EXECUTION COPY
SECURITIZED ASSET BACKED RECEIVABLES
LLC,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING
LP,
Servicer,
MORTGAGERAMP, LLC,
Loan Performance Advisor,
FREMONT INVESTMENT & LOAN,
Responsible Party,
and
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
Trustee
__________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2005
__________________________________________
SECURITIZED ASSET BACKED RECEIVABLES LLC
TRUST 2005-FR4
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-FR4
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
Section 2.01
Conveyance of Mortgage Loans
48
Section 2.02
Acceptance by the Trustee of the Mortgage
Loans
51
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
52
Section 2.04
[Reserved].
55
Section 2.05
Execution and Delivery of
Certificates
55
Section 2.06
REMIC Matters
55
Section 2.07
Representations and Warranties of the
Depositor
56
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01
Servicer to Service Mortgage
Loans
57
Section 3.02
Subservicing Agreements between the
Servicer and Subservicers
59
Section 3.03
Successor Subservicers
60
Section 3.04
Liability of the Servicer
60
Section 3.05
No Contractual Relationship between
Subservicers and the Trustee
61
Section 3.06
Assumption or Termination of Subservicing
Agreements by Trustee
61
Section 3.07
Collection of Certain Mortgage Loan
Payments
61
Section 3.08
Subservicing Accounts
64
Section 3.09
Collection of Taxes, Assessments and
Similar Items; Escrow Accounts
64
Section 3.10
Collection Account
65
Section 3.11
Withdrawals from the Collection
Account
66
Section 3.12
Investment of Funds in the Collection
Account, Escrow Accounts and
the Distribution Account
67
Section 3.13
Maintenance of Hazard Insurance and
Errors and Omissions and
Fidelity Coverage
69
Section 3.14
Enforcement of Due-On-Sale Clauses;
Assumption Agreements
70
Section 3.15
Realization upon Defaulted Mortgage
Loans
71
Section 3.16
Release of Mortgage Files
72
Section 3.17
Title, Conservation and Disposition of
REO Property
73
Section 3.18
Notification of Adjustments
75
Section 3.19
Access to Certain Documentation and
Information Regarding the
Mortgage Loans
75
Section 3.20
Documents, Records and Funds in
Possession of the Servicer to Be
Held for the Trustee
76
Section 3.21
Servicing Compensation
76
Section 3.22
Annual Statement as to
Compliance
76
Section 3.23
Annual Independent Public
Accountants’ Servicing Statement;
Financial Statements
77
Section 3.24
Trustee to Act as Servicer
77
Section 3.25
Compensating Interest
78
Section 3.26
Credit Reporting; Gramm-Leach-Bliley
Act
78
Section 3.27
[Reserved].
78
Section 3.28
[Reserved].
78
Section 3.29
Mortgage Loan Information
78
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01
Advances
79
Section 4.02
Priorities of Distribution
80
Section 4.03
Monthly Statements to
Certificateholders
88
Section 4.04
Certain Matters Relating to the
Determination of LIBOR
91
Section 4.05
Allocation of Applied Realized Loss
Amounts
92
Section 4.06
Swap Accounts
92
ARTICLE V
THE CERTIFICATES
Section 5.01
The Certificates
96
Section 5.02
Certificate Register; Registration of
Transfer and Exchange of
Certificates
97
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates
102
Section 5.04
Persons Deemed Owners
102
Section 5.05
Access to List of
Certificateholders’ Names and Addresses
103
Section 5.06
Maintenance of Office or
Agency
103
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE LOAN PERFORMANCE
ADVISOR
Section 6.01
Respective Liabilities of the Depositor
and the Servicer
103
Section 6.02
Merger or Consolidation of the Depositor
or the Servicer
103
Section 6.03
Limitation on Liability of the Depositor,
the Servicer and Others
104
Section 6.04
Limitation on Resignation of the
Servicer
104
Section 6.05
Additional Indemnification by the
Servicer; Third Party Claims
105
Section 6.06
Duties of the Loan Performance
Advisor
105
ARTICLE VII
DEFAULT
Section 7.01
Events of Default
105
Section 7.02
Trustee to Act; Appointment of
Successor
107
Section 7.03
Notification to
Certificateholders
109
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01
Duties of the Trustee
109
Section 8.02
Certain Matters Affecting the
Trustee
110
Section 8.03
Trustee Not Liable for Certificates or
Mortgage Loans
111
Section 8.04
Trustee May Own Certificates
111
Section 8.05
Trustee’s Fees and
Expenses
111
Section 8.06
Eligibility Requirements for the
Trustee
112
Section 8.07
Resignation and Removal of the
Trustee
113
Section 8.08
Successor Trustee
113
Section 8.09
Merger or Consolidation of the
Trustee
114
Section 8.10
Appointment of Co-Trustee or Separate
Trustee
114
Section 8.11
Tax Matters
115
Section 8.12
Periodic Filings
118
Section 8.13
Tax Classification of the Excess Reserve
Fund Account and the Cap
Agreements
120
ARTICLE IX
TERMINATION
Section 9.01
Termination upon Liquidation or Purchase
of the Mortgage Loans
122
Section 9.02
Final Distribution on the
Certificates
122
Section 9.03
Additional Termination
Requirements
123
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment
124
Section 10.02
Recordation of Agreement;
Counterparts
126
Section 10.03
Governing Law
126
Section 10.04
Intention of Parties
126
Section 10.05
Notices
127
Section 10.06
Severability of Provisions
128
Section 10.07
Limitation on Rights of
Certificateholders
128
Section 10.08
Inspection and Audit Rights
128
Section 10.09
Certificates Nonassessable and Fully
Paid
129
Section 10.10
Assignment; Sales; Advance
Facilities
129
Section 10.11
Rule of Construction
130
Section 10.12
Waiver of Jury Trial
131
Section 10.13
Rights of the Swap Provider
131
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 Mortgage Loans
Schedule IV
Representations and Warranties as to the
Responsible Party
Schedule V
Representations and Warranties of the
Depositor as to the Mortgage Loans
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
THIS POOLING AND SERVICING AGREEMENT,
dated as of September 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 ”), MORTGAGE RAMP INC., as loan performance
advisor (the “ Loan Performance Advisor ”),
FREMONT INVESTMENT & LOAN, California state-chartered
industrial bank, as responsible party (the “ Responsible
Party ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, 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
As provided herein, the Trustee shall
elect that the Trust Estate (exclusive of the Interest Rate Swap
Agreements, the Cap Agreements and the assets held in the Excess
Reserve Fund Account (including any Supplemental Interest Trust and
any right to prepayment premium on the Mortgage Loans)) be treated
for federal income tax purposes as comprising four real estate
mortgage investment conduits (each a “REMIC” or, in the
alternative, the “REMIC 1,” “REMIC 2” and
“REMIC 3” and the “Master REMIC”).
Each Certificate, other than the Class R Certificate,
represents ownership of a regular interest in the Master REMIC for
purposes of the REMIC Provisions. Each Certificate, other
than the Class X and P Certificates, also represents rights with
respect to payments to be made from the Excess Reserve Fund Account
and the Swap Accounts as further described in Sections 3.07 and
4.06 of this Agreement. The Class X Certificates also
evidence ownership of the assets held from time to time in the
Excess Reserve Fund Account, as further described in Sections 3.07
and 4.06 hereof. The Class R Certificates represent ownership
of the sole class of residual interest in each of the REMIC 1,
REMIC 2, REMIC 3, and the Master REMIC for purposes of the REMIC
Provisions.
The Master REMIC shall hold as its assets
the several classes of uncertificated REMIC 3 Interests, other than
the LT-R3 Interest, and each such REMIC 3 Interest (other than the
LT-R3 Interest) is hereby designated as a regular interest in REMIC
3 for purposes of the REMIC Provisions. REMIC 3 shall hold as
its assets the several classes of uncertificated REMIC 2 Interests,
other than the LT-R2 Interest, and each such REMIC 2 Interest
(other than the LT-R2 Interest) is hereby designated as a regular
interest in REMIC 2 for purposes of the REMIC Provisions.
