EXHIBIT 4
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▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Seller)
and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
(Master Servicer)
and
WACHOVIA BANK, NATIONAL ASSOCIATION
(Trustee)
POOLING AND SERVICING AGREEMENT
Dated as of August 28, 2003
$235,020,224.00
Mortgage Asset-Backed Pass-Through Certificates
Series 2003-1
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..................................................
Section 1.02 Acts of Holders..............................................
Section 1.03 Effect of Headings and Table of Contents.....................
Section 1.04 Benefits of Agreement........................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF THE CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by Custodian......................................
Section 2.03 Representations and Warranties of the Master Servicer and
the Seller..................................................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 Designation of Certificates; Designation of Startup Day
and Latest Possible Maturity Date...........................
Section 2.06 Optional Substitution of Mortgage Loans......................
ARTICLE III
ADMINISTRATION OF THE TRUST ESTATE; SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Certificate Account..........................................
Section 3.02 Permitted Withdrawals from the Certificate Account...........
Section 3.03 Advances by Master Servicer and Trustee......................
Section 3.04 Custodian to Cooperate;
Release of Owner Mortgage Loan Files........................
Section 3.05 Reports to the Trustee; Annual Compliance Statements.........
Section 3.06 Title, Management and Disposition of Any REO Mortgage
Loan........................................................
Section 3.07 Amendments to Servicing Agreements,
Modification of Standard Provisions.........................
Section 3.08 Oversight of Servicing.......................................
Section 3.09 Termination and Substitution of Servicing Agreements.........
Section 3.10 Application of Net Liquidation Proceeds......................
Section 3.11 Act Reports..................................................
ARTICLE IV
DISTRIBUTIONS IN RESPECT OF CERTIFICATES;
PAYMENTS TO CERTIFICATEHOLDERS;
STATEMENTS AND REPORTS
Section 4.01 Distributions................................................
Section 4.02 Allocation of Realized Losses................................
Section 4.03 Paying Agent.................................................
Section 4.04 Statements to Certificateholders;
Reports to the Trustee and the Seller.......................
Section 4.05 Reports to Mortgagors and the Internal Revenue Service.......
Section 4.06 Calculation of Amounts; Binding Effect of Interpretations
and Actions of Master Servicer..............................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Registration of Certificates.................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
Section 5.07 Definitive Certificates......................................
Section 5.08 Notices to Clearing Agency...................................
ARTICLE VI
THE SELLER AND THE MASTER SERVICER
Section 6.01 Liability of the Seller and the Master Servicer..............
Section 6.02 Merger or Consolidation of the Seller or the Master
Servicer....................................................
Section 6.03 Limitation on Liability of the Seller, the Master
Servicer and Others.........................................
Section 6.04 Resignation of the Master Servicer...........................
Section 6.05 Compensation to the Master Servicer..........................
Section 6.06 Assignment or Delegation of Duties by Master Servicer........
Section 6.07 Indemnification of Trustee and Seller by Master Servicer.....
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Other Remedies of Trustee....................................
Section 7.03 Directions by Certificateholders and
Duties of Trustee During Event of Default...................
Section 7.04 Action upon Certain Failures of the
Master Servicer and upon Event of Default...................
Section 7.05 Trustee to Act; Appointment of Successor.....................
Section 7.06 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee............................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Required to Make Investigation...................
Section 8.04 Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.05 Trustee May Own Certificates.................................
Section 8.06 The Master Servicer to Pay Fees and Expenses.................
Section 8.07 Eligibility Requirements.....................................
Section 8.08 Resignation and Removal......................................
Section 8.09 Successor....................................................
Section 8.10 Merger or Consolidation......................................
Section 8.11 Authenticating Agent.........................................
Section 8.12 Separate Trustees and Co-Trustees............................
Section 8.13 Tax Matters; Compliance with REMIC Provisions................
Section 8.14 Monthly Advances.............................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Purchase by the
Seller or Liquidation of All Mortgage Loans.................
Section 9.02 Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment....................................................
Section 10.02 Recordation of Agreement.....................................
Section 10.03 Limitation on Rights of Certificateholders...................
Section 10.04 Governing Law; Jurisdiction..................................
Section 10.05 Notices......................................................
Section 10.06 Severability of Provisions...................................
Section 10.07 Special Notices to Rating Agencies...........................
Section 10.08 Covenant of Seller...........................................
Section 10.09 Recharacterization...........................................
ARTICLE XI
TERMS FOR CERTIFICATES
Section 11.01 Cut-Off Date.................................................
Section 11.02 Cut-Off Date Aggregate Principal Balance.....................
Section 11.03 Original Group I-A Percentage................................
Section 11.04 Original Group II-A Percentage...............................
Section 11.05 Original Principal Balances of the Classes of Class A
Certificates................................................
Section 11.06 Original Aggregate Non-PO Principal Balance..................
Section 11.07 Original Aggregate Percentages...............................
Section 11.07(a) Original Aggregate Subordinate Percentage.................
Section 11.07(b) Original Aggregate Class A Percentage.....................
Section 11.08 Original Class B Principal Balance...........................
Section 11.09 Original Principal Balances of the Classes of Class B
Certificates................................................
Section 11.10 Original Class B-1 Fractional Interest.......................
Section 11.11 Original Class B-2 Fractional Interest.......................
Section 11.12 Original Class B-3 Fractional Interest.......................
Section 11.13 Original Class B-4 Fractional Interest.......................
Section 11.14 Original Class B-5 Fractional Interest.......................
Section 11.15 Closing Date.................................................
Section 11.16 Right to Purchase............................................
Section 11.17 Wire Transfer Eligibility....................................
Section 11.18 Single Certificate...........................................
Section 11.19 Servicing Fee Rate...........................................
Section 11.20 Master Servicing Fee Rate....................................
EXHIBITS
EXHIBIT A-I-A-1 - Form of Face of Class I-A-1 Certificate
EXHIBIT A-I-A-2 - Form of Face of Class I-A-2 Certificate
EXHIBIT A-I-A-3 - Form of Face of Class I-A-3 Certificate
EXHIBIT A-I-A-R - Form of Face of Class I-A-R Certificate
EXHIBIT A-II-A-1 - Form of Face of Class II-A-1 Certificate
EXHIBIT A-A-PO - Form of Face of Class A-PO Certificate
EXHIBIT B-1 - Form of Face of Class B-1 Certificate
EXHIBIT B-2 - Form of Face of Class B-2 Certificate
EXHIBIT B-3 - Form of Face of Class B-3 Certificate
EXHIBIT B-4 - Form of Face of Class B-4 Certificate
EXHIBIT B-5 - Form of Face of Class B-5 Certificate
EXHIBIT B-6 - Form of Face of Class B-6 Certificate
EXHIBIT C - Form of Reverse of Series 2003-1 Certificates
EXHIBIT D - Reserved
EXHIBIT E - Custodial Agreement
EXHIBIT F-1A - Schedule of Type 1 Mortgage Loans in Loan Group I
EXHIBIT F-1B - Schedule of Type 1 Mortgage Loans in Loan Group II
EXHIBIT G - Request for Release
EXHIBIT H - Affidavit Pursuant to Section
860E(e)(4) of the Internal Revenue Code of 1986,
as amended, and for Non-ERISA Investors
EXHIBIT I - Letter from Transferor of Residual
Certificates
EXHIBIT J - Transferee's Letter (Class [B-4] [B-5]
[B-6] Certificates)
EXHIBIT K - Reserved
EXHIBIT L - Servicing Agreements
EXHIBIT M - Form of Special Servicing Agreement
EXHIBIT N - Form of Initial Certification of the
Custodian
EXHIBIT O - Form of Final Certification of the
Custodian
SCHEDULE I - Applicable Unscheduled Principal
Receipt Period
This Pooling and Servicing Agreement, dated as of August 28, 2003
executed by ▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION, as Seller, ▇▇▇▇▇ FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer and WACHOVIA BANK,
NATIONAL ASSOCIATION, 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
Seller, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article.
Accepted Master Servicing Practices: Accepted Master Servicing
Practices shall consist of the customary and usual master servicing practices of
prudent master servicing institutions which service mortgage loans of the same
type as the Mortgage Loans in the jurisdictions in which the related Mortgaged
Properties are located, regardless of the date upon which the related Mortgage
Loans were originated.
Adjusted Principal Balance: As to any Distribution Date and any
Class of Class B Certificates, the greater of (A) zero and (B) (i) the Principal
Balance of such Class with respect to such Distribution Date minus (ii) the
Adjustment Amount for such Distribution Date less the Principal Balances for any
Classes of Class B Certificates with higher numerical designations.
Adjustment Amount: For any Distribution Date, the difference between
(A) the sum of the Aggregate Class A Principal Balance and the Class B Principal
Balance as of the related Determination Date and (B) the sum of (i) the sum of
the Aggregate Class A Principal Balance and the Class B Principal Balance as of
the Determination Date succeeding such Distribution Date and (ii) the aggregate
amount that would have been distributed to all Classes as principal in
accordance with Section 4.01(a)(i) for such Distribution Date without regard to
the provisos in the definitions of Class B-1 Optimal Principal Amount, Class B-2
Optimal Principal Amount, Class B-3 Optimal Principal Amount, Class B-4 Optimal
Principal Amount, Class B-5 Optimal Principal Amount and Class B-6 Optimal
Principal Amount.
Aggregate Adjusted Pool Amount: With respect to any Distribution
Date, the sum of the Group I Adjusted Pool Amount and Group II Adjusted Pool
Amount.
Aggregate Class A Principal Balance: With respect to any
Determination Date, the sum of the Group I-A Principal Balance and Group II-A
Principal Balance.
Aggregate Class A Percentage: As to any Distribution Date, the
percentage obtained by dividing (i) the sum of the Group I-A Non-PO Principal
Balance and the Group II-A Non-PO Principal Balance by (ii) the sum of the Group
I Pool Balance (Non-PO Portion) and the Group II Pool Balance (Non-PO Portion).
Aggregate Group I-A Unpaid Interest Shortfall: As to any
Distribution Date, an amount equal to the sum of the Class A Unpaid Interest
Shortfalls for the Group I-A Certificates.
Aggregate Group II-A Unpaid Interest Shortfall: As to any
Distribution Date, an amount equal to the sum of the Class A Unpaid Interest
Shortfalls for the Group II-A Certificates.
Aggregate Non-PO Principal Balance: As of any Determination Date,
the sum of the Group I-A Non-PO Principal Balance, the Group II-A Non-PO
Principal Balance and the Class B Principal Balance as of such date.
Aggregate Subordinate Percentage: As to any Determination Date, the
Class B Principal Balance divided by the sum of the Group I Pool Balance (Non-PO
Portion) and the Group II Pool Balance (Non-PO Portion).
Agreement: This Pooling and Servicing Agreement and all amendments
and supplements hereto.
Applicable Unscheduled Principal Receipt Period: With respect to the
Mortgage Loans serviced by each Servicer and each of Full Unscheduled Principal
Receipts and Partial Unscheduled Principal Receipts, the Unscheduled Principal
Receipt Period specified on Schedule I hereto, as amended from time to time by
the Master Servicer pursuant to Section 10.01(b) hereof.
Apportioned Class B Principal Distribution Amount: As to any
Distribution Date and any Class of Class B Certificates, the product of (i) the
applicable Class B Principal Distribution Amount less the amount, if any, that
would have been distributable to such Class pursuant to Section 4.01(a)(ii) that
is used to pay the Class A-PO Deferred Amounts as provided in Paragraph fourth
of Section 4.01(a)(i) and (ii) the Apportionment Fraction for such Class.
Apportionment Fraction: As to any Class of Class B Certificates and
any Distribution Date occurring prior to the Subordination Depletion Date and
(i) on or after the Distribution Date on which the Principal Balances of the
Group I-A Certificates have been reduced to zero, a fraction, the numerator of
which is the applicable Class B Loan Group I Optimal Principal Amount and the
denominator of which is the applicable Class B Optimal Principal Amount without
regard to the proviso thereto or (ii) on or after the Distribution Date on which
the Principal Balance of the Group II-A Certificates has been reduced to zero, a
fraction, the numerator of which is the applicable Class B Loan Group II Optimal
Principal Amount and the denominator of which is the applicable Class B Optimal
Principal Amount without regard to the proviso thereto.
Authenticating Agent: Any authenticating agent appointed by the
Trustee pursuant to Section 8.11. There shall initially be no Authenticating
Agent for the Certificates.
Available Master Servicer Compensation: With respect to any
Distribution Date, the sum of (a) the Master Servicing Fee for such Distribution
Date, (b) interest earned through the business day preceding the applicable
Distribution Date on any Prepayments in Full remitted to the Master Servicer and
(c) the aggregate amount of Month End Interest remitted by the Servicers to the
Master Servicer pursuant to the related Servicing Agreements.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that a Bankruptcy Loss
shall not be deemed a Bankruptcy Loss hereunder so long as the applicable
Servicer has notified the Master Servicer and the Trustee in writing that such
Servicer is diligently pursuing any remedies that may exist in connection with
the representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by such Servicer without giving
effect to any Debt Service Reduction.
Beneficial Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as reflected
on the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency), as the case may be.
Book-Entry Certificate: Any one of the Class I-A-1 Certificates,
Class I-A-2 Certificates, Class I-A-3 Certificates, Class II-A-1 Certificates,
Class A-PO Certificates, Class B-1 Certificates, Class B-2 Certificates and
Class B-3 Certificates, beneficial ownership and transfers of which shall be
evidenced by, and made through, book entries by the Clearing Agency as described
in Section 5.01(b).
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a legal holiday in the City of New York, State of Iowa, State of Maryland, State
of Minnesota or State of North Carolina or (iii) a day on which banking
institutions in the City of New York, or the State of Iowa, State of Maryland,
State of Minnesota or State of North Carolina are authorized or obligated by law
or executive order to be closed.
Certificate: Any one of the Class A Certificates or Class B
Certificates.
Certificate Account: The separate trust account established and
maintained by the Master Servicer in the name of the Master Servicer on behalf
of the Trustee pursuant to Section 3.01. The Certificate Account shall be an
Eligible Account.
Certificate Custodian: Initially, Wachovia Bank, National
Association; thereafter any other Certificate Custodian acceptable to The
Depository Trust Company and selected by the Trustee.
Certificate Register and Certificate Registrar: Respectively, the
register maintained pursuant to and the registrar provided for in Section 5.02.
The initial Certificate Registrar is the Trustee.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purposes
of the taking of any action under Articles VII or VIII, any Certificate
registered in the name of the Master Servicer, a Servicer or any affiliate
thereof shall be deemed not to be outstanding and the Voting Interest evidenced
thereby shall not be taken into account in determining whether the requisite
percentage of Certificates necessary to effect any such action has been
obtained.
Class: All certificates whose form is identical except for
variations in the Percentage Interest evidenced thereby.
Class A Certificate: Any of the Group I-A Certificates, Group II-A
Certificates or Class A-PO Certificates.
Class A Certificateholder: The registered holder of a Class A
Certificate.
Class A-PO Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-A-PO and Exhibit C hereto.
Class A-PO Certificateholder: The registered holder of a Class A-PO
Certificate.
Class A-PO Component: Each of the Class I-A-PO Component or Class
II-A-PO Component.
Class A-PO Deferred Amount: For any Distribution Date prior to the
Subordination Depletion Date and any Class A-PO Component, the difference
between (A) the sum of (x) the amount by which the sum of the Class A-PO Optimal
Principal Amount for the related Group for all prior Distribution Dates exceeded
the amounts distributed on the Class A-PO Certificates with respect to such
Class A-PO Component on such prior Distribution Dates pursuant to Paragraph
third clause (A) or clause (B), as applicable, of Section 4.01(a)(i) and (y) the
sum of the product for each Discount Mortgage Loan in the related Loan Group
which became a Liquidated Loan at any time on or prior to the last day of the
Applicable Unscheduled Principal Receipt Period for Full Unscheduled Principal
Receipts for the current Distribution Date of (a) the PO Fraction for such
Discount Mortgage Loan and (b) an amount equal to the principal portion of
Realized Losses (other than Bankruptcy Losses due to Debt Service Reductions)
incurred with respect to such Discount Mortgage Loan and (B) the sum of (x) the
sum of such Class A-PO Component's PO Recoveries for such Distribution Date and
prior Distribution Dates and (y) amounts distributed on the Class A-PO
Certificates with respect to such Class A-PO Component on prior Distribution
Dates pursuant to Paragraph fourth clause (A) or clause (B), as applicable, of
Section 4.01(a)(i). On and after the Subordination Depletion Date, the Class
A-PO Deferred Amount for each Class A-PO Component will be zero. No interest
will accrue on any Class A-PO Deferred Amount.
Class I-A-1 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-I-A-1 and Exhibit C hereto.
Class I-A-1 Certificateholder: The registered holder of a Class
I-A-1 Certificate.
Class I-A-2 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-I-A-2 and Exhibit C hereto.
Class I-A-2 Certificateholder: The registered holder of a Class
I-A-2 Certificate.
Class I-A-3 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-I-A-3 and Exhibit C hereto.
Class I-A-3 Certificateholder: The registered holder of a Class
I-A-3 Certificate.
Class I-A-PO Optimal Principal Amount: As to any Distribution Date,
an amount equal to the sum of (I) the sum, as to each Group I Mortgage Loan that
is an Outstanding Mortgage Loan, of the product of (x) the PO Fraction with
respect to such Group I Mortgage Loan and (y) the sum of:
(i) the principal portion of the Monthly Payment due on the Due Date
occurring in the month of such Distribution Date on such Group I Mortgage
Loan;
(ii) all Unscheduled Principal Receipts (other than Recoveries) that
were received by a Servicer with respect to such Group I Mortgage Loan
during the Applicable Unscheduled Principal Receipt Period relating to
such Distribution Date for each applicable type of Unscheduled Principal
Receipt;
(iii) the Scheduled Principal Balance of each Group I Mortgage Loan
which, during the one month period ending on the day preceding the
Determination Date for such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the excess of the unpaid principal balance of such Group I
Mortgage Loan substituted for a Group I Mortgage Loan during the one month
period ending on the day preceding the Determination Date for such
Distribution Date occurs over the unpaid principal balance of such Group I
Mortgage Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Group I Mortgage
Loan; and
(II) the Class I-A-PO Recovery for such Distribution Date.
Class I-A-PO Recovery: As to any Distribution Date prior to the
Subordination Depletion Date, the lesser of (a) the Class A-PO Deferred Amount
for the Class I-A-PO Component for such Distribution Date (calculated without
regard to the Class I-A-PO Recovery for such Distribution Date) and (b) an
amount equal to the sum as to each Group I Mortgage Loan as to which there has
been a Recovery during the Applicable Unscheduled Principal Receipt Period, of
the product of (x) the PO Fraction with respect to such Group I Mortgage Loan
and (y) the amount of the Recovery with respect to such Group I Mortgage Loan.
As to any Distribution Date on or after the Subordination Depletion Date, the
amount determined in accordance with clause (b) above.
Class I-A-R Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-I-A-R and Exhibit C hereto.
Class I-A-R Certificateholder: The registered holder of the Class
I-A-R Certificate.
Class II-A-1 Certificate: Any one of the Certificates executed by
the Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-II-A-1 and Exhibit C hereto.
Class II-A-1 Certificateholder: The registered holder of a Class
II-A-1 Certificate.
Class II-A-PO Optimal Principal Amount: As to any Distribution Date,
an amount equal to the sum of (I) the sum, as to each Group II Mortgage Loan
that is an Outstanding Mortgage Loan, of the product of (x) the PO Fraction with
respect to such Group II Mortgage Loan and (y) the sum of:
(i) the principal portion of the Monthly Payment due on the Due Date
occurring in the month of such Distribution Date on such Group II Mortgage
Loan;
(ii) all Unscheduled Principal Receipts (other than Recoveries) that
were received by a Servicer with respect to such Group II Mortgage Loan
during the Applicable Unscheduled Principal Receipt Period relating to
such Distribution Date for each applicable type of Unscheduled Principal
Receipt;
(iii) the Scheduled Principal Balance of each Group II Mortgage Loan
which, during the one month period ending on the day preceding the
Determination Date for such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the excess of the unpaid principal balance of such Group II
Mortgage Loan substituted for a Group II Mortgage Loan during the one
month period ending on the day preceding the Determination Date for such
Distribution Date occurs over the unpaid principal balance of such Group
II Mortgage Loan, less the amount allocable to the principal portion of
any unreimbursed Periodic Advances previously made by the applicable
Servicer, the Master Servicer or the Trustee in respect of such Group II
Mortgage Loan; and
(II) the Class II-A-PO Recovery for such Distribution Date.
Class II-A-PO Recovery: As to any Distribution Date prior to the
Subordination Depletion Date, the lesser of (a) the Class A-PO Deferred Amount
for the Class II-A-PO Component for such Distribution Date (calculated without
regard to the Class II-A-PO Recovery for such Distribution Date) and (b) an
amount equal to the sum as to each Group II Mortgage Loan as to which there has
been a Recovery during the Applicable Unscheduled Principal Receipt Period, of
the product of (x) the PO Fraction with respect to such Group II Mortgage Loan
and (y) the amount of the Recovery with respect to such Group II Mortgage Loan.
As to any Distribution Date on or after the Subordination Depletion Date, the
amount determined in accordance with clause (b) above.
Class A Interest Percentage: As to any Distribution Date and any
Class of Class A Certificates, the percentage calculated by dividing the
Interest Accrual Amount of such Class (determined without regard to clause (ii)
of the definition thereof) by the sum of (a) the Group I-A Interest Accrual
Amount and (b) the Group II-A Interest Accrual Amount (determined, in each case,
without regard to clause (ii) of the definition of each Interest Accrual
Amount).
