders Basis Risk Carry
Forward Amounts.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment and any Interest Rate Cap
Payment
for such date into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk
Carry Forward Amount on any Class of
Certificates, the Trustee shall (1)
withdraw from the Distribution Account and
deposit in the Excess Reserve Fund
Account, as set forth in Section
4.02(a)(iii)(Q), the lesser of (x) the Class X
Distributable Amount (without regard to the
reduction in the definition thereof
with respect to the Basis Risk Payment (to
the extent remaining after the
distributions specified in Sections
4.02(a)(iii)(A)-(P)) and (y) the aggregate
Basis Risk Carry Forward Amounts for such
Distribution Date and (2) withdraw
from the Excess Reserve Fund Account
amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk
Carry Forward Amount. Such payments shall
be allocated to those Classes on a pro rata
basis based upon the amount of Basis
Risk Carry Forward Amount owed to each such
Class and shall be paid in the
priority set forth in Sections
4.02(a)(iii)(R)-(S).
(ii) The Trustee shall account for the Excess Reserve Fund
Account as an asset of a grantor trust under subpart E, Part I
of
subchapter J of the Code and not as an asset of any REMIC
created
pursuant to this Agreement. The beneficial owners of the Excess
Reserve Fund Account are the Class X Certificateholders. For
all
federal tax purposes, amounts transferred by the Upper Tier REMIC
to
the Excess Reserve Fund Account shall be treated as distributions
by
the Trustee to the Class X Certificateholders.
(iii) Any Basis Risk Carry Forward Amounts paid by the Trustee
to the LIBOR Certificateholders shall be accounted for by the
Trustee as amounts paid first to the Holders of the Class X
Certificates and then to the respective Class or Classes of
LIBOR
Certificates. In addition, the Trustee shall account for the
LIBOR
Certificateholders' rights to receive payments of Basis Risk
Carry
Forward Amounts as rights in a limited recourse interest rate
cap
contract written by the Class X Certificateholders in favor of
the
LIBOR Certificateholders.
(iv) Notwithstanding any provision contained in this
Agreement, the Trustee shall not be required to make any
payments
from the Excess Reserve Fund Account except as expressly set
forth
in this Section 3.07(c) and Sections 4.02(a)(iii)(R), (S) and
(T).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the
Certificateholders. The Depositor shall cause the
Closing Date Deposit Amount to be deposited
into the Distribution Account on the
Closing Date. The Trustee shall, promptly
upon receipt, deposit in the
Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments;
and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not
required
to be remitted, it may at any time direct
the Trustee in writing to withdraw
such amount from the Distribution Account,
any provision herein to the contrary
notwithstanding. Such direction may be
accomplished by delivering notice to the
Trustee which describes the amounts
deposited in error in the Distribution
Account. All funds deposited in the
Distribution 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 4.02. In no event shall
the Trustee incur liability for withdrawals
from the Distribution Account at the
direction of the Servicer.
(e) The Trustee shall invest the funds in the Distribution
Account
in one or more Permitted Investments in
accordance with Section 3.12. The
Trustee may withdraw from the Distribution
Account any income or gain earned
from the investment of funds deposited
therein for its own benefit.
(f) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed
change of the location of the
Collection Account within a reasonable
period of time prior to any change
thereof.
(g) The Trustee shall comply with its duties under the USA
Patriot
Act of 2001.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement,
the Subservicer will be required to
establish and maintain one or more
segregated accounts (collectively, the
"Subservicing Account"). The Subservicing
Account shall be an Eligible Account and
shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in
the clearing account (which account
must be an Eligible Account) in which it
customarily deposits payments and
collections on mortgage loans in connection
with its mortgage loan servicing
activities on a daily basis, and in no
event more than one Business Day after
the Subservicer's receipt thereof, all
proceeds of Mortgage Loans received by
the Subservicer less its servicing
compensation to the extent permitted by the
Subservicing Agreement, and shall
thereafter deposit such amounts in the
Subservicing Account, in no event more than
two Business Days after the deposit
of such funds into the clearing account.
