▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION,
as Servicer
MLCC MORTGAGE INVESTORS, INC.,
as Seller
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
_______________________
POOLING AND SERVICING AGREEMENT
Dated as of _______, 199_
______________________
ML Revolving Home Equity Loan Asset Backed Certificates
Series 199_-_
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
Definitions
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Interest Calculations . . . . . . . . . . . . . . . . . . 26
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans . . . . . . . . . . . . . . . 27
Section 2.02. Acceptance by Trustee; Retransfer
of Mortgage Loans; Substitution of
Eligible Substitute Mortgage Loans. . . . . . . . . . . . 32
Section 2.03. Representations and Warranties
Regarding the Servicer . . . . . . . . . . . . . . . . . . 35
Section 2.04. Representations and Warranties of the Servicer Regarding the
Mortgage Loans; Repurchase and Substitution Obligations . 37
Section 2.05. Execution and Authentication
of Certificates . . . . . . . . . . . . . . . . . . . . . 41
Section 2.06. Retransfers of Mortgage Loans
at Election of the Seller . . . . . . . . . . . . . . . . 41
Section 2.07. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 43
Section 2.08. Covenants of the Seller . . . . . . . . . . . . . . . . . 44
ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. MLCC to Act as Servicer . . . . . . . . . . . . . . . . . 45
Section 3.02. Collection of Certain Mortgage Loan
Payments; Mortgage Loan Payment Record . . . . . . . . . . 47
Section 3.03. Permitted Debits to the Mortgage Loan
Payment Record . . . . . . . . . . . . . . . . . . . . . . 49
Section 3.04. Hazard Insurance Policies; Property
Protection Expenses . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.05. Mortgagor Transfers of
Mortgaged Properties . . . . . . . . . . . . . . . . . . . 52
Section 3.06. Realization Upon Defaulted
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . 53
Section 3.07. Trustee to Cooperate . . . . . . . . . . . . . . . . . . . 54
Section 3.08. Servicing Compensation; Payment
of Certain Expenses by Servicer . . . . . . . . . . . . . 55
Section 3.09. Annual Statement as to Compliance . . . . . . . . . . . . 56
Section 3.10. Annual Independent Public
Accountants' Servicing Report . . . . . . . . . . . . . . 56
Section 3.11. Access to Certain Documentation
and Information Regarding the
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . 57
Section 3.12. Maintenance of Certain Servicing Policies . . . . . . . . 57
Section 3.13. Reports to the Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 3.14. Information Required by the Internal Revenue Service Generally
and Reports of
Foreclosures and Abandonments of
Mortgaged Property . . . . . . . . . . . . . . . . . . . . 58
Section 3.15. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 58
Section 3.16. Further Assurances . . . . . . . . . . . . . . . . . . . . 59
ARTICLE IV
Servicing Certificate; Certificate Account Deposit
Section 4.01. Servicing Certificate . . . . . . . . . . . . . . . . . . 60
Section 4.02. Certificate Account . . . . . . . . . . . . . . . . . . . 63
Section 4.03. Payments Under Support Agreement . . . . . . . . . . . . . 64
Section 4.04. The Certificate Insurance Policy . . . . . . . . . . . . . 64
ARTICLE V
Payments and Statements to
Certificateholders
Section 5.01. Distributions . . . . . . . . . . . . . . . . . . . . . . 66
Section 5.02. Certain Calculations by the Trustee . . . . . . . . . . . 70
Section 5.03. Statements to Certificateholders . . . . . . . . . . . . . 70
Section 5.04. Rights of Certificateholders . . . . . . . . . . . . . . . 72
ARTICLE VI
The Certificates
Section 6.01. The Certificates . . . . . . . . . . . . . . . . . . . . . 73
Section 6.02. Registration of Transfer and
Exchange of Certificates; Registrar . . . . . . . . . . . 74
Section 6.03. Mutilated, Destroyed, Lost
or Stolen Certificates . . . . . . . . . . . . . . . . . . 76
Section 6.04. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 77
Section 6.05. Restrictions on Transfer
of Seller Certificates . . . . . . . . . . . . . . . . . . 77
Section 6.06. Actions of Certificateholders . . . . . . . . . . . . . . 79
ARTICLE VII
The Servicer and the Seller
Section 7.01. Liability of the Servicer . . . . . . . . . . . . . . . . 80
Section 7.02. Merger or Consolidation of,
or Assumption of the Obligations
of, the Servicer or Seller . . . . . . . . . . . . . . . . 80
Section 7.03. Limitation on Liability of
the Servicer and Others . . . . . . . . . . . . . . . . . 81
Section 7.04. Servicer Not to Resign . . . . . . . . . . . . . . . . . . 81
Section 7.05. Limitation on Liability of Certain Persons . . . . . . . . 82
Section 7.06. Liability of Seller . . . . . . . . . . . . . . . . . . . 83
Section 7.07. Seller May Own Certificates . . . . . . . . . . . . . . . 83
ARTICLE VIII
Default
Section 8.01. Events of Default . . . . . . . . . . . . . . . . . . . . 85
Section 8.02. Trustee to Act; Appointment of Successor . . . . . . . . . 87
Section 8.03. Notification to Certificateholders . . . . . . . . . . . . 88
Section 8.04. Waiver of Past Events of Default . . . . . . . . . . . . . 88
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 90
Section 9.02. Certain Matters Affecting the Trustee . . . . . . . . . . 91
Section 9.03. Trustee Not Liable for Certificates
or Mortgage Loans . . . . . . . . . . . . . . . . . . . . 93
Section 9.04. Trustee May Own Certificates . . . . . . . . . . . . . . . 93
Section 9.05. Servicer to Pay Trustee's Fees and Expenses . . . . . . . 93
Section 9.06. Eligibility Requirements for Trustee . . . . . . . . . . . 94
Section 9.07. Resignation or Removal of Trustee . . . . . . . . . . . . 94
Section 9.08. Successor Trustee . . . . . . . . . . . . . . . . . . . . 96
Section 9.09. Merger or Consolidation of Trustee . . . . . . . . . . . . 96
Section 9.10. Appointment of Co-Trustee or
Separate Trustee . . . . . . . . . . . . . . . . . . . . . 96
Section 9.11. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 98
Section 9.12. ▇▇▇▇▇▇ Act . . . . . . . . . . . . . . . . . . . . . . . . 98
ARTICLE X
Termination
Section 10.01. Termination . . . . . . . . . . . . . . . . . . . . . . . 100
Section 10.02. Termination by Certificate Insurer . . . . . . . . . . . 102
ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events . . . . . . . . . . . . . . . . 103
Section 11.02. Additional Rights Upon an Insolvency Event . . . . . . . 105
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.02. Recordation of Agreement . . . . . . . . . . . . . . . . 108
Section 12.03. Limitation on Rights of Certificateholders . . . . . . . 108
Section 12.04. (Reserved) . . . . . . . . . . . . . . . . . . . . . . . 109
Section 12.05. The Certificate Insurer. . . . . . . . . . . . . . . . . 109
Section 12.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . 110
Section 12.07. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 12.08. Severability of Provisions . . . . . . . . . . . . . . . 110
Section 12.09. Assignment . . . . . . . . . . . . . . . . . . . . . . . 111
Section 12.10. Certificates Nonassessable and Fully Paid . . . . . . . . 111
Section 12.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . 111
Section 12.12. Effect of Headings and Table of Contents . . . . . . . . 111
Section 12.13. Third Party Beneficiary . . . . . . . . . . . . . . . . . 111
Section 12.14. Merger and Integration . . . . . . . . . . . . . . . . . 112
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
EXHIBIT A - Form of Face of Investor Certificate . . . . . . . A-1
EXHIBIT B - Form of Face of Seller Certificate . . . . . . . . S-1
EXHIBIT C - Form of Reverse of Investor Certificate . . . . . . C-1
EXHIBIT D - Form of Reverse of Seller Certificate . . . . . . . D-1
EXHIBIT E - Form of Notice for Certificate
Insurance Policy . . . . . . . . . . . . . . . . E-1
EXHIBIT F - Mortgage Loan Schedule . . . . . . . . . . . . . . F-1
THIS POOLING AND SERVICING AGREEMENT, dated as of _______, 199_, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION, a corporation organized and existing under
the laws of the State of Delaware, MLCC MORTGAGE INVESTORS, INC., a corpora-
tion organized and existing under the laws of the State of Delaware, and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Trustee,
W I T N E S S E T H T H A T:
----------------------------
In consideration of the mutual agreements herein contained, the 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: As to any Distribution
-----------------------------------------
Date, the amount, if any, required to reduce the Certificate Principal
Balance (after giving effect to the distribution of all other amounts
actually distributed on the Investor Certificates on such Distribution Date)
until the Invested Amount (immediately following such Distribution Date)
exceeds the Certificate Principal Balance (as so reduced) by the amount, if
any, equal to (x) the Required Amount minus (y) the Seller Subordinated
Amount.
Accrual Period: As 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 Distribution Date, and, in the case of
the first Distribution Date, the period beginning on ______, 199_ and ending
on the day preceding the first Distribution Date.
Additional Balance: As to any Mortgage Loan and day, the unpaid
------------------
balance of any principal advanced to the related Mortgagor after the date as
of which the related Cut-off Date Trust Balance is calculated.
Aggregate Investor Loss Amount: With respect to any Distribution
------------------------------
Date, the total of the Investor Loss Amounts for prior Distribution Dates
(other than Investor Loss Amounts that were reallocated on prior Distribution
Dates to the Seller pursuant to Section 5.01(c)(ii)).
Agreement: This Pooling and Servicing Agreement and all amendments
---------
hereof and supplements hereto.
Alternate Certificate Rate: As to any Accrual Period, the weighted
--------------------------
average of the Net Loan Rates applicable to the Mortgage Loans included in
the Trust Fund during the Collection Period preceding the related
Distribution Date, weighted on the basis of the monthly average Trust
Balances of such Mortgage Loans during such Collection Period as determined
by the Servicer in accordance with its normal servicing procedures, less the
Premium Percentage for the related Distribution Date.
Alternative Principal Payment: As to any Distribution Date, the
-----------------------------
amount (but not less than zero) equal to the aggregate amount of Trust
Principal Collections received during the related Collection Period minus the
total Additional Balances created during such Collection Period.
Appraised Value: As to any Mortgaged Property and time referred to
---------------
herein, the appraised value of the Mortgaged Property based upon the
appraisal made by or on behalf of the Seller at such time.
Assignment of Retained Rights: As defined in Section 2.01(f).
-----------------------------
Available Distribution Amount: As to any Distribution Date, the
-----------------------------
aggregate of the amounts on deposit in the Certificate Account on such
Distribution Date described in clauses (i) - (vi), inclusive, of Section
4.01.
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.
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 national banks in the States of New York, Florida or
California are required or authorized by law to be closed.
Certificate: Any Investor Certificate or a Seller Certificate.
-----------
Certificate Account: The trust account or accounts created and
-------------------
maintained with the Trustee pursuant to Section 4.02 and which shall be an
Eligible Account and shall be entitled "Bankers Trust Company of California,
N.A., in trust for the benefit of the registered holders of the ML Revolving
Home Equity Loan Asset Backed Certificates, Series 1996-1"; provided,
however, that if the Certificate Account is opened under a different name,
the Seller shall, promptly after the Closing Date, cause the Certificate
Account to be retitled in the above name.
Certificateholder or Holder: The Person in whose name a Certificate
---------------------------
is registered in the Certificate Register, except that, solely for the
purpose of giving any consent pursuant to this Agreement, any Investor
Certificate registered in the name of the Seller or the Servicer or any
affiliate of either shall be deemed not to be outstanding and the Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests necessary to effect any
such consent has been obtained.
Certificate Formula Interest: As to any Distribution Date, interest
----------------------------
at the Certificate Rate for the related Accrual Period on the Certificate
Principal Balance on the first day of such Accrual Period (after giving
effect to the distribution of principal made on the first day of such Accrual
Period).
Certificate Insurance Policy: The certificate insurance policy
----------------------------
number ________ dated as of the Closing Date, issued by the Certificate
Insurer to the Trustee for the benefit of the Holders of the Investor
Certificates.
Certificate Insurer: AMBAC Indemnity Corporation, or its successor in
-------------------
interest.
Certificate Interest Collections: As to any Distribution Date, an
--------------------------------
amount equal to the Floating Allocation Percentage of the aggregate amount of
Trust Interest Collections for the related Collection Period.
Certificate Owner: With respect to an Investor Certificate, the
-----------------
person who is the beneficial owner of a Book-Entry Certificate.
Certificate Principal Balance: As of any Distribution Date, (i) the
-----------------------------
Original Certificate Principal Balance minus (ii) the aggregate amount
actually distributed as principal on the Investor Certificates on previous
Distribution Dates.
Certificate Register and Certificate Registrar: The register
----------------------------------------------
maintained and the registrar appointed pursuant to Section 6.02.
Certificate Rate: As to the initial Distribution Date, LIBOR
----------------
determined as of ________, 199_ plus 0.__%. As to any subsequent
Distribution Date, LIBOR plus 0.__%; provided, however, that in the event the
Alternate Certificate Rate is less than LIBOR for such Distribution Date plus
the applicable percentage specified above, the Certificate Rate for such
Distribution Date shall be the Alternate Certificate Rate.
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 Period: As to any Distribution Date and collections other
-----------------
than scheduled payments of Interest Collections and scheduled and unscheduled
payments of Principal Collections by Mortgagors, the calendar month preceding
the month in which such Distribution Date occurs. As to such Interest
Collections and Principal Collections and any Distribution Date, the period
from and including the 17th day of the month preceding the month in which
such Distribution Date occurs to and including the 16th day of the month in
which such Distribution Date occurs.
Combined Loan-to-Value Ratio: As of any date and Mortgage Loan, the
----------------------------
fraction, expressed as a percentage, the numerator of which is the sum of (i)
the Credit Limit and (ii) the unpaid principal balance of any related senior
mortgage loan or loans as of such date and the denominator of which is
generally the lesser of the Appraised Value or the sales price of the
Mortgaged Property, as applicable, as of the date of the appraisal and/or
purchase contract for the Mortgaged Property, as applicable, used by or on
behalf of MLCC to underwrite such Mortgage Loan.
Common Mortgage Loan Interests: The Common Mortgage Loans and, to
------------------------------
the extent provided in subsection 2.01(a), the related Loan Agreements,
Mortgages and other Mortgage File documents.
Common Mortgage Loans: Such of the Mortgage Loans, certain of the
---------------------
balances of which were sold and assigned to Trust 1989, Trust 1991, Trust
1993, Trust 1994-1, Trust 1994-2, Trust 1995-1 or Trust 1995-2 pursuant to
the Trust 1989 Pooling and Servicing Agreement, the Trust 1991 Pooling and
Servicing Agreement, the Trust 1993 Pooling and Servicing Agreement, the
Trust 1994-1 Pooling and Servicing Agreement, the Trust 1994-2 Pooling and
Servicing Agreement, the Trust 1995-1 Pooling and Servicing Agreement, and
the Trust 1995-2 Pooling and Servicing Agreement, respectively, until such
balances are reduced to zero.
Corporate Trust Office: The principal office of the Trustee in
----------------------
California, at which at any particular time its trust shall administer this
Agreement, which office at the date of the execution of this Agreement is
located at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ML
Revolving Home Equity Loan Asset Backed Certificates, Series 1996-1;
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Credit Limit: As to any Mortgage Loan, the maximum Loan Balance
------------
permitted under the terms of the related Loan Agreement.
Cut-off Date: With respect to each Initial Mortgage Loan, April 1,
------------
1996 and, with respect to each Eligible Substitute Mortgage Loan, the day on
which each such Mortgage Loan is transferred to the Trust.
Cut-off Date Pool Balance: The aggregate of the Cut-off Date Trust
-------------------------
Balances of the Initial Mortgage Loans.
Cut-off Date Trust Balance: As to any Mortgage Loan, the unpaid
--------------------------
principal balance thereof (which may be $0) transferred and assigned to the
Trust as of the applicable Cut-off Date (excluding, in the case of any Common
Mortgage Loan, the portion thereof owned by one or more Prior Trusts).
Defective Mortgage Loan: Any Mortgage Loan which is required to be
-----------------------
repurchased or replaced by the Servicer pursuant to Sections 2.02, 2.04 or
3.01.
Depository: The initial Depository shall be The Depository Trust
----------
Company, the nominee of which is Cede & Co., as the registered Holder of one
or more Certificates evidencing the Certificate Principal Balance. The
Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other financial
----------------------
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: The __th day (or, if such __th day is not a
------------------
Business Day, the Business Day immediately preceding such 17th day) of the
month in which the related Distribution Date occurs.
Dissolution Distribution Date: The date on which the proceeds from
-----------------------------
the sale, disposition or liquidation of the Trust Balance of the Mortgage
Loans are received and distributed to Certificateholders pursuant to Article
XI hereof.
Distribution Date: The __th day of each month beginning in the month
-----------------
following the month of the initial issuance of the Certificates (or, if such
__th day is not a Business Day, the Business Day immediately following).
Eligible Account: One or more accounts:
----------------
(i) that are maintained with a depository institution or trust company
whose long-term and short-term unsecured debt obligations (or, in
the case of a depository institution or trust company that is the
principal subsidiary of a bank holding company, the debt
obligations of such holding company) at the time of deposit therein
have been rated by each Rating Agency in its highest rating catego-
▇▇▇▇;
(ii) that are maintained with a depository institution or trust company
the long-term unsecured debt obligations of which have been rated
Baa3 or higher by Moody's, and the deposits in which are fully
insured by the Federal Deposit Insurance Corporation acting through
either the BIF or the SAIF;
(iii) that are segregated trust accounts maintained with the corporate
trust department of a depository institution or trust company,
acting in its fiduciary capacity, which has a short-term deposit
rating of P-1 by Moody's and A-1+ by Standard & Poor's; or
(iv) such other accounts that are acceptable to each Rating Agency and
the Certificate Insurer, as evidenced by a letter from each Rating
Agency and the Certificate Insurer to the Trustee, without
reduction or withdrawal of the rating of the Investor Certificates.
The depository institution or trust company with which the Eligible Account
is maintained shall be organized under the laws of the United States or any
state thereof, have a net worth in excess of $100,000,000 and deposits
insured to the full extent permitted by law by the Federal Deposit Insurance
Corporation and be subject to supervision and examination by federal or state
banking authorities. An Eligible Account may bear interest, and may include,
if otherwise qualified by this definition, an account maintained with the
Trustee.
Eligible Substitute Mortgage Loan: A Mortgage Loan to be substituted
---------------------------------
by the Servicer for a Defective Mortgage Loan pursuant to Section 2.02, 2.04
or 3.01, which on the date of such substitution shall:
(i) have a Trust Balance not substantially greater than and not less
than the Trust Balance of the Defective Mortgage Loan;
(ii) have a Loan Rate of not less than the Loan Rate of the Defective
Mortgage Loan and not more than 500 basis points in excess thereof;
(iii) have a Loan Rate based on the same index as that of the Defective
Mortgage Loan;
(iv) have a Margin that is not less than the Margin for the Defective
Mortgage Loan, or more than 100 basis points higher than the Margin
for the Defective Mortgage Loan;
(v) have a maximum Loan Rate and a minimum Loan Rate, if any, that are
not lower than the maximum Loan Rate and minimum Loan Rate,
respectively, of the Defective Mortgage Loan;
(vi) have a remaining term to maturity not more than six months earlier
and not more than six months later than the remaining term to
maturity of the Defective Mortgage Loan, and in no case later than
March 1, 2006;
(vii) comply with the representations and warranties set forth in Section
2.04 (which representations and warranties shall be deemed to be
made as of the date of substitution);
(viii) have a Combined Loan-to-Value Ratio that is not greater than the
Combined Loan-to-Value Ratio of the Defective Mortgage Loan as of
the date of origination of the Defective Mortgage Loan;
(ix) have a Mortgage in a lien position at least equal to the lien
position of the Mortgage securing the Defective Mortgage Loan; and
(x) be secured by a Mortgaged Property that is subject to the same use
(owner-occupied, second home or rental property) and that has the
same structural characteristics (attached or detached) as the
Mortgaged Property securing the Defective Mortgage Loan,
provided, however, that in the case of clause (x), an owner-occupied,
detached Mortgaged Property will satisfy the requirements of clause (x) in
all cases.
Event of Default: As defined in Section 8.01.
----------------
Fixed Allocation Percentage: With respect to any date, the greater
---------------------------
of (i) __% and (ii) the percentage equivalent (but not in excess of 100%) of
a fraction, the numerator of which is the Invested Amount and the denominator
of which is the Pool Balance as of the end of such day.
Floating Allocation Percentage: As 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 first day of the month
preceding the month in which such Distribution Date occurs.
Indirect Parent: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc., a Delaware corporation,
---------------
or its successor in interest.
Initial Mortgage Loans: The mortgage loans (including the rights to
----------------------
receive payments thereunder) transferred and assigned to the Trustee on the
Closing Date pursuant to Section 2.01, together with the related Loan
Agreements and other Mortgage File documents and the rights thereunder
conveyed to the Trustee on the Closing Date pursuant to Section 2.01.
Insurance Agreement: The Insurance and Indemnity Agreement dated as
-------------------
of the Closing Date, among the Servicer, the Seller, the Trustee and the
Certificate Insurer, including any amendments and supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any
------------------
insurance policy covering a Mortgage Loan or the related Mortgaged Property
net of any component thereof covering any expenses incurred by or on behalf
of the Seller or the Servicer in connection with obtaining such Insurance
Proceeds.
Insured Amount: As defined in the Certificate Insurance Policy.
--------------
Insured Payment: With respect to any Distribution Date, the Insured
---------------
Amount for such Distribution Date paid to the Trustee by the Certificate
Insurer.
Interest Collections: As to any payment on a Mortgage Loan made by
--------------------
or on behalf of the related Mortgagor for the related Collection Period, the
portion thereof allocable to accrued interest for the related Interest Period
in accordance with the terms of the related Loan Agreement (net of interest
at the Servicing Fee Rate on the Loan Balance for each day during such
Interest Period), including Net Liquidation Proceeds allocable to interest on
such Mortgage Loan.
Interest Period: As to any payment of interest on a Mortgage Loan,
---------------
the period during which the interest covered by such payment accrued and
which, for any Distribution Date, is the month preceding the month in which
such Distribution Date occurs.
Invested Amount: With respect to any date, an amount equal to the
---------------
Original Invested Amount minus the sum of (i) the total of Trust Principal
Collections previously distributed to Investor Certificateholders pursuant to
Section 5.01(b) and (ii) the Aggregate Investor Loss Amount.
Investor Certificate: Any one of the Certificates signed and
--------------------
countersigned by the Trustee substantially in the form set forth in Exhibits
A and C hereto.
Investor Certificate Distribution Amount: As to any Distribution
----------------------------------------
Date, the sum of all amounts to be distributed to the Investor
Certificateholders pursuant to Article V and Article XI hereof.
Investor Certificateholder: The Holder of an Investor Certificate.
--------------------------
Investor Loss Amount: With respect to any Distribution Date, the
--------------------
amount equal to the product of (i) the Floating Allocation Percentage 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 (i) paid to Investor
Certificateholders from Certificate Interest Collections pursuant to Section
5.01(a), (ii) paid to Investor Certificateholders from Trust Interest
Collections and Trust Principal Collections allocable to the Seller pursuant
to Section 5.01(c)(i), (iii) reallocated to the Seller pursuant to Section
5.01(c)(ii), or (iv) paid to Investor Certificateholders from Insured
Payments pursuant to Section 5.01(d).
Late Payment Rate: For any Distribution Date, the rate of interest,
-----------------
as it is publicly announced by Citibank, N.A. at its principal office in New
York, New York as its prime rate (any change in such prime rate of interest
to be effective on the date such change is announced by Citibank, N.A.) plus
_%. The Late Payment Rate shall be computed on the basis of a year of 365
days calculating the actual number of days elapsed. In no event shall the
Late Payment Rate exceed the maximum rate permissible under any applicable
law limiting interest rates.
LIBOR: As to any Distribution Date as follows:
-----
(i) the arithmetic mean (rounded, if necessary, to the nearest one
sixteenth of a percent, with one thirty-second of a percent rounded
upwards) of the offered rates for United States dollar deposits for one
month which appear on the Reuters Screen LIBO Page (as defined below) as
of 11:00 A.M., London time, on the second LIBOR Business Day prior to
the immediately preceding Distribution Date (as of April 30, 1996 in the
case of the initial Distribution Date); provided that at least two such
offered rates appear on the Reuters Screen LIBO Page on such date. If
fewer than two offered rates appear, LIBOR will be determined on such
date as described in clause (ii) below. "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuter Monitor Money
Rates Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London inter-bank offered rates of
major banks).