Class A Pass-Through Rate: As to the Class I-A-1, Class I-A-2, Class
I-A-3, Class I-A-R and Class II-A-1 Certificates, 5.750% per annum. The Class
A-PO Certificates are not entitled to interest and do not have Class A
Pass-Through Rates.
Class A Unpaid Interest Shortfall: As to any Distribution Date and
Class of Class A Certificates, the amount, if any, by which the aggregate of the
Group I-A Interest Shortfall Amounts or Group II-A Interest Shortfall Amounts
for such Class for prior Distribution Dates is in excess of the amounts
distributed in respect of such Class on prior Distribution Dates pursuant to
Paragraph second of Section 4.01(a)(i).
Class B Certificate: Any one of the Class B-1 Certificates, Class
B-2 Certificates, Class B-3 Certificates, Class B-4 Certificates, Class B-5
Certificates or Class B-6 Certificates.
Class B Certificateholder: The registered holder of a Class B
Certificate.
Class B Distribution Amount: Any of the Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 or Class B-6 Distribution Amounts.
Class B Interest Accrual Amount: With respect to any Distribution
Date, the sum of the Interest Accrual Amounts for the Classes of Class B
Certificates with respect to such Distribution Date.
Class B Interest Percentage: With respect to any Distribution Date
and any Class of Class B Certificates, the percentage calculated by dividing the
Interest Accrual Amount of such Class (determined without regard to clause (ii)
of the definition thereof) by the Class B Interest Accrual Amount (determined
without regard to clause (ii) of the definition of each Interest Accrual
Amount).
Class B Interest Shortfall Amount: Any of the Class B-1 Interest
Shortfall Amount, Class B-2 Interest Shortfall Amount, Class B-3 Interest
Shortfall Amount, Class B-4 Interest Shortfall Amount, Class B-5 Interest
Shortfall Amount or Class B-6 Interest Shortfall Amount.
Class B Loan Group I Optimal Principal Amount: Any of the Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Loan Group I Optimal
Principal Amounts.
Class B Loan Group II Optimal Principal Amount: Any of the Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Loan Group II
Optimal Principal Amounts.
Class B Loan Group Optimal Principal Amount: Either of the Class B
Loan Group I Optimal Principal Amount or Class B Loan Group II Optimal Principal
Amount.
Class B Loss Percentage: With respect to any Determination Date and
any Class of Class B Certificates then outstanding, the percentage calculated by
dividing the Principal Balance of such Class B by the Class B Principal Balance
(determined without regard to any Principal Balance of any Class of Class B
Certificates not then outstanding), in each case determined as of the preceding
Determination Date.
Class B Optimal Principal Amount: Any of the Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 or Class B-6 Optimal Principal Amounts.
Class B Pass-Through Rate: As to any Distribution Date, 5.750% per
annum.
Class B Principal Balance: As of any date, an amount equal to the
sum of the Class B-1 Principal Balance, Class B-2 Principal Balance, Class B-3
Principal Balance, Class B-4 Principal Balance, Class B-5 Principal Balance and
Class B-6 Principal Balance.
Class B Principal Distribution Amount: Any of the Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Principal Distribution
Amounts.
Class B Unpaid Interest Shortfall: Any of the Class B-1 Unpaid
Interest Shortfall, Class B-2 Unpaid Interest Shortfall, Class B-3 Unpaid
Interest Shortfall, Class B-4 Unpaid Interest Shortfall, Class B-5 Unpaid
Interest Shortfall or Class B-6 Unpaid Interest Shortfall.
Class B-1 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit B-1 and Exhibit C hereto.
Class B-1 Certificateholder: The registered holder of a Class B-1
Certificate.
Class B-1 Distribution Amount: As to any Distribution Date, any
amount distributable to the Holders of the Class B-1 Certificates pursuant to
Paragraphs first, second and third of Section 4.01(a)(ii).
Class B-1 Interest Shortfall Amount: As to any Distribution Date,
any amount by which the Interest Accrual Amount of the Class B-1 Certificates
with respect to such Distribution Date exceeds the amount distributed in respect
of the Class B-1 Certificates on such Distribution Date pursuant to Paragraph
first of Section 4.01(a)(ii).
Class B-1 Loan Group I Optimal Principal Amount: As to any
Distribution Date, the Class B-1 Optimal Principal Amount calculated only with
respect to Group I Mortgage Loans and without regard to the proviso thereto.
Class B-1 Loan Group II Optimal Principal Amount: As to any
Distribution Date, the Class B-1 Optimal Principal Amount calculated only with
respect to Group II Mortgage Loans and without regard to the proviso thereto.
Class B-1 Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum of (I) the sum, as to each Outstanding Mortgage Loan, of
the product of (x) the Non-PO Fraction with respect to such Mortgage Loan and
(y) the sum of:
(i) the Group I Class B-1 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-1 Percentage (with respect to
each such Group II Mortgage Loan) of the principal portion of the Monthly
Payment due on the Due Date occurring in the month of such Distribution
Date on such Mortgage Loan;
(ii) the Group I Class B-1 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-1 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of all
Unscheduled Principal Receipts (other than Recoveries) that were received
by a Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I Class B-1 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-1 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of the
Scheduled Principal Balance of such Mortgage Loan which, during the one
month period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Seller pursuant to Section 2.02
or 2.03; and
(iv) the Group I Class B-1 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-1 Percentage (with respect to
each such Group II Mortgage Loan) of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a Mortgage Loan during the
one month period ending on the day preceding the Determination Date for
such Distribution Date over the unpaid principal balance of such Mortgage
Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I Class B-1 Prepayment Percentage or Group II Class B-1
Prepayment Percentage, as applicable, of the Non-PO Recovery for each Loan
Group for such Distribution Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-1 Optimal Principal Amount
will equal the lesser of (A) the Class B-1 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-1 Certificates.
Class B-1 Principal Balance: As to the first Determination Date, the
Original Class B-1 Principal Balance. As of any subsequent Determination Date,
the Original Class B-1 Principal Balance less the sum of all amounts previously
distributed in respect of the Class B-1 Certificates on prior Distribution Dates
(A) pursuant to Paragraph third of Section 4.01(a)(ii) and (B) as a result of a
Principal Adjustment; provided, however, if the Class B-1 Certificates are the
most subordinate Certificates outstanding, the Class B-1 Principal Balance will
equal the difference, if any, between the Aggregate Adjusted Pool Amount as of
the preceding Distribution Date less the Aggregate Class A Principal Balance as
of such Determination Date.
Class B-1 Principal Distribution Amount: As to any Distribution
Date, any amount distributable to the Holders of the Class B-1 Certificates
pursuant to Paragraph third of Section 4.01(a)(ii).
Class B-1 Unpaid Interest Shortfall: As to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-1 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-1 Certificates on prior Distribution Dates pursuant to
Paragraph second of Section 4.01(a)(ii).
Class B-2 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit B-2 and Exhibit C hereto.
Class B-2 Certificateholder: The registered holder of a Class B-2
Certificate.
Class B-2 Distribution Amount: As to any Distribution Date, any
amount distributable to the Holders of the Class B-2 Certificates pursuant to
Paragraphs fourth, fifth and sixth of Section 4.01(a)(ii).
Class B-2 Interest Shortfall Amount: As to any Distribution Date,
any amount by which the Interest Accrual Amount of the Class B-2 Certificates
with respect to such Distribution Date exceeds the amount distributed in respect
of the Class B-2 Certificates on such Distribution Date pursuant to Paragraph
fourth of Section 4.01(a)(ii).
Class B-2 Loan Group I Optimal Principal Amount: As to any
Distribution Date, the Class B-2 Optimal Principal Amount calculated only with
respect to Group I Mortgage Loans and without regard to the proviso thereto.
Class B-2 Loan Group II Optimal Principal Amount: As to any
Distribution Date, the Class B-2 Optimal Principal Amount calculated only with
respect to Group II Mortgage Loans and without regard to the proviso thereto.
Class B-2 Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum of (I) the sum, as to each Outstanding Mortgage Loan, of
the product of (x) the Non-PO Fraction with respect to such Mortgage Loan and
(y) the sum of:
(i) the Group I Class B-2 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-2 Percentage (with respect to
each such Group II Mortgage Loan) of the principal portion of the Monthly
Payment due on the Due Date occurring in the month of such Distribution
Date on such Mortgage Loan;
(ii) the Group I Class B-2 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-2 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of all
Unscheduled Principal Receipts (other than Recoveries) that were received
by a Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I Class B-2 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-2 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of the
Scheduled Principal Balance of such Mortgage Loan which, during the one
month period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Seller pursuant to Section 2.02
or 2.03; and
(iv) the Group I Class B-2 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-2 Percentage (with respect to
each such Group II Mortgage Loan) of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a Mortgage Loan during the
one month period ending on the day preceding the Determination Date for
such Distribution Date over the unpaid principal balance of such Mortgage
Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I Class B-2 Prepayment Percentage or Group II Class B-2
Prepayment Percentage, as applicable, of the Non-PO Recovery for each Loan
Group for such Distribution Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-2 Optimal Principal Amount
will equal the lesser of (A) the Class B-2 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-2 Certificates.
Class B-2 Principal Balance: As to the first Determination Date, the
Original Class B-2 Principal Balance. As of any subsequent Determination Date,
the Original Class B-2 Principal Balance less the sum of all amounts previously
distributed in respect of the Class B-2 Certificates on prior Distribution Dates
(A) pursuant to Paragraph sixth of Section 4.01(a)(ii) and (B) as a result of a
Principal Adjustment; provided, however, if the Class B-2 Certificates are the
most subordinate Certificates outstanding, the Class B-2 Principal Balance will
equal the difference, if any, between the Aggregate Adjusted Pool Amount as of
the preceding Distribution Date less the sum of the Aggregate Class A Principal
Balance and the Class B-1 Principal Balance as of such Determination Date.
Class B-2 Principal Distribution Amount: As to any Distribution
Date, any amount distributable to the Holders of the Class B-2 Certificates
pursuant to Paragraph sixth of Section 4.01(a)(ii).
Class B-2 Unpaid Interest Shortfall: As to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-2 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-2 Certificates on prior Distribution Dates pursuant to
Paragraph fifth of Section 4.01(a)(ii).
Class B-3 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit B-3 and Exhibit C hereto.
Class B-3 Certificateholder: The registered holder of a Class B-3
Certificate.
Class B-3 Distribution Amount: As to any Distribution Date, any
amount distributable to the Holders of the Class B-3 Certificates pursuant to
Paragraphs seventh, eighth and ninth of Section 4.01(a)(ii).
Class B-3 Interest Shortfall Amount: As to any Distribution Date,
any amount by which the Interest Accrual Amount of the Class B-3 Certificates
with respect to such Distribution Date exceeds the amount distributed in respect
of the Class B-3 Certificates on such Distribution Date pursuant to Paragraph
seventh of Section 4.01(a)(ii).
Class B-3 Loan Group I Optimal Principal Amount: As to any
Distribution Date, the Class B-3 Optimal Principal Amount calculated only with
respect to Group I Mortgage Loans and without regard to the proviso thereto.
Class B-3 Loan Group II Optimal Principal Amount: As to any
Distribution Date, the Class B-3 Optimal Principal Amount calculated only with
respect to Group II Mortgage Loans and without regard to the proviso thereto.
Class B-3 Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum of (I) the sum, as to each Outstanding Mortgage Loan, of
the product of (x) the Non-PO Fraction with respect to such Mortgage Loan and
(y) the sum of:
(i) the Group I Class B-3 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-3 Percentage (with respect to
each such Group II Mortgage Loan) of the principal portion of the Monthly
Payment due on the Due Date occurring in the month of such Distribution
Date on such Mortgage Loan;
(ii) the Group I Class B-3 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-3 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of all
Unscheduled Principal Receipts (other than Recoveries) that were received
by a Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I Class B-3 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-3 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of the
Scheduled Principal Balance of such Mortgage Loan which, during the one
month period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Seller pursuant to Section 2.02
or 2.03; and
(iv) the Group I Class B-3 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-3 Percentage (with respect to
each such Group II Mortgage Loan) of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a Mortgage Loan during the
one month period ending on the day preceding the Determination Date for
such Distribution Date over the unpaid principal balance of such Mortgage
Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I Class B-3 Prepayment Percentage or Group II Class B-3
Prepayment Percentage, as applicable, of the Non-PO Recovery for each Loan
Group for such Distribution Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-3 Optimal Principal Amount
will equal the lesser of (A) the Class B-3 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-3 Certificates.
Class B-3 Principal Balance: As to the first Determination Date, the
Original Class B-3 Principal Balance. As of any subsequent Determination Date,
the Original Class B-3 Principal Balance less the sum of all amounts previously
distributed in respect of the Class B-3 Certificates on prior Distribution Dates
(A) pursuant to Paragraph ninth of Section 4.01(a)(ii) and (B) as a result of a
Principal Adjustment; provided, however, if the Class B-3 Certificates are the
most subordinate Certificates outstanding, the Class B-3 Principal Balance will
equal the difference, if any, between the Aggregate Adjusted Pool Amount as of
the preceding Distribution Date less the sum of the Aggregate Class A Principal
Balance, the Class B-1 Principal Balance and the Class B-2 Principal Balance as
of such Determination Date.
Class B-3 Principal Distribution Amount: As to any Distribution
Date, any amount distributable to the Holders of the Class B-3 Certificates
pursuant to Paragraph ninth of Section 4.01(a)(ii).
Class B-3 Unpaid Interest Shortfall: As to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-3 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-3 Certificates on prior Distribution Dates pursuant to
Paragraph eighth of Section 4.01(a)(ii).
Class B-4 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit B-4 and Exhibit C hereto.
Class B-4 Certificateholder: The registered holder of a Class B-4
Certificate.
Class B-4 Distribution Amount: As to any Distribution Date, any
amount distributable to the Holders of the Class B-4 Certificates pursuant to
Paragraphs tenth, eleventh, and twelfth of Section 4.01(a)(ii).
Class B-4 Interest Shortfall Amount: As to any Distribution Date,
any amount by which the Interest Accrual Amount of the Class B-4 Certificates
with respect to such Distribution Date exceeds the amount distributed in respect
of the Class B-4 Certificates on such Distribution Date pursuant to Paragraph
tenth of Section 4.01(a)(ii).
Class B-4 Loan Group I Optimal Principal Amount: As to any
Distribution Date, the Class B-4 Optimal Principal Amount calculated only with
respect to Group I Mortgage Loans and without regard to the proviso thereto.
Class B-4 Loan Group II Optimal Principal Amount: As to any
Distribution Date, the Class B-4 Optimal Principal Amount calculated only with
respect to Group II Mortgage Loans and without regard to the proviso thereto.
Class B-4 Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum of (I) the sum, as to each Outstanding Mortgage Loan, of
the product of (x) the Non-PO Fraction with respect to such Mortgage Loan and
(y) the sum of:
(i) the Group I Class B-4 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-4 Percentage (with respect to
each such Group II Mortgage Loan) of the principal portion of the Monthly
Payment due on the Due Date occurring in the month of such Distribution
Date on such Mortgage Loan;
(ii) the Group I Class B-4 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-4 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of all
Unscheduled Principal Receipts (other than Recoveries) that were received
by a Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I Class B-4 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-4 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of the
Scheduled Principal Balance of such Mortgage Loan which, during the one
month period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Seller pursuant to Section 2.02
or 2.03; and
(iv) the Group I Class B-4 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-4 Percentage (with respect to
each such Group II Mortgage Loan) of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a Mortgage Loan during the
one month period ending on the day preceding the Determination Date for
such Distribution Date over the unpaid principal balance of such Mortgage
Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I Class B-4 Prepayment Percentage or Group II Class B-4
Prepayment Percentage, as applicable, of the Non-PO Recovery for each Loan
Group for such Distribution Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-4 Optimal Principal Amount
will equal the lesser of (A) the Class B-4 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-4 Certificates.
Class B-4 Principal Balance: As to the first Determination Date, the
Original Class B-4 Principal Balance. As of any subsequent Determination Date,
the Original Class B-4 Principal Balance less the sum of all amounts previously
distributed in respect of the Class B-4 Certificates on prior Distribution Dates
(A) pursuant to Paragraph twelfth of Section 4.01(a)(ii) and (B) as a result of
a Principal Adjustment; provided, however, if the Class B-4 Certificates are the
most subordinate Certificates outstanding, the Class B-4 Principal Balance will
equal the difference, if any, between the Aggregate Adjusted Pool Amount as of
the preceding Distribution Date less the sum of the Aggregate Class A Principal
Balance, the Class B-1 Principal Balance, the Class B-2 Principal Balance and
the Class B-3 Principal Balance as of such Determination Date.
Class B-4 Principal Distribution Amount: As to any Distribution
Date, any amount distributable to the Holders of the Class B-4 Certificates
pursuant to Paragraph twelfth of Section 4.01(a)(ii).
Class B-4 Unpaid Interest Shortfall: As to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-4 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-4 Certificates on prior Distribution Dates pursuant to
Paragraph eleventh of Section 4.01(a)(ii).
Class B-5 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit B-5 and Exhibit C hereto.
Class B-5 Certificateholder: The registered holder of a Class B-5
Certificate.
Class B-5 Distribution Amount: As to any Distribution Date, any
amount distributable to the Holders of the Class B-5 Certificates pursuant to
Paragraphs thirteenth, fourteenth, and fifteenth of Section 4.01(a)(ii).
Class B-5 Interest Shortfall Amount: As to any Distribution Date,
any amount by which the Interest Accrual Amount of the Class B-5 Certificates
with respect to such Distribution Date exceeds the amount distributed in respect
of the Class B-5 Certificates on such Distribution Date pursuant to Paragraph
thirteenth of Section 4.01(a)(ii).
Class B-5 Loan Group I Optimal Principal Amount: As to any
Distribution Date, the Class B-5 Optimal Principal Amount calculated only with
respect to Group I Mortgage Loans and without regard to the proviso thereto.
Class B-5 Loan Group II Optimal Principal Amount: As to any
Distribution Date, the Class B-5 Optimal Principal Amount calculated only with
respect to Group II Mortgage Loans and without regard to the proviso thereto.
Class B-5 Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum of (I) the sum, as to each Outstanding Mortgage Loan, of
the product of (x) the Non-PO Fraction with respect to such Mortgage Loan and
(y) the sum of:
(i) the Group I Class B-5 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-5 Percentage (with respect to
each such Group II Mortgage Loan) of the principal portion of the Monthly
Payment due on the Due Date occurring in the month of such Distribution
Date on such Mortgage Loan;
(ii) the Group I Class B-5 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-5 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of all
Unscheduled Principal Receipts (other than Recoveries) that were received
by a Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I Class B-5 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-5 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of the
Scheduled Principal Balance of such Mortgage Loan which, during the one
month period ending prior to the day preceding the Determination Date for
such Distribution Date, was repurchased by the Seller pursuant to Section
2.02 or 2.03; and
(iv) the Group I Class B-5 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-5 Percentage (with respect to
each such Group II Mortgage Loan) of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a Mortgage Loan during the
one month period ending prior to the day preceding the Determination Date
for such Distribution Date over the unpaid principal balance of such
Mortgage Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I Class B-5 Prepayment Percentage or Group II Class B-5
Prepayment Percentage, as applicable, of the Non-PO Recovery for each Loan
Group for such Distribution Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-5 Optimal Principal Amount
will equal the lesser of (A) the Class B-5 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-5 Certificates.
Class B-5 Principal Balance: As to the first Determination Date, the
Original Class B-5 Principal Balance. As of any subsequent Determination Date,
the Original Class B-5 Principal Balance less the sum of all amounts previously
distributed in respect of the Class B-5 Certificates on prior Distribution Dates
(A) pursuant to Paragraph fifteenth of Section 4.01(a)(ii) and (B) as a result
of a Principal Adjustment; provided, however, if the Class B-5 Certificates are
the most subordinate Certificates outstanding, the Class B-5 Principal Balance
will equal the difference, if any, between the Aggregate Adjusted Pool Amount as
of the preceding Distribution Date less the sum of the Aggregate Class A
Principal Balance, the Class B-1 Principal Balance, the Class B-2 Principal
Balance, the Class B-3 Principal Balance and the Class B-4 Principal Balance as
of such Determination Date.
Class B-5 Principal Distribution Amount: As to any Distribution
Date, any amount distributable to the Holders of the Class B-5 Certificates
pursuant to Paragraph fifteenth of Section 4.01(a)(ii).
Class B-5 Unpaid Interest Shortfall: As to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-5 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-5 Certificates on prior Distribution Dates pursuant to
Paragraph fourteenth of Section 4.01(a)(ii).
Class B-6 Certificate: Any one of the Certificates executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit B-6 and Exhibit C hereto.
Class B-6 Certificateholder: The registered holder of a Class B-6
Certificate.
Class B-6 Distribution Amount: As to any Distribution Date, any
amount distributable to the Holders of the Class B-6 Certificates pursuant to
Paragraphs sixteenth, seventeenth and eighteenth of Section 4.01(a)(ii).
Class B-6 Interest Shortfall Amount: As to any Distribution Date,
any amount by which the Interest Accrual Amount of the Class B-6 Certificates
with respect to such Distribution Date exceeds the amount distributed in respect
of the Class B-6 Certificates on such Distribution Date pursuant to Paragraph
sixteenth of Section 4.01(a)(ii).
Class B-6 Loan Group I Optimal Principal Amount: As to any
Distribution Date, the Class B-6 Optimal Principal Amount calculated only with
respect to Group I Mortgage Loans and without regard to the proviso thereto.
Class B-6 Loan Group II Optimal Principal Amount: As to any
Distribution Date, the Class B-6 Optimal Principal Amount calculated only with
respect to Group II Mortgage Loans and without regard to the proviso thereto.