The Subservicer shall thereafter
deposit such proceeds in the Collection
Account or remit such proceeds to the
Servicer for deposit in the Collection
Account not later than two Business Days
after the deposit of such amounts in the
Subservicing Account. For purposes of
this Agreement, the Servicer shall be
deemed to have received payments on the
Mortgage Loans when the Subservicer
receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar
Items;
Escrow Accounts. (a) The Servicer shall
enforce the obligations under each
paid-in-full, life-of-the-loan tax service
contract in effect with respect to
each Mortgage Loan (each, a "Tax Service
Contract"). Each Tax Service Contract
shall be assigned to a successor Servicer,
at the Servicer's expense in the
event that the Servicer is terminated as
Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b)
are not otherwise provided pursuant to the
Tax Service Contracts described in
paragraph (a) hereof, the Servicer
undertakes to perform such functions. To the
extent the related Mortgage provides for
Escrow Payments, the Servicer shall
establish and maintain, or cause to be
established and maintained, one or more
segregated accounts (the "Escrow
Accounts"), which shall be Eligible Accounts.
The Servicer shall deposit in the clearing
account (which account must be an
Eligible Account) in which it customarily
deposits payments and collections on
mortgage loans in connection with its
mortgage loan servicing activities on a
daily basis, and in no event more than one
Business Day after the Servicer's
receipt thereof, all collections from the
Mortgagors (or related advances from
Subservicers) for the payment of taxes,
assessments, hazard insurance premiums
and comparable items for the account of the
Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans
and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in
no event more than two Business Days
after the deposit of such funds in the
clearing account, for the purpose of
effecting the payment of any such items as
required under the terms of this
Agreement. Withdrawals of amounts from an
Escrow Account may be made only to (i)
effect payment of taxes, assessments,
hazard insurance premiums, and comparable
items; (ii) reimburse the Servicer (or a
Subservicer to the extent provided in
the related Subservicing Agreement) out of
related collections for any advances
made pursuant to Section 3.01 (with respect
to taxes and assessments) and
Section 3.13 (with respect to hazard
insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages;
(iv) pay interest, if required and as
described below, to Mortgagors on balances
in the Escrow Account; (v) clear and
terminate the Escrow Account at the
termination of the Servicer's obligations
and responsibilities in respect of the
Mortgage Loans under this Agreement; or
(vi) recover amounts deposited in error. As
part of its servicing duties, the
Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow
Accounts, to the extent required by law
and, to the extent that interest earned
on funds in the Escrow Accounts is
insufficient, to pay such interest from its
or their own funds, without any
reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow
Payments, the Servicer shall determine
whether any such payments are made by the
Mortgagor in a manner and at a time
that avoids the loss of the Mortgaged
Property due to a tax sale or the
foreclosure of a tax lien. The Servicer
assumes full responsibility for the
payment of all such bills within such time
and shall effect payments of all such
bills irrespective of the Mortgagor's
faithful performance in the payment of
same or the making of the Escrow Payments
and shall make advances from its own
funds to effect such payments; provided,
however, that such advances are deemed
to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee,
the
Servicer shall establish and maintain, or
cause to be established and
maintained, one or more segregated Eligible
Accounts (such account or accounts,
the "Collection Account"), held in trust
for the benefit of the Trustee. On
behalf of the Trustee, the Servicer shall
deposit or cause to be deposited in
the clearing account (which account must be
an Eligible Account) in which it
customarily deposits payments and
collections on mortgage loans in connection
with its mortgage loan servicing activities
on a daily basis, and in no event
more than one Business Day after the
Servicer's receipt thereof, and shall
thereafter deposit into the Collection
Account, in no event more than two
Business Days after the deposit of such
funds into the clearing account, as and
when received or as otherwise required
hereunder, the following payments and
collections received or made by it
subsequent to the Cut-off Date (other than in
respect of principal or interest on the
related Mortgage Loans due on or before
the Cut-off Date), or payments (other than
Principal Prepayments) received by it
on or prior to the Cut-off Date but
allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii)
all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds, to the
extent such Insurance Proceeds and Condemnation Proceeds are not
to
be applied to the restoration of the related Mortgaged Property
or
released to the related Mortgagor in accordance with the
express
requirements of law or in accordance with Accepted Servicing
Practices, Liquidation Proceeds and Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted
Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.13(a) in respect
of
any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with this Agreement; and
(vii) all Prepayment Charges collected by the Servicer.