(ii) If on such date fewer than two offered rates appear on the
Reuters Screen LIBO Page as described in clause (i) above, the Trustee
will request the principal London office of each of four reference banks
(which shall be National Westminster Bank Plc, Bank of Tokyo Trust Co.,
Llyods Bank Plc, and Bankers Trust Co., so long as each such bank is
engaged in transactions in the London inter-bank market) ("Reference
Banks") to provide the Trustee with its offered quotation for United
States dollar deposits for one month to prime banks in the London
inter-bank market as of 11:00 A.M., London time, on such date. If at
least two Reference Banks provide the Trustee with such offered
quotations, then LIBOR on such date will be the arithmetic mean
(rounded, if necessary, to the nearest one sixteenth of a percent, with
one thirty-second of a percent rounded upwards) of all such quotations.
If on such date fewer than two of the Reference Banks provide the
Trustee with such an offered quotation, LIBOR on such date will be the
arithmetic mean (rounded, if necessary, to the nearest one sixteenth of
a percent, with one thirty-second of a percent rounded upwards) of the
offered per annum rates which one or more leading banks in The City of
New York selected by the Trustee (after consultation with the Servicer)
are quoting as of 11:00 A.M., New York City time, on such date to
leading European banks for United States dollar deposits for one month,
provided, however, that if such banks are not quoting as described
above, LIBOR will be the LIBOR applicable to the immediately 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 States of New York or
California or in the City of London, England are required or authorized by
law to be closed.
Liquidated Mortgage Loan: As to any Distribution Date, any
------------------------
Mortgage Loan which was not previously a Liquidated Mortgage Loan, was in
default during the related Collection Period and with respect to which the
Servicer has determined that all Liquidation Proceeds which the Servicer
expects to recover from or on account of such Mortage Loan have been
recovered.
Liquidation Expenses: Expenses which are incurred by the Servicer in
--------------------
connection with the liquidation of any defaulted Mortgage Loan and not
recovered under any insurance policy or from the related Mortgagor,
including, without limitation, legal fees and expenses, real estate brokerage
commissions, any unreimbursed amount expended by the Servicer pursuant to
Section 3.06 with respect to such Mortgage Loan (including, without
limitation, amounts advanced to correct defaults on any mortgage loan which
is prior to such defaulted Mortgage Loan) and any related and previously
unreimbursed Property Protection Expenses.
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 Trust Balance thereof at the end of such
Collection Period, after giving effect to the Net Trust Liquidation Proceeds
applied in reduction of such Trust Balance in accordance with the related
Loan Agreement and this Agreement.
Liquidation Proceeds: Cash or funds (including Insurance Proceeds)
--------------------
received in connection with the liquidation of any defaulted Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise.
Loan Agreement: As to any Mortgage Loan, the Credit Agreement, Note
--------------
or other instrument pursuant to which the Servicer agrees to make revolving
credit loans to a Mortgagor or a Mortgagor agrees to repay such loans on the
terms and conditions provided in such instrument.
Loan Balance: As to any Mortgage Loan and day, the principal balance
------------
of such Mortgage Loan upon which interest accrued for such day was
calculated.
Loan Rate: As to any Mortgage Loan and day, the rate of interest
---------
applicable to the calculation of interest for such day on the Loan Balance.
Managed Amortization Period: The period from the first Distribution
---------------------------
Date to and including the earlier of (i) the Distribution Date in _____ ____
and (ii) the day as of which a Rapid Amortization Event occurs.
Margin: As to any Mortgage Loan, the spread over the applicable
------
index, as specified in the related Loan Agreement.
Maximum Principal Payment: As to any Distribution Date, an amount
-------------------------
equal to the Fixed Allocation Percentage of the aggregate amount of Trust
Principal Collections for the related Collection Period.
Minimum Monthly Payment: As to any Mortgage Loan and any month, the
-----------------------
minimum amount required to be paid by the related Mortgagor pursuant to the
related Loan Agreement.
Minimum Seller Interest: As to any date, an amount equal to the
-----------------------
lesser of (i) _% of the Pool Balance on such date and (ii) the Original
Seller Certificate Principal Balance.
Monthly Advance: As to any Distribution Date, the aggregate of the
---------------
advances made by the Servicer on such Distribution Date pursuant to Section
4.02, the amount of any such Monthly Advance being equal to the excess of:
(i) the total amount of accrued interest (adjusted to interest at the
related Net Loan Rate) and principal due (including principal due
by reason of default or acceleration) on the Trust Balances of the
Mortgage Loans for the related Interest Period, over
(ii) the total amount of interest (adjusted to interest at the related
Net Loan Rate) and principal collected on the Trust Balances of the
Mortgage Loans for the related Collection Period as of the
Determination Date,
minus any amounts with respect to installments of interest and principal on
the Trust Balances of the Mortgage Loans which (x) were delinquent as of the
end of the related Collection Period, (y) were not the subject of a previous
Monthly Advance and (z) are determined by the Servicer to be Nonrecoverable
Advances.
Monthly Advance Reimbursement Amount: As to any Distribution Date,
------------------------------------
the aggregate of the Monthly Advances which have not been reimbursed (or
deemed to have been reimbursed) to the Servicer through either (i)
withdrawals from the Certificate Account on or before such Distribution Date
pursuant to the second paragraph of Section 4.02 or (ii) debits to the
Mortgage Loan Payment Record pursuant to clause (ii) of Section 3.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
-------
interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
--------
first, second or more junior lien on an estate in fee simple interest in real
property securing a Mortgage Loan or creating a first, second or more junior
lien on a leasehold interest insofar as such leasehold interest exceeds the
term of the related mortgage by five years.
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 Payment Record: With respect to the Trust, the record
----------------------------
maintained by the Servicer pursuant to Section 3.02(b).
Mortgage Loan Schedule: As of any date, the schedule of Mortgage
----------------------
Loans included in the Trust Fund on such date. The initial schedule of
Mortgage Loans as of the Cut-off Date is attached hereto as Exhibit F and
sets forth as to each Initial Mortgage Loan (i) the Cut-off Date Trust
Balance, (ii) the Credit Limit, (iii) the stated maturity upon which any out-
standing Loan Balance is due and payable, (iv) the identification number, (v)
the state and zip code of the related Mortgaged Property, and (vi) whether
such loan is a Common Mortgage Loan. The Mortgage Loan Schedule will be
amended from time to time to reflect the removal of any Mortgage Loans from
the Trust and/or the conveyance of any Eligible Substitute Mortgage Loans to
the Trust, and when so amended shall include the information set forth above
with respect to each Eligible Substitute Mortgage Loan as of its related Cut-
off Date.
Mortgage Loan Seller: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, a Delaware
--------------------
corporation, or its successor in interest, as seller of the Trust Balances of
the Mortgage Loans to the Seller.
Mortgage Loan With Title Insurance: Each of the following Mortgage
----------------------------------
Loans:
(i) Mortgage Loans originated before February 1, 1994;
(ii) Mortgage Loans originated after February 1, 1994 in which (a) the
Credit Limit was over $1,000,000, or (b) the Mortgage Loan was
being used for a purchase money first mortgage transaction; and
(iii) Any other Mortgage Loan for which the Mortgage Loan Seller required
title insurance to be obtained.
Mortgage Loans: Such of the mortgage loans transferred and assigned
--------------
to the Trustee pursuant to Section 2.01 as from time to time are held as a
part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule. Any reference in this Agreement (including, without
limitation, any reference in subsection 2.01(a)) to a Mortgage Loan sold and
assigned to, or repurchased or purchased from, the Trust Fund or as
constituting part of the Trust Fund shall mean such Mortgage Loan to the
extent of the related balance owned by the Trust Fund. Any defaulted ▇▇▇▇-
▇▇▇▇ Loan in respect of which the Servicer has not yet received all
Liquidation Proceeds that it expects to receive shall continue to be a part
of the Trust Fund. All proceeds of any such defaulted Mortgage Loan shall be
credited to the Mortgage Loan Payment Record to the same extent as proceeds
of Mortgage Loans which are not defaulted.
Mortgaged Property: The underlying property securing a Mortgage
------------------
Loan.
Mortgagor: The obligor under a Loan Agreement.
---------
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
------------------------
Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: As to any Mortgage Loan and day, the Loan Rate less
-------------
the Servicing Fee Rate.
Net Trust Liquidation Proceeds: As to any Liquidated Mortgage Loan,
------------------------------
(i) the lesser of (x) Net Liquidation Proceeds and (y) the Trust Balance of
such Mortgage Loan at the time of liquidation, together with accrued and
unpaid interest thereon at the Net Loan Rate from the last day on which
interest was paid in full on such Mortgage Loan to the end of the Collection
Period in which such Mortgage Loan became a Liquidated Mortgage Loan, minus
(ii) any amount which may be retained by the Servicer on account of any
unreimbursed Monthly Advances under clause (iii) of Section 3.03.
Nonrecoverable Advance: Any portion of a Monthly Advance previously
----------------------
made or proposed to be made in respect of a Mortgage Loan which has not been
previously reimbursed to the Servicer and which, in the good faith judgment
of the Servicer, will not or, in the case of a proposed Monthly Advance,
would not be ultimately recoverable from Net Trust Liquidation Proceeds or
other recoveries in respect of the related Mortgage Loan. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any pro-
posed advance, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by a certificate of a Servicing Officer delivered to the Trustee
and detailing the reasons for such determination.
Officer's Certificate: A certificate signed by the Chairman of the
---------------------
Board, the President, a Senior Vice President or a Vice President of the
Seller or the Servicer, as the case may be, and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel acceptable to the
------------------
Trustee and the Certificate Insurer, who may be internal counsel for the
Seller or the Servicer.
Original Certificate Principal Balance: $___________.
--------------------------------------
Original Invested Amount: $___________.
------------------------
Original Seller Certificate Principal Balance: $_________.
---------------------------------------------
Overcollateralization Amount: As of any date of determination, the
----------------------------
amount, if any, by which the Invested Amount exceeds the Certificate
Principal Balance.
Ownership Interest: With respect to any Certificate, any ownership
------------------
or security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
Percentage Interest: As to any Investor Certificate, the percentage
-------------------
interest evidenced thereby in distributions required to be made thereon, such
percentage interest being equal to the percentage obtained by dividing the
initial principal denomination of such Investor Certificate by the Original
Certificate Principal Balance.
Permitted Investments: One or more of the following (excluding any
---------------------
callable investments purchased at a premium):
(i) obligations of, or guaranteed as to timely principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the
United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition
thereof, provided that the short-term unsecured obligations of the
party agreeing to repurchase such obligations are at the time rated
by each Rating Agency in its highest short-term rating category;
provided that if ▇▇▇▇▇'▇ is a Rating Agency, the short-term debt
obligations of the party agreeing to repurchase shall be rated
Prime-1 or better;
(iii) certificates of deposit, demand and time deposits and bankers'
acceptances (which, if ▇▇▇▇▇'▇ is a Rating Agency, shall each have
an original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity
of more than 365 days) of any U.S. depository institution or trust
company incorporated under the laws of the United States or any
state; provided that the short-term debt obligations of such
depository institution or trust company (or, if the only Rating
Agency is Standard & Poor's, in the case of the principal
depository institution in a depository institution holding company,
debt obligations of the depository institution holding company) at
the date of acquisition thereof have been rated by each Rating
Agency in its highest short-term rating category; provided that if
▇▇▇▇▇'▇ is a Rating Agency, the short-term obligations of such
depository institution or trust company shall be rated Prime-1 or
better;
(iv) commercial paper (having original maturities of not more than 270
days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in its highest short-term rating
category;
(v) investments in money market mutual funds registered under the
Investment Company Act of 1940 that are rated by each Rating Agency
in its highest rating category; provided that if Standard & Poor's
is a Rating Agency, the rating of such money market funds shall be
AAAm or AAAm-G; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not result in a
reduction in the then current rating or ratings of the Investor
Certificates without taking into account the Certificate Insurance
Policy, as evidenced by a letter to such effect from such Rating
Agency.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Balance: As to any date, the aggregate of the Trust Balances of
------------
all Mortgage Loans as of such date.
Pool Factor: As to any Distribution Date, the percentage, carried to
-----------
six places, obtained by dividing the Certificate Principal Balance for such
Distribution Date by the Original Certificate Principal Balance.
Preference Amount: As defined in the Certificate Insurance Policy.
-----------------
Premium Amount: As to any Distribution Date, beginning on the first
--------------
Distribution Date, the product of (x) the Premium Percentage and (y) the
Certificate Principal Balance on such Distribution Date (before taking into
account any distributions of principal to be made to Investor Certificate-
holders on such Distribution Date).
Premium Percentage: As defined in the Certificate Insurance Policy.
------------------
Principal Collections: As to any Mortgage Loan and Collection
---------------------
Period, all amounts (other than Insurance Proceeds and Liquidation Proceeds)
received from or on behalf of the related Mortgagor during such Collection
Period which, at the time of receipt, were applied in reduction of the Loan
Balance in accordance with the terms of the related Loan Agreement.
Prior Trust: Any of Trust 1989, Trust 1991, Trust 1993, Trust 1994
-----------
1, Trust 1994-2, Trust 1995-1 and Trust 1995-2.
Prior Trust Pooling and Servicing Agreement: Any of the Trust 1989
-------------------------------------------
Pooling and Servicing Agreement, the Trust 1991 Pooling and Servicing
Agreement, the Trust 1993 Pooling and Servicing Agreement, the Trust 1994-1
Pooling and Servicing Agreement, the Trust 1994-2 Pooling and Servicing
Agreement, the Trust 1995-1 Pooling and Servicing Agreement or the Trust
1995-2 Pooling and Servicing Agreement.
Prior Trust Trustee: Any of the Trust 1989 Trustee, the Trust 1991
-------------------
Trustee, the Trust 1993 Trustee, the Trust 1994-1 Trustee, the Trust 1994-2
Trustee, the Trust 1995-1 Trustee and the Trust 1995-2 Trustee.
Property Protection Expenses: Expenses paid or incurred by or for
----------------------------
the account of the Servicer in connection with the preservation or protection
of a Mortgaged Property or the security of a Mortgaged Property including (i)
hazard insurance policy premiums, (ii) real estate taxes and property repair,
replacement, protection and preservation expenses, (iii) amounts expended to
cure or prevent any default with respect to any mortgage loan senior to a
Mortgage Loan, and (iv) similar expenses reasonably paid or incurred to
preserve or protect the value of such security.
Rapid Amortization Commencement Date: The earlier of the
------------------------------------
Distribution Date in ___ ____ and the Distribution Date next following 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 Seller
at the time of the initial issuance of the Investor 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 Servicer, notice of which designation shall be given to the Trustee.
References herein to the highest rating categories of a Rating Agency shall
mean AAA (long-term), AAAm or AAAm-G (money market funds) and A-1+ (short-
term) in the case of Standard & Poor's and Aaa (long-term) and P-1 (short-
term) in the case of Moody's and in the case of any other Rating Agency shall
mean such equivalent ratings.
Record Date: As to any Distribution Date, the last day of the month
-----------
(or if such last day is not a Business Day, the Business Day immediately
preceding such last day) preceding the month of such Distribution Date.
Reimbursement Amount: As to any Distribution Date, the sum of (x)(i)
--------------------
all Insured Payments paid by the Certificate Insurer, but for which the
Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 5.01(a) plus (ii) interest accrued thereon, calculated at
the Late Payment Rate from the date the Trustee received the related Insured
Payments and (y)(i) any amounts then due and owing to the Certificate Insurer
under the Insurance Agreement or the Certificate Insurance Policy plus (ii)
interest on such amounts at the Late Payment Rate. The Certificate Insurer
shall notify the Trustee and the Servicer of the amount of any Reimbursement
Amount.
Required Amount: For each Distribution Date occurring on or prior to
---------------
the 30th Distribution Date, _% of the Cut-off Date Pool Balance. For each
Distribution Date thereafter, the lesser of (i) _% of the Cut-off Date Pool
Balance and (ii) _% of the Pool Balance as of such Distribution Date;
provided that in no event will the Required Amount be less than a floor
amount equal to the greater of (x) _% of the Cut-off Date Pool Balance and
(y) __% of the aggregate Trust Balances of all Mortgage Loans delinquent 91
days or more (including for this purpose any Mortgage Loans in foreclosure
and any Mortgage Loans with respect to which the related Mortgaged Properties
have been acquired by the Trust Fund) as of the end of the related Collection
Period. Notwithstanding the foregoing, for each Distribution Date, if the
cumulative principal losses on the Trust Balances of the Mortgage Loans
specified in item (xxxvi) of the Servicing Certificate prepared pursuant to
Section 4.01 exceed ____% of the Cut-off Date Pool Balance, then the Required
Amount shall be ____% of the Cut-off Date Pool Balance.
Responsible Officer: When used with respect to the Trustee, the
-------------------
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman
or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, the
Controller and any Assistant Controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter, to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
Retained Rights: As defined in Section 2.01(e).
---------------
Retransfer Date: As defined in Section 2.06.
---------------
Retransfer Notice Date: As defined in Section 2.06.
----------------------
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 Payment: With respect to any
---------------------------------------
Distribution Date during the Managed Amortization Period, an amount equal to
the lesser of (i) the Maximum Principal Payment and (ii) the Alternative
Principal Payment. With respect to any Distribution Date on or after the
Rapid Amortization Commencement Date, an amount equal to the Maximum
Principal Payment.
Seller: MLCC Mortgage Investors, Inc., a Delaware corporation, or
------
its successor in interest.
Seller Certificate: The Certificates signed and countersigned by the
------------------
Trustee substantially in the form set forth in Exhibits B and D hereto.
Seller Certificate Principal Balance: As of the date of determin
------------------------------------
ation thereof, the amount equal to (i) the Pool Balance as of the end of the
day next preceding such date of determination minus (ii) the Invested Amount
as of the end of such day.
Seller Certificateholders: The Holders of the Seller Certificates.
-------------------------
Seller Interest Collections: As to any Distribution Date, Trust
---------------------------
Interest Collections for the related Collection Period that are not
Certificate Interest Collections.
Seller Principal Collections: As to any Distribution Date, Trust
----------------------------
Principal Collections for the related Collection Period minus the amount of
such Trust Principal Collections required to be distributed to Investor
Certificateholders pursuant to Section 5.01(b).
Seller Subordinated Amount: As to any Distribution Date, the least of
--------------------------
(i) _% of the Cut-off Date Pool Balance minus the sum of (a) the
aggregate amount of Trust Principal Collections allocable to the
Seller that have previously been distributed to Investor
Certificateholders pursuant to Section 5.01(c)(i) and (b) the
aggregate amount of Investor Loss Amounts that have previously been
reallocated to the Seller pursuant to Section 5.01(c)(ii); or
(ii) the Seller Subordinated Amount on the previous Distribution Date;
or
(iii) the Required Amount.
Seriously Delinquent Mortgage Loan: As to any Distribution Date, any
----------------------------------
Mortgage Loan which (i) had not reached its stated maturity and was
delinquent in payment of interest for more than 90 days at the end of the
related Collection Period, (ii) had reached its stated maturity and was more
than 60 days delinquent at the end of the related Collection Period, or (iii)
was in default under the terms and provisions of the Loan Agreement (other
than a default related to a delinquency) as of the end of the related
Collection Period and as to which the Servicer had notified the Mortgagor of
such default, terminated the Loan Agreement and demanded the immediate
repayment of the outstanding Loan Balance.
Servicer or MLCC: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, a Delaware
----------------
corporation, or its successor in interest or any successor servicer appointed
as herein provided.
Servicing Certificate: A certificate completed by and executed on
---------------------
behalf of the Servicer in accordance with Section 4.01.
Servicing Fee Rate: 0.__% per annum.
------------------
Servicing Officer: Any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to the Trustee by the Servicer, as such list may from time to time be
amended.
Standard & Poor's: Standard & Poor's Corporation or its successor in
-----------------
interest.
Stated Maturity Date: The Distribution Date in June 2006.
--------------------
Support Agreement: The letter agreement between the Servicer and its
-----------------
Indirect Parent dated as of April 1, 1996, pursuant to which the Indirect
Parent ensures performance by the Servicer of the obligations to repurchase
certain Mortgage Loans pursuant to Section 2.02 and to deposit certain
amounts in the Certificate Account pursuant to Section 4.02.
Transfer: Any direct or indirect transfer, sale, pledge,
--------
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
Transfer Date: With respect to the Initial Mortgage Loans, the
-------------
Closing Date and with respect to any Eligible Substitute Mortgage Loan, the
date on which such Eligible Substitute Mortgage Loan is conveyed to the Trust
under the terms hereof.
Transfer Deposit Amount: As defined in Section 2.02(b).
-----------------------
Transferee: Any Person who is acquiring by Transfer any Ownership
----------
Interest in a Certificate.
Trust: The trust created by this Agreement and designated "ML
-----
Revolving Home Equity Loan Trust 1996-1".
Trust 1989: The trust created by the Trust 1989 Pooling and
----------
Servicing Agreement and designated "ML Home Equity Loan Trust 1989-1".
Trust 1989 Pooling and Servicing Agreement: The Pooling and
------------------------------------------
Servicing Agreement dated as of November 1, 1989 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Equity
Management, Inc., as Servicer, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Home Equity Acceptance, Inc., as
Seller, and Security Pacific National Bank, as Trustee, and all amendments
thereof and supplements thereto.
Trust 1989 Trustee: The institution which executed the Trust 1989
------------------
Pooling and Servicing Agreement as Trustee, or its successors in interest, or
any successor trustee that has been appointed in accordance with the terms of
the Trust 1989 Pooling and Servicing Agreement.
Trust 1991: The trust created by the Trust 1991 Pooling and
----------
Servicing Agreement and designated "ML Home Equity Loan Trust 1991-2".
Trust 1991 Pooling and Servicing Agreement: The Pooling and
------------------------------------------
Servicing Agreement dated as of September 1, 1991 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, as Servicer, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Home Equity Acceptance, Inc., as
Seller, and Bankers Trust Company of California, N.A., as Trustee, and all
amendments thereof and supplements thereto.
Trust 1991 Trustee: The institution which executed the Trust 1991
------------------
Pooling and Servicing Agreement as Trustee, or its successors in interest, or
any successor trustee that has been appointed in accordance with the terms of
the Trust 1991 Pooling and Servicing Agreement.
Trust 1993: The trust created by the Trust 1993 Pooling and
----------
Servicing Agreement and designated "ML Home Equity Loan Trust 1993-1".
Trust 1993 Pooling and Servicing Agreement: The Pooling and
------------------------------------------
Servicing Agreement dated as of February 1, 1993 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, as Servicer, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Home Equity Acceptance, Inc., as
Seller, and Bankers Trust Company of California, N.A., as Trustee, and all
amendments thereof and supplements thereto.
Trust 1993 Trustee: The institution which executed the Trust 1993
------------------
Pooling and Servicing Agreement as Trustee, or its successors in interest, or
any successor trustee that has been appointed in accordance with the terms of
the Trust 1993 Pooling and Servicing Agreement.
Trust 1994-1: The trust created by the Trust 1994-1 Pooling and
------------
Servicing Agreement and designated "ML Home Equity Loan Trust 1994-1".
Trust 1994-1 Pooling and Servicing Agreement: The Pooling and
--------------------------------------------
Servicing Agreement dated as of April 1, 1994 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, as Servicer, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Home Equity Acceptance, Inc., as
Seller, and Bankers Trust Company of California, N.A., as Trustee, and all
amendments thereof and supplements thereto.
Trust 1994-1 Trustee: The institution which executed the Trust 1994
--------------------
1 Pooling and Servicing Agreement as Trustee, or its successors in interest,
or any successor trustee that has been appointed in accordance with the terms
of the Trust 1994-1 Pooling and Servicing Agreement.
Trust 1994-2: The trust created by the Trust 1994-2 Pooling and
------------
Servicing Agreement and designated "ML Home Equity Loan Trust 1994-2".
Trust 1994-2 Pooling and Servicing Agreement: The Pooling and
--------------------------------------------
Servicing Agreement dated as of September 1, 1994 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, as Servicer, MLCC Mortgage Investors, Inc., as Seller, and
Bankers Trust Company of California, N.A., as Trustee, and all amendments
thereof and supplements thereto.
Trust 1994-2 Trustee: The institution which executed the Trust 1994
--------------------
2 Pooling and Servicing Agreement as Trustee, or its successors in interest,
or any successor trustee that has been appointed in accordance with the terms
of the Trust 1994-2 Pooling and Servicing Agreement.
Trust 1995-1: The trust created by the Trust 1995-1 Pooling and
------------
Servicing Agreement and designated "ML Home Equity Loan Trust 1995-1".