Class B-6 Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum of (I) the sum, as to each Outstanding Mortgage Loan, of
the product of (x) the Non-PO Fraction with respect to such Mortgage Loan and
(y) the sum of:
(i) the Group I Class B-6 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-6 Percentage (with respect to
each such Group II Mortgage Loan) of the principal portion of the Monthly
Payment due on the Due Date occurring in the month of such Distribution
Date on such Mortgage Loan;
(ii) the Group I Class B-6 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-6 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of all
Unscheduled Principal Receipts (other than Recoveries) that were received
by a Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I Class B-6 Prepayment Percentage (with respect to
each such Group I Mortgage Loan) or Group II Class B-6 Prepayment
Percentage (with respect to each such Group II Mortgage Loan) of the
Scheduled Principal Balance of such Mortgage Loan which, during the one
month period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Seller pursuant to Section 2.02
or 2.03; and
(iv) the Group I Class B-6 Percentage (with respect to each such
Group I Mortgage Loan) or Group II Class B-6 Percentage (with respect to
each such Group II Mortgage Loan) of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a Mortgage Loan during the
one month period ending on the day preceding the Determination Date for
such Distribution Date over the unpaid principal balance of such Mortgage
Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I Class B-6 Prepayment Percentage or Group II Class B-6
Prepayment Percentage, as applicable, of the Non-PO Recovery for each Loan
Group for such Distribution Date.
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-6 Optimal Principal Amount
will equal the lesser of (A) the Class B-6 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-6 Certificates.
Class B-6 Principal Balance: As to the first Determination Date, the
Original Class B-6 Principal Balance. As of any subsequent Determination Date,
the Original Class B-6 Principal Balance less the sum of all amounts previously
distributed in respect of the Class B-6 Certificates on prior Distribution Dates
pursuant to Paragraph eighteenth of Section 4.01(a)(ii); provided, however, if
the Class B-6 Certificates are outstanding, the Class B-6 Principal Balance will
equal the difference, if any, between the Aggregate Adjusted Pool Amount as of
the preceding Distribution Date less the sum of the Aggregate Class A Principal
Balance, the Class B-1 Principal Balance, the Class B-2 Principal Balance, the
Class B-3 Principal Balance, the Class B-4 Principal Balance and the Class B-5
Principal Balance as of such Determination Date.
Class B-6 Principal Distribution Amount: As to any Distribution
Date, any amount distributable to the Holders of the Class B-6 Certificates
pursuant to Paragraph eighteenth of Section 4.01(a)(ii).
Class B-6 Unpaid Interest Shortfall: As to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-6 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-6 Certificates on prior Distribution Dates pursuant to
Paragraph seventeenth of Section 4.01(a)(ii).
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
initial Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, financial
institution or other Person for whom a Clearing Agency effects book-entry
transfers of securities deposited with the Clearing Agency.
Closing Date: The date of initial issuance of the Certificates, as
set forth in Section 11.15.
Code: The Internal Revenue Code of 1986, as it may be amended from
time to time, any successor statutes thereto, and applicable U.S. Department of
the Treasury temporary or final regulations promulgated thereunder.
Compensating Interest: With respect to any Distribution Date, the
least of (a) the aggregate Prepayment Interest Shortfall on the Mortgage Loans
for such Distribution Date, (b) the product of (i) 1/12th of 0.20% and (ii) the
Pool Scheduled Principal Balance for such Distribution Date and (c) the
Available Master Servicing Compensation for such Distribution Date.
Component: The Class I-A-PO Component or Class II-A-PO Component.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: The principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office, at the date of the execution of this instrument, is located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Current Group I-A Interest Distribution Amount: As to any
Distribution Date, the amount distributed in respect of the Classes of Group I-A
Certificates pursuant to Paragraph first clause (A) of Section 4.01(a)(i) on
such Distribution Date.
Current Group II-A Interest Distribution Amount: As to any
Distribution Date, the amount distributed in respect of the Classes of Group
II-A Certificates pursuant to Paragraph first clause (B) of Section 4.01(a)(i)
on such Distribution Date.
Current Class B Interest Distribution Amount: As to any Distribution
Date, the amount distributed in respect of the Classes of Class B Certificates
pursuant to Paragraphs first, fourth, seventh, tenth, thirteenth and sixteenth
of Section 4.01(a)(ii) on such Distribution Date.
Current Class B-1 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Principal Balances of the Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates by the Aggregate Non-PO Principal Balance. As to
the first Distribution Date, the Original Class B-1 Fractional Interest.
Current Class B-2 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Principal Balances of the Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates by the Aggregate Non-PO Principal Balance. As to the
first Distribution Date, the Original Class B-2 Fractional Interest.
Current Class B-3 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Principal Balances of the Class B-4, Class B-5 and Class B-6
Certificates by the Aggregate Non-PO Principal Balance. As to the first
Distribution Date, the Original Class B-3 Fractional Interest.
Current Class B-4 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Principal Balances of the Class B-5 and Class B-6 Certificates by
the Aggregate Non-PO Principal Balance. As to the first Distribution Date, the
Original Class B-4 Fractional Interest.
Current Class B-5 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the Principal Balance of the Class B-6 Certificates by the Aggregate Non-PO
Principal Balance. As to the first Distribution Date, the Original Class B-5
Fractional Interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is
not a Prepayment in Full.
Curtailment Interest Shortfall: On any Distribution Date with
respect to a Group I or Group II Mortgage Loan which was the subject of a
Curtailment:
(A) in the case where the Applicable Unscheduled Principal Receipt
Period is the Mid-Month Receipt Period and such Curtailment is
received by the Servicer on or after the Determination Date in
the month preceding the month of such Distribution Date but
prior to the first day of the month of such Distribution Date,
the amount of interest that would have accrued at the Net
Mortgage Interest Rate on the amount of such Curtailment from
the day of its receipt or, if earlier, its application by the
Servicer through the last day of the month preceding the month
of such Distribution Date; and
(B) in the case where the Applicable Unscheduled Principal Receipt
Period is the Prior Month Receipt Period and such Curtailment
is received by the Servicer during the month preceding the
month of such Distribution Date, the amount of interest that
would have accrued at the Net Mortgage Interest Rate on the
amount of such Curtailment from the day of its receipt or, if
earlier, its application by the Servicer through the last day
of the month in which such Curtailment is received.
Custodial Agreement: The Custodial Agreement, dated as of August 28,
2003, among the Custodian, the Seller, the Master Servicer and the Trustee,
which agreement is attached hereto as Exhibit E, as the same may be amended or
modified from time to time in accordance with the terms thereof.
Custodial P&I Account: The Custodial P&I Account, as defined in each
of the Servicing Agreements, with respect to the Mortgage Loans. In determining
whether the Custodial P&I Account under any Servicing Agreement is "acceptable"
to the Master Servicer (as may be required by the definition of "Eligible
Account" contained in the Servicing Agreements), the Master Servicer shall
require that any such account shall be acceptable to each of the Rating
Agencies.
Custodian: ▇▇▇▇▇ Fargo Bank Minnesota, National Association, or its
successor in interest under the Custodial Agreement.
Cut-Off Date: The first day of the month of initial issuance of the
Certificates as set forth in Section 11.01.
Cut-Off Date Aggregate Principal Balance: The aggregate of the
Cut-Off Date Principal Balances of the Mortgage Loans as set forth in Section
11.02.
Cut-Off Date Principal Balance: As to each Mortgage Loan, its unpaid
principal balance as of the close of business on the Cut-Off Date (but without
giving effect to any Unscheduled Principal Receipts received or applied on the
Cut-Off Date), reduced by all payments of principal due on or before the Cut-Off
Date and not paid, and increased by scheduled monthly payments of principal due
after the Cut-Off Date but received by the related Servicer on or before the
Cut-Off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then-outstanding indebtedness under the Mortgage Loan, or any reduction
in the amount of principal to be paid in connection with any scheduled Monthly
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.01(b).
Denomination: The amount, if any, specified on the face of each
Certificate representing the principal portion of the Cut-Off Date Aggregate
Principal Balance evidenced by such Certificate.
Determination Date: The 17th day of the month in which the related
Distribution Date occurs, or if such 17th day is not a Business Day, the
Business Day preceding such 17th day.
Discount Mortgage Loan: A Group I Discount Mortgage Loan or Group II
Discount Mortgage Loan.
Distribution Date: The 25th day of any month, beginning in the month
following the month of initial issuance of the Certificates, or if such 25th day
is not a Business Day, the Business Day following such 25th day.
Due Date: With respect to any Mortgage Loan, the day of the month in
which the Monthly Payment on such Mortgage Loan is scheduled to be paid.
Eligible Account: One or more accounts (i) that are maintained with
a depository institution (which may be the Master Servicer) whose long-term debt
obligations (or, in the case of a depository institution which is part of a
holding company structure, the long-term debt obligations of such parent holding
company) at the time of deposit therein are rated at least "AA" (or the
equivalent) by each of the Rating Agencies, (ii) the deposits in which are fully
insured by the FDIC through either the Bank Insurance Fund or the Savings
Association Insurance Fund, (iii) the deposits in which are insured by the FDIC
through either the Bank Insurance Fund or the Savings Association Insurance Fund
(to the limit established by the FDIC) and the uninsured deposits in which
accounts are otherwise secured, as evidenced by an Opinion of Counsel delivered
to the Trustee, such that the Trustee, on behalf of the Certificateholders has a
claim with respect to the funds in such accounts or a perfected first security
interest against any collateral securing such funds that is superior to claims
of any other depositors or creditors of the depository institution with which
such accounts are maintained, (iv) that are trust accounts maintained with the
trust department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity or (v) such other account that is
acceptable to each of the Rating Agencies and would not cause the Trust Estate
to fail to qualify as a REMIC or result in the imposition of any federal tax on
the REMIC.
Eligible Investments: At any time, any one or more of the following
obligations and securities which shall mature not later than the Business Day
preceding the Distribution Date next succeeding the date of such investment,
provided that such investments continue to qualify as "cash flow investments" as
defined in Code Section 860G(a)(6):
(i) obligations of the United States of America or any agency
thereof, provided such obligations are backed by the full faith and credit
of the United States of America;
(ii) general obligations of or obligations guaranteed by any state
of the United States of America or the District of Columbia receiving the
highest short-term or highest long-term rating of each Rating Agency, or
such lower rating as would not result in the downgrading or withdrawal of
the rating then assigned to any of the Certificates by either Rating
Agency or result in any of such rated Certificates being placed on credit
review status (other than for possible upgrading) by either Rating Agency;
(iii) commercial or finance company paper which is then rated in the
highest long-term commercial or finance company paper rating category of
each Rating Agency or the highest short-term rating category of each
Rating Agency, or such lower rating category as would not result in the
downgrading or withdrawal of the rating then assigned to any of the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for possible
upgrading) by either Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal funds
or banker's acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or debt
obligations of such depository institution or trust company (or in the
case of the principal depository institution in a holding company system,
the commercial paper or debt obligations of such holding company) are then
rated in the highest short-term or the highest long-term rating category
for such securities of each of the Rating Agencies, or such lower rating
categories as would not result in the downgrading or withdrawal of the
rating then assigned to any of the Certificates by either Rating Agency or
result in any of such rated Certificates being placed on credit review
status (other than for possible upgrading) by either Rating Agency;
(v) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation acceptable to each Rating Agency at the time
of the issuance of such agreements;
(vi) repurchase agreements on obligations with respect to any
security described in clauses (i) or (ii) above or any other security
issued or guaranteed by an agency or instrumentality of the United States
of America, in either case entered into with a depository institution or
trust company (acting as principal) described in (iv) above;
(vii) securities (other than stripped bonds or stripped coupon
securities) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which, at the time of such investment or contractual
commitment providing for such investment, are then rated in the highest
short-term or the highest long-term rating category by each Rating Agency,
or in such lower rating category as would not result in the downgrading or
withdrawal of the rating then assigned to any of the Certificates by
either Rating Agency or result in any of such rated Certificates being
placed on credit review status (other than for possible upgrading) by
either Rating Agency;
(viii) such other investments acceptable to each Rating Agency as
would not result in the downgrading of the rating then assigned to the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for possible
upgrading) by either Rating Agency; and
(ix) any mutual fund, money market fund, common trust fund or other
pooled investment vehicle, the assets of which are limited to instruments
that otherwise would constitute Eligible Investments hereunder, including
any such fund that is managed by the Trustee or any affiliate of the
Trustee or for which the Trustee or any of its affiliates acts as an
adviser as long as such fund is rated in at least the highest rating
category by each Rating Agency.
In no event shall an instrument be an Eligible Investment if such
instrument evidences either (i) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (ii) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provide a
yield to maturity at the date of investment of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Prohibited Holder: As defined in Section 5.02(d).
Errors and Omissions Policy: As defined in each of the Servicing
Agreements.
Event of Default: Any of the events specified in Section 7.01.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
Fidelity Bond: As defined in each of the Servicing Agreements.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates is made pursuant to Section 9.01.
Final Scheduled Maturity Date: The Final Scheduled Maturity Date for
each Class of Group I-A Certificates and the Class B Certificates is September
25, 2033, which corresponds to the "latest possible maturity date" for purposes
of Section 860G(a)(1) of the Internal Revenue Code of 1986, as amended. The
Final Scheduled Maturity Date for the Class II-A-1 Certificates is September 25,
2018.
Fitch: Fitch Ratings, or its successors in interest.
Fixed Retained Yield: The fixed percentage of interest on each
Mortgage Loan with a Mortgage Interest Rate greater than the sum of (a) 5.750%,
(b) the applicable Servicing Fee Rate and (c) the Master Servicing Fee Rate,
which will be determined on a loan by loan basis and will equal the Mortgage
Interest Rate on each Mortgage Loan minus the sum of the rates described in
clauses (a), (b) and (c), which is not assigned to and not part of the Trust
Estate.
Fixed Retained Yield Rate: With respect to each Mortgage Loan, a per
annum rate equal to the greater of (a) zero and (b) the Mortgage Interest Rate
on such Mortgage Loan minus the sum of (i) 5.750%, (ii) the applicable Servicing
Fee Rate and (iii) the Master Servicing Fee Rate.
Full Unscheduled Principal Receipt: Any Unscheduled Principal
Receipt with respect to a Mortgage Loan (i) in the amount of the outstanding
principal balance of such Mortgage Loan and resulting in the full satisfaction
of such Mortgage Loan or (ii) representing Liquidation Proceeds other than
Partial Liquidation Proceeds.
Group: Either of Group I or Group II.
Group I: The Group I-A Certificates and Class I-A-PO Component.
Group I Adjusted Pool Amount: With respect to any Distribution Date,
the aggregate of the Cut-Off Date Principal Balances of the Group I Mortgage
Loans minus the sum of (i) all amounts in respect of principal received in
respect of the Group I Mortgage Loans (including, without limitation, amounts
received as Monthly Payments, Periodic Advances, Unscheduled Principal Receipts
and Substitution Principal Amounts) and distributed to Holders of the
Certificates on such Distribution Date and all prior Distribution Dates, (ii)
the principal portion of all Liquidated Loan Losses incurred on such Group I
Mortgage Loans for which the Liquidation Proceeds were received from the Cut-Off
Date through the end of the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date and
(iii) the principal portion of all Bankruptcy Losses (other than Debt Service
Reductions) incurred on the Group I Mortgage Loans from the Cut-Off Date through
the end of the period corresponding to the Applicable Unscheduled Principal
Receipt Period with respect to Full Unscheduled Principal Receipts for such
Distribution Date.
Group I Adjusted Pool Amount (PO Portion): With respect to any
Distribution Date, the sum of the amounts, calculated as follows, with respect
to all Outstanding Mortgage Loans that are Group I Mortgage Loans: the product
of (i) the PO Fraction for each such Group I Mortgage Loan and (ii) the
remainder of (A) the Cut-Off Date Principal Balance of such Mortgage Loan minus
(B) the sum of (x) all amounts in respect of principal received in respect of
such Group I Mortgage Loan (including, without limitation, amounts received as
Monthly Payments, Periodic Advances, Unscheduled Principal Receipts and
Substitution Principal Amounts) and distributed to Holders of the Certificates
on such Distribution Date and all prior Distribution Dates, (y) the principal
portion of any Liquidated Loan Losses incurred on such Group I Mortgage Loans
for which Liquidation Proceeds were received from the Cut-Off Date through the
end of the Applicable Unscheduled Principal Receipt Period with respect to Full
Unscheduled Principal Receipts for such Distribution Date and (z) the principal
portion of all Bankruptcy Losses (other than Debt Service Reductions) incurred
on the Group I Mortgage Loans from the Cut-Off Date through the end of the
period corresponding to the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date.
Group I Class B Percentage: Any of the Group I Class B-1 Percentage,
Group I Class B-2 Percentage, Group I Class B-3 Percentage, Group I Class B-4
Percentage, Group I Class B-5 Percentage or Group I Class B-6 Percentage.
Group I Class B Prepayment Percentage: Any of the Group I Class B-1
Prepayment Percentage, Group I Class B-2 Prepayment Percentage, Group I Class
B-3 Prepayment Percentage, Group I Class B-4 Prepayment Percentage, Group I
Class B-5 Prepayment Percentage or Group I Class B-6 Prepayment Percentage.
Group I Class B-1 Percentage: As to any Distribution Date, the
percentage calculated by multiplying the Group I Subordinated Percentage by
either (i) if any Class B Certificates (other than the Class B-1 Certificates)
are eligible to receive principal distributions for such Distribution Date in
accordance with Section 4.01(d), a fraction, the numerator of which is the Class
B-1 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the sum of the Principal
Balances of the Classes of Class B Certificates eligible to receive principal
distributions for such Distribution Date in accordance with the provisions of
Section 4.01(d) or (ii) except as set forth in Section 4.01(d)(ii), in the event
that the Class B Certificates (other than the Class B-1 Certificates) are not
eligible to receive distributions of principal in accordance with Section
4.01(d)(i), one.
Group I Class B-1 Prepayment Percentage: As to any Distribution
Date, the percentage calculated by multiplying the Group I Subordinated
Prepayment Percentage by either (i) if any Class B Certificates (other than the
Class B-1 Certificates) are eligible to receive principal distributions for such
Distribution Date in accordance with Section 4.01(d), a fraction, the numerator
of which is the Class B-1 Principal Balance (determined as of the Determination
Date preceding such Distribution Date) and the denominator of which is the sum
of the Principal Balances of the Classes of Class B Certificates eligible to
receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d) or (ii) except as set forth in Section
4.01(d)(ii), in the event that the Class B Certificates (other than the Class
B-1 Certificates) are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), one.
Group I Class B-2 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Group I Subordinated Percentage by (ii) a fraction, the numerator of which is
the Class B-2 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-2 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group I
Class B-2 Percentage for such Distribution Date will be zero.
Group I Class B-2 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group I Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-2 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-2
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group I Class B-2 Prepayment Percentage
for such Distribution Date will be zero.
Group I Class B-3 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Group I Subordinated Percentage by (ii) a fraction, the numerator of which is
the Class B-3 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-3 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group I
Class B-3 Percentage for such Distribution Date will be zero.
Group I Class B-3 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group I Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-3 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-3
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group I Class B-3 Prepayment Percentage
for such Distribution Date will be zero.
Group I Class B-4 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Group I Subordinated Percentage by (ii) a fraction, the numerator of which is
the Class B-4 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-4 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group I
Class B-4 Percentage for such Distribution Date will be zero.
Group I Class B-4 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group I Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-4 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-4
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group I Class B-4 Prepayment Percentage
for such Distribution Date will be zero.
Group I Class B-5 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Group I Subordinated Percentage by (ii) a fraction, the numerator of which is
the Class B-5 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-5 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group I
Class B-5 Percentage for such Distribution Date will be zero.
Group I Class B-5 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group I Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-5 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-5
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group I Class B-5 Prepayment Percentage
for such Distribution Date will be zero.
Group I Class B-6 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Group I Subordinated Percentage by (ii) a fraction, the numerator of which is
the Class B-6 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-6 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group I
Class B-6 Percentage for such Distribution Date will be zero.
Group I Class B-6 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group I Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-6 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-6
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group I Class B-6 Prepayment Percentage
for such Distribution Date will be zero.
Group I Discount Mortgage Loan: A Group I Mortgage Loan with a Net
Mortgage Interest Rate of less than 5.750%.
Group I Mortgage Loans: Those Mortgage Loans listed on Exhibit F-1A
attached hereto.
Group I Pool Balance (Non-PO Portion): As of any Distribution Date,
the sum of the amounts for each Group I Mortgage Loan that is an Outstanding
Mortgage Loan of the product of (i) the Non-PO Fraction for such Mortgage Loan
and (ii) the Scheduled Principal Balance of such Mortgage Loan.
Group I Pool Balance (PO Portion): As of any Distribution Date, the
sum of the amounts for each Group I Mortgage Loan that is an Outstanding
Mortgage Loan of the product of (i) the PO Fraction for such Mortgage Loan and
(ii) the Scheduled Principal Balance of such Mortgage Loan.