The foregoing requirements for deposit in the Collection
Account
shall be exclusive, it being understood and
agreed that, without limiting the
generality of the foregoing, payments in
the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees
and other similar fees and charges need
not be deposited by the Servicer in the
Collection Account and shall, upon
collection, belong to the Servicer as
additional compensation for its servicing
activities. In the event the Servicer shall
deposit in the Collection Account
any amount not required to be deposited
therein, it may at any time withdraw
such amount from the Collection Account,
any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in
Permitted
Investments in accordance with the
provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee
and the Depositor of the location of
the Collection Account maintained by it
when established and prior to any change
thereof.
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make
withdrawals from the Collection Account
for any of the following purposes or as
described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the
Trustee (A) the Trustee Fee with respect to such Distribution
Date
and (B) all Available Funds in respect of the related
Distribution
Date together with all amounts representing Prepayment Charges
(payable to the Class P Certificateholders) from the Mortgage
Loans
received during the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only
to
the extent of amounts received which represent Late Collections
(net
of the related Servicing Fees) of Scheduled Payments on
Mortgage
Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with
respect to each Mortgage Loan, but only to the extent of any
Late
Collections or other amounts as may be collected by the
Servicer
from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on each Remittance Date any
interest
or investment income earned on funds deposited in the
Collection
Account;
(v) to pay to the Responsible Party or the Depositor, with
respect to each Mortgage Loan that has previously been
repurchased
or replaced pursuant to this Agreement all amounts received
thereon
subsequent to the date of purchase or substitution, as the case
may
be;
(vi) to reimburse the Servicer for any P&I Advance or
Servicing Advance previously made which the Servicer has
determined
to be a Nonrecoverable P&I Advance or Nonrecoverable
Servicing
Advance in accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for Servicing
Advances in respect of, expenses incurred in connection with
any
Mortgage Loan pursuant to Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee
for expenses incurred by or reimbursable to the Servicer, the
Depositor or the Trustee, as the case may be, pursuant to
Section
6.03, Section 7.02 or Section 8.05;
(ix) to reimburse the Servicer or the Trustee, as the case may
be, for expenses reasonably incurred in respect of the breach
or
defect giving rise to the repurchase obligation under Section
2.07
of this Agreement that were included in the Repurchase Price of
the
Mortgage Loan, including any expenses arising out of the
enforcement
of the repurchase obligation, to the extent not otherwise paid
pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection
Account in error;
(xi) to withdraw any amounts held in the Collection Account
and not required to be remitted to the Trustee on the
Remittance
Date occurring in the month in which such amounts are deposited
into
the Collection Account, to reimburse the Servicer for
unreimbursed
P&I Advances;
(xii) to invest funds in Permitted Investments in accordance
with Section 3.12; and
(xiii) to clear and terminate the Collection Account upon
termination of this Agreement.