Trust 1995-1 Pooling and Servicing Agreement: The Pooling and
--------------------------------------------
Servicing Agreement dated as of March 1, 1995 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, as Servicer, MLCC Mortgage Investors, Inc., as Seller, and
Bankers Trust Company of California, N.A., as Trustee, and all amendments
thereof and supplements thereto.
Trust 1995-1 Trustee: The institution which executed the Trust 1995
--------------------
1 Pooling and Servicing Agreement as Trustee, or its successors in interest,
or any successor trustee that has been appointed in accordance with the terms
of the Trust 1995-1 Pooling and Servicing Agreement.
Trust 1995-2: The trust created by the Trust 1995-2 Pooling and
------------
Servicing Agreement and designated "ML Home Equity Loan Trust 1995-2".
Trust 1995-2 Pooling and Servicing Agreement: The Pooling and
--------------------------------------------
Servicing Agreement dated as of October 1, 1995 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, as Servicer, MLCC Mortgage Investors, Inc., as Seller, and
Bankers Trust Company of California, N.A., as Trustee, and all amendments
thereof and supplements thereto.
Trust 1995-2 Trustee: The institution which executed the Trust 1995
--------------------
2 Pooling and Servicing Agreement as Trustee, or its successors in interest,
or any successor trustee that has been appointed in accordance with the terms
of the Trust 1995-2 Pooling and Servicing Agreement.
Trust Balance: As to any Mortgage Loan, other than a Liquidated
-------------
Mortgage Loan, and day, the related Cut-off Date Trust Balance, plus any
Additional Balances in respect of such Mortgage Loan arising during the
Managed Amortization Period, minus the sum of (i) all Principal Collections
credited against the Loan Balance (excluding, in the case of any Common
Mortgage Loan, any such Principal Collections applied in reduction of the
principal balance of such Common Mortgage Loan sold and assigned to one or
more of the Prior Trusts) in accordance with the related Loan Agreement prior
to such day, and (ii) any Trust Insurance Proceeds received prior to such day
in respect of such Mortgage Loan. For purposes of this definition, a
Liquidated Mortgage Loan shall be deemed to have a Trust Balance equal to the
Trust Balance of the related Mortgage Loan immediately prior to the final
recovery of related Liquidation Proceeds and a Trust Balance of zero
thereafter.
Trust Fund: The corpus of the ML Revolving Home Equity Loan Trust
----------
1996-1, consisting of, to the extent described herein, the following:
(i) the Trust Balance of each Mortgage Loan, including any Additional
Balance arising during the Managed Amortization Period under such
Mortgage Loan subsequent to the related Cut-off Date, all payments
of interest and of principal thereon, from whatever source derived,
received on or with respect to such Mortgage Loan on and after the
applicable Cut-off Date and allocable to such Trust Balance (but
not including all accrued interest and principal due on or with
respect to such Mortgage Loan for Interest Periods prior to the
related Cut-off Date);
(ii) such assets as shall from time to time be identified as deposited
in the Certificate Account in accordance with this Agreement;
(iii) the interest of the Certificateholders to the extent of the Trust
Balances of the Mortgage Loans and interest accrued thereon in (x)
property which secured a Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure, (y) any insurance
policies related to the Mortgage Loans, including hazard insurance
policies, and (z) the related Mortgage, Loan Agreement and other
Mortgage File documents for each Mortgage Loan;
(iv) the benefit of the Support Agreement and the Certificate Insurance
Policy; and
(v) the proceeds of each of the foregoing.
Trust Insurance Proceeds: As to any Mortgage Loan and Collection
------------------------
Period, an amount equal to the lesser of (i) Insurance Proceeds paid to the
Servicer during such Collection Period (reduced by any related expenses of
the Servicer in collecting such proceeds), which (x) are not Liquidation
Proceeds, (y) are not 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 Servicer and (z) will be applied by
the Servicer in reduction of the Loan Balance of such Mortgage Loan and (ii)
the Trust Balance of such Mortgage Loan at the end of such Collection Period,
together with accrued and unpaid interest thereon at the Net Loan Rate from
the last day on which interest was paid in full on such Mortgage Loan to the
end of such Collection Period.
Trust Interest Collections: As to any payment on a Mortgage Loan
--------------------------
made by or on behalf of the related Mortgagor for the related Collection
Period, the lesser of (i) the portion thereof allocable to accrued interest
for the related Interest Period in accordance with the terms of the related
Loan Agreement (net of interest at the Servicing Fee Rate on the Loan Balance
for each day during such Interest Period) and (ii) accrued interest at the
Net Loan Rate on the Trust Balance for each day during such Interest Period.
Trust Principal Collections: As to any Mortgage Loan and Collection
---------------------------
Period, the sum of (i) all amounts (other than Insurance Proceeds and
Liquidation Proceeds) received from or on behalf of the related Mortgagor
during such Collection Period which, at the time of receipt, were applied in
reduction of the Loan Balance in accordance with the terms of the related
Loan Agreement (other than, in the case of any Common Mortgage Loan, any such
principal collections applied in reduction of the principal balance of such
Common Mortgage Loan sold and assigned to any Prior Trust), (ii) the
principal portion of any Net Trust Liquidation Proceeds and Trust Insurance
Proceeds and (iii) the principal portion of any Transfer Deposit Amount.
Trustee: The institution executing this Agreement as Trustee, or its
-------
successor in interest, or any successor trustee that has been appointed in
accordance with the terms of this Agreement.
Unpaid Certificate Interest Shortfall: As to any Distribution Date,
-------------------------------------
the aggregate amount, if any, of Certificate Formula Interest that was
accrued in respect of one or more prior Distribution Dates and has not been
distributed to Investor Certificateholders.
Section 1.02. Interest Calculations.
---------------------
All calculations of interest hereunder that are made in respect of the
Loan Balance, Trust Balance or Additional Balance of a Mortgage Loan,
including calculations of interest at the Servicing Fee Rate, 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 Accrual Period and a year assumed to consist of 360 days.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans.
----------------------------
(a) In consideration of the Trustee's delivery to or upon the order of
the Seller of the Certificates in an aggregate amount equal to the Cut-off
Date Pool Balance, the Seller does hereby transfer, assign, set over and
otherwise convey to the Trustee without recourse (except as provided herein)
all the right, title and interest of the Seller in and to (i)(A) the Cut-off
Date Trust Balance of each Mortgage Loan, including any Additional Balance
arising during the Managed Amortization Period under each Mortgage Loan
subsequent to the related Cut-off Date and assigned and transfered to the
Trustee hereunder, all payments of interest and principal thereon, from
whatever source derived, which are received on or with respect to each
Mortgage Loan on or after the Cut-off Date and are allocable to the Trust
Balance (but not including all accrued interest and principal due on or with
respect to the Mortgage Loans for Interest Periods prior to the Cut-off
Date), (B) the Certificate Account, and (C) the Certificate Insurance Policy,
(ii) to the extent of the Trust Balances of the Mortgage Loans and interest
accrued thereon, as provided in this Agreement, (A) any Mortgaged Properties
converted to ownership through foreclosure or deed in lieu or otherwise, (B)
any insurance policies related to the Mortgage Loans, and (C) the related
Mortgages, Loan Agreements and other Mortgage File documents for the Mortgage
Loans; and (iii) the proceeds of each of the foregoing.
The Seller and the Trustee acknowledge that the Prior Trusts have
rights, interests, power and authority with respect to the Common Mortgage
Loans and the related Loan Agreements, Mortgages and other Mortgage File
documents to the extent provided in the Prior Trust Pooling and Servicing
Agreements. The Servicer acknowledges that, pursuant to the terms of the
Loan Agreements, amounts received from or on behalf of the Mortgagor of a
Common Mortgage Loan which, at the time of receipt, are treated as principal
collections pursuant to the related Loan Agreement, will be applied in
reduction of the principal balance of such Common Mortgage Loan sold to one
or more of the Prior Trusts as provided in the Prior Trust Pooling and
Servicing Agreements before such collections may be applied as Principal
Collections under this Agreement.
The parties hereto intend that the transaction set forth herein be a
sale by the Mortgage Loan Seller to the Seller and a sale by the Seller to
the Trust of all of their 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 Mortgage Loan Seller and the
Seller hereby grant to the Trustee a first priority security interest in all
of the Mortgage Loan Seller's and the Seller's right, title and interest in
and to the (i) Mortgage Loans identified on the Mortgage Loan Schedule on the
Cut-off Date, (ii) Mortgage Loans added to the Mortgage Loan Schedule from
time to time, (iii) all property included in the Trust Fund, (iv) and all
proceeds of any of the foregoing; and this Agreement shall constitute a
security agreement under applicable law.
In connection with such assignment, transfer and conveyance of the Trust
Fund, as promptly as practicable but in no event later than 10 days following
the Closing Date, (i) the Mortgage Loan Seller will file in the appropriate
office in the State in which the principal place of business of the Mortgage
Loan Seller is located a UCC-1 financing statement executed by the Mortgage
Loan Seller as debtor, naming the Seller as secured party and listing as
collateral the Mortgage Loans identified on the Mortgage Loan Schedule and
all property constituting the Trust Fund, and (ii) the Seller will file in
the appropriate office in the State in which the principal place of business
of the Seller is located a UCC-1 financing statement executed by the Seller
as debtor, naming the Trustee as secured party and listing as collateral the
Mortgage Loans identified on the Mortgage Loan Schedule and all property
constituting the Trust Fund. In connection with such filings, the Mortgage
Loan Seller and the Seller agree that they shall each cause to be filed all
necessary continuation statements thereof and to take or cause to be taken
such actions and execute such documents as are necessary to perfect and
protect the Certificateholders' interests in the Mortgage Loans and the
proceeds thereof allocable thereto.
(b) In connection with the foregoing assignment, transfer and
conveyance by the Seller, the Servicer acknowledges that it is holding as
custodian for the Trustee or the applicable Prior Trustee the following
documents or instruments with respect to each Mortgage Loan so assigned and
transferred (other than Mortgage Loans which have been prepaid in full on or
after the Cut-off Date and prior to the date of the execution of this
Agreement):
(i) The original Loan Agreement;
(ii) The related Mortgage with evidence of recording indicated
thereon; and
(iii) As to each Mortgage Loan With Title Insurance, evidence of
such insurance (to the extent such evidence is included in the
related Mortgage File).
Except as hereinafter provided, the 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 in order to carry out the duties of Servicer hereunder, then
such successor shall be entitled to request delivery of such documents or
instruments by the Servicer and to retain such documents or instruments for
as long as necessary for servicing purposes. Any such documents or
instruments shall be returned to the Servicer (unless returned to the related
Mortgagor in connection with the payment in full of the related Mortgage
Loan) when possession thereof is no longer required.
(c) The Servicer further confirms to the Trustee that it has caused the
portions of its records relating to the Mortgage Loans to be clearly and
unambiguously marked to indicate that the Trust Balances of such Mortgage
Loans (to the extent provided herein) have been assigned and transferred to
the Trustee and constitute part of the Trust Fund in accordance with the
terms of the trust created hereunder.
(d) The Servicer's right to maintain possession of the documents
enumerated above shall continue so long as the long term unsecured debt of
the Indirect Parent is assigned ratings of at least A- by Standard and Poor's
and A3 by ▇▇▇▇▇'▇. At such time as the long term unsecured debt of the
Indirect Parent does not satisfy the above referenced criteria, as promptly
as practicable but in no event more than 90 days following the happening of
such event (or 120 days upon the receipt by the Trustee from the Servicer of
a letter from each Rating Agency that such longer period (without taking into
account the Certificate Insurance Policy) will not result in a reduction in
or withdrawal of any rating of the Investor Certificates), the Servicer shall
at the expense of the Servicer (i) prepare assignments in recordable form to
the Trustee of each Mortgage Loan (which may be a blanket assignment) and
(ii) deliver the related Mortgage Files to the Trustee to be held by the
Trustee in trust, upon the terms herein set forth, for the use and benefit of
all present and future Certificateholders and the Trustee shall retain
possession thereof except to the extent the Servicer requires any Mortgage
Files for normal servicing as contemplated by Section 3.07; provided,
however, that such preparation of assignments and delivery of related
Mortgage Files shall not be required in the case of any Common Mortgage Loan
for which the Servicer has so prepared an assignment and delivered the
related Mortgage File to the related Prior Trustee. In the event the Servicer
fails to deliver the Mortgage Files to the Trustee within such 90 day period
or, if applicable, 120 day period, the Trustee shall give written notice
pursuant to the Support Agreement to the Indirect Parent of the Servicer's
failure to deliver the Mortgage Files.
Within 60 days following delivery of the Mortgage Files to the Trustee,
it will review or cause to be reviewed each 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 60 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 the Mortgage Loan Schedule, the Trustee shall
promptly notify the Servicer, which shall have a period of 30 days after such
notice within which to correct or cure any such defect. Upon the completion
of the review by the Trustee of each Mortgage File within such 60 day period
and, if necessary, the correction or cure of any defect by the Servicer
within such 30 day period, the Servicer will submit such assignments of the
Mortgage Loans for recording in the appropriate public offices for real
property records within seven (7) days of the completion of such review and
necessary correction and instruct the recording offices to return the
original recorded assignments to the Trustee. Within 30 days following
receipt by the Trustee of the recorded assignment the Trustee shall review or
cause to be reviewed such assignment to confirm the information specified
above with respect to the other documents. The Trustee shall notify the
Servicer of any defect in such assignment based on such review. The Servicer
shall have a period of 30 days following such notice to correct or cure such
defect.
If the Servicer fails to record an assignment of a Mortgage Loan as
herein provided, the Trustee shall prepare and file or cause to be prepared
and filed, at the expense of the Servicer, such assignments in the
appropriate real property or other records and the Servicer hereby appoints
the Trustee as its attorney-in-fact with full power and authority acting in
its stead for the purpose of such preparation and filing.
(e) On the Closing Date the Seller shall deliver the Certificate
Insurance Policy to the Trustee.
(f) Bankers Trust Company of California, N.A., as the Prior Trust
Trustee or successor trustee for each of the Prior Trusts, hereby
acknowledges that the Mortgage Loan Seller has previously reserved and
retained certain rights, interests, power and authority (the "Retained
Rights") with respect to the Common Mortgage Loan Interests to the extent of
the Mortgage Loan Seller's interest in the Common Mortgage Loan Interests not
sold to the Prior Trusts, all as set forth more fully in the Prior Trust
Pooling and Servicing Agreements. Without limiting the generality of the
foregoing, the Retained Rights include the right of the Mortgage Loan Seller
to certain balances arising under the related Common Mortgage Loans, together
with payments of principal and interest, from whatever source derived,
allocable to such balances, as provided in the Prior Trust Pooling and
Servicing Agreements. The Mortgage Loan Seller hereby notifies the Prior
Trust Trustees that certain of the Retained Rights are being assigned to the
Trustee pursuant to, and to the extent provided in, this Agreement (the
"Assignment of Retained Rights").
Bankers Trust Company of California, N.A., as the Prior Trust Trustee or
successor trustee for each of the Prior Trusts, hereby acknowledges receipt
of (i) a copy of this Agreement, (ii) notice of the Assignment of Retained
Rights as set forth in this Section 2.01(f), (iii) notice of the transfer and
assignment to the Trustee of the Common Mortgage Loan Interests and related
rights (including, without limitation, payments on the Common Mortgage Loans)
as evidenced by this Section 2.01(f), and (iv) notice of the Trustee's first
priority perfected security interest in the Common Mortgage Loan Interests
and related rights (including, without limitation, payments on the Common
Mortgage Loans) as evidenced by, and to the extent provided in, this
Agreement.
Not later than the end of the 90 day period or, if applicable, 120 day
period specified in Section 2.01(d), the Servicer shall deliver the Mortgage
File for each Common Mortgage Loan to the Prior Trust Trustee with the most
senior rights thereto. Each of the Prior Trust Trustees hereby agrees to act
for the Trust Fund as a bailee that has received notification of the Trust
Fund's interest in the Common Mortgage Loans to the extent of the Trust
Balances at such time as the Prior Trust Trustees take possession of the Loan
Agreements or any of the other Mortgage File documents with respect to the
Common Mortgage Loans. Further, each of the Prior Trust Trustees agrees that
if the Loan Agreement or any of the other Mortgage File documents with
respect to any Common Mortgage Loan that may be held by it in its capacity as
trustee are no longer required to be held by it in such capacity (by reason
of payment of the balance of such Common Mortgage Loan owned by such Prior
Trust or for any other reason that under the related Prior Trust Pooling and
Servicing Agreement permits or requires release of the related Mortgage File
to the Seller), and the Trust Balance of such Common Mortgage Loan is then
owned by the Trust Fund, the Prior Trust Trustee shall promptly transfer
possession of all such Mortgage File documents to the Prior Trust Trustee, if
any, with the then most senior rights to the related Mortgage File for such
Common Mortgage Loan and if there is no such trustee, then to the Trustee or
to any successor Trustee. Each of the Prior Trust Trustees hereby
acknowledges and confirms that its right, title and interest in any mortgage
loan and any property related to such mortgage loan conveyed to it pursuant
to Section 2.01(a) of the applicable Prior Trust Pooling and Servicing
Agreement, is limited to the "trust balance" (as defined in the applicable
Prior Trust Pooling and Servicing Agreement), if any, of any such mortgage
loan plus accrued interest, if any, thereon.
Nothing in this Section 2.01(f) shall be deemed to affect the right or
obligation of a Prior Trust Trustee to release the Mortgage File of any
Common Mortgage Loan to the servicer of the related Prior Trust or to the
Servicer to the extent permitted or required by the applicable Prior Trust
Pooling and Servicing Agreement.
Section 2.02. Acceptance by Trustee; Retransfer
---------------------------------
of Mortgage Loans; Substitution of
----------------------------------
Eligible Substitute Mortgage Loans.
----------------------------------
(a) The Trustee acknowledges the assignment and transfer of the Loan
Agreements and the Mortgages pursuant to Section 2.01, and declares that it
will hold the Trust Fund in trust, upon the terms herein set forth, for the
use and benefit of all present and future Certificateholders and the
Certificate Insurer.
(b) If the time to correct or cure any defect of which the Trustee has
notified the Servicer following any review by the Trustee of the Mortgage
Files pursuant to Section 2.01 has expired without any correction or cure or
if any loss that materially and adversely affects the interests of the
Certificateholders is incurred in respect of any Mortgage Loan as a result of
(i) a defect in any document constituting a part of a Mortgage File or (ii)
the Servicer's retention of such Mortgage File, then on the Business Day next
preceding the Distribution Date in the month following the Collection Period
in which the time to correct or cure such defect expired or such loss
occurred, deposit in the Certificate Account 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 Trust Balance of such Mortgage Loan shall be deducted from the Pool
Balance; provided, however, that interest accrued on the Trust Balance of
such Mortgage Loan to the end of the related Interest Period shall be the
property of the Trust. The Servicer shall determine if the removal of such
Trust Balance from the Pool Balance in accordance with the preceding sentence
would cause the Seller Certificate Principal Balance to be less than the
Minimum Seller Interest ("Transfer Deficiency"), in which event the Servicer
shall deliver written notice of such deficiency to the Trustee and the
Seller, and within five Business Days after the Business Day of such
retransfer the Servicer shall either (i) substitute an Eligible Substitute
Mortgage Loan or (ii) deposit into the Certificate 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 Certificate Account or, if the Seller Certificate Principal Balance
is not reduced below the Minimum Seller 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 and deliver such
instrument of transfer or assignment presented to it by the Servicer, in each
case without recourse, as shall be necessary to vest in the Servicer or the
Seller, as the case may be, legal and beneficial ownership of such
repurchased or removed Mortgage Loan (including any property acquired in
respect thereof and any insurance policy or Insurance Proceeds with respect
thereto). Notwithstanding the preceding sentence, the Trustee shall not be
required to execute and deliver such instrument of transfer and assignment if
the Mortgage Loan is required to be retained for the use and benefit of a
Prior Trust pursuant to a Prior Trust Pooling and Servicing Agreement. It is
understood and agreed that the obligation of the Seller and the Servicer 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 Trans-
fer Deposit Amount into the Certificate Account shall constitute the sole
remedy respecting such defect available to Certificateholders, the Trustee or
the Certificate Insurer, and such obligation on the part of the Servicer
shall survive any resignation or termination of the Servicer pursuant to
Section 7.04 or 8.01.
Notwithstanding the foregoing, if any Eligible Substitute Mortgage Loans
conveyed to the Trust are Common Mortgage Loans, the Servicer shall be
required to deliver to, and deposit with, the Trustee with respect to such
Common Mortgage Loans an Officer's Certificate identifying the Eligible
Substitute Mortgage Loans with respect to which such documents or instruments
previously were delivered and deposited pursuant to a Prior Trust Pooling and
Servicing Agreement. The documents or instruments identified in such
Officer's Certificate shall be considered to be part of the Mortgage Files
for all purposes of this Agreement and shall be subject to the provisions of
Section 2.01(e).
Notwithstanding any other provision of this Section 2.02(b), a re-
transfer of a Defective Mortgage Loan to the Servicer pursuant to this
Section that would cause the Seller Certificate Principal Balance to be less
than the Minimum Seller Interest shall not occur if either the Seller fails
to convey an Eligible Substitute Mortgage Loan or to deposit into the
Certificate Account any related Transfer Deposit Amount required by this
Section 2.02(b) with respect to the transfer of such Defective Mortgage Loan.
(c) For any Collection Period during which the Servicer substitutes
one or more Eligible Substitute Mortgage Loans, the Servicer shall determine
the Transfer Deposit Amount which shall be deposited into the Certificate
Account on the Business Day next preceding the Distribution Date occurring in
the month following such Collection Period. All amounts received in respect
of the Eligible Substitute Mortgage Loan or Loans during the Collection
Period in which the circumstances giving rise to the relevant substitution
occur shall not be a part of the Trust Fund and shall not be deposited by the
Servicer into the Certificate Account. All amounts received by the Servicer
in respect of any Mortgage Loan so removed from the Trust Fund during the
Collection Period in which the circumstances giving rise to such substitution
occur shall be deposited by the Servicer into the Certificate Account. Upon
the substitution of an Eligible Substitute Mortgage Loan or Loans, such
Mortgage Loans shall be subject to the terms of this Agreement in all
respects, and the Servicer shall be deemed to have entered into or 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 Servicer in selecting each
Eligible Substitute Mortgage Loan shall not be adverse to the interests of
the Trustee, the Certificate Insurer and the Investor Certificateholders and
shall be comparable to the selection procedures applicable to the Mortgage
Loans conveyed hereunder as of the date of this Agreement.
The provisions of this Section 2.02(c) shall apply to (i) any removal or
retransfer of Defective Mortgage Loan or Loans, (ii) the substitution of
Eligible Substitute Mortgage Loan or Loans by the Servicer pursuant to
Section 2.04(b) and 3.01(c) or (iii) the repurchase of any Mortgage Loan or
Loans by the Servicer pursuant to Section 3.06.
The Mortgage Loan Schedule shall be amended to reflect all additions,
substitutions or deletions of Mortgage Loans provided for in this Section.
Section 2.03. Representations and Warranties
------------------------------
Regarding the Servicer.
----------------------
The Servicer represents and warrants to the Trustee, the Certificate
Insurer and the Investor Certificateholders that:
(i) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has
the corporate power to own its assets and to transact the business
in which it is currently engaged. The 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 properties owned or leased by it requires such quali-
fication 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 Servicer;
(ii) The 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 corporation action
to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(iii) The 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 which consent the Servicer has not already
obtained in connection with the execution, delivery, performance,
validity or enforceability of this Agreement;
(iv) The execution, delivery and performance of this Agreement by the
Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of the Servicer, or constitute a material
breach of any mortgage, indenture, contract or other agreement to
which the Servicer is a party or by which the Servicer may be
bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any
of its properties or with respect to this Agreement or the
Certificates which, if adversely determined, would in the opinion
of the Servicer have a material adverse effect on the transactions
contemplated by this Agreement;
(vi) On the Closing Date, the Servicer will assign and transfer all of
its right, title and interest in the Trust Balance of each Mortgage
Loan to the Seller;
(vii) The Servicer will take all necessary actions to enforce payment of
the Mortgage Loans by the obligors thereon, including commencing or
joining as a party to proceedings; and
(viii) (a) Immediately prior to the assignment and transfer referenced in
(vi) above, the Servicer had good title to the Mortgage Loans, is
authorized to assign and transfer the Trust Balance of each
Mortgage Loan to the Seller and (b) the Servicer and its assignees,
including the Seller and the Trustee, have the right to enforce
payment of the Mortgage Loans against the obligors on such Mortgage
Loans.
Upon discovery by the Seller, the Servicer or the Trustee of a breach of any
of the foregoing representations and warranties in this Section 2.03 which
materially and adversely affects the interests of the Investor
Certificateholders, the party discovering such breach shall give prompt
written notice to the other parties. Within sixty (60) days of its discovery
or receipt of notice of any such breach, the Servicer shall use all
reasonable efforts to cure such breach in all material respects.