REMIC 2 shall hold as its assets the several classes of
uncertificated REMIC 1 Interests, other than the LT-R1 Interest,
and each such REMIC 2 Interest (other than the LT-R2 Interest) is
hereby designated as a regular interest in REMIC 2 for purposes of
the REMIC Provisions. REMIC 1 shall hold as its assets the
Mortgage Loans and all collections and accounts related thereto,
other than the Interest Rate Swap Agreements, the Cap Agreements
and the Excess Reserve Fund Account (including any Supplemental
Interest Trust and any right to prepayment premium on the Mortgage
Loans).
For purposes of the REMIC Provisions, the
latest possible maturity date for each regular interest in each
REMIC created hereby is the Latest Possible Maturity
Date.
REMIC 1
REMIC 1 shall issue a regular interest
that corresponds to the Group III Mortgage Loans and has a
principal balance equal to the principal balance the Group III
Mortgage Loan (a “Group III Regular Interest”).
The principal balance of such Group III Regular Interest
shall be decreased by an principal received or loss of principal on
the Group III Mortgage Loans. The interest rate for such
Group III Regular Interest shall be the Group III REMIC Weighted
Average Rate. The Group III REMIC Weighted Average Rate shall
be a weighted average of the Adjusted Rates for the Group III
Mortgage Loans. The Adjusted Rate for each Group III Mortgage
for each Due Period commencing prior to the first adjustment date
for the interest rate on such Group III Mortgage shall be LIBOR
plus the corresponding REMIC 1 Net Margin. The REMIC 1 Net
Margin is equal to the Adjusted Net Mortgage Rate of the Group III
Mortgage Loan in excess of the fixed rate set forth for the
particular Distribution Date on Balance Guaranteed Swap Agreement
Fixed Rate Schedule. If there is no such excess, then the
difference shall be subtracted from LIBOR with a floor of zero.
After the first adjustment date of the Group III Mortgage
Loan, the Adjusted Rate for such Group III Mortgage Loan shall be
equal the Net Adjusted Mortgage Rate except such interest rate
shall be determined without regard to any floor on such Group III
Mortgage Loan in excess of its related margin. REMIC 1 shall
also issue an interest only interest entitled to the excess of the
weighted average of the Adjusted Mortgage Rates of the Group III
Mortgage Loans in excess of the REMIC 1 Group III REMIC Weighted
Average Rate (the “Group III IO Interest”). REMIC
1 shall also issue a regular interest with a principal balance
equal to the Group I Mortgage Loans that has an interest rate equal
to the weighted average of the Adjusted Net Mortgage Rates of the
Group I Mortgage Loans and is entitled to receive the principal and
net interest accrued on such Mortgage Loans on each Distribution
Date (the “Group I Regular Interest”), a regular
interest with a principal balance equal to the Group II Mortgage
Loans that has an interest rate equal to the weighted average of
the Adjusted Net Mortgage Rates of the Group II Mortgage Loans and
is entitled to receive the principal and net interest accrued on
such Mortgage Loans on each Distribution Date (the “Group II
Regular Interest”), and a single interest representing the
sole class of residual in REMIC 1 (the “LT-R1
Interest”).
REMIC 2.
REMIC 2 shall issue five REMIC regular
interests. It shall issue an interest with an principal
balance equal to the Class A-3 Certificate issued by the Master
REMIC (the “LT2-A3 Interest”). Principal received
from, and if necessary realized losses attributable to, the Group
III Mortgage Loans shall be allocated to the LT2-A3 Interest so
that its principal balance on each Distribution Date will be
reduced to the lesser of (i) the outstanding principal balance of
the Class A-3 Certificate issued by the Master REMIC and the (ii)
the principal balance of the Group III Mortgage Loans as of the end
of the related Due Period (adjusted for prepayments received during
the Prepayment Period after the end of the related Due Period that
are distributable in the current Distribution Period). The
interest rate for the LT2-A3 Interest shall be the Group III REMIC
Weighted Average Rate. REMIC 2 shall also issue the
“LT-GIII Excess Interest” that shall have an initial
principal balance equal to the Group III Mortgage Loan Stated
Principal Balance as of the Cutoff Date less the initial principal
balance o the LT2-A3 Interest and which shall accrue interest equal
to the Group III REMIC Weighted Average Rate. In addition,
REMIC 2 shall also issue a regular interest with a principal
balance and interest rate equal to those of the Group I Regular
Interest issued by REMIC 1 (the “LT2-GI Interest”), a
regular interest with a principal balance and interest rate equal
to those of the Group II Regular Interest issued by REMIC 1 (the
“LT2-GII Interest), a regular interest entitled to 100% of
the cash flow of the Group III IO Interest issued by REMIC 1 (the
“LT2-GIII IO Interest”), and a single interest
representing the sole class of residual in REMIC 1 (the
“LT-R2 Interest”).
REMIC 3. The following table sets
forth (or describes) the class designation, interest rate, and
initial principal balance for each Subsidiary REMIC Interest (each
such Interest other than the LT-R3 Interest, a “Subsidiary
REMIC Regular Interest”):
|
Interest Designation
|
|
Initial
Principal Balance
|
Corresponding Class of Master REMIC Certificates
|
|
LT3-A1A(1)
|
(2)
|
(6)
|
Class A-1A
|
|
LT3-A1B(1)
|
(2)
|
(6)
|
Class A-1B
|
|
LT3-A2A(1)
|
(2)
|
(6)
|
Class A-2A
|
|
LT3-A2B(1)
|
(2)
|
(6)
|
Class A-2B
|
|
LT3-A2C(1)
|
(2)
|
(6)
|
Class A-2C
|
|
LT3-A3(1)
|
(2)
|
(6)
|
Class A-3
|
|
LT3-M1(1)
|
(2)
|
(6)
|
Class M-1
|
|
LT3-M2(1)
|
(2)
|
(6)
|
Class M-2
|
|
LT3-M3(1)
|
(2)
|
(6)
|
Class M-3
|
|
LT3-B1(1)
|
(2)
|
(6)
|
Class B-1
|
|
LT3-B2(1)
|
(2)
|
(6)
|
Class B-2
|
|
LT-B3(1)
|
(2)
|
(6)
|
Class B-3
|
|
LT-B4(1)
|
(2)
|
(6)
|
Class B-4
|
|
LT-Grp IA
|
(3)
|
(7)
|
Not
Applicable
|
|
LT-Grp IB
|
(3)
|
(7)
|
Not
Applicable
|
|
LT-Grp IIA
|
(4)
|
(8)
|
Not
Applicable
|
|
LT-Grp IIB
|
(4)
|
(8)
|
Not
Applicable
|
|
LT-Grp IIIA
|
(5)
|
(9)
|
Not
Applicable
|
|
LT-Grp IIIB
|
(5)
|
(9)
|
Not
Applicable
|
|
LT3-GIII IO
|
(13)
|
(13)
|
Not
Applicable
|
|
LT3-G Swap IO
|
(14)
|
(14)
|
Not
Applicable
|
|
LT3-Excess
|
(2)
|
(10)
|
Not
Applicable
|
|
LT-R3
|
(11)
|
(11)
|
Not
Applicable
|
(1)
The Subsidiary REMIC Accretion Directed
Interests.
(2)
The interest rate on this Interest shall
be a rate equal to the Adjusted Pool Net WAC, which rate can be
calculated as a rate equal to the weighted average of the interest
rates on the LT2-GI Interest, the LT2-GII Interest, LT2-A3
Interest, and the LT2-GIII Excess Interest adjusted to an interest
accrual period of the actual number of days in a month and a year
of 360 days.
(3)
The interest rate on this Interest shall
be a rate equal to the Group I Net WAC Cap, which rate can be
calculated as a rate equal to the weighted average of the Adjusted
Net Mortgage Rates of the Group I Mortgage Loans adjusted to an
interest accrual period of the actual number of days in a month and
a year of 360 days.
(4)
The interest rate on this Interest shall
be a rate equal to the Group II Net WAC Cap, which rate can be
calculated as a rate equal to the weighted average of the Adjusted
Net Mortgage Rates of the Group II Mortgage Loans adjusted to an
interest accrual period of the actual number of days in a month and
a year of 360 days.