(b) 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, to
the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii),
(v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written
notification (as set forth in Section
4.01(d)) to the Depositor, on or prior to
the next succeeding Remittance Date,
upon making any withdrawals from the
Collection Account pursuant to subclause
(a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account, the
Escrow Account and the Distribution
Account. (a) The Servicer may invest the
funds in the Collection Account and the
Escrow Accounts (to the extent permitted
by law and the related Mortgage Loan
documents)(for purposes of this Section
3.12, each such Account is referred to as
an "Investment Account"), in one or
more Permitted Investments bearing interest
or sold at a discount, and maturing,
unless payable on demand, no later than the
Business Day immediately preceding
the date on which such funds are required
to be withdrawn from such account
pursuant to this Agreement. The Trustee
shall invest the funds in the
Distribution Account in one or more
Permitted Investments. All such Permitted
Investments shall be held to maturity,
unless payable on demand. Any investment
of funds in an Investment Account (other
than investments of funds in the
Distribution Account) shall be made in the
name of the Servicer. The Servicer
shall be entitled to sole possession
(except with respect to any income and gain
realized on any investment in the
Distribution Account) over each such
investment, and any certificate or other
instrument evidencing any such
investment shall be delivered directly to
the Servicer, or with respect to
investments of funds in the Distribution
Account, the Trustee or its agent,
together with any document of transfer
necessary to transfer title to such
investment to the Servicer, or with respect
to investments of funds in the
Distribution Account, the Trustee or its
agent. In the event amounts on deposit
in an Investment Account are at any time
invested in a Permitted Investment
payable on demand, the Service may:
(x) consistent
with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand
payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account or
Escrow Account, as applicable, held by or
on behalf of the Servicer, shall be for the
benefit of the Servicer and shall be
subject to its withdrawal in the manner set
forth in Section 3.11. The Servicer
shall deposit in the Collection Account or
Escrow Account, as applicable, the
amount of any loss of principal incurred in
respect of any such Permitted
Investment made with funds in such accounts
immediately upon realization of such
loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held
by the Trustee, shall be for the
benefit of the Trustee, and shall be
subject to the Trustee's withdrawal in the
manner set forth in Section 3.07(e). The
Trustee shall deposit in the
Distribution Account the amount of any loss
of principal incurred in respect of
any such Permitted Investment made with
funds in such account immediately upon
realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if
any
default occurs in the making of any payment
due under any Permitted Investment,
or if a default occurs in any other
performance required under any Permitted
Investment, the Servicer or the Trustee
(solely with respect to the Distribution
Account) shall take such action as may be
appropriate to enforce such payment or
performance, including the institution and
prosecution of appropriate
proceedings.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The
Servicer shall cause to be maintained
for each Mortgage Loan fire insurance with
extended coverage on the related
Mortgaged Property in an amount which is at
least equal to the least of (i) the
outstanding principal balance of such
Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss
to the improvements that are a part
of such property on a replacement cost
basis and (iii) the maximum insurable
value of the improvements which are a part
of such Mortgaged Property, in each
case in an amount not less than such amount
as is necessary to avoid the
application of any coinsurance clause
contained in the related hazard insurance
policy. The Servicer shall also cause to be
maintained fire insurance with
extended coverage on each REO Property in
an amount which is at least equal to
the lesser of (i) the maximum insurable
value of the improvements which are a
part of such property and (ii) the
outstanding principal balance of the related
Mortgage Loan at the time it became an REO
Property, plus accrued interest at
the Mortgage Rate and related Servicing
Advances. The Servicer will comply in
the performance of this Agreement with all
reasonable rules and requirements of
each insurer under any such hazard
policies. Any amounts to be collected by the
Servicer under any such policies (other
than amounts to be applied to the
restoration or repair of the property
subject to the related Mortgage or amounts
to be released to the Mortgagor in
accordance with the procedures that the
Servicer would follow in servicing loans
held for its own account, subject to
the terms and conditions of the related
Mortgage and Mortgage Note) shall be
deposited in the Collection Account,
subject to withdrawal pursuant to Section
3.11. Any cost incurred by the Servicer in
maintaining any such insurance shall
not, for the purpose of calculating
distributions to the Trustee, be added to
the unpaid principal balance of the related
Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
It is understood and agreed that no