Section 2.04. Representations and Warranties of the Servicer
-------------------------------------
Regarding the Mortgage Loans; Repurchase and Substitution Obligations.
-------------------
--------------------
As indicated in Section 2.03(vi), on the Closing Date the Trust Balances
of the Mortgage Loans are being assigned and transfered by the Servicer to
the Seller. In connection with such assignment and transfer the Servicer is
making the representations and warranties in this Section 2.04 to the Seller.
As a condition of the purchase by the Seller, the Seller has required that
the Servicer make such representations and warranties directly to the
Trustee, the Certificate Insurer and the Investor Certificateholders so that
the Trustee may recover directly against the Servicer on such representations
and warranties rather than indirectly through claims by the Seller against
the Servicer. Consequently, the Servicer represents and warrants to the
Trustee, the Certificate Insurer and the Investor Certificateholders as of
the Closing Date (unless otherwise specified) and as to each Mortgage Loan
that:
(i) The information set forth in the Mortgage Loan Schedule was true
and correct in all material respects at the date or dates
respecting which such information is furnished;
(ii) As of the Closing Date, each Mortgage is a valid lien on the
property securing the amount owed by the Mortgagor under the Loan
Agreement subject only to (a) the lien of current real property
taxes and assessments, (b) any related first, second or third
mortgage loan, which first, second or third mortgage loan does not
contain an obligatory future advance provision (except for certain
Mortgage Loans that are subordinate to mortgage loans held by MLCC,
in which case the senior lien amount is defined as the total credit
limit of the senior liens), (c) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally in the area wherein the property subject to
the Mortgage is located or specifically reflected in the appraisal
obtained in connection with the origination of the related Mortgage
Loan obtained by the Seller and (d) 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;
(iii) Immediately prior to the transfer and assignment by the Servicer to
the Seller referred to in Section 2.03(vi) hereof and the transfer
and assignment by the Seller to the Trust Fund referred to in
Section 2.01, the Servicer and the Seller each had good title to
each Mortgage Loan and was authorized to transfer the Trust Balance
of each Mortgage Loan to the Seller and to the Trust Fund,
respectively;
(iv) As of the Cut-off Date, no payment of interest on or in respect of
any Mortgage Loan is more than one month past due;
(v) As of the Closing Date, to the best knowledge of the Servicer,
there is no mechanics' lien or claim for work, labor or material
affecting the premises subject to any Mortgage which is or may be a
lien prior to, or equal or coordinate with, the lien of such
Mortgage except those which are insured against by the title
insurance policy referred to in (x) below;
(vi) As of the Closing Date, to the best knowledge of the Servicer,
there is no delinquent tax or assessment lien against any Mortgaged
Property;
(vii) As of the Closing Date, to the best knowledge of the Servicer,
there is no valid offset, defense or counterclaim to any Loan
Agreement or Mortgage;
(viii) As of the Closing Date, to the best knowledge of the Servicer,
without independent investigation, the physical property subject to
each Mortgage is free of material damage, including damage by
water, flood or similar casualty, and is in good repair (excluding
any damage to the Mortgaged Property from the presence of hazardous
wastes or hazardous substances, as to which no representation or
warranty is made);
(ix) As of the origination of each Mortgage Loan and as of the Closing
Date, all requirements of federal, state or local laws, including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity
and disclosure laws and the regulations promulgated thereunder
which are applicable to the origination and servicing of the
Mortgage Loans, have been complied with in all material respects
and the consummation of the transactions herein contemplated,
including, without limitation, the receipt of interest by Certifi
cateholders, will not violate of such laws in any
material respect;
(x) As to each Mortgage Loan With Title Insurance, a lender's title
insurance policy or binder, or other assurance of title customary
in the relevant jurisdiction therefor, was issued on or as of the
date of the recording of each such Mortgage, and each such policy
or binder is valid and remains in full force and effect;
(xi) As of the Closing Date, the Servicer has not received a notice of
default of any first mortgage loan related to a Mortgaged Property
which has not been cured by a party other than the Servicer;
(xii) As to most of the Mortgage Loans, the definition of "Prime Rate"
for each day set forth in the Loan Agreements is the prime rate
published for that day in The Wall Street Journal; if a prime rate
range is published, the Loan Agreements provide either that the
highest rate of that range is to be used or that the midpoint of
any prime rate range published in The Wall Street Journal is to be
used; and for the other Mortgage Loans, the Loan Agreements provide
that the "Prime Rate" for any day is the highest prime rate (or
equivalent rate) quoted for that day by three specified banks;
(xiii) As of the Closing Date, no more than _____% of the Mortgage Loans
by principal balance have as Mortgagors employees or independent
contractors entitled to the reduced Loan Rates specified in the
schedules referred to in clause (xii) above;
(xiv) At the date of the execution of the related Loan Agreement, the
Combined Loan-to-Value Ratio for each of the Mortgage Loans was not
in excess of 85%, except with respect to approximately ____% of the
Mortgage Loans by principal balance;
(xv) Except with respect to approximately ____% of the Mortgage Loans by
principal balance, no Mortgage Loan was originated in a program
conducted by the Servicer in which the amount of documentation in
the underwriting process was limited in comparison to the
Servicer's normal documentation requirements;
(xvi) Approximately _____% of the Mortgage Loans by principal balance
were, as of their origination, the primary residences of the
related Mortgagors;
(xvii) Not more than ____% of the Mortgage Loans by principal balance are
secured by Mortgaged Properties located in the same zip code area;
(xviii) Not more than ____% of the Mortgage Loans by principal balance will
be secured by condominiums;
(xix) Not more than ____% of the Mortgage Loans by principal balance will
be secured by manufactured homes within the meaning of ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Code, Section 5402(6);
(xx) With respect to each Mortgage Loan originated by the Servicer, the
Servicer performed a full appraisal of the related Mortgaged
Property at the origination of such Mortgage Loan;
(xxi) No selection procedure believed by the Servicer to be adverse to
the interests of the Certificateholders was used in selecting the
Mortgage Loans for inclusion in the Trust Fund; and
(xxii) Each Mortgagor is required to maintain for the corresponding
Mortgaged Property a hazard insurance policy conforming to the
requirements of Section 3.04 and, to the best knowledge of the
Servicer, each such individual hazard insurance policy is in effect
and has not lapsed.
The representations and warranties set forth in this Section 2.04 shall
survive the transfer and assignment of the Mortgage Loans to the Trustee.
Upon discovery by the Seller, the Servicer or the Trustee of a breach of any
of the foregoing representations and warranties, without regard to any
limitation set forth in such representation or warranty concerning the
knowledge of the Servicer as to the facts stated therein, which materially
and adversely affects the interests of the Investor Certificateholders or the
Certificate Insurer in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties. Any breach of a
representation and warranty contained in clauses (ii)(b) and (v) - (viii),
inclusive, shall not be deemed to materially and adversely affect the inter-
ests of Investor Certificateholders or the Certificate Insurer in the related
Mortgage Loan to the extent that such Mortgage Loan is not a delinquent or
defaulted Mortgage Loan. Within 60 days of its discovery or receipt of
notice of any such breach, the Servicer shall use all reasonable efforts to
cure such breach in all material respects. Unless at the expiration of such
60-day period, such breach has been cured in all material respects or
otherwise does not exist or continue to exist, the Servicer shall, not later
than the Business Day next preceding the Distribution Date in the month
following the related Collection Period in which any such cure period ex-
pired, either (i) repurchase such Defective Mortgage Loan (including any
property acquired in respect thereof and any insurance policy or Insurance
Proceeds with respect thereto) or (ii) remove such Mortgage Loan from the
Trust Fund and substitute in its place an Eligible Substitute Mortgage Loan
or Loans, in either case in the same manner and subject to the same
conditions as set forth in Section 2.02. Upon making any such repurchase or
removal, the Servicer shall be entitled to receive an instrument of assign-
ment of the repurchased or removed Mortgage Loan from the Trustee to the
extent set forth in Section 2.02. The obligation of the Servicer to
repurchase or remove any such Defective Mortgage Loan (or property acquired
in respect thereof) shall constitute the sole remedy against the Servicer
with respect to such breach of the foregoing representations or warranties
available to Investor Certificateholders, the Trustee on behalf of Certifi-
cateholders, or the Certificate Insurer, and such obligation on the part of
the Servicer shall survive any resignation or termination of the Servicer
pursuant to Section 7.04 or 8.01.
Section 2.05. Execution and Authentication
----------------------------
of Certificates.
-----------------------------------
The Trustee has caused to be executed, countersigned and delivered to or
upon the order of the Seller (except that the Seller Certificates shall be in
the name of the Seller), in exchange for the Initial Mortgage Loans,
concurrently with the transfer and assignment to the Trustee of the Initial
Mortgage Loans, Investor Certificates in authorized denominations and the
Seller Certificates, together evidencing the entire ownership of the Trust
Fund.
Section 2.06. Retransfers of Mortgage Loans
-----------------------------
at Election of the Seller.
---------------------------------------------
Subject to the conditions set forth below, the Seller may, but shall not
be obligated to, require the retransfer of Mortgage Loans from the Trust to
the Seller as of the end of a Collection Period (the "Retransfer Date")
during the Managed Amortization Period. On the fifth (5th) Business Day (the
"Retransfer Notice Date") prior to the Retransfer Date designated in such
notice, the Seller shall give the Trustee 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;
(ii) On the Retransfer Notice Date the Seller Certificate Principal
Balance (after giving effect to the removal from the Trust of the
Mortgage Loans) is at least equal to the Minimum Seller Interest;
(iii) The retransfer of any Mortgage Loans on any Retransfer Date during
the Managed Amortization Period shall not, in the reasonable belief
of the Servicer, 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 Retransfer Date, the Servicer shall have delivered
to the Trustee a revised Mortgage Loan Schedule, reflecting the
proposed retransfer and on the Retransfer Date the Servicer shall
have caused the portions of its records relating to the Mortgage
Loans to be clearly and unambiguously marked to show that the
Mortgage Loans retransferred to the Seller are no longer owned by
the Trust;
(v) The Seller shall represent and warrant that no selection procedures
reasonably believed by the Seller to be adverse to the interests of
the Investor Certificateholders or the Certificate Insurer were
utilized in selecting the Mortgage Loans to be removed from the
Trust;
(vi) In connection with the first retransfer of Mortgage Loans pursuant
to this Section 2.06, each Rating Agency shall have received on or
prior to the Retransfer Notice Date notice of such proposed
retransfer of Mortgage Loans and, prior to the first Retransfer
Date, shall have notified the Seller 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 taking into account the Certificate Insurance Policy;
(vii) The percentage of the Trust Balances of the Mortgage Loans
remaining in the Trust Fund (after giving effect to the proposed
retransfer) that are delinquent more than 30 days shall not exceed
by more than ____% the percentage (based on the average for the
three immediately preceding months) of the Trust Balances of the
Mortgage Loans in the Trust Fund (prior to giving effect
to the proposed
retransfer) that
are delinquent
more than 30
days; and
(viii) The Seller shall have delivered to the Trustee and the Certificate
Insurer an Officer's Certificate certifying that the items set
forth in subparagraphs (i) through (vii), inclusive, have been
performed or are true and correct, an 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 Seller or the Servicer, the
Servicer shall perform in a timely manner those acts required of it as
specified above. Upon satisfaction of the above conditions, on the
Retransfer Date the Trustee shall execute and deliver to the Servicer such
instruments of assignment and other documents prepared by the Servicer as
shall be reasonably necessary to retransfer such Mortgage Loan or Loans to
the Servicer. Any such retransfer of the Trust's right, title and interest in
and to Mortgage Loans shall be without recourse, representation or warranty
by the Trust to the Seller.
The Mortgage Loan Schedule shall be amended to reflect all additions,
substitutions or deletions of Mortgage Loans provided for in this Section
2.06.
Section 2.07. Tax Treatment.
-------------
It is the intention of the Seller, the Servicer and the Investor
Certificateholders (and Certificate Owners) that the Investor Certificates
will be 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 Seller, the Servicer, the Trustee and each Investor Certificateholder
(and 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) agree to treat the Investor
Certificates (or beneficial interest therein), for purposes of federal, state
and local income, as indebtedness secured by the Mortgage Loans and to report
the transactions contemplated by this Agreement on all applicable tax returns
in a manner consistent with such treatment. Each Certificateholder agrees
that it will cause any Certificate Owner acquiring an interest in a Investor
Certificate through it to comply with this Agreement as to treatment 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.
Furthermore, the Trustee shall treat the Trust as a security device only, and
shall not file tax returns or obtain an employer identification number on
behalf of the Trust.
Section 2.08. Covenants of the Seller.
-----------------------
The Seller shall not, without the prior written consent of the
Certificate Insurer and the Trustee (which consent of the Trustee shall be
given only upon the delivery to the Trustee by the Seller of a letter from
each Rating Agency to the effect that any of the following will not result in
a downgrading or withdrawal of its rating of the Investor Certificates), do
any of the following:
(a) dissolve or liquidate, in whole or in part, or file a petition to
take advantage of any applicable insolvency, bankruptcy or reorganization
statute;
(b) merge or consolidate with any other corporation other than a
corporation wholly-owned, directly or indirectly, by the Indirect Parent,
having a certificate of incorporation containing provisions identical to the
covenants of this Section 2.08 and executing an agreement of assumption to
perform every obligation of the Seller hereunder; or
(c) incur any indebtedness except in connection with, or relating to,
the issuance of obligations that are rated in the highest rating category of
each Rating Agency.
ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. MLCC to Act as Servicer.
-----------------------
(a) The Servicer shall service and administer the Mortgage Loans in
accordance with its customary servicing procedures consistent with general
industry practice. The Servicer shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Servicer shall continue, and 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
execute, at the Servicer's direction, any special or limited powers of
attorney and other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder.
For purposes of this Article III, to the extent that the Servicer
determines that there are any conflicts or inconsistencies between its
servicing responsibilities set forth in this Agreement and its servicing
responsibilities as servicer of one or more Common Mortgage Loans set forth
in the Prior Trust Pooling and Servicing Agreements, the Servicer shall use
its best efforts to service the Mortgage Loans for purposes of this Agreement
in accordance with the most prudent and conservative procedures set forth in
either the Prior Trust Pooling and Servicing Agreements or in this Agreement.
The relationship of the Servicer (and of any successor to the 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 connection with its servicing and administration of the Mortgage
Loans, the Servicer may consent to the placing or refinancing of a lien
senior to that of the Mortgage on the related Mortgaged Property. Any such
consent shall be consistent with the Servicer's then current practice
respecting comparable mortgage loans held in its own portfolio and may be
given only in the following situations:
(i) the Combined Loan-to-Value Ratio of the related Mortgage Loan
following such placing or refinancing of a senior lien does not
exceed the Combined Loan-to-Value Ratio at origination of such
Mortgage Loan; or
(ii) such placement or refinancing of an existing senior lien is in
connection with a new senior lien for which the principal balance
is limited to the sum of the unpaid principal balance of the
existing senior lien, closing costs (including all prepaid items),
points and other funds for the Mortgagor's use (which other funds
do not exceed 1% of the principal balance of the new senior lien).
(c) In connection with its servicing and administration of the Mortgage
Loans, during the Rapid Amortization Period the Servicer may increase the
Credit Limit specified in the related Loan Agreement by modifying the Loan
Agreement to provide for an additional amount. The Combined Loan-to-Value
Ratio of such Mortgage Loan immediately following such modification shall not
exceed 85%.
(d) In connection with its servicing and administration of the Mortgage
Loans and at the request of a Mortgagor or at its own initiative, the
Servicer may agree to modify the Loan Agreement relating to the Mortgage Loan
of such Mortgagor or waive compliance by the Mortgagor with any provision of
such Loan Agreement. Any such modification or waiver shall be consistent with
the Servicer's then current practice respecting comparable mortgage loans
held in its own portfolio and shall not:
(i) extend the scheduled maturity date of, modify the interest rate
payable under (except as required by law or as contemplated by the
Loan Agreement), or constitute a cancellation or discharge of the
outstanding Loan Balance under, such Mortgage Loan; or
(ii) materially and adversely affect the security afforded by the Mort-
gaged Property.
Any modification, waiver or change of the nature described in Section 3.02(a)
shall be deemed not to violate either Section 3.01(d)(i) or (ii).
(e) In the event that:
(i) the Servicer consents to (A) the placing or refinancing of a senior
lien that does not satisfy the requirements of Section 3.01(b), (B)
the modification of a Loan Agreement to provide for an increased
Credit Limit resulting in a Combined Loan-to-Value Ratio exceeding
the limitation specified in Section 3.01(c), or (C) the
modification or waiver of a Loan Agreement that does not satisfy
the requirements of Section 3.01(d), or
(ii) any loss is suffered by the Trust Fund in respect of any Mortgage
Loan as a result of a failure to file on or within 90 days
subsequent to the Closing Date of the UCC-1 financing statements
referred to in Section 2.01,
then the Servicer shall, not later than the Business Day preceding the
Distribution Date in the month following the Collection Period during which
such modification, change, loss or consent occurred, either repurchase the
applicable Mortgage Loan or Loans or substitute one or more Eligible
Substitute Mortgage Loans for the applicable Mortgage Loan or Loans.
Each repurchase or substitution shall be accomplished in the same manner
and subject to the same conditions as set forth in Section 2.02. Upon
completing any such repurchase or substitution, the Servicer 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.
The Mortgage Loan Schedule shall be amended to reflect all deletions,
substitutions or additions of Mortgage Loans provided for in this Section
3.01.
(f) Notwithstanding anything to the contrary in Section 3.01(e), if the
short-term credit rating of the Indirect Parent is downgraded below A-1/P-1,
any repurchase or substitution of a Mortgage Loan pursuant to Section
3.01(e) shall occur on the second Business Day following the date on which
the applicable modification, waiver or changes agreed to by the Servicer are
made by it.
Section 3.02. Collection of Certain Mortgage Loan
-----------------------------------
Payments; Mortgage Loan Payment Record.
----------------------------------------------------------
(a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures as it follows with respect to mortgage
loans in its servicing portfolio comparable to the Mortgage Loans.
Consistent with, and without limiting the generality of, the foregoing, the
Servicer may, in its discretion, do the following:
(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,
(ii) if the Mortgagor is in default or about to be in default because of
the Mortgagor's financial condition, arrange with a Mortgagor a
schedule for the payment of interest due and unpaid for a period of
not more than 180 days after the date of the initial uncured
delinquency thereon, and
(iii) waive compliance with or modify the terms of such Mortgage Loan as
appropriate to permit the Mortgagor to bring such Mortgage Loan
current and/or remedy any deviations from compliance with the
documentation for such Mortgage Loan.
provided, however, that as to clause (ii) above, the Servicer may in its
discretion arrange with a Mortgagor a schedule for the payment of interest
due and unpaid for a period that exceeds 180 days if such arrangement is
determined by the Servicer to be reasonable and consistent with its then
current practice respecting comparable mortgage loans held in its own port-
folio, including but not limited to its practices regarding mortgage loans
secured by mortgage properties located in federally designated disaster
areas.
Any waiver or modification of the sort described in this Section 3.02(a)
shall not (x) be considered in any determination pursuant to clause (i) of
the definition of Seriously Delinquent Mortgage Loan or (y) affect the amount
or timing of the Servicer's obligation to make Monthly Advances with respect
to any Mortgage Loan which Monthly Advances shall be made without regard to
any such waiver or modification.
(b) The Servicer shall establish and maintain for the Trust Fund a
Mortgage Loan Payment Record in which the following payments on and
collections in respect of the Mortgage Loans shall as promptly as practicable
be credited by the Servicer for the account of the Holders of the
Certificates:
(i) All Interest Collections and Principal Collections;
(ii) The Transfer Deposit Amount in respect of any Mortgage Loans
transferred, substituted or repurchased pursuant to Sections 2.02, 2.04,
3.01 and 3.06;
(iii) All Net Trust Liquidation Proceeds; and
(iv) All Trust Insurance Proceeds (including, for this purpose,
any amounts required to be credited by the Servicer pursuant to the last
sentence of Section 3.04(c)).
The foregoing requirements respecting credits to the Mortgage Loan Payment
Record are exclusive. Without limiting the generality of the preceding
sentence, the Servicer need not enter in the Mortgage Loan Payment Record
amounts representing fees (including annual fees) or late charge penalties
payable by Mortgagors, or amounts received by the Servicer for the account of
Mortgagors for application towards the payment of taxes, insurance premiums,
assessments and similar items. If any such amounts are credited to the
Mortgage Loan Payment Record, they shall be thereafter debited to the
Mortgage Loan Payment Record by the Servicer in accordance with its normal
servicing procedures.
(c) Until the Business Day prior to each Distribution Date on which
amounts are required to be deposited in the Certificate Account pursuant to
Section 4.02, the Servicer may, so long as the Indirect Parent has a
short-term credit rating of A-1/P-1 or higher and a long-term unsecured debt
rating of at least A3 by ▇▇▇▇▇'▇, retain and commingle such amounts with its
own funds and shall be entitled to retain for its own account any investment
income thereon, and any such investment income shall not be subject to any
claim of the Trustee or Certificateholders. In the event that the Servicer
is not permitted to retain and commingle such amounts with its own funds, it
shall, all provisions in this Agreement to the contrary notwithstanding,
deposit such amounts in the Certificate Account created and maintained
pursuant to Section 4.02 not later than the second Business Day following
receipt, subject to withdrawal to the same extent as debits to the Mortgage
Loan Payment Record are permitted pursuant to Section 3.03.
(d) The Mortgage Loan Payment Record shall be made available for
inspection during normal business hours of the Servicer upon request of the
Trustee or the firm of independent accountants acting pursuant to Section
3.10.
Section 3.03. Permitted ▇▇▇▇--------------------------------------ts to
_________________________________________________________
the Mortgage Loan--------------------------------------------------------
----_________________________________________________________________________
____
------------------------------------------------------____________________
__________________________________
Payment Record. ______________
The Servicer may, from time to time, make debits to the Mortgage Loan
Payment Record for the following purposes:
(i) to make deposits into the Certificate Account pursuant to Section
4.02;
(ii) to reimburse or indemnify the Servicer to the extent required or
permitted by Section 7.03;
(iii) to reimburse the Servicer for unreimbursed Monthly Advances
theretofore made in respect of any Mortgage Loan to the extent of
receipts by the Servicer of late payments of Trust Interest
Collections and Net Trust Liquidation Proceeds in respect of such
Mortgage Loan;
(iv) to reimburse the Servicer for any Nonrecoverable Advance;
(v) to pay the Servicer amounts received in respect of Defective
Mortgage Loans during the Collection Period in which such Defective
Mortgage Loans were replaced, substituted for or repurchased or
which were otherwise reflected in the calculation of the related
Transfer Deposit Amount;
(vi) to pay the Servicer out of related collections the servicing fee
pursuant to Section 3.08; and
(vii) to pay the Servicer the servicing fee pursuant to Section 3.08 with
respect to any Liquidated Mortgage Loan to the extent that Net
Liquidation Proceeds for such Mortgage Loan exceed the related Loan
Balance together with interest accrued thereon at the Net Loan Rate
from the last date to which such interest was distributed to
Certificateholders to the end of the related Collection Period pre-
ceding the Distribution Date for which the related Net Trust
Liquidation Proceeds are distributed to Certificateholders.
In addition, if the Servicer credits to the Mortgage Loan Payment Record
any amount not required to be credited thereto 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 debit such amount in
the Mortgage Loan Payment Record, any provision herein to the contrary not-
withstanding. All amounts credited by the Servicer to the Mortgage Loan
Payment Record shall be held by the Servicer in trust for the
Certificateholders until such amounts are disbursed in accordance with
Section 4.02 or debited in accordance with this Section 3.03.
Section 3.04. Hazard Insurance Policies; Property
--------------------------------------------------
rotection Expenses.
