1
Exhibit 4.1
Subject to Completion
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor,
-------------------------------------------
as Master Servicer,
and
[-----------------------------------]
as Trustee
-----------------------
POOLING AND SERVICING AGREEMENT
Dated as of _________________, 199__
----------------------
Home Equity Loan Asset Backed Certificates
Series 199__-__
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................................. 1
Section 1.02. Interest Calculations................................................................... 16
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES;
TAX TREATMENT
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
Fund Advances Under Credit Line Agreements.............................................. 16
Section 2.02. Acceptance by Trustee; Retransfer of Mortgage Loans..................................... 19
Section 2.03. Representations and Warranties Regarding the Master Servicer............................ 21
Section 2.04. Representations and Warranties of the Seller Regarding
the Mortgage Loans; Retransfer of Certain Mortgage Loans................................ 22
Section 2.05. Covenants of the Depositor.............................................................. 27
Section 2.06. Retransfers of Mortgage Loans at Election of Transferor................................. 27
Section 2.07. Execution and Authentication of Certificates............................................ 28
Section 2.08. Tax Treatment........................................................................... 28
Section 2.09. Representations and Warranties of the Depositor......................................... 29
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. The Master Servicer..................................................................... 29
Section 3.02. Collection of Certain Mortgage Loan Payments............................................ 31
Section 3.03. Withdrawals from the Collection Account................................................. 32
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses........................... 33
Section 3.05. Assumption and Modification Agreements.................................................. 33
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.............................................................. 34
Section 3.07. Trustee to Cooperate.................................................................... 35
Section 3.08. Servicing Compensation; Payment of Certain Expenses
by Master Servicer..................................................................... 35
Section 3.09. Annual Statement as to Compliance....................................................... 36
Section 3.10. Annual Servicing Report................................................................. 36
Section 3.11. Annual Opinion of Counsel............................................................... 36
Section 3.12. Access to Certain Documentation and Information
Regarding the Mortgage Loans........................................................... 36
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Section 3.13. Maintenance of Certain Servicing Insurance Policies..................................... 37
Section 3.14. Reports to the Securities and Exchange Commission....................................... 37
Section 3.15. Tax Returns............................................................................. 37
Section 3.16. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments
of Mortgaged Property................................................................... 37
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Servicing Certificate................................................................... 38
Section 4.02. Claims upon the Policy; Policy Payments Account......................................... 40
Section 4.03. Spread Account.......................................................................... 41
Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation.................................. 42
Section 4.05. Optional Advances of the Master Servicer................................................ 43
ARTICLE V
PAYMENTS AND STATEMENTS TO
CERTIFICATEHOLDERS; RIGHTS OF CERTIFICATEHOLDERS
Section 5.01. Distributions........................................................................... 43
Section 5.02. Calculation of the Investor Certificate Rate............................................ 45
Section 5.03. Statements to Certificateholders........................................................ 45
Section 5.04. Rights of Certificateholders............................................................ 47
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates........................................................................ 47
Section 6.02. Registration of Transfer and Exchange of Investor
Certificates; Appointment of Registrar.................................................. 47
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates....................................... 49
Section 6.04. Persons Deemed Owners................................................................... 49
Section 6.05. Restrictions on Transfer of Transferor Certificates..................................... 49
Section 6.06. Appointment of Paying Agent............................................................. 51
Section 6.07. Acceptance of Obligations............................................................... 51
ARTICLE VII
THE MASTER SERVICER AND THE DEPOSITOR
Section 7.01. Liability of the Master Servicer and the Depositor...................................... 51
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor.................................... 51
Section 7.03. Limitation on Liability of the Master Servicer and Others............................... 51
Section 7.04. Master Servicer Not to Resign........................................................... 52
Section 7.05. Delegation of Duties.................................................................... 53
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Section 7.06. Indemnification of the Trust by the Master Servicer..................................... 53
Section 7.07. Indemnification of the Trust by the Transferor.......................................... 53
Section 7.08. Limitation on Liability of the Transferor............................................... 53
ARTICLE VIII
SERVICING TERMINATION
Section 8.01. Events of Servicing Termination......................................................... 54
Section 8.02. Trustee to Act; Appointment of Successor................................................ 55
Section 8.03. Notification to Certificateholders...................................................... 56
ARTICLE IX
THE TRUSTEE
Section 9.01. Duties of Trustee....................................................................... 56
Section 9.02. Certain Matters Affecting the Trustee................................................... 58
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans................................... 59
Section 9.04. Trustee May Own Certificates............................................................ 59
Section 9.05. Master Servicer to Pay Trustee's Fees and Expenses;
Master Servicer to Indemnify............................................................ 60
Section 9.06. Eligibility Requirements for Trustee.................................................... 60
Section 9.07. Resignation or Removal of Trustee....................................................... 60
Section 9.08. Successor Trustee....................................................................... 61
Section 9.09. Merger or Consolidation of Trustee...................................................... 61
Section 9.10. Appointment of Co-Trustee or Separate Trustee........................................... 61
Section 9.11. Limitation of Liability................................................................. 63
Section 9.12. Trustee May Enforce Claims Without Possession of Certificates........................... 63
Section 9.13. Suits for Enforcement................................................................... 63
ARTICLE X
TERMINATION
Section 10.01. Termination............................................................................. 63
ARTICLE XI
RAPID AMORTIZATION EVENTS
Section 11.01. Rapid Amortization Events.............................................................. 65
Section 11.02. Additional Rights Upon the Occurrence of Certain Events................................ 66
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment.............................................................................. 67
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Section 12.02. Recordation of Agreement............................................................... 69
Section 12.03. Limitation on Rights of Certificateholders............................................. 69
Section 12.04. Governing Law.......................................................................... 70
Section 12.05. Notices................................................................................ 70
Section 12.06. Severability of Provisions............................................................. 70
Section 12.07. Assignment............................................................................. 70
Section 12.08. Certificates Nonassessable and Fully Paid.............................................. 71
Section 12.09. Third-Party Beneficiaries.............................................................. 71
Section 12.10. Counterparts........................................................................... 71
Section 12.11. Effect of Headings and Table of Contents............................................... 71
Section 12.12. Insurance Agreement.................................................................... 71
EXHIBITS
EXHIBIT A - FORM OF INVESTOR CERTIFICATE......................................................... A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE....................................................... B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE............................................................... C-1
EXHIBIT D - RESERVED............................................................................. D-1
EXHIBIT E - ANNUAL OPINION OF COUNSEL............................................................ E-1
EXHIBIT F - FORM OF CREDIT LINE AGREEMENT........................................................ F-1
EXHIBIT G - RESERVED............................................................................. G-1
EXHIBIT H - RESERVED............................................................................. H-1
EXHIBIT I - LETTER OF REPRESENTATIONS............................................................ I-1
EXHIBIT J - RESERVED............................................................................. J-1
EXHIBIT K - FORM OF INVESTMENT LETTER............................................................ K-1
EXHIBIT L - FORM OF REQUEST FOR RELEASE.......................................................... L-1
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This Pooling and Servicing Agreement, dated as of
____________, 199__, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. (the "Depositor"),
______________________________, the "Master Servicer", and
[______________________], as Trustee (the "Trustee"),
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article.
Accelerated Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, required to reduce the Investor
Certificate Principal Balance (after giving effect to the distribution of all
other amounts actually distributed on the Investor Certificates on such
Distribution Date) so that the Invested Amount (immediately following such
Distribution Date) exceeds the Investor Certificate Principal Balance (as so
reduced) by the Required Overcollateralization Amount.
Additional Balance: As to any Mortgage Loan and day, the
aggregate amount of all Draws conveyed to the Trust pursuant to Section 2.01.
[Adjustment Date: With respect to any Interest Period, the
second LIBOR Business Day preceding the first day of such Interest Period.]
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
Alternative Principal Payment: As to any Distribution Date,
the greater of (x) _____% of the Investor Certificate Principal Balance
immediately prior to the Distribution Date or (y) the amount (but not less than
zero) equal to Principal Collections for such Distribution Date less the
aggregate of Draws under the Credit Line Agreements during the related
Collection Period.
Appointment Day: As defined in Section 11.02.
Appraised Value: As to any Mortgaged Property, the value
established by any of the following: (i) with respect to Credit Line Agreements
with Credit Limits greater than $________, by a full appraisal, (ii) with
respect to Credit Line Agreements with Credit Limits equal to or less than
$_________, by a drive by inspection of such Mortgaged Property made to
establish compliance with the underwriting criteria then in effect in connection
with the application for the Mortgage Loan secured by such Mortgaged Property.
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Asset Balance: As to any Mortgage Loan, other than a
Liquidated Mortgage Loan, and day, the related Cut-off Date Asset Balance, plus
(i) any Additional Balance in respect of such Mortgage Loan, minus (ii) all
collections credited as principal against the Asset Balance of any such Mortgage
Loan in accordance with the related Credit Line Agreement. For purposes of this
definition, a Liquidated Mortgage Loan shall be deemed to have an Asset Balance
equal to the Asset Balance of the related Mortgage Loan immediately prior to the
final recovery of related Liquidation Proceeds and an Asset Balance of zero
thereafter.
Assignment of Mortgage: With respect to any Mortgage, an
assignment, notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the sale of the Mortgage to the Trustee, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
BIF: The Bank Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Bank Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.
Billing Cycle: With respect to any Mortgage Loan and
Collection Period, the billing period specified in the related Credit Line
Agreement and with respect to which amounts billed are received during such
Collection Period.
Book-Entry Certificate: Any Investor Certificate registered in
the name of the Depository or its nominee, ownership of which is reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such Depository).
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York or ___________
are required or authorized by law to be closed.
Certificate: An Investor Certificate or a Transferor
Certificate.
Certificate Owner: The Person who is the beneficial owner of a
Book-Entry Certificate.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 6.02.
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, direction, waiver or request pursuant to this
Agreement, (x) any Investor Certificate registered in the name of the
Transferor, or any Person known to a Responsible Officer to be an Affiliate of
either the Depositor or the Transferor and (y) any Investor Certificate for
which the Transferor, or any Person known to a Responsible Officer to
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be an Affiliate of either such entity is the Certificate Owner shall be deemed
not to be outstanding (unless to the knowledge of a Responsible Officer (i) the
Transferor, or such Affiliate is acting as trustee or nominee for a Person who
is not an Affiliate of the Transferor and who makes the voting decision with
respect to such Investor Certificate or (ii) the Transferor, or such Affiliate
is the Certificate Owner of all the Investor Certificates) and the Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests necessary to effect any
such consent, direction, waiver or request has been obtained.
Closing Date: _______________, 199___.
Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time (or any successor statute thereto).
Collection Account: The custodial account or accounts created
and maintained for the benefit of the Investor Certificateholders and the Credit
Enhancer pursuant to Section 3.02(b). The Collection Account shall be an
Eligible Account.
Collection Period: With respect to any Distribution Date
(other than the first Collection Period) and any Mortgage Loan, the calendar
month preceding such Distribution Date. With respect to the first Distribution
Date, the period from _______________, 199___ through _______________, 199___.
Combined Loan-to-Value Ratio: With respect to any Mortgage
Loan as of any date, the percentage equivalent of the fraction, the numerator of
which is the sum of (i) the Credit Limit and (ii) the outstanding principal
balance as of the date of execution of the related original Credit Line
Agreement (or any subsequent date as of which such outstanding principal balance
may be determined in connection with an increase in the Credit Limit for such
Mortgage Loan) of any mortgage loan or mortgage loans that are senior or equal
in priority to the Mortgage Loan and which is secured by the same Mortgaged
Property and the denominator of which is the Valuation of the related Mortgaged
Property.
Corporate Trust Office: The principal office of the Trustee at
which at any particular time its corporate business shall be administered, which
office on the Closing Date is located at __________________________________,
Attention: _________________.
Credit Enhancement Draw Amount: As to any Distribution Date,
an amount equal to the sum of (x) the amount by which the amount to be
distributed to Investor Certificateholders pursuant to Section 5.01(a)(iii)
exceeds the amount of Investor Interest Collections on deposit in the Collection
Account on the Business Day preceding such Distribution Date that is available
to be applied therefor and the sum of the amount if any deposited in the
Collection Account in respect of such Distribution Date pursuant to Section 4.05
and any amount transferred from the Spread Account to the Collection Account
pursuant to Section 4.03, (y) the Guaranteed Principal Distribution Amount and
(z) any Preference Claim for such Distribution Date.
Credit Enhancer: _______________________________, a
________________________ company, any successor thereto or any replacement
credit enhancer substituted pursuant to Section _____.
Credit Enhancer Default: The failure by the Credit Enhancer to
make a payment required under the Policy in accordance with the terms thereof.
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Credit Limit: As to any Mortgage Loan, the maximum Asset
Balance permitted under the terms of the related Credit Line Agreement.
Credit Limit Utilization Rate: As to any Mortgage Loan, the
percentage equivalent of a fraction the numerator of which is the Cut-off Date
Asset Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
Credit Line Agreement: With respect to any Mortgage Loan, the
related credit line account agreement executed by the related Mortgagor and any
amendment or modification thereof.
Custodial Agreement: Any Custodial Agreement between any
Custodian and the Trustee, which is reasonably acceptable in form and substance
to the Credit Enhancer, relating to the custody of the Mortgage Loans and the
Related Documents.
Custodian: Any custodian appointed by the Trustee under a
Custodial Agreement to maintain all or a portion of the Mortgage Files pursuant
to Section 2.01(b).
Cut-off Date: ______________, 199___.
Cut-off Date Asset Balance: With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date.
Cut-off Date Pool Balance: The Pool Balance calculated as of
the Cut-off Date.
Defective Mortgage Loan: A Mortgage Loan subject to retransfer
pursuant to Section 2.02, 2.04 or 2.06.
Deficiency Amount: As defined in Section 5.01(d).
Definitive Certificates: As defined in Section 6.02(c).
Delivery Event: As defined in Section 2.01.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. or its successor
in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is Cede & Co., as the registered Holder of
Investor Certificates evidencing $______________ in initial aggregate principal
amount of the Investor Certificates. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the UCC of the State of
New York.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date, the
third Business Day prior to such Distribution Date.
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Distribution Date: The ________th day of each month, or if
such day is not a Business Day, then the next Business Day, beginning in the
month immediately following the month of the initial issuance of the
Certificates.
Draw: With respect to any Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the Cut-off Date in accordance with the
related Mortgage Note.
Due Date: As to any Mortgage Loan, the fifteenth day of the
month.
Electronic Ledger: The electronic master record of home equity
credit line mortgage loans maintained by the Master Servicer.
Eligible Account: (i) An account that is maintained with a
depository institution whose debt obligations [throughout] the time of any
deposit therein are rated in the highest short-term debt rating category by the
Rating Agencies, (ii) one or more accounts with a depository institution having
a minimum long-term unsecured debt rating of "_______" by ________________ and
"_____" by __________________, which accounts are fully insured by either SAIF
or BIF, (iii) a segregated trust account maintained with the Trustee or an
Affiliate of the Trustee in its fiduciary capacity, or (iv) an account otherwise
acceptable to each Rating Agency and the Credit Enhancer, as evidenced at
closing by delivery of a rating letter by each Rating Agency and thereafter by
delivery of a letter from each Rating Agency and the Credit Enhancer to the
Trustee, within 30 days of receipt of notice of such deposit, to reduce or
withdraw its then-current rating of the Certificates without regard to the
Policy.
Eligible Investments: (i) obligations of the United States or
any agency thereof, provided such obligations are backed by the full faith and
credit of the United States; (ii) general obligations of or obligations
guaranteed by any state of the United States or the District of Columbia
receiving the highest long-term debt rating of each Rating Agency rating the
related Series of Securities, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the Certificates by
each such Rating Agency; (iii) commercial or finance company paper (including,
without limitation, commercial paper issued by Countrywide Home Loans, Inc. or
any of its Affiliates) which is then receiving the highest commercial or finance
company paper rating of each such Rating Agency, or such lower rating as will
not result in the downgrading or withdrawal of the ratings then assigned to the
Certificates by each such Rating Agency; (iv) certificates of deposit, demand or
time deposits, or bankers' acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or long term
unsecured debt obligations of such depository institution or trust company (or
in the case of the principal depository institution in a holding company system,
the commercial paper or long-term unsecured debt obligations of such holding
company, but only if ▇▇▇▇▇'▇ is not a Rating Agency) are then rated one of the
two highest long-term and the highest short-term ratings of each such Rating
Agency for such securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by any
such Rating Agency; (iv) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC; (v) guaranteed reinvestment
agreements issued by any bank, insurance company or other corporation
containing, at the time of the issuance of such agreements, such terms and
conditions as will not result in the downgrading or withdrawal of the rating
then assigned to the Certificates by any such Rating Agency; (vi) repurchase
obligations with respect to any security described in clauses (i) and (ii)
above, in either case entered into with a depository institution or trust
company (acting as principal) described in clause (iv) above; (vii) securities
(other than stripped bonds, stripped coupons or instruments sold at
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a purchase price in excess of 115% of the face amount thereof) bearing interest
or sold at a discount issued by any corporation incorporated under the laws of
the United States or any state thereof which, at the time of such investment,
have one of the two highest ratings of each Rating Agency (except if the Rating
Agency is Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such securities), or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by any
such Rating Agency, as evidenced by a signed writing delivered by each such
Rating Agency; and (viii) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable to each Rating
Agency as will not result in the downgrading or withdrawal of the rating then
assigned to the Securities of such Series by any such Rating Agency, as
evidenced by a signed writing delivered by each such Rating Agency; provided
that no such instrument shall be a Permitted Investment if such instrument
evidences the right to receive interest only payments with respect to the
obligations underlying such instrument.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted
by the Seller for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Asset Balance (or in the case of a
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an
aggregate Asset Balance), not ____ percent more or ____ percent less than the
Transfer Deficiency, if any, relating to such Defective Mortgage Loan; (ii) have
a Loan Rate not less than the Loan Rate of the Defective Mortgage Loan and not
more than ___% in excess of the Loan Rate of such Defective Mortgage Loan; (iii)
have a Loan Rate based on the same Index with adjustments to such Loan Rate made
on the same Interest Rate Adjustment Date as that of the Defective Mortgage
Loan; (iv) have a Gross Margin that is not less than the Gross Margin of the
Defective Mortgage Loan and not more than _____ basis points higher than the
Gross Margin for the Defective Mortgage Loan; (v) have a Mortgage of the same or
higher level of priority as the Mortgage relating to the Defective Mortgage Loan
at the time such Mortgage was transferred to the Trust; (vi) have a remaining
term to maturity not more than ____ months earlier and not more than _____
months later than the remaining term to maturity of the Defective Mortgage Loan;
(vii) comply with each representation and warranty set forth in Section 2.04
(deemed to be made as of the date of substitution); and (viii) have an original
Combined Loan-to-Value Ratio not greater than that of the Defective Mortgage
Loan. More than one Eligible Substitute Mortgage Loan may be substituted for a
Defective Mortgage Loan if such Eligible Substitute Mortgage Loans meet the
foregoing attributes in the aggregate and such substitution is approved in
writing in advance by the Credit Enhancer.
Endorsement: As defined in the Policy.
ERISA: Employee Retirement Income Security Act of 1974, as
amended.
Event of Servicing Termination: As defined in Section 8.01.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
Fiscal Agent: As defined in the Policy.
Foreclosure Profit: With respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation
Proceeds exceeds (ii) the related Asset Balance (plus accrued and unpaid
interest thereon at the applicable Loan Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.
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Gross Margin: As to any Mortgage Loan, the percentage set
forth as the "Gross Margin" for such Mortgage Loan on Exhibit ___ hereto.
Guaranteed Distribution: With respect to any Distribution
Date, the sum of the (i) the Guaranteed Principal Distribution Amount and (ii)
the amount to be distributed to Certificateholders pursuant to Section
5.01(a)(iii) for such Distribution Date.
Guaranteed Principal Distribution Amount: With respect to any
Distribution Date, (i) on any such Distribution Date, other than the
Distribution Date in ___________ 20___, the amount, if any, required to reduce
the Investor Certificate Principal Balance (after giving effect to the
distributions of Interest Collections and Principal Collections that are
allocable to principal on the Investor Certificates on such Distribution Date)
to the Invested Amount immediately following such Distribution Date or (ii) on
the Distribution Date in _____________ 20___, the amount by which the
outstanding Investor Certificate Principal Balance (after giving effect to
Interest Collections allocable and distributable to principal on the Investor
Certificates on such Distribution Date) exceeds the sum of the amounts on
deposit in the Collection Account available to be distributed to the Investor
Certificateholders pursuant to Section 5.01(b) hereof.
Increased Senior Lien Limitation: As defined in Section
3.01(a).
Index: With respect to each Interest Rate Adjustment Date for
a Mortgage Loan, the highest Prime Rate as published in the "Money Rates" table
of The Wall Street Journal as of the first business day of the calendar month.
Insolvency Event: As defined in Section 11.02.
Insurance Agreement: The insurance and indemnity agreement
dated as of ____________, 19___ among the Depositor, the Master Servicer, the
Trustee and the Credit Enhancer, including any amendments and supplements
thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than
the Credit Enhancer) pursuant to any insurance policy covering a Mortgage Loan,
or amounts required to be paid by the Master Servicer pursuant to the last
sentence of Section 3.04, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures or (iv) required to be paid to any
holder of a mortgage senior to such Mortgage Loan.