earthquake or other additional insurance is
to be required of any Mortgagor
other than pursuant to such applicable laws
and regulations as shall at any time
be in force and as shall require such
additional insurance. If the Mortgaged
Property or REO Property is at any time in
an area identified in the Federal
Register by the Federal Emergency
Management Agency as having special flood
hazards and flood insurance has been made
available, the Servicer will cause to
be maintained a flood insurance policy in
respect thereof. Such flood insurance
shall be in an amount equal to the lesser
of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the
maximum amount of such insurance
available for the related Mortgaged
Property under the national flood insurance
program (assuming that the area in which
such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a
blanket
policy with an insurer having a general
policy rating of A:VI or better in
Best's (or such other rating that is
comparable to such rating) insuring against
hazard losses on all of the Mortgage Loans,
it shall conclusively be deemed to
have satisfied its obligations as set forth
in the first two sentences of this
Section 3.13, it being understood and
agreed that such policy may contain a
deductible clause, in which case the
Servicer shall, in the event that there
shall not have been maintained on the
related Mortgaged Property or REO Property
a policy complying with the first two
sentences of this Section 3.13, and there
shall have been one or more losses which
would have been covered by such policy,
deposit to the Collection Account from its
own funds the amount not otherwise
payable under the blanket policy because of
such deductible clause. In
connection with its activities as
administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and
present, on behalf of itself and the
Trustee claims under any such blanket
policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance
covering errors and omissions for
failure in the performance of the
Servicer's obligations under this Agreement,
which policy or policies shall be in such
form and amount that would meet the
requirements of Fannie Mae or Freddie Mac
if it were the purchaser of the
Mortgage Loans, unless the Servicer has
obtained a waiver of such requirements
from Fannie Mae or Freddie Mac. The
Servicer shall also maintain a fidelity bond
in the form and amount that would meet the
requirements of Fannie Mae or Freddie
Mac, unless the Servicer has obtained a
waiver of such requirements from Fannie
Mae or Freddie Mac. The Servicer shall
provide the Trustee with copies of any
such insurance policies and fidelity bond.
The Servicer shall be deemed to have
complied with this provision if an
Affiliate of the Servicer has such errors and
omissions and fidelity bond coverage and,
by the terms of such insurance policy
or fidelity bond, the coverage afforded
thereunder extends to the Servicer. Any
such errors and omissions policy and
fidelity bond shall by its terms not be
cancelable without thirty days' prior
written notice to the Trustee. The
Servicer shall also cause each Subservicer
to maintain a policy of insurance
covering errors and omissions and a
fidelity bond which would meet such
requirements.
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. The Servicer will, to the
extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged
Property by any Mortgagor (whether by
absolute conveyance or by contract of sale,
and whether or not the Mortgagor
remains or is to remain liable under the
Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the
maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable
thereto; provided, however, that the
Servicer shall not be required to take such
action if, in its sole business
judgment, the Servicer believes it is not
in the best interests of the Trust
Fund and shall not exercise any such rights
if prohibited by law from doing so.
If the Servicer reasonably believes it is
unable under applicable law to enforce
such "due-on-sale" clause or if any of the
other conditions set forth in the
proviso to the preceding sentence apply,
the Servicer will enter into either (i)
an assumption and modification agreement
from or with the person to whom such
property has been conveyed or is proposed
to be conveyed, pursuant to which such
person becomes liable under the Mortgage
Note and, to the extent permitted by
applicable state law, the Mortgagor remains
liable thereon or (ii) a
substitution agreement as provided in the
succeeding sentence. The Servicer is
also authorized to enter into a
substitution of liability agreement with such
person, pursuant to which the original
Mortgagor is released from liability and
such person is substituted as the Mortgagor
and becomes liable under the
Mortgage Note, provided, that no such
substitution shall be effective unless
such person satisfies the underwriting
criteria of the Servicer and has a credit
risk rating at least equal to that of the
original Mortgagor. In connection with
any assumption, modification or
substitution, the Servicer shall apply such
underwriting standards and follow such
practices and procedures as shall be
normal and usual in its general mortgage
servicing activities and as it applies
to other mortgage loans owned solely by it.
The Servicer shall not take or enter
into any assumption and modification
agreement, however, unless (to the extent
practicable in the circumstances) it shall
have received confirmation, in
writing, of the continued effectiveness of
any applicable hazard insurance
policy, or a new policy meeting the
requirements of this Section is obtained.