------------------
(a) Under the terms of each of the Mortgage Loans, the Mortgagor is
required to maintain for the corresponding Mortgaged Property a hazard
insurance policy which contains a standard mortgagee's clause with an
appropriate endorsement in favor of the Servicer or the Trustee and which
insures against loss by fire and by hazards included within the term
"extended coverage" and by such other hazards for which the Servicer requires
coverage. The hazard insurance coverage for the Mortgage Loans shall be in
the amounts and for the periods of time required by the Servicer. In
general, such hazard coverage for each Mortgage Loan will be in an amount
approximately equal to the lesser of (a) the maximum insurable value of the
Mortgaged Property or (b) the Credit Limit of such Mortgage Loan plus the
outstanding balance of any mortgage loan senior to such Mortgage Loan, but in
no event will such amount be less than is necessary to prevent the Mortgagor
from becoming a coinsurer thereunder. If the Mortgaged Property is in an
area identified at the time of origination in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount representing coverage not less
than the least of (i) the Credit Limit of such Mortgage Loan plus the
outstanding balance of any mortgage loan senior to such Mortgage Loan, (ii)
the full insurable value or (iii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973. The Servicer shall
also maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, hazard insurance with extended coverage in a similar amount. In
general, such hazard coverage for each such foreclosed Mortgage Loan will be
in an amount which is at least approximately equal to the lesser of (a) the
maximum insurable value from time to time of the improvements which are a
part of such property or (b) the Credit Limit of such Mortgage Loan plus the
outstanding balance of any mortgage loan senior to such Mortgage Loan at the
time of such foreclosure plus accrued interest and the good-faith estimate of
the Servicer of related Liquidation Expenses to be incurred in connection
therewith. Amounts collected by the Servicer under any such policies shall
be credited to the Mortgage Loan Payment Record and deposited in the
Certificate Account to the extent that they constitute Net Trust Liquidation
Proceeds or Trust Insurance Proceeds.
(b) If the Servicer, or an affiliate thereof, shall obtain and maintain
a "mortgagee interest policy" issued by an insurer acceptable to the Rating
Agencies insuring against hazard losses on all of the Mortgaged Properties in
an amount equal to the aggregate Loan Balances outstanding from time to time
under the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in the second and third sentences of Section
3.04(a). Such mortgagee policy may contain a deductible clause, in which case
the Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with the second and third
sentences of Section 3.04(a), and there shall have been a loss which would
have been covered by such policy, credit to the Mortgage Loan Payment Record
and deposit into the Certificate Account, no later than 60 days after such
loss occurs, the amount not otherwise payable under the blanket policy
because of such deductible clause.
(c) The Servicer shall incur, or refrain from incurring, Liquidation
Expenses and Property Protection Expenses with respect to Mortgage Loans in a
manner consistent with this Agreement and the Servicer's then current
practice respecting comparable mortgage loans in its own portfolio. Anything
contained herein to the contrary notwithstanding, the Servicer shall have the
right to assign, transfer, abandon or surrender any Mortgaged Property, if,
in the good faith judgment of the Servicer, there is a reasonable possibility
that continued retention of such interest in such Mortgaged Property could
result in Liquidation Expenses and Property Protection Expenses with respect
to such Mortgage Loan exceeding Liquidation Proceeds. The Servicer shall be
reimbursed for amounts expended for Property Protection Expenses and Liquida-
tion Expenses with respect to Mortgage Loans in accordance with the terms of
this Agreement.
Section 3.05. Mortgagor Transfers of
----------------------
Mortgaged Properties.
----------------------------------------
In any case in which the Servicer becomes aware that a Mortgaged
Property has been conveyed by a Mortgagor (except to, or for the benefit of,
the Mortgagor, a co-Mortgagor or relative of the Mortgagor), the Servicer
will take reasonable steps to freeze such Mortgagor's Credit Limit at the
level of the current outstanding Loan Balance. Notwithstanding the
Servicer's efforts to freeze a Mortgagor's Credit Limit at the current
outstanding Loan Balance under such circumstances, the Loan Balance of such a
Mortgage Loan may include any charges which may accrue subsequent to the date
of such freeze.
The Servicer shall exercise or refrain from exercising its right to
undertake to collect the full amount due under the related Loan Agreement
consistent with the then current practice of the Servicer and without regard
to the inclusion of such Mortgage Loan in the Trust Fund and not in the
Servicer's portfolio. If it elects not to enforce its right to accelerate
and collect the full amount of such Mortgage Loan or if it is prevented from
doing so by applicable law, the Servicer 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 Loan Agreement and the Mortgagor remains
liable thereon. The 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 retaining 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 Loan Agreement may be made by
the 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 Loan
Agreement pursuant to Section 3.01(d). Any fee collected by the Servicer for
entering into any such assumption will be retained by the Servicer as
additional servicing compensation.
Notwithstanding any provision of this Agreement to the contrary, the
Servicer shall not be deemed to be in default, breach or otherwise in
violation of its obligations hereunder by reason of any transfer of a
Mortgaged Property which occurs by operation of law or which the Servicer is
restricted by law from preventing.
Section 3.06. Realization Upon Defaulted
--------------------------
Mortgage Loans.
----------------------------------
The Servicer shall foreclose upon or otherwise comparably convert to
ownership Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in delinquency or default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.02. In connection with such foreclosure or other conversion, the
Servicer shall follow such practices (including, in the case of any
delinquency or default on a related prior mortgage loan, the advancing of
funds to correct such delinquency or default) and procedures as it shall deem
necessary or advisable and as shall be normal and usual in the general first
and second mortgage loan servicing activities of the Servicer. The Servicer
shall be reimbursed for Property Protection Expenses incurred by it out of
the related Liquidation Proceeds. Notwithstanding the foregoing, the
Servicer shall not be required (i) to expend its own funds in connection with
any foreclosure or towards the correction of any delinquency or default on a
related prior mortgage loan or restoration of any property unless, in the
reasonable judgment of the Servicer, such foreclosure, correction or resto-
ration will increase Net Trust Liquidation Proceeds, or (ii) to foreclose
upon or otherwise convert to ownership any Mortgaged Property which the
Servicer has determined may be materially contaminated with hazardous wastes
or hazardous substances.
In lieu of foreclosing on any delinquent or defaulted Mortgage Loan, the
Servicer, may, in its sole discretion, repurchase from the Trust Fund any
Mortgage Loan which is a Seriously Delinquent Mortgage Loan. Each repurchase
shall be subject to the same conditions as set forth in Section 2.02. The
repurchase price for any Seriously Delinquent Mortgage Loan shall be equal to
the sum of (i) the Trust Balance thereof as of the end of the Collection
Period next preceding the Distribution Date upon which the proceeds of such
repurchase are to be distributed and (ii) accrued and unpaid interest to the
end of such Collection Period computed on a daily basis at the Net Loan Rate
on the Trust Balance thereof. The purchase price shall be included as part of
the Transfer Deposit Amount deposited into the Certificate Account on the
Business Day next preceding the Distribution Date upon which the proceeds of
such repurchase are to be distributed. Upon making any such purchase the
Servicer 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.
In the event that title to any Mortgaged Property securing a Mortgage
Loan other than a Common Mortgage Loan is acquired in foreclosure or by deed
in lieu of foreclosure, the deed or certificate of sale shall be issued to
the Servicer on behalf of the Trust Fund, to the Trustee on behalf of
Certificateholders, or to the Trustee's nominee on behalf of
Certificateholders.
Section 3.07. Trustee to Cooperate.
--------------------
Upon the payment in full of the Trust Balance of any Mortgage Loan
during the Rapid Amortization Period or the distribution of all Net Trust
Liquidation Proceeds with respect to any Mortgage Loan, the Servicer will
notify the Trustee 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 credited to the Mortgage Loan Payment Record
pursuant to Section 3.02 have been so credited) of a Servicing Officer. Such
notification shall be made each month at the time that the Servicer delivers
the Servicing Certificate to the Trustee pursuant to Section 4.01. Upon any
such payment or distribution, the Servicer is authorized to execute, pursuant
to the authorization contained in Section 3.01, if the Loan Balance of such
Mortgage Loan equals zero, an instrument of satisfaction regarding the
related Mortgage, which instrument of satisfaction shall be recorded by the
Servicer if required by applicable law and be delivered to the Person
entitled thereto. No expenses incurred in connection with such instrument of
satisfaction shall be reimbursed from amounts at the time credited to the
Mortgage Loan Payment Record.
If the Trustee is holding the Mortgage Files, from time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan, the
Trustee shall, upon request of the Servicer and delivery to the Trustee of a
receipt signed by a Servicing Officer, release the related Mortgage File to
the Servicer and shall execute at the Servicer's direction such documents as
shall be necessary to the prosecution of any such proceedings. Such trust
receipt shall obligate the Servicer to return the Mortgage File to the
Trustee when the need therefor by the Servicer no longer exists 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
receipt shall be released by the Trustee to the Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
delinquent or defaulted Mortgage Loan following any recordation of the
assignments of Mortgage in accordance with the provisions of this Agreement,
the Trustee shall, if so requested, assign such delinquent or defaulted
Mortgage Loan for the purpose of collection to the Servicer or to another
assignee for collection designated by the Servicer (any such assignment shall
unambiguously indicate that the assignment is for the purpose of collection
only), and, upon such assignment, such assignee for collection will thereupon
bring all required actions in its own name and otherwise enforce the terms of
the Mortgage Loan and the Servicer will deposit or credit any Net Trust
Liquidation Proceeds received with respect thereto in the Certificate Account
or the Mortgage Loan Payment Record, as the case may be. 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 Servicer shall cause the
assignee for collection to promptly reassign such Mortgage Loan to the
Trustee and return it to the place where the related Mortgage File was being
maintained.
Section 3.08. Servicing Compensation; Payment
-------------------------------
of Certain Expenses by Servicer.
---------------------------------------------------
(a) The Servicer shall be entitled to withhold and pay to itself as
servicing compensation out of each payment received by it on account of
interest on a Mortgage Loan an amount equal to daily interest at the
Servicing Fee Rate on the Loan Balance from time to time outstanding during
the related Interest Period. Additional servicing compensation in the form
of assumption fees, annual fees, late payment charges or otherwise shall be
retained by the Servicer.
(b) The Servicer shall be required to pay all expenses incurred by it
in connection with its activities hereunder (including payment of Trustee
fees, and 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.
Section 3.09. Annual Statement as to Compliance.
---------------------------------
The Servicer will deliver to the Company and the Trustee on or before
March 31 of each year, beginning with the first March 31 that occurs at least
six months after the Cut-off Date, an Officers' Certificate stating, as to
each signer thereof, that (a) a review of the activities of the Servicer
during the preceding calendar year and of performance under this Agreement
has been made under such officer's supervision and (b) to the best of such
officer's knowledge, based on such review the Servicer has fulfilled all of
its obligations under this Agreement in all material respects throughout such
year, or, if there has been a default in the fulfillment of any such
obligation in any material respect, specifying each such default known to
such officer and the nature and status thereof. Copies of such statement
shall be provided to each Rating Agency and the Certificate Insurer. Copies
of such statement shall also be provided by the Servicer to any
Certificateholder upon request. If the Servicer shall fail to provide such
copies and the Trustee is aware that the Servicer has not so provided copies,
the Trustee shall provide such copies at the Servicer's expense if the
Trustee has received such statement.
Section 3.10. Annual Independent Public
-------------------------
Accountants' Servicing Report.
-------------------------------------------------
On or before March 31 of each year, beginning with the first March 31
that occurs at least six months after the Cut-off Date, the Servicer at its
expense shall cause a nationally recognized firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a report to the Company and the Trustee to the effect
that all Mortgage Loans serviced by the Servicer under this Agreement were
included in the total population that was subject to selection for testing in
such firm's examination of certain documents and records and that such
examination, which has been conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers (or such other audit
or review program applicable to the Servicer), has disclosed no items of
material noncompliance with the provisions of the Uniform Single Attestation
Program for Mortgage Bankers (or such other program), except for such items
of noncompliance as shall be set forth in such report. Copies of such report
shall be provided to the Rating Agencies, the Certificate Insurer, and, upon
request, to the Certificateholders, by the Servicer, or by the Trustee at the
Servicer's expense if the Trustee has received such report and the Servicer
shall fail to provide such copies and the Trustee is aware that the Servicer
has not so provided copies.
Section 3.11. Access to Certain Documentation
-------------------------------
------------------------------------------------- and
Information Regarding the
Mortgage Loans.
----------------------------------
(a) The Servicer shall provide to the Trustee, the Certificate Insurer,
Investor Certificateholders which are federally insured savings and loan
associations, the Office of Thrift Supervision, the Federal Deposit Insurance
Corporation and the supervisory agents and examiners of such office and such
corporation, access to the documentation regarding the Mortgage Loans
required by applicable regulations of the Office of Thrift Supervision, such
access being afforded without charge but only upon reasonable request and
during normal business hours at the offices of the Servicer. Nothing in this
Section 3.11 shall derogate from the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in
this Section 3.11 as a result of such obligation shall not constitute a
breach of this Section 3.11.
(b) The Servicer shall supply information, in such form as the Trustee
shall reasonably request, to the Trustee on or before the start of the third
Business Day preceding each Distribution Date, as is required in the
Trustee's reasonable judgment to enable the Trustee to make required
distributions and to furnish the required reports to Certificateholders and
to make any draws under the Certificate Insurance Policy.
Section 3.12. Maintenance of Certain Servicing Policies.
-----------------------------------------
The Servicer shall during the term of its service as servicer maintain
in force (i) a policy or policies of insurance covering errors and omissions
in the performance of its obligations as servicer hereunder and (ii) a
fidelity bond in respect of its officers, employees or agents. Each such
policy or policies and bond shall, together, 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;
provided, however, that if the cost of the premiums for such policy or
policies and bond in any year is greater than an amount equal to the sum of
(i) the premiums paid by the Servicer for such policy or policies and bond in
the year during which this Agreement was executed and (ii) the product of (x)
the number of full years from the date of this Agreement to such future date,
(y) 0.15 and (z) the premium amount described in clause (i) above, the policy
or policies and bond maintained by the Servicer may provide for coverage
which does not satisfy the requirements of the Federal National Mortgage
Association so long as the premiums paid by the Servicer therefor approximate
such sum.
Section 3.13. Reports to the Securities and Exchange Commission.
-------------------------------------- ----------
The Servicer 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.
Section 3.14. Information Required by the Internal Revenue Service
--------------------------------------------
Generally and Reports of
Foreclosures and Abandonments of
--------------------------------
Mortgaged Property.
------------------
In addition to the requirements set forth in Section 3.01, the Servicer
shall prepare and deliver, or cause to be prepared and delivered, to the
Trustee for the Trustee's signature, and shall file or cause to be filed, all
federal and state information reports when and as required by all applicable
state and federal income tax laws, including, without limitation, reports
required by Section 6050J of the Code.
Section 3.15. Tax Returns.
-----------
In accordance with Section 2.07 hereof, the Trustee shall not file any
federal or state income tax return for the Trust or apply for a taxpayer
identification number on behalf of the Trust. The Seller shall treat the
Mortgage Loans as its property for all federal and state tax purposes and
shall report all income earned thereon (including amounts payable as fees to
the Servicer) as its income for federal 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 or state tax returns, the
Servicer shall prepare and deliver, or cause to be prepared and delivered, to
the Trustee for filing any tax returns required to filed by the Trust; the
Servicer, as agent on behalf of the Trust, shall promptly sign such returns
and such returns shall be filed by the Servicer. The Servicer shall also
prepare or shall cause to be prepared all tax information required by and to
be distributed to Certificateholders. In no event shall the Trustee or the
Servicer be liable for any liabilities, costs or expenses of the Trust, the
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation federal, state or local income 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. Further Assurances.
------------------
The Servicer shall provide any certifications and other information
reasonably requested by the Trustee.
ARTICLE IV
Servicing Certificate; Certificate Account Deposit
Section 4.01. Servicing Certificate.
---------------------
With respect to each Distribution Date, not later than the second
Business Day prior to each Distribution Date, the Servicer shall deliver to
the Trustee, the Certificate Insurer and to the Rating Agencies a Servicing
Certificate stating the related Collection Period, Distribution Date, the
series number of the Certificates, the date of this Agreement, and including,
but not limited to, the following information:
(i) the aggregate amount of Trust Interest Collections for such
Collection Period (net of any amount included therein which has
been retained by the Servicer prior to such Distribution Date in
reimbursement for any portion of a Monthly Advance made in respect
of the related Mortgage Loan as permitted by clause (iii) of
Section 3.03);
(ii) the aggregate amount of Trust Principal Collections for such
Collection Period;
(iii) the aggregate of any Trust Insurance Proceeds received during the
related Collection Period (including, for this purpose, any amounts
required to be credited by the Servicer pursuant to the last
sentence of Section 3.04(b));
(iv) the aggregate of any Net Trust Liquidation Proceeds received during
the related Collection Period;
(v) the amount of any Transfer Deposit Amount paid by the Seller or
Servicer pursuant to Section 2.02, 2.04, 3.01 or 3.06;
(vi) the Monthly Advance for such Distribution Date;
(vii) the Available Distribution Amount for such Distribution Date;
(viii) any Monthly Advance Reimbursement Amount for such Distribution
Date;
(ix) the Floating Allocation Percentage and the Fixed Allocation
Percentage for such Distribution Date;
(x) the Certificate Interest Collections for such Distribution
Date;
(xi) the Certificate Formula Interest for the related Accrual
Period, together with a specification as to the Certificate
Rate applicable to such Distribution Date and whether it is
derived from LIBOR or the Alternate Certificate Rate;
(xii) the Unpaid Certificate Interest Shortfall, if any;
(xiii) the portion of the Unpaid Certificate Interest Shortfall, if
any, to be distributed on such Distribution Date;
(xiv) the amount of Unpaid Certificate Interest Shortfall, if any,
to remain after the distribution on such Distribution Date;
(xv) the Seller Interest Collections and Seller Principal
Collections for such Distribution Date;
(xvi) the Accelerated Principal Distribution Amount for such
Distribution Date;
(xvii) the Scheduled Principal Collections Payment, separately
stating the components thereof;
(xviii) the aggregate of the Liquidation Loss Amounts and the Investor
Loss Amount for such Distribution Date;
(xix) 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 Section 5.01(a)(iv);
(xx) the Pool Balance of the Mortgage Loans, as of the end of the
preceding Collection Period;
(xxi) the Invested Amount as of the end of the preceding Collection
Period;
(xxii) the Required Amount for such Distribution Date;
(xxiii) the Seller Subordinated Amount for such Distribution Date;
(xxiv) the Overcollateralization Amount, if any, after giving effect
to the distribution to be made on such Distribution Date;
(xxv) the Certificate Principal Balance and Pool Factor after giving
effect to the distribution on such Distribution Date;
(xxvi) the Seller Certificate Principal Balance after giving effect
to the distribution on such Distribution Date;
(xxvii) the aggregate amount of Additional Balances created during the
previous Collection Period;
(xxviii) whether a Rapid Amortization Event has occurred since the
prior Distribution Date, specifying each such Rapid
Amortization Event if one has occurred;
(xxix) the Insured Amount, if any, for such Distribution Date;
(xxx) the Reimbursement Amount, if any, for such Distribution Date;
(xxxi) the amount to be distributed to the Seller pursuant to Section
5.01(a)(vii);
(xxxii) the number and aggregate Trust Balances of Mortgage Loans
delinquent (a) 31 to 60 days, (b) 61 to 90 days and (c) 91 days or
more, respectively, as of the end of the related Collection Period;
(xxxiii) the number and aggregate Trust Balances of all Mortgage Loans
in foreclosure as of the end of the related Collection Period;
(xxxiv) the book value (within the meaning of 12 C.F.R. Section 571.13
or comparable provision) of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure;
(xxxv) the aggregate of the Trust Balances as of the end of the
related Collection Period of the Mortgage Loans which became
Liquidated Mortgage Loans during such Collection Period;
(xxxvi) the cumulative amount of Liquidation Loss Amounts for such
Distribution Date and all prior Distribution Dates; and
(xxxvii) the number and aggregate Trust Balances of Mortgage Loans to
be retransferred from the Trust Fund on the related Retransfer
Date and the cumulative number and aggregate Trust Balance of
all Mortgage Loans that have been retransferred on all prior
Retransfer Dates.
Section 4.02. Certificate Account.
-------------------
The Servicer shall establish and maintain with the Trustee the
Certificate Account as a single, separate account for the benefit of the
Holders of Certificates. The Servicer shall remit to the Trustee by wire
transfer of immediately available funds for deposit into the Certificate
Account, not later than 1:00 p.m. New York City time on the Business Day
prior to each Distribution Date, an amount equal to the aggregate of the
amounts specified in clauses (i) - (v), inclusive, of the Servicing
Certificate furnished to the Trustee pursuant to Section 4.01. The Servicer
shall include with such deposit any Monthly Advance for such Distribution
Date as specified in the Servicing Certificate.
On each Distribution Date upon which there is a Monthly Advance
Reimbursement Amount, upon the request of the Servicer, the Trustee shall
withdraw from the Certificate Account for the account of the Servicer an
amount equal to the Monthly Advance Reimbursement Amount, but not in excess
of (i) the Available Distribution Amount (without taking into account any
portion thereof representing payments of Trust Interest Collections and Trust
Principal Collections allocable to the Seller and payments of any Insured
Amounts) minus (ii) the sum of the Investor Certificate Distribution Amount,
the Premium Amount and the Reimbursement Amount.
At the direction of the Servicer signed by a Servicing Officer, the
Trustee shall invest any funds in the Certificate Account in Permitted
Investments specified in such direction (including (but not limited to)
obligations of the Trustee or any of its affiliates, if such obligations
otherwise qualify as Permitted Investments). Such direction shall be in
writing, shall designate specific investments and shall certify that the
specified investments constitute Permitted Investments. Each investment
shall mature not later than the Business Day next preceding the Distribution
Date following the date of such investment (unless the obligor in respect of
such investment is the Trustee, in which case such investment may mature on
such Distribution Date) and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment shall be for
the benefit of the Servicer. The Trustee shall remit all such income and
gain to the Servicer on each Distribution Date. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Certificate Account by the Servicer out of its own funds immediately as
realized. The Trustee shall not be liable for any loss incurred in connection
with any such investment except with respect to any investment where the
Trustee is the obligor thereon.
Section 4.03. Payments Under Support Agreement.
--------------------------------
In the event that the Servicer does not, on or before 1:00 P.M. New York
City time on the Business Day preceding a Distribution Date, remit to the
Trustee for deposit in the Certificate Account the respective amounts
required to be remitted by it pursuant to Section 4.02, the Trustee, no later
than 2:00 P.M. on such day, shall make a written demand pursuant to the
Support Agreement upon the Indirect Parent for any and all amounts required
to be deposited in the Certificate Account by it pursuant thereto.
To the extent of any payment by the Indirect Parent under the Support
Agreement, the Indirect Parent shall have all rights of the Servicer under
this Agreement to be reimbursed for such payment made by the Indirect Parent,
including, without limitation, rights in and to any Mortgage Loan or payment
with respect to any Mortgage Loan or the proceeds thereof. In addition, the
Indirect Parent shall be subrogated to the rights of Investor
Certificateholders to the extent of payments under the Support Agreement.
Each of the Seller, the Servicer and the Trustee agrees to such subrogation
and, further, agrees to execute such instruments and to take such actions as,
in the sole judgment of the Indirect Parent, as evidenced in writing to the
Seller, the Servicer and the Trustee, are necessary to evidence such
subrogation.
Section 4.04. The Certificate Insurance Policy.
--------------------------------
(a) If, on any Determination Date, the statement delivered to the
Trustee pursuant to Section 4.01 indicates that there will be the payment of
an Insured Amount for the related Distribution Date, the Trustee shall
complete the Notice for Payment (as defined and included in the form
specified by the Certificate Insurance Policy). The Trustee shall submit
such notice to the Certificate Insurer no later than 12:00 noon New York City
time on the Business Day preceding such Distribution Date as a claim for an
Insured Payment.
(b) Upon receipt of Insured Payments from the Certificate Insurer on
behalf of Investor Certificateholders, the Trustee shall deposit such Insured
Payments in the Certificate Account and shall distribute such Insured
Payments, or the proceeds thereof, in accordance with Section 5.01(a);
provided that Insured Payments shall be applied and distributed solely to
Holders of the Investor Certificates and any Preference Amount shall be
distributed solely to the Holders of the Investor Certificates.
(c) The Trustee shall (i) receive as attorney-in-fact of each Holder of
Investor Certificates receiving any Insured Payment from the Certificate
Insurer and (ii) disburse the same to the Holders of such Certificates as set
forth in Section 5.01(a). Insured Payments disbursed by the Trustee from
proceeds of a Certificate Insurance Policy shall not be considered payment by
the Trust Fund with respect to such Certificates, and the Certificate Insurer
shall be entitled to receive the related Reimbursement Amount pursuant to
Section 5.01(a)(v). The Trustee hereby agrees on behalf of each Investor
Certificateholder and the Trust Fund for the benefit of the Certificate
Insurer that it recognizes that to the extent the Certificate Insurer makes
Insured Payments, either directly or indirectly (as by paying through the
Trustee), to the Holders of such Certificates, the Certificate Insurer will
be entitled to receive the related Reimbursement Amount pursuant to Section
5.01(a)(v).
(d) Subject only to the priority of payment provisions of this
Agreement, each of the Seller, the Servicer and the Trustee acknowledges
that, to the extent of any payment made by the Certificate Insurer pursuant
to the Certificate Insurance Policy, the Certificate Insurer is to be fully
subrogated to the extent of such payment and any additional interest due on
any late payment, to the rights of the Holders of the Investor Certificates
to any moneys paid or payable in respect of the Investor Certificates under
this Agreement or otherwise. Each of the Seller, the Servicer and the
Trustee agrees to such subrogation and, further, agrees to execute such
instruments and to take such actions as, in the sole judgment of the
Certificate Insurer, as evidenced in writing to the Seller, the Servicer and
the Trustee, are necessary to evidence such subrogation and, subject to the
priority of payment provisions of this Agreement, to perfect the rights of
the Certificate Insurer to receive any moneys paid or payable in respect of
the Investor Certificates under this Agreement or otherwise.
ARTICLE V
Payments and Statements to
Certificateholders
Section 5.01. Distributions.
-------------
(a) Distribution of Certificate Interest Collections. On each
------------------------------------------------
Distribution Date, the Trustee shall, based upon information set forth in the
Servicing Certificate, distribute out of the Certificate Account to the
extent of Certificate Interest Collections collected during the related
Collection Period and any Monthly Advance for such Distribution Date
(including any amount paid by the Indirect Parent under the Support Agreement
pursuant to Section 4.03), in the following amounts and order of priority to
the following Persons:
(i) to the Certificate Insurer, the Premium Amount;
(ii) to the Investor Certificateholders as interest, the
Certificate Formula Interest and any Unpaid Certificate
Interest Shortfall;
(iii) to the Investor Certificateholders as principal in reduction
of the Certificate Principal Balance, any Investor Loss Amount
for such Distribution Date;
(iv) to the Investor Certificateholders as principal in reduction
of the Certificate Principal Balance, the aggregate amount of
any Investor Loss Reduction Amounts for previous Distribution
Dates that have not been previously reimbursed to Investor
Certificateholders pursuant to this clause (iv);
(v) to the Certificate Insurer, any Reimbursement Amount;
(vi) to the Investor Certificateholders as principal in reduction
of the Certificate Principal Balance, any Accelerated
Principal Distribution Amount; and
(vii) to the Seller, any remaining amount.
provided, however, that, notwithstanding the above prioritization of the
distribution of the Certificate Interest Collections on deposit in the
Certificate Account, on each Distribution Date any Insured Payment received
by the Trustee and deposited in the Certificate Account shall be applied by
the Trustee solely for the benefit of the Investor Certificateholders.
(b) Distribution of Trust Principal Collections. Subject to Section
-------------------------------------------
11.02(b) and except on the Stated Maturity Date, on each Distribution Date,
the Trustee shall distribute out of the Certificate Account to Investor
Certificateholders the Trust Principal Collections up to the Scheduled
Principal Collections Payment (but not in excess of the Certificate Principal
Balance). On the Stated Maturity Date, the Trustee shall distribute Trust
Principal Collections to the Investor Certificateholders up to the
Certificate Principal Balance.
(c) Application of Seller Subordinated Amount. (i) If, after
-----------------------------------------
applying Certificate Interest Collections as provided in Section 5.01(a)
above, any amounts payable pursuant to clauses (i) through (iv), inclusive,
of Section 5.01(a) remain unpaid, the Trustee shall, based on information set
forth in the Servicing Certificate, apply Seller Interest Collections and
Seller Principal Collections (but only up to the Seller Subordinated Amount
prior to such application) to make such payments and the Seller Subordinated
Amount shall be reduced in accordance with clause (i)(a) of the definition
thereof to the extent of such application of funds.
(ii) If Seller Interest Collections and Seller Principal Collections as
so applied in the preceding paragraph are insufficient to cover the amounts
payable pursuant to clauses (iii) and (iv) of Section 5.01(a) on such
Distribution Date, then the remaining Investor Loss Amount (but only to the
extent of the remaining Seller Subordinated Amount on such Distribution Date)
shall be reallocated to the Seller (i.e., in accordance with the definition
of Aggregate Investor Loss Amount) and the Seller Subordinated Amount shall
be reduced in accordance with clause (i)(b) of the definition thereof to the
extent of such reallocation to the Seller.
(d) Distribution of the Insured Payment. With respect to any
-----------------------------------
Distribution Date, to the extent that:
(i) the amount on deposit in the Certificate Account on such
Distribution Date and available to be distributed pursuant to
Section 5.01(a), together with the amount of Seller Interest
Collections and Seller Principal Collections to be applied pursuant
to Section 5.01(c), are less than the amount payable pursuant to
Section 5.01(a)(ii) on such Distribution Date, plus
(ii) after the Seller Subordinated Amount has been reduced to zero, the
amount, if any, by which the Certificate Principal Balance as of
such Distribution Date (after giving effect to all other amounts
distributable and allocable to principal on the Investor
Certificates on such Distribution Date) exceeds the Invested Amount
as of such Distribution Date (after giving effect to all other
amounts distributable and allocable to principal on the Investor
Certificates on such Distribution Date), plus
(iii) any portion of the Certificate Principal Balance remains
outstanding on the Stated Maturity Date (after giving effect to all
other amounts distributable and allocable to principal on the
Investor Certificates on such Distribution Date),
the Trustee will make such payments (the "Deficiency Amount") to Investor
Certificateholders from the Insured Payment pursuant to Section 4.04.
Notwithstanding the foregoing, the Certificate Insurance Policy (i)
shall not cover any such Deficiency Amount on any Dissolution Distribution
Date and (ii) shall not be available to cover any insufficiency in the
distributions required to be made to Investor Certificateholders pursuant to
Section 11.02(b).
The aggregate amount of principal distributed to Investor
Certificateholders under Article V of this Agreement shall not exceed the
Original Certificate Principal Balance.
(e) Method of Distribution. On each Distribution Date, the Trustee
----------------------
shall distribute 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 mailed to such Certificateholder at the address
appearing in the Certificate Register, or upon written request of a Holder of
a Investor Certificate received by the Trustee at least five Business Days
prior to the related Record Date, by wire transfer (but only if such Certifi-
cateholder is the Depository or such Certificateholder owns of record one or
more Investor Certificates which have principal denominations aggregating at
least $5,000,000), or by such other means of payment as such Certifi-
cateholder 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) Final Distribution. Except as otherwise provided in Section
------------------
10.01 and Section 11.02, when the Trustee expects that the final distribution
with respect to the Investor Certificates will be made on the next
Distribution Date, the Trustee shall, no later than three (3) days after the
related Determination Date, mail to each Holder on such date of the Investor
Certificates a notice to the effect that: (i) the Trustee expects that the
final distribution with respect to the Investor Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein,
and (ii) no interest shall accrue on the Investor Certificates from and after
the end of the related Interest Accrual Period. In the event that
Certificateholders do not surrender their Certificates for final
cancellation, the Trustee shall follow procedures comparable to the
arrangements set forth in Section 10.01(e).
(g) 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 the Investor Certificates. None of the Trustee, the Seller nor
the Servicer shall have any responsibility therefore except as otherwise
provided by applicable law.
(h) Distributions to Holders of Seller 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
Seller the Seller Interest Collections and Seller Principal Collections that
are not required to be distributed to the Investor Certificateholders
pursuant to Section 5.01(c) on such Distribution Date; provided that
collections allocable to the Seller Certificates will be distributed to the
Seller only to the extent that such distribution will not reduce the amount
of the Seller Certificate Principal Balance as of such Distribution Date
below the Minimum Seller Interest. Amounts not distributed to the Seller
because of such limitations will be retained in the Certificate Account until
the Seller Certificate Principal Balance exceeds the Minimum Seller Interest,
at which time such excess shall be released to the Seller. If any such
amounts are still retained in the Certificate 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. Certain Calculations by the Trustee.
-----------------------------------
On the LIBOR Business Day next preceding each Distribution Date the
Trustee shall determine LIBOR for the next Accrual Period. The Trustee shall
promptly advise the Servicer of such determination by tested telex or telefax
to the address provided herein.
The determination of LIBOR by the Trustee for each Accrual Period
(excluding the first Accrual Period) shall (in the absence of manifest error)
be final, conclusive and binding upon the Certificateholders, the Servicer
and any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns.
Section 5.03. Statements to Certificateholders.
--------------------------------
Not later than the second Business Day prior to each Distribution Date,
the Servicer shall deliver to the Trustee for mailing to each Holder of a
Investor Certificate and the Certificate Insurer a statement with respect to
such Distribution Date setting forth:
(i) the Investor Certificate Distribution Amount;
(ii) the amount of interest included in such distribution and the
related Certificate Rate;
(iii) the amount, if any, of any Unpaid Certificate Interest
Shortfall in such distribution;
(iv) the amount, if any, of the remaining Unpaid Certificate
Interest Shortfall after giving effect to such distribution;
(v) the amount, if any, of principal in such distribution,
separately stating the components thereof;
(vi) the amount, if any, of the reimbursement of previous
Investor Loss Reduction Amounts in such distribution;
(vii) the amount, if any, of the aggregate of unreimbursed
Investor Loss Reduction Amounts after giving effect to such
distribution;
(viii) the Investor Floating Allocation Percentage for such
Distribution Date;
(ix) the Invested Amount, the Certificate Principal Balance and
the Pool Factor, each after giving effect to such distribution;
(x) the Required Amount for such Distribution Date,
(xi) the Seller Subordinated Amount after giving effect to such
distribution,
(xii) the Pool Balance of the Mortgage Loans as of the end of the
preceding Collection Period and the end of the second preceding
Collection Period;
(xiii) the Overcollateralization Amount, if any;
(xiv) the Servicing Fee for such Distribution Date;
(xv) the amount of any Monthly Advance by the Servicer;
(xvi) the number and aggregate Trust Balances of Mortgage Loans
delinquent (a) 31 to 60 days, (b) 61 to 90 days and (c) 91 days or more,
respectively, as of the end of the preceding Collection Period;
(xvii) the number and aggregate Trust Balances of the Mortgage
Loans in foreclosure as of the end of the preceding Collection Period;
(xviii) the book value (within the meaning of 12 C.F.R.
Section 571.13 or comparable provision) of any real estate acquired
through foreclosure or grant of a deed in lieu of foreclosure; and
(xix) the amount of any Insured Payments by the Certificate
Insurer;
(xx) the number and aggregate Trust Balance of Mortgage Loans to
be retransferred from the Trust Fund on the related Retransfer Date, and
the cumulative number and aggregate Trust Balance of all Mortgage Loans
that have been retransferred on all prior Retransfer Dates.
In the case of information furnished pursuant to clauses (ii)
through (vii) above, the amounts shall be expressed as a dollar amount per
Investor Certificate with a $1,000 denomination.
Within 90 days after the end of each calendar year, the Servicer shall
deliver to the Trustee for mailing to each Person who at any time during the
calendar year was the Holder of a Investor Certificate and to the Certificate
Insurer a statement containing the information set forth in clauses (ii) and
(v) above aggregated for such calendar year or, in the case of each Person
who was a Certificateholder for a portion of such calendar year, setting
forth such information for each month thereof. Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Code.
The Trustee shall prepare or cause to be prepared (based on information
provided to it by the Servicer and in a manner consistent with the treatment
of the Investor Certificates as indebtedness) 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 on
the Investor Certificates (e.g., Internal Revenue Service Form 1099-OID) and
shall file and distribute such forms as required by law.
Section 5.04. Rights of Certificateholders.
----------------------------
The Investor Certificates shall represent fractional undivided interests
in the Trust Fund, including the benefits of the Certificate Account and the
right to receive Certificate Interest Collections, Principal Collections and
other amounts at the times and in the amounts specified in this Agreement;
the Seller Certificates shall represent the remaining interest in the Trust
Fund.
ARTICLE VI
The Certificates
Section 6.01. The Certificates. The Investor Certificates shall be
----------------
substantially in the forms set forth in Exhibits A and C, and the Seller
Certificates shall be substantially in the forms set forth in Exhibits B and
D, and shall, on original issue, be executed, countersigned and delivered by
the Trustee to or upon the order of the Seller concurrently with the transfer
and assignment to the Trustee of the Trust Fund. The Investor Certificates
shall be initially evidenced by one or more certificates representing the
entire Original Certificate Principal Balance. Beneficial ownership of the
Investor Certificates that are Book-Entry Certificates may be held in minimum
dollar denominations of $25,000 and integral multiples of $1,000 in excess
thereof (except as provided in the following paragraph). The sum of the
denominations of all outstanding Investor Certificates shall equal the
Original Certificate Principal Balance. The Seller 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.
Beneficial ownership of the Investor Certificates that are Book-Entry
Certificates may be held in minimum dollar denominations of less than $25,000
and integral multiples of $1,000 in excess thereof in the case of Persons who
(i) are sophisticated, institutional investors having knowledge and
experience in financial and business matters, (ii) are purchasing on behalf
of, and serving as investment advisor or manager for, one or more Persons who
are sophisticated, institutional investors having knowledge and experience in
financial and business matters, (iii) are purchasing Certificates which have,
in the aggregate, an Original Certificate Principal Balance in excess of
$25,000, and (iv) have requested that Investor Certificates be issued in such
lower minimum denominations and registered in the name of Persons meeting the
criteria in clause (ii).
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 Trustee,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or
did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless such Certificate shall have been manually countersigned by
the Trustee substantially in the form provided for herein, and such
countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
countersignature. Subject to Section 6.02(c), the Investor Certificates shall
be Book-Entry Certificates. The Seller Certificates shall not be Book-Entry
Certificates.
Section 6.02. Registration of Transfer and
----------------------------
Exchange of Certificates; 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 Certificates and of Transfers and exchanges of Certifi-
▇▇▇▇▇ 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 Trustee maintained for such purpose pursuant
to the foregoing paragraph, the Trustee shall execute, countersign and de-
liver, in the name of the designated Transferee or Transferees, one or more
new Investor Certificates of the same aggregate Percentage Interest.
At the option of the Investor Certificateholders, Investor Certificates
may be exchanged for other Investor Certificates of authorized denominations
of the same aggregate Percentage Interest, 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, countersign and deliver the Investor Certificates which the Cer-
tificateholder making the exchange is entitled to receive. Every Investor
Certificate presented or surrendered for Transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any Transfer or exchange of Investor
Certificates, but the Trustee 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 Investor Certificates.
All Certificates surrendered for Transfer and exchange shall be
cancelled by the Trustee.
(b) Except as provided in Section 6.02(d), the Book-Entry 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, Depository
Participants and indirect participating firms as representatives 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 representatives 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 Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
Whenever notice or other communication to the Investor
Certificateholders is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificate Owners pursuant
to Section 6.02(d), the Trustee shall give to the Depository all such notices
and communications specified herein to be given to Certificateholders.
(c) If (x)(i) the Servicer advises the Trustee and the Certificate
Insurer in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Servicer
is unable to locate a qualified successor, (y) the Servicer at its option may
advise the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) after the occurrence of an Event of
Default, Certificate Owners representing Percentage Interests aggregating not
less than 50% of the aggregate Percentage Interests of the Investor
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Certificate Owners, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability
of definitive, fully registered Investor Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to
the Trustee of the Investor Certificates by the Depository, accompanied by
registration instructions from the Depository for registration, the Trustee
shall, at the expense of the Servicer, issue the Definitive Certificates.
The Definitive Certificates shall be issued in minimum denominations of
$25,000 and integral multiples of $1,000 in excess thereof, except that any
Investor Certificate that was represented by a Book-Entry Certificate in an
amount less than $25,000 immediately prior to the issuance of a Definitive
Certificate pursuant to the second paragraph of Section 6.01 shall be issued
in minimum denomination equal to the amount represented by such Book-Entry
Certificate and shall be subject to the same restrictions on transfer set
forth in the second paragraph of Section 6.01. Neither the Servicer 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 to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
Section 6.03. Mutilated, Destroyed, Lost
--------------------------
or Stolen Certificates.
------------------------------------------
If (i) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (ii) there is delivered to the Trustee, the
Servicer and the Seller such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor, Class and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Trustee) connected therewith. Any new Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership
in the Trust Fund, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 6.04. Persons Deemed Owners.
---------------------
The Servicer, the Seller, the Certificate Insurer, the Trustee and any
agent of the Servicer, the Seller or the Trustee may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.01 and for all
other purposes whatsoever, and neither the Servicer, the Seller, the
Certificate Insurer, the Trustee nor any agent of the Servicer, the Seller,
the Certificate Insurer or the Trustee shall be affected by notice to the
contrary.
Section 6.05. Restrictions on Transfer
------------------------
of Seller Certificates.
----------------------
(a) The Seller 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 Seller
Certificates, "transferred" or a "transfer") only in accordance with this
Section 6.05.
(b) No transfer of a Seller 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. The Trustee and the Servicer shall
require a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Servicer that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from which Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee or the
Servicer, and the Trustee and the Servicer shall require the transferee to
execute an investment letter acceptable to and in form and substance
satisfactory to the Trustee and the Servicer certifying to the Trustee and
the Servicer the facts surrounding such transfer, which Investment letter
shall not be an expense of the Trustee or the Servicer; provided that such
Opinion of Counsel shall not be required in the case of transfers by or to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated or an affiliate thereof.
The Holder of a Seller Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee, the Servicer and the
Certificate Insurer against any liability that may result if the transfer is
not so exempt or if not made in accordance with such federal and state laws.
(c) The Seller Certificates and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent:
(i) the Person that acquires a Seller 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 Seller hereunder with respect to the
assets evidenced by the Seller Certificates, and (C) as part of its
acquisition of a Seller Certificate, acquire all rights of the related Seller
or any transferee under this Section 6.05(c) to amounts payable to such
Seller or such transferee under Sections 5.01(a)(vii) and 5.01(g), (ii) the
Seller 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 Section 6.05(c)
have been complied with and an Opinion of Counsel stating that all conditions
precedent provided by this Section 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 Seller 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 without taking
into account the Certificate Insurance Policy, will not be reduced or
withdrawn; (iv) the Seller 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
assets 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 assets and the other property
conveyed hereunder shall have been taken or made and (vi) the transferee
shall have assumed the obligations of the Seller pursuant to Section 7.06
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) without taking into account the Certificate Insurance
Policy, shall not be reduced or withdrawn.
Section 6.06. Actions of Certificateholders.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders
in person or by its agent duly appointed in writing; and except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where required,
to the Seller, the Certificate Insurer or the Servicer. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee, the Seller, the Certificate Insurer and the Servicer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by a Certificateholder shall bind every Holder of
every Certificate issued upon the registration of Transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted
to be done, by the Trustee, the Seller or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(d) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
(e) The ownership of Certificates shall be proved by the Certificate
Register.
ARTICLE VII
The Servicer and the Seller
Section 7.01. Liability of the Servicer.
-------------------------
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein.
Section 7.02. Merger or Consolidation of,
---------------------------
or Assumption of the Obligations
----------------------------------------------------
of, the Servicer or Seller.
----------------------------------------------
Any corporation into which the Servicer or Seller may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer or Seller shall be a party, or any
corporation succeeding to the business of the Servicer or Seller, or any
corporation, more than 50% of the voting stock of which is, directly or
indirectly, owned by the Indirect Parent, which executes an agreement of
assumption to perform every obligation of the Servicer or Seller hereunder,
shall be the successor of the Servicer or Seller 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.
Notwithstanding anything to the contrary contained in this Section 7.02
or in Section 7.04, the Servicer may assign its rights and delegate its
duties and obligations under this Agreement; provided that (i) the purchaser
or transferee accepting such assignment or delegation shall be a Person
reasonably satisfactory to the Trustee and which shall be qualified to
service mortgage loans for the Federal National Mortgage Association, and
shall execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant
and condition to be performed or observed by the Servicer under this
Agreement from and after the date of such agreement; and (ii) each Rating
Agency's rating of the Investor Certificates in effect immediately prior to
such assignment, sale or transfer will not be qualified, downgraded or
withdrawn as a result of such assignment, sale or transfer, as evidenced by a
letter to such effect from each Rating Agency. In the case of any such
assignment and delegation, the Servicer shall remain liable for all
liabilities and obligations incurred by it as Servicer hereunder prior to the
satisfaction of the conditions to such assignment and delegation set forth in
clauses (i) and (ii) of the preceding sentence.
Section 7.03. Limitation on Liability of
--------------------------
the Servicer and Others.
-------------------------------------------
Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Trust Fund or
the Certificateholders for any action taken or for refraining from the taking
of any action by the Servicer pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
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 Servicer or by reason of reckless disregard
of obligations and duties of the Servicer hereunder. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person
----- -----
respecting any matters arising hereunder. The 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 liabil-
ity; provided, however, that the 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 the event of any such
loss, liability or expense, the legal expenses and costs of such action and
any liability resulting therefrom shall be expenses, costs and liabilities
for which the Servicer shall be entitled to reimbursement therefor only from
amounts otherwise distributable to the Holders of the Seller Certificates on
any subsequent Distribution Date. The Servicer's right to reimbursement
pursuant to this Section 7.03 shall survive any resignation or termination of
the Servicer pursuant to Section 7.04 or 8.01 with respect to any such
losses, liabilities or expenses arising prior to such resignation or termi-
nation (or arising from events that occurred prior to such resignation or
termination). Any claims under this Section 7.03 by or on behalf of the
Certificateholders or the Trust Fund shall be made only against the Servicer,
who shall be liable hereunder with respect to its own acts and omissions as
well as the acts and omissions of its directors, officers, employees and
agents.
Section 7.04. Servicer Not to Resign.
----------------------
Subject to the provisions of Section 7.02, the Servicer shall not resign
from the obligations and duties hereby imposed on it (i) for so long as the
Trust owns Trust Balances of one or more Common Mortgage Loans, unless it has
resigned from its obligations and duties as servicer under all Prior Trust
Pooling and Servicing Agreements applicable to such Common Mortgage Loans or
(ii) except upon determination that the performance of its duties hereunder
is no longer permissible under applicable law or is in material conflict by
reason of applicable law with any other activities carried on by it or its
subsidiaries or other affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer
or such subsidiaries or other affiliates at the date of this Agreement. For
so long as the Trust owns Trust Balances of one or more Common Mortgage
Loans, the determination set forth in clause (ii) shall provide the basis for
the Servicer's resignation only if the Servicer simultaneously resigns from
its obligations and duties as servicer under the Prior Trust Pooling and
Servicing Agreements applicable to such Common Mortgage Loans. For so long
as the Trust owns Trust Balances of one or more Common Mortgage Loans, the
Servicer shall resign from its obligations and duties hereunder promptly upon
any resignation from its obligations and duties as servicer under the Prior
Trust Pooling and Servicing Agreements applicable to such Common Mortgage
Loans.
Any resignation under this Section 7.04 shall not relieve the 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
Servicer; provided, however, that no resignation by the Servicer shall become
effective until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
8.02. The Servicer shall have no claim (whether by subrogation or otherwise)
or other action against any Certificateholder for any amounts paid by the
Servicer pursuant to any provision of this Agreement. Any determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of Counsel to such effect delivered to the Trustee and the Certificate
Insurer.
Section 7.05. Limitation on Liability of Certain Persons.
------------------------------------------
No recourse under or upon any obligation or covenant of this Agreement,
or of any Certificate, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Seller or of any successor
corporation, either directly or through the Seller, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise. This Agreement and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability
whatever shall attach to, or is or shall be incurred by the incorporators,
shareholders, officers or directors as such, of the Seller, or any of them,
because of the issuance of the Certificates, or under or by reason of the
obligations, covenants or agreements contained in this Agreement or in any of
the Certificates or implied therefrom; and that any and all such personal
liability, either at common law or in equity or by constitution or statute,
of, and any and all such rights and claims against, every such incorporator,
shareholder, officer or director, as such, because of the issuance of the
Certificates, or under or by reason of the obligations, covenants or
agreements contained in this Agreement or in any of the Certificates or
implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Agreement and the
issuance of the Certificates. The Seller and any director, officer, employee
or agent of the Seller 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.
Section 7.06. Liability of Seller.
-------------------
Notwithstanding Section 7.05 or any other provisions of this Agreement,
the Seller by entering into this Agreement, by its acceptance thereof, agrees
to be liable, directly to the injured party, for the entire amount of any
losses, claims, damages or liabilities (other than those that would be
incurred by a Certificateholder if the Certificates were notes secured by the
Trust assets, for example, as a result of the performance of the Trust
assets, market fluctuations, a shortfall or failure to make payment under the
Certificate Insurance Policy or other similar market or investment risks
associated with ownership of the Certificates) arising out of or based on the
arrangement created by this Agreement or the actions of the Servicer taken
pursuant hereto (to the extent that, if the Trust assets at the time the
claim is made were used to pay in full all outstanding Certificates, the
Trust assets that would remain after the Certificateholders and Certificate
Insurer were paid in full would be insufficient to pay any such losses,
claims, damages or liabilities) as though this Agreement created a
partnership under the Delaware Revised Uniform Partnership Act in which the
Seller was a general partner. The rights created by this Section 7.06 shall
run directly to and be enforceable by the injured party subject to the
limitations hereof.
Section 7.07. Seller May Own Certificates.
---------------------------
The Seller and any Person controlling, controlled by or under common
control with the Seller may in its individual or any other capacity become
the owner or pledgee of Investor Certificates with the same rights as it
would have if it were not the Seller or such an affiliate thereof, except as
otherwise provided in the definition of the term "Certificateholder"
specified in Section 1.01. Certificates so owned by or pledged to the Seller
or such controlling or commonly controlled Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Investor
Certificates, except as otherwise provided in the definition of the term
"Certificateholder" specified in Section 1.01.
ARTICLE VIII
Default
Section 8.01. Events of Default.
-----------------
If any one of the following events ("Events of Default") shall occur and
be continuing:
(i) Any failure by the Servicer to remit to the Trustee any
payment required to be made under the terms of such Certificates and
this Agreement which continues unremedied for a period of five (5)
Business Days after the date upon which written notice of such failure
shall have been given to the Servicer by the Trustee or to the Servicer
and the Trustee by Holders of Investor Certificates evidencing not less
than 25% of the aggregate Percentage Interests of the Investor
Certificates or by the Certificate Insurer; or
(ii) Failure on the part of the Servicer duly to observe or perform
in any material respect any other covenants or agreements of the
Servicer set forth in the Certificates or in this Agreement, which
covenants and agreements (A) materially affect the rights of
Certificateholders and (B) continue unremedied for a period of sixty
(60) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer
by the Trustee, or to the Servicer and the Trustee by the Holders of
Investor Certificates evidencing not less than 25% of the aggregate
Percentage Interests of the Investor Certificates or by the Certificate
Insurer; or
(iii) The entry against the Servicer of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, 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 sixty (60) consecutive days; or
(iv) The consent by the Servicer to the appointment of a con-
servator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to substantially all of its
property; or the 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 Default shall
not have been remedied by the Servicer, either the Trustee (with the consent
of the Certificate Insurer, which consent shall not be unreasonably
withheld), or the Holders of Investor Certificates evidencing not less than
25% of the aggregate Percentage Interests of the Investor Certificates (with
the consent of the Certificate Insurer) or the Certificate Insurer, by notice
then given in writing to the Servicer (and to the Trustee if given by
Certificateholders or the Certificate Insurer) may terminate all of the
rights and obligations of the Servicer as servicer under this Agreement. In
addition, for so long as the Trust owns Trust Balances of one or more Common
Mortgage Loans, whether or not there is any Event of Default hereunder, if
the Servicer is terminated as servicer under the Prior Trust Pooling and
Servicing Agreements applicable to such Common Mortgage Loans, the Trustee
shall promptly deliver a notice of termination to the Servicer and shall
appoint as successor Servicer pursuant to Section 8.02 the same Person
appointed to succeed the Servicer as servicer under such Prior Trust Pooling
and Servicing Agreements.
Any written notice provided to the Servicer shall be simultaneously
provided to the Indirect Parent, the Certificate Insurer and the Rating
Agencies. On or after the receipt by the Servicer of such written notice,
all authority and power of the 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 Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement of the
Mortgage Loans and related documents, or otherwise. The Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibili-
ties and rights of the 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 Servicer and credited by it to the Mortgage
Loan Payment Record, or that have been deposited by the Servicer in the
Certificate Account or thereafter received by the Servicer with respect to
the Mortgage Loans. In addition to any other amounts which are then, or,
notwithstanding the termination of its activities as servicer, may become,
payable to the Servicer under this Agreement, the Servicer shall be entitled
to receive out of any delinquent payment on account of interest on a Mortgage
Loan, due during the period prior to the notice pursuant to this Section 8.01
which terminates the obligation and rights of the Servicer hereunder and re-
ceived after such notice, that portion of such payment which it would have
been entitled to retain pursuant to Section 3.03(ii) if such notice had not
been given.
Section 8.02. Trustee to Act; Appointment of Successor.
----------------------------------------
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 8.01 or the Servicer's resignation in accordance with the
terms of Section 7.04, and, for so long as the Trust owns Trust Balances of
one or more Common Mortgage Loans (and if and for so long as the Trustee also
acts as servicer under a Prior Trust Pooling and Servicing Agreement
applicable to such Common Mortgage Loans), the Trustee shall be the successor
in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof; provided, however,
that the responsibilities and duties of the Servicer pursuant to Section 2.02
and Section 2.04, the obligations of the Servicer to make repurchases or
replacements of Mortgage Loans pursuant to Section 3.01 and Section 3.06 and
the obligations of the Servicer to make Monthly Advances pursuant to Section
4.02 shall not be the responsibilities, duties or obligations of the Trustee.
As compensation therefor, the Trustee shall, except as provided in Section
8.01, be entitled to such compensation as the Servicer would have been
entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Trustee is unwilling to act as
successor Servicer, (ii) if the Trustee is legally unable so to act, (iii)
for so long as the Trust owns one or more Trust Balances of the Common
Mortgage Loans, if the Trustee is not acting as servicer under the Prior
Trust Pooling and Servicing Agreements applicable to such Common Mortgage
Loans, the Trustee may (in the situation described in clause (i)) or shall
(in the situation described in clause (ii) or (iii)) appoint, with the
consent of the Certificate Insurer, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution
that is then servicing a home equity loan portfolio and having all licenses,
permits and approvals required by applicable law, and having a net worth of
not less than $10,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder; provided, however, that, for so long as the Trust
owns Trust Balances of one or more Common Mortgage Loans, any such successor
Servicer shall be the same Person that is then acting as, or has been
designated to act as, servicer under the Prior Trust Pooling and Servicing
Agreements applicable to such Common Mortgage Loans; and provided, further,
that the appointment of any such successor Servicer shall not result in the
reduction, suspension or withdrawal of the ratings assigned to the Investor
Certificates by any Rating Agency without taking into account the Certificate
Insurance Policy. Pending appointment of a successor to the Servicer here-
under, 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 Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted the Servicer hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.
(b) Any successor, including the Trustee, to the Servicer as servicer
shall during the term of its service as servicer maintain in force (i) a
policy or policies of insurance covering errors and omissions in the
performance of its obligations as servicer hereunder, and (ii) a fidelity
bond in respect of its officers, employees and agents to the same extent as
the Servicer is so required pursuant to Section 3.12. No successor servicer
(other than the Trustee as successor to the Servicer) shall have the right
(i) to maintain possession of the Mortgage Files as set forth in Section
2.01(d) or (ii) to retain and commingle payments on, and collections in
respect of, the Mortgage Loans with its own funds pursuant to Section
3.02(c).
Section 8.03. Notification to Certificateholders.
----------------------------------
Upon any termination or appointment of a successor to the Servicer
pursuant to this Article VIII, the Trustee shall give prompt written notice
thereof (i) to Certificateholders at their respective addresses appearing in
the Certificate Register, (ii) to each Rating Agency at their respective
addresses set forth in Section 11.06, and (iii) to the Certificate Insurer at
its address set forth in Section 11.06.
Section 8.04. Waiver of Past Events of Default.
--------------------------------
The Holders of Investor Certificates evidencing not less than 51% of the
aggregate Percentage Interests of the Investor Certificates together, with
the consent of the Certificate Insurer, may, on behalf of all Holders of
Certificates, waive any Event of Default by the Servicer in the performance
of its obligations hereunder and its consequences, except a default in making
any required deposits to the Certificate Account in accordance with this
Agreement. Upon any such waiver of a past Event of Default, such Event of
Default shall cease to exist and shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in
this Agreement. If an Event of Default has occurred (which has not been
cured), 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.
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 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 misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the
Trustee 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 performing its
duties in accordance with the terms of this Agreement;
(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 direction of the Holders of Investor
Certificates evidencing not less than 25% of the aggregate
Percentage Interests of the Investor Certificates with the consent
of the Certificate Insurer 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 Servicer to comply with the obligations of the Servicer
referred to in clauses (i) and (ii) of Section 8.01 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 Servicer, the Holders of
Certificates evidencing not less than 25% of the Trust Fund (based
on the outstanding principal balances of the Certificates) or the
Certificate Insurer.
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, and
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 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 Servicer in accordance
with the terms of this Agreement.
Section 9.02. Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 9.01:
(i) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond
or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and 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 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, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of an Event of Default (which has
not been cured), 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;
(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 Default and after the curing
of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or documents, unless requested in writing to do so by
Holders of Investor Certificates evidencing not less than 25% of
the aggregate Percentage Interests of the Investor Certificates or
the Certificate Insurer; 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 Servicer or, if paid by the Trustee, shall be ▇▇▇▇-
bursed by the Servicer upon demand. Nothing in this clause (v)
shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors; and
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through
agents or attorneys or a custodian.
Section 9.03. Trustee Not Liable for Certificates
-----------------------------------
or Mortgage Loans.
-------------------------------------
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Servicer, 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 countersignature 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 Servicer of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Certificate Account by the
Servicer.
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.
Section 9.05. Servicer to Pay Trustee's Fees and Expenses.
-------------------------------------------
The 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 Servicer will
pay or reimburse the Trustee upon its request for all reasonable expenses
(including any expenses arising under Section 4.04(d)), 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 Certi-
ficateholders hereunder. In addition, the Servicer covenants and agrees to
indemnify the Trustee from, and hold it harmless against, any and all losses,
liabilities, damages, claims, legal actions, including any pending or
threatened claims or legal actions, or expenses other than those resulting
from the negligence or bad faith of the Trustee.
Section 9.06. Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times (i) be a Person having its
principal office in the state of New York or in the same state as that in
which the initial Trustee under this Agreement has its principal office and
organized and doing business under the laws of such State or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority and (ii)
have at all times a long term unsecured debt rating (or the direct or
indirect corporate parent of the Trustee have a long term unsecured debt
rating if the Trustee does not have such a rating) that will not result in
the downgrading or withdrawal of the rating or ratings then assigned to the
Certificates by each Rating Agency. If such Person 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 Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 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 Seller. Upon receiving
such notice of resignation, the Servicer shall promptly appoint a successor
Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
Trustee; provided, however, that, (i) such appointment does not result in a
reduction or withdrawal of the then current rating of the Investor
Certificates, and (ii) so long as such consent is not unreasonably withheld,
the Certificate Insurer consents to such appointment. The Servicer shall
make a good faith effort to appoint a successor within 30 days of its receipt
of such notice. If the Servicer does not appoint a successor Trustee within
such 30 day period and it is not making a good faith effort to appoint a
successor Trustee, then the Certificate Insurer may appoint a successor
Trustee. The Servicer shall indemnify the Trustee for any loss, liability,
or expense incurred as a result of the Servicer's failure to make a good
faith effort to appoint a successor Trustee. If no successor Trustee shall
have been so appointed and having 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 (i) 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 Seller, (ii) the Seller has delivered to the Trustee
a letter from any Rating Agency to the effect that the rating of the Investor
Certificates has been or is about to be reduced or withdrawn on account of a
reduction in the long-term credit rating of the Trustee or the parent of the
Trustee (if (a) the Trustee proposes to the Seller and the Servicer to enter
into an agreement with the Trustee and the Seller and the Servicer, each in
its sole discretion, elect to enter into such agreement and (b) such
agreement is consented to by the Certificate Insurer and is satisfactory to
the Rating Agencies without resulting in a reduction in or withdrawal of any
rating of the Investor Certificates, then upon the execution and delivery of
such agreement the Seller shall not request such resignation pursuant to this
clause (ii)) and the Trustee shall fail to resign after written request
therefor by the Seller, or (iii) the Trustee shall become incapable of
acting, 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, then the Seller or,
in the case of clause (ii) above, the Servicer may remove the Trustee and
appoint a successor trustee, subject to the following paragraph and to the
consent of the Certificate Insurer to such appointment (which consent 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.
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 Servicer 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 Seller, the 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 Servicer shall mail notice of the succession of such
Trustee hereunder to all holders of Certificates at their addresses as shown
in the Certificate Register. If the Servicer fails to mail such notice
within 10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
Section 9.09. Merger or Consolidation of Trustee.
----------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation 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 Fund or any Mortgaged Property may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons ap-
proved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for
the benefit of the Certificateholders, such title to the Trust Fund, or any
part thereof, and, subject to the other provisions of this Section 9.10, such
powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer 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 Default shall have occurred and
be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 9.08.
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 (provided, however, 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 per-
formed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unquali-
fied to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to
the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Servicer and the Trustee acting jointly may at any time accept
the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article 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 Seller.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 9.11. Tax Returns.
-----------
The Trustee, upon request, will furnish the Servicer with all such
information as may be reasonably required and within the Trustee's reasonable
control or knowledge in connection with the Servicer's preparation of all tax
returns of the Trust Fund, and shall, upon request, execute such returns.
Section 9.12. ▇▇▇▇▇▇ Act.
----------
Any provisions required to be contained in this Agreement by Section 126
of Article 4-A of the New York Real Property Law are hereby incorporated, and
such provisions shall be in addition to those conferred or imposed by this
Agreement; provided, however, that to the extent that such Section 126 shall
not apply to this Agreement, such Section 126 shall not have any effect, and
if such Section 126 should at any time be repealed or cease to apply to this
Agreement, or be construed by judicial decision to be inapplicable, such
Section 126 shall cease to have any further effect upon the provisions of
this Agreement. In case of a conflict between the provisions of this
Agreement and any mandatory provision of Article 4-A of the New York Real
Property Law, such mandatory provisions of such Article 4-A shall prevail,
provided, however, that if such Article 4-A shall not apply to this
Agreement, or be construed by judicial decision to be inapplicable, such
mandatory provisions of such Article 4-A shall cease to have any further
effect upon the provisions of this Agreement.
ARTICLE X
Termination
Section 10.01. Termination.
-----------
(a) The respective obligations and responsibilities of the Servicer,
the Seller 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 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
Certificate Insurer and (B) the earliest of:
(i) the retransfer, under the conditions specified in Section 10.01(b),
to the Servicer of the Investor Certificateholders' interest in
each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund for an amount equal to
the sum of (A) the Certificate Principal Balance, (B) accrued and
unpaid Certificate Formula Interest through the day preceding the
final Distribution Date, (C) any Unpaid Certificate Interest
Shortfall, and (D) any accrued and unpaid Investor Loss Reduction
Amounts through the day preceding such final Distribution Date;
(ii) the day following the Distribution Date on which the distribution
made to Investor Certificateholders has reduced the Certificate
Principal Balance to zero;
(iii) the final payment or other liquidation (or any Monthly Advance with
respect thereto) of the Trust Balance of the last Mortgage Loan
remaining in the Trust Fund (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; and
(iv) the Distribution Date in _________.
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof.
(b) The Servicer shall have the right to exercise the option to
retransfer to itself each Mortgage Loan pursuant to Section 10.01(a)(i) on
any Distribution Date on or after the Distribution Date immediately prior to
which the Certificate Principal Balance is less than ten percent (10%) of the
Original Certificate Principal Balance and all amounts due and owing to the
Certificate Insurer for unpaid premiums and unreimbursed draws on the
Certificate Insurance Policy, together with interest thereon as provided
under the Insurance Agreement, have been paid. If such right is exercised
and the Trustee is holding the Mortgage Files, the Servicer shall provide to
the Trustee the certification required by Section 3.07 and the Trustee shall,
promptly following payment of the retransfer price, release to the Servicer
the Mortgage Files pertaining to the Mortgage Loans being retransferred.
(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
Servicer to the Trustee no later than the 20th day of the month preceding the
month of such final distribution, if the Servicer is exercising its right to
repurchase the assets of the Trust Fund) by letter to Investor Certificate-
holders and the Certificate Insurer mailed not earlier than the first day and
not later than the tenth day of the month of such final distribution
specifying (A) 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 desig-
nated, (B) the amount of any such final distribution and (C) that the Record
Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the Investor
Certificates at the office or agency of the Trustee therein specified. In
the event written directions are delivered by the Servicer to the Trustee as
described in the preceding sentence, the Servicer shall deposit in the
Certificate Account before the Distribution Date for such final distribution
in immediately available funds an amount equal to the repurchase price for
the assets of the Trust Fund computed as above provided. Such deposit shall
be in lieu of the deposit otherwise required to be made in respect of such
Distribution Date.
(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, an amount
equal to (i) if such final distribution is not being made pursuant to the
retransfer to the Servicer 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 will withdraw from the
Certificate Account and remit to the Certificate Insurer 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 Certificate
Insurer for unpaid premiums and unreimbursed draws on the Certificate
Insurance 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 Certificate Account not distributed in final distribution to
the Certificate Insurer or 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 Servicer (if the Servicer has exercised
its right to retransfer 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, any funds deposited in such escrow account and
remaining unclaimed shall be paid by the Trustee to the Servicer and
thereafter Investor Certificateholders shall look only to the Servicer with
respect to any claims in respect of such funds.
Section 10.02. Termination by Certificate Insurer.
----------------------------------
In the event the Servicer does not exercise its option to terminate the
Trust Fund pursuant to this Article X, the Certificate Insurer may do so on
the same terms.
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 Servicer (i) to make any payment or
deposit required by the terms of this Agreement, on or before the date
occurring five (5) 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 the covenants set forth in Section 2.04 or (iii) duly to
observe or perform in any material respect any other covenants or agreements
of the Servicer set forth in this Agreement, which failure, in each case,
materially and adversely affects the interests of the Certificateholders or
the Certificate Insurer and which, in the case of clause (iii), continues
unremedied and continues to affect materially and adversely the interests of
the Certificateholders for a period of sixty (60) days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the Servicer and
the Trustee by the Certificate Insurer or the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 51%;
(b) any representation or warranty made by the Servicer 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 Certificate Insurer 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 Investor Certificateholders or
the Certificate Insurer for a period of sixty (60) days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the Servicer and
the Trustee by either the Certificate Insurer 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
Servicer have 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, with the consent of the Certificate Insurer, may
specify) in accordance with the provisions hereof;
(c) the Seller or the Servicer shall 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 Seller or the
Servicer or of or relating to all or substantially all of 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, 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
Seller or the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of thirty (30) days; or the Seller or
the 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;
(d) the Trust shall become subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended;
(e) any Event of Default shall occur;
(f) the aggregate of Insured Payments under the Certificate Insurance
Policy exceeds 1% of the Pool Balance as of the Cut-off Date; or
(g) the Seller or the Servicer becomes subject to a tax lien and not
released within sixty (60) days of its attachment;
then, in the case of any event described in subparagraph (a), (b) or (e)
after the applicable grace period, if any, set forth in such subparagraphs,
either the Certificate Insurer, the Trustee or the Holders of Investor
Certificates evidencing Percentage Interests aggregating more than 51%, with
the consent of the Certificate Insurer, by notice given in writing to the
Seller and the Servicer (and to the Trustee if given by either the
Certificate Insurer 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
subparagraphs (c), (d), (f) or (g), a Rapid Amortization Event shall occur
without any notice or other action on the part of the Trustee, the
Certificate Insurer or the Investor Certificateholders, immediately upon the
occurrence of such event.
Section 11.02. Additional Rights Upon an Insolvency Event.
------------------------------------------
(a) If the Seller 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 Seller 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 Seller and such decree shall have
remained in force undischarged or unstayed for a period of 30 days; or the
Seller 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"), (i) the Seller 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 and the Certificate Insurer of such Insolvency
Event, and (ii) the arrangement among the Certificateholders and the Seller
shall dissolve and the Trust shall be liquidated in accordance with the
following procedures. The Seller shall on the Appointment Day immediately
cease to transfer Additional Balances to the Trust. Notwithstanding any
cessation of the transfer to the Trust of Additional Balances, Additional
Balances transferred to the Trust prior to the occurrence of such Insolvency
Event or violation, and Principal Collections and Interest Collections,
whenever created, accrued in respect of such Mortgage Loans shall continue to
be a part of the Trust, and shall continue to be allocated and paid in
accordance with Article IV. Within fifteen (15) days of the Appointment Day,
the Trustee shall (i) publish a notice in an authorized newspaper that an
Insolvency Event has occurred and that the Trustee intends to sell, dispose
of or otherwise liquidate the Trust assets on commercially reasonable terms
and in a commercially reasonable manner and (ii) send written notice to the
Certificateholders describing the provisions of this Section 11.02 and
requesting instructions from such Holders. Unless within seventy-five (75)
days from the day notice pursuant to clause (i) above is first published the
Trustee shall have received written instructions from Holders of Investor
Certificates evidencing more than 51% of the aggregate Percentage Interests
to the effect that such Certificateholders disapprove of the liquidation of
the Trust assets, the Trustee shall sell, dispose of or otherwise liquidate
the Trust assets in a commercially reasonable manner and on commercially
reasonable terms, which shall include the solicitation of competitive bids.
The Trustee may obtain a prior determination from any such conservator,
receiver or liquidator 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 Trust
assets pursuant to subsection (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 to
the Servicer to the Trustee, first be paid to the Certificate Insurer to
reimburse the Certificate Insurer for previously unreimbursed Insured
Payments and other amounts owing under the Insurance Agreement and second be
paid to the Trustee in reimbursement of expenses incurred in connection with
the sale, disposition or liquidation of the Trust assets pursuant to Section
11.02(a); and provided, further, that the 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 Certificate Principal
Balance through the Accrual 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 Certificate Principal
Balance.
The Certificate Insurance Policy will not cover any shortfall in the event
such proceeds are insufficient to make a full distribution to Investor
Certificateholders pursuant to Section 11.02(b). On the day following the
final Distribution Date on which such proceeds are distributed to the
Investor Certificateholders, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article XI with respect to competitive bids
or any other of its duties.
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment.
---------
This Agreement may be amended from time to time by the Servicer, the
Seller and the Trustee, with the consent of the Certificate Insurer so long
as such consent is not unreasonably withheld and without the consent of any
of the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to
correct or supplement any provisions herein or therein which may be
inconsistent with any other provisions herein or therein, as the case may be,
or (iii) to add or delete any other provisions not inconsistent herewith with
respect to matters or questions arising under this Agreement, including
provisions relating to the Trust's ownership of Trust Balances of Common
Mortgage Loans and the issuance of definitive Certificates to Certificate
Owners in the event that book-entry registration of Investor Certificates is
no longer permitted; provided, however, that in each case such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder.
This Agreement may also be amended from time to time by the Servicer,
the Seller and the Trustee, with the consent of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 66%
and the consent of the Certificate Insurer, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or the Certificate Insurance Policy, or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (a) reduce in any manner the amount of, or delay the
timing of, collections of payments on Mortgage Loans or distributions which
are required to be made on any Certificate without the consent of the Holder
of such Certificate or (b) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all
Investor Certificates then outstanding.
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 taxed at the
entity level; or (iii) result in the Trust being taxed as a taxable mortgage
pool (as defined in Section 7701(i) of the Code).
Not later than the time of obtaining any such consent the Trustee shall
furnish written notification of the substance of such amendment to each
Rating Agency. Promptly after the execution of any such amendment or con-
sent, the Trustee shall furnish written notification of the substance of such
amendment to each Certificateholder.
It shall not be necessary for the consent of 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 connection with any amendment pursuant to this Section 12.01, the
Trustee shall be entitled to receive an Opinion of Counsel to the effect that
such amendment is authorized or permitted by this Agreement. In no event
shall any Opinion of Counsel provided pursuant to this Section 12.01 be an
expense of the Trustee.
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 Servicer and at its expense
on direction by the Trustee, but only upon direction of the Trustee
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of 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 Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a partition or
winding up of the Trust Fund, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or such party.
No Certificateholder shall have any right to vote (except as provided in
Section 12.01) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third 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 25% 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. Each
Certificateholder expressly covenants with every other Certificateholder and
the Trustee that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 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.
Section 12.04. (Reserved).
Section 12.05. The Certificate Insurer.
-----------------------
The Certificate Insurer is a third-party beneficiary of this Agreement.
Any right conferred to the Certificate Insurer shall be suspended during any
period in which the Certificate Insurer is in default in its payment
obligations under the Certificate Insurance Policy. During any period of
suspension the Certificate Insurer's rights hereunder shall vest in the
Holders of the Investor Certificates and shall be exercisable by the Holders
of at least a majority in Percentage Interest of the outstanding Investor
Certificates. At such time as the Investor Certificates are no longer
outstanding hereunder and the Certificate Insurer has been reimbursed for all
Insured Payments to which it is entitled hereunder and has been paid all
Premium Amounts due and owing under the Insurance Agreement, the Certificate
Insurer's rights hereunder shall terminate.
Section 12.06. Governing Law.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES AND THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION), AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 12.07. Notices.