Interest Collections: As to any Distribution Date, the sum of
all payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds and
Net Liquidation Proceeds as is allocable to interest on the applicable Mortgage
Loan) collected by the Master Servicer under the Mortgage Loans (excluding any
fees (including annual fees) or late charges or similar administrative fees paid
by Mortgagors) during the related Collection Period minus the Servicing Fee
payable to the Master Servicer with respect to the related Collection Period.
The terms of the related Credit Line Agreement shall determine the portion of
each payment in respect of such Mortgage Loan that constitutes principal or
interest.
Interest Period: With respect to any Distribution Date other
than the first Distribution Date, the period beginning on the preceding
Distribution Date and ending on the day preceding such
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Distribution Date, and in the case of the first Distribution Date, the period
beginning on the Closing Date and ending on the day preceding the first
Distribution Date.
Interest Rate Adjustment Date: With respect to each Mortgage
Loan, any date on which the Loan Rate is adjusted in accordance with the related
Credit Line Agreement.
Intervening Assignments: As defined in Section 2.01.
Invested Amount: With respect to any Distribution Date, an
amount equal to the Original Invested Amount minus (i) the amount of Principal
Collections previously distributed to Investor Certificateholders and minus (ii)
the Investor Loss Amounts for prior Distribution Dates.
Investor Certificate: Any certificate executed and
authenticated by the Trustee substantially in the form set forth in Exhibit ___
hereto.
Investor Certificate Distribution Amount: As to any
Distribution Date, the sum of all amounts to be distributed to the Holders of
Investor Certificates pursuant to Article V and Article XI hereof.
Investor Certificate Interest: With respect to any
Distribution Date, interest for the related Interest Period at the applicable
Investor Certificate Rate on the Investor Certificate Principal Balance as of
the first day of such Interest Period (after giving effect to the distributions
made on the first day of such Interest Period).
Investor Certificate Principal Balance: With respect to any
Distribution Date, (a) the Original Investor Certificate Principal Balance less
(b) the aggregate of amounts actually distributed as principal on the Investor
Certificates.
Investor Certificate Rate: The sum of [(a) LIBOR as of the
second LIBOR Business Day prior to the immediately preceding Distribution Date
(or as of two LIBOR Business Days prior to the Closing Date, in the case of the
first Distribution Date) and (b) _____% per annum]; provided, however, that in
no event shall the Investor Certificate Rate with respect to any Interest Period
exceed the Maximum Rate for such Interest Period.
Investor Certificateholder: The Holder of an Investor
Certificate.
Investor Floating Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the Invested Amount at the close of business on the preceding
Distribution Date (or at the Closing Date in the case of the first Distribution
Date) and the denominator of which is the Pool Balance, calculated as of the
beginning of the related Collection Period.
Investor Fixed Allocation Percentage: ____%.
Investor Interest Collections: As to any Distribution Date,
the product of (i) the Interest Collections during the related Collection Period
and (ii) the Investor Floating Allocation Percentage for such Distribution Date.
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Investor Loss Amount: With respect to any Distribution Date,
the amount equal to the product of (i) the Investor Floating Allocation
Percentage for such Distribution Date and (ii) the aggregate of the Liquidation
Loss Amounts for such Distribution Date.
Investor Loss Reduction Amount: With respect to any
Distribution Date, the portion, if any, of the Investor Loss Amount for such
Distribution Date and all prior Distribution Dates that has not been distributed
to Investor Certificateholders on such Distribution Date pursuant to Section
5.01(a)(iv) or 5.01(a)(v) or by way of the Credit Enhancement Draw Amount.
Investor Principal Collections: As to any Distribution Date,
the Investor Fixed Allocation Percentage of Principal Collections in respect of
such Distribution Date.
Investor Servicing Fee: With respect to any Distribution Date,
the product of (i) the Investor Floating Allocation Percentage for such
Distribution Date and (ii) the Servicing Fee for such Distribution Date.
[LIBOR: As to any date, the rate for United States dollar
deposits for one month which appear on the Telerate Screen LIBOR Page 3750 as of
11:00 A.M., London time. If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such service is no
longer offered, such other service for displaying LIBOR or comparable rates as
may be reasonably selected by the Depositor after consultation with the
Trustee), the rate will be the Reference Bank Rate. If no such quotations can be
obtained and no Reference Bank Rate is available, LIBOR will be LIBOR applicable
to the preceding Distribution Date.]
[LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York or
in the city of London, England are required or authorized by law to be closed.]
Lien: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment pursuant to Section 7.02 hereof shall not
be deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with
respect to which the related Mortgage Note provides for a lifetime rate cap, the
maximum Loan Rate permitted over the life of such Mortgage Loan under the terms
of the related Credit Line Agreement, as set forth on Exhibit ___ hereto.
Liquidated Mortgage Loan: As to any Distribution Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Collection Period, that all Liquidation Proceeds which it expects to
recover with respect to the disposition of such Mortgage Loan or the related REO
have been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of
overhead) which are incurred by the Master Servicer in connection with the
liquidation of any Mortgage Loan and not recovered under any insurance policy,
including, without limitation, legal fees and expenses, any unreimbursed amount
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expended pursuant to Section 3.06 (including, without limitation, amounts
advanced to correct defaults on any mortgage loan which is senior to such
Mortgage Loan and amounts advanced to keep current or pay off a mortgage loan
that is senior to such Mortgage Loan) respecting the related Mortgage Loan and
any related and unreimbursed expenditures with respect to real estate property
taxes, water or sewer taxes, condominium association dues, property restoration
or preservation or insurance against casualty, loss or damage.
Liquidation Loss Amount: With respect to any Distribution Date
and any Mortgage Loan that becomes a Liquidated Mortgage Loan during the related
Collection Period, the unrecovered Asset Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
in reduction of such Asset Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds
but not including amounts drawn under the Policy) received in connection with
the liquidation of any Mortgage Loan or related REO, whether through trustee's
sale, foreclosure sale or otherwise.
Loan Rate: With respect to any Mortgage Loan and as of any
day, the per annum rate of interest applicable under the related Credit Line
Agreement to the calculation of interest for such day on the Asset Balance of
such Mortgage Loan.
Loan Rate Cap: With respect to each Mortgage Loan, the lesser
of (i) the Lifetime Rate Cap, if any, or (ii) the applicable state usury
ceiling, if any.
Managed Amortization Period: The period from the Closing Date
to and including the Rapid Amortization Commencement Date.
Master Servicer: [__________________________________] and any
successor thereto and any successor hereunder.
Maximum Principal Payment: With respect to any Distribution
Date, the Investor Fixed Allocation Percentage of the Principal Collections for
such Distribution Date.
Maximum Rate: As to any Interest Period, the Weighted Average
Net Loan Rate for the Collection Period during which such Interest Period begins
(adjusted to an effective rate reflecting accrued interest calculated on the
basis of the actual number of days in the Collection Period commencing in the
month in which such Interest Period commences and a year assumed to consist of
360 days).
Minimum Monthly Payment: With respect to any Mortgage Loan and
any month, the minimum amount required to be paid by the related Mortgagor in
that month.
Minimum Transferor Interest: With respect to any date, an
amount equal to the lesser of (a) ___% of the Pool Balance on such date and (b)
the Transferor Principal Balance as of the Closing Date.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple interest in real
property securing a Mortgage Loan.
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Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: With respect to any date, the schedule
of Mortgage Loans included in the Trust on such date. The initial schedule of
Mortgage Loans as of the Cut-off Date is the schedule set forth herein as
Exhibit ___, which schedule sets forth as to each Mortgage Loan (i) the Cut-off
Date Asset Balance, (ii) the Credit Limit, (iii) the Gross Margin, (iv) the
Lifetime Rate Cap, (v) the account number, (vi) the current Loan Rate, (vii) the
Combined Loan-to-Value Ratio, (viii) a code specifying the property type, (ix) a
code specifying documentation type and (x) a code specifying lien position. The
Mortgage Loan Schedule will be deemed to be amended from time to time to reflect
Additional Balances.
Mortgage Loans: The mortgage loans, including Additional
Balances with respect thereto, that are transferred and assigned to the Trustee
pursuant to Section 2.01, together with the Related Documents, exclusive of
Mortgage Loans that are retransferred to the Depositor, the Master Servicer or
the Seller from time to time pursuant to Section 2.02, 2.04, [2.05], 2.06,
[2.09] or [3.01] as from time to time are held as a part of the Trust. The
mortgage loans originally so held are identified in the Mortgage Loan Schedule
delivered on the Closing Date. The Mortgage Loans shall also include any
Eligible Substitute Mortgage Loan Substituted by the Seller for a Defective
Mortgage Loan pursuant to Sections 2.02 and 2.04.
Mortgage Note: With respect to a Mortgage Loan, the Credit
Line Agreement pursuant to which the related mortgagor agrees to pay the
indebtedness evidenced thereby and secured by the related Mortgage.
Mortgaged Property: The underlying property, including any
real property and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Credit Line
Agreement.
Net Liquidation Proceeds: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any Mortgage Loan and as to any
day, the Loan Rate less the Servicing Fee Rate, the Premium Fee Rate and the
Trustee Fee Rate.
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor, the Transferor or the Master Servicer, or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case may
be, and delivered to the Depositor and the Trustee, as the case may be, as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to
the Trustee, who may be in-house counsel for the Depositor, the Seller, the
Master Servicer or the Transferor (except that any opinion pursuant to Section
7.04 or relating to taxation must be an opinion of independent outside counsel)
and who, in the case of opinions delivered to the Credit Enhancer and the Rating
Agency, is reasonably acceptable to it.
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Original Invested Amount: $_____________.
Original Investor Certificate Principal Balance:
$________________.
Overcollateralization Amount: At the time of reference
thereto, the amount, if any, by which the Invested Amount exceeds the Investor
Certificate Principal Balance.
Paying Agent: Any paying agent appointed pursuant to Section
6.06.
Percentage Interest: As to any Investor Certificate, the
percentage obtained by dividing the principal denomination of such Investor
Certificate by the aggregate of the principal denominations of all Investor
Certificates.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Policy: The financial guaranty insurance policy number
___________, and all endorsements thereto, dated as of the Closing Date, issued
by the Credit Enhancer to the Trustee for the benefit of the Investor
Certificateholders.
Policy Payments Account: As defined in Section 4.02.
Pool Balance: With respect to any date, the aggregate of the
Asset Balances of all Mortgage Loans as of such date.
Pool Factor: With respect to any Distribution Date, the
percentage, carried to seven places, obtained by dividing the Investor
Certificate Principal Balance for such Distribution Date by the Original
Investor Certificate Principal Balance.
Preference Claim: As defined in Section 4.02.
Premium Fee Rate: As described in the Insurance Agreement.
Principal Collections: As to any Distribution Date, the sum of
all payments by or on behalf of Mortgagors and any other amounts constituting
principal (including but not limited to any portion of Insurance Proceeds or Net
Liquidation Proceeds allocable to principal of the applicable Mortgage Loan, and
Transfer Deposit Amounts, but excluding Foreclosure Profits) collected by the
Master Servicer under the Mortgage Loans during the related Collection Period.
The terms of the related Credit Line Agreement shall determine the portion of
each payment in respect of a Mortgage Loan that constitutes principal or
interest.
Publication Date: As defined in Section 11.02(a).
Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of the Cut-off Date, between [Countrywide Home Loans, Inc.], as seller,
and the Depositor, as purchaser, with respect to the Mortgage Loans.
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Rapid Amortization Commencement Date: The earlier of (i) the
Distribution Date in ____________ 200__ and (ii) the Distribution Date next
succeeding the Collection Period in which a Rapid Amortization Event is deemed
to occur pursuant to Section 11.01.
Rapid Amortization Event: As defined in Section 11.01.
Rapid Amortization Period: The period following the Managed
Amortization Period until the termination of the Trust pursuant to Section
10.01.
Rating Agency: Any statistical credit rating agency, or its
successor, that rated the Investor Certificates at the request of the Depositor
at the time of the initial issuance of the Certificates. If such agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Depositor
and the Credit Enhancer, notice of which designation shall be given to the
Trustee. References herein to the highest short term unsecured rating category
of a Rating Agency shall mean A-1+ or better in the case of ____________________
and P-1 or better in the case of _______________ and in the case of any other
Rating Agency shall mean the ratings such other Rating Agency deems equivalent
to the foregoing ratings. References herein to the highest long-term rating
category of a Rating Agency shall mean "AAA" in the case of ____________________
and "Aaa" in the case of _______________ and in the case of any other Rating
Agency, the rating such other Rating Agency deems equivalent to the foregoing
ratings.
Record Date: The last day preceding the related Distribution
Date; provided, however, that following the date on which Definitive
Certificates are available pursuant to Section 6.02(c) the Record Date shall be
the last day of the calendar month preceding the month in which the related
Distribution Date occurs.
Reference Bank Rate: As to any Interest Period as follows: the
arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth of
a percent) of the offered rates for United States dollar deposits for one month
which are offered by the Reference Banks as of _____ A.M., London time, on the
second LIBOR Business Day prior to the first day of such Interest Period to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the Outstanding Investor Certificate Principal Balance;
provided that at least two such Reference Banks provide such rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the arithmetic mean of
the rates quoted by one or more major banks in New York City, selected by the
Depositor after consultation with the Trustee, as of _____ A.M., New York City
time, on such date for loans in U.S. Dollars to leading European Banks for a
period of one month in amounts approximately equal to the outstanding Investor
Certificate Principal Balance. If no such quotations can be obtained, the
Reference Bank Rate shall be the Reference Bank Rate applicable to the preceding
Interest Period.
Reference Banks: Three major banks that are engaged in the
London interbank market, selected by the Depositor after consultation with the
Trustee.
Related Documents: As defined in Section 2.01.
REO: A Mortgaged Property that is acquired by the Trust in
foreclosure or by deed in lieu of foreclosure.
Required Overcollateralization Amount: As defined in the
Insurance Agreement.
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Responsible Officer: When used with respect to the Trustee,
any officer of the Trustee with direct responsibility for the administration of
this Agreement and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
Revolving Period: With respect to each Mortgage Loan, the
period specified for such Mortgage Loan in the related Credit Line Agreement,
during which the Mortgagor is permitted to make Draws.
SAIF: The Savings Association Insurance Fund, as from time to
time constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Savings Association Insurance Fund is not existing and performing
duties now assigned to it, the body performing such duties on such date.
Scheduled Principal Collections Distribution Amount: With
respect to any Distribution Date during the Managed Amortization Period and the
Investor Certificates, an amount equal to the lesser of (i) the Maximum
Principal Payment and (ii) the Alternative Principal Payment. With respect to
any Distribution Date in respect of the Rapid Amortization Period, the Maximum
Principal Payment.
Seller: [_______________________________] and any successor
thereto.
Servicing Certificate: A certificate completed and executed by
a Servicing Officer in accordance with Section 4.01.
Servicing Fee: With respect to any Distribution Date, the
product of (i) the Servicing Fee Rate divided by 12 and (ii) the aggregate Asset
Balance of the Mortgage Loans on the first day of the Collection Period
preceding such Distribution Date (or at the Cut-off Date with respect to the
first Distribution Date).
Servicing Fee Rate: _____% per annum.
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Trustee (with a copy to the Credit Enhancer) by the Master
Servicer on the Closing Date, as such list may be amended from time to time.
Spread Account: The account created pursuant to Section 4.03
and maintained pursuant to the Insurance Agreement.
Spread Account Maximum: As defined in the Insurance Agreement.
Telerate Screen LIBO Page 3750: The display designated as page
3750 on the Telerate Service (or such other page as may replace page 3750 on
that service for the purpose of displaying London inter-bank offered rates of
major banks).
Transfer Date: As defined in Section 2.06.
Transfer Deficiency: As defined in Section 2.02.
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Transfer Deposit Amount: As defined in Section 2.02.
Transfer Notice Date: As defined in Section 2.06.
Transferor or Transferor Certificateholders: The Holders of
the Transferor Certificates.
Transferor Certificates: The certificates executed and
authenticated by the Trustee substantially in the form set forth in Exhibit ___
hereto.
Transferor Collections: As to any period, the sum of
Transferor Interest Collections and Transferor Principal Collections for such
period.
Transferor Interest Collections: Interest Collections that are
not Investor Interest Collections, reduced by the Transferor Servicing Fee.
Transferor Principal Balance: As of any date of determination,
the amount equal to (i) the Pool Balance at the end of the day next preceding
such date of determination less (ii) the Invested Amount as of the close of
business on the preceding Distribution Date.
Transferor Principal Collections: On any Distribution Date,
Principal Collections received during the related Collection Period minus the
amount of such Principal Collections required to be distributed to Investor
Certificateholders pursuant to Section 5.01(b).
Transferor Servicing Fee: With respect to any Distribution
Date, the Servicing Fee for such Distribution Date less the Investor Servicing
Fee for such Distribution Date.
Trust: The trust created by this Agreement, the corpus of
which consists of the Mortgage Loans, such other assets as shall from time to
time be identified as deposited in the Collection Account in accordance with
this Agreement, property that secured a Mortgage Loan and that has become REO,
the interest of the Depositor in certain hazard insurance policies maintained by
the Mortgagors or the Master Servicer in respect of the Mortgage Loans, the
Policy, an assignment of the Depositor's rights under the Purchase Agreement and
all proceeds of each of the foregoing (exclusive of payments of accrued interest
on the Mortgage Loans which are due on or prior to the Cut-off Date or due in
the month of ____________).
Trustee: ____________________________ or any successor Trustee
appointed in accordance with this Agreement that has accepted such appointment
in accordance with this Agreement.
Trustee Fee: A fee which is separately agreed to between the
Master Servicer and the Trustee.
Trustee Fee Rate: The per annum rate at which the Trustee Fee
is calculated.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
Unpaid Investor Certificate Interest Shortfall: With respect
to any Distribution Date, the aggregate amount, if any, of Investor Certificate
Interest that was accrued in respect of a prior Distribution Date and has not
been distributed to Investor Certificateholders.
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Valuation: With respect to any Mortgaged Property and time
referred to herein, the lesser of (i) the Appraised Value of the Mortgaged
Property and (ii) in the case of a Mortgaged Property purchased within one year
of the origination of the related Mortgage loan, the purchase price of the
Mortgaged Property.
Weighted Average Net Loan Rate: As to any Collection Period,
the average of the daily Net Loan Rate for each Mortgage Loan for each day
during the related Billing Cycle, weighted on the basis of the daily average of
the related Asset Balances outstanding for each day in such Billing Cycle for
each Mortgage Loan as determined by the Master Servicer in accordance with the
Master Servicer's normal servicing procedures.
Section 1.02. Interest Calculations. All calculations of
interest hereunder that are made in respect of the Asset Balance of a Mortgage
Loan shall be made on a daily basis using a 365-day year. All calculations of
interest on the Investor Certificates shall be made on the basis of the actual
number of days in an Interest Period and a year assumed to consist of 360 days.
The calculation of the Servicing Fee shall be made on the basis of a 360-day
year consisting of twelve 30-day months. All dollar amounts calculated hereunder
shall be rounded to the nearest ▇▇▇▇▇ with one-half of one ▇▇▇▇▇ being rounded
down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES;
TAX TREATMENT
Section 2.01. Conveyance of Mortgage Loans; Retention of
Obligation to Fund Advances Under Credit Line Agreements. The Depositor,
concurrently with the execution and delivery of this Agreement, does hereby
transfer, assign, set over and otherwise convey to the Trust without recourse
(subject to Sections 2.02 and 2.04) all of its right, title and interest in and
to (i) each Mortgage Loan, including its Asset Balance (including all Additional
Balances) and all collections in respect thereof received on or after the
Cut-off Date (excluding payments in respect of accrued interest due prior to the
Cut-off Date or due in the month of ____________); (ii) property that secured a
Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure;
(iii) the Depositor's rights under the Purchase Agreement; (iv) [the Depositor's
rights under the hazard insurance policies,] (v) the Collection Account and the
[Security Account for the Certificates] (excluding net earnings thereon); (vi)
the Policy, (vii) the Spread Account and (viii) all other assets included or to
be included in the Trust for the benefit of Certificateholders; provided,
however, neither the Trustee nor the Trust assumes the obligation under any
Credit Line Agreement that provides for the funding of future advances to the
Mortgagor thereunder, and neither the Trust nor the Trustee shall be obligated
or permitted to fund any such future advances. Additional Balances shall be part
of the related Asset Balance and are hereby transferred to the Trust on the
Closing Date pursuant to this Section 2.01, and therefore part of the Trust
property. In addition, on or prior to the Closing Date, the Depositor shall
cause the Credit Enhancer to deliver the Policy to the Trustee for the benefit
of the Investor Certificateholders. The foregoing transfer, assignment, set-over
and conveyance to the Trust shall be made to the Trustee, on behalf of the
Trust, and each reference in this Agreement to such transfer, assignment,
set-over and conveyance shall be construed accordingly.