Group I Pool Distribution Amount: As of any Distribution Date, the
funds eligible for distribution to the Group I-A Certificates, Class I-A-PO
Component and Class B Certificates on such Distribution Date, which shall be the
sum of (i) all previously undistributed payments or other receipts on account of
principal and interest on or in respect of the Group I Mortgage Loans
(including, without limitation, the proceeds of any repurchase of a Group I
Mortgage Loan by the Seller and any Substitution Principal Amount) received by
the Master Servicer with respect to the applicable Remittance Date in the month
of such Distribution Date and any Unscheduled Principal Receipts received by the
Master Servicer on or prior to the Business Day preceding such Distribution
Date, (ii) all Periodic Advances made with respect to Group I Mortgage Loans by
a Servicer pursuant to the related Servicing Agreement or Periodic Advances with
respect to Group I Mortgage Loans made by the Master Servicer or the Trustee
pursuant to Section 3.03, (iii) any remaining Reimbursement Amount relating to a
Group I Mortgage Loan as provided in Section 4.01(a)(ii) and (iv) all other
amounts (including any Insurance Proceeds and Compensating Interest) with
respect to a Group I Mortgage Loan required to be placed in the Certificate
Account by the Servicer on or before the applicable Remittance Date or by the
Master Servicer or the Trustee on or prior to the Distribution Date, but
excluding the following:
(a) amounts received as late payments of principal or interest with
respect to a Group I Mortgage Loan and respecting which the Master
Servicer or the Trustee has made one or more unreimbursed Periodic
Advances;
(b) the portion of Liquidation Proceeds used to reimburse any
unreimbursed Periodic Advances with respect to a Group I Mortgage Loan by
the Master Servicer or the Trustee;
(c) those portions of each payment of interest on a particular Group
I Mortgage Loan which represent (i) the Fixed Retained Yield, if any, (ii)
the applicable Servicing Fee and (iii) the Master Servicing Fee;
(d) all amounts representing scheduled payments of principal and
interest on Group I Mortgage Loans due after the Due Date occurring in the
month in which such Distribution Date occurs;
(e) all Unscheduled Principal Receipts received by the Servicers
with respect to Group I Mortgage Loans after the Applicable Unscheduled
Principal Receipt Period relating to the Distribution Date for the
applicable type of Unscheduled Principal Receipt, and all related payments
of interest on such amounts;
(f) all repurchase proceeds with respect to Group I Mortgage Loans
repurchased by the Seller pursuant to Section 2.02 or 2.03 on or following
the Determination Date in the month in which such Distribution Date occurs
and the difference between the unpaid principal balance of a Group I
Mortgage Loan substituted for a Group I Mortgage Loan pursuant to Section
2.02, 2.03 or 2.06 on or following the Determination Date in the month in
which such Distribution Date occurs and the unpaid principal balance of
such Group I Mortgage Loan;
(g) that portion of Liquidation Proceeds and REO Proceeds with
respect to any Group I Mortgage Loan which represents any unpaid Servicing
Fee or Master Servicing Fee;
(h) all income from Eligible Investments that is held in the
Certificate Account for the account of the Master Servicer;
(i) all other amounts permitted to be withdrawn from the Certificate
Account in respect of the Group I Mortgage Loans, to the extent not
covered by clauses (a) through (h) above, or not required to be deposited
in the Certificate Account under this Agreement;
(j) Liquidation Profits in respect of Group I Mortgage Loans;
(k) Month End Interest in respect of Group I Mortgage Loans; and
(l) all amounts reimbursable to a Servicer for PMI Advances in
respect of Group I Mortgage Loans.
Group I Pool Scheduled Principal Balance: As to any Distribution
Date, the aggregate Scheduled Principal Balance of all Group I Mortgage Loans
that were Outstanding Mortgage Loans on the Due Date in the month preceding the
month of such Distribution Date.
Group I Subordinated Percentage: As to any Distribution Date, the
percentage which is the difference between 100% and the Group I-A Percentage for
such date.
Group I Subordinated Prepayment Percentage: As to any Distribution
Date, the percentage which is the difference between 100% and the Group I-A
Prepayment Percentage for such date.
Group II: The Group II-A Certificates and Class II-A-PO Component.
Group II Adjusted Pool Amount: With respect to any Distribution
Date, the aggregate of the Cut-Off Date Principal Balances of the Group II
Mortgage Loans minus the sum of (i) all amounts in respect of principal received
in respect of the Group II Mortgage Loans (including, without limitation,
amounts received as Monthly Payments, Periodic Advances, Unscheduled Principal
Receipts and Substitution Principal Amounts) and distributed to Holders of the
Certificates on such Distribution Date and all prior Distribution Dates, (ii)
the principal portion of all Liquidated Loan Losses incurred on such Group II
Mortgage Loans for which the Liquidation Proceeds were received from the Cut-Off
Date through the end of Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date and
(iii) the principal portion of all Bankruptcy Losses (other than Debt Service
Reductions) incurred on the Group II Mortgage Loans from the Cut-Off Date
through the end of the period corresponding to the Applicable Unscheduled
Principal Receipt Period with respect to Full Unscheduled Principal Receipts for
such Distribution Date.
Group II Adjusted Pool Amount (PO Portion): With respect to any
Distribution Date, the sum of the amounts, calculated as follows, with respect
to all Outstanding Mortgage Loans that are Group II Mortgage Loans: the product
of (i) the PO Fraction for each such Group II Mortgage Loan and (ii) the
remainder of (A) the Cut-Off Date Principal Balance of such Mortgage Loan minus
(B) the sum of (x) all amounts in respect of principal received in respect of
such Group II Mortgage Loan (including, without limitation, amounts received as
Monthly Payments, Periodic Advances, Unscheduled Principal Receipts and
Substitution Principal Amounts) and distributed to Holders of the Certificates
on such Distribution Date and all prior Distribution Dates, (y) the principal
portion of any Liquidated Loan Losses incurred on such Group II Mortgage Loans
for which Liquidation Proceeds were received from the Cut-Off Date through the
end of the Applicable Unscheduled Principal Receipt Period with respect to Full
Unscheduled Principal Receipts for such Distribution Date and (z) the principal
portion of all Bankruptcy Losses (other than Debt Service Reductions) incurred
on the Group II Mortgage Loans from the Cut-Off Date through the end of the
period corresponding to the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date.
Group II Class B Percentage: Any one of the Group II Class B-1
Percentage, Group II Class B-2 Percentage, Group II Class B-3 Percentage, Group
II Class B-4 Percentage, Group II Class B-5 Percentage or Group II Class B-6
Percentage.
Group II Class B Prepayment Percentage: Any of the Group II Class
B-1 Prepayment Percentage, Group II Class B-2 Prepayment Percentage, Group II
Class B-3 Prepayment Percentage, Group II Class B-4 Prepayment Percentage, Group
II Class B-5 Prepayment Percentage or Group II Class B-6 Prepayment Percentage.
Group II Class B-1 Percentage: As to any Distribution Date, the
percentage calculated by multiplying the Group II Subordinated Percentage by
either (i) if any Class B Certificates (other than the Class B-1 Certificates)
are eligible to receive principal distributions for such Distribution Date in
accordance with Section 4.01(d), a fraction, the numerator of which is the Class
B-1 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the sum of the Principal
Balances of the Classes of Class B Certificates eligible to receive principal
distributions for such Distribution Date in accordance with the provisions of
Section 4.01(d) or (ii) except as set forth in Section 4.01(d)(ii), in the event
that the Class B Certificates (other than the Class B-1 Certificates) are not
eligible to receive distributions of principal in accordance with Section
4.01(d)(i), one.
Group II Class B-1 Prepayment Percentage: As to any Distribution
Date, the percentage calculated by multiplying the Group II Subordinated
Prepayment Percentage by either (i) if any Class B Certificates (other than the
Class B-1 Certificates) are eligible to receive principal distributions for such
Distribution Date in accordance with Section 4.01(d), a fraction, the numerator
of which is the Class B-1 Principal Balance (determined as of the Determination
Date preceding such Distribution Date) and the denominator of which is the sum
of the Principal Balances of the Classes of Class B Certificates eligible to
receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d) or (ii) except as set forth in Section
4.01(d)(ii), in the event that the Class B Certificates (other than the Class
B-1 Certificates) are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), one.
Group II Class B-2 Percentage: As to any Distribution Date, except
as set forth in the next sentence, the percentage calculated by multiplying (i)
the Group II Subordinated Percentage by (ii) a fraction, the numerator of which
is the Class B-2 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-2 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group II
Class B-2 Percentage for such Distribution Date will be zero.
Group II Class B-2 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group II Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-2 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-2
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group II Class B-2 Prepayment Percentage
for such Distribution Date will be zero.
Group II Class B-3 Percentage: As to any Distribution Date, except
as set forth in the next sentence, the percentage calculated by multiplying (i)
the Group II Subordinated Percentage by (ii) a fraction, the numerator of which
is the Class B-3 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-3 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group II
Class B-3 Percentage for such Distribution Date will be zero.
Group II Class B-3 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group II Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-3 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-3
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group II Class B-3 Prepayment Percentage
for such Distribution Date will be zero.
Group II Class B-4 Percentage: As to any Distribution Date, except
as set forth in the next sentence, the percentage calculated by multiplying (i)
the Group II Subordinated Percentage by (ii) a fraction, the numerator of which
is the Class B-4 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-4 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group II
Class B-4 Percentage for such Distribution Date will be zero.
Group II Class B-4 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group II Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-4 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-4
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group II Class B-4 Prepayment Percentage
for such Distribution Date will be zero.
Group II Class B-5 Percentage: As to any Distribution Date, except
as set forth in the next sentence, the percentage calculated by multiplying (i)
the Group II Subordinated Percentage by (ii) a fraction, the numerator of which
is the Class B-5 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-5 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group II
Class B-5 Percentage for such Distribution Date will be zero.
Group II Class B-5 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group II Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-5 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-5
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group II Class B-5 Prepayment Percentage
for such Distribution Date will be zero.
Group II Class B-6 Percentage: As to any Distribution Date, except
as set forth in the next sentence, the percentage calculated by multiplying (i)
the Group II Subordinated Percentage by (ii) a fraction, the numerator of which
is the Class B-6 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Principal Balances of the Classes of Class B Certificates eligible to receive
principal distributions for such Distribution Date in accordance with the
provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii), in
the event that the Class B-6 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Group II
Class B-6 Percentage for such Distribution Date will be zero.
Group II Class B-6 Prepayment Percentage: As to any Distribution
Date, except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Group II Subordinated Prepayment Percentage by (ii) a
fraction, the numerator of which is the Class B-6 Principal Balance (determined
as of the Determination Date preceding such Distribution Date) and the
denominator of which is the sum of the Principal Balances of the Classes of
Class B Certificates eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-6
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Group II Class B-6 Prepayment Percentage
for such Distribution Date will be zero.
Group II Discount Mortgage Loan: A Group II Mortgage Loan with a Net
Mortgage Interest Rate of less than 5.750%.
Group II Mortgage Loans: Those Mortgage Loans listed on Exhibit F-1B
attached hereto.
Group II Pool Balance (Non-PO Portion): As of any Distribution Date,
the sum of the amounts for each Group II Mortgage Loan that is an Outstanding
Mortgage Loan of the product of (i) the Non-PO Fraction for such Mortgage Loan
and (ii) the Scheduled Principal Balance of such Mortgage Loan.
Group II Pool Balance (PO Portion): As of any Distribution Date, the
sum of the amounts for each Group II Mortgage Loan that is an Outstanding
Mortgage Loan of the product of (i) the PO Fraction for such Mortgage Loan and
(ii) the Scheduled Principal Balance of such Mortgage Loan.
Group II Pool Distribution Amount: As of any Distribution Date, the
funds eligible for distribution to the Group II-A Certificates, Class II-A-PO
Component and Class B Certificates on such Distribution Date, which shall be the
sum of (i) all previously undistributed payments or other receipts on account of
principal and interest on or in respect of the Group II Mortgage Loans
(including, without limitation, the proceeds of any repurchase of a Group II
Mortgage Loan by the Seller and any Substitution Principal Amount) received by
the Master Servicer with respect to the applicable Remittance Date in the month
of such Distribution Date and any Unscheduled Principal Receipts received by the
Master Servicer on or prior to the Business Day preceding such Distribution
Date, (ii) all Periodic Advances made with respect to Group II Mortgage Loans by
a Servicer pursuant to the related Servicing Agreement or Periodic Advances with
respect to Group II Mortgage Loans made by the Master Servicer or the Trustee
pursuant to Section 3.03 and (iii) any remaining Reimbursement Amount relating
to a Group II Mortgage Loan as provided in Section 4.01(a)(ii) and (iv) all
other amounts (including any Insurance Proceeds and Compensating Interest) with
respect to a Group II Mortgage Loan required to be placed in the Certificate
Account by the Servicer on or before the applicable Remittance Date or by the
Master Servicer or the Trustee on or prior to the Distribution Date, but
excluding the following:
(a) amounts received as late payments of principal or interest
with respect to a Group II Mortgage Loan and respecting which the Master
Servicer or the Trustee has made one or more unreimbursed Periodic
Advances;
(b) the portion of Liquidation Proceeds used to reimburse any
unreimbursed Periodic Advances with respect to a Group II Mortgage Loan by
the Master Servicer or the Trustee;
(c) those portions of each payment of interest on a particular
Group II Mortgage Loan which represent (i) the Fixed Retained Yield, if
any, (ii) the applicable Servicing Fee and (iii) the Master Servicing Fee;
(d) all amounts representing scheduled payments of principal
and interest on Group II Mortgage Loans due after the Due Date occurring
in the month in which such Distribution Date occurs;
(e) all Unscheduled Principal Receipts received by the
Servicers with respect to Group II Mortgage Loans after the Applicable
Unscheduled Principal Receipt Period relating to the Distribution Date for
the applicable type of Unscheduled Principal Receipt, and all related
payments of interest on such amounts;
(f) all repurchase proceeds with respect to Group II Mortgage
Loans repurchased by the Seller pursuant to Section 2.02 or 2.03 on or
following the Determination Date in the month in which such Distribution
Date occurs and the difference between the unpaid principal balance of a
Group II Mortgage Loan substituted for a Group II Mortgage Loan pursuant
to Section 2.02, 2.03 or 2.06 on or following the Determination Date in
the month in which such Distribution Date occurs and the unpaid principal
balance of such Group II Mortgage Loan;
(g) that portion of Liquidation Proceeds and REO Proceeds with
respect to any Group II Mortgage Loan which represents any unpaid
Servicing Fee or Master Servicing Fee;
(h) all income from Eligible Investments that is held in the
Certificate Account for the account of the Master Servicer;
(i) all other amounts permitted to be withdrawn from the
Certificate Account in respect of the Group II Mortgage Loans, to the
extent not covered by clauses (a) through (h) above, or not required to be
deposited in the Certificate Account under this Agreement;
(j) Liquidation Profits in respect of Group II Mortgage Loans;
(k) Month End Interest in respect of Group II Mortgage Loans;
and
(l) all amounts reimbursable to a Servicer for PMI Advances in
respect of Group II Mortgage Loans.
Group II Pool Scheduled Principal Balance: As to any Distribution
Date, the aggregate Scheduled Principal Balance of all Group II Mortgage Loans
that were Outstanding Mortgage Loans on the Due Date in the month preceding the
month of such Distribution Date.
Group II Subordinated Percentage: As to any Distribution Date, the
percentage which is the difference between 100% and the Group II-A Percentage
for such date.
Group II Subordinated Prepayment Percentage: As to any Distribution
Date, the percentage which is the difference between 100% and the Group II-A
Prepayment Percentage for such date.
Group I-A Certificate: Any Class I-A-1, Class I-A-2, Class I-A-3 or
Class I-A-R Certificate.
Group I-A Distribution Amount: As to any Distribution Date and any
Class of Group I-A Certificates, the amount distributable to such Class of Group
I-A Certificates pursuant to Paragraphs first clause (A), second clause (A) and
third clause (A)(1) of Section 4.01(a)(i). As to any Distribution Date and the
Class I-A-PO Component, the amount distributable to the Class A-PO Certificates
with respect to the Class I-A-PO Component pursuant to Paragraphs third clause
(A)(2) and fourth clause (A) of Section 4.01(a)(i) on such Distribution Date.
Group I-A Interest Accrual Amount: As to any Distribution Date, the
sum of the Interest Accrual Amounts for the Group I-A Certificates with respect
to such Distribution Date.
Group I-A Interest Percentage: As to any Distribution Date and any
Class of Group I-A Certificates, the percentage calculated by dividing the
Interest Accrual Amount of such Class (determined without regard to clause (ii)
of the definition thereof) by the Group I-A Interest Accrual Amount (determined
without regard to clause (ii) of the definition of each Interest Accrual
Amount).
Group I-A Interest Shortfall Amount: As to any Distribution Date and
any Class of Group I-A Certificates, any amount by which the Interest Accrual
Amount of such Class with respect to such Distribution Date exceeds the amount
distributed in respect of such Class on such Distribution Date pursuant to
Paragraph first clause (A) of Section 4.01(a)(i).
Group I-A Loss Denominator: As to any Determination Date, an amount
equal to the Group I-A Non-PO Principal Balance.
Group I-A Loss Percentage: As to any Determination Date and any
Class of Group I-A Certificates, the percentage calculated by dividing the
Principal Balance of such Class by the Group I-A Loss Denominator (determined
without regard to any such Principal Balance of any Class of Group I-A
Certificates not then outstanding), in each case determined as of the preceding
Determination Date.
Group I-A Non-PO Optimal Amount: As to any Distribution Date, the
sum for such Distribution Date of (i) the Group I-A Interest Accrual Amount,
(ii) the Aggregate Group I-A Unpaid Interest Shortfall and (iii) the Group I-A
Non-PO Optimal Principal Amount.
Group I-A Non-PO Optimal Principal Amount: As to any Distribution
Date, an amount equal to the sum of (I) the sum, as to each Group I Mortgage
Loan that is an Outstanding Mortgage Loan, of the product of (x) the Non-PO
Fraction with respect to such Mortgage Loan, and (y) the sum of:
(i) the Group I-A Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Group I-A Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group I-A Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month period
ending on the day preceding the Determination Date of such Distribution
Date, was repurchased by the Seller pursuant to Section 2.02 or 2.03; and
(iv) the Group I-A Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a Mortgage Loan
during the one month period ending on the day preceding the Determination
Date for such Distribution Date over the unpaid principal balance of such
Mortgage Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group I-A Prepayment Percentage of the Non-PO Recovery for Loan
Group I for such Distribution Date.
Group I-A Non-PO Principal Balance: As of any date, an amount equal
to the Group I-A Principal Balance less the Principal Balance of the Class
I-A-PO Component.
Group I-A Non-PO Principal Distribution Amount: As to any
Distribution Date, the aggregate amount distributed in respect of the Classes of
Group I-A Certificates pursuant to Paragraph third clause (A)(1) of Section
4.01(a)(i).
Group I-A Percentage: As to any Distribution Date occurring on or
prior to the Subordination Depletion Date, the lesser of (i) 100% and (ii) the
percentage obtained by dividing the Group I-A Non-PO Principal Balance
(determined as of the Determination Date preceding such Distribution Date) by
the Group I Pool Balance (Non-PO Portion). As to any Distribution Date occurring
subsequent to the Subordination Depletion Date, 100% or such lesser percentage
which will cause the Group I-A Non-PO Principal Balance to decline to zero
following the distribution made on such Distribution Date.
Group I-A Prepayment Percentage: As to any Distribution Date to and
including the Distribution Date in August 2008, 100%. As to any Distribution
Date subsequent to August 2008 to and including the Distribution Date in August
2009, the Group I-A Percentage as of such Distribution Date plus 70% of the
Group I Subordinated Percentage as of such Distribution Date. As to any
Distribution Date subsequent to August 2009 to and including the Distribution
Date in August 2010, the Group I-A Percentage as of such Distribution Date plus
60% of the Group I Subordinated Percentage as of such Distribution Date. As to
any Distribution Date subsequent to August 2010 to and including the
Distribution Date in August 2011, the Group I-A Percentage as of such
Distribution Date plus 40% of the Group I Subordinated Percentage as of such
Distribution Date. As to any Distribution Date subsequent to August 2011 to and
including the Distribution Date in August 2012, the Group I-A Percentage as of
such Distribution Date plus 20% of the Group I Subordinated Percentage as of
such Distribution Date. As to any Distribution Date subsequent to August 2012,
the Group I-A Percentage as of such Distribution Date. The foregoing is subject
to the following: (i) if the aggregate distribution to Holders of Group I-A
Certificates on any Distribution Date of the Group I-A Prepayment Percentage
provided above of Unscheduled Principal Receipts distributable on such
Distribution Date would reduce the Group I-A Non-PO Principal Balance below
zero, the Group I-A Prepayment Percentage for such Distribution Date shall be
the percentage necessary to bring the Group I-A Non-PO Principal Balance to zero
and thereafter the Group I-A Prepayment Percentage shall be zero and (ii) if the
Aggregate Class A Percentage as of any Distribution Date is greater than the
Original Aggregate Class A Percentage, the Group I-A Prepayment Percentage for
such Distribution Date shall be 100%. Notwithstanding the foregoing, with
respect to any Distribution Date on which the following criteria are not met,
the reduction of the Group I-A Prepayment Percentage described in the second
through sixth sentences of this definition of Group I-A Prepayment Percentage
shall not be applicable with respect to such Distribution Date. In such event,
the Group I-A Prepayment Percentage for such Distribution Date will be
determined in accordance with the applicable provision, as set forth in the
first through fifth sentences above, which was actually used to determine the
Group I-A Prepayment Percentage for the Distribution Date occurring in the
August preceding such Distribution Date (it being understood that for the
purposes of the determination of the Group I-A Prepayment Percentage for the
current Distribution Date, the current Group I-A Percentage and Group I
Subordinated Percentage shall be utilized). No reduction in either the Group I-A
Prepayment Percentage or the Group II-A Prepayment Percentage referred to in the
second through sixth sentences hereof or the definition of "Group II-A
Prepayment Percentage" shall be applicable, with respect to any Distribution
Date if (a) the average outstanding principal balance on such Distribution Date
and for the preceding five Distribution Dates on the Mortgage Loans that were
delinquent 60 days or more (including for this purpose any payments due with
respect to Mortgage Loans in foreclosure and REO Mortgage Loans) were greater
than or equal to 50% of the Class B Principal Balance or (b) cumulative Realized
Losses on the Mortgage Loans exceed (1) 30% of the Original Class B Principal
Balance if such Distribution Date occurs between and including September 2008
and August 2009, (2) 35% of the Original Class B Principal Balance if such
Distribution Date occurs between and including September 2009 and August 2010,
(3) 40% of the Original Class B Principal Balance if such Distribution Date
occurs between and including September 2010 and August 2011, (4) 45% of the
Original Class B Principal Balance if such Distribution Date occurs between and
including September 2011 and August 2012, and (5) 50% of the Original Class B
Principal Balance if such Distribution Date occurs during or after September
2012. With respect to any Distribution Date on which the Group I-A Prepayment
Percentage is reduced below the Group I-A Prepayment Percentage for the prior
Distribution Date, the Master Servicer shall certify to the Trustee, based upon
information provided by each Servicer as to the Mortgage Loans serviced by it
that the criteria set forth in the preceding sentence are met.