Any fee collected by the Servicer in
respect of an assumption or substitution of
liability agreement will be retained by the
Servicer as additional servicing
compensation. In connection with any such
assumption, no material term of the
Mortgage Note (including but not limited to
the related Mortgage Rate and the
amount of the Scheduled Payment) may be
amended or modified, except as otherwise
required pursuant to the terms thereof. The
Servicer shall notify the Trustee
that any such substitution, modification or
assumption agreement has been
completed by forwarding to the Trustee the
executed original of such
substitution or assumption agreement, which
document shall be added to the
related Mortgage File and shall, for all
purposes, be considered a part of such
Mortgage File to the same extent as all
other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of
this Agreement, the Servicer shall not be
deemed to be in default, breach or any
other violation of its obligations
hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the
terms of the Mortgage Note or any
assumption which the Servicer may be
restricted by law from preventing, for any
reason whatsoever. For purposes of this
Section 3.14, the term "assumption" is
deemed to also include a sale (of the
Mortgaged Property) subject to the
Mortgage that is not accompanied by an
assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The
Servicer
shall use its best efforts, consistent with
Accepted Servicing Practices, to
foreclose upon or otherwise comparably
convert (which may include an acquisition
of REO Property) the ownership of
properties securing such of the Mortgage Loans
as come into and continue in default and as
to which no satisfactory
arrangements can be made for collection of
delinquent payments pursuant to
Section 3.07, and which are not released
from this Agreement pursuant to any
other provision hereof. The Servicer shall
use reasonable efforts to realize
upon such defaulted Mortgage Loans in such
manner as will maximize the receipt
of principal and interest by the Trustee,
taking into account, among other
things, the timing of foreclosure
proceedings. The foregoing is subject to the
provisions that the Servicer shall not be
required to expend its own funds in
connection with foreclosure or other
conversion, correction of a default on a
senior mortgage or restoration of any
property unless it shall determine in its
sole discretion (i) that such foreclosure,
correction or restoration will
increase the net Liquidation Proceeds of
the related Mortgage Loan to the
Trustee, after reimbursement to itself for
such expenses and (ii) that such
expenses will be recoverable by the
Servicer through Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds
or Subsequent Recoveries from the
related Mortgaged Property, as contemplated
in Section 3.11. 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 related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as
any
recovery resulting from a partial
collection of Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or
Subsequent Recoveries or any income from an
REO Property, will be applied in the
following order of priority: first, to
reimburse the Servicer or any Subservicer
for any related unreimbursed Servicing
Advances, pursuant to Section 3.11 or 3.17;
second, to reimburse the Servicer
for any related unreimbursed P&I
Advances, pursuant to Section 3.11; third, to
accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the
Mortgage Rate, to the date of the
liquidation or REO Disposition, or to the Due
Date prior to the Remittance Date on which
such amounts are to be distributed if
not in connection with a liquidation or REO
Disposition; and fourth, as a
recovery of principal of the Mortgage Loan.
If the amount of the recovery so
allocated to interest is less than a full
recovery thereof, that amount will be
allocated as follows: first, to unpaid
Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing
Fee Rate). The portion of the
recovery so allocated to unpaid Servicing
Fees shall be reimbursed to the
Servicer or any Subservicer pursuant to
Section 3.11 or 3.17. The portions of
the recovery so allocated to interest at
the Mortgage Rate (net of the Servicing
Fee Rate) and to principal of the Mortgage
Loan shall be applied as follows:
first, to reimburse the Servicer or any
Subservicer for any related unreimbursed
Servicing Advances in accordance with
Section 3.11 or 3.17, and second, to the
Trustee in accordance with the provisions
of Section 4.02, subject to paragraph
(g) of Section 3.17 with respect to certain
excess recoveries from an REO
Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance
of a deed in lieu of foreclosure, in
the event the Servicer has received actual
notice of, or has actual knowledge of
the presence of, hazardous or toxic
substances or wastes on the related
Mortgaged Property, or if the Trustee
otherwise requests, the Servicer shall
cause an environmental inspection or review
of such Mortgaged Property to be
conducted by a qualified inspector. Upon
completion of the inspection, the
Servicer shall promptly provide the Trustee
and the Depositor with a written
report of the environmental inspection.