The Depositor agrees to take or cause to be taken such actions
and execute such documents (including without limitation the filing of all
necessary continuation statements for the UCC-1 financing statements filed in
the State of __________ (which shall have been filed within 90 days of the
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Closing Date) describing the Cut-off Date Asset Balances and Additional Balances
and naming the Depositor as debtor and the Trustee as secured party and any
amendments to UCC-1 financing statements required to reflect a change in the
name or corporate structure of the Depositor or the filing of any additional
UCC-1 financing statements due to the change in the principal office of the
Depositor (within 90 days of any event necessitating such filing) as are
necessary to perfect and protect the Certificateholders' and Credit Enhancer's
interests in each Cut-off Date Asset Balance and Additional Balances and the
proceeds thereof (other than maintaining possession by the Trustee of the
Mortgage Loans and the Mortgage Files, which possession will, subject to the
terms hereof, be maintained by the Master Servicer as custodian and bailee of
the Trustee).
In connection with such transfer and assignment by the
Depositor, the Master Servicer acknowledges that it is holding as custodian and
bailee for the Trustee the following documents or instruments (the "Related
Documents") with respect to each Mortgage Loan:
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in
recordable form;
(iii) the original recorded Mortgage or, if, in
connection with any Mortgage Loan, the original recorded Mortgage with
evidence of recording thereon cannot be delivered on or prior to the
Closing Date because of a delay caused by the public recording office
where such original Mortgage has been delivered for recordation or
because such original Mortgage has been lost, the Seller, at the
direction of the Depositor, will deliver or cause to be delivered to
the Custodian, as agent for the Trustee, a true and correct copy of
such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Depositor
stating that such original Mortgage has been dispatched to the
appropriate public recording official or (ii) in the case of an
original Mortgage that has been lost, a certificate by the appropriate
county recording office where such Mortgage is recorded;
(iv) if applicable, the original intervening
assignments, if any ("Intervening Assignments"), with evidence of
recording thereon, showing a complete chain of title to the Mortgage
from the originator to the Depositor or, if any such original
Intervening Assignment has not been returned from the applicable
recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller stating that such
original Intervening Assignment has been dispatched to the appropriate
public recording official for recordation or (ii) in the case of an
original Intervening Assignment that has been lost, a certificate by
the appropriate county recording office where such Mortgage is
recorded;
(v) either (1) for each Mortgage Loan with a Credit
Limit in excess of $_________, a title policy or (2) for all other
Mortgage Loans, either a title policy, a title search or guaranty of
title with respect to the related Mortgaged Property;
(vi) the original of any guaranty executed in
connection with the Mortgage Note;
(vii) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Mortgage Loan; and
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(viii) any security agreement, chattel mortgage or
equivalent instrument executed in connection with the Mortgage;
provided, however, that as to any Mortgage Loan, if (a) as evidenced by an
Opinion of Counsel delivered to and in form and substance satisfactory to the
Trustee and the Credit Enhancer, (x) an optical image or other representation of
the related documents specified in clauses (i) through (viii) above are
enforceable in the relevant jurisdictions to the same extent as the original of
such document and (y) such optical image or other representation does not impair
the ability of an owner of such Mortgage Loan to transfer its interest in such
Mortgage Loan, and (b) the retention of such documents in such format will not
result in a reduction in the then current rating of the Investor Certificates,
without regard to the Policy, such optical image or other representation may be
held by the Master Servicer, as custodian for the Trustee or assignee in lieu of
the physical documents specified above.
The Depositor hereby confirms to the Trustee that it has
caused the portions of the Electronic Ledgers relating to the Mortgage Loans to
be clearly and unambiguously marked, and has made the appropriate entries in its
general accounting records, to indicate that such Mortgage Loans have been
transferred to the Trust at the direction of the Depositor. The Master Servicer
hereby confirms to the Trustee that it has clearly and unambiguously made
appropriate entries in its general accounting records indicating that such
Mortgage Loans constitute part of the Trust and are serviced by it on behalf of
the Trust in accordance with the terms hereof.
The parties hereto intend that the transaction set forth
herein be a sale by the Depositor to the Trust of all the Depositor's right,
title and interest in and to the Mortgage Loans and other property described
above. In the event the transaction set forth herein is deemed not to be a sale,
the Depositor hereby grants to the Trust a security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans
whether now existing or hereafter created, all monies due or to become due on
the Mortgage Loans and all proceeds of any thereof; and this Agreement shall
constitute a security agreement under applicable law.
Except as hereinafter provided, the Master Servicer shall be
entitled to maintain possession of all of the foregoing documents and
instruments and shall not be required to deliver any of them to the Trustee. In
the event, however, that possession of any of such documents or instruments is
required by any Person (including the Trustee) acting as successor servicer
pursuant to Section 7.04 or 8.02 in order to carry out the duties of Master
Servicer hereunder, then such successor shall be entitled to request delivery,
at the expense of the Master Servicer, of such documents or instruments by the
Master Servicer and to retain such documents or instruments for servicing
purposes; provided that the Trustee or such servicers shall maintain such
documents at such offices as may be required by any regulatory body having
jurisdiction over such Mortgage Loans.
The Master Servicer's right to maintain possession of the
documents enumerated above shall continue so long as the long term unsecured
debt of the Master Servicer is assigned ratings of at least "_______" by
__________________ and "_______" by _______________. At such time as the
condition specified in the preceding sentence is not satisfied, as promptly as
practicable but in no event more than 90 days in the case of clause (i) below
and 60 days in the case of clause (ii) below following the occurrence of such
event (a "Delivery Event"), the Master Servicer shall, at its expense, (i)
either (x) record an assignment of Mortgage in favor of the Trustee (which may
be a blanket assignment if permitted by applicable law) in the appropriate real
property or other records or (y) deliver to the Trustee the assignment of such
Mortgage in favor of the Trustee in form for recordation, together with an
Opinion of Counsel addressed to the Trustee and the Credit Enhancer to the
effect that recording is not
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required to protect the Trustee's right, title and interest in and to the
related Mortgage Loan or, in case a court should recharacterize the sale of the
Mortgage Loans as a financing, to perfect a first priority security interest in
favor of the Trustee in the related Mortgage Loan, which Opinion of Counsel also
shall be reasonably acceptable to each of the Rating Agencies (as evidenced in
writing) and the Credit Enhancer, and (ii) unless an Opinion of Counsel,
reasonably acceptable to the Trustee, the Rating Agencies (as evidenced in
writing) and the Credit Enhancer, is delivered to the Trustee and the Credit
Enhancer to the effect that delivery of the Mortgage Files is not necessary to
protect the Trustee's right, title and interest in the related Mortgage Loans;
provided that the lack of delivery will not result in a reduction in the then
current rating of the Investor Certificates, without regard to the Policy,
deliver the related Mortgage Files to the Trustee or to a custodian located in
the State of ____________ appointed by the Trustee and acceptable to the Rating
Agencies and the Credit Enhancer to be held by the Custodian on behalf of the
Trustee in trust, upon the terms herein set forth, for the use and benefit of
all present and future Certificateholders and the Custodian on behalf of the
Trustee shall retain possession thereof except to the extent the Master Servicer
requires any Mortgage Files for normal servicing as contemplated by Section
3.07. The Trustee is hereby appointed as the attorney-in-fact of the Master
Servicer with the power to prepare, execute and record Assignments of Mortgages
in the event that the Master Servicer fails to do so on a timely basis as
provided in this paragraph.
Within 90 days following delivery, if any, of the Mortgage
Files to the Trustee pursuant to the preceding paragraph, the Trustee shall
review each such Mortgage File to ascertain that all required documents set
forth in this Section 2.01 have been executed and received, and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule
and in so doing the Trustee may rely on the purported due execution and
genuineness of any signature thereon. If within such 90-day period the Trustee
finds any document constituting a part of a Mortgage File not to have been
executed or received or to be unrelated to the Mortgage Loans identified in said
Mortgage Loan Schedule or, if in the course of its review, the Trustee
determines that such Mortgage File is otherwise defective in any material
respect, the Trustee shall promptly upon the conclusion of its review notify the
Seller and the Credit Enhancer, and the Seller will have a period of 90 days
after such notice within which to correct or cure any such defect.
The Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section 2.01. In reviewing
any Mortgage File pursuant to this Section, the Trustee shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form (except, if applicable, to determine if the Trustee is the assignee or
endorsee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, or whether a blanket assignment is
permitted in any applicable jurisdiction, whether any Person executing any
document is authorized to do so or whether any signature thereon is genuine, but
shall only be required to determine whether a document has been executed, that
it appears to be what it purports to be, and, where applicable, that it purports
to be recorded.
Section 2.02. Acceptance by Trustee; Retransfer of Mortgage
Loans. (a) The Trustee hereby acknowledges its receipt of the Policy and the
Mortgage Loans, and declares that the Trustee holds and will hold such
instrument, and to the extent that any documents are delivered to it pursuant to
Section 2.01, will hold such documents, and all amounts received by it
thereunder and hereunder, in trust, upon the terms herein set forth, for the use
and benefit of all present and future Certificateholders and the Credit
Enhancer. If the time to cure any defect in respect of any Mortgage Loan of
which the Trustee has notified the Seller and the Depositor following the review
pursuant to Section 2.01 has expired or if at any time any loss is suffered by
the Trustee on behalf of the Certificateholders or the Credit Enhancer,
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in respect of any Mortgage Loan as a result of (i) a defect in any document
constituting a part of its Mortgage File or (ii) an Assignment of Mortgage to
the Trustee not having been recorded as required by Section 2.01, then on the
next succeeding Business Day upon the deposit to the Collection Account of the
Transfer Deposit Amount, if any, and upon satisfaction of the applicable
conditions described herein, all right, title and interest of the Trust in and
to such Mortgage Loan shall be deemed to be retransferred, reassigned and
otherwise reconveyed, without recourse, representation or warranty, to the
Seller on such Business Day and the Asset Balance of such Mortgage Loan shall be
deducted from the Pool Balance; provided, however, that interest accrued on the
Asset Balance of such Mortgage Loan to the end of the related Collection Period
shall be the property of the Trust. The Trustee shall determine if the reduction
of such Asset Balance from the Pool Balance in accordance with the preceding
sentence would cause the Transferor Principal Balance to be less than the
Minimum Transferor Interest ("Transfer Deficiency"), in which event the Trustee
shall deliver written notice of such deficiency to the Depositor and the Seller,
and within five Business Days after the Business Day of such retransfer the
Seller, pursuant to the Purchase Agreement, shall either (i) substitute an
Eligible Substitute Mortgage Loan or (ii) deposit into the Collection Account an
amount (the "Transfer Deposit Amount") in immediately available funds equal to
the Transfer Deficiency or a combination of both (i) and (ii) above. Such
reduction or substitution and the actual payment of any Transfer Deposit Amount,
if any, shall be deemed to be payment in full for such Mortgage Loan. Upon
receipt of any Eligible Substitute Mortgage Loan or of written notification
signed by a Servicing Officer to the effect that the Transfer Deposit Amount in
respect of a Defective Mortgage Loan has been deposited into the Collection
Account or, if the Transferor Principal Balance is not reduced below the Minimum
Transferor Interest as a result of the deemed retransfer of a Defective Mortgage
Loan, then as promptly as practicable following such deemed transfer, the
Trustee shall execute such documents and instruments of transfer presented by
the Seller, in each case without recourse, representation or warranty, and take
such other actions as shall reasonably be requested by the Seller to effect such
transfer by the Trust of such Defective Mortgage Loan pursuant to this Section.
It is understood and agreed that the obligation of the Seller to accept a
transfer of a Defective Mortgage Loan and to either convey an Eligible
Substitute Mortgage Loan or to make a deposit of any related Transfer Deposit
Amount into the Collection Account shall constitute the sole remedy respecting
such defect available to Certificateholders, the Trustee and the Credit Enhancer
against the Seller.
The Master Servicer, promptly following the transfer of a
Defective Mortgage Loan from or to the Trust pursuant to this Section, shall
amend the Mortgage Loan Schedule and make appropriate entries in its general
account records to reflect such transfer. The Master Servicer shall, following
such retransfer, appropriately ▇▇▇▇ its records to indicate that it is no longer
servicing such Mortgage Loan on behalf of the Trust. The [Seller], [Depositor]
promptly following such transfer, shall appropriately ▇▇▇▇ its Electronic Ledger
and make appropriate entries in its general account records to reflect such
transfer.
Notwithstanding any other provision of this Section, a
retransfer of a Defective Mortgage Loan to the Seller pursuant to this Section
that would cause the Transferor Principal Balance to be less than the Minimum
Transferor Interest shall not occur if either the Seller fails to convey an
Eligible Substitute Mortgage Loan or to deposit into the Collection Account any
related Transfer Deposit Amount required by this Section with respect to the
transfer of such Defective Mortgage Loan.
(b) As to any Eligible Substitute Mortgage Loan or Loans,
pursuant to the Purchase Agreement, the Seller shall, if a Delivery Event has
occurred, deliver to the Trustee with respect to such Eligible Substitute
Mortgage Loan or Loans such documents and agreements as are required to be held
by the Trustee in accordance with Section 2.01. For any Collection Period during
which the Seller substitutes one or more Eligible Substitute Mortgage Loans, the
Master Servicer shall determine the
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Transfer Deposit Amount which amount shall be deposited by the Seller in the
Collection Account at the time of substitution. All amounts received in respect
of the Eligible Substitute Mortgage Loan or Loans during the Collection Period
in which the circumstances giving rise to such substitution occur shall not be a
part of the Trust Fund and shall not be deposited by the Master Servicer in the
Collection Account. All amounts received by the Master Servicer during the
Collection Period in which the circumstances giving rise to such substitution
occur in respect of any Defective Mortgage Loan so removed by the Trust Fund
shall be deposited by the Master Servicer in the Collection Account. Upon such
substitution, the Eligible Substitute Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and pursuant to the Purchase
Agreement, the Seller shall be deemed to have made with respect to such Eligible
Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Section 2.04. The
procedures applied by the Seller in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Trustee, the
Certificateholders and the Credit Enhancer.
Section 2.03. Representations and Warranties Regarding the
Master Servicer. The Master Servicer represents and warrants to the Trustee and
the Credit Enhancer that as of the Closing Date:
(i) The Master Servicer is a ______________
corporation, validly existing and in good standing under the laws of
the State of _________________, and has the corporate power to own its
assets and to transact the business in which it is currently engaged.
The Master Servicer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or any properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Master
Servicer;
(ii) The Master Servicer has the power and authority
to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this
Agreement will constitute the valid and binding obligation of the
Master Servicer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Master Servicer is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization,
or registration or declaration, as shall have been obtained or filed,
as the case may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this
Agreement by the Master Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court
applicable to the Master Servicer or any provision of the Certificate
of Incorporation or Bylaws of the Master Servicer, or constitute a
material breach of any mortgage, indenture, contract or other agreement
to which the Master Servicer is a party or by which the Master Servicer
may be bound; and
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(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Master Servicer threatened, against the
Master Servicer or any of its properties or with respect to this
Agreement or the Certificates which in the opinion of the Master
Servicer has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Agreement.
The representations and warranties set forth in this Section shall survive the
sale and assignment of the Mortgage Loans to the Trust. Upon discovery of a
breach of any representations and warranties which materially and adversely
affects the interests of the Certificateholders or the Credit Enhancer, the
person discovering such breach shall give prompt written notice to the other
parties and to the Credit Enhancer. Within 90 days of its discovery or its
receipt of notice of breach, or, with the prior written consent of a Responsible
Officer of the Trustee, such longer period specified in such consent, the Master
Servicer shall cure such breach in all material respects.
Section 2.04. Representations and Warranties of the Seller
Regarding the Mortgage Loans; Retransfer of Certain Mortgage Loans. Pursuant to
the Purchase Agreement, the Seller has represented and warranted to the Trustee
and the Credit Enhancer that as of the Cut-off Date, unless otherwise
specifically set forth herein:
(i) As of the Closing Date, this Agreement constitutes a
legal, valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights generally and by the availability
of equitable remedies;
(ii) As of the Closing Date with respect to the Mortgage Loans
and as of the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, either (A) the Purchase Agreement constitutes
a valid transfer and assignment to the Depositor of all right, title
and interest of the Seller in and to the Cut-off Date Asset Balances
with respect to the applicable Mortgage Loans, all monies due or to
become due with respect thereto (excluding payments in respect of
accrued interest due prior to the Cut-off Date or due in the month of
_________), and all proceeds of such Cut-off Date Asset Balances with
respect to the Mortgage Loans and such funds as are from time to time
deposited in the Collection Account (excluding any investment earnings
thereon) and all other property specified in the definition of "Asset"
as being part of the corpus of the Trust conveyed to the Trust by the
Seller, and upon payment for the Additional Balances, will constitute a
valid transfer and assignment to the Trustee of all right, title and
interest of the Seller in and to the Additional Balances, all monies
due or to become due with respect thereto, and all proceeds of such
Additional Balances and all other property specified in the definition
of "Asset" relating to the Additional Balances or (B) the Purchase
Agreement constitutes a grant of a security interest (as defined in the
UCC as in effect in ____________) in such property to the Trustee on
behalf of the Trust. [If the Purchase Agreement constitutes the grant
of a security interest to the Trust in such property, and if the
Trustee obtains and maintains possession of the Mortgage File for each
Mortgage Loan, the Trust shall have a first priority perfected security
interest in such property, subject to the effect of Section 9-306 of
the UCC with respect to collections on the Mortgage Loans that are
deposited in the Collection Account in accordance with the next to last
paragraph of Section 3.02(b)]; provided, however, that nothing in this
clause (ii) shall be construed to obligate the Master Servicer to
deliver any Mortgage Files other than as set forth in Section 2.01
hereof;
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(iii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan and as of the date any Additional Balance is
created, the information set forth in the Mortgage Loan Schedule for
such Mortgage Loans is true and correct in all material respects;
(iv) The applicable Cut-off Date Asset Balance has not been
assigned or pledged, and the Seller is the sole owner and holder of
such Cut-off Date Asset Balance free and clear of any and all liens,
claims, encumbrances, participation interests, equities, pledges,
charges or security interests of any nature, and has full right and
authority, under all governmental and regulatory bodies having
jurisdiction over the ownership of the applicable Mortgage Loan, to
sell, assign or transfer the same pursuant to the Purchase Agreement;
(v) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage Note and the Mortgage
with respect to each Mortgage Loan have not been assigned or pledged,
and the Seller is the sole owner and holder of the Mortgage Loan free
and clear of any and all liens, claims, encumbrances, participation
interests, equities, pledges, charges or security interests of any
nature, and has full right and authority, under all governmental and
regulatory bodies having jurisdiction over the ownership of the
applicable Mortgage Loans, to sell and assign the same pursuant to the
Purchase Agreement;
(vi) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage is a valid and
subsisting first or second lien, as set forth on the Mortgage Loan
Schedule with respect to each related Mortgage Loan, on the property
therein described, and as of the applicable Cut-off Date the related
Mortgaged Property is free and clear of all encumbrances and liens
having priority over the first or second lien, as applicable, of such
Mortgage except for liens for (i) real estate taxes and special
assessments not yet delinquent; (ii) any first mortgage loan secured by
such Mortgaged Property and specified on the Mortgage Loan Schedule;
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording that are
acceptable to mortgage lending institutions generally; and (iv) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage;
(vii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, there is no valid offset, defense or
counterclaim of any obligor under any Credit Line Agreement or
Mortgage;
(viii) To the best knowledge of the Seller, as of the Closing
Date with respect to the Mortgage Loans and the applicable Transfer
Date with respect to any Eligible Substitute Mortgage Loan, there is no
delinquent recording or other tax or fee or assessment lien against any
related Mortgaged Property;
(ix) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, there is no proceeding pending or, to the
best knowledge of the Seller, threatened for the total or partial
condemnation of the related Mortgaged Property, and such property is
free of material damage;
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(x) To the best knowledge of the Seller, as of the Closing
Date with respect to the Mortgage Loans and the applicable Transfer
Date with respect to any Eligible Substitute Mortgage Loan, there are
no mechanics' or similar liens or claims which have been filed for
work, labor or material affecting the related Mortgaged Property which
are, or may be, liens prior or equal to the lien of the related
Mortgage, except liens which are fully insured against by the title
insurance policy referred to in clause (xiv);
(xi) No Minimum Monthly Payment is more than 89 days
delinquent (measured on a contractual basis); and with respect to the
Mortgage Loans no more than _____% (by Cut-off Date Pool Balance) were
30-59 days delinquent (measured on a contractual basis) and no more
than _____% (by Cut-off Date Pool Balance) were 60-89 days delinquent
(measured on a contractual basis);
(xii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, for each Mortgage Loan, the related Mortgage
File contains each of the documents and instruments specified to be
included therein;
(xiii) The related Mortgage Note and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the Mortgage Loan;
(xiv) Either a lender's title insurance policy or binder was
issued on the date of origination of the Mortgage Loan and each such
policy is valid and remains in full force and effect, or a title search
or guaranty of title customary in the relevant jurisdiction was
obtained with respect to a Mortgage Loan as to which no title insurance
policy or binder was issued;
(xv) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, none of the Mortgaged Properties is a mobile
home or a manufactured housing unit that is not considered or
classified as part of the real estate under the laws of the
jurisdiction in which it is located;
(xvi) As of the Cut-off Date for the Mortgage Loans no more
than _____% of such Mortgage Loans, by aggregate principal balance, are
secured by Mortgaged Properties located in one United States postal zip
code;
(xvii) The Combined Loan-to-Value Ratio for each Mortgage Loan
was not in excess of 100%;
(xviii) No selection procedure reasonably believed by the
Seller to be adverse to the interests of the Certificateholders or the
Credit Enhancer was utilized in selecting the Mortgage Loans;
(xix) The Seller has not transferred the Mortgage Loans to the
Trust with any intent to hinder, delay or defraud any of its creditors;
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(xx) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate
on the average daily Asset Balance during the interest period relating
to the date on which such Minimum Monthly Payment is due;
(xxi) Within 90 days of the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing
with respect to the Mortgage Loans, the applicable Transfer Date with
respect to any Eligible Substitute Mortgage Loan, the Seller will file
UCC-1 financing statements with respect to the Mortgage Loans;
(xxii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, each Credit Line Agreement and each Mortgage
Loan is an enforceable obligation of the related Mortgagor, except as
the enforceability thereof may be limited by the bankruptcy, insolvency
or similar laws affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, the Seller has not received a notice of
default of any senior mortgage loan related to a Mortgaged Property
that has not been cured by a party other than the Master Servicer;
(xxiv) The definition of Prime Rate in each Credit Line
Agreement relating to a Mortgage Loan does not differ materially from
the definition in the form of Credit Line Agreement in Exhibit ____;
(xxv) The weighted average remaining term to maturity of the
Mortgage Loans on a contractual basis as of the Cut-off Date for the
Mortgage Loans is approximately ___ months. On each date that the Loan
Rates have been adjusted, interest rate adjustments on the Mortgage
Loans were made in compliance with the related Mortgage and Mortgage
Note and applicable law. Over the term of each Mortgage Loan, the Loan
Rate may not exceed the related Loan Rate Cap, if any. The Loan Rate
Caps range between ____% and ____%. The Margins range between ____% and
____% and the weighted average Margin is approximately ____% as of the
Cut-off Date for the Mortgage Loans. The Loan Rates on such Mortgage
Loans range between ____% and _____% and the weighted average Loan Rate
is approximately _____%.