Group I-A Principal Balance: As of any date, an amount equal to the
sum of the Principal Balances for the Group I-A Certificates and the Class
I-A-PO Component.
Group II-A Certificate: Any Class II-A-1 Certificate.
Group II-A Distribution Amount: As to any Distribution Date and any
Class of Group II-A Certificates, the amount distributable to such Class of
Group II-A Certificates pursuant to Paragraphs first clause (B), second clause
(B) and third clause (B)(1) of Section 4.01(a)(i). As to any Distribution Date
and the Class II-A-PO Component, the amount distributable to the Class A-PO
Certificates with respect to the Class II-A-PO Component pursuant to Paragraphs
third clause (B)(2) and fourth clause (B) of Section 4.01(a)(i) on such
Distribution Date.
Group II-A Interest Accrual Amount: As to any Distribution Date, the
sum of the Interest Accrual Amounts for the Classes of Group II-A Certificates
with respect to such Distribution Date.
Group II-A Interest Percentage: As to any Distribution Date and any
Class of Group II-A Certificates, the percentage calculated by dividing the
Interest Accrual Amount of such Class (determined without regard to clause (ii)
of the definition thereof) by the Group II-A Interest Accrual Amount (determined
without regard to clause (ii) of the definition of each Interest Accrual
Amount).
Group II-A Interest Shortfall Amount: As to any Distribution Date
and any Class of Group II-A Certificates, any amount by which the Interest
Accrual Amount of such Class with respect to such Distribution Date exceeds the
amount distributed in respect of such Class on such Distribution Date pursuant
to Paragraph first clause (B) of Section 4.01(a)(i).
Group II-A Loss Denominator: As to any Determination Date, an amount
equal to the Group II-A Non-PO Principal Balance.
Group II-A Loss Percentage: As to any Determination Date and any
Class of Group II-A Certificates, the percentage calculated by dividing the
Principal Balance of such Class by the Group II-A Loss Denominator (determined
without regard to any such Principal Balance of any Class of Group II-A
Certificates not then outstanding), in each case determined as of the preceding
Determination Date.
Group II-A Non-PO Optimal Amount: As to any Distribution Date, the
sum for such Distribution Date of (i) the Group II-A Interest Accrual Amount,
(ii) the Aggregate Group II-A Unpaid Interest Shortfall and (iii) the Group II-A
Non-PO Optimal Principal Amount.
Group II-A Non-PO Optimal Principal Amount: As to any Distribution
Date, an amount equal to the sum of (I) the sum, as to each Group II Mortgage
Loan that is an Outstanding Mortgage Loan, of the product of (x) the Non-PO
Fraction with respect to such Mortgage Loan, and (y) the sum of:
(i) the Group II-A Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Group II-A Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Group II-A Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month period
ending on the day preceding the Determination Date for such Distribution
Date, was repurchased by the Seller pursuant to Section 2.02 or 2.03; and
(iv) the Group II-A Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a Mortgage Loan
during the one month period ending on the day preceding the Determination
Date for such Distribution Date over the unpaid principal balance of such
Mortgage Loan, less the amount allocable to the principal portion of any
unreimbursed Periodic Advances previously made by the applicable Servicer,
the Master Servicer or the Trustee in respect of such Mortgage Loan; and
(II) the Group II-A Prepayment Percentage of the Non-PO Recovery for Loan
Group II for such Distribution Date.
Group II-A Non-PO Principal Balance: As of any date, an amount equal
to the Group II-A Principal Balance less the Principal Balance of the Class
II-A-PO Component.
Group II-A Non-PO Principal Distribution Amount: As to any
Distribution Date, the aggregate amount distributed in respect of the Classes of
Group II-A Certificates pursuant to Paragraph third clause (B)(1) of Section
4.01(a)(i).
Group II-A Percentage: As to any Distribution Date occurring on or
prior to the Subordination Depletion Date, the lesser of (i) 100% and (ii) the
percentage obtained by dividing the Group II-A Non-PO Principal Balance
(determined as of the Determination Date preceding such Distribution Date) by
the Group II Pool Balance (Non-PO Portion). As to any Distribution Date
occurring subsequent to the Subordination Depletion Date, 100% or such lesser
percentage which will cause the Group II-A Non-PO Principal Balance to decline
to zero following the distribution made on such Distribution Date.
Group II-A Prepayment Percentage: As to any Distribution Date to and
including the Distribution Date in August 2008, 100%. As to any Distribution
Date subsequent to August 2008 to and including the Distribution Date in August
2009, the Group II-A Percentage as of such Distribution Date plus 70% of the
Group II Subordinated Percentage as of such Distribution Date. As to any
Distribution Date subsequent to August 2009 to and including the Distribution
Date in August 2010, the Group II-A Percentage as of such Distribution Date plus
60% of the Group II Subordinated Percentage as of such Distribution Date. As to
any Distribution Date subsequent to August 2010 to and including the
Distribution Date in August 2011, the Group II-A Percentage as of such
Distribution Date plus 40% of the Group II Subordinated Percentage as of such
Distribution Date. As to any Distribution Date subsequent to August 2011 to and
including the Distribution Date in August 2012, the Group II-A Percentage as of
such Distribution Date plus 20% of the Group II Subordinated Percentage as of
such Distribution Date. As to any Distribution Date subsequent to August 2012,
the Group II-A Percentage as of such Distribution Date. The foregoing is subject
to the following: (i) if the aggregate distribution to Holders of Group II-A
Certificates on any Distribution Date of the Group II-A Prepayment Percentage
provided above of Unscheduled Principal Receipts distributable on such
Distribution Date would reduce the Group II-A Non-PO Principal Balance below
zero, the Group II-A Prepayment Percentage for such Distribution Date shall be
the percentage necessary to bring the Group II-A Non-PO Principal Balance to
zero and thereafter the Group II-A Prepayment Percentage shall be zero and (ii)
if the Aggregate Class A Percentage as of any Distribution Date is greater than
the Original Aggregate Class A Percentage, the Group II-A Prepayment Percentage
for such Distribution Date shall be 100%. Notwithstanding the foregoing, with
respect to any Distribution Date on which the following criteria are not met,
the reduction of the Group II-A Prepayment Percentage described in the second
through sixth sentences of this definition of Group II-A Prepayment Percentage
shall not be applicable with respect to such Distribution Date. In such event,
the Group II-A Prepayment Percentage for such Distribution Date will be
determined in accordance with the applicable provision, as set forth in the
first through fifth sentences above, which was actually used to determine the
Group II-A Prepayment Percentage for the Distribution Date occurring in the
August preceding such Distribution Date (it being understood that for the
purposes of the determination of the Group II-A Prepayment Percentage for the
current Distribution Date, the current Group II-A Percentage and Group II
Subordinated Percentage shall be utilized). No reduction in either the Group I-A
Prepayment Percentage or the Group II-A Prepayment Percentage referred to in the
second through sixth sentences hereof or the definition of "Group I-A Prepayment
Percentage" shall be applicable, with respect to any Distribution Date if (a)
the average outstanding principal balance on such Distribution Date and for the
preceding five Distribution Dates on Mortgage Loans that were delinquent 60 days
or more (including for this purpose any payments due with respect to Mortgage
Loans in foreclosure and REO Mortgage Loans) were greater than or equal to 50%
of the Class B Principal Balance or (b) cumulative Realized Losses on the
Mortgage Loans exceed (1) 30% of the Original Class B Principal Balance if such
Distribution Date occurs between and including September 2008 and August 2009,
(2) 35% of the Class B Principal Balance if such Distribution Date occurs
between and including September 2009 and August 2010, (3) 40% of the Original
Class B Principal Balance if such Distribution Date occurs between and including
September 2010 and August 2011, (4) 45% of the Class B Principal Balance if such
Distribution Date occurs between and including September 2011 and August 2012,
and (5) 50% of the Original Class B Principal Balance if such Distribution Date
occurs during or after September 2012. With respect to any Distribution Date on
which the Group II-A Prepayment Percentage is reduced below the Group II-A
Prepayment Percentage for the prior Distribution Date, the Master Servicer shall
certify to the Trustee, based upon information provided by each Servicer as to
the Mortgage Loans serviced by it that the criteria set forth in the preceding
sentence are met.
Group II-A Principal Balance: As of any date, an amount equal to the
sum of the Principal Balances for the Group II-A Certificates and the Class
II-A-PO Component.
Group A Non-PO Principal Balance: Either of the Group I-A Non-PO
Principal Balance and Group II-A Non-PO Principal Balance.
Holder: See "Certificateholder."
Independent: When used with respect to any specified Person, such
Person who (i) is in fact independent of the Seller, the Master Servicer and any
Servicer, (ii) does not have any direct financial interest or any material
indirect financial interest in the Seller or the Master Servicer or any Servicer
or in an affiliate of either, and (iii) is not connected with the Seller, the
Master Servicer or any Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Insurance Policy: Any insurance or performance bond relating to a
Mortgage Loan or the Mortgage Loans, including any hazard insurance, special
hazard insurance, flood insurance, primary mortgage insurance, mortgagor
bankruptcy bond or title insurance.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any
Insurance Policy covering a Mortgage Loan.
Insured Expenses: Expenses covered by any Insurance Policy covering
a Mortgage Loan.
Interest Accrual Amount: As to any Distribution Date and any Class
of Class A Certificates (other than the Class A-PO Certificates), (i) the
product of (a) 1/12th of the Class A Pass-Through Rate for such Class and (b)
the Principal Balance of such Class as of the Determination Date immediately
preceding such Distribution Date minus (ii) the sum of (A) the Group I-A
Interest Percentage or Group II-A Interest Percentage, as applicable, of such
Class of the interest portion of any Realized Losses allocated to the Group I-A
Certificates or to the Group II-A Certificates, as applicable, on or after the
Subordination Depletion Date pursuant to Section 4.02(c) and (B) the Class A
Interest Percentage of such Class of any Non-Supported Interest Shortfall or
Relief Act Shortfall allocated to the Class A Certificates with respect to such
Distribution Date. The Class A-PO Certificates have no Interest Accrual Amount.
As to any Distribution Date and any Class of Class B Certificates,
an amount equal to (i) the product of 1/12th of the Class B Pass-Through Rate
and the Principal Balance of such Class as of the Determination Date preceding
such Distribution Date minus (ii) the Class B Interest Percentage of such Class
of any Non-Supported Interest Shortfall or Relief Act Shortfall allocated to the
Class B Certificates with respect to such Distribution Date.
Liquidated Loan: A Mortgage Loan with respect to which the related
Mortgaged Property has been acquired, liquidated or foreclosed and with respect
to which the applicable Servicer determines that all Liquidation Proceeds which
it expects to recover have been recovered.
Liquidated Loan Loss: With respect to any Distribution Date, the
aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Loan during the Applicable Unscheduled Principal Receipt
Period with respect to Full Unscheduled Principal Receipts for such Distribution
Date, equal to the excess of (i) the unpaid principal balance of each such
Liquidated Loan, plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Net
Mortgage Interest Rate from the Due Date as to which interest was last paid with
respect thereto through the last day of the month preceding the month in which
such Distribution Date occurs, over (ii) Net Liquidation Proceeds with respect
to such Liquidated Loan.
Liquidation Expenses: Expenses incurred by a Servicer in connection
with the liquidation of any defaulted Mortgage Loan or property acquired in
respect thereof (including, without limitation, legal fees and expenses,
committee or referee fees, and, if applicable, brokerage commissions and
conveyance taxes), any unreimbursed advances expended by such Servicer pursuant
to its Servicing Agreement or the Master Servicer or Trustee pursuant hereto
respecting the related Mortgage Loan, including any unreimbursed advances for
real property taxes or for property restoration or preservation of the related
Mortgaged Property. Liquidation Expenses shall not include any previously
incurred expenses in respect of an REO Mortgage Loan which have been netted
against related REO Proceeds.
Liquidation Proceeds: Amounts received by a Servicer (including
Insurance Proceeds) or PMI Advances made by a Servicer in connection with the
liquidation of defaulted Mortgage Loans or property acquired in respect thereof,
whether through foreclosure, sale or otherwise, including payments in connection
with such Mortgage Loans received from the Mortgagor, other than amounts
required to be paid to the Mortgagor pursuant to the terms of the applicable
Mortgage or to be applied otherwise pursuant to law.
Liquidation Profits: As to any Distribution Date and any Mortgage
Loan that became a Liquidated Loan during the Applicable Unscheduled Principal
Receipt Period with respect to Full Unscheduled Principal Receipts for such
Distribution Date, the excess, if any, of (i) Net Liquidation Proceeds in
respect of such Liquidated Loan over (ii) the unpaid principal balance of such
Liquidated Loan plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Net
Mortgage Interest Rate from the Due Date to which interest was last paid with
respect thereto through the last day of the month preceding the month in which
such Distribution Date occurs.
Loan Group I: The Group I Mortgage Loans.
Loan Group II: The Group II Mortgage Loans.
Loan Group: Either of Loan Group I or Loan Group II.
Loan-to-Value Ratio: The ratio, expressed as a percentage, the
numerator of which is the principal balance of a particular Mortgage Loan at
origination and the denominator of which is the lesser of (x) the appraised
value of the related Mortgaged Property determined in the appraisal used by the
originator at the time of origination of such Mortgage Loan, and (y) if the
Mortgage is originated in connection with a sale of the Mortgaged Property, the
sale price for such Mortgaged Property.
Master Servicer: ▇▇▇▇▇ Fargo Bank Minnesota, National Association,
or its successor in interest.
Master Servicing Fee: With respect to any Mortgage Loan and any
Distribution Date, the fee payable monthly to the Master Servicer pursuant to
Section 6.05 equal to a fixed percentage (expressed as a per annum rate) of the
unpaid principal balance of such Mortgage Loan.
Master Servicing Fee Rate: As set forth in Section 11.20.
MERS: The Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any MOM Mortgage Loan or any other Mortgage Loan
as to which MERS is (or is intended to be) the mortgagee of record and as to
which a MIN has been assigned.
MIN: A MERS Mortgage Identification Number assigned to a Mortgage
Loan in accordance with the MERS Procedure Manual.
MOM: A Mortgage Loan where the related Mortgage names MERS as the
original mortgagee thereof, as to which a MIN has been assigned, and which
Mortgage has not been assigned to any other person.
Moody's: ▇▇▇▇▇'▇ Investors Service Inc., or its successor in
interest.
Mid-Month Receipt Period: With respect to each Distribution Date,
the one month period beginning on the Determination Date (or, in the case of the
first Distribution Date, from and including the Cut-Off-Date) occurring in the
calendar month preceding the month in which such Distribution Date occurs and
ending on the day preceding the Determination Date immediately preceding such
Distribution Date.
Month End Interest: As defined in each Servicing Agreement.
Monthly Payment: As to any Mortgage Loan (including any REO Mortgage
Loan) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment for any Curtailments and Deficient Valuations occurring prior to such
Due Date but before any adjustment to such amortization schedule, other than for
Deficient Valuations, by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period).
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on Mortgaged Property securing a Mortgage Note together with any
Mortgage Loan Rider, if applicable.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum rate
at which interest accrues on the unpaid principal balance thereof as set forth
in the related Mortgage Note, which rate is as indicated on the Mortgage Loan
Schedule.
Mortgage Loan Purchase Agreement: The mortgage loan purchase
agreement dated as of August 28, 2003 between WFHM, as seller, and the Seller,
as purchaser.
Mortgage Loan Rider: The standard ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac riders to
the Mortgage Note and/or Mortgage riders required when the Mortgaged Property is
a condominium unit or a unit in a planned unit development.
Mortgage Loan Schedule: The list of the Mortgage Loans transferred
to the Trustee on the Closing Date as part of the Trust Estate and attached
hereto as Exhibits F-1A and F-1B, which list may be amended following the
Closing Date upon conveyance of a Substitute Mortgage Loan pursuant to Section
2.02, 2.03 or 2.06 and which list shall set forth at a minimum the following
information as of the close of business on the Cut-Off Date (or, with respect to
Substitute Mortgage Loans, as of the close of business on the day of
substitution) as to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the city, state and zip code of the Mortgaged Property;
(iii) the type of property;
(iv) the Mortgage Interest Rate;
(v) the Net Mortgage Interest Rate;
(vi) the Monthly Payment;
(vii) the original number of months to maturity;
(viii) the scheduled maturity date;
(ix) the Cut-Off Date Principal Balance;
(x) the Loan-to-Value Ratio at origination;
(xi) whether such Mortgage Loan is a Subsidy Loan;
(xii) whether such Mortgage Loan is covered by primary mortgage
insurance;
(xiii) the applicable Servicing Fee Rate;
(xiv) the Master Servicing Fee Rate;
(xv) Fixed Retained Yield Rate, if applicable; and
(xvi) for each Other Servicer Mortgage Loan, the name of the
Servicer with respect thereto.
Such schedule may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Loans: Each of the mortgage loans transferred and assigned
to the Trustee on the Closing Date pursuant to Section 2.01 and any mortgage
loans substituted therefor pursuant to Section 2.02, 2.03 or 2.06, in each case
as from time to time are included in the Trust Estate as identified in the
Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan together with any related
Mortgage Loan Riders, if applicable.
Mortgaged Property: The property subject to a Mortgage, which may
include Co-op Shares or residential long-term leases.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any defaulted Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
Net Mortgage Interest Rate: With respect to each Mortgage Loan, a
rate equal to (i) the Mortgage Interest Rate on such Mortgage Loan minus (ii)
the sum of (a) the applicable Servicing Fee Rate, as set forth in Section 11.19
with respect to such Mortgage Loan, (b) the Master Servicing Fee Rate, as set
forth in Section 11.20 with respect to such Mortgage Loan and (c) the Fixed
Retained Yield Rate, if any, with respect to such Mortgage Loan. Any regular
monthly computation of interest at such rate shall be based upon annual interest
at such rate on the applicable amount divided by twelve.
Net REO Proceeds: As to any REO Mortgage Loan, REO Proceeds net of
any related expenses of the Servicer.
Non-permitted Foreign Holder: As defined in Section 5.02(d).
Non-PO Fraction: With respect to any Group I or Group II Mortgage
Loan, the lesser of (i) 1.00 and (ii) the quotient obtained by dividing the Net
Mortgage Interest Rate for such Mortgage Loan by 5.750%.
Non-PO Recovery: As to any Distribution Date and each Loan Group,
the amount of all Recoveries for Group I Mortgage Loans or Group II Mortgage
Loans, as applicable, received during the Applicable Unscheduled Principal
Receipt Periods for such Distribution Date less the Class A-PO Recovery for such
Distribution Date.
Nonrecoverable Advance: Any portion of a Periodic Advance previously
made or proposed to be made in respect of a Mortgage Loan which has not been
previously reimbursed to the Servicer, the Master Servicer or the Trustee, as
the case may be, and which the Servicer, the Master Servicer or the Trustee
determines will not, or in the case of a proposed Periodic Advance would not, be
ultimately recoverable from Liquidation Proceeds or other recoveries in respect
of the related Mortgage Loan. The determination by the Servicer, the Master
Servicer or the Trustee (i) that it has made a Nonrecoverable Advance or (ii)
that any proposed Periodic Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officer's Certificate of the Servicer
delivered to the Master Servicer for redelivery to the Trustee or, in the case
of a Master Servicer determination, an Officer's Certificate of the Master
Servicer delivered to the Trustee, in each case detailing the reasons for such
determination.
Non-Supported Interest Shortfall: With respect to any Distribution
Date, the sum of (i) the excess, if any, of the aggregate Prepayment Interest
Shortfall on the Mortgage Loans over the aggregate Compensating Interest with
respect to such Distribution Date and (ii) Curtailment Interest Shortfalls with
respect to such Distribution Date. With respect to each Distribution Date
occurring on or after the Subordination Depletion Date, the Non-Supported
Interest Shortfall determined pursuant to the preceding sentence will be
increased by the amount of any Subordination Depletion Date Interest Shortfall
for such Distribution Date. Any Non-Supported Interest Shortfall will be
allocated to (a) the Class A Certificates according to the percentage obtained
by dividing the sum of the Group I-A Non-PO Principal Balance and Group II-A
Non-PO Principal Balance by the Aggregate Non-PO Principal Balance and (b) the
Class B Certificates according to the percentage obtained by dividing the Class
B Principal Balance by the Aggregate Non-PO Principal Balance.
Non-U.S. Person: As defined in Section 4.01(f).
Officers' Certificate: With respect to any Person, a certificate
signed by the Chairman of the Board, the President or a Vice President, and by
the Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who may be outside
or salaried counsel for the Seller, a Servicer or the Master Servicer, or any
affiliate of the Seller, a Servicer or the Master Servicer, acceptable to the
Trustee if such opinion is to be delivered to the Trustee; provided, however,
that with respect to REMIC matters, matters relating to the determination of
Eligible Accounts or matters relating to transfers of Certificates, such counsel
shall be Independent.