(5)
The interest rate on this Interest shall
be a rate equal to the weighted average rate of the LT2-GIII Excess
Interest and the LT2-A3 Interest, adjusted to an interest accrual
period of the actual number of days in a month and a year of 360
days reducing the rate on the LT2-A3 Interest by 0.08% per annum
for the first 85 Distribution Dates and by 0.50% per annum for each
Distribution Date thereafter.
(6)
This Interest shall have an initial
principal balance equal to 25% of the initial principal balance of
its corresponding class in the Master REMIC. Principal
payments and Realized Losses from Mortgage Loans shall be paid (or
allocated) to maintain the 25% ratio for the REMIC Interests
corresponding to the Master REMIC Classes.
(7)
This Interest shall have an initial
principal balance equal to 25% of the aggregate of the principal
balances of each Group I Mortgage Loan as of the Cut-Off
Date.
(8)
This Interest shall have an initial
principal balance equal to 25% of the aggregate of the principal
balances of each Group II Mortgage Loans as of the Cut-Off
Date.
(9)
This Interest shall have an initial
principal balance equal to 25% of the aggregate of the principal
balances of each Group III Mortgage Loans as of the Cut-Off
Date.
(10)
This Interest shall have an initial
principal balance equal to (i) the initial principal balances of
the Mortgage Loans as of the Cut-Off Date less (ii) an amount equal
to the sum of the initial principal balances of the other REMIC
Interests, other than the LT-Excess Interest.
(11)
The LT-R3 Interest shall have no
principal balance and no interest rate and shall be entitled to
only those distributable assets, if any, remaining in the REMIC 3
REMIC on each Distribution Date after all amounts required to be
distributed to the remaining REMIC 3 REMIC Interests and applicable
Trust expenses have been paid. It is expected that there will
not be any distributions on the LT-R3 Interest.
(12)
[Reserved].
(13)
This class shall be entitled to all the
cash flow from the LT2-GIII IO Interest.
(14)
This class shall be an interest only
class entitled to 0.08% interest per annum on the principal balance
of the Class LT2-A3 Interest for the first 85 Distribution Dates
and 0.50% interest per annum on the principal balance of LT2-A3
Interest thereafter.
On each Distribution Date, all principal
payments received (or advances) and any Realized Losses with
respect to the Mortgage Loans (plus accrued interest on the
LT-Excess Interest to the extent necessary) shall be allocated and
applied in reduction of the principal balances of the REMIC 3
Regular Interests such that following such allocation and
distribution:
(i)
the principal balance of each of the
REMIC 3 Accretion Directed Interests equal 25% of the principal
balance of its Corresponding Class of Master REMIC
Certificates;
(ii)
the principal balance of each of the
LT3-Grp IA and LT3-Grp IB Interests equals 25% of the aggregate of
the principal balances of the Group I Mortgage Loans as of the
beginning of the Prepayment Period related to the next Distribution
Date;
(iii)
the principal balance of each of the
LT3-Grp IIA and LT3-Grp IIB Interests equals 25% of the aggregate
of the principal balances of the Group II Mortgage Loans as of the
beginning of the Prepayment Period related to the next Distribution
Date;
(iv)
the principal balance of each of the
LT3-Grp IIA and LT3-Grp IIB Interests equals 25% of the aggregate
of the principal balances of the Group III Mortgage Loans as of the
beginning of the Prepayment Period related to the next Distribution
Date; and
(v)
the principal balance of the LT3-Excess
Interest equals the excess of the aggregate of the principal
balances of the Mortgage Loans as of the opening of business on the
first Business Day of the Prepayment Period related to the next
Distribution Date over the aggregate of the principal balances of
the remaining REMIC 3 Regular Interests as reduced on such
Distribution Date.
The Master REMIC. The Class A-1A,
Class A-1B, Class A-2A, Class A-2B, Class A-2C, Class A-3, Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3, Class
B-4 and Class X Certificates are hereby designated as
“regular interests” with respect to the Master REMIC
(the “Master REMIC Regular Certificates”) and the R-4
Interest is hereby designated as the single “residual
interest” with respect to the Master REMIC.
The beneficial ownership interest in the
Master REMIC created hereunder shall be evidenced by the interests
having the following characteristics and terms:
|
|
Initial Certificate
Principal Balance
|
Certificate Interest Rate
|
|
Class A-1A
|
$387,240000
|
(1)
|
|
Class A-1B
|
$96,810,000
|
(2)
|
|
Class A-2A
|
$130,101,000
|
(3)
|
|
Class A-2B
|
$53,539,000
|
(4)
|
|
Class A-2C
|
$39,266,000
|
(5)
|
|
Class A-3
|
$109,049,000
|
(6)
|
|
Class M-1
|
$93,901,000
|
(7)
|
|
Class M-2
|
$71,387,000
|
(8)
|
|
Class M-3
|
$17,572,000
|
(9)
|
|
Class B-1
|
$18,670,000
|
(10)
|
|
Class B-2
|
$13,728,000
|
(11)
|
|
Class B-3
|
$14,827,000
|
(12)
|
|
Class B-4
|
$13,728,000
|
(13)
|
|
Class X
|
(14)
|
(14)
|
|
Class R-1
|
(15)
|
(15)
|
(1)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.30% per
annum (or LIBOR plus .6000% per annum for each Interest Period
occurring after the Clean-Up Call Date), (ii) the Group I Net
WAC Cap and (iii) the Adjusted Pool Net WAC.
(2)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.35% per
annum (or LIBOR plus 0.70% per annum for each Interest Period
occurring after the Clean-Up Call Date), (ii) the Group I Net
WAC Cap and (iii) the Adjusted Pool Net WAC.
(3)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.12% per
annum (or LIBOR plus 0.24% per annum for each Interest Period
occurring after the Clean-Up Call Date), (ii) the Group II Net
WAC Cap and (iii) the Adjusted Pool Net WAC.
(4)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.26% per
annum (or LIBOR plus 0.52% per annum for each Interest Period
occurring after the Clean-Up Call Date), (ii) the Group II Net
WAC Cap and (iii) the Adjusted Pool Net WAC.
(5)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.36% per
annum (or LIBOR plus 0.72% per annum for each Interest Period
occurring after the Clean-Up Call Date), (ii) the Group II Net
WAC Cap and (iii) the Adjusted Pool Net WAC.
(6)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.20% per
annum (or LIBOR plus 0.40% per annum for each Interest Period
occurring after the Clean-Up Call Date), (ii) the Group II Net
WAC Cap and (iii) the Adjusted Pool Net WAC.
(7)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.4800% per
annum (or LIBOR plus 0.72% per annum for each Interest Period
occurring after the Clean-Up Call Date) and (ii) the Adjusted
Pool Net WAC.
(8)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.64% per
annum (or LIBOR plus 0.96% per annum for each Interest Period
occurring after the Clean-Up Call Date) and (ii) the Adjusted
Pool Net WAC.
(9)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.67% per
annum (or LIBOR plus 1.0050% per annum for each Interest Period
occurring after the Clean-Up Call Date) and (ii) the Adjusted
Pool Net WAC.
(10)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 1.1700% per
annum (or LIBOR plus 1.755% per annum for each Interest Period
occurring after the Clean-Up Call Date) and (ii) the Adjusted
Pool Net WAC.
(11)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 1.27% per
annum (or LIBOR plus 1.905% per annum for each Interest Period
occurring after the Clean-Up Call Date) and (ii) the Adjusted
Pool Net WAC.