(xxvi) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, each Mortgaged Property consists of a single
parcel of real property with a one-to-four unit single family residence
erected thereon, or an individual condominium unit, planned unit
development unit or townhouse;
(xxvii) No more than _____% (by Cut-off Date Pool Balance) of
the Mortgage Loans are secured by real property improved by individual
condominium units, planned development units, townhouses or two-to-four
family residences erected thereon, and at least _____% (by Cut-off Date
Pool Balance) of the Mortgage Loans are secured by real property with a
detached one-family residence erected thereon;
(xxviii) The Credit Limits on the Mortgage Loans range between
$________ and $__________ with an average of $_________. As of the
Cut-off Date for the Mortgage Loans, no Mortgage Loan had a principal
balance in excess of approximately $__________ and the average
principal balance of the Mortgage Loans is equal to approximately
$_________; and
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(xxix) Approximately ____% and _____% of the Mortgage Loans,
by aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are first and second liens, respectively.
With respect to the representations and warranties set forth
in this Section 2.04 that have been made to the best of the Seller's knowledge
or as to which the Seller has no knowledge, if it is discovered by the Seller,
the Depositor, the Master Servicer or a Responsible Officer of the Trustee that
the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan then, notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation and warranty being inaccurate at the time the
representation or warranty was made, the Purchase Agreement will provide that
such inaccuracy shall be deemed a breach of the applicable representation or
warranty.
(b) It is understood and agreed that the representations and
warranties described in this Section 2.04 will survive delivery of the
respective Mortgage Files to the Trustee pursuant to Section 2.01 and the
termination of the rights and obligations of the Master Servicer pursuant to
Section 7.04 or 8.02. Upon discovery by the Seller, the Depositor, the Master
Servicer, the Credit Enhancer or a Responsible Officer of the Trustee of a
breach of any of the foregoing representations and warranties (other than the
representation and warranty set forth in Section 2.04(a)(iv) above), without
regard to any limitation set forth therein concerning the knowledge of the
Seller as to the facts stated therein, which materially and adversely affects
the interests of the Trust or the Investor Certificateholders or the Credit
Enhancer in the related Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties and the Credit Enhancer. Within
90 days of its discovery or its receipt of notice of such breach, the Seller
pursuant to the Purchase Agreement shall use all reasonable efforts to cure such
breach in all material respects or shall, not later than the Business Day next
preceding the Distribution Date in the month following the Collection Period in
which any such cure period expired (or such later date that is acceptable to the
Trustee and the Credit Enhancer as evidenced by their written consents), either
(a) accept a transfer of such Mortgage Loan from the Trust or (b) substitute an
Eligible Substitute Mortgage Loan in the same manner and subject to the same
conditions as set forth in Section 2.02; provided, however, that the cure for
any breach of a representation and warranty relating to the characteristics of
the Mortgage Loans in the aggregate shall be a repurchase of or substitution for
only the Mortgage Loans necessary to cause such characteristics to be in
compliance with the related representation and warranty. Upon accepting such
transfer and making any required deposit into the Collection Account or
substitution of an Eligible Substitute Mortgage Loan, as the case may be, the
Seller shall be entitled to receive an instrument of assignment or transfer from
the Trustee to the same extent as set forth in Section 2.02 with respect to the
transfer of Mortgage Loans under that Section.
It is understood and agreed that the obligation of the Seller
to accept a transfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit in the Collection Account or to
substitute an Eligible Substitute Mortgage Loan, as the case may be, shall
constitute the sole remedy against the Seller respecting such breach available
to Investor Certificateholders, the Trustee on behalf of Investor
Certificateholders and the Credit Enhancer; provided, however, that the Seller
shall defend and indemnify the Trustee, the Credit Enhancer and the Investor
Certificateholders against all reasonable costs and expenses, and all losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel and the amount of any settlement entered into with the consent of the
Seller (such consent not to be unreasonably withheld), which may be asserted
against or incurred by any of them as a result of any third-party action arising
out of any breach of any such representation and warranty. Notwithstanding the
foregoing, with regard to any breach of the representation and warranty set
forth in Section 2.04(a)(iv), the sale and assignment of the affected
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Mortgage Loans to the Trust shall be deemed void and the Seller pursuant to the
Purchase Agreement shall pay to the Trust the sum of (i) the amount of the
related Asset Balances, plus unpaid accrued interest on each such Asset Balance
at the applicable Loan Rate to the date of payment and (ii) the amount of any
loss suffered by Certificateholders or the Credit Enhancer with respect to the
affected Mortgage Loans.
Section 2.05. Covenants of the Depositor. The Depositor
hereby covenants that:
(a) Security Interests. Except for the transfer hereunder, the
Depositor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Mortgage Loan,
whether now existing or hereafter created, or any interest therein; the
Depositor will notify the Trustee of the existence of any Lien on any Mortgage
Loan immediately upon discovery thereof; and the Depositor will defend the
right, title and interest of the Trust in, to and under the Mortgage Loans,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Depositor; provided, however, that nothing in this
Section 2.05(a) shall prevent or be deemed to prohibit the Depositor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) Negative Pledge. The Depositor hereby agrees not to
transfer, assign, exchange, pledge, finance, hypothecate, grant a security
interest in or otherwise convey the Transferor Certificates except in accordance
with Sections 6.05 and 7.02.
(c) Additional Indebtedness. So long as the Investor
Certificates are outstanding the Depositor will not incur any debt other than
debt that (i) is non-recourse to the assets of the Depositor other than the
Mortgage Loans specifically pledged as security for such debt, or (ii) is
subordinated in right of payment to the rights of the Investor
Certificateholders or (iii) is assigned a rating by each of the Rating Agencies
that is the same as the then current rating of the Investor Certificates.
(d) Downgrading. The Depositor will not engage in any activity
which would result in a downgrading of the Investor Certificates.
(e) Amendment to Certificate of Incorporation. The Depositor
will not amend its Certificate of Incorporation without prior written notice to
the Rating Agencies and the Credit Enhancer.
(f) Principal Place of Business. The Depositor's principal
place of business is in California and it will not change its principal place of
business without prior written notice to the Rating Agencies.
Section 2.06. Retransfers of Mortgage Loans at Election of
Transferor. Subject to the conditions set forth below, the Transferor may, but
shall not be obligated to, require the retransfer of Mortgage Loans from the
Trust to the Seller as of the close of business on a Distribution Date (the
"Transfer Date"). On the fifth Business Day (the "Transfer Notice Date") prior
to the Transfer Date designated in such notice, the Transferor shall give the
Trustee and the Master Servicer a notice of the proposed retransfer that
contains a list of the Mortgage Loans to be retransferred. Such retransfers of
Mortgage Loans shall be permitted upon satisfaction of the following conditions:
(i) No Rapid Amortization Event has occurred;
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(ii) On the Transfer Notice Date the Transferor
Principal Balance (after giving effect to the removal from the Trust of
the Mortgage Loans proposed to be retransferred) is at least equal to
the Minimum Transferor Interest;
(iii) The transfer of any Mortgage Loans on any
Transfer Date during the Managed Amortization Period shall not, in the
reasonable belief of the Transferor, cause a Rapid Amortization Event
to occur or an event which with notice or lapse of time or both would
constitute a Rapid Amortization Event;
(iv) On or before the Transfer Date, the Transferor
shall have delivered to the Trustee a revised Mortgage Loan Schedule,
reflecting the proposed transfer and the Transfer Date, and the Master
Servicer shall have marked the Electronic Ledger to show that the
Mortgages Loans transferred to the Transferor are no longer owned by
the Trust;
(v) The Transferor shall represent and warrant that
no selection procedures reasonably believed by the Transferor to be
adverse to the interests of the Investor Certificateholders or the
Credit Enhancer were utilized in selecting the Mortgage Loans to be
removed from the Trust;
(vi) In connection with first retransfer of Mortgage
Loans pursuant to this Section, each Rating Agency shall have received
on or prior to the related Transfer Notice Date notice of such proposed
retransfer of Mortgage Loans and, prior to the Transfer Date, shall
have notified the Trustee in writing that such retransfer of Mortgage
Loans would not result in a reduction or withdrawal of its then current
rating of the Investor Certificates without regard to the Policy;
(vii) The Transferor shall have delivered to the
Trustee and the Credit Enhancer an Officer's Certificate certifying
that the items set forth in subparagraphs (i) through (vi), inclusive,
have been performed or are true and correct, as the case may be. The
Trustee may conclusively rely on such Officer's Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein
and shall incur no liability in so relying.
Upon receiving the requisite information from the Transferor, the Master
Servicer shall perform in a timely manner those acts required of it, as
specified above. Upon satisfaction of the above conditions, on the Transfer Date
the Trustee shall deliver, or cause to be delivered, to the Transferor the
Mortgage File for each Mortgage Loan being so transferred, and the Trustee shall
execute and deliver to the Transferor such other documents prepared by the
Transferor as shall be reasonably necessary to transfer such Mortgage Loans to
the Transferor. Any such transfer of the Trust's right, title and interest in
and to Mortgage Loans shall be without recourse, representation or warranty by
or of the Trustee or the Trust to the Transferor.
Section 2.07. Execution and Authentication of Certificates.
The Trustee, on behalf of the Trust, has caused to be executed, authenticated
and delivered to or upon the order of the Depositor, in exchange for the Trust,
concurrently with the sale, assignment and conveyance to the Trustee of the
Trust, Investor Certificates in authorized denominations and the Transferor
Certificates, together evidencing the ownership of the entire Trust.
Section 2.08. Tax Treatment. It is the intention of the
Depositor, the Transferor and the Investor Certificateholders that the Investor
Certificates will be indebtedness of the Transferor for
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federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income. The Transferor, the Depositor,
the Trustee and each Investor Certificateholder (or Certificate Owner) by
acceptance of its Investor Certificate (or, in the case of a Certificate Owner,
by virtue of such Certificate Owner's acquisition of a beneficial interest
therein) agrees to treat the Investor Certificates (or beneficial interest
therein), for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the
Transferor secured by the assets of the Trust and to report the transactions
contemplated by this Agreement on all applicable tax returns in a manner
consistent with such treatment. Each Investor Certificateholder agrees that it
will cause any Certificate Owner acquiring an interest in an Investor
Certificate through it to comply with this Agreement as to treatment of the
Investor Certificates as indebtedness for federal, state and local income and
franchise tax purposes and for purposes of any other tax imposed on or measured
by income. The Trustee will prepare and file all tax reports required hereunder.
Section 2.09. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trustee on behalf of the
Certificateholders and the Credit Enhancer as follows:
(i) This Agreement constitutes a valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by
the Depositor to the Trustee of each Mortgage Loan, the Depositor was
the sole beneficial owner of each Mortgage Loan (insofar as such title
was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has
transferred all right, title and interest in the Mortgage Loans to the
Trustee; and
(iv) The Depositor has not transferred the Mortgage
Loans to the Trustee with any intent to hinder, delay or defraud any of
its creditors.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. The Master Servicer. (a) The Master Servicer
shall service and administer the Mortgage Loans in a manner consistent with the
terms of this Agreement and with general industry practice and shall have full
power and authority, acting alone or through a subservicer, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Master Servicer
shall at all times remain responsible to the Trustee, the Certificateholders and
the Credit Enhancer for the performance of its duties and obligations hereunder
in accordance with the terms hereof. Any amounts received by any subservicer in
respect of a Mortgage Loan shall be deemed to have been received by the Master
Servicer whether or not actually received by it. Without limiting the generality
of the foregoing, the Master Servicer shall continue, and
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is hereby authorized and empowered by the Trustee, to execute and deliver, on
behalf of itself, the Certificateholders and the Trustee, or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties. The Trustee shall,
upon the written request of a Servicing Officer, furnish the Master Servicer
with any powers of attorney and other documents necessary or appropriate to
enable the Master Servicer to carry out its servicing and administrative duties
hereunder. The Master Servicer in such capacity may also consent to the placing
of a lien senior to that of any Mortgage on the related Mortgaged Property,
provided that
(x) such Mortgage succeeded to a first lien position
after the related Mortgage Loan was conveyed to the Trust and,
immediately following the placement of such senior lien, such
Mortgage is in a second lien position and the outstanding
principal amount of the mortgage loan secured by such
subsequent senior lien is no greater than the outstanding
principal amount of the senior mortgage loan secured by the
Mortgaged Property as of the date the related Mortgage Loan
was originated; or
(y) the Mortgage relating to such Mortgage Loan was
in a second lien position as of the Cut-off Date and the new
senior lien secures a mortgage loan that refinances an
existing first mortgage loan and the outstanding principal
amount of the replacement first mortgage loan immediately
following such refinancing is not greater than the outstanding
principal amount of such existing first mortgage loan at the
date of origination of such Mortgage Loan;
provided, further, that such senior lien does not secure a note that provides
for negative amortization. Notwithstanding the foregoing, the Master Servicer
can consent to the placing of liens senior to that of a Mortgage on the related
Mortgaged Property which have a principal balance in excess of the principal
balance of the senior lien it replaces on Mortgage Loans having in the aggregate
Asset Balances not in excess of ___% of the Cut-off Date Pool Balance; provided,
however, that, with respect to Mortgage Loans which as of the Cut-off Date had
combined Loan-to-Value Ratios in excess of ___%, the aggregate Asset Balance of
such Mortgage Loans with respect to which the senior lien may be so modified
shall not exceed _____% of the Cut-off Date Pool Balance (such ___% and _____%
herein referred to as the "Increased Senior Lien Limitation"). Any such increase
to the principal balance of the senior lien shall not exceed the greater of
$_______ and _____% of the principal balance of the senior lien prior to such
increase.
The Master Servicer may also, without prior approval from the
Rating Agencies or the Credit Enhancer, increase the Credit Limits on Mortgage
Loans provided that (i) new appraisals are obtained and the Combined
Loan-to-Value Ratios of the Mortgage Loans after giving effect to such increase
are less than or equal to the Combined Loan-to-Value Ratios or the Mortgage
Loans as of the Cut-off Date and (ii) such increases are consistent with the
Master Servicer's underwriting policies. In addition, the Master Servicer may
increase the Credit Limits on Mortgage Loans having aggregate balances of up to
____% of the aggregate Cut-off Date Pool Balance, without obtaining new
appraisals provided that (i) the increase in the Credit Limit does not cause the
Combined Loan-to-Value Ratios of the Mortgage Loans to exceed _____% and (ii)
the increase is consistent with the Master Servicer's underwriting policies.
Furthermore, the Master Servicer may, without prior approval
from the Rating Agencies and the Credit Enhancer solicit Mortgagors for a
reduction in Loan Rates; provided that the Master Servicer can only reduce such
Loan Rates on up to ____% of the Mortgage Loans by Cut-off Date Pool
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Balance. Any such solicitations shall not result in a reduction in the weighted
average Gross Margin of the Mortgage Loans in the pool by more than ____ basis
points taking into account any such prior reductions.
In addition, the Master Servicer may agree to changes in the
terms of a Mortgage Loan at the request of the Mortgagor provided that such
changes (i) do not materially and adversely affect the interests of
Certificateholders or the Credit Enhancer and (ii) are consistent with prudent
and customary business practice as evidenced by a certificate signed by a
Servicing Officer delivered to the Trustee and the Credit Enhancer.
In addition to the foregoing, the Master Servicer may solicit
Mortgagors to change any other terms of the related Mortgage Loans, provided
that such changes (i) do not materially and adversely affect the interest of
Certificateholders or the Credit Enhancer and (ii) are consistent with prudent
and customary business practice as evidenced by a certificate signed by a
Servicing Officer delivered to the Trustee and the Credit Enhancer. Nothing
herein shall limit the right of the Master Servicer to solicit Mortgagors with
respect to new loans (including mortgage loans) that are not Mortgage Loans.
The relationship of the Master Servicer (and of any successor
to the Master Servicer as servicer under this Agreement) to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) In the event that the rights, duties and obligations of
the Master Servicer are terminated hereunder, any successor to the Master
Servicer in its sole discretion may, to the extent permitted by applicable law,
terminate the existing subservicer arrangements with any subservicer or assume
the terminated Master Servicer's rights under such subservicing arrangements
which termination or assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments.
(a) The Master 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, follow such
collection procedures as it follows with respect to mortgage loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or any
assumption fees or other fees which may be collected in the ordinary course of
servicing such Mortgage Loan and (ii) arrange with a Mortgagor a schedule for
the payment of interest due and unpaid; provided that such arrangement is
consistent with the Master Servicer's policies with respect to the mortgage
loans it owns or services; provided, further, that notwithstanding such
arrangement such Mortgage Loans will be included in the information regarding
delinquent Mortgage Loans set forth in the Servicing Certificate and monthly
statement to Certificateholders pursuant to Section 5.03.
(b) The Master Servicer shall establish and maintain a trust
account (the "Collection Account") titled "___________________________, as
Trustee, in trust for the registered holders of Home Equity Loan Asset Backed
Certificates, Series 199__-__ and _____________________." The Collection Account
shall be an Eligible Account. The Master Servicer shall on the Closing Date
deposit any amounts representing payments on, and any collections in respect of,
the Mortgage Loans received after the Cut-off Date and prior to the Closing Date
(exclusive of payments in respect of accrued interest due on or prior to the
Cut-off Date or due in the month of _________), and thereafter the Master
Servicer shall deposit within two Business Days following receipt thereof the
following payments and collections received or made by it (without duplication):
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(i) all collections on and in respect of the Mortgage
Loans;
(ii) the amounts, if any, deposited to the Collection
Account pursuant to Section 4.05;
(iii) Net Liquidation Proceeds net of any related
Foreclosure Profit;
(iv) Insurance Proceeds (including, for this purpose,
any amount required to be credited by the Master Servicer pursuant to
the last sentence of Section 3.04 and excluding the portion thereof, if
any, that has been applied to the restoration or repair of the related
Mortgaged Property or released to the related Mortgagor in accordance
with the normal servicing procedures of the Master Servicer); and
(v) any amounts required to be deposited therein
pursuant to Section 10.01;
provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Master Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties
payable by Mortgagors, or amounts received by the Master Servicer for the
accounts of Mortgagors for application towards the payment of taxes, insurance
premiums, assessments, excess pay off amounts and similar items. The Master
Servicer shall remit all Foreclosure Profits to the Seller.
The Trustee shall hold amounts deposited in the Collection
Account as trustee for the Certificateholders and for the Credit Enhancer. In
addition, the Master Servicer shall notify the Trustee and the Credit Enhancer
in writing on each Determination Date of the amount of payments and collections
in the Collection Account allocable to Interest Collections and Principal
Collections for the related Distribution Date. Following such notification, the
Master Servicer shall be entitled to withdraw from the Collection Account and
retain any amounts that constitute income and gain realized from the investment
of such payments and collections.
All income and gain realized from any investment in Eligible
Investments of funds in the Collection Account shall be for the benefit of the
Master Servicer and shall be subject to its withdrawal from time to time. The
amount of any losses incurred in respect of the principal amount of any such
investments shall be deposited in the Collection Account by the Master Servicer
out of its own funds immediately as realized.
Section 3.03. Withdrawals from the Collection Account. From
time to time, withdrawals may be made from the Collection Account by the Master
Servicer for the following purposes:
(i) To the Master Servicer as payment for its Servicing Fee
pursuant to Section 3.08;
(ii) To pay to the Master Servicer amounts on deposit in the
Collection Account that are not to be included in the distributions and
payments pursuant to Section 5.01 to the extent provided by the second
to the last and the last paragraph of Section 3.02(b);
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(iii) To make or to permit the Paying Agent to make
distributions and payments pursuant to Section 5.01; and
(iv) Prior to the Collection Period preceding the Rapid
Amortization Commencement Date, to pay to the Seller, the amount of any
Additional Balances as and when created during the related Collection
Period, provided, that the aggregate amount so paid to the Seller in
respect of Additional Balances at any time during any Collection Period
shall not exceed the amount of Principal Collections theretofore
received for such Collection Period minus the amount determined
pursuant to clause (x) of the definition of "Alternative Principal
Payment".