In the event (a) the environmental inspection report indicates
that
the Mortgaged Property is contaminated by
hazardous or toxic substances or
wastes and (b) the Servicer proceeds with
foreclosure or acceptance of a deed in
lieu of foreclosure, the Servicer shall be
reimbursed for all reasonable costs
associated with such foreclosure or
acceptance of a deed in lieu of foreclosure
and any related environmental clean-up
costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall
be entitled to be reimbursed from
amounts in the Collection Account pursuant
to Section 3.11. In the event the
Servicer does not proceed with foreclosure
or acceptance of a deed in lieu of
foreclosure, the Servicer shall be
reimbursed from general collections for all
Servicing Advances made with respect to the
related Mortgaged Property from the
Collection Account pursuant to Section
3.11.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in
full
of any Mortgage Loan, or the receipt by the
Servicer of a notification that
payment in full shall be escrowed in a
manner customary for such purposes, the
Servicer will, within five (5) Business
Days of the payment in full, notify the
Trustee by a certification (which
certification shall include a statement to the
effect that all amounts received or to be
received in connection with such
payment which are required to be deposited
in the Collection Account pursuant to
Section 3.10 have been or will be so
deposited) of a Servicing Officer and shall
request delivery to it of the Custodial
File by submitting a Request for
Release, which Request for Release may be
in an electronic format in a form
acceptable to the Trustee. Upon receipt of
such certification and Request for
Release, the Trustee shall promptly release
the related Custodial File to the
Servicer within two (2) Business Days. No
expenses incurred in connection with
any instrument of satisfaction or deed of
reconveyance shall be chargeable to
the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan,
including, for this purpose, collection under
any Insurance Policy relating to the
Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the
Trustee, of a Request for Release,
which Request for Release may be in an
electronic format in a form acceptable to
the Trustee, release the related Custodial
File to the Servicer, and the Trustee
shall, at the direction of the Servicer,
execute such documents as shall be
necessary to the prosecution of any such
proceedings and the Servicer shall
retain the Mortgage File in trust for the
benefit of the Trustee. Such Request
for Release shall obligate the Servicer to
return each and every document
previously requested from the Custodial
File to the Trustee when the need
therefor by the Servicer no longer exists,
unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been
deposited in the Collection Account or the
Mortgage File or such document has
been delivered to an attorney, or to a
public trustee or other public official
as required by law, for purposes of
initiating or pursuing legal action or other
proceedings for the foreclosure of the
Mortgaged Property either judicially or
non-judicially, and the Servicer has
delivered to the Trustee a certificate of a
Servicing Officer certifying as to the name
and address of the Person to which
such Mortgage File or such document was
delivered and the purpose or purposes of
such delivery. Upon receipt of a
certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that
all amounts received or to be
received in connection with such
liquidation that are required to be deposited
into the Collection Account have been so
deposited, or that such Mortgage Loan
has become an REO Property, a copy of the
Request for Release shall be released
by the Trustee to the Servicer or its
designee.
Upon written certification of a Servicing Officer, the Trustee
shall
execute and deliver to the Servicer copies
of any court pleadings, requests for
trustee's sale or other documents
reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged
Property or to any legal action brought
to obtain judgment against any Mortgagor on
the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce
any other remedies or rights
provided by the Mortgage Note or Mortgage
or otherwise available at law or in
equity, or shall exercise and deliver to
the Servicer a power of attorney
sufficient to authorize the Servicer to
execute such documents on its behalf.
Each such certification shall include a
request that such pleadings or documents
be executed by the Trustee and a statement
as to the reason such documents or
pleadings are required and that the
execution and delivery thereof by the
Trustee will not invalidate or otherwise
affect the lien of the Mortgage, except
for the termination of such a lien upon
completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO
Property.