(12)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 1.72% (or
LIBOR plus 2.580% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(13)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 2.50% (or
LIBOR plus 3.75% per annum for each Interest Period occurring after
the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(14)
The Class X Certificate shall have an
initial principal balance equal to $38,439,689.90, which is equal
to the excess of the principal balance of the Mortgage Loans as of
the Cut-Off Date over the sum of the initial principal balances of
the Certificates, other than the Class X, Class P and Class R
Certificates. It shall not be entitled to interest on its
principal balance. The Class X Certificate shall also have an
initial notional balance equal to the aggregate of the principal
balance of each Mortgage Loan as of the Cut-Off Date and such
notional balance for each Distribution Date shall equal the
aggregate principal balance of the Mortgage Loans as of the
beginning of the related Prepayment Period. The Class X
Certificate shall be entitled to receive interest on its notional
balance at a per annum rate equal to the excess of (i) the
weighted average of the interest rates of the REMIC 3 Accretion
Directed Interests, and the LT-Grp IA, LT-Grp IB, LT-Grp IIA,
LT-Grp IIB, LT-Excess Interests, weighted on the principal balance
of each such Interest, over (ii) the product of (x) two
and (y) the weighted average of the interest rates of the
REMIC 3 Accretion Directed Interests and LT-3 Excess Interest,
weighted on the principal balance of each such Interest, treating
for purposes of this clause (y) the interest rate of the LT-3
Excess Interest as capped at zero and the interest rate of each of
the remaining of such interests as capped at the interest rate of
its corresponding class in the Master REMIC. In addition, the
Class X Certificates shall be entitled to an amount, as principal,
equal to the amount that the Mortgage Loan Balance exceeds the
aggregate Certificate Principal Balance of the Certificates (other
than the Class P Certificate), as of the Startup Date. The
Class X shall also be entitled to the cash flow from the LT3-GIII
IO and the LT3-G Swap IO.
(15)
The Class R-1 Interest is the residual
interest in the Master REMIC. The Class R Certificates
represent ownership of the LT-R1 Interest, LT-R2 Interest, LT-R3
Interest and the Class R-1 Interest. The Class R Certificates
do not have either a principal balance or an interest
rate.
The foregoing REMIC structure is intended
to cause all of the cash from the Mortgage Loans to flow through to
the Master REMIC as cash flow on a REMIC regular interest, without
creating any shortfall—actual or potential (other than for
credit losses) to any REMIC regular interest. To the extent
that the structure is believed to diverge from such intention the
Trustee shall seek direction from the Depositor to resolve
ambiguities to accomplish such result and shall to the extent
necessary request the Depositor to rectify any drafting errors or
clarify to the structure without Certificateholder approval (based
upon the guidance of the Depositor and its counsel) to accomplish
such intention.
In addition, the Trust shall issue the
Class P Certificate which shall be entitled to 100% of the
prepayment premiums on the Mortgage Loans. The Trustee shall
account for the right to the prepayment premiums as held by a
separate grantor trust under subpart E of part I of subchapter J of
chapter 1 of subtitle A of the Internal Revenue Code and the Class
P Certificate as the sole interest in such grantor trust and shall
not treat the Class P Certificate as issued by any REMIC created
under this Agreement.
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, Class A-2C and A-3
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 and
Class M-3 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.
ERISA-Restricted Swap
Certificates
Class A, Class M, Class B-1, Class B-2
and Class B-3 Certificates.
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 B-4,
Class P, Class X and Class R
Certificates.
Rating Agencies
Moody’s, Fitch, 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 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.
Accumulated Class A-3 Basis Risk
Payback Payment : With
respect to any Distribution Date, an amount equal to the sum of (a)
Class A-3 Uncapped Floater Payments made by the Swap Provider 3 in
the current Distribution Date plus (b) any Accumulated Class A-3
Basis Risk Payback Payments remaining after the prior Distribution
Date plus interest at a rate equal to the current Class A-3
Pass-Through Rate (without giving effect to the Group III Loan
Cap), calculated on an “actual/360” basis.
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
Repurchase Price in respect of a Mortgage Loan repurchased by the
Responsible Party on or prior to the related Determination Date;
and (vi) the proceeds with respect to the termination of the Trust
Fund pursuant to clause (a) of Section 9.01; 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.
Balance Guaranteed Swap
Agreement : The balance
guaranteed swap agreement, dated September 29, 2005 between the
Trustee and the Swap Provider 2.
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.
Barclays Bank : 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.
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, with respect to the
Class A-3 Certificates, the Group III 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 or any
Defaulted Swap Termination Payment).
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 M Cap Agreement and the Class B Cap
Agreement.
Cap
Provider :
Barclays Bank.
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, the Group II Class A Certificates or the Class
A-3 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; (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; and (C) with respect to the Class A-3 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 III 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) 48.60% 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
$5,491,288.
Class A-1
Certificates : Collectively, the Class
A-1A and Class A-1B Certificates.
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
Certificates : Collectively, the Class
A-2A, Class A-2B and Class A-2C Certificates.
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 A-3
Certificates : All Certificates bearing
the class designation of “Class A-3”.
Class A-3
Uncapped Floater Fee : With respect to each
Distribution Date, a fee equal to the product of (i) the Class A-3
Uncapped Floater Fee Rate, and (ii) the lesser of (a) the
Outstanding Class Certificate Balance of the Class A-3 Certificates
and (b) the aggregate Stated Principal Balance of the Group III
Mortgage Loans as of the beginning of the related Due
Period.
Class A-3
Uncapped Floater Fee Rate : A rate equal to 0.08% per
annum, determined on an “actual/360” basis (such rate
to increase to 0.50% per annum on and after the 85th Distribution
Date).
Class A-3
Uncapped Floater Payment : With respect to each
Distribution Date, and any Group III Mortgage Loan subsequent to
the respective first Adjustment Date, an amount equal to the lesser
of (i) the product of (a) the lesser of (1) the Class A-3
Certificate Balance (prior to giving effect to any distributions on
such Distribution Date) multiplied by a fraction, the numerator of
which is the aggregate Stated Principal Balance of the Group III
Mortgage Loans that have reached their first Adjustment Dates as of
the beginning of the related Due Period and the denominator of
which is the aggregate Stated Principal Balance of the Group III
Mortgage Loans as of the beginning of the related Due Period and
(2) the aggregate Stated Principal Balance of the Group III
Mortgage Loans that that have reached their first Adjustment Dates
as of the beginning of the related Due Period, and (b) the product
of (1) the excess of (A) the Pass-Through Rate for the Class A-3
Certificates on such Distribution Date without giving effect to the
Group III Loan Cap over (B) Group III Floating Net WAC as of the
beginning of the related Due Period, and (2) a fraction, the
numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 360 and
(ii) any Basis Risk Carry Forward Amount on the Class A-3
Certificates for that Distribution Date, in each case to the extent
unpaid from Available Funds and payments made by the Swap Provider
2 on such Distribution Date.
Class A-3 Uncapped Swap
Agreement : The Class
A-3 uncapped swap agreement, dated September 29, 2005 between the
Trustee and the Swap Provider 3.
Class B Cap
Agreement :
The interest rate cap agreement, dated September 29, 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) and
(E) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over
(ii) the lesser of (A) 85.30% 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
$5,491,288.
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 B-1
Certificates (after taking into account the distribution of the
Class B-1 Principal Distribution Amount for such Distribution
Date), and (F) the Class Certificate Balance of the
Class B-2 Certificates immediately prior to such Distribution
Date over (ii) the lesser of (A) 87.80% 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 $5,491,288.
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 B-1
Certificates (after taking into account the distribution of the
Class B-1 Principal Distribution Amount for such Distribution
Date), (F) 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 (G) the Class Certificate
Balance of the Class B-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 90.50%
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 $5,491,288.
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 B-1
Certificates (after taking into account the distribution of the
Class B-1 Principal Distribution Amount for such Distribution
Date), (F) 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), (G) 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 (H) the
Class Certificate Balance of the Class B-4 Certificates
immediately prior to such Distribution Date over (ii) the
lesser of (A) 93.00% 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
$5,491,288.
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 IO
Shortfalls :
As defined in Section 8.13. For the avoidance of doubt, the
Class IO Shortfall for any Distribution Date shall equal the amount
payable to the Class X Certificates in respect of amounts due to
the Swap Providers on such Distribution Date (other than Defaulted
Swap Termination Payments) in excess of the amount payable on the
Class X Interest (prior to reduction for any Basis Risk Payment or
Swap Termination Payments) on such Distribution Date, all as
further provided in Section 8.13.
Class M Cap
Agreement :
The interest rate cap agreement, dated September 29, 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) 65.70% 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 $5,491,288.
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) 78.70%
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 $5,491,288.
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) 81.90% 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
$5,491,288.
Class P
Certificates : All Certificates bearing
the class designation of “Class P”.
Class LT-R1 Interest
: The residual interest in REMIC 1 as
described in the Preliminary Statement.
Class LT-R2 Interest
: The residual interest in REMIC 2 as
described in the Preliminary Statement.