If the Master Servicer deposits in the Collection Account any
amount not required to be deposited therein or any amount in respect of payments
by Mortgagors made by checks subsequently returned for insufficient funds or
other reason for non-payment it may at any time withdraw such amount from the
Collection Account, and any such amounts shall not be included in the amounts to
be deposited in the Collection Account pursuant to Section 3.02(b), any
provision herein to the contrary notwithstanding.
Section 3.04. Maintenance of Hazard Insurance; Property
Protection Expenses. The Master Servicer shall cause to be maintained for each
Mortgage Loan hazard insurance naming the Master Servicer or the related
subservicer as loss payee thereunder providing extended coverage in an amount
which is at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan from time to time or (ii) the combined
principal balance owing on such Mortgage Loan and any mortgage loan senior to
such Mortgage Loan from time to time. The Master Servicer shall also maintain on
property acquired upon foreclosure, or by deed in lieu of foreclosure, hazard
insurance with extended coverage in an amount which is at least equal to the
lesser of (i) the maximum insurable value from time to time of the improvements
which are a part of such property or (ii) the combined principal balance owing
on such Mortgage Loan and any mortgage loan senior to such Mortgage Loan at the
time of such foreclosure or deed in lieu of foreclosure plus accrued interest
and the good-faith estimate of the Master Servicer of related Liquidation
Expenses to be incurred in connection therewith. Amounts collected by the Master
Servicer under any such policies shall be deposited in the Collection Account to
the extent called for by Section 3.02. In cases in which any Mortgaged Property
is located in a federally designated flood area, the hazard insurance to be
maintained for the related Mortgage Loan shall include flood insurance. All such
flood insurance shall be in such amounts as are required under applicable
guidelines of the Federal Flood Emergency Act. The Master Servicer shall be
under no obligation to require that any Mortgagor maintain earthquake or other
additional insurance and shall be under no obligation itself to maintain any
such additional insurance on property acquired in respect of a Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Master
Servicer shall obtain and maintain a blanket policy consistent with prudent
industry standards insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry standards, it shall conclusively
be deemed to have satisfied its obligations as set forth in the first sentence
of this Section 3.04 and there shall have been a loss which would have been
covered by such policy, deposit in the Collection Account, as the case may be,
the amount not otherwise payable under the blanket policy because of such
deductible clause.
Section 3.05. Assumption and Modification Agreements. In any
case in which a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall exercise its right to accelerate the
maturity of such Mortgage Loan consistent with the then current practice of the
Master Servicer and without regard to the inclusion of such Mortgage Loan in the
Trust. If it elects not to enforce its right to accelerate or if it is prevented
from doing so by applicable law, the
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Master Servicer (so long as such action conforms with the underwriting standards
generally acceptable in the industry at the time for new origination) is
authorized to take or enter into an assumption and modification agreement from
or with the Person to whom such Mortgaged Property has been or is about to be
conveyed, pursuant to which such Person becomes liable under the Credit Line
Agreement and, to the extent permitted by applicable law, the Mortgagor remains
liable thereon. The Master Servicer shall notify the Trustee that any assumption
and modification agreement has been completed by delivering to the Trustee an
Officer's Certificate certifying that such agreement is in compliance with this
Section 3.05 and by forwarding to the applicable Custodian, as agent for the
Trustee, the original copy of such assumption and modification agreement. Any
such assumption and modification agreement shall, for all purposes, be
considered a part of the related Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. No change in the terms of
the related Credit Line Agreement may be made by the Master Servicer in
connection with any such assumption to the extent that such change would not be
permitted to be made in respect of the original Credit Line Agreement pursuant
to the fourth paragraph of Section 3.01(a). Any fee collected by the Master
Servicer for entering into any such agreement will be retained by the Master
Servicer as additional servicing compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans. The Master Servicer shall foreclose upon
or otherwise comparably convert to ownership Mortgaged Properties securing such
of the Mortgage Loans as come into and continue in default when, in the opinion
of the Master Servicer based upon the practices and procedures referred to in
the following sentence, no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.02; provided that if the Master
Servicer has actual knowledge or reasonably believes that any Mortgaged Property
is affected by hazardous or toxic wastes or substances and that the acquisition
of such Mortgaged Property would not be commercially reasonable, then the Master
Servicer will not cause the Trust to acquire title to such Mortgaged Property in
a foreclosure or similar proceeding. In connection with such foreclosure or
other conversion, the Master Servicer shall follow such practices (including, in
the case of any default on a related senior mortgage loan, the advancing of
funds to correct such default) and procedures as it shall deem necessary or
advisable and as shall be normal and usual in its general mortgage servicing
activities. The foregoing is subject to the proviso that the Master Servicer
shall not be required to expend its own funds in connection with any foreclosure
or towards the correction of any default on a related senior mortgage loan or
restoration of any property unless it shall determine that such expenditure will
increase Net Liquidation Proceeds.
In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders.
The Master Servicer, in its sole discretion, shall have the
right to purchase for its own account from the Trust any Mortgage Loan which is
91 days or more delinquent at a price equal to the purchase price described
below. The price for any Mortgage Loan purchased hereunder (which shall be
calculated in the same manner set forth in Section 2.02) shall be deposited in
the Collection Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit ___ hereto, shall release or cause to be
released to the Master Servicer the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment prepared by the Master
Servicer, in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and
the Master Servicer shall succeed to all the Trustee's right, title and interest
in and to such Mortgage Loan and all security and documents related thereto.
Such assignment shall be an assignment outright and not for security. The Master
Servicer shall thereupon own such Mortgage
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Loan, and all security and documents, free of any further obligation to the
Trustee, the Credit Enhancer or the Certificateholders with respect thereto.
Section 3.07. Trustee to Cooperate. On or before each
Distribution Date, the Master Servicer will notify the Trustee of the payment in
full of the Asset Balance of any Mortgage Loan during the preceding Collection
Period, which notification shall be by a certification (which certification
shall include a statement to the effect that all amounts received in connection
with such payment which are required to be deposited in the Collection Account
pursuant to Section 3.02 have been so deposited or credited) of a Servicing
Officer. Upon any such payment in full, the Master Servicer is authorized to
execute, pursuant to the authorization contained in Section 3.01, if the
assignments of Mortgage have been recorded as required hereunder, an instrument
of satisfaction regarding the related Mortgage, which instrument of satisfaction
shall be recorded by the Master Servicer if required by applicable law and be
delivered to the Person entitled thereto. It is understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or transfer
shall be reimbursed from amounts deposited in the Collection Account. If the
Trustee is holding the Mortgage Files, from time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, or in connection with the
payment in full of the Asset Balance of any Mortgage Loan, the Trustee shall,
upon request of the Master Servicer and delivery to the Trustee of a Request for
Release substantially in the form attached hereto as Exhibit ___ signed by a
Servicing Officer, release the related Mortgage File to the Master Servicer and
the Trustee shall execute such documents, in the forms provided by the Master
Servicer, as shall be necessary to the prosecution of any such proceedings or
the taking of other servicing actions. Such trust receipt shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released by
the Trustee or such Custodian to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage
securing any Mortgage Loan that is in default following recordation of the
assignments of Mortgage in accordance with the provisions hereof, the Trustee
shall, if so requested in writing by the Master Servicer, execute an appropriate
assignment in the form provided to the Trustee by the Master Servicer to assign
such Mortgage Loan for the purpose of collection to the Master Servicer or to
the related subservicer (any such assignment shall unambiguously indicate that
the assignment is for the purpose of collection only), and, upon such
assignment, the Master Servicer will thereupon bring all required actions in its
own name and otherwise enforce the terms of the Mortgage Loan and deposit the
Net Liquidation Proceeds, exclusive of Foreclosure Profits, received with
respect thereto in the Collection Account. In the event that all delinquent
payments due under any such Mortgage Loan are paid by the Mortgagor and any
other defaults are cured, then the Master Servicer shall promptly reassign such
Mortgage Loan to the Trustee and return the related Mortgage File to the place
where it was being maintained.
Section 3.08. Servicing Compensation; Payment of Certain
Expenses by Master Servicer. The Master Servicer shall be entitled to receive
the Servicing Fee pursuant to Section 3.03 as compensation for its services in
connection with servicing the Mortgage Loans. Moreover, additional servicing
compensation in the form of late payment charges or other receipts not required
to be deposited in the Collection Account (other than Foreclosure Profits) shall
be retained by the Master Servicer. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder
(including payment of all other fees and expenses not expressly stated hereunder
to be for the account of the Certificateholders) and shall not be entitled to
reimbursement therefor except as specifically provided herein. Liquidation
Expenses are reimbursable to the Master Servicer solely from related Liquidation
Proceeds.
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Section 3.09. Annual Statement as to Compliance. (a) The
Master Servicer will deliver to the Trustee, the Credit Enhancer and the Rating
Agencies, on or before _______ of each year, beginning _____________, 19___, an
Officer's Certificate stating that (i) a review of the activities of the Master
Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer has
fulfilled all of its material obligations under this Agreement throughout such
fiscal year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Master Servicer shall deliver to the Trustee, the
Credit Enhancer and each of the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter,
written notice by means of an Officer's Certificate of any event which with the
giving of notice or the lapse of time or both, would become an Event of
Servicing Termination.
Section 3.10. Annual Servicing Report. On or before _________
of each year, beginning ____________, 19___, the Master Servicer, at its
expense, shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Master Servicer) to
furnish a report to the Trustee, the Credit Enhancer and each Rating Agency to
the effect that such firm has examined certain documents and records relating to
the servicing of mortgage loans during the most recent fiscal year then ended
under pooling and servicing agreements (substantially similar to this Agreement,
including this Agreement) that such examination, was conducted substantially in
compliance with the audit guide for audits of non-supervised mortgagees approved
by the Department of Housing and Urban Development for use by independent public
accountants (to the extent that the procedures in such audit guide are
applicable to the servicing obligations set forth in such agreements) and that
such examination has disclosed no items of noncompliance with the provisions of
this Agreement which, in the opinion of such firm, are material, except for such
items of noncompliance as shall be set forth in such report.
Section 3.11. Annual Opinion of Counsel. On or before
_________ of each year, beginning _____________, 19___, each of the Transferor
and the Depositor, at its expense, shall deliver to the Trustee and the Credit
Enhancer the applicable Opinion of Counsel specified in Exhibit E hereto.
Section 3.12. Access to Certain Documentation and Information
Regarding the Mortgage Loans. (a) The Master Servicer shall provide to the
Trustee, the Credit Enhancer, any Investor Certificateholders that are federally
insured savings and loan associations, the Office of Thrift Supervision,
successor to the Federal Home Loan Bank Board, the FDIC and the supervisory
agents and examiners of the Office of Thrift Supervision access to the
documentation regarding the Mortgage Loans required by applicable regulations of
the Office of Thrift Supervision and the FDIC (acting as operator of the SAIF or
the BIF), such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Master Servicer.
Nothing in this Section 3.12 shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Master Servicer to provide
access as provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
(b) The Master Servicer shall supply information in such form
as the Trustee shall reasonably request to the Trustee and the Paying Agent, on
or before the start of the Determination Date preceding the related Distribution
Date, as is required in the Trustee's reasonable judgment to enable the
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Paying Agent or the Trustee, as the case may be, to make required distributions
and to furnish the required reports to Certificateholders and to make any claim
under the Policy.
Section 3.13. Maintenance of Certain Servicing Insurance
Policies. The Master Servicer shall during the term of its service as servicer
maintain in force (i) a policy or policies of insurance covering errors and
omissions in the performance of its obligations as master servicer hereunder and
(ii) a fidelity bond in respect of its officers, employees or agents. Each such
policy or policies and bond together shall comply with the requirements from
time to time of the Federal National Mortgage Association for persons performing
servicing for mortgage loans purchased by such Association.
Section 3.14. Reports to the Securities and Exchange
Commission. The Trustee shall, on behalf of the Trust, cause to be filed with
the Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder. Upon
the request of the Trustee, each of the Master Servicer, the Depositor and the
Transferor shall cooperate with the Trustee in the preparation of any such
report and shall provide to the Trustee in a timely manner all such information
or documentation as the Trustee may reasonably request in connection with the
performance of its duties and obligations under this Section.
Section 3.15. Tax Returns. In accordance with Section 2.08
hereof, the Trustee shall prepare and file any Federal, State or local income
and franchise tax return for the Trust as well as any other applicable return
and apply for a taxpayer identification number on behalf of the Trust. The
Transferor shall treat the Mortgage Loans as its property for all Federal, State
or local tax purposes and shall report all income earned thereon (including
amounts payable as fees to the Master Servicer) as its income for income tax
purposes. In the event the Trust shall be required pursuant to an audit or
administrative proceeding or change in applicable regulations to file Federal,
State or local tax returns, the Trustee shall prepare and file or shall cause to
be prepared and filed any tax returns required to be filed by the Trust; the
Trustee shall promptly sign such returns and deliver such returns after
signature to the Master Servicer and such returns shall be filed by the Master
Servicer. The Trustee shall also prepare or shall cause to be prepared all tax
information required by law to be distributed to Investor Certificateholders. In
no event shall the Trustee or the Master Servicer be liable for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders, the Transferor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation Federal, state or local income and franchise or
excise taxes or any other tax imposed on or measured by income (or any interest
or penalty with respect thereto or arising from a failure to comply therewith).
Section 3.16. Information Required by the Internal Revenue
Service Generally and Reports of Foreclosures and Abandonments of Mortgaged
Property. The Master Servicer shall prepare and deliver all federal and state
information reports when and as required by all applicable state and federal
income tax laws. In particular, with respect to the requirement under Section
6050J of the Code to the effect that the Master Servicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year beginning
in 1997, the Master Servicer shall file reports relating to each instance
occurring during the previous calendar year in which the Master Servicer (i) on
behalf of the Trustee acquires an interest in any Mortgaged Property through
foreclosure or other comparable conversion in full or partial satisfaction of a
Mortgage Loan, or (ii) knows or has reason to know that any Mortgaged Property
has been abandoned. The reports from the Master Servicer shall be in form and
substance sufficient to meet the reporting requirements imposed by Section
6050J.
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ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Servicing Certificate. Not later than each
Determination Date, the Master Servicer shall deliver (a) to the Trustee, the
Statement to Certificateholders required to be prepared pursuant to Section 5.03
and (b) to the Trustee, the Seller, the Depositor, the Paying Agent, the Credit
Enhancer and each Rating Agency a Servicing Certificate (in written form or the
form of computer readable media or such other form as may be agreed to by the
Trustee and the Master Servicer), together with an Officer's Certificate to the
effect that such Servicing Certificate is true and correct in all material
respects, stating the related Collection Period, Distribution Date, the series
number of the Certificates, the date of this Agreement, and:
(i) the aggregate amount of collections received on
the Mortgage Loans on or prior to the Determination Date in respect of
such Collection Period;
(ii) the aggregate amount of (a) Interest Collections
and (b) Principal Collections for such Collection Period;
(iii) the Investor Floating Allocation Percentage and
the Investor Fixed Allocation Percentage for such Collection Period;
(iv) the Investor Interest Collections and Investor
Principal Collections for such Collection Period;
(v) the Transferor Interest Collections and
Transferor Principal Collections for such Collection Period;
(vi) Investor Certificate Interest and the Investor
Certificate Rate for the related Interest Period;
(vii) the amount, if any, of such Investor
Certificate Interest that is not payable on account of insufficient
Investor Interest Collections;
(viii) the portion of the Unpaid Investor Certificate
Interest Shortfall, if any, the amount of interest on such shortfall at
the Certificate Rate applicable from time to time (separately stated)
to be distributed on such Distribution Date;
(ix) the Unpaid Investor Certificate Interest
Shortfall, if any, to remain after the distribution on such
Distribution Date;
(x) the Accelerated Principal Distribution Amount and
the portion thereof that will be distributed pursuant to Section
5.01(a)(vii);
(xi) the Scheduled Principal Collections Distribution
Amount, separately stating the components thereof;
(xii) the amount of any Transfer Deposit Amount paid
by the Seller or the Depositor pursuant to Section 2.02 or 2.04;
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(xiii) any accrued and unpaid Servicing Fees for
previous Collection Periods and the Servicing Fee for such Collection
Period;
(xiv) the Investor Loss Amount for such Collection
Period;
(xv) the aggregate amount, if any, of Investor Loss
Reduction Amounts for previous Distribution Dates that have not been
previously reimbursed to Investor Certificateholders pursuant to
5.01(a)(v);
(xvi) the aggregate Asset Balance of the Mortgage
Loans as of the end of the preceding Collection Period and as of the
end of the second preceding Collection Period;
(xvii) the Pool Balance as of the end of the
preceding Collection Period and as of the end of the second preceding
Collection Period;
(xviii) the Invested Amount as of the end of the
preceding Collection Period;
(xix) the Investor Certificate Principal Balance and
Pool Factor after giving effect to the distribution on such
Distribution Date and to any reduction on account of the Investor Loss
Amount;
(xx) the Transferor Principal Balance after giving
effect to the distribution on such Distribution Date;
(xxi) the aggregate amount of Additional Balances
created during the previous Collection Period;
(xxii) the number and aggregate Asset Balances of
Mortgage Loans (x) as to which the Minimum Monthly Payment is
delinquent for 30-59 days, 60-89 days and 90 or more days, respectively
and (y) that have become REO, in each case as of the end of the
preceding Collection Period;
(xxiii) whether a Rapid Amortization Event has
occurred since the prior Determination Date, specifying each such Rapid
Amortization Event if one has occurred; and
(xxiv) whether an Event of Servicing Termination has
occurred since the prior Determination Date, specifying each such Event
of Servicing Termination if one has occurred;
(xxv) the amount to be distributed to the Credit
Enhancer pursuant to Section 5.01(a)(vi) and Section 5.01(a)(viii)(y),
stated separately;
(xxvi) the amount to be distributed to the Spread
Account pursuant to Section 5.01(a)(viii)(x);
(xxvii) the Guaranteed Principal Distribution Amount
for such Distribution Date;
(xxviii) the Credit Enhancement Draw Amount, if any,
for such Distribution Date;
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(xxix) the amount to be distributed to the Transferor
pursuant to Section 5.01(a)(x);
(xxx) the amount to be paid to the Master Servicer
pursuant to Section 5.01(a)(ix);
(xxxi) the Maximum Rate for the related Collection
Period and the Weighted Average Net Loan Rate;
(xxxii) the total amount of funds on deposit in the
Spread Account and the applicable Spread Account Maximum;
(xxxiii) the expected amount of any optional advances
pursuant to Section 4.05 hereof by the Master Servicer included in the
distribution on such Distribution Date and the aggregate expected
amount of optional advances pursuant to Section 4.05 hereof by the
Master Servicer outstanding as of the close of business on such
Distribution Date;
(xxxiv) the Overcollateralization Amount after giving
effect to the distribution to be made on such Distribution; and
(xxxv) the number and principal balances of any
Mortgage Loans retransferred to the Transferor pursuant to Section
2.06.
The Trustee shall conclusively rely upon the information contained in a
Servicing Certificate for purposes of making distributions pursuant to Section
5.01, shall have no duty to inquire into such information and shall have no
liability in so relying. The format and content of the Servicing Certificate may
be modified by the mutual agreement of the Master Servicer, the Trustee and the
Credit Enhancer. The Master Servicer shall give notice of any such change to the
Rating Agencies.
Section 4.02. Claims upon the Policy; Policy Payments Account.
(a) If, by the close of business on the third Business Day
prior to a Distribution Date, the sum of the funds then on deposit in the
Collection Account for the related Collection Period which are payable to the
Investor Certificateholders pursuant to Sections 5.01(a), (b) and (g) (after
giving effect to the distribution of the Trustee Fee and the Premium), the
amounts on deposit in the Spread Account and the amount, if any, deposited into
the Collection Account pursuant to Section 4.05 are insufficient to pay the
Guaranteed Distribution on such Distribution Date, then the Trustee shall give
notice to the Credit Enhancer by telephone or telecopy of the amount equal to
the Credit Enhancement Draw Amount. Such notice of such sum shall be confirmed
in writing in the form set forth as Exhibit ___ to the Endorsement of the
Policy, to the Credit Enhancer and the Fiscal Agent, if any, at or before 10:00
a.m., New York City time, on the second Business Day prior to such Distribution
Date. Following receipt by the Credit Enhancer of such notice in such form, the
Credit Enhancer or the Fiscal Agent will pay any amount payable under the Policy
on the later to occur of (i) 12:00 noon, New York City time, on the Business Day
following such receipt and (ii) 12:00 noon, New York City time, on the
Distribution Date to which such deficiency relates, as provided in the
Endorsement to the Policy.