(a) This Section shall apply only to REO
Properties acquired for the account of
the Trustee and shall not apply to any REO
Property relating to a Mortgage Loan
which was purchased or repurchased from the
Trustee pursuant to any provision
hereof. In the event that title to any such
REO Property is acquired, the
Servicer shall cause the deed or
certificate of sale to be issued in the name of
the Trustee, on behalf of the
Certificateholders.
(b) The Servicer shall manage, conserve, protect and operate
each
REO Property for the Trustee solely for the
purpose of its prompt disposition
and sale. The Servicer, either itself or
through an agent selected by the
Servicer, shall manage, conserve, protect
and operate the REO Property in the
same manner that it manages, conserves,
protects and operates other foreclosed
property for its own account, and in the
same manner that similar property in
the same locality as the REO Property is
managed. The Servicer shall attempt to
sell the same (and may temporarily rent the
same for a period not greater than
one year, except as otherwise provided
below) on such terms and conditions as
the Servicer deems to be in the best
interest of the Trustee. The Servicer shall
notify the Trustee from time to time as to
the status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the
REO
Property as soon as possible and shall sell
such REO Property in any event
within one year after title has been taken
to such REO Property, unless the
Servicer determines, and gives an
appropriate notice to the Trustee to such
effect, that a longer period is necessary
for the orderly liquidation of such
REO Property. If a period longer than one
year is permitted under the foregoing
sentence and is necessary to sell any REO
Property, the Servicer shall report
monthly to the Trustee as to the progress
being made in selling such REO
Property.
(d) The Servicer shall segregate and hold all funds collected
and
received in connection with the operation
of any REO Property separate and apart
from its own funds and general assets and
shall deposit such funds in the
Collection Account.
(e) The Servicer shall deposit net of reimbursement to the
Servicer
for any related outstanding Servicing
Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be
deposited in the Collection Account, in
no event later than two Business Days after
the deposit of such funds into the
clearing account, all revenues received
with respect to the related REO Property
and shall withdraw therefrom funds
necessary for the proper operation,
management and maintenance of the REO
Property.
(f) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed
Servicing Advances as well as any
unpaid Servicing Fees from proceeds
received in connection with the REO
Disposition, as further provided in Section
3.11.
(g) Any net proceeds from an REO Disposition which are in excess
of
the unpaid principal balance of the related
Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date
of the REO Disposition shall be
retained by the Servicer as additional
servicing compensation.
(h) The Servicer shall use its reasonable best efforts to sell,
or
cause the Subservicer to sell, in
accordance with Accepted Servicing Practices,
any REO Property as soon as possible, but
in no event later than the conclusion
of the third calendar year beginning after
the year of its acquisition by the
Lower Tier REMIC unless (i) the Servicer
applies for an extension of such period
from the Internal Revenue Service pursuant
to the REMIC Provisions and Code
Section 856(e)(3), in which event such REO
Property shall be sold within the
applicable extension period, or (ii) the
Servicer obtains for the Trustee an
Opinion of Counsel, addressed to the
Depositor, the Trustee and the Servicer, to
the effect that the holding by the Lower
Tier REMIC of such REO Property
subsequent to such period will not result
in the imposition of taxes on
"prohibited transactions" as defined in
Section 860F of the Code or cause the
Lower Tier REMIC or the Upper Tier REMIC to
fail to qualify as a REMIC under the
REMIC Provisions or comparable provisions
of relevant state laws at any time.
The Servicer shall manage, conserve,
protect and operate each REO Property for
the Trustee solely for the purpose of its
prompt disposition and sale in a
manner which does not cause such REO
Property to fail to qualify as "foreclosure
property" within the meaning of Section
860G(a)(8) or result in the receipt by
the Lower Tier REMIC of any "income from
non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the
Code or any "net income from foreclosure
property" which is subject to taxation
under Section 860G(a)(1) of the Code.
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 Trustee on behalf of the
Certificateholders, rent the same, or any
part thereof, as the Servicer deems to
be in the best interest of the Trustee on
behalf of the Certificateholders for
the period prior to the sale of such REO
Property; provided, however, that any
rent r