Class LT-R3 Interest
: The residual interest in REMIC 3 as
described in the Preliminary Statement.
Class R
Certificates : All Certificates bearing
the class designation of “Class R”.
Class UT-R
Interest :
The sole class of “residual interest” in the
Master REMIC evidenced by the Class R Certificate.
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 from the excess Reserve Fund Account or any
Swap Termination Payment.
Class X
Interest :
The Master REMIC Regular Interest represented by the
Class X Certificates as specified and described in the
Preliminary Statement and the related footnote thereto.
Closing
Date :
September 29, 2005.
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) its appraised value at the time of sale, or (ii)
in the case of a refinancing or modification, the appraised value
of the Mortgaged property at the time of the refinancing or
modification.
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 (i) for purposes of
Certificate transfers, at Wells Fargo Center, Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services –
SABR-2005-FR4 and (ii) for all other purposes, at 9062 Old
Annapolis Road, Columbia, Maryland 21045,
Attention: Client Manager-SABR-2005-FR4, facsimile
no. (410) 715-2380, and which is the address to which notices
to and correspondence with the Trustee should be
directed.
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
|
|
October 2007 through September 2008
|
1.750% for the first month, plus an additional 1/12th of 2.150% for
each month thereafter (e.g., 2.825% in April 2008)
|
|
October 2008 through September 2009
|
3.900% for the first month, plus an additional 1/12th of 2.250% for
each month thereafter (e.g., 5.025% in April 2009)
|
|
October 2009 through September 2010
|
6.150% for the first month, plus an additional 1/12th of 1.750% for
each month thereafter (e.g., 7.025% in April 2010)
|
|
October 2010 through September 2011
|
7.900% for the first month, plus an additional 1/12th of 0.950% for
each month thereafter (e.g., 8.375% in April 2011)
|
|
October 2011 and thereafter
|
8.850%
|
|
|
|
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 :
September 1, 2005.
Cut-off Date Pool
Principal Balance : The aggregate Stated
Principal Balances of all Mortgage Loans as of the Cut-off
Date.
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
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 (i.e., 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) the credit risk score (FICO score);
(28) the loan credit grade classification (as described in the
underwriting guidelines); (29) the Mortgage Rate at
origination; (30) the Mortgage Rate as of the Cut-off Date;
(31) the value of the Mortgaged Property; (32) a code
indicating the term and amount of Prepayment Charges applicable to
such Mortgage Loan (including any prepayment penalty term), if any;
(33) 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; (34) a code indicating the documentation style,
as required by Standard & Poor’s criteria; (35) the date
of origination; (36) a code indicating whether the Mortgage
Loan is a Balloon Loan; (37) the Due Date for the first
Scheduled Payment; (38) the original Scheduled Payment due;
(39) the debt-to-income ratio with respect to the Mortgage
Loan; (40) the Mortgage Rate calculation method (i.e., 30/360,
simple interest, other); (41) a code indicating whether the
Mortgage Loan is Home Loan; (42) appraisal verification (Y/N);
(43) type of appraisal verification, if any; and
(44) 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., or any successor thereto. 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: Securitized Asset
Backed Receivables LLC Trust 2005-FR4, 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.
Defaulted Swap
Termination Payment : Any Swap Termination Payment
required to be paid by the Trust to any Swap Provider pursuant to
any Interest Rate Swap Agreement as a result of an Event of Default
(as defined in the related Interest Rate Swap Agreement) with
respect to which such Swap Provider is the defaulting party or a
Termination Event (as defined in the related Interest Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax
Event Upon Merger (each as defined in the related Interest Rate
Swap Agreement)) with respect to which such Swap Provider is the
sole Affected Party (as defined in the related Interest Rate Swap
Agreement).
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, 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 30.00% 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 and A-1 by Standard & Poor’s.
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
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
“Wells Fargo Bank, National Association in trust for
registered holders of Securitized Asset Backed Receivables LLC
Trust 2005-FR4 Mortgage Pass-Through Certificates,
Series 2005-FR4”. 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 October
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 and
“F1+” by Fitch (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.
ERISA-Restricted
Swap 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 “Wells Fargo Bank, National Association in
trust for registered holders of Securitized Asset Backed
Receivables LLC Trust 2005-FR4, Mortgage Pass-Through Certificates,
Series 2005-FR4”. 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, the Trustee Fee Rate and the Loan
Performance Advisor Fee Rate.
Expense
Fees :
As to each Mortgage Loan, the sum of the Servicing Fee, the
Trustee Fee and the Loan Performance Advisor 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 2036.
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-FR4, 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, a per annum rate equal to 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 minus the product of (A) the Net Swap
Payment 1 to be made to the Swap Provider 1, if any, expressed as a
percentage equal to a fraction, the numerator of which is equal to
the Net Swap Payment 1 to be made to the Swap Provider 1 and the
denominator of which is equal to the aggregate Stated Principal
Balance of the Group I Mortgage Loans and the Group II Mortgage
Loans at the beginning of such Due Period and (B) 12 and
(ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related
Interest Accrual Period.
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
October 2007, 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 1.75%, or (ii) for
any Distribution Date in or after October 2007, 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, a per annum rate equal to 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 minus the product of (A) the Net Swap
Payment 1 to be made to the Swap Provider 1, if any, expressed as a
percentage equal to a fraction, the numerator of which is equal to
the Net Swap Payment 1 to be made to the Swap Provider 1 and the
denominator of which is equal to the aggregate Stated Principal
Balance of the Group I Mortgage Loans and Group II Mortgage Loans
at the beginning of such Due Period and (B) 12 and (ii) a
fraction, the numerator of which is 30 and the denominator of which
is the actual number of days in the related Interest Accrual
Period.
Group II
Mortgage Loans : The Mortgage Loans
identified on the Mortgage Loan Schedule as Group II Mortgage
Loans.
Group III Floating
Net WAC :
With respect to any Distribution Date, a per annum rate equal
to the product of (i) the weighted average of the Adjusted Net
Mortgage Rates for each Group III Mortgage Loan that has reached
its first Adjustment Date as of the beginning of that Due Period
then in effect on the beginning of the related Due Period minus the
product of (A) the Net Swap Payment 2 to be made to the Swap
Provider 2 on the related Distribution Date, if any, expressed as a
percentage equal to a fraction, the numerator of which is equal to
the Net Swap Payment 2 to be made to the Swap Provider 2 on the
related Distribution Date and the denominator of which is equal to
the aggregate Stated Principal Balance of the Group III Mortgage
Loans at the beginning of that Due Period and (B) 12, minus the
product of (x) the aggregate Group III Floor Payments to be made to
the Swap Provider 3 on the related Distribution Date, if any,
expressed as a percentage equal to a fraction, the numerator of
which is equal to the aggregate Group III Floor Payments to be made
to the Swap Provider 3 on the related Distribution Date and the
denominator of which is equal to the aggregate Stated Principal
Balance of the Group III Mortgage Loans at the beginning of that
Due Period and (y) 12, minus the product of (1) the Class A-3
Uncapped Floater Fee to be made to the Swap Provider 3 on the
related Distribution Date, expressed as a percentage equal to a
fraction, the numerator of which is equal to the Class A-3 Uncapped
Floater Fee to be made to the Swap Provider 3 on the related
Distribution Date and the denominator of which is equal to the
aggregate Stated Principal Balance of the Group III Mortgage Loans
at the beginning of that Due Period and (2) 12, and (ii) a
fraction, the numerator of which is 30 and the denominator of which
is the actual number of days in the related Interest Accrual
Period.
Group III Floor Payment
: With respect to each Distribution
Date and any Group III Mortgage Loan subsequent to the respective
first Adjustment Date, an amount equal to the product of (i) the
excess, if any, of (a) the Minimum Mortgage Rate of such Mortgage
Loan over (b) the Mortgage Loan index rate plus the related margin
for such Mortgage Loan and (ii) the principal balance of such
Mortgage Loan as of the beginning of the related Due Period divided
by 12.
Group III Loan
Cap :
With respect to the Group III Mortgage Loans as of any
Distribution Date, a per annum rate equal to 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 III Mortgage Loans minus the product of (A) the Net Swap
Payment 2 to be made to the Swap Provider 2 on the related
Distribution Date, if any, expressed as a percentage equal to a
fraction, the numerator of which is equal to the Net Swap Payment 2
to be made to the Swap Provider 2 on the related Distribution Date
and the denominator of which is equal to the aggregate Stated
Principal Balance of the Group III Mortgage Loans at the beginning
of such Due Period and (B) 12, minus the product of (x) the
aggregate Group III Floor Payments to be made to the Swap Provider
3 on the related Distribution Date, if any, expressed as a
percentage equal to a fraction, the numerator of which is equal to
the aggregate Group III Floor Payments to be made to the Swap
Provider 3 on the related Distribution Date and the denominator of
which is equal to the aggregate Stated Principal Balance of the
Group III Mortgage Loans at the beginning of that Due Period and
(y) 12, minus the product of (1) the Class A-3 Uncapped Floater Fee
to be made to the Swap Provider 3 on the related Distribution Date,
expressed as a percentage equal to a fraction, the numerator of
which is equal to the Class A-3 Uncapped Floater Fee to be made to
the Swap Provider 3 on the related Distribution Date and the
denominator of which is equal to the aggregate Stated Principal
Balance of the Group III Mortgage Loans at the beginning of that
Due Period and (2) 12, and (ii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of
days in the related Interest Accrual Period.
Group III
Mortgage Loans : The Mortgage Loans
identified on the Mortgage Loan Schedule as Group III Mortgage
Loans.
Group Loan
Cap: The Group I Loan Cap, the
Group II Loan Cap or the Group III 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, (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 and (iii) for the Group III Mortgage
Loans, the excess of the aggregate Stated Principal Balance of the
Group III Mortgage Loans as of the beginning of the related Due
Period over the aggregate Class Certificate Balance of the
Class A-3 Certificates immediately prior to the current
Distribution Date.
High Cost
Loan :
A Mortgage Loan (a) covered by the Home Ownership and
Equity Protection Act of 1994, (b) classified as a “high
cost home,” “threshold,” “covered,”
“high risk home,” “predatory,” or similar
loan under any other applicable federal, state or local law (or a
similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest
rates, points and/or fees) or (c) a Mortgage Loan categorized
as High Cost pursuant to Appendix E of Standard & Poor’s
Glossary.
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
each REMIC Regular Interest issued by any Trust REMIC 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 Swap
Agreements : Each of (1)
the Notional Swap Agreement, (2) the Balance Guaranteed Swap
Agreement and (3) the Class A-3 Uncapped Swap Agreement or
any other cap agreement or swap agreement (including any related
schedules) entered into by the Trustee on behalf of the Trust
pursuant to Section 2.01(d) hereof.
Interest Rate Cap
Payment :
(a) With respect to the Class M Certificates, for
the first 31 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 (b) with respect to the Class B
Certificates, for the first 31 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.
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.
Interim Servicing Agreement
: The Interim Servicing Agreement,
dated as of November 1, 2004, by and between the Responsible Party
and the Purchaser.
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, the Group II Mortgage
Loans or the Group III Mortgage Loans, as applicable.
Loan Performance Advisor
: MortgageRamp, LLC, a Delaware
limited liability company, and its successors in interest, and if a
successor loan performance advisor is appointed hereunder, such
successor.
Loan Performance Advisor
Agreement : The Loan
Performance Advisor Agreement, dated as of February 1, 2005, by and
between the Purchaser and the Loan Performance Advisor.
Loan Performance
Advisor Fee : As to any Distribution
Date, an amount equal to the product of (a) one-twelfth of the
Loan Performance Advisor Fee Rate and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as of the preceding
Distribution Date or, in the case of the first Distribution Date,
the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date; provided , however that the Loan
Performance Advisor Fee for any Distribution Date shall not be
lower than $1,500.
Loan Performance Advisor Fee
Rate : With respect to each
Mortgage Loan, either (a) 0.015% per annum or (b) if the Loan
Performance Advisor Fee is the amount calculated pursuant to the
proviso in the definition of “Loan Performance Advisor
Fee”, a per annum rate determined by dividing such fee by the
average of the aggregate Stated Principal Balance of the Mortgage
Loans as of the preceding Distribution Date.
Loan-to-Value
Ratio or
LTV : As of any date and as to any First-Lien Mortgage
Loan, the ratio (expressed as a percentage) of the outstanding
principal balance of the First-Lien Mortgage Loan to (a) in the
case of a purchase, the lesser of (i) the sale price of the
Mortgaged Property and (ii) its appraised value at the time of sale
or (b) in the case of a refinancing or modification, the appraised
value of the Mortgaged Property at the time of the refinancing or
modification.
London Business
Day :
Any day on which dealings in deposits of United States
dollars are transacted in the London interbank market.
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® 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.
Net Swap
Payments :
Any Net Swap Payment 1 and any Net Swap
Payment 2.
Net Swap Payment
1 :
With respect to any Distribution Date, any payment (other
than a related Swap Termination Payment) made by the Trustee
to the Swap Provider 1 on such Distribution Date.
Net Swap Payment
2 :
With respect to any Distribution Date, any payment (other
than a related Swap Termination Payment) made by the Trustee
to the Swap Provider 2 on such Distribution Date.
Net Swap
Receipts :
Any Net Swap Receipt 1 and any Net Swap Receipt 2.
Net Swap Receipt
1 :
With respect to any Distribution Date, any payment (other
than a related Swap Termination Payment) made by the Swap Provider
1 to the Trustee on such Distribution Date.
Net Swap Receipt
2 :
With respect to any Distribution Date, any payment (other
than a related Swap Termination Payment) made by the Swap Provider
2 to the Trustee on 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.
Notional Swap Agreement
: The notional swap agreement,
dated September 29, 2005 between the Trustee and the Swap Provider
1.
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 any Trust 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
: April 27, 2005, with respect to
those Mortgage Loans sold to the Purchaser pursuant to the purchase
price and terms agreement, dated February 3, 2005, and May 26,
2005, with respect to those Mortgage Loans sold to the Purchaser
pursuant to the purchase price and terms agreement, dated April 12,
2005.
Originator : Fremont Investment &
Loan, a California state-chartered industrial bank, and its
successors in interest.
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, 0.300%;
Class A-1B Certificates, 0.350%; Class A-2A Certificates,
0.120%; Class A-2B Certificates, 0.260%; Class A-2C
Certificates, 0.360%; Class A-3 Certificates, 0.200%;
Class M-1 Certificates, 0.480%; Class M-2 Certificates,
0.640%; Class M-3 Certificates, 0.670%; Class B-1
Certificates, 1.170%; Class B-2 Certificates, 1.270%;
Class B-3 Certificates, 1.720%; and Class B-4
Certificates, 2.500%. On the first Distribution Date after
the Optional Termination Date, the Pass-Through Margins shall
increase to: Class A-1A Certificates, 0.600%;
Class A-1B Certificates, 0.700%; Class A-2A Certificates,
0.240%; Class A-2B Certificates, 0.520%; Class A-2C
Certificates, 0.720%; Class A-3 Certificates, 0.400%;
Class M-1 Certificates, 0.720%; Class M-2 Certificates,
0.960%; Class M-3 Certificates, 1.005%; Class B-1
Certificates, 1.755%; Class B-2 Certificates, 1.905%;
Class B-3 Certificates, 2.580%; and Class B-4
Certificates, 3.750%.
Pass-Through
Rate :
For each Class of Certificates, each Class of
Master REMIC Regular Interest and each Class of Regular
Interest issued by a Trust REMIC, 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 and
P-1 by Moody’s;
(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 S&P and Moody's (in each case, to the extent they
are designated as Rating Agencies in the Preliminary Statement),
and by each other 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
S&P and Moody's (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement), and by
each other 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; 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 any
Trust 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 the
weighted average of the Group I Loan Cap, the Group II Loan Cap and
the Group III Loan Cap, weighted on the basis of the related Group
Subordinate Amount.
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
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 Repurchase Price allocable to
principal with respect to each Mortgage Loan repurchased by the
Responsible Party that was repurchased on or prior to the related
Determination Date; and (v) all Substitution Adjustment
Amounts allocable to principal with respect to the substitutions of
Mortgage Loans that occur on or prior to the related Determination
Date; (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).
The Principal Remittance Amount on the initial Distribution
Date shall also include the cash deposit made by the Depositor
pursuant to Section 3.07 of this Agreement.
Private
Certificates : As specified in the
Preliminary Statement.
Prospectus
Supplement :
The Prospectus Supplement, dated September 22, 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 Responsible Party and the
Purchaser.
Purchaser
: Barclays
Bank.
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, as amended,
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, 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 to the date of
repurchase, (iii) all unreimbursed Servicing Advances and
(iv) all expenses incurred by the Trustee arising out of the
Trustee’s enforcement of the Responsible Party’s
repurchase obligation hereunder.
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 and who shall have direct
responsibility for the administration of this Agreement.
Responsible
Party :
Fremont Investment & Loan, a California state-chartered
industrial bank, 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, 51.40%.
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 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.
Servicing Transfer Date
: With respect to those Mortgage
Loans listed under Exhibit A of the assignment and conveyance
agreement dated August 25, 2005 between Barclays Bank and the
Servicer, September 1, 2005, and with respect to those Mortgage
Loans listed under Exhibit A of the assignment and conveyance
agreement dated September 26, 2005 between Barclays Bank and the
Servicer, September 26, 2005.
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 3.50% of the Cut-off Date Pool Principal
Balance. On and after the Stepdown Date, an amount equal to
7.00% 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-FR4, 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® 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 October 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 : The Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates.
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 substituted by the Responsible Party for a
Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in a Request for Release, substantially in the form of
Exhibit J, (i) have a Stated Principal Balance, after
deduction of all Scheduled Payments due in the month of
substitution, not in excess of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) be accruing interest at a rate not
lower than and not more than 1% higher than that of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted
Mortgage Loan; and (v) comply with each representation and
warranty set forth in Section 2.03.
Substitution
Adjustment Amount : As defined in
Section 2.03.
Supplemental Interest Trust
: The corpus of a trust created pursuant
to Section 4.06 of this Agreement and designated as the
“Supplemental Interest Trust,” consisting of (i) the
Notional Swap Agreement, (ii) the Balance Guaranteed Swap
Agreement, (iii) the Class A-3 Uncapped Swap Agreement, (iv) the
Swap Accounts, (v) the right to receive the Class X Distributable
Amount as provided in Section 4.02(a)(iii)(S) and (vi) the right to
receive Class IO Shortfalls.
Supplemental Interest Trust
Amount : The sum of any
payments deposited into Swap Account 1, Swap Account 2 or Swap
Account 3.
Swap Account 1 : A trust sub-account created pursuant to
Section 4.06(a)(i) of this Agreement.
Swap Account 2 : A trust sub-account created pursuant to
Section 4.06(a)(ii) of this Agreement.
Swap Account 3 : A trust sub-account created pursuant to
Section 4.06(a)(iii) of this Agreement.
Swap Accounts : Swap Account 1, Swap Account 2 and Swap Account
3.
Swap LIBOR : With respect to any Distribution Date (and the
related Interest Accrual Period), the product of
(i) USD–LIBOR–BBA (as used in the related Interest
Rate Swap Agreement), (ii) two, and (iii) the quotient of (a) the
actual number of days in the Interest Accrual Period for the LIBOR
Certificates divided by (b) 30.
Swap Provider 1
: Barclays Bank.
Swap Provider 2
: Barclays Bank.
Swap Provider 3
: Barclays Bank.
Swap Providers : Swap Provider 1, Swap Provider 2 and Swap
Provider 3.
Swap Termination
Payment 1 :
Any payment payable by the Trust or the Swap Provider 1 upon
termination of the Notional Swap Agreement as a result of an Event
of Default (as defined in the Notional Swap Agreement) or a
Termination Event (as defined in the Notional Swap
Agreement).
Swap Termination
Payment 2 :
Any payment payable by the Trust or the Swap Provider 2 upon
termination of the Balance Guaranteed Swap Agreement as a result of
an Event of Default (as defined in the Balance Guaranteed Swap
Agreement) or a Termination Event (as defined in the Balance
Guaranteed Swap Agreement).
Swap Termination
Payment 3 :
Any payment payable by the Trust or the Swap Provider 3 upon
termination of the Class A-3 Uncapped Swap Agreement as a result of
an Event of Default (as defined in the Class A-3 Uncapped Swap
Agreement) or a Termination Event (as defined in the Class A-3
Uncapped Swap Agreement).
Swap Termination
Payments :
Any Swap Termination Payment 1, any Swap Termination Payment
2 and any Swap Termination Payment 3.
Tax Matters Person
: The Holder of the Class R
Certificates designated as “tax matters person” of each
Trust REMIC 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 (A) the amounts payable to the Certificates
pursuant to Section 4.02(a)(i) on such Distribution Date and
(B) any Net Swap Payments and Swap Termination Payments other than
Defaulted Swap Termination Payments paid to the Swap Provider 1 and
the Swap Provider 2 and (C) the Class A-3 Uncapped Floater Fee, the
aggregate Group III Floor Payments and any Swap Termination
Payments other than Defaulted Swap Termination Payments paid to the
Swap Provider 3.
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 Supplemental
Interest Trust and (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
Trust
REMIC :
Any of REMIC 1, REMIC 2, REMIC 3 or the Master REMIC, as
applicable.
Trustee
: Wells Fargo
Bank, National Association, 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
preceding Distribution Date.
Trustee Fee
Rate :
With respect to each Mortgage Loan, 0.002% 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 or any substantially similar
administrative exemption granted by the U.S. Department of
Labor.
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.
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. On the Closing Date, the Depositor shall
pay, without any right of reimbursement from the Trust, to the Cap
Provider the “Fixed Amount” (as defined in the related
Cap Agreement) due and payable to the Cap Provider pursuant to the
terms of each Cap Agreement.
(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 Responsible Party
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 Responsible Party shall deliver or 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 any, with
evidence of recording thereon;
(v)
the original Assignment of Mortgage for
each Mortgage Loan endorsed in blank (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 Responsible Party shall deliver or
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 a certificate from an escrow company, a title company or a
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.
To the extent not previously delivered to
the Purchaser pursuant to the Purchase Agreement, the Responsible
Party shall promptly upon receipt from the respective recording
office cause to be delivered to the Trustee the original recorded
document described in (iii), (iv) and (vi) above.
From time to time, the Responsible Party,
the Depositor or the Servicer, as applicable, shall forward to the
Trustee, additional original documents, additional documents
evidencing an assumption, modification, consolidation or extension
of a Mortgage Loan, in accordance with the terms of this Agreement
upon receipt of such documents. All such mortgage documents
held by the Trustee as to each Mortgage Loan shall constitute the
“ Custodial File ”.
To the extent not previously delivered to
the Purchaser pursuant to this Agreement, on or prior to the
Closing Date, the Responsible Party shall deliver to the Trustee,
Assignments of Mortgages, in blank, for each Mortgage Loan that is
not a MERS Designated Loan. No later than thirty (30)
Business Days following the later of the Closing Date and the date
of receipt by the Servicer of the complete recording information
for a Mortgage, the Servicer shall promptly submit or cause to be
submitted for recording, at the expense of the Responsible Party
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 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. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned by the
Responsible Party, at the expense of the Responsible Party, to
“Wells Fargo Bank, National Association, as trustee under the
Pooling and Servicing Agreement dated as of September 1, 2005,
Securitized Asset Backed Receivables LLC Trust 2005-FR4”.
In the event that any such Assignment of Mortgage is lost or
returned unrecorded because of a defect therein, the Responsible
Party shall promptly cause to be delivered a substitute Assignment
of Mortgage to cure such defect and thereafter cause each such
assignment to be duly recorded 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 180 days
(or such other time period as may be required by any Rating Agency)
following the Closing Date, and in the event that the Responsible
Party does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor,
the related Mortgage Loan shall, upon the request of the Depositor,
be repurchased by the Responsible Party at the price and in the
manner specified in Section 2.03. The foregoing
repurchase obligation 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-FR4” and Wells Fargo Bank, National Association 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 and directed to enter into the Cap Agreements.
The Trustee on behalf of the Supplemental Interest Trust is
hereby authorized and directed to enter into the Interest Rate Swap
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, Minnesota,
California or Utah, 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 an Initial
Certification prior to the Closing Date, or, as the Depositor
agrees on the Closing Date, certifying receipt of a Mortgage Note
and Assignment of Mortgage for each Mortgage Loan. 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. The 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. The
Depositor hereby makes the representations and warranties set forth
in Schedule V hereto to the Trustee as of the dates set
forth in such Schedule.
(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), (ooo), (ppp), (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), (ooo), (ppp), (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. Within
90 days of the earlier of either discovery by or notice to the
Depositor of any breach of a representation or warranty set forth
in clause (a) of Schedule V hereto with respect to any
Mortgage Loan that is also a breach of the representation and
warranty set forth in clause (aaa) of Schedule III and
the Responsible Party has not repurchased such Mortgage Loan within
the applicable time period for repurchase set forth above, the
Depositor shall repurchase such Mortgage Loan at the Repurchase
Price or substitute a Substitute Mortgage Loan for such Mortgage
Loan.
(e)
With respect to any Substitute Mortgage
Loan or Loans, the Responsible Party shall deliver to the Trustee
for the benefit of the Certificateholders the Mortgage Note, the
Mortgage, the related assignment of the 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
with respect to any Distribution Date after the end of the related
Prepayment Period. 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
Responsible Party 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
Responsible Party shall be entitled to retain all amounts received
in respect of such Deleted Mortgage Loan.
(f)
The Servicer shall 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 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, the Trustee
shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to the
Responsible Party and shall execute and deliver at the Responsible
Party’s direction such instruments of transfer or assignment
prepared by the Responsible Party, in each case without recourse,
as shall be necessary to vest title in the Responsible Party, of
the Trustee’s interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
(g)
or any month in which 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 plus an
amount equal to the aggregate of any unreimbursed Advances with
respect to such Deleted Mortgage Loans (collectively, the “
Substitution Adjustment Amount ”) shall be remitted by
the Responsible Party to the Servicer for deposit into the
Collection Account 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 or
substitution obligation referred to in Section 2.03(d), the
Responsible Party shall indemnify the Depositor, any of its
Affiliates, the Servicer, the Trustee 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 (including, without
limitation, any taxes payable by the Trust) 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)
The Servicer shall amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect
the removal of such Deleted Mortgage Loan and the Servicer shall
deliver the amended Mortgage Loan Schedule to the
Trustee.
(j)
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
Distribution Account Deposit Date for the Distribution Date in the
month following the month during which the Responsible Party became
obligated to repurchase or replace such Mortgage Loan 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. In accordance with
Section 10.05(b), the Trustee shall promptly notify each Rating
Agency of a purchase of a Mortgage Loan pursuant to this Section
2.03.
It is understood and agreed that the
obligation of the Responsible Party under this Agreement 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 of the
Responsible Party set forth in Section 2.03(h), 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 2036, which is the
Distribution Date in the month following the month in which the
latest Mortgage Loan maturity date occurs.
Amounts distributable to the Class X
Certificates (prior to any reduction for any Basis Risk Payment and
Defaulted Swap Termination Payment), exclusive of any amounts
received from the Swap Provider, shall be deemed paid from the
Master REMIC in respect of the Class X Interest to the Holders of
the Class X Certificates prior to distribution of any Basis Risk
Payments to the LIBOR Certificates.
For federal income tax purposes, any
amount distributed on the LIBOR Certificates on any Distribution
Date in excess of the amount distributable on their Corresponding
Class of Master REMIC Regular Interest on such Distribution Date
shall be treated as having been paid from the Excess Reserve Fund
Account or the Swap Accounts, as applicable, and any amount
distributable on such Corresponding Class of Master REMIC Regular
Interest on such Distribution Date in excess of the amount
distributable on the Corresponding Class of LIBOR Certificates on
such Distribution Date shall be treated as having been paid to the
Interest Rate Swap Accounts, all pursuant to and as further
provided in Section 8.13.
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; and
(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.
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 or to a custodian, as the case may be, and shall inure to
the benefit of 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 by the Trustee 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 be responsible for preparing
and recording all lien releases and mortgage satisfactions in
accordance with state and local regulations, and shall be
responsible for all expenses in connection therewith if not paid by
the Mortgagor if permitted by applicable law and the related
Mortgage Loan Documents (except if such expense would constitute a
Servicing Advance) and all other consequences resulting from its
failure to fully discharge such obligation. 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, as amended, 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 any Trust 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 from its own funds, without any right of
reimbursement therefor, 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 (prior to using any Net Swap Receipts).
(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)(O), 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 or Defaulted Swap Termination Payments (to the
extent remaining after the distributions specified in Sections
4.02(a)(iii)(A)-(Q)) 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)(P)-(Q).
(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 Master 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 from the Excess
Reserve Fund Account or the Swap Accounts shall be accounted for by
the Trustee as amounts paid first to the Holders of the
Class X Certificates (in respect of the Class X Interest)
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 from the Excess Reserve Fund Account
(along with payments of Basis Risk Carry Forward Amounts from the
Swap Accounts) 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)(P)-(S).
(d)
The Trustee shall establish and maintain
the Distribution Account on behalf of the Certificateholders.
On the Closing Date, the Depositor shall make a cash deposit
in the amount of $9,975,751.19 which shall be deposited in the
Distribution Account and of which approximately $6,988,553.82,
$56,326.12 and $2,930,871.25 will be treated as Principal
Remittance Amounts for Group I Mortgage Loans, Group II Mortgage
Loans and Group III Mortgage Loans, respectively. 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 may 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 not later than 30
days and not more than 45 days prior to any change
thereof.
(g)
In order to comply with its duties under
the USA Patriot Act of 2001, the Trustee shall comply with the
Wells Fargo anti-money laundering compliance program, including,
without limitation, any customer identification
procedures.
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 by the Servicer 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, 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 of
the Responsible Party under 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 clear and terminate the Collection
Account upon termination of this Agreement; and
(xii)
on or prior to each Remittance Date, to
remit to the Loan Performance Advisor the Loan Performance Advisor
Fee with respect to such Distribution Date.
(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, Escrow Accounts 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)
and the Trustee may invest funds in the Distribution Account and
shall invest such funds in the Distribution Account (for purposes
of this Section 3.12, each such Account and each of the Swap
Accounts 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; provided , however , that any such
Permitted Investment managed by or advised by the Trustee or any of
its Affiliates may mature, unless payable on demand, no later than
the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. If no investment
instruction is given in a timely manner, the Trustee shall hold the
funds in the Distribution Account uninvested. All such
Permitted Investments shall be held to maturity, unless payable on
demand. Any investment of funds in an Investment Account
shall be made in the name of the Servicer or the Trustee, as
applicable. The Servicer or the Trustee, as applicable, shall
be entitled to sole possession over each such investment, and any
certificate or other instrument evidencing any such investment
shall be delivered directly to the Servicer or the Trustee or its
agent, as applicable, together with any document of transfer
necessary to transfer title to such investment to the Servicer or
the Trustee or its agent, as applicable. In the event amounts
on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Servicer or the
Trustee, as applicable, 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 a payment
due under any Permitted Investment of funds held in the Escrow
Account or the Collection Account, or if a default occurs in any
other performance required under any Permitted Investment of funds
held in the Escrow Account or the Collection Account, the Servicer
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 required to be deposited in the Escrow Account and 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, 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 deed or
certificate of sale shall be issued to Wells Fargo Bank, National
Association (or, if applicable, the name of the successor Trustee)
as Trustee for Securitized Asset Backed Receivables LLC 2005-FR4
Mortgage Pass-Through Certificates, Series 2005-FR4, or to its
nominee, for the benefit 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 on behalf of the Certificateholders.
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 REMIC 1 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 REMIC 1 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 any Trust 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 REMIC 1 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
received or accrued with respect to such REO Property qualifies as
“rents from real property” as defined in
Section 856(d) of the Code.
Section 3.18
Notification of Adjustments
. With respect to each Adjustable
Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Adjustment Date and shall adjust the Scheduled Payment
on the related mortgage payment Adjustment Date, if applicable, in
compliance with the requirements of applicable law and the related
Mortgage and Mortgage Note. In the event that an Index
becomes unavailable or otherwise unpublished, the Servicer shall
select a comparable alternative i