(b) The Trustee shall establish a separate special purpose
trust account, which account shall be an Eligible Account, for the benefit of
Holders of the Investor Certificates and the Credit Enhancer referred to herein
as the "Policy Payments Account" over which the Trustee shall have
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exclusive control and sole right of withdrawal. The Trustee shall deposit any
amount paid under the Policy in the Policy Payments Account and distribute such
amount only for purposes of payment to Holders of the Investor Certificates of
the Guaranteed Distribution for which a claim was made and such amount may not
be applied to satisfy any costs, expenses or liabilities of the Master Servicer,
the Trustee or the Trust Fund. Amounts paid under the Policy shall be
transferred to the Collection Account in accordance with the next succeeding
paragraph and disbursed by the Trustee to Holders of Investor Certificates in
accordance with Section 5.01. It shall not be necessary for such payments to be
made by checks or wire transfers separate from the checks or wire transfers used
to pay the Guaranteed Distribution with other funds available to make such
payment. However, the amount of any payment of principal of or interest on the
Investor Certificates to be paid from funds transferred from the Policy Payments
Account shall be noted as provided in paragraph (c) below in the Certificate
Register and in the statement to be furnished to Holders of the Investor
Certificates pursuant to Section 5.03. Funds held in the Policy Payments Account
shall not be invested.
On any Distribution Date with respect to which a claim has
been made under the Policy, the amount of any funds received by the Trustee as a
result of any claim under the Policy, to the extent required to make the
Guaranteed Distribution on such Distribution Date, shall be withdrawn from the
Policy Payments Account and deposited in the Collection Account and applied by
the Trustee, together with the other funds to be withdrawn from the Collection
Account pursuant to Section 5.01 directly to the payment in full of the
Guaranteed Distribution due on the Investor Certificates. Any funds received by
the Trustee shall be used solely for payment to the Holders of Investor
Certificates and may not be applied to satisfy any costs, expenses or
liabilities of the Master Servicer, the Trustee or the Trust. Any funds
remaining in the Policy Payments Account on the first Business Day following a
Distribution Date shall be remitted to the Credit Enhancer, pursuant to the
instructions of the Credit Enhancer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Investor Certificate
from moneys received under the Policy. The Credit Enhancer shall have the right
to inspect such records at reasonable times during normal business hours upon
one Business Day's prior notice to the Trustee.
(d) The Trustee shall promptly notify the Credit Enhancer and
Fiscal Agent of any proceeding or the institution of any action, of which a
Responsible Officer of the Trustee has actual knowledge, seeking the avoidance
as a preferential transfer under applicable bankruptcy, insolvency, receivership
or similar law (a "Preference Claim") of any distribution made with respect to
the Investor Certificates. Each Investor Certificateholder, by its purchase of
Investor Certificates, the Master Servicer and the Trustee hereby agree that,
the Credit Enhancer (so long as no Credit Enhancer Default exists) may at any
time during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Credit Enhancer shall be subrogated to the rights of the Master
Servicer, the Trustee and each Investor Certificateholder in the conduct of any
such Preference Claim, including, without limitation, all rights of any party to
an adversary proceeding action with respect to any court order issued in
connection with any such Preference Claim.
Section 4.03. Spread Account. (a) The Trustee shall establish
and maintain a separate trust account (the "Spread Account") titled
"________________________, as Trustee, in trust for the registered holders of
Revolving Home Equity Loan Asset Backed Certificates, Series 199__-__ and
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_____________________." The Spread Account shall be an Eligible Account. Amounts
on deposit in the Spread Account will, at the direction of the Transferor, be
invested in either Eligible Investments maturing no later than the day before
the next Distribution Date or in the commercial paper (maturing no later than
the day before the next Distribution Date) of
[__________________________________], or any of its Affiliates, provided that
such commercial paper's short-term rating is no lower than "___" and ____ and
the long-term unsecured debt of [____________________________] is rated at least
"____" by _______________, or such lower rating as is agreed to by the Rating
Agencies as evidenced by a letter from each such Rating Agency.
All income and gain realized from any investment of funds in
the Spread Account shall be for the benefit of the Transferor and shall be
subject to its withdrawal from time to time. The amount of any losses incurred
in respect of the principal amount of any such investments shall be deposited in
the Spread Account by the Transferor out of its own funds immediately as
realized.
(b) On each Determination Date the Trustee shall determine (i)
the extent to which Investor Interest Collections and the amounts, if any,
deposited into the Collection Account pursuant to Section 4.05 applied in the
order specified in Section 5.01(a) are insufficient to make distributions as
provided in clauses (iii) and (iv) of Section 5.01(a) and (ii) the Guaranteed
Principal Distribution Amount for the related Distribution Date. On each
Distribution Date the Trustee shall withdraw from the Spread Account and deposit
into the Collection Account the lesser of the amount on deposit in the Spread
Account and an amount equal to the sum of the amounts, if any, determined in
clauses (i) and (ii) of the preceding sentence.
(c) Following the termination of the Trust pursuant to Section
10.01 or 11.02 hereof, the Trustee shall withdraw all amounts then on deposit in
the Spread Account and distribute such amounts first to any amounts due and
owing to the Credit Enhancer and then to the Transferor. If on any Distribution
Date the amount on deposit in the Spread Account exceeds the Spread Account
Maximum, the Trustee shall withdraw such excess and distribute it to the
Transferor.
Section 4.04. Effect of Payments by the Credit Enhancer;
Subrogation. Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any of the Investor Certificates which is
made with moneys received pursuant to the terms of the Policy shall not be
considered payment of such Investor Certificates from the Trust and shall not
result in the payment of or the provision for the payment of the principal of or
interest on such Investor Certificates within the meaning of Section 5.01. The
Depositor, the Master Servicer and the Trustee acknowledge, and each Holder by
its acceptance of an Investor Certificate agrees, that without the need for any
further action on the part of the Credit Enhancer, the Depositor, the Master
Servicer, the Trustee or the Certificate Registrar (a) to the extent the Credit
Enhancer makes payments, directly or indirectly, on account of principal of or
interest on any Investor Certificates to the Holders of such Certificates, the
Credit Enhancer will be fully subrogated to the rights of such Holders to
receive such principal and interest from the Trust and (b) the Credit Enhancer
shall be paid such principal and interest but only from the sources and in the
manner provided herein for the payment of such principal and interest.
The Trustee and the Master Servicer shall cooperate in all
respects with any reasonable request by the Credit Enhancer for action to
preserve or enforce the Credit Enhancer's rights or interests under this
Agreement without limiting the rights or affecting the interests of the Holders
as otherwise set forth herein.
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Section 4.05. Optional Advances of the Master Servicer. The
Master Servicer, in its sole discretion, may advance the interest component of
any delinquent Minimum Monthly Payment (or any portion thereof) by depositing
such amount into the Collection Account on or prior to the Determination Date.
ARTICLE V
PAYMENTS AND STATEMENTS TO
CERTIFICATEHOLDERS; RIGHTS OF CERTIFICATEHOLDERS
Section 5.01. Distributions.
(a) Distributions of Investor Interest Collections and
Investment Proceeds. Subject to Section 11.02(b), on each Distribution Date, the
Trustee or the Paying Agent, as the case may be, shall distribute out of the
Collection Account to the extent of Investor Interest Collections collected
during the related Collection Period and the amounts transferred from the Spread
Account as determined pursuant to Section 4.03(b) and the amount, if any,
deposited into the Collection Account pursuant to Section 4.05, the following
amounts and in the following order of priority to the following Persons (based
on the information set forth in the Servicing Certificate):
(i) the Trustee Fee for such Distribution Date to the
Trustee;
(ii) the premium pursuant to the Insurance Agreement
to the Credit Enhancer;
(iii) the Investor Certificate Interest for such
Distribution Date to the Investor Certificateholders and the Unpaid
Investor Certificate Interest Shortfall, if any, for such Distribution
Date to the Investor Certificateholders plus, to the extent legally
permissible, interest thereon at the Investor Certificate Rate;
(iv) the Investor Loss Amount for such Collection
Period to the Investor Certificateholders as principal in reduction of
the Investor Certificate Principal Balance;
(v) to Investor Certificateholders as principal in
reduction of the Investor Certificate Principal Balance the aggregate
amount of the Investor Loss Reduction Amounts, if any, for previous
Distribution Dates that have not been previously reimbursed to Investor
Certificateholders pursuant to this clause (v);
(vi) to reimburse the Credit Enhancer for previously
unreimbursed Credit Enhancement Draw Amounts together with interest
thereon at the applicable rate set forth in the Insurance Agreement;
(vii) the Accelerated Principal Distribution Amount,
if any, to the Investor Certificateholders;
(viii) (x) to the Trustee to deposit to the Spread
Account up to the Spread Account Maximum and (y) to the Credit Enhancer
for any amounts owed to the Credit Enhancer pursuant to the Insurance
Agreement;
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(ix) any amount required to be paid to the Master
Servicer pursuant to Section 7.03 which has not been previously paid to
the Master Servicer; and
(x) any remaining amount to the Transferor.
(b) Distribution of Principal Collections. Subject to Section
11.02(b) and except on the Distribution Date in __________ 20___, on each
Distribution Date, the Trustee shall distribute out of the Collection Account to
the Investor Certificateholders the Principal Collections (including amounts
transferred thereto from the Spread Account pursuant to Section 4.03(b) in
respect of the amount determined pursuant to Section 4.03(b)(ii) up to the
Scheduled Principal Collections Distribution Amount but not in excess of the
Investor Certificate Principal Balance. On the Distribution Date in ____________
20___, the Trustee shall distribute to Investor Certificateholders Principal
Collections up to the Investor Certificate Principal Balance.
(c) Reserved.
(d) Distribution of the Credit Enhancement Draw Amount: With
respect to any Distribution Date, to the extent that Investor Interest
Collections and amounts transferred from the Spread Account on the related
Distribution Date in respect of the amount determined pursuant to Section
4.03(b)(i) and any amounts, if any, deposited to the Collection Account pursuant
to Section 4.05 applied in the order specified in Section 5.01(a) are
insufficient to make distributions as provided in clause (iii) of Section
5.01(a) above, the Trustee will make such payments (the "Deficiency Amount")
from the amount drawn under the Policy for such Distribution Date pursuant to
Section 4.02. For any Distribution Date as to which there is a Guaranteed
Principal Distribution Amount, the Trustee shall distribute the Guaranteed
Principal Distribution Amount to Certificateholders from the amount drawn under
the Policy for such Distribution Date pursuant to Section 4.02.
The aggregate amount of principal distributed to the Investor
Certificateholders under this Agreement shall not exceed the Original Investor
Certificate Principal Balance.
(e) Method of Distribution. The Trustee shall make
distributions in respect of a Distribution Date to each Investor
Certificateholder of record on the related Record Date (other than as provided
in Section 10.01 respecting the final distribution) by check or money order
mailed to such Investor Certificateholder at the address appearing in the
Certificate Register, or upon written request by an Investor Certificateholder
delivered to the Trustee at least five Business Days prior to such Record Date,
by wire transfer (but only if such Certificateholder is the Depository or such
Certificateholder owns of record one or more Investor Certificates having
principal denominations aggregating at least $______________), or by such other
means of payment as such Investor Certificateholder and the Trustee shall agree.
Distributions among Investor Certificateholders shall be made in proportion to
the Percentage Interests evidenced by the Investor Certificates held by such
Investor Certificateholders.
(f) Distributions on Book-Entry Certificates. Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to the accounts
of its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of
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the Investor Certificates. None of the Trustee, the Paying Agent, the
Certificate Registrar, the Depositor, the Credit Enhancer or the Master Servicer
shall have any responsibility therefor except as otherwise provided by
applicable law.
(g) Distributions to Holders of Transferor Certificates. On
each Distribution Date, the Trustee shall, based upon the information set forth
in the Servicing Certificate for such Distribution Date, distribute to the
Transferor (i) the Transferor Interest Collections for the related Collection
Period and (ii) the portion, if any, of Transferor Principal Collections for the
related Collection Period in excess of Additional Balances created during such
Collection Period; provided that collections allocable to the Transferor
Certificates will be distributed to the Transferor only to the extent that such
distribution will not reduce the amount of the Transferor Principal Balance as
of the related Distribution Date below the Minimum Transferor Interest. Amounts
not distributed to the Transferor because of such limitations will be retained
in the Collection Account until the Transferor Principal Balance exceeds the
Minimum Transferor Interest, at which time such excess shall be released to the
Transferor. If any such amounts are still retained in the Collection Account
upon the commencement of the Rapid Amortization Period, such amounts will be
paid to the Investor Certificateholders as a reduction of the Investor
Certificate Principal Balance.
Section 5.02. Calculation of the Investor Certificate Rate. On
the [second LIBOR Business Day immediately preceding each Distribution Date, the
Trustee shall determine LIBOR] for the Interest Period commencing on such
Distribution Date and inform the Master Servicer (at the facsimile number given
to the Trustee in writing) of such rates. On each Determination Date, the
Trustee shall determine the applicable Investor Certificate Rate for the related
Distribution Date.
Section 5.03. Statements to Certificateholders. Concurrently
with each distribution to Investor Certificateholders, the Trustee shall forward
to each Investor Certificateholder, the Master Servicer and each Rating Agency a
statement prepared by the Master Servicer pursuant to Section 4.01 with respect
to such distribution setting forth:
(i) the Investor Floating Allocation Percentage for
the preceding Collection Period;
(ii) the Investor Certificate Distribution Amount;
(iii) the amount of Investor Certificate Interest in
such distribution and the related Investor Certificate Rate;
(iv) the amount, if any, of any Unpaid Investor
Certificate Interest Shortfall in such distribution;
(v) the amount, if any, of the remaining Unpaid
Investor Certificate Interest Shortfall after giving effect to such
distribution;
(vi) the amount, if any, of principal in such
distribution, separately stating the components thereof;
(vii) the amount, if any, of the reimbursement of
previous Investor Loss Reduction Amounts in such distribution;
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(viii) the amount, if any, of the aggregate of
unreimbursed Investor Loss Reduction Amounts after giving effect to
such distribution;
(ix) the Servicing Fee for such Distribution Date;
(x) the Invested Amount, the Investor Certificate
Principal Balance and the Pool Factor, each after giving effect to such
distribution;
(xi) the Pool Balance as of the end of the preceding
Collection Period and the aggregate of the Asset Balances of the
Mortgage Loans at the close of business on the last day of the related
Collection Period;
(xii) the Credit Enhancement Draw Amount, if any;
(xiii) the number and aggregate Asset Balances of
Mortgage Loans as to which the Minimum Monthly Payment is delinquent
for 30-59 days, 60-89 days and 90 or more days, respectively, as of the
end of the preceding Collection Period;
(xiv) the book value (within the meaning of 12 C.F.R.
ss. 571.13 or comparable provision) of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure;
(xv) the amount of any optional advances pursuant to
Section 4.05 hereof by the Master Services included in the distribution
on such Distribution Date and the aggregate amount of optional advances
pursuant to Section 4.05 hereof by the Master Services outstanding as
of the close of business on such Distribution Date;
(xvi) the Investor Certificate Rate applicable to the
distribution on the following Distribution Date;
(xvii) the number and principal balances of any
Mortgage Loans retransferred to the Transferor pursuant to (a) Section
2.04 and (b) Section 2.06.
In the case of information furnished pursuant to clauses (ii)
and (iii) in respect of Investor Certificate Interest, (iv) and (viii) above,
the amounts shall be expressed as a dollar amount per Investor Certificate with
a $1,000 denomination.
Within 60 days after the end of each calendar year, the Master
Servicer shall prepare or cause to be prepared and shall forward to the Trustee
the information set forth in clauses (iii) and (vi) above aggregated for such
calendar year. Such obligation of the Master Servicer shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Master Servicer or a Paying Agent pursuant to any requirements
of the Code.
The Trustee shall prepare or cause to be prepared (in a manner
consistent with the treatment of the Investor Certificates as indebtedness of
the Transferor, or as may be otherwise required by Section 3.15) Internal
Revenue Service Form 1099 (or any successor form) and any other tax forms
required to be filed or furnished to Certificateholders in respect of
distributions by the Trustee (or the Paying Agent) on the Investor Certificates
and shall file and distribute such forms as required by law.
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Section 5.04. Rights of Certificateholders. The Investor
Certificates shall represent fractional undivided interests in the Trust,
including the benefits of the Collection Account and the right to receive
Investor Interest Collections, Principal Collections and other amounts at the
times and in the amounts specified in this Agreement; the Transferor
Certificates shall represent the remaining interest in the Trust.
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates. The Investor Certificates and
Transferor Certificates shall be substantially in the forms set forth in
Exhibits A and B, respectively, and shall, on original issue, be executed,
authenticated and delivered by the Trustee to or upon the order of the Depositor
concurrently with the sale and assignment to the Trustee of the Trust. The
Investor Certificates shall be initially evidenced by one or more certificates
representing the entire Original Investor Certificate Principal Balance and
shall be held in minimum dollar denominations of $1,000 and integral dollar
multiples in excess thereof, except that one Investor Certificate may be in a
different denomination of less than $1,000 so that the sum of the denominations
of all outstanding Investor Certificates shall equal the Original Investor
Certificate Principal Balance. The sum of the denominations of all outstanding
Investor Certificates shall equal the Original Investor Certificate Principal
Balance. The Transferor Certificates shall be issuable as one or more
certificates representing the entire interest in the assets of the Trust other
than that represented by the Investor Certificates and shall initially be issued
to the Seller.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer under its seal
imprinted thereon. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Trustee shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Transferor Certificates or did not hold such
offices at the date of such Transferor Certificate. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless such Certificate shall have been manually authenticated by the Trustee
substantially in the form provided for herein, and such authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. Subject to Section
6.02(c), the Investor Certificates shall be Book-Entry Certificates. The
Transferor Certificates shall not be Book-Entry Certificates.
Section 6.02. Registration of Transfer and Exchange of
Investor Certificates; Appointment of Registrar. (a) The Certificate Registrar
shall cause to be kept at the Corporate Trust Office a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Investor
Certificates and of transfers and exchanges of Investor Certificates as herein
provided. The Trustee shall initially serve as Certificate Registrar for the
purpose of registering Investor Certificates and transfers and exchanges of
Investor Certificates as herein provided.
Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Certificate Registrar maintained for
such purpose pursuant to the foregoing paragraph, the Trustee on behalf of the
Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Investor Certificates of the same
aggregate Percentage Interest.
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At the option of the Investor Certificateholders, Investor
Certificates may be exchanged for other Investor Certificates in authorized
denominations and the same aggregate Percentage Interests, upon surrender of the
Investor Certificates to be exchanged at any such office or agency. Whenever any
Investor Certificates are so surrendered for exchange, the Trustee shall execute
and authenticate and deliver the Investor Certificates which the Investor
Certificateholder making the exchange is entitled to receive. Every Investor
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) below, the BookEntry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Investor Certificates
may not be transferred by the Trustee except to another Depository; (ii) the
Depository shall maintain book-entry records with respect to the Certificate
Owners and with respect to ownership and transfers of such Investor
Certificates; (iii) ownership and transfers of registration of the Investor
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall deal with the Depository as representative of the Certificate
Owners of the Investor Certificates for purposes of exercising the rights of
Holders under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement the terms of
this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as Depository, and (y) the Trustee or the
Depositor is unable to locate a qualified successor, (ii) the Depositor, at its
sole option, with the consent of the Trustee, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of an Event of
Servicing Termination, the Depository, at the direction of Certificate Owners
representing Percentage Interests aggregating not less than 51% advises the
Trustee in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered Investor
Certificates (the "Definitive Certificates") to Certificate Owners is no longer
in the best interests of the Certificate Owners. Upon surrender to the
Certificate Registrar of the Investor Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall execute and authenticate the Definitive Certificates. Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed
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to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates, and the Trustee, the Certificate
Registrar, the Master Servicer and the Depositor shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder.
No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
All Investor Certificates surrendered for registration of
transfer or exchange shall be cancelled by the Certificate Registrar and
disposed of pursuant to its standard procedures.
Section 6.03. Mutilated, Destroyed, Lost or Stolen
Certificates. If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section 6.03, the Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Certificate Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 6.03, shall constitute
complete and indefeasible evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 6.04. Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Master Servicer, the
Depositor, the Trustee, the Certificate Registrar, any Paying Agent and any
agent of the Master Servicer, the Depositor, the Trustee, any Paying Agent or
the Certificate Registrar may treat the Person, including a Depository, in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 5.01 and for all other
purposes whatsoever, and none of the Master Servicer, the Depositor, the
Trustee, the Certificate Registrar, any Paying Agent or any agent of any of them
shall be affected by notice to the contrary.
Section 6.05. Restrictions on Transfer of Transferor
Certificates. (a) The Transferor Certificates shall be assigned, transferred,
exchanged, pledged, financed, hypothecated or otherwise conveyed (collectively,
for purposes of this Section 6.05 and any other Section referring to the
Transferor Certificates, "transferred" or a "transfer") only in accordance with
this Section 6.05.