-------
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered at or mailed by
certified mail, return receipt requested, to (a) in the case of the Servicer,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, (b) in the case of the Seller,
MLCC Mortgage Investors, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, (c) in the case of the Trustee, at the
Corporate Trust Office, (d) in the case of ▇▇▇▇▇'▇, ABS Monitoring
Department, 4th Floor, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (e) in the
case of the Certificate Insurer, AMBAC Indemnity Corporation, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance-MBS,
(f) in the case of Standard and Poor's, Debt Rating Division, ▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset-Backed Surveillance
Group, or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed to a Certificateholder within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 12.08. 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 12.09. Assignment.
----------
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 7.02 and 7.04, this Agreement may not be assigned by the
Seller or the Servicer without the prior written consent of Holders of
Investor Certificates evidencing Percentage Interests aggregating not less
than 66%.
Section 12.10. Certificates Nonassessable and Fully Paid.
-----------------------------------------
The parties agree that the Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the beneficial ownership
interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust Fund or for any reason whatsoever, and that
Certificates upon execution, countersignature and delivery thereof by the
Trustee pursuant to Section 6.01 are and shall be deemed fully paid.
Section 12.11. 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 12.12. 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 12.13. Third Party Beneficiary.
-----------------------
This Agreement shall inure to the benefit of and be binding upon the
parties hereto, and, in addition, shall inure to the benefit of
Certificateholders and, to the extent provided herein, the Certificate
Insurer and their respective successors and permitted assigns. Except as
otherwise provided in this Agreement, no other Person shall have any right or
obligation hereunder.
Section 12.14. Merger and Integration.
----------------------
Except as specifically stated otherwise herein, this Agreement sets
forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, and all
contemporaneous oral understandings, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.
* * *
IN WITNESS WHEREOF, the Servicer, the Seller 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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
By
-------------------------------
Name:
Title:
MLCC MORTGAGE INVESTORS, INC.
By
---------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
By
---------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee of ML Home Equity Loan Trust
1989-1, ML Home Equity Loan Trust 1991-2,
ML Home Equity Loan Trust 1993-1, ML Home
Equity Loan Trust 1994-1, ML Home Equity
Loan Trust 1994-2, ML Home Equity Loan
Trust 1995-1, ML Home Equity Loan Trust
1995-2
By
---------------------------------
Name:
Title:
State of )
) ss.:
County of )
On the ___ day of ___, 199_ before me, a notary public in and for
the State of Florida, personally appeared _______________ known to me who,
being by me duly sworn, did depose and say that he is located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; that he is a
_____________________ of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, a corporation
formed under the laws of the State of Delaware, 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)
State of )
) ss.:
County of )
On the ___ day of ___, 1996 before me, a notary public in and for
the State of Florida, personally appeared _________ _____, known to me who,
being by me duly sworn, did depose and say that she is located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; that she is an
___________________ of MLCC Mortgage Investors, Inc., a corporation formed
under the laws of the State of Delaware, one of the parties that executed the
foregoing instrument; and that she signed her name thereto by order of the
Board of Directors of said corporation.
--------------------------------
Notary Public
(Notarial Seal)
State of )
) ss.:
County of )
On the ___ day of ___, 199_ before me, a notary public in and for
the State of California, personally appeared ________ __________, known to me
who, being by me duly sworn, did depose and say that she/he is located at
__________________; that she/he is a _____________________ of Bankers Trust
Company of California, N.A., one of the parties that executed the foregoing
instrument; and that she or he signed her or his name thereto under authority
granted by the Board of Directors of said Bank.
-------------------------------------------------------------------
Notary Public
(Notarial Seal)
State of )
) ss.:
County of )
On the ___ 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 she/he resides at
__________________; that she/he is a _____________________ of Bankers Trust
Company of California, N.A., one of the parties that executed the foregoing
instrument; and that she or he signed her or his name thereto under authority
granted by the Board of Directors of said Bank.
-------------------------------------------------------------------
Notary Public
(Notarial Seal)
EXHIBIT A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Initial Certificate Principal
Balance of this Investor
Certificate : $
Certificate Rate : Variable
Original Certificate Principal
Balance of all Investor
Certificates : $
CUSIP No. :
Date of Pooling and
Servicing Agreement :
Certificate No. : 1
Cut-Off Date :
First Distribution
Date: :
Stated Maturity Date :
ML REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 199_-_
INVESTOR CERTIFICATE
evidencing a percentage interest in the distributions
allocable to the Investor Certificates evidencing an
undivided interest in a Trust consisting primarily of a
pool of adjustable rate home equity revolving credit line
loans serviced by
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
This Certificate does not represent an obligation of or interest in MLCC
Mortgage Investors, Inc. (the "Seller"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation or
the Trustee referred to below or any of their affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
Certificate Principal Balance of this Certificate by the Original Certificate
Principal Balance of all Investor Certificates) in certain monthly
distributions with respect to a Trust consisting primarily of a pool of home
equity revolving credit line loans (the "Mortgage Loans"), transferred by the
Seller to the Trustee and serviced by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation (in
such capacity, the "Servicer", including any successor Servicer under the
Agreement referred to below). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as specified above (the "Agreement") among the
Seller, the Servicer, and Bankers Trust Company of California, N.A., as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate is one of the Investor Certificates from a duly
authorized issue of Certificates designated as ML Revolving Home Equity Loan
Asset Backed Certificates, Series 199_-_, representing, to the extent
specified in the Agreement, an undivided interest in: (i) the Mortgage Loans,
to the extent of their Trust Balances, and the proceeds thereof, (ii)
collections in respect of the Trust's interest in the Mortgage Loans received
on or after the Cut-off Date, (iii) an irrevocable and unconditional limited
financial guarantee insurance policy (the "Policy"), (iii) property that
secured a Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure or otherwise, (iv) the interest of the Trust in certain
hazard insurance policies covering the Mortgaged Properties, and (v) certain
other property relating to the Mortgage Loans (collectively, the "Trust
Assets").
On each Distribution Date, the Trustee shall distribute to each Investor
Certificateholder of record on the related Record Date (other than the final
distribution) by check mailed to such Certificateholder at the address
appearing in the Certificate Register, or upon written request of a Holder of
an Investor Certificate received by the Trustee at least five Business Days
prior to the related Record Date, by wire transfer (but only if such Certifi-
cateholder is the Depository or such Certificateholder owns of record one or
more Investor Certificates which have principal denominations aggregating at
least $5,000,000), or by such other means of payment as such Certifi-
cateholder 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. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee, of the
pendency of such distribution, and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or if such day is not a Business Day, then on
the next succeeding Business Day (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day preceding
the month of such Distribution Date (the "Record Date"), in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and
the amount required to be distributed to Holders of Investor Certificates on
such Distribution Date under the terms of the Agreement.
The Certificates are limited in right of payment to certain
payments on and collections in respect of the Mortgage Loans, all as more
specifically set forth in the Agreement. The Certificateholder, by its
acceptance of this Certificate, agrees that it will look solely to the funds
on deposit in the Certificate Account for payment hereunder, and that the
Trustee in its individual capacity is not personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
As provided in the Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions
to the Investor Certificateholders and, subject to certain conditions in the
Agreement, Mortgage Loans may, at the election of the Seller, be removed from
the Trust and transferred to the Seller (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
It is the intention of the Seller and the Investor
Certificateholders that the Investor Certificates will be 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 Seller, the Trustee
and the Holder of this Certificate (or Certificate Owner) by acceptance of
this Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest herein) 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 secured by the Trust
Assets and to report the transactions contemplated by the Agreement on all
applicable tax returns in a manner consistent with such treatment. Each
Holder of this Certificate agrees that it will cause any Certificate Owner
acquiring an interest in this Certificate through it to comply with the
Agreement as to treatment 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 Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer and the Trustee, and the rights of the
Certificateholders under the Agreement, at any time by the Seller, the
Servicer and the Trustee with the consent (i) of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 66%
and (ii) of the Certificate Insurer. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Investor Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the
Certificate Registrar for such purpose, accompanied by a written instrument
of transfer in form satisfactory to the Trustee, if so required by the
Trustee, be duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of
authorized denominations, if applicable, and evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of a like tenor in authorized
denominations (in the case of the Investor Certificates) and evidencing the
same aggregate Percentage Interest, as requested by the Holder surrendering
the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee or the Certificate Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Seller, the Servicer, the Certificate Insurer and the
Certificate Registrar and any agent of the foregoing may treat the Person in
whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Seller, the Servicer, the Certificate
Insurer, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (A) payment in
full of all amounts owing to the Certificate Insurer and (B) the earliest of:
(i) the retransfer to the Servicer of the Investor Certificateholders'
interest in each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund for an amount equal to the sum of
(a) the Certificate Principal Balance, (b) accrued and unpaid Certificate
Formula Interest through the day preceding the final Distribution Date, (c)
any Unpaid Certificate Interest Shortfall, and (d) any accrued and unpaid
Investor Loss Reduction Amounts through the day preceding such final
Distribution Date; (ii) the day following the Distribution Date on which the
distribution made to Investor Certificateholders has reduced the Certificate
Principal Balance to zero; (iii) the final payment or other liquidation (or
any Monthly Advance with respect thereto) of the Trust Balance of the last
Mortgage Loan remaining in the Trust Fund (including without limitation the
disposition of the Mortgage Loans) or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan; and (iv) the Stated Maturity Date.
The Servicer, or in the event the Servicer does not exercise its option
to terminate the Trust Fund, the Certificate Insurer, may effect an early
retirement of the Certificates by paying the retransfer price and accepting
retransfer of the Trust Assets pursuant to the terms of the Agreement on any
Distribution Date after the Certificate Principal Balance is less than or
equal to 10% of the Original Investor Certificate Principal Balance and all
amounts due and owing to the Certificate Insurer have been paid; provided,
however, that in no event shall the Trust continue beyond the expiration of
21 years from the death of certain person named in the Agreement. Upon
retirement of the Certificates in accordance with Section 10.01 of the
Agreement, the Trustee shall execute such documents and instruments of
transfer presented by the Servicer or Certificate Insurer and take such other
actions as the Servicer or Certificate Insurer may reasonably request to
effect the retransfer of the Mortgage Loans to the Servicer or Certificate
Insurer.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth.
Dated:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
not in its individual capacity but solely
as Trustee
------------------------------
Authorized Officer
Countersigned:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
By:
--------------------------------
Authorized Officer of
Bankers Trust Company of California, N.A.,
not in its individual capacity
but solely as Trustee
EXHIBIT B
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE INVESTOR
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS
OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.05 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, THAT IF SUCH
TRANSFEREE IS AN INSURANCE COMPANY THAT THE TRANSFEREE IS AN INSURANCE
COMPANY WHICH IS PURCHASING THIS CERTIFICATE 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 THIS CERTIFICATE ARE COVERED UNDER PTCE 95-60 OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.05(c) OF THE AGREEMENT REFERRED
TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Date of Pooling and Servicing
Agreement: :
Cut-off Date :
Percentage Interest : 100%
Certificate No. : 1
First Distribution Date :
Stated Maturity Date :
ML REVOLVING HOME MORTGAGE LOAN ASSET BACKED CERTIFICATES,
SERIES 199_-_
SELLER CERTIFICATE
evidencing a percentage interest in the distributions
allocable to the Seller Certificates evidencing an
undivided interest in a Trust consisting primarily of a
pool of adjustable rate home equity loan revolving credit
line loans serviced by
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
This Certificate does not represent an obligation of or interest in MLCC
Mortgage Investors, Inc. (the "Seller"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation or
the Trustee referred to below or any of their affiliates. Neither this
Certificate nor the underlying Trust Assets are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that ___________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate in the entire
interest not allocated to the Investor Certificates in certain monthly
distributions with respect to a Trust consisting primarily of a pool of
mortgage loans (the "Mortgage Loans"), sold by the Seller and serviced by
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation (the "Servicer", including any successor
Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Seller, the Servicer, and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
This Certificate evidences a Seller Certificate from a duly authorized
issue of Certificates designated as ML Revolving Home Equity Loan Asset
Backed Certificates, Series 199_-_, and representing, to the extent specified
in the Agreement, an undivided ownership interest in: (i) the Mortgage Loans,
to the extent of their Trust Balances, and the proceeds thereof, (ii)
collections in respect of the Trust's interest in the Mortgage Loans received
on or after the Cut-off Date, (iii) property that secured a Mortgage Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure or
otherwise, (iv) the interest of the Trust in certain hazard insurance
policies covering the Mortgaged Properties, and (v) certain other property
relating to the Mortgage Loans (collectively, the "Trust Assets").
The certificates are limited in right of payment to certain payments on
and collections in respect of the Trust Assets, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds available in
accordance with the terms of the Agreement for payment hereunder and that the
Trustee in its individual capacity is not personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer and the Trustee, and the rights of the
Certificateholders under the Agreement, at any time by the Seller, the
Servicer and the Trustee with the consent (i) of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 66%
and (ii) of the Certificate Insurer. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Investor Certificates.
No transfer of a Seller 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. There shall be delivered to the Trustee and the
Servicer a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Servicer that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from which Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee or the
Servicer, and the Trustee and the Servicer shall require the transferee to
execute an investment letter acceptable to and in form and substance
satisfactory to the Trustee and the Servicer certifying to the Trustee and
the Servicer the facts surrounding such transfer, which Investment letter
shall not be an expense of the Trustee or the Servicer; provided that such
Opinion of Counsel shall not be required in the case of transfers by or to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated or an affiliate thereof.
The Holder of a Seller Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee, the Servicer and the
Certificate Insurer against any liability that may result if the transfer is
not so exempt or if not made in accordance with such federal and state laws.
As provided in the Agreement and subject to certain limitations set
forth therein, and subject to the restrictions set forth on the first page
hereof, neither this Certificate nor any legal or beneficial interest herein
may be, directly or indirectly, purchased, transferred, sold, pledged,
assigned or otherwise disposed of, and any proposed transferee hereof shall
not become the registered Holder hereof, without the satisfaction of the
conditions set forth in Section 6.05 of the Agreement.
No service charge will be made for any such registration of Transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Trustee, the Servicer, the Certificate Insurer and the Certificate
Registrar and any agent of the foregoing may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee, the Servicer, the Certificate Insurer, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (A) payment in
full of all amounts owing to the Certificate Insurer and (B) the earliest of:
(i) the retransfer to the Servicer of the Investor Certificateholders'
interest in each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund for an amount equal to the sum of
(a) the Certificate Principal Balance, (b) accrued and unpaid Certificate
Formula Interest through the day preceding the final Distribution Date, (c)
any Unpaid Certificate Interest Shortfall, and (d) any accrued and unpaid
Investor Loss Reduction Amounts through the day preceding such final
Distribution Date; (ii) the day following the Distribution Date on which the
distribution made to Investor Certificateholders has reduced the Certificate
Principal Balance to zero; (iii) the final payment or other liquidation (or
any Monthly Advance with respect thereto) of the Trust Balance of the last
Mortgage Loan remaining in the Trust Fund (including without limitation the
disposition of the Mortgage Loans) or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan; and (iv) the Distribution Date in ____ ____.
The Servicer, or in the event the Servicer does not exercise its option
to terminate the Trust Fund, the Certificate Insurer, may effect an early
retirement of the Certificates by paying the retransfer price and accepting
retransfer of the Trust Assets pursuant to the terms of the Agreement on any
Distribution Date after the Investor Certificate Principal Balance is less
than or equal to 10% of the Original Investor Certificate Principal Balance
and all amounts due and owing to the Certificate Insurer have been paid;
provided, however, that in no event shall the Trust continue beyond the
expiration of 21 years from the death of certain person named in the
Agreement. Upon retirement of the Certificates in accordance with Section
10.01 of the Agreement, the Trustee shall execute such documents and
instruments of transfer presented by the Servicer or Certificate Insurer and
take such other actions as the Servicer or Certificate Insurer may reasonably
request to effect the retransfer of the Mortgage Loans to the Servicer or
Certificate Insurer.
Any purported Transfer of a Seller Certificate in violation of the
restriction on Transfer will be null and void and vest no rights to the
purported Transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth.
Dated:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
not in its individual capacity but solely
as Trustee
------------------------------
Authorized Officer
Countersigned:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
By:
--------------------------------
Authorized Officer of
Bankers Trust Company of California, N.A.,
not in its individual capacity
but solely as Trustee
EXHIBIT C
REVERSE OF INVESTOR CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as ML Revolving Home Equity Loan Asset Backed Certificates, Series
199_-_ (herein called the "Certificates"), and representing, to the extent
specified in the Agreement, an undivided interest in: (i) the Mortgage Loans,
to the extent of their Trust Balances, and the proceeds thereof, (ii)
collections in respect of the Trust's interest in the Mortgage Loans received
on or after the Cut-off Date, (iii) an irrevocable and unconditional limited
financial guarantee insurance policy (the "Policy"), (iii) property that
secured a Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure or otherwise, (iv) the interest of the Trust in certain
hazard insurance policies covering the Mortgaged Properties, and (v) certain
other property relating to the Mortgage Loans.
The Certificates are limited in right of payment to certain
payments on and collections in respect of the Mortgage Loans, all as more
specifically set forth in the Agreement. The Certificateholder, by its
acceptance of this Certificate, agrees that it will look solely to the funds
on deposit in the Certificate Account for payment hereunder and that the
Trustee in its individual capacity is not personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Seller, the Servicer and the Trustee, and the rights of the
Certificateholders under the Agreement, at any time by the Seller, the
Servicer and the Trustee with the consent (i) of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 66%
and (ii) of the Certificate Insurer. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Investor Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained
by the Certificate Registrar for such purpose, accompanied by a written
instrument of transfer in form satisfactory to the Trustee, if so required by
the Trustee, be duly executed by the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations, if applicable, and evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of a like tenor in
authorized denominations (in the case of the Investor Certificates) and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Trustee, the Seller, the Servicer, the Certificate Insurer and
the Certificate Registrar and any agent of the foregoing may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Seller, the Servicer, the Certificate
Insurer, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (A) payment in
full of all amounts owing to the Certificate Insurer and (B) the earliest of:
(i) the retransfer to the Servicer of the Investor Certificateholders'
interest in each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund for an amount equal to the sum of
(a) the Certificate Principal Balance, (b) accrued and unpaid Certificate
Formula Interest through the day preceding the final Distribution Date, (c)
any Unpaid Certificate Interest Shortfall, and (d) any accrued and unpaid
Investor Loss Reduction Amounts through the day preceding such final
Distribution Date; (ii) the day following the Distribution Date on which the
distribution made to Investor Certificateholders has reduced the Certificate
Principal Balance to zero; (iii) the final payment or other liquidation (or
any Monthly Advance with respect thereto) of the Trust Balance of the last
Mortgage Loan remaining in the Trust Fund (including without limitation the
disposition of the Mortgage Loans) or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan; and (iv) the Stated Maturity Date.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE)
___________________
___________________
---------------------------------------------------------------
(Please Print or Typewrite Name and Address of Assignee)
---------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby
does irrevocably constitute and appoint
Attorney
-------------------------------------------------------
to transfer the within Certificate on the books kept for the
registration thereof, with full power of substitution in the premises.
Dated:
(Signature guaranty)
----------------------------
NOTICE: The signature to this assignment
------------------------------
must correspond with the name as it appears upon the face of the within
Certificate in every particular, without alteration or enlargement or any
change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
EXHIBIT D
REVERSE OF SELLER CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as ML Revolving Home Equity Loan Asset Backed Certificates, Series
199_-_ (herein called the "Certificates"), and representing, to the extent
specified in the Agreement, an undivided interest in: (i) the Mortgage Loans,
to the extent of their Trust Balances, and the proceeds thereof, (ii)
collections in respect of the Trust's interest in the Mortgage Loans received
on or after the Cut-off Date, (iii) an irrevocable and unconditional limited
financial guarantee insurance policy (the "Policy"), (iii) property that
secured a Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure or otherwise, (iv) the interest of the Trust in certain
hazard insurance policies covering the Mortgaged Properties, and (v) certain
other property relating to the Mortgage Loans.
The Certificates are limited in right of payment to certain
payments on and collections in respect of the Mortgage Loans, all as more
specifically set forth in the Agreement. The Certificateholder, by its
acceptance of this Certificate, agrees that it will look solely to the funds
on deposit in the Certificate Account for payment hereunder and that the
Trustee in its individual capacity is not personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Seller, the Servicer and the Trustee, and the rights of the
Certificateholders under the Agreement, at any time by the Seller, the
Servicer and the Trustee with the consent (i) of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than 66%
and (ii) of the Certificate Insurer. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Investor Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained
by the Certificate Registrar for such purpose, accompanied by a written
instrument of transfer in form satisfactory to the Trustee, if so required by
the Trustee, be duly executed by the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations, if applicable, and evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of a like tenor in
authorized denominations (in the case of the Investor Certificates) and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Trustee, the Seller, the Servicer, the Certificate Insurer and
the Certificate Registrar and any agent of the foregoing may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Seller, the Servicer, the Certificate
Insurer, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (A) payment in
full of all amounts owing to the Certificate Insurer and (B) the earliest of:
(i) the retransfer to the Servicer of the Investor Certificateholders'
interest in each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund for an amount equal to the sum of
(a) the Certificate Principal Balance, (b) accrued and unpaid Certificate
Formula Interest through the day preceding the final Distribution Date, (c)
any Unpaid Certificate Interest Shortfall, and (d) any accrued and unpaid
Investor Loss Reduction Amounts through the day preceding such final
Distribution Date; (ii) the day following the Distribution Date on which the
distribution made to Investor Certificateholders has reduced the Certificate
Principal Balance to zero; (iii) the final payment or other liquidation (or
any Monthly Advance with respect thereto) of the Trust Balance of the last
Mortgage Loan remaining in the Trust Fund (including without limitation the
disposition of the Mortgage Loans) or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan; and (iv) the Stated Maturity Date.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE)
___________________
___________________
---------------------------------------------------------------
(Please Print or Typewrite Name and Address of Assignee)
---------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby
does irrevocably constitute and appoint
Attorney
-------------------------------------------------------
to transfer the within Certificate on the books kept for the
registration thereof, with full power of substitution in the premises.
Dated:
(Signature guaranty)
----------------------------
NOTICE: The signature to this assignment
------------------------------
must correspond with the name as it appears upon the face of the within
Certificate in every particular, without alteration or enlargement or any
change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
EXHIBIT E
(FORM OF NOTICE FOR CERTIFICATE
INSURANCE POLICY)
TO THE CERTIFICATE GUARANTY INSURANCE POLICY
--------------------------------------------
Policy No. ________
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS
Date: ( )
AMBAC INDEMNITY CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Reference is made to Certificate Guaranty Insurance Policy No. AB0065BE
(the "Policy") issued by AMBAC Indemnity Corporation ("AMBAC"). Terms
capitalized herein and not otherwise defined shall have the meanings
specified in the Policy unless the context otherwise requires.
The Trustee hereby certifies as follows:
1. The Trustee is the Trustee under the Agreement for the Holders;
2. The relevant Distribution Date is (date);
3. Payment on the Certificates in respect of the Distribution Date was
due to be received on ______ under the Agreement, in an amount
equal to $________;
4. There is a Non-Payment of an Insured Amount of $________, of which
$___________ represent amounts described in clauses (a) and (b), or
(y), as the case may be, of the definition thereof.
(5. The Trustee has designated $________ as Preference Amounts in
respect of ________ Distribution Dates; such amount is therefore
also due and owing pursuant to the terms of the Agreement as
aportion of the Insured Amount);
6. The Trustee has not heretofore made a demand for the Insured Amount
in respect of the Distribution Date;
7. The Trustee hereby requests the payment of the Insured Amount be
made by AMBAC under the Policy and directs that payment under the
Policy be made to the following account by bank wire transfer of
federal or other immediately available funds in accordance with the
terms of the Policy to:
___________________ Trustee's account number
8. The Trustee hereby agrees that, following receipt of the Insured
Amount from AMBAC, it shall (a) hold such amounts in trust and
apply the same directly to the distribution payment on the
Certificates when due; (b) not apply such funds for any other
purpose; (c) not commingle such funds with other funds held by the
Trustee; and (d) maintain an accurate record of such payments with
respect to each Certificate and the corresponding claim on the
Policy and proceeds thereof.
By: Trustee
--------------------------
Title:
--------------------------
(Officer)
EXHIBIT F
---------
MORTGAGE LOAN SCHEDULE
A COPY ON ELECTRONIC MEDIUM (FLOPPY DISKETTE) OF THE MORTGAGE LOAN SCHEDULE
HAS BEEN FORWARDED TO THE TRUSTEE FOR THEIR FILES. A COPY OF THE MORTGAGE
LOAN SCHEDULE MAY BE OBTAINED FROM THE TRUSTEE.