Optimal Adjustment Event: With respect to any Class of Class B
Certificates and any Distribution Date, an Optimal Adjustment Event will occur
with respect to such Class if: (i) the Principal Balance of such Class on the
Determination Date succeeding such Distribution Date would have been reduced to
zero (regardless of whether such Principal Balance was reduced to zero as a
result of principal distribution or the allocation of Realized Losses) and (ii)
(a) the Principal Balance of any Class of Class A Certificates would be subject
to further reduction as a result of the third or fifth sentences of the
definition of Principal Balance or (b) the Principal Balance of a Class of Class
B Certificates with a lower numerical designation would be reduced with respect
to such Distribution Date as a result of the application of the proviso in the
definition of Class B-1 Principal Balance, Class B-2 Principal Balance, Class
B-3 Principal Balance, Class B-4 Principal Balance, Class B-5 Principal Balance
or Class B-6 Principal Balance.
Original Aggregate Class A Percentage: The Aggregate Class A
Percentage as of the Cut-Off Date as set forth in Section 11.07(b).
Original Aggregate Non-PO Principal Balance: The Aggregate Non-PO
Principal Balance as of the Cut-Off Date, as set forth in Section 11.06.
Original Aggregate Subordinate Percentage: The Aggregate Subordinate
Percentage as of the Cut-Off Date, as set forth in Section 11.07(a).
Original Group I-A Percentage: The Group I-A Percentage as of the
Cut-Off Date, as set forth in Section 11.03.
Original Group II-A Percentage: The Group II-A Percentage as of the
Cut-Off Date, as set forth in Section 11.04.
Original Class B Principal Balance: The sum of the Original Class
B-1 Principal Balance, Original Class B-2 Principal Balance, Original Class B-3
Principal Balance, Original Class B-4 Principal Balance, Original Class B-5
Principal Balance and Original Class B-6 Principal Balance, as set forth in
Section 11.08.
Original Class B-1 Fractional Interest: As to the first Distribution
Date, the percentage obtained by dividing the sum of the Original Class B-2
Principal Balance, the Original Class B-3 Principal Balance, the Original Class
B-4 Principal Balance, the Original Class B-5 Principal Balance and the Original
Class B-6 Principal Balance by the Original Aggregate Non-PO Principal Balance.
The Original Class B-1 Fractional Interest is specified in Section 11.10.
Original Class B-2 Fractional Interest: As to the first Distribution
Date, the percentage obtained by dividing the sum of the Original Class B-3
Principal Balance, the Original Class B-4 Principal Balance, the Original Class
B-5 Principal Balance and the Original Class B-6 Principal Balance by the
Original Aggregate Non-PO Principal Balance. The Original Class B-2 Fractional
Interest is specified in Section 11.11.
Original Class B-3 Fractional Interest: As to the first Distribution
Date, the percentage obtained by dividing the sum of the Original Class B-4
Principal Balance, the Original Class B-5 Principal Balance and the Original
Class B-6 Principal Balance by the Original Aggregate Non-PO Principal Balance.
The Original Class B-3 Fractional Interest is specified in Section 11.12.
Original Class B-4 Fractional Interest: As to the first Distribution
Date, the percentage obtained by dividing the sum of the Original Class B-5
Principal Balance and the Original Class B-6 Principal Balance by the Original
Aggregate Non-PO Principal Balance. The Original Class B-4 Fractional Interest
is specified in Section 11.13.
Original Class B-5 Fractional Interest: As to the first Distribution
Date, the percentage obtained by dividing the Original Class B-6 Principal
Balance by the Original Aggregate Non-PO Principal Balance. The Original Class
B-5 Fractional Interest is specified in Section 11.14.
Original Class B-1 Principal Balance: The Class B-1 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.09.
Original Class B-2 Principal Balance: The Class B-2 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.09.
Original Class B-3 Principal Balance: The Class B-3 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.09.
Original Class B-4 Principal Balance: The Class B-4 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.09.
Original Class B-5 Principal Balance: The Class B-5 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.09.
Original Class B-6 Principal Balance: The Class B-6 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.09.
Original Principal Balance: Any of the Original Principal Balances
of the Classes of Class A Certificates as set forth in Section 11.05; the
Original Class B-1 Principal Balance, Original Class B-2 Principal Balance,
Original Class B-3 Principal Balance, Original Class B-4 Principal Balance,
Original Class B-5 Principal Balance or Original Class B-6 Principal Balance as
set forth in Section 11.09.
Other Servicer: Any of the Servicers other than WFHM.
Other Servicing Agreements: The Servicing Agreements other than the
WFHM Servicing Agreement.
Other Servicer Mortgage Loan: Any of the Group I Mortgage Loans, if
any, identified in Exhibit F-2A hereto and any of the Group II Mortgage Loans,
if any, identified in Exhibit F-2B hereto, as such Exhibits may be amended from
time to time in connection with a substitution pursuant to Section 2.02 or 2.06,
which Mortgage Loan is serviced under an Other Servicing Agreement.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Mortgage Loan) which was not the subject of a Full Unscheduled
Principal Receipt prior to such Due Date and which was not repurchased by the
Seller prior to such Due Date pursuant to Section 2.02 or 2.03.
Owner Mortgage Loan File: A file maintained by the Custodian for
each Mortgage Loan that contains the documents specified in Section 2.01 and any
additional documents required to be added to the Owner Mortgage Loan File
pursuant to this Agreement.
Partial Liquidation Proceeds: Liquidation Proceeds received by a
Servicer prior to the Unscheduled Principal Receipt Period in which the related
Mortgage Loan became a Liquidated Loan.
Partial Unscheduled Principal Receipt: An Unscheduled Principal
Receipt which is not a Full Unscheduled Principal Receipt.
Paying Agent: The Person authorized on behalf of the Trustee, as
agent for the Master Servicer, to make distributions to Certificateholders with
respect to the Certificates and to forward to Certificateholders the periodic
and annual statements required by Section 4.04. The Paying Agent may be any
Person directly or indirectly controlling or controlled by or under common
control with the Master Servicer and may be the Trustee. The initial Paying
Agent is appointed in Section 4.03(a).
Payment Account: The account maintained pursuant to Section 4.03(b).
Percentage Interest: With respect to a Class A Certificate of a
Class, the undivided percentage interest obtained by dividing the original
principal balance of such Certificate by the Original Principal Balance of such
Class of Class A Certificates. With respect to a Class B Certificate of a Class,
the undivided percentage interest obtained by dividing the original principal
balance of such Certificate by the Original Principal Balance of such Class of
Class B Certificates.
Periodic Advance: The aggregate of the advances required to be made
by a Servicer on any Distribution Date pursuant to its Servicing Agreement or by
the Master Servicer or the Trustee hereunder, the amount of any such advances
being equal to the total of all Monthly Payments (adjusted, in each case (i) in
respect of interest, to the applicable Mortgage Interest Rate less the
applicable Servicing Fee in the case of Periodic Advances made by a Servicer and
to the applicable Net Mortgage Interest Rate in the case of Periodic Advances
made by the Master Servicer or Trustee and (ii) by the amount of any related
Debt Service Reductions or reductions in the amount of interest collectable from
the Mortgagor pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, or similar legislation or regulations then in effect) on the
Mortgage Loans, that (x) were delinquent as of the close of business on the
related Determination Date, (y) were not the subject of a previous Periodic
Advance by such Servicer or of a Periodic Advance by the Master Servicer or the
Trustee, as the case may be and (z) have not been determined by the Master
Servicer, such Servicer or Trustee to be Nonrecoverable Advances.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan: As defined in Section 5.02(c).
PMI Advance: As defined in the related Servicing Agreement, if
applicable.
PO Fraction: With respect to any Discount Mortgage Loan, the
difference between 1.0 and the Non-PO Fraction for such Mortgage Loan; with
respect to any other Mortgage Loan, zero.
PO Recoveries: Either of the Class I-A-PO Recoveries or the Class
II-A-PO Recoveries.
Pool Balance (Non-PO Portion): Any of the Group I Pool Balance
(Non-PO Portion) or Group II Pool Balance (Non-PO Portion).
Pool Scheduled Principal Balance: The sum of the Group I Pool
Scheduled Principal Balance and Group II Pool Scheduled Principal Balance.
Prepayment In Full: With respect to any Mortgage Loan, a Mortgagor
payment consisting of a Principal Prepayment in the amount of the outstanding
principal balance of such loan and resulting in the full satisfaction of such
obligation.
Prepayment Interest Shortfall: On any Distribution Date, the amount
of interest, if any, that would have accrued on any Mortgage Loan which was the
subject of a Prepayment in Full at the Net Mortgage Interest Rate for such
Mortgage Loan from the date of its Prepayment in Full (but in the case of a
Prepayment in Full where the Applicable Unscheduled Principal Receipt Period is
the Mid-Month Receipt Period, only if the date of the Prepayment in Full is on
or after the Determination Date in the month prior to the month of such
Distribution Date and prior to the first day of the month of such Distribution
Date) through the last day of the month prior to the month of such Distribution
Date.
Principal Adjustment: In the event that the Class B-1 Optimal
Principal Amount, Class B-2 Optimal Principal Amount, Class B-3 Optimal
Principal Amount, Class B-4 Optimal Principal Amount, Class B-5 Optimal
Principal Amount or Class B-6 Optimal Principal Amount is calculated in
accordance with the proviso in such definition with respect to any Distribution
Date, the Principal Adjustment for such Class of Class B Certificates shall
equal the difference between (i) the amount that would have been distributed to
such Class as principal in accordance with Section 4.01(a)(i) for such
Distribution Date, calculated without regard to such proviso and assuming there
are no Principal Adjustments for such Distribution Date and (ii) the Adjusted
Principal Balance for such Class.
Principal Balance: As of the first Determination Date and as to any
Class of Class A Certificates of a Group, the Original Principal Balance of such
Class. As of any subsequent Determination Date prior to the Subordination
Depletion Date and as to any Class of Class A Certificates (other than the Class
A-PO Certificates), the Original Principal Balance of such Class less the sum of
all amounts previously distributed in respect of such Class on prior
Distribution Dates (i) pursuant to Paragraph third clauses (A)(1) and (B)(1) of
Section 4.01(a)(i), as applicable, (ii) pursuant to clause (iii) of Section
4.01(b), and (iii) as a result of a Principal Adjustment. After the
Subordination Depletion Date, each such Principal Balance of a Class of Class A
Certificates (other than the A-PO Certificates) will also be reduced (if clause
(i) is greater than clause (ii)) or increased (if clause (i) is less than clause
(ii)) on each Determination Date by an amount equal to the product of the Group
I-A Loss Percentage or Group II-A Loss Percentage, as applicable, of such Class
and the difference, if any, between (i) the Group I-A Non-PO Principal Balance
or Group II-A Non-PO Principal Balance, as applicable, as of such Determination
Date without regard to this sentence and (ii) the difference between (A) the
Group I Adjusted Pool Amount or Group II Adjusted Pool Amount, as applicable,
for the preceding Distribution Date and (B) the Group I Adjusted Pool Amount (PO
Portion) or Group II Adjusted Pool Amount (PO Portion), as applicable, for the
preceding Distribution Date.
As of any subsequent Determination Date prior to the Subordination
Depletion Date and as to the Class I-A-PO and Class II-A-PO Components, the
Original Principal Balance of such Component less the sum of all amounts
previously distributed in respect of the Class A-PO Certificates with respect to
such Class A-PO Component on prior Distribution Dates pursuant to Paragraphs
third clauses (A)(2) and (B)(2), as applicable, and fourth clause (A) and (B),
as applicable, of Section 4.01(a)(i). After the Subordination Depletion Date,
the Group I Adjusted Pool Amount (PO Portion) or Group II Adjusted Pool Amount
(PO Portion), as applicable, for the preceding Distribution Date.
The Principal Balance of the Class A-PO Certificates will equal the
sum of the Principal Balances of the Class A-PO Components.
As to the Class B Certificates, the Class B-1 Principal Balance,
Class B-2 Principal Balance, Class B-3 Principal Balance, Class B-4 Principal
Balance, Class B-5 Principal Balance and Class B-6 Principal Balance,
respectively.
Notwithstanding the foregoing, no Principal Balance of a Class or
Component will be increased on any Determination Date such that the Principal
Balance of such Class or Component exceeds its Original Principal Balance less
all amounts previously distributed in respect of such Class or Component on
prior Distribution Dates pursuant to Paragraph third clauses (A)(1) or (B)(1) of
Section 4.01(a)(i), Paragraph third clauses (A)(2) or (B)(2) of Section
4.01(a)(i), or Paragraphs third, sixth, ninth, twelfth, fifteenth or eighteenth
of Section 4.01(a)(ii).
Principal Prepayment: Any Mortgagor payment on a Mortgage Loan which
is received in advance of its Due Date and is not accompanied by an amount
representing scheduled interest for any period subsequent to the date of
prepayment.
Prior Month Receipt Period: With respect to each Distribution Date,
the calendar month preceding the month in which such Distribution Date occurs.
Priority Amount: For any Distribution Date, the lesser of (i) the
Principal Balance of the Class I-A-3 Certificates and (ii) the product of (1)
the Priority Percentage, (2) the Shift Percentage and (3) the sum of the
Scheduled Principal Amount and the Unscheduled Principal Amount.
Priority Percentage: The Principal Balance of the Class I-A-3
Certificates divided by the Group I Pool Balance (Non-PO Portion).
Prohibited Transaction Tax: Any tax imposed under Section 860F of
the Code.
Prospectus: The prospectus dated August 26, 2003 as supplemented by
the prospectus supplement dated August 26, 2003, relating to the Class A, Class
B-1, Class B-2 and Class B-3 Certificates.
Prudent Servicing Practices: The standard of care set forth in each
Servicing Agreement.
Rating Agency: Any nationally recognized statistical credit rating
agency, or its successor, that rated one or more Classes of the Certificates at
the request of the Seller at the time of the initial issuance of the
Certificates. The Rating Agencies for the Class A Certificates are Fitch and
▇▇▇▇▇'▇. The Rating Agency for the Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates is Fitch. If any 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 Seller, notice of which
designation shall be given to the Trustee and the Master Servicer. References
herein to the highest short-term rating category of a Rating Agency shall mean
F1+ in the case of Fitch, P-1 in the case of ▇▇▇▇▇'▇ and in the case of any
other Rating Agency shall mean its equivalent of such ratings. References herein
to the highest long-term rating categories of a Rating Agency shall mean AAA in
the case of Fitch and Aaa in the case of ▇▇▇▇▇'▇, and in the case of any other
Rating Agency shall mean its equivalent of such ratings without any plus or
minus.
Realized Losses: With respect to any Distribution Date, (i)
Liquidated Loan Losses incurred on Liquidated Loans for which the Liquidation
Proceeds were received during the Applicable Unscheduled Principal Receipt
Period with respect to Full Unscheduled Principal Receipts with respect to such
Distribution Date and (ii) Bankruptcy Losses incurred during the period
corresponding to the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date.
Record Date: The last Business Day of the month preceding the month
of the related Distribution Date.
Recovery: Any amount received on a Mortgage Loan subsequent to such
Mortgage Loan being determined to be a Liquidated Loan.
Reimbursement Amount: As defined in Section 2.03(c).
Relief Act Shortfall: Any interest shortfalls arising as a result of
the reduction in the amount of monthly interest payments on any Mortgage Loans
as a result of the application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended, or comparable state legislation. Any Relief Act Shortfall will
be allocated to (a) the Group I-A Certificates and the Group II-A Certificates
according to the percentage obtained by dividing the Group I-A Non-PO Principal
Balance or Group II-A Non-PO Principal Balance, as applicable, by the Aggregate
Non-PO Principal Balance and (b) the Class B Certificates according to the
percentage obtained by dividing the Class B Principal Balance by the Aggregate
Non-PO Principal Balance.
REMIC: A "real estate mortgage investment conduit" as defined in
Code Section 860D. "The REMIC" means the REMIC constituted by the Trust Estate.
REMIC Provisions: Provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of Part IV of Subchapter M
of Chapter 1 of Subtitle A of the Code, and related provisions, and U.S.
Department of the Treasury temporary, proposed or final regulations promulgated
thereunder, as the foregoing are in effect (or with respect to proposed
regulations, are proposed to be in effect) from time to time.
Remittance Date: As defined in each of the Servicing Agreements.
REO Mortgage Loan: Any Mortgage Loan which is not a Liquidated Loan
and as to which the indebtedness evidenced by the related Mortgage Note is
discharged and the related Mortgaged Property is held as part of the Trust
Estate.
REO Proceeds: Proceeds received in respect of any REO Mortgage Loan
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
Request for Release: A request for release in substantially the form
attached as Exhibit G hereto.
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, 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, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
Rule 144A: Rule 144A promulgated under the Securities Act of 1933,
as amended.
Scheduled Principal Amount: The sum for each outstanding Group I
Mortgage Loan (including each defaulted Group I Mortgage Loan with respect to
which the related Mortgaged Property has been acquired by the Trust Estate) of
the product of (A) the Non-PO Fraction for such Mortgage Loan and (B) the sum of
the amounts described in clauses Iy(i) and Iy(iv) of the definition of Group I-A
Non-PO Optimal Principal Amount, but without such amount being multiplied by the
Group I-A Percentage.
Scheduled Principal Balance: As to any Mortgage Loan and
Distribution Date, the principal balance of such Mortgage Loan as of the Due
Date in the month preceding the month of such Distribution Date as specified in
the amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any bankruptcy (other than Deficient
Valuations) or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to (A) Unscheduled Principal Receipts received or
applied by the applicable Servicer during the related Unscheduled Principal
Receipt Period for each applicable type of Unscheduled Principal Receipt related
to the Distribution Date occurring in the month preceding such Distribution
Date, (B) Deficient Valuations incurred prior to such Due Date and (C) the
payment of principal due on such Due Date and irrespective of any delinquency in
payment by the related Mortgagor. Accordingly, the Scheduled Principal Balance
of a Mortgage Loan which becomes a Liquidated Loan at any time through the last
day of such related Unscheduled Principal Receipt Period shall be zero.
Seller: ▇▇▇▇▇ Fargo Asset Securities Corporation, or its
successor in interest.
Servicer Mortgage Loan File: As defined in each of the Servicing
Agreements.
Servicers: WFHM, as a Servicer under the related Servicing
Agreement.
Servicing Agreements: Each of the Servicing Agreements executed with
respect to a portion of the Mortgage Loans by one of the Servicers, which
agreements are attached hereto, collectively, as Exhibit L.
Servicing Fee: With respect to any Servicer, as defined in its
Servicing Agreement.
Servicing Fee Rate: With respect to a Mortgage Loan, as set forth in
Section 11.19.
Servicing Officer: Any officer of a Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans.
Shift Percentage: As to any Distribution Date, the percentage
indicated below:
Shift
Distribution Date Occurring In Percentage
------------------------------ ----------
September 2003 through August 2008 ............................ 0%
September 2008 through August 2009 ............................ 30%
September 2009 through August 2010 ............................ 40%
September 2010 through August 2011 ............................ 60%
September 2011 through August 2012 ............................ 80%
September 2012 and thereafter ................................. 100%
Similar Law: As defined in Section 5.02(c).
Single Certificate: A Certificate of any Class that
evidences the smallest permissible Denomination for such Class, as
set forth in Section 11.18.
Startup Day: As defined in Section 2.05.
Subordination Depletion Date: The Distribution Date preceding the
first Distribution Date on which each of the Group I-A Percentage and Group II-A
Percentage (in each case, determined pursuant to clause (ii) of the definition
thereof) equals or exceeds 100%.
Subordination Depletion Date Interest Shortfall: With respect to any
Distribution Date that occurs on or after the Subordination Depletion Date with
respect to any Unscheduled Principal Receipt (other than a Prepayment in Full or
Curtailment):
(A) in the case where the Applicable Unscheduled Principal Receipt
Period is the Mid-Month Receipt Period and such Unscheduled
Principal Receipt is received by the Servicer on or after the
Determination Date in the month preceding the month of such
Distribution Date but prior to the first day of the month of
such Distribution Date, the amount of interest that would have
accrued at the Net Mortgage Interest Rate on the amount of
such Unscheduled Principal Receipt from the day of its receipt
or, if earlier, its application by the Servicer through the
last day of the month preceding the month of such Distribution
Date; and
(B) in the case where the Applicable Unscheduled Principal Receipt
Period is the Prior Month Receipt Period and such Unscheduled
Principal Receipt is received by the Servicer during the month
preceding the month of such Distribution Date, the amount of
interest that would have accrued at the Net Mortgage Interest
Rate on the amount of such Unscheduled Principal Receipt from
the day of its receipt or, if earlier, its application by the
Servicer through the last day of the month in which such
Unscheduled Principal Receipt is received.
Subsidy Account: If the Trust Estate contains any Subsidy Loans, the
deposit account or accounts created and maintained by the Servicer for deposit
of Subsidy Funds and amounts payable under interest subsidy agreements relating
to mortgage loans other than the Mortgage Loans.
Subsidy Funds: If the Trust Estate contains any Subsidy Loans, funds
contributed by the employer of a Mortgagor in order to reduce the payments
required from the Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest
subsidy agreement pursuant to which the monthly interest payments made by the
related Mortgagor will be less than the scheduled monthly interest payments on
such Mortgage Loan, with the resulting difference in interest payments being
provided by the employer of the Mortgagor. Each Subsidy Loan will be identified
as such in the Mortgage Loan Schedule.
Substitute Mortgage Loan: As defined in Section 2.02.
Substitution Principal Amount: With respect to any Mortgage Loan
substituted in accordance with Section 2.02 or pursuant to Section 2.03 or 2.06,
the excess of (x) the unpaid principal balance of the Mortgage Loan which is
substituted for over (y) the unpaid principal balance of the Substitute Mortgage
Loan, each balance being determined as of the date of substitution.
Trust Estate: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans (other than any Fixed Retained Yield), such
amounts as may be held from time to time in the Certificate Account (other than
any Fixed Retained Yield), the rights of the Trustee to receive the proceeds of
all insurance policies and performance bonds, if any, required to be maintained
hereunder or under the related Servicing Agreement, property which secured a
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure and all other property and rights described in the first paragraph
of Section 2.01.
Trustee: Wachovia Bank, National Association, a national banking
association with its principal office located in Charlotte, North Carolina, or
any successor trustee appointed as herein provided.
Type 1 Mortgage Loan: Any of the Group I Mortgage Loans identified
in Exhibit F-1A hereto and any of the Group II Mortgage Loans identified in
Exhibit F-1B hereto, as such Exhibits may be amended from time to time in
connection with a substitution pursuant to Section 2.02 or 2.06, serviced under
the WFHM Servicing Agreement and having a Mid-Month Receipt Period with respect
to all types of Unscheduled Principal Receipts.
Undercollateralized Amount: As defined in Section 4.01(b)(iii).
Undercollateralized Group: As defined in Section 4.01(b)(iii).
Unpaid Interest Shortfalls: Each of the Class A Unpaid Interest
Shortfalls, the Class B-1 Unpaid Interest Shortfall, the Class B-2 Unpaid
Interest Shortfall, the Class B-3 Unpaid Interest Shortfall, the Class B-4
Unpaid Interest Shortfall, the Class B-5 Unpaid Interest Shortfall and the Class
B-6 Unpaid Interest Shortfall.
Unscheduled Principal Amount: The sum for each outstanding Group I
Mortgage Loan (including each defaulted Group I Mortgage Loan with respect to
which the related Mortgaged Property has been acquired by the Trust Estate) of
the product of (A) the Non-PO Fraction for such Mortgage Loan and (B) the sum of
the amounts described in clauses Iy(ii) and Iy(iii) of the definition of Group
I-A Non-PO Optimal Principal Amount, but without such amount being multiplied by
the Group I-A Prepayment Percentage.
Unscheduled Principal Receipt: Any Principal Prepayment or other
recovery of principal on a Mortgage Loan, including, without limitation,
Liquidation Proceeds, Net REO Proceeds, Recoveries and proceeds received from
any condemnation award or proceeds in lieu of condemnation other than that
portion of such proceeds released to the Mortgagor in accordance with the terms
of the Mortgage or Prudent Servicing Practices, but excluding any Liquidation
Profits and proceeds of a repurchase of a Mortgage Loan by the Seller and any
Substitution Principal Amounts.
Unscheduled Principal Receipt Period: Either a Mid-Month
Receipt Period or a Prior Month Receipt Period.
U.S. Person: As defined in Section 4.01(f).
Voting Interest: With respect to any provisions hereof providing for
the action, consent or approval of the Holders of all Certificates evidencing
specified Voting Interests in the Trust Estate, each Class of Certificates will
be entitled to a pro rata portion of the Voting Interest equal to the ratio
obtained by dividing the Principal Balance of such Class by the sum of the Group
I-A Principal Balance, the Group II-A Principal Balance and the Class B
Principal Balance. Each Certificateholder of a Class will have a Voting Interest
equal to the product of the Voting Interest to which such Class is collectively
entitled and the Percentage Interest in such Class represented by such Holder's
Certificates. With respect to any provisions hereof providing for action,
consent or approval of each Class of Certificates or specified Classes of
Certificates, each Certificateholder of a Class will have a Voting Interest in
such Class equal to such Holder's Percentage Interest in such Class.
WFHM: ▇▇▇▇▇ Fargo Home Mortgage, Inc., or its successor in interest.
WFHM Correspondents: The entities listed on the Mortgage Loan
Schedule, from which WFHM purchased the Mortgage Loans.
WFHM Servicing Agreement: The Servicing Agreement providing for the
servicing of the Type 1 Mortgage Loans initially by WFHM.
Section 1.02 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee. 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, if made in the manner provided in this
Section 1.02. The Trustee shall promptly notify the Master Servicer in writing
of the receipt of any such instrument or writing.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. When such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee and the Authenticating Agent)
shall be proved by the Certificate Register, and neither the Trustee, the Seller
nor the Master Servicer shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, the
Seller or the Master Servicer in reliance thereon, whether or not notation of
such action is made upon such Certificate.
Section 1.03 Effect of Headings and Table of Contents.
The Article and Section headings in this Agreement and the Table of
Contents are for convenience of reference only and shall not affect the
interpretation or construction of this Agreement.
Section 1.04 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or
implied, shall give to any Person, other than the parties to this Agreement and
their successors hereunder and the Holders of the Certificates, any benefit or
any legal or equitable right, power, remedy or claim under this Agreement.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF THE CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Seller, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee, without recourse all the right, title and
interest of the Seller in and to (a) the Trust Estate, including all interest
(other than the portion, if any, representing the Fixed Retained Yield) and
principal received by the Seller on or with respect to the Mortgage Loans after
the Cut-Off Date (and including scheduled payments of principal and interest due
after the Cut-Off Date but received by the Seller on or before the Cut-Off Date
and Unscheduled Principal Receipts received or applied on the Cut-Off Date, but
not including payments of principal and interest due on the Mortgage Loans on or
before the Cut-Off Date), (b) the Insurance Policies, (c) the obligations of the
Servicers under the Servicing Agreements with respect to the Mortgage Loans, (d)
the right to receive amounts, if any, payable on behalf of any Mortgagor from
the Subsidy Account relating to any Subsidy Loan and (e) proceeds of all the
foregoing.
In connection with such assignment, the Seller shall, with respect
to each Mortgage Loan, deliver, or cause to be delivered, to the Custodian, on
or before the Closing Date the following documents or instruments with respect
to each Mortgage Loan:
(i) The original Mortgage Note, endorsed in blank, with all prior
and intervening endorsements as may be necessary to show a complete chain of
endorsements. With respect to any Mortgage Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced,
a Lost Note Affidavit with a copy of the Mortgage Note;
(ii) The original recorded Mortgage with evidence of recordation
noted thereon or attached thereto, together with any addenda or riders thereto,
or a copy of such recorded Mortgage with such evidence of recordation certified
to be true and correct by the appropriate governmental recording office; or a
copy of such recorded Mortgage with such evidence of recordation, or if the
original Mortgage has been submitted for recordation but has not been returned
from the applicable public recording office, a copy of the Mortgage certified by
an officer of WFHM or the applicable WFHM Correspondent to be a true and correct
copy of the original Mortgage submitted for recordation;
(iii) For each MERS Mortgage Loan that is not a MOM Mortgage Loan,
the original assignment showing MERS as the assignee of the Mortgage, with
evidence of recording thereon or copies thereof certified by an officer of WFHM
or the applicable WFHM Correspondent to have been submitted for recordation;
(iv) A recorded original assignment of the related Mortgage from
WFHM assigning the related Mortgage to the Trustee (which may be assigned in
blank), certified by the recording office, or, if such assignment is in the
process of being recorded, a copy of the related Mortgage transmitted for
recordation certified by an officer of WFHM or applicable WFHM Correspondent to
be a true and correct copy of such assignment submitted for recordation;
provided, however, if recordation is not required as described below, an
assignment in recordable form (which may be assigned in blank) with respect to
the related Mortgage;
(v) Each original recorded intervening assignment of the Mortgage as
may be necessary to show a complete chain of title from the Mortgage Loan
originator to WFHM, with evidence of recordation noted thereon or attached
thereto, or a copy of such assignment with such evidence of recordation to be
true and correct by the appropriate governmental recording office, or, if any
such assignment has been submitted for recordation but has not been returned
from the applicable public recording office or is not otherwise available, a
copy of such assignment certified by an officer of WFHM or the applicable WFHM
Correspondent to be a true and correct copy of the recorded assignment submitted
for recordation;
(vi) The original policy of the title insurance or certificate of
title insurance or a written commitment to issue such a title insurance policy
or certificate of title insurance, or a copy of such title insurance certified
as true and correct by the applicable insurer or any attorney's certificate of
title with an Officer's Certificate of WFHM or the applicable WFHM Correspondent
that such attorney's certificate of title is customarily used in lieu of a title
insurance policy in the jurisdiction in which the related mortgage property is
located;
(vii) The original of each assumption agreement, modification,
written assurance or substitution agreement pertaining to such Mortgage Loan, if
any, or, if such document is in the process of being recorded, a copy of such
document, certified by an officer of WFHM or the applicable WFHM Correspondent
of such Mortgage Loan or by the applicable title insurance company, closing
agent, settlement agent, escrow agent or closing attorney to be a true and
correct copy of such document transmitted for recordation, if any; and
(viii) For each Mortgage Loan secured by Co-op Shares, the originals
of the following documents or instruments:
(a) The loan security agreement;
(b) The stock certificate;
(c) The stock power, executed in blank;
(d) The executed proprietary lease;
(e) The executed recognition agreement;
(f) The executed assignment of recognition agreement;
(g) The executed UCC-1 financing statement with evidence of
recording thereon; and
(h) The executed UCC-3 financing statements or other
appropriate UCC financing statements required by state
law, evidencing a complete and unbroken chain from the
mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation).
If any Mortgage or an assignment of a Mortgage to the Trustee or any
prior assignment is in the process of being recorded on the Closing Date, the
Seller shall use its best efforts to cause each such original recorded document
or certified copy thereof to be delivered to the Custodian promptly following
its recordation, but in no event later than one (1) year following the Closing
Date. If any Mortgage has been recorded in the name of MERS or its designee, no
assignment of Mortgage in favor of the Trustee will be required to be prepared
or delivered and instead, the Master Servicer shall take all actions as are
necessary to cause the Trust Estate to be shown as the owner of the related
Mortgage Loan on the records of MERS for the purpose of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS. The Seller
shall also cause to be delivered to the Custodian any other original mortgage
loan document included in the Owner Mortgage Loan File if a copy thereof has
been delivered. The Seller shall pay from its own funds, without any right of
reimbursement therefor, the amount of any costs, liabilities and expenses
incurred by the Trust Estate by reason of the failure of the Seller to cause to
be delivered to the Custodian within one (1) year following the Closing Date any
original Mortgage or assignment of a Mortgage (except with respect to any
Mortgage recorded in the name of MERS) not delivered to the Custodian on the
Closing Date.
In lieu of recording an assignment of any Mortgage the Seller may,
deliver or cause to be delivered to the Custodian the assignment of the Mortgage
Loan to the Trustee in a form suitable for recordation, if (i) with respect to a
particular state the Trustee has received an Opinion of Counsel acceptable to it
that such recording is not required to make the assignment effective against the
parties to the Mortgage or subsequent purchasers or encumbrancers of the
Mortgaged Property or (ii) the Seller has been advised by each Rating Agency
that non-recordation in a state will not result in a reduction of the rating
assigned by that Rating Agency at the time of initial issuance of the
Certificates. In the event that the Custodian receives notice that recording is
required to protect the right, title and interest of the Trustee in and to any
such Mortgage Loan for which recordation of an assignment has not previously
been required, the Custodian shall promptly notify the Trustee and the Custodian
shall within five Business Days (or such other reasonable period of time
mutually agreed upon by the Custodian and the Trustee) of its receipt of such
notice deliver each previously unrecorded assignment to the related Servicer for
recordation.
Except where endorsements in blank are authorized, endorsements of
any Mortgage Notes shall comply with the following format:
WITHOUT RECOURSE
PAY TO THE ORDER OF:
WACHOVIA BANK, NATIONAL ASSOCIATION, AS
TRUSTEE under the pooling and servicing
agreement dated as of [date].
and its successors and assigns,
▇▇▇▇▇ Fargo Home Mortgage, Inc.
[Signature of Officer]
[Officer's Name and Title]
Except where assignments in blank are authorized or in the case of
any Mortgage registered in the name of MERS, assignments of any Mortgage shall
comply with the following:
WACHOVIA BANK, NATIONAL ASSOCIATION, AS
TRUSTEE
and its successors and assigns
Section 2.02 Acceptance by Custodian.
Subject to the provisions of the following paragraph, pursuant to
the Custodial Agreement, the Custodian, on behalf of the Trustee, will declare
that it holds and will hold the documents delivered to it pursuant to Section
2.01 above and the other documents constituting a part of the Owner Mortgage
Loan Files delivered to it in trust, upon the trusts herein set forth, for the
use and benefit of all present and future Certificateholders. Upon execution of
this Agreement, the Custodian will deliver to the Seller and the Trustee an
initial certification in the form of Exhibit N hereto, to the effect that,
except as may be specified in a list of exceptions attached thereto, it has
received the original Mortgage Notes relating to each Mortgage Loan on the
Mortgage Loan Schedule.
The Custodian will review each Owner Mortgage Loan File within 45
days after execution of this Agreement. The Custodian will deliver no later than
30 days after completion of such review to the Seller and the Trustee a final
certification in the form of Exhibit O hereto to the effect that, except as may
be specified in a list of exceptions attached thereto, all required documents
set forth in Section 2.01 have been executed and received and appear regular on
their face, and that such documents relate to the Mortgage Loans identified in
the Mortgage Loan Schedule based on a comparison of the Mortgage Loan
identifying number, Mortgagor name and street address, and in so doing the
Custodian may rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon.
If within such 45 day period the Custodian finds any document
constituting a part of an Owner Mortgage Loan File not to have been executed or
received or to be unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule or not to appear regular on its face, the Custodian shall promptly
(and in no event more than 30 days after completion of the review) notify the
Trustee and the Trustee shall notify the Seller. The Seller shall have a period
of 60 days after the date of such notice within which to correct or cure any
such defect. The Seller hereby covenants and agrees that, if any material defect
is not so corrected or cured, the Seller will, not later than 60 days after the
Trustee's notice to it referred to above respecting such defect, either (i)
repurchase the related Mortgage Loan or any property acquired in respect thereof
from the Trust Estate at a price equal to (a) 100% of the unpaid principal
balance of such Mortgage Loan plus (b) accrued interest at the Mortgage Interest
Rate (less any Fixed Retained Yield) through the last day of the month in which
such repurchase takes place or (ii) if within two years of the Startup Day, or
such other period permitted by the REMIC Provisions, substitute for any Mortgage
Loan to which such material defect relates, a new mortgage loan (a "Substitute
Mortgage Loan") having such characteristics so that the representations and
warranties of the Seller set forth in Section 2.03(b) hereof (other than Section
2.03(b)(i)) would not have been incorrect had such Substitute Mortgage Loan
originally been a Mortgage Loan. In no event shall any Substitute Mortgage Loan
have an unpaid principal balance, as of the date of substitution, greater than
the Scheduled Principal Balance (reduced by the scheduled payment of principal
due on the Due Date in the month of substitution) of the Mortgage Loan for which
it is substituted. In addition, such Substitute Mortgage Loan shall have a
Loan-to-Value Ratio less than or equal to and a Net Mortgage Interest Rate equal
to that of the Mortgage Loan for which it is substituted.
In the case of a repurchased Mortgage Loan or property, the purchase
price shall be deposited by the Seller in the Certificate Account maintained by
the Master Servicer pursuant to Section 3.01. In the case of a Substitute
Mortgage Loan, the Owner Mortgage Loan File relating thereto shall be delivered
to the Custodian and the Substitution Principal Amount, together with (i)
interest on such Substitution Principal Amount at the applicable Net Mortgage
Interest Rate to the following Due Date of such Mortgage Loan which is being
substituted for and (ii) an amount equal to the aggregate amount of unreimbursed
Periodic Advances in respect of interest previously made by the Servicer, the
Master Servicer or the Trustee with respect to such Mortgage Loan, shall be
deposited in the Certificate Account. The Monthly Payment on the Substitute
Mortgage Loan for the Due Date in the month of substitution shall not be part of
the Trust Estate. Upon receipt by the Custodian of a Request for Release signed
by an officer of the Seller, the Custodian shall release to the Seller the
related Owner Mortgage Loan File. The Trustee shall execute and deliver such
instrument of transfer or assignment (or, in the case of a Mortgage Loan
registered in the name of MERS or its designee, the Master Servicer shall take
all necessary action to reflect such assignment on the records of MERS), in each
case without recourse, as shall be necessary to vest in the Seller legal and
beneficial ownership of such substituted or repurchased Mortgage Loan or
property. It is understood and agreed that the obligation of the Seller to
substitute a new Mortgage Loan for or repurchase any Mortgage Loan or property
as to which such a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to the
Certificateholders or the Trustee on behalf of the Certificateholders. The
failure of the Custodian to give the final certification or the Trustee to give
any notice within the required time periods shall not affect or relieve the
Seller's obligation to repurchase any Mortgage Loan pursuant to this Section
2.02.
Section 2.03 Representations and Warranties of the Master Servicer
and the Seller.
(a) The Master Servicer hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that, as of the date of
execution of this Agreement:
(i) The Master Servicer is a national banking association duly
chartered and validly existing in good standing under the laws of the
United States;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's corporate charter or
by-laws or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material contract, agreement or other instrument to which
the Master Servicer is a party or which may be applicable to the Master
Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Seller, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its
properties or might have consequences that would affect its performance
hereunder; and
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations under
this Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 2.03(a) shall survive delivery of the respective Owner
Mortgage Loan Files to the Trustee or the Custodian.
(b) The Seller hereby represents and warrants to the Trustee for the
benefit of Certificateholders that, as of the date of execution of this
Agreement, with respect to the Mortgage Loans, or each Mortgage Loan, as the
case may be:
(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 as specified in the Mortgage Loan Schedule;
(ii) Immediately prior to the transfer and assignment contemplated
herein, the Seller was the sole owner and holder of the Mortgage Loan free
and clear of any and all liens, pledges, charges or security interests of
any nature and has full right and authority to sell and assign the same;
(iii) The Mortgage is a valid, subsisting and enforceable first lien
on the property therein described, and the Mortgaged Property is free and
clear of all encumbrances and liens having priority over the first lien of
the Mortgage except for liens for real estate taxes and special
assessments not yet due and payable and liens or interests arising under
or as a result of any federal, state or local law, regulation or ordinance
relating to hazardous wastes or hazardous substances, and, if the related
Mortgaged Property is a condominium unit, any lien for common charges
permitted by statute or homeowners association fees; and if the Mortgaged
Property consists of shares of a cooperative housing corporation, any lien
for amounts due to the cooperative housing corporation for unpaid
assessments or charges or any lien of any assignment of rents or
maintenance expenses secured by the real property owned by the cooperative
housing corporation; and any security agreement, chattel mortgage or
equivalent document related to, and delivered to the Trustee or to the
Custodian with, any Mortgage establishes in the Seller a valid and
subsisting first lien on the property described therein and the Seller has
full right to sell and assign the same to the Trustee;
(iv) Neither the Seller nor any prior holder of the Mortgage or the
related Mortgage Note has modified the Mortgage or the related Mortgage
Note in any material respect, satisfied, canceled or subordinated the
Mortgage in whole or in part, released the Mortgaged Property in whole or
in part from the lien of the Mortgage, or executed any instrument of
release, cancellation, modification or satisfaction, except in each case
as is reflected in an agreement delivered to the Trustee or the Custodian
pursuant to Section 2.01;
(v) All taxes, governmental assessments, insurance premiums, and
water, sewer and municipal charges, which previously became due and owing
have been paid, or an escrow of funds has been established, to the extent
permitted by law, in an amount sufficient to pay for every such item which
remains unpaid; and the Seller has not advanced funds, or received any
advance of funds by a party other than the Mortgagor, directly or
indirectly (except pursuant to any Subsidy Loan arrangement) for the
payment of any amount required by the Mortgage, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage Loan proceeds, whichever is later, to the day which precedes by
thirty days the first Due Date under the related Mortgage Note;
(vi) The Mortgaged Property is undamaged by water, fire, earthquake,
earth movement other than earthquake, windstorm, flood, tornado or similar
casualty (excluding casualty from the presence of hazardous wastes or
hazardous substances, as to which the Seller makes no representations), so
as to affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended and to
the best of the Seller's knowledge, there is no proceeding pending or
threatened for the total or partial condemnation of the Mortgaged
Property;
(vii) The Mortgaged Property is free and clear of all mechanics' and
materialmen's liens or liens in the nature thereof; provided, however,
that this warranty shall be deemed not to have been made at the time of
the initial issuance of the Certificates if a title policy affording, in
substance, the same protection afforded by this warranty is furnished to
the Trustee by the Seller;
(viii) Except for Mortgage Loans secured by Co-op Shares and
Mortgage Loans secured by residential long-term leases, the Mortgaged
Property consists of a fee simple estate in real property; all of the
improvements which are included for the purpose of determining the
appraised value of the Mortgaged Property lie wholly within the boundaries
and building restriction lines of such property and no improvements on
adjoining properties encroach upon the Mortgaged Property (unless insured
against under the related title insurance policy); and to the best of the
Seller's knowledge, the Mortgaged Property and all improvements thereon
comply with all requirements of any applicable zoning and subdivision laws
and ordinances;
(ix) The Mortgage Loan meets, or is exempt from, applicable state or
federal laws, regulations and other requirements, pertaining to usury, and
the Mortgage Loan is not usurious;
(x) To the best of the Seller's knowledge, all inspections, licenses
and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use
and occupancy of the same, including, but not limited to, certificates of
occupancy and fire underwriting certificates, have been made or obtained
from the appropriate authorities;
(xi) All payments required to be made up to the Due Date immediately
preceding the Cut-Off Date for such Mortgage Loan under the terms of the
related Mortgage Note have been made and no Mortgage Loan had more than
one delinquency in the 12 months preceding the Cut-Off Date;
(xii) The Mortgage Note, the related Mortgage and other agreements
executed in connection therewith are genuine, and each is the legal, valid
and binding obligation of the maker thereof, enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law); and, to the best of the Seller's knowledge, all parties
to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage has
been duly and properly executed by the Mortgagor;
(xiii) Each Mortgage Loan at the time it was originated complied in
all material respects with applicable federal, state and local laws
including, without limitation, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity,
predatory and abusive lending laws and disclosure laws;
(xiv) The proceeds of the Mortgage Loans have been fully disbursed,
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements and
as to disbursements of any escrow funds therefor have been complied with
(except for escrow funds for exterior items which could not be completed
due to weather and escrow funds for the completion of swimming pools); and
all costs, fees and expenses incurred in making, closing or recording the
Mortgage Loan have been paid, except recording fees with respect to
Mortgages not recorded as of the Closing Date;
(xv) The Mortgage Loan (except any Mortgage Loan secured by a
Mortgaged Property located in any jurisdiction, as to which an opinion of
counsel of the type customarily rendered in such jurisdiction in lieu of
title insurance is instead received) is covered by an American Land Title
Association mortgagee title insurance policy or other generally acceptable
form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac,
issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac insuring
the originator, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan and
subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of the date of recording of such Mortgage acceptable to mortgage
lending institutions in the area in which the Mortgaged Property is
located or specifically referred to in the appraisal performed in
connection with the origination of the related Mortgage Loan, (C) liens
created pursuant to any federal, state or local law, regulation or
ordinance affording liens for the costs of clean-up of hazardous
substances or hazardous wastes or for other environmental protection
purposes and (D) such other matters to which like properties are commonly
subject which do not individually, or in the aggregate, materially
interfere with the benefits of the security intended to be provided by the
Mortgage; the Seller is the sole insured of such mortgagee title insurance
policy, the assignment to the Trustee of the Seller's interest in such
mortgagee title insurance policy does not require any consent of or
notification to the insurer which has not been obtained or made, such
mortgagee title insurance policy is in full force and effect and will be
in full force and effect and inure to the benefit of the Trustee, no
claims have been made under such mortgagee title insurance policy, and no
prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such
mortgagee title insurance policy;
(xvi) The Mortgaged Property securing each Mortgage Loan is insured
by an insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement, in an amount which is not less than the lesser of 100% of the
insurable value of the Mortgaged Property and the outstanding principal
balance of the Mortgage Loan, but in no event less than the minimum amount
necessary to fully compensate for any damage or loss on a replacement cost
basis; if the Mortgaged Property is a condominium unit, it is included
under the coverage afforded by a blanket policy for the project; if upon
origination of the Mortgage Loan, the improvements on the Mortgaged
Property were in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the
least of (A) the outstanding principal balance of the Mortgage Loan, (B)
the full insurable value of the Mortgaged Property and (C) the maximum
amount of insurance which was available under the National Flood Insurance
Act of 1968, as amended; and each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense;
(xvii) To the best of the Seller's knowledge, there is no default,
breach, violation or event of acceleration existing under the Mortgage or
the related Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration; the
Seller has not waived any default, breach, violation or event of
acceleration; and no foreclosure action is currently threatened or has
been commenced with respect to the Mortgage Loan;
(xviii) No Mortgage Note or Mortgage is subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note or
Mortgage, or the exercise of any right thereunder, render the Mortgage
Note or Mortgage unenforceable, in whole or in part, or subject it to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, and no such right of rescission, set-off, counterclaim
or defense has been asserted with respect thereto;
(xix) Each Mortgage Note is payable in monthly payments, resulting
in complete amortization of the Mortgage Loan over a term of not more than
360 months;
(xx) Each Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including realization by judicial foreclosure (subject to any
limitation arising from any bankruptcy, insolvency or other law for the
relief of debtors), and there is no homestead or other exemption available
to the Mortgagor which would interfere with such right of foreclosure;
(xxi) To the best of the Seller's knowledge, no Mortgagor is a
debtor in any state or federal bankruptcy or insolvency proceeding;
(xxii) Each Mortgaged Property is located in the United States and
consists of a one- to four-unit residential property, which may include a
detached home, townhouse, condominium unit or a unit in a planned unit
development or, in the case of Mortgage Loans secured by Co-op Shares,
leases or occupancy agreements;
(xxiii) The Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;
(xxiv) With respect to each Mortgage where a lost note affidavit has
been delivered to the Trustee in place of the related Mortgage Note, the
related Mortgage Note is no longer in existence;
(xxv) In the event that the Mortgagor is an inter vivos "living"
trust, (i) such trust is in compliance with ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
standards for inter vivos trusts and (ii) holding title to the Mortgaged
Property in such trust will not diminish any rights as a creditor
including the right to full title to the Mortgaged Property in the event
foreclosure proceedings are initiated;
(xxvi) If the Mortgage Loan is secured by a long-term residential
lease, (1) the lessor under the lease holds a fee simple interest in the
land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent
and the acquisition by the holder of the Mortgage of the rights of the
lessee upon foreclosure or assignment in lieu of foreclosure or provide
the holder of the Mortgage with substantially similar protections; (3) the
terms of such lease do not (a) allow the termination thereof upon the
lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default, (b)
allow the termination of the lease in the event of damage or destruction
as long as the Mortgage is in existence, (c) prohibit the holder of the
Mortgage from being insured (or receiving proceeds of insurance) under the
hazard insurance policy or policies relating to the Mortgaged Property or
(d) permit any increase in rent other than pre-established increases set
forth in the lease; (4) the original term of such lease is not less than
15 years; (5) the term of such lease does not terminate earlier than five
years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold
estates in transferring ownership in residential properties is a widely
accepted practice; and
(xxvii) No Mortgage Loan is a "high cost" loan as defined under any
federal, state or local law applicable to such Mortgage Loan at the time
of its origination.
Notwithstanding the foregoing, no representations or warranties are
made by the Seller as to the environmental condition of any Mortgaged Property;
the absence, presence or effect of hazardous wastes or hazardous substances on
any Mortgaged Property; any casualty resulting from the presence or effect of
hazardous wastes or hazardous substances on, near or emanating from any
Mortgaged Property; the impact on Certificateholders of any environmental
condition or presence of any hazardous substance on or near any Mortgaged
Property; or the compliance of any Mortgaged Property with any environmental
laws, nor is any agent, person or entity otherwise affiliated with the Seller
authorized or able to make any such representation, warranty or assumption of
liability relative to any Mortgaged Property. In addition, no representations or
warranties are made by the Seller with respect to the absence or effect of fraud
in the origination of any Mortgage Loan.
It is understood and agreed that the representations and warranties
set forth in this Section 2.03(b) shall survive delivery of the respective Owner
Mortgage Loan Files to the Custodian and shall inure to the benefit of the
Trustee notwithstanding any restrictive or qualified endorsement or assignment.
(c) Upon discovery by either the Seller, the Master Servicer, the
Trustee or the Custodian that any of the representations and warranties made in
subsection (b) above is not accurate (referred to herein as a "breach") and,
except for a breach of the representation and warranty set forth in subsection
(b)(i), where such breach is a result of the Cut-Off Date Principal Balance of a
Mortgage Loan being greater, by $5,000 or greater, than the Cut-Off Date
Principal Balance of such Mortgage Loan indicated on the Mortgage Loan Schedule,
that such breach materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties (any Custodian
being so obligated under a Custodial Agreement). Within 60 days of the earlier
of its discovery or its receipt of notice of any such breach, the Seller shall
cure such breach in all material respects or shall either (i) repurchase the
Mortgage Loan or any property acquired in respect thereof from the Trust Estate
at a price equal to (A) 100% of the unpaid principal balance of such Mortgage
Loan plus (B) accrued interest at the Net Mortgage Interest Rate for such
Mortgage Loan through the last day of the month in which such repurchase took
place or (ii) if within two years of the Startup Day, or such other period
permitted by the REMIC Provisions, substitute for such Mortgage Loan in the
manner described in Section 2.02. In addition to the foregoing, if a breach of
the representation set forth in clause (b)(xiii) of this Section 2.03 occurs as
a result of a violation of an applicable predatory or abusive lending law, the
Seller shall reimburse the Trust for all costs and damages including, but not
limited to, reasonable attorneys' fees and costs, incurred by the Trust as a
result of the violation of such law (such amount, the "Reimbursement Amount").
The purchase price of any repurchase described in this paragraph, the
Substitution Principal Amount, if any, plus accrued interest thereon and the
other amounts referred to in Section 2.02, and any Reimbursement Amount shall be
deposited in the Certificate Account. It is understood and agreed, except with
respect to the second preceding sentence, that the obligation of the Seller to
repurchase or substitute for any Mortgage Loan or property as to which such a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to Certificateholders or the Trustee on behalf
of Certificateholders, and such obligation shall survive until termination of
the Trust Estate hereunder.
Section 2.04 Execution and Delivery of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery of the Owner Mortgage Loan Files to the Custodian, on behalf of
the Trustee, and, concurrently with such delivery, has executed and delivered to
or upon the order of the Seller, in exchange for the Mortgage Loans together
with all other assets included in the definition of "Trust Estate," receipt of
which is hereby acknowledged, Certificates in authorized denominations which
evidence ownership of the entire Trust Estate.
Section 2.05 Designation of Certificates; Designation of Startup Day
and Latest Possible Maturity Date.
The Seller hereby designates the Classes of Class A Certificates
(other than the Class I-A-R Certificate) and the Classes of Class B Certificates
as classes of "regular interests" and the Class I-A-R Certificate as the single
class of "residual interest" in the REMIC for the purposes of Code Sections
860G(a)(1) and 860G(a)(2), respectively. The Closing Date is hereby designated
as the "Startup Day" of the REMIC within the meaning of Code Section 860G(a)(9).
The "latest possible maturity date" of the regular interests in the REMIC is
September 25, 2033 for purposes of Code Section 860G(a)(1).
Section 2.06 Optional Substitution of Mortgage Loans.
During the three-month period beginning on the Startup Date, the
Seller shall have the right, but not the obligation, in its sole discretion for
any reason, to substitute for any Group I or Group II Mortgage Loan a Substitute
Mortgage Loan meeting the requirements of Section 2.02. Any such substitution
shall be carried out in the manner described in Section 2.02. The Substitution
Principal Amount, if any, plus accrued interest thereon and the other amounts
referred to in Section 2.02, shall be deposited in the Certificate Account.
ARTICLE III
ADMINISTRATION OF THE TRUST ESTATE; SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Certificate Account.
(a) The Master Servicer shall establish and maintain a Certificate
Account for the deposit of funds received by the Master Servicer with respect to
the Mortgage Loans serviced by each Servicer pursuant to each of the Servicing
Agreements. Such account shall be maintained as an Eligible Account. The Master
Servicer shall give notice to each Servicer and the Seller of the location of
the Certificate Account and of any change in the location thereof.
(b) The Master Servicer shall deposit into the Certificate Account
on the day of receipt thereof all amounts received by it from any Servicer
pursuant to any of the Servicing Agreements and shall, in addition, deposit into
the Certificate Account the following amounts, in the case of amounts specified
in clause (i), not later than the Distribution Date on which such amounts are
required to be distributed to Certificateholders and, in the case of the amounts
specified in clause (ii), not later than the Business Day next following the day
of receipt and posting by the Master Servicer:
(i) Periodic Advances pursuant to Section 3.03(a) made by the Master
Servicer or the Trustee, if any and any amounts deemed received by the
Master Servicer pursuant to Section 3.01(d); and
(ii) in the case of any Mortgage Loan that is repurchased by the
Seller pursuant to Section 2.02, 2.03 or 3.08 or that is auctioned by the
Master Servicer pursuant to Section 3.08 or purchased by the Master
Servicer pursuant to Section 3.08 or 9.01, the purchase price therefor or,
where applicable, any Substitution Principal Amount and any amounts
received in respect of the interest portion of unreimbursed Periodic
Advances.
(c) The Master Servicer shall cause the funds in the Certificate
Account to be invested in Eligible Investments. No such Eligible Investments
will be sold or disposed of at a gain prior to maturity unless the Master
Servicer has received an Opinion of Counsel or other evidence satisfactory to it
that such sale or disposition will not cause the Trust Estate to be subject to
Prohibited Transactions Tax, otherwise subject the Trust Estate to tax, or cause
the Trust Estate to fail to qualify as a REMIC while any Certificates are
outstanding. Any amounts deposited in the Certificate Account prior to the
Distribution Date shall be invested for the account of the Master Servicer and
any investment income thereon shall be additional compensation to the Master
Servicer for services rendered under this Agreement. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Certificate Account by the Master Servicer out of its own funds immediately as
realized, without any right of reimbursement therefor from the Trust Estate.
(d) For purposes of this Agreement, the Master Servicer will be
deemed to have received from a Servicer on the applicable Remittance Date for
such funds all amounts deposited by such Servicer into the Custodial P&I Account
maintained in accordance with the applicable Servicing Agreement, if such
Custodial P&I Account is not an Eligible Account as defined in this Agreement,
to the extent such amounts are not actually received by the Master Servicer on
such Remittance Date as a result of the bankruptcy, insolvency, receivership or
other financial distress of the depository institution in which such Custodial
P&I Account is being held. To the extent that amounts so deemed to have been
received by the Master Servicer are subsequently remitted to the Master
Servicer, the Master Servicer shall be entitled to retain such amounts.
Section 3.02 Permitted Withdrawals from the Certificate Account.
(a) The Master Servicer may, from time to time, make withdrawals
from the Certificate Account for the following purposes (limited, in the case of
Servicer reimbursements, to cases where funds in the respective Custodial P&I
Account are not sufficient therefor):
(i) to reimburse the Master Servicer, the Trustee or any Servicer
for Periodic Advances made by the Master Servicer or the Trustee pursuant
to Section 3.03(a) or any Servicer pursuant to any Servicing Agreement
with respect to previous Distribution Dates, such right to reimbursement
pursuant to this subclause (i) being limited to amounts received on or in
respect of particular Mortgage Loans (including, for this purpose,
Liquidation Proceeds, REO Proceeds and proceeds from the purchase, sale,
repurchase or substitution of Mortgage Loans pursuant to Section 2.02,
2.03, 2.06, 3.08 or 9.01) respecting which any such Periodic Advance was
made;
(ii) to reimburse any Servicer, the Master Servicer or the Trustee
for any Periodic Advances determined in good faith to have become
Nonrecoverable Advances provided, however, that any portion of
Nonrecoverable Advances representing Fixed Retained Yield shall be
reimbursable only from amounts constituting Fixed Retained Yield and not
from the assets of the Trust Estate;
(iii) to reimburse the Master Servicer or any Servicer from
Liquidation Proceeds for Liquidation Expenses and for amounts expended by
the Master Servicer or any Servicer pursuant hereto or to any Servicing
Agreement, respectively, in good faith in connection with the restoration
of damaged property or for foreclosure expenses;
(iv) from any Mortgagor payment on account of interest or other
recovery (including Net REO Proceeds) with respect to a particular
Mortgage Loan, to pay the Master Servicing Fee with respect to such
Mortgage Loan to the Master Servicer;
(v) to reimburse the Master Servicer, any Servicer or the Trustee
(or, in certain cases, the Seller) for expenses incurred by it (including
taxes paid on behalf of the Trust Estate) and recoverable by or
reimbursable to it pursuant to Section 3.03(c), 3.03(d) or 6.03 or the
second sentence of Section 8.13(a) or pursuant to such Servicer's
Servicing Agreement, provided such expenses are "unanticipated" within the
meaning of the REMIC Provisions;
(vi) to pay to the Seller or other purchaser with respect to each
Mortgage Loan or property acquired in respect thereof that has been
repurchased or replaced pursuant to Section 2.02, 2.03 or 2.06 or
auctioned pursuant to Section 3.08 or to pay to the Master Servicer with
respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 3.08 or 9.01, all amounts received
thereon and not required to be distributed as of the date on which the
related repurchase or purchase price or Scheduled Principal Balance was
determined;
(vii) to remit funds to the Paying Agent in the amounts and in the
manner provided for herein;
(viii) to pay to the Master Servicer any interest earned on or
investment income with respect to funds in the Certificate Account;
(ix) to pay to the Master Servicer or any Servicer out of
Liquidation Proceeds allocable to interest the amount of any unpaid Master
Servicing Fee or Servicing Fee (as adjusted pursuant to the related
Servicing Agreement) and any unpaid assumption fees, late payment charges
or other Mortgagor charges on the related Mortgage Loan;
(x) to pay to the Master Servicer as additional master servicing
compensation any Liquidation Profits which a Servicer is not entitled to
pursuant to the applicable Servicing Agreement;
(xi) to withdraw from the Certificate Account any amount deposited
in the Certificate Account that was not required to be deposited therein;
(xii) to clear and terminate the Certificate Account pursuant to
Section 9.01; and
(xiii) to pay to WFHM from any Mortgagor payment on account of
interest or other recovery (including Net REO Proceeds) with respect to a
particular Mortgage Loan, the Fixed Retained Yield, if any, with respect
to such Mortgage Loan; provided, however, that with respect to any payment
of interest received by the Master Servicer in respect of a Mortgage Loan
(whether paid by the Mortgagor or received as Liquidation Proceeds,
Insurance Proceeds or otherwise) which is less than the full amount of
interest then due with respect to such Mortgage Loan, only that portion of
such payment of interest that bears the same relationship to the total
amount of such payment of interest as the Fixed Retained Yield Rate, if
any, in respect of such Mortgage Loan bears to the Mortgage Interest Rate
shall be allocated to the Fixed Retained Yield with respect thereto.
(b) The Master Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
payment to and withdrawal from the Certificate Account.
Section 3.03 Advances by Master Servicer and Trustee.
(a) In the event an Other Servicer fails to make any required
Periodic Advances of principal and interest on a Mortgage Loan as required by
the related Other Servicing Agreement prior to the Distribution Date occurring
in the month during which such Periodic Advance is due, the Master Servicer
shall make Periodic Advances to the extent provided hereby. In the event WFHM
fails to make any required Periodic Advances of principal and interest on a
Mortgage Loan as required by the WFHM Servicing Agreement prior to the
Distribution Date occurring in the month during which such Periodic Advance is
due, the Trustee shall, to the extent required by Section 8.14, make such
Periodic Advance to the extent provided hereby, provided that the Trustee has
previously received the certificate of the Master Servicer described in the
following sentence. The Master Servicer shall certify to the Trustee with
respect to any such Distribution Date (i) the amount of Periodic Advances
required of WFHM or such Other Servicer, as the case may be, (ii) the amount
actually advanced by WFHM or such Other Servicer, (iii) the amount that the
Trustee or Master Servicer is required to advance hereunder and (iv) whether the
Master Servicer has determined that it reasonably believes that such Periodic
Advance is a Nonrecoverable Advance. Amounts advanced by the Trustee or Master
Servicer shall be deposited in the Certificate Account on the related
Distribution Date. Notwithstanding the foregoing, neither the Master Servicer
nor the Trustee will be obligated to make a Periodic Advance that it reasonably
believes to be a Nonrecoverable Advance. The Trustee may conclusively rely for
any determination to be made by it hereunder upon the determination of the
Master Servicer as set forth in its certificate.
(b) To the extent an Other Servicer fails to make an advance on
account of the taxes or insurance premiums with respect to a Mortgage Loan
required pursuant to the related Other Servicing Agreement, the Master Servicer
shall, if the Master Servicer knows of such failure of the Servicer, advance
such funds and take such steps as are necessary to pay such taxes or insurance
premiums. To the extent WFHM fails to make an advance on account of the taxes or
insurance premiums with respect to a Mortgage Loan required pursuant to the WFHM
Servicing Agreement, the Master Servicer shall, if the Master Servicer knows of
such failure of WFHM, certify to the Trustee that such failure has occurred.
Upon receipt of such certification, the Trustee shall advance such funds and
take such steps as are necessary to pay such taxes or insurance premiums.
(c) The Master Servicer and the Trustee shall each be entitled to be
reimbursed from the Certificate Account for any Periodic Advance made by it
under Section 3.03(a) to the extent described in Section 3.02(a)(i) and (a)(ii).
The Master Servicer and the Trustee shall be entitled to be reimbursed pursuant
to Section 3.02(a)(v) for any advance by it pursuant to Section 3.03(b). The
Master Servicer shall diligently pursue restoration of such amount to the
Certificate Account from the related Servicer. The Master Servicer shall, to the
extent it has not already done so, upon the request of the Trustee, withdraw
from the Certificate Account and remit to the Trustee any amounts to which the
Trustee is entitled as reimbursement pursuant to Section 3.02 (a)(i), (ii) and
(v).
(d) Except as provided in Section 3.03(a) and (b), neither the
Master Servicer nor the Trustee shall be required to pay or advance any amount
which any Servicer was required, but failed, to deposit in the Certificate
Account.
Section 3.04 Custodian to Cooperate; Release of Owner Mortgage Loan
Files.
In connection with the deposit by a Servicer into the Certificate
Account of the proceeds from a Liquidated Loan or of a Prepayment in Full, the
Master Servicer or applicable Servicer shall confirm to the Trustee that all
amounts required to be remitted to the Certificate Account in connection with
such Mortgage Loan have been so deposited, and the Master Servicer or applicable
Servicer shall deliver two copies of such Request for Release to the Custodian.
The Custodian shall, within five Business Days of its receipt of such a Request
for Release, release the related Owner Mortgage Loan File to the Master Servicer
or such Servicer, as requested by the Master Servicer or such Servicer. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including but not limited to, collection under
any insurance policies, or to effect a partial release of any Mortgaged Property
from the lien of the Mortgage, the Servicer of such Mortgage Loan shall deliver
to the Master Servicer or Custodian two copies of a Request for Release in hard
copy or in electronic format acceptable to the Custodian. Upon the Master
Servicer's receipt of any such Request for Release, the Master Servicer shall
promptly forward such request in hard copy or in electronic format acceptable to
the Custodian. The Custodian shall, within five Business Days, release the
related Owner Mortgage Loan File to the Master Servicer or such Servicer. Any
such Request for Release shall obligate the Master Servicer or such Servicer, as
the case may be, to return the Owner Mortgage Loan File to the Custodian