(b) No transfer of a Transferor Certificate shall be made
unless such transfer is exempt from the registration requirements of the
Securities Act of 1933, as amended, and any applicable state securities laws or
is made in accordance with said Act and laws. Except for the initial issuance of
the Transferor Certificate to the Transferor, the Trustee shall require (i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Trustee certifying to the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee or (ii) if the investment letter is not delivered, a written Opinion
of Counsel acceptable to and in form and substance satisfactory to the Trustee
and the Depositor that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from said Act or is
being made
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pursuant to said Act, which Opinion of Counsel shall not be an expense of the
Trustee or the Depositor. The Holder of a Transferor Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Transferor
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(c) The Transferor Certificates and any interest therein shall
not be transferred except upon satisfaction of the following conditions
precedent: (i) the Person that acquires a Transferor Certificate shall (A) be
organized and existing under the laws of the United States of America or any
state or the District of Columbia thereof, (B) expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, the performance of
every covenant and obligation of the Transferor hereunder and (C) as part of its
acquisition of a Transferor Certificate, acquire all rights of the Transferor or
any transferee under this Section 6.05(c) to amounts payable to such Transferor
or such transferee under Sections 5.01(a)(x) and 5.01(g); (ii) the Holder of the
Transferor Certificates shall deliver to the Trustee an Officer's Certificate
stating that such transfer and such supplemental agreement comply with this
Section 6.05(c) and that all conditions precedent provided by this subsection
6.05(c) have been complied with and an Opinion of Counsel stating that all
conditions precedent provided by this subsection 6.05(c) have been complied
with, and the Trustee may conclusively rely on such Officer's Certificate, shall
have no duty to make inquiries with regard to the matters set forth therein and
shall incur no liability in so relying; (iii) the Holder of the Transferor
Certificates shall deliver to the Trustee a letter from each Rating Agency
confirming that its rating of the Investor Certificates, after giving effect to
such transfer, will not be reduced or withdrawn without regard to the Policy;
(iv) the transferee of the Transferor Certificates shall deliver to the Trustee
an Opinion of Counsel to the effect that (a) such transfer will not adversely
affect the treatment of the Investor Certificates after such transfer as debt
for federal and applicable state income tax purposes, (b) such transfer will not
result in the Trust being subject to tax at the entity level for federal or
applicable state tax purposes, (c) such transfer will not have any material
adverse impact on the federal or applicable state income taxation of an Investor
Certificateholder or any Certificate Owner and (d) such transfer will not result
in the arrangement created by this Agreement or any "portion" of the Trust,
being treated as a taxable mortgage pool as defined in Section 7701(i) of the
Code; (v) all filings and other actions necessary to continue the perfection of
the interest of the Trust in the Mortgage Loans and the other property conveyed
hereunder shall have been taken or made and (vi) the transferee shall have
assumed the obligations of the Transferor pursuant to Section 7.07 hereof.
Notwithstanding the foregoing, the requirement set forth in subclause (i)(A) of
this Section 6.05(c) shall not apply in the event the Trustee shall have
received a letter from each Rating Agency confirming that its rating of the
Investor Certificates, after giving effect to a proposed transfer to a Person
that does not meet the requirement set forth in subclause (i)(A), shall not be
reduced or withdrawn. Notwithstanding the foregoing, the requirements set forth
in this paragraph (c) shall not apply to the initial issuance of the Transferor
Certificates to the Transferor.
(d) Except for the initial issuance of the Transferor
Certificate to the Transferor, no transfer of a Transferor Certificate shall be
made unless the Trustee shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, nor a Person acting on
behalf of any such plan, which representation letter shall not be an expense of
the Trustee, (ii) if the purchaser is an insurance company, a representation
that the purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under PTCE 95-60, or (iii) in the case of any Transferor Certificate presented
for registration in the name of an employee benefit plan subject to ERISA, and
Section 4975 of the Code (or comparable
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provisions of any subsequent enactments), or a trustee of any such plan, an
Opinion of Counsel to the effect that the purchase or holding of such
Certificate will not result in the assets of the Trust being deemed to be "plan
assets" and subject to the prohibited transaction provisions of ERISA and the
Code and will not subject the Trustee to any obligation in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee or the Depositor.
Section 6.06. Appointment of Paying Agent. (a) The Paying
Agent shall make distributions to Investor Certificateholders from the
Collection Account pursuant to Section 5.01 and shall report the amounts of such
distributions to the Trustee. The duties of the Paying Agent may include the
obligation (i) to withdraw funds from the Collection Account pursuant to Section
3.03 and for the purpose of making the distributions referred to above and (ii)
to distribute statements and provide information to Certificateholders as
required hereunder. The Paying Agent hereunder shall at all times be a
corporation duly incorporated and validly existing under the laws of the United
States of America or any state thereof, authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal or
state authorities. The Paying Agent shall initially be the Trustee. The Trustee
may appoint a successor to act as Paying Agent, which appointment shall be
reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than
the Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Investor Certificateholders in trust
for the benefit of the Investor Certificateholders entitled thereto until such
sums shall be paid to such Certificateholders and shall agree that it shall
comply with all requirements of the Code regarding the withholding of payments
in respect of Federal income taxes due from Certificate Owners and otherwise
comply with the provisions of this Agreement applicable to it.
Section 6.07. Acceptance of Obligations. The Transferor, by
its acceptance of the Transferor Certificates, agrees to be bound by and to
perform all the duties of the Transferor set forth in this Agreement.
ARTICLE VII
THE MASTER SERVICER AND THE DEPOSITOR
Section 7.01. Liability of the Master Servicer and the
Depositor. The Master Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Master Servicer herein. The Depositor shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Depositor.
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor. Any corporation into which
the Master Servicer or the Depositor may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Master Servicer or the Depositor shall be a party, or any corporation succeeding
to the business of the Master Servicer or the Depositor, shall be the successor
of the Master Servicer or the Depositor, as the case may be, hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
Section 7.03. Limitation on Liability of the Master Servicer
and Others. Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from
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the taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties of the Master Servicer or by
reason of reckless disregard of obligations and duties of the Master Servicer
hereunder. The Master Servicer and any director or officer or employee or agent
of the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to duties to service the Mortgage Loans in accordance with this
Agreement, and which in its opinion may involve it in any expense or liability;
provided, however, that the Master Servicer may in its sole discretion undertake
any such action which it may deem necessary or desirable in respect of this
Agreement, and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the reasonable legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust and the Master Servicer shall only
be entitled to be reimbursed therefor pursuant to Section 5.01(a)(ix). The
Master Servicer's right to indemnity or reimbursement pursuant to this Section
7.03 shall survive any resignation or termination of the Master Servicer
pursuant to Section 7.04 or 8.01 with respect to any losses, expenses, costs or
liabilities arising prior to such resignation or termination (or arising from
events that occurred prior to such resignation or termination).
Section 7.04. Master Servicer Not to Resign. Subject to the
provisions of Section 7.02, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) upon determination that
the performance of its obligations or duties hereunder are no longer permissible
under applicable law or are in material conflict by reason of applicable law
with any other activities carried on by it or its subsidiaries or Affiliates,
the other activities of the Master Servicer so causing such a conflict being of
a type and nature carried on by the Master Servicer or its subsidiaries or
Affiliates at the date of this Agreement or (ii) upon satisfaction of the
following conditions: (a) the Master Servicer has proposed a successor servicer
to the Trustee in writing and such proposed successor servicer is reasonably
acceptable to the Trustee; (b) each Rating Agency shall have delivered a letter
to the Trustee prior to the appointment of the successor servicer stating that
the proposed appointment of such successor servicer as Master Servicer hereunder
will not result in the reduction or withdrawal of the then current rating of the
Investor Certificates without regard to the Policy; and (c) such proposed
successor servicer is reasonably acceptable to the Credit Enhancer, as evidenced
by a letter to the Trustee; provided, however, that no such resignation by the
Master Servicer shall become effective until the Trustee or successor servicer
designated by the Master Servicer as provided above shall have assumed the
Master Servicer's responsibilities and obligations hereunder or the Trustee
shall have designated a successor servicer in accordance with Section 8.02. Any
such resignation shall not relieve the Master Servicer of responsibility for any
of the obligations specified in Sections 8.01 and 8.02 as obligations that
survive the resignation or termination of the Master Servicer. Any such
determination permitting the resignation of the Master Servicer pursuant to
clause (i) above shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee and the Credit Enhancer. The Master Servicer shall have
no claim (whether by
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subrogation or otherwise) or other action against any Certificateholder or the
Credit Enhancer for any amounts paid by the Master Servicer pursuant to any
provision of this Agreement.
Section 7.05. Delegation of Duties. In the ordinary course of
business, the Master Servicer at any time may delegate any of its duties
hereunder to any Person, including any of its Affiliates, or any subservicer
referred to in Section 3.01, who agrees to conduct such duties in accordance
with standards comparable to those with which the Master Servicer complies
pursuant to Section 3.01. Such delegation shall not relieve the Master Servicer
of its liabilities and responsibilities with respect to such duties and shall
not constitute a resignation within the meaning of Section 7.04.
Section 7.06. Indemnification of the Trust by the Master
Servicer. The Master Servicer shall indemnify and hold harmless the Trust and
the Trustee from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of the Master Servicer's activities or omissions
in servicing or administering the Mortgage Loans that are not in accordance with
this Agreement, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
7.06 shall survive termination of this Agreement.
Section 7.07. Indemnification of the Trust by the Transferor.
Notwithstanding anything to the contrary contained herein, the Transferor (i)
agrees to be liable directly to the injured party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than those
attributable to an Investor Certificateholder in the capacity as an investor in
the Investor Certificates as a result of defaults on the Mortgage Loans) to the
extent that the Transferor would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the Transferor was
a general partner and (ii) shall indemnify and hold harmless the Trust and the
Trustee from and against any loss, liability, expense, damage, claim or injury
(other than those attributable to an Investor Certificateholder in the capacity
as an investor in the Investor Certificates as a result of defaults on the
Mortgage Loans) arising out of or based on this Agreement by reason of any acts,
omissions, or alleged acts or omissions arising out of activities of the Trust
or the Trustee, or the actions of the Master Servicer including, but not limited
to, amounts payable to the Master Servicer pursuant to Section 7.03, any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided that the Transferor shall not indemnify
the Trustee (but shall indemnify any other injured party) if such loss,
liability, expense, damage or injury is due to the Trustee's willful
malfeasance, bad faith or gross negligence or by reason of the Trustee's
reckless disregard of its obligations hereunder. The provisions of this
indemnity shall run directly to and be enforceable by an injured party subject
to the limitations hereof.
Section 7.08. Limitation on Liability of the Transferor. None
of the directors or officers or employees or agents of the Transferor shall be
under any liability to the Trust, the Trustee or the Certificateholders, it
being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the execution of this
Agreement and the issuance of the Certificates; provided, however, that this
provision shall not protect any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of the duties hereunder. Except as provided in
Section 7.07, the Transferor shall not be under any liability to the Trust, the
Trustee or the Certificateholders for any action taken or for refraining from
the taking of any action in its capacity as Transferor pursuant to this
Agreement whether arising
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from express or implied duties under this Agreement; provided, however, that
this provision shall not protect the Transferor against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties hereunder. The Transferor and any director or
officer or employee or agent of the Transferor may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
ARTICLE VIII
SERVICING TERMINATION
Section 8.01. Events of Servicing Termination. If any one of
the following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Master Servicer to deposit in
the Collection Account any deposit required to be made under the terms
of this Agreement which continues unremedied for a period of five
Business Days after the date upon which written notice of such failure
shall have been given to the Master Servicer by the Trustee or to the
Master Servicer and the Trustee by the Credit Enhancer or Holders of
Investor Certificates evidencing Percentage Interests aggregating not
less than 25%; or
(ii) Failure on the part of the Master Servicer duly
to observe or perform in any material respect any other covenants or
agreements of the Master Servicer set forth in the Certificates or in
this Agreement, which failure continues unremedied for a period of 60
days after the date on which written notice of such failure, requiring
the same to be remedied, and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Master Servicer by the
Trustee or to the Master Servicer and the Trustee by the Credit
Enhancer or the Holders of Investor Certificates evidencing Percentage
Interests aggregating not less than 25%; or
(iii) The entry against the Master Servicer of a
decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(iv) The consent by the Master Servicer to the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to substantially all
of its property; or the Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Master Servicer, with respect to
an Event of Servicing Termination specified in (i) - (iv), above, either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating not less than 51%, by notice then given in
writing to the Master Servicer
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(and to the Trustee if given by the Credit Enhancer or the Holders of Investor
Certificates) may terminate all of the rights and obligations of the Master
Servicer as servicer under this Agreement. Any such notice to the Master
Servicer shall also be given to each Rating Agency and the Credit Enhancer. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Certificates or the Mortgage Loans or otherwise, shall pass to
and be vested in the Trustee pursuant to and under this Section 8.01; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and related documents, or otherwise. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Master Servicer hereunder, including, without limitation, the
transfer to the Trustee for the administration by it of all cash amounts that
shall at the time be held by the Master Servicer and to be deposited by it in
the Collection Account, or that have been deposited by the Master Servicer in
the Collection Account or thereafter received by the Master Servicer with
respect to the Mortgage Loans. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Mortgage Files to
the successor Master Servicer and amending this Agreement to reflect such
succession as Master Servicer pursuant to this Section 8.01 shall be paid by the
predecessor Master Servicer (or if the predecessor Master Servicer is the
Trustee, the initial Master Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of
performance under Section 8.01(i) for a period of ten Business Days or under
Section 8.01(ii) for a period of 60 Business Days, shall not constitute an Event
of Servicing Termination if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Master Servicer and such delay or
failure was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Master Servicer from using its best
efforts to perform its respective obligations in a timely manner in accordance
with the terms of this Agreement and the Master Servicer shall provide the
Trustee, the Transferor, the Credit Enhancer and the Investor Certificateholders
with an Officers' Certificate giving prompt notice of such failure or delay by
it, together with a description of its efforts to so perform its obligations.
The Master Servicer shall immediately notify the Trustee in writing of any
Events of Servicing Termination.
Section 8.02. Trustee to Act; Appointment of Successor. (a) On
and after the time the Master Servicer receives a notice of termination pursuant
to Section 8.01 or 7.04, the Trustee shall be the successor in all respects to
the Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof. Notwithstanding the above, if the
Trustee becomes the Master Servicer hereunder, it shall have no responsibility
or obligation (i) of repurchase or substitution with respect to any Mortgage
Loan, (ii) with respect to any representation or warranty of the Master
Servicer, and (iii) for any act or omission of either a predecessor or successor
Master Servicer other than the Trustee. As compensation therefor, the Trustee
shall be entitled to such compensation as the Master Servicer would have been
entitled to hereunder if no such notice of termination had been given. In
addition, the Trustee will be entitled to compensation with respect to its
expenses in connection with conversion of certain information, documents and
record keeping, as provided in Section 7.04(b). Notwithstanding the above, (i)
if the Trustee is unwilling to act as successor Master Servicer, or (ii) if the
Trustee is legally unable so to act, the Trustee may (in the situation described
in clause (i)) or shall (in the situation described in clause (ii))
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appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $______________ as
the successor to the Master Servicer hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Master Servicer
hereunder; provided that any such successor Master Servicer shall be acceptable
to the Credit Enhancer, as evidenced by the Credit Enhancer's prior written
consent, which consent shall not be unreasonably withheld; and provided further
that the appointment of any such successor Master Servicer will not result in
the qualification, reduction or withdrawal of the ratings assigned to the
Certificates by the Rating Agencies without regard to the Policy. Pending
appointment of a successor to the Master Servicer hereunder, unless the Trustee
is prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.08 (or such lesser compensation as
the Trustee and such successor shall agree). The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) Any successor, including the Trustee, to the Master
Servicer as servicer shall during the term of its service as servicer (i)
continue to service and administer the Mortgage Loans for the benefit of
Certificateholders and the Credit Enhancer and (ii) maintain in force a policy
or policies of insurance covering errors and omissions in the performance of its
obligations as Master Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Master Servicer is so
required pursuant to Section 3.12. The appointment of a successor Master
Servicer shall not affect any liability of the predecessor Master Servicer which
may have arisen under this Agreement prior to its termination as Master Servicer
(including, without limitation, any deductible under an insurance policy
pursuant to Section 3.04), nor shall any successor Master Servicer be liable for
any acts or omissions of the predecessor Master Servicer or for any breach by
such Master Servicer of any of their representations or warranties contained
herein.
Section 8.03. Notification to Certificateholders. Upon any
termination or appointment of a successor to the Master Servicer pursuant to
this Article VIII or Section 7.04, the Trustee shall give prompt written notice
thereof to the Certificateholders at their respective addresses appearing in the
Certificate Register, the Credit Enhancer and each Rating Agency.
ARTICLE IX
THE TRUSTEE
Section 9.01. Duties of Trustee. The Trustee, prior to the
occurrence of an Event of Servicing Termination and after the curing or waiver
of all Events of Servicing Termination which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Servicing Termination has occurred (which has not been
cured or waived) of which a Responsible Officer has knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;
provided, however, that if the Trustee is acting as Master Servicer it shall use
the same degree of care and skill as is required of the Master Servicer under
this Agreement.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be
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furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Servicing
Termination of which a Responsible Officer of the Trustee has
knowledge, and after the curing or waiver of all such Events of
Servicing Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Trustee and, in the absence of
bad faith on the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the consent or direction of the Credit
Enhancer or in accordance with the direction of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than
51% relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge
of any failure by the Master Servicer to comply with the obligations of
the Master Servicer referred to in clauses (i) and (ii) of Section 8.01
or of the occurrence of a Rapid Amortization Event unless a Responsible
Officer of the Trustee at the Corporate Trust Office obtains actual
knowledge of such failure or the Trustee receives written notice of
such failure from the Master Servicer, the Credit Enhancer or the
Holders of Investor Certificates evidencing Percentage Interests
aggregating not less than 51%.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. None
of the provisions contained in this Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Agreement and in no event shall it be required to perform or
accept responsibility for the obligations of the Depositor, the Seller or the
Transferor.
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Section 9.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 9.01:
(i) the Trustee may request and rely upon, and shall
be protected in acting or refraining from acting upon, any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or
to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders or the Credit Enhancer, pursuant to the provisions
of this Agreement, unless such Certificateholders or the Credit
Enhancer shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or wilful misconduct in the performance of any such act;
nothing contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of an Event of Servicing Termination
(which has not been cured or waived) of which a Responsible Officer has
knowledge, to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs, unless it is acting as Master
Servicer;
(iv) the Trustee shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) prior to the occurrence of an Event of Servicing
Termination and after the curing or waiver of all Events of Servicing
Termination which may have occurred, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
documents, unless requested in writing to do so by Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than
51%; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Master Servicer or, if paid by the
Trustee, shall be reimbursed by the Master Servicer upon demand.
Nothing in this clause (v) shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
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(vi) the Trustee shall not be accountable, shall have
no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer until such time as the Trustee may be
required to act as Master Servicer pursuant to Section 8.02; and
(vii) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through an Affiliate, agents or attorneys or a custodian.
Section 9.03. Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer.
The Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance
of any such perfection and priority, or for or with respect to the sufficiency
of the Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 8.02); the validity
of the assignment of any Mortgage Loan to the Trustee or of any intervening
assignment; the completeness of any Mortgage Loan; the performance or
enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 8.02); the compliance by the
Depositor, the Seller or the Master Servicer with any warranty or representation
made under the Purchase Agreement, this Agreement or in any related document or
the accuracy of any such warranty or representation prior to the Trustee's
receipt of notice or other discovery of any non-compliance therewith or any
breach thereof; any investment of monies by or at the direction of the Master
Servicer or any loss resulting therefrom, it being understood that the Trustee
shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Depositor, the Master
Servicer (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 8.02), any subservicer or any Mortgagor; any action
of the Master Servicer (other than if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 8.02), or any subservicer taken in the name
of the Trustee; the failure of the Master Servicer or any subservicer to act or
perform any duties required of it as agent of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Master Servicer (other
than if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 8.02); provided, however, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this Agreement. The
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder (unless
the Trustee shall have become the successor Master Servicer) or to prepare or
file any Securities and Exchange Commission filing for the Trust or to record
this Agreement.
Section 9.04. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not Trustee and may transact
any banking and trust business with the Seller, the Master Servicer, the Credit
Enhancer or the Depositor.
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Section 9.05. Master Servicer to Pay Trustee's Fees and
Expenses; Master Servicer to Indemnify. The Master Servicer covenants and agrees
to pay to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee, and
the Master Servicer will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith or which is the
responsibility of Certificateholders hereunder. The Master Servicer covenants
and agrees to indemnify the Trustee from, and hold it harmless against, any and
all losses, liabilities, damages, claims or expenses other than those resulting
from the negligence or bad faith of the Trustee. This section shall survive
termination of this Agreement or the resignation or removal of any Trustee
hereunder.
Section 9.06. Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be a corporation duly incorporated and
validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $____________, subject to supervision
or examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.06, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The principal office of the Trustee (other
than the initial Trustee) shall be in a state with respect to which an Opinion
of Counsel has been delivered to such Trustee at the time such Trustee is
appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of such state. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.07.
Section 9.07. Resignation or Removal of Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Transferor, the Depositor, the Master
Servicer, the Credit Enhancer and each Rating Agency. Upon receiving such notice
of resignation, the Transferor shall promptly appoint a successor Trustee
(approved in writing by the Credit Enhancer, so long as such approval is not
unreasonably withheld) by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee (who shall deliver a copy
to the Master Servicer) and one copy to the successor Trustee; provided,
however, that any such successor Trustee shall be subject to the prior written
approval of the Transferor. If no successor Trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Transferor or the Credit Enhancer, or if at any
time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if a tax is imposed or threatened with respect to the Trust Fund
by any state in which the Trustee or the Trust Fund is located (which tax cannot
be vacated by the appointment of a co-Trustee or separate trustee pursuant to
Section 9.10), then the Transferor or the Credit Enhancer
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may remove the Trustee. If the Transferor or the Credit Enhancer removes the
Trustee under the authority of the immediately preceding sentence, the
Transferor shall promptly appoint a successor Trustee (approved in writing by
the Credit Enhancer, which approval shall not be unreasonably withheld) by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
The Holders of Investor Certificates evidencing Percentage
Interests aggregating over ____% of all Investor Certificates may at any time
remove the Trustee by written instrument or instruments delivered to the Master
Servicer, the Transferor and the Trustee; the Transferor shall thereupon use its
best efforts to appoint a successor trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 9.08.
Section 9.08. Successor Trustee. Any successor Trustee
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Transferor, the Depositor, the Master Servicer, the Credit Enhancer and to
its predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Transferor, the Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in
this Section 9.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 9.08, the successor Trustee shall mail notice of the
succession of such Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to each Rating Agency. If the
Master Servicer fails to mail such notice within 30 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Master Servicer.
Section 9.09. Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all of the business of the Trustee, shall be the successor
of the Trustee hereunder, provided such Person shall be eligible under the
provisions of Section 9.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property may at the time be located, the
Transferor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments necessary to appoint one or more Persons approved by
the Credit Enhancer to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the
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Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 9.10, such powers, duties, obligations,
rights and trusts as the Transferor and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Master Servicer. If the Transferor shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case an Event of Servicing Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 9.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 9.08. The Master Servicer shall be responsible
for the fees of any co-trustee or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee hereunder;
and
(iii) the Master Servicer and the Trustee acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee except that following the occurrence of
an Event of Servicing Termination, the Trustee acting alone may accept
the resignation or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Transferor and the Master Servicer.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
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Section 9.11. Limitation of Liability. The Certificates are
executed by the Trustee, not in its individual capacity but solely as Trustee of
the Trust, in the exercise of the powers and authority conferred and vested in
it by the Trust Agreement. Each of the undertakings and agreements made on the
part of the Trustee in the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the purpose
of binding only the Trust.
Section 9.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursement and advances of the Trustee, its agents and counsel, be
for the ratable benefit or the Certificateholders in respect of which such
judgment has been recovered.
Section 9.13. Suits for Enforcement. In case an Event of
Servicing Termination or other default by the Master Servicer, the Transferor or
the Depositor hereunder shall occur and be continuing, the Trustee, in its
discretion, may proceed to protect and enforce its rights and the rights of the
Investor Certificateholders under this Agreement by a suit, action or proceeding
in equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
ARTICLE X
TERMINATION
Section 10.01. Termination. (a) The respective obligations and
responsibilities of the Master Servicer, the Depositor, the Transferor and the
Trustee created hereby (other than the obligation of the Trustee to make certain
payments to Certificateholders after the final Distribution Date and the
obligation of the Master Servicer to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the final Distribution Date pursuant to this Article X following the later of
(A) payment in full of all amounts owing to the Credit Enhancer and (B) the
earliest of (i) the transfer, under the conditions specified in Section
10.01(b), to the Transferor of the Investor Certificateholders' interest in each
Mortgage Loan and all property acquired in respect of any Mortgage Loan
remaining in the Trust for an amount equal to the sum of (w) the Investor
Certificate Principal Balance, (x) accrued and unpaid Investor Certificate
Interest through the day preceding the final Distribution Date, and (y) interest
accrued on any Unpaid Investor Certificate Interest Shortfall, to the extent
legally permissible, (ii) the day following the Distribution Date on which the
distribution made to Investor Certificateholders has reduced the Investor
Certificate Principal Balance to zero, (iii) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust (including without
limitation the disposition of the Mortgage Loans pursuant to Section 10.02) or
the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan (iv) the Distribution Date in ____________
20___; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the date of the last survivor
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof. Upon termination in
accordance with clause (i) or (ii) of this Section 10.01, the Trustee shall
execute such documents and instruments of transfer presented by the Transferor,
in each case without
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recourse, representation or warranty, and take such other actions as the
Transferor may reasonably request to effect the transfer of the Mortgage Loans
to the Transferor.
(b) The Transferor shall have the right to exercise the option
to effect the transfer to the Transferor of each Mortgage Loan pursuant to
Section 10.01(a) above on any Distribution Date on or after the Distribution
Date immediately prior to which the Investor Certificate Principal Balance is
less than _____ percent (____%) of the Original Investor Certificate Principal
Balance and all amounts due and owing to the Credit Enhancer for unpaid premiums
and unreimbursed draws on the Policy, together with interest thereon as provided
under the Insurance Agreement, have been paid.
(c) Notice of any termination, specifying the Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Investor Certificateholders may surrender their Investor Certificates
to the Trustee for payment of the final distribution and cancellation, shall be
given promptly by the Trustee (upon receipt of written directions from the
Transferor, if the Transferor is exercising its right to transfer of the
Mortgage Loans, given not later than the first day of the month preceding the
month of such final distribution) to the Credit Enhancer and to the Master
Servicer by letter to Investor Certificateholders mailed not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of such final distribution specifying (i) the Distribution Date upon which final
distribution of the Investor Certificates will be made upon presentation and
surrender of Investor Certificates at the office or agency of the Trustee
therein designated, (ii) the amount of any such final distribution and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Investor Certificates at the office or agency of the Trustee therein specified.
In the event written directions are delivered by the Transferor to the Trustee
as described in the preceding sentence, the Transferor shall deposit in the
Collection Account on or before the Distribution Date for such final
distribution in immediately available funds an amount which, when added to the
funds on deposit in the Collection Account that are payable to the Investor
Certificateholders, will be equal to the retransfer amount for the Mortgage
Loans computed as above provided.
(d) Upon presentation and surrender of the Investor
Certificates, the Trustee shall cause to be distributed to the Holders of
Investor Certificates on the Distribution Date for such final distribution, in
proportion to the Percentage Interests of their respective Investor Certificates
and to the extent that funds are available for such purpose, an amount equal to
(i) if such final distribution is not being made pursuant to the transfer to the
Transferor pursuant to Section 10.01(a)(i), the amount required to be
distributed to Investor Certificateholders pursuant to Section 5.01 for such
Distribution Date and (ii) if such final distribution is being made pursuant to
such retransfer, the amount specified in Section 10.01(a)(i). The distribution
on such final Distribution Date pursuant to a retransfer pursuant to Section
10.01(a)(i) shall be in lieu of the distribution otherwise required to be made
on such Distribution Date in respect of the Certificates. On the final
Distribution Date prior to having made the distributions called for above, the
Trustee shall, based upon the information set forth in the Servicing Certificate
for such Distribution Date, withdraw from the Collection Account and remit to
the Credit Enhancer the lesser of (x) the amount available for distribution on
such final Distribution Date, net of any portion thereof necessary to pay the
amounts described in clauses (d)(i) and (ii) above and (y) the unpaid amounts
due and owing to the Credit Enhancer for unpaid premiums and unreimbursed draws
on the Policy, together with interest thereon as provided under the Insurance
Agreement.
(e) In the event that all of the Investor Certificateholders
shall not surrender their Investor Certificates for final payment and
cancellation on or before such final Distribution Date, the Trustee shall on
such date cause all funds in the Collection Account not distributed in final
distribution
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to Investor Certificateholders to be withdrawn therefrom and credited to the
remaining Investor Certificateholders by depositing such funds in a separate
escrow account for the benefit of such Investor Certificateholders and the
Transferor (if the Transferor has exercised its right to transfer the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice to
the remaining Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Investor
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders concerning surrender of their
Investor Certificates, and the cost thereof shall be paid out of the funds on
deposit in such escrow account.
ARTICLE XI
RAPID AMORTIZATION EVENTS
Section 11.01. Rapid Amortization Events. If any one of the
following events shall occur during the Managed Amortization Period:
(a) failure on the part of the Seller (i) to make any payment
or deposit required by the terms of this Agreement, on or before the
date occurring three Business Days after the date such payment or
deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any other covenants or agreements of
the Seller set forth in the Purchase Agreement, which failure, in each
case, materially and adversely affects the interests of the
Certificateholders or the Credit Enhancer and which, in the case of
clause (ii), continues unremedied and continues to affect materially
and adversely the interests of the Certificateholders for a period of
60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Seller
by the Trustee, or to the Seller and the Trustee by the Holders of
Investor Certificates evidencing Percentage Interests aggregating not
less than 51%;
(b) any representation or warranty made by the Seller in the
Purchase Agreement or the Depositor in this Agreement shall prove to
have been incorrect in any material respect when made, as a result of
which the interests of the Investor Certificateholders or the Credit
Enhancer are materially and adversely affected and which continues to
be incorrect in any material respect and continues to affect materially
and adversely the interests of the Certificateholders or the Credit
Enhancer for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been
given to the Seller or the Depositor, as the case may be, by the
Trustee, or to the Seller, the Depositor and the Trustee by either the
Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating not less than 51%; provided, however,
that a Rapid Amortization Event pursuant to this subparagraph (b) shall
not be deemed to have occurred hereunder if the Transferor has accepted
retransfer of the related Mortgage Loan or Mortgage Loans during such
period (or such longer period (not to exceed an additional 60 days) as
the Trustee may specify) in accordance with the provisions hereof;
(c) the Transferor or the Depositor shall voluntarily go into
liquidation, consent to the appointment of a conservator or receiver or
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Transferor or the Depositor, or of or relating to all
or substantially all of such Person's
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property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Transferor or the Depositor and such
decree or order shall have remained in force undischarged or unstayed
for a period of 30 days; or the Transferor or the Depositor shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(d) the Trust shall become subject to registration as an
"investment company" under the Investment Company Act of 1940, as
amended;
then, in the case of any event described in subparagraph (a) or (b) after the
applicable grace period, if any, set forth in such subparagraphs, either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating more than 51%, by notice given in writing to
the Transferor, the Depositor and the Master Servicer (and to the Trustee if
given by either the Credit Enhancer or the Investor Certificateholders) may
declare that an early amortization event (a "Rapid Amortization Event") has
occurred as of the date of such notice, and in the case of any event described
in subparagraph (c) or (d), a Rapid Amortization Event shall occur without any
notice or other action on the part of the Trustee, the Credit Enhancer or the
Investor Certificateholders, immediately upon the occurrence of such event.
Section 11.02. Additional Rights Upon the Occurrence of
Certain Events.
(a) If the Transferor voluntarily goes into liquidation or
consents to the appointment of a conservator or receiver or liquidator or
similar person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Transferor or of or
relating to all or substantially all its property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator or receiver or liquidator or similar person in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Transferor and such decree shall have remained in
force undischarged or unstayed for a period of 30 days; or the Transferor shall
admit in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations (such voluntary liquidation, appointment,
entering of such decree, admission, filing, making, suspension or violation or
other event described above, an "Insolvency Event"), the Transferor shall on the
day of such appointment, voluntary liquidation, entering of such decree,
admission, filing, making, suspension or inability, as the case may be (the
"Appointment Day"), promptly give notice to the Trustee, the Master Servicer and
the Credit Enhancer of such Insolvency Event. Within 15 days of the receipt by
the Trustee of the Transferor's notice of an Insolvency Event, the Trustee shall
(i) publish a notice in Authorized Newspapers that an Insolvency Event has
occurred and that the Trustee intends to direct the Master Servicer to sell,
dispose of or otherwise liquidate the Mortgage Loans in a commercially
reasonable manner and (ii) send written notice to the Investor
Certificateholders describing the provisions of this Section 11.02, which notice
shall inform Investor Certificateholders that unless more than _____% of all
Investor Certificateholders advise the Trustee in writing that they wish the
Trustee to instruct the Master Servicer not to sell, dispose of or otherwise
liquidate the Mortgage Loans within 90 days from the day notice pursuant to
clause (i) above is first published (the "Publication Date"), the Trustee shall
instruct
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the Master Servicer to proceed to sell, dispose of, or otherwise liquidate the
Mortgage Loans in a commercially reasonable manner and on commercially
reasonable terms, which shall include the solicitation of competitive bids, and
shall proceed to consummate the sale, liquidation or disposition of the Mortgage
Loans as provided above with the highest bidder for the Mortgage Loans. The
Transferor shall be permitted to bid for the Mortgage Loans. The Trustee may
obtain a prior determination from such conservator or receiver that the terms
and manner of any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Sections 11.01 and 11.02 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of
the Mortgage Loans pursuant to Section 11.02(a) above shall be treated as
collections on the Mortgage Loans received during the Rapid Amortization Period;
provided, however, that such proceeds will, based on amounts specified in
writing by the Master Servicer to the Trustee, first be paid to the Credit
Enhancer to reimburse the Credit Enhancer for previously unreimbursed Credit
Enhancement Draw Amounts and other amounts owing under the Insurance Agreement;
and provided, further, that the Certificateholders' Fixed Allocation Percentage
of such remaining proceeds shall be paid to Investor Certificateholders in the
following amounts and order of priority:
(i) all accrued and unpaid interest on the Investor
Certificate Principal Balance through the Interest Period immediately
preceding the Distribution Date on which such proceeds are distributed
to the Investor Certificateholders; and
(ii) an amount of principal up to the Investor
Certificate Principal Balance.
The Policy shall cover any shortfall in the event such proceeds are insufficient
to make the distributions to Investor Certificateholders pursuant to Section
11.02(b). On the day following the Distribution Date on which such proceeds are
distributed to the Investor Certificateholders, the Trust shall terminate.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment. This Agreement may be amended from
time to time by the Master Servicer, the Depositor and the Trustee, in each case
without the consent of any of the Certificateholders, but only with the consent
of the Credit Enhancer (which consent shall not be unreasonably withheld), (i)
to cure any ambiguity, (ii) to correct any defective provisions or to correct or
supplement any provisions herein that may be inconsistent with any other
provisions herein, (iii) to add to the duties of the Transferor or the Master
Servicer, (iv) to add any other provisions with respect to matters or questions
arising under this Agreement or the Policy, as the case may be, which shall not
be inconsistent with the provisions of this Agreement, (v) to add or amend any
provisions of this Agreement as required by any Rating Agency or any other
nationally recognized statistical rating organization in order to maintain or
improve any rating of the Investor Certificates (it being understood that, after
obtaining the ratings in effect on the Closing Date, neither the Trustee, the
Depositor nor the Master Servicer is obligated to obtain, maintain or improve
any such rating), (vi) to add or amend any provisions of this Agreement to
correct or cure any defective provision or ambiguity as a result of a transfer
of the Transferor Certificates pursuant to Section 6.05, (vii) to comply with
any requirement imposed by the Code or (viii) to increase the Increased Senior
Lien Limitation; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel, materially and adversely affect the interests of any
Certificateholder or the Credit Enhancer; and provided, further, that the
amendment shall not be
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deemed to adversely affect in any material respect the interests of the
Certificateholders and no opinion referred to in the preceding proviso shall be
required to be delivered if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Investor Certificates without regard to the Policy. Notwithstanding the
foregoing, any amendment pursuant to clause (viii) above shall be permissible
only upon receipt of a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Investor Certificateholders without regard to the Policy.
This Agreement also may be amended from time to time by the
Master Servicer, the Depositor and the Trustee, and the Master Servicer and the
Credit Enhancer, may from time to time consent to the amendment of the Policy
with the consent of the Holders of the Investor Certificates evidencing
Percentage Interests aggregating not less than 51%, and in the case of an
amendment to this Agreement, with the consent of the Credit Enhancer for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Certificateholders; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates or distributions or payments under the Policy which are required to
be made on any Certificate without the consent of the Holder of such Certificate
or (ii) reduce the aforesaid percentage required to consent to any such
amendment, without the consent of the Holders of all Certificates then
outstanding or (iii) adversely effect in any material respect the interests of
the Credit Enhancer.
Notwithstanding the foregoing, the Agreement may not be
amended unless, in connection with such amendment, an Opinion of Counsel is
furnished to the Trustee that such amendment will not (i) adversely affect the
status of the Investor Certificates as debt; (ii) result in the Trust being
taxable at the entity level; or (iii) result in the Trust being classified as a
taxable mortgage pool (as defined in Section 7701(i) of the Code).
Following the execution and delivery of any such amendment
hereto or to the Policy to which the Credit Enhancer was required to consent,
either the Transferor, if the Transferor requested the amendment, or the Master
Servicer, if the Master Servicer requested the amendment, shall reimburse the
Credit Enhancer for the reasonable out-of-pocket costs and expenses incurred by
the Credit Enhancer in connection with such amendment.
Prior to the execution of any such amendment, the party hereto
requesting any such amendment shall furnish written notification of the
substance of such amendment to each Rating Agency. In addition, promptly after
the execution of any such amendment made with the consent of the Investor
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Investor Certificateholder and fully
executed original counterparts of the instruments effecting such amendment to
the Credit Enhancer.
It shall not be necessary for the consent of Investor
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Trustee may prescribe.
In executing any amendment permitted by this Section 12.01,
the Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel stating that such
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amendment is authorized or permitted hereby and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Trustee's own rights, duties or immunities under this Agreement or
otherwise.
Section 12.02. Recordation of Agreement. This Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Trustee, but only upon direction of Investor Certificateholders
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of Investor
Certificateholders. The Investor Certificateholders requesting such recordation
shall bear all costs and expenses of such recordation. The Trustee shall have no
obligation to ascertain whether such recordation so affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 12.03. Limitation on Rights of Certificateholders. The
death or incapacity of any Investor Certificateholder shall not operate to
terminate this Agreement or the Trust, nor entitle such Investor
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided in Sections 8.01, 9.01, 9.02, 11.01 and 12.01) or in any manner
otherwise control the operation and management of the Trust, or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Investor Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Investor Certificates evidencing
Percentage Interests aggregating not less than 51% shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder, or to enforce
any right under this Agreement, except in the manner herein provided and for the
equal,
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ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 12.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
By accepting its Investor Certificate, each Investor
Certificateholder agrees that unless a Credit Enhancer Default exists, the
Credit Enhancer shall have the right to exercise all rights of the Investor
Certificateholders under this Agreement without any further consent of the
Investor Certificateholders.
Section 12.04. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 12.05. Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at or mailed by certified mail, return
receipt requested, to (a) in the case of the Depositor, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ____________________, (b) in the case of the Master
Servicer, [________________________________________________________, Attention:
____________________], (c) in the case of the Trustee, at the Corporate Trust
Office, (d) in the case of the Credit Enhancer,
_________________________________, Attention: ____________________ (telecopy
number ____________________), (e) in the case of [each Rating Agency],
___________________________________________________, and (f) in the case of
____________________, __________________________, or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party. [In each case in which a notice or other communication to the
Credit Enhancer refers to an Event of Servicing Termination or a claim under the
Policy or with respect to which failure on the part of the Credit Enhancer to
respond shall be deemed to constitute consent or acceptance, then a copy of such
notice or other communication should also be sent to the attention of the
______________ and the _____________________ and shall be marked to indicate
"URGENT MATERIAL ENCLOSED."] Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice. Any notice or other document required to be delivered or mailed by
the Trustee to any Rating Agency shall be given on a best efforts basis and only
as a matter of courtesy and accommodation and the Trustee shall have no
liability for failure to deliver such notice or document to any Rating Agency.
Section 12.06. Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 6.05, 7.02 and 7.04,
this Agreement may not be assigned by the Depositor or the Master Servicer
without the prior written consent of the Credit Enhancer and Holders of the
Investor Certificates evidencing Percentage Interests aggregating not less than
____%.
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Section 12.08. Certificates Nonassessable and Fully Paid. The
parties agree that the Investor Certificateholders shall not be personally
liable for obligations of the Trust, that the beneficial ownership interests
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever, and that the Certificates
upon execution, authentication and delivery thereof by the Trustee pursuant to
Section 2.08 or 6.02 are and shall be deemed fully paid.
Section 12.09. Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders, the Certificate Owners, the Credit Enhancer and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation hereunder.
Section 12.10. Counterparts. This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
Section 12.11. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 12.12. Insurance Agreement. The Trustee is authorized
and directed to execute and deliver the Insurance Agreement and to perform the
obligations of the Trustee thereunder.
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IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused this Agreement to be duly executed by their respective
officers all as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By:
---------------------------
Name:
Title:
[----------------------------],
as Master Servicer
By:
---------------------------
Name:
Title:
[---------------------------],
as Trustee
By:
---------------------------
Name:
Title:
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State of )
) ss.:
County of )
On the __th day of __________, 199_ before me, a notary public
in and for the State of ________, personally appeared _____________________,
known to me who, being by me duly sworn, did depose and say that he resides at
_________________, ____________, ________ _____; that he is the ______________
of _____________________________, a [New York] corporation, one of the parties
that executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
-----------------------
Notary Public
[Notarial Seal]
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State of )
) ss.:
County of )
On the __th day of __________, 199_ before me, a notary public
in and for the State of ________, personally appeared _____________________,
known to me who, being by me duly sworn, did depose and say that he resides at
_________________, ____________, ________ _____; that he is the ______________
of _____________________________, a national banking association, one of the
parties that executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
-----------------------------
Notary Public
[Notarial Seal]
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State of )
) ss.:
County of )
On the __th day of ______________, 199_ before me, a notary
public in and for the State of ________, personally appeared _________________,
known to me who, being by me duly sworn, did depose and say that he resides at
_______________, _______________ _____; that he is the _____________ of ________
____, a _____________ banking corporation, one of the parties that executed the
foregoing instrument; and that he signed his name thereto by order of the Board
of Directors of said corporation.
--------------------------
Notary Public
[Notarial Seal]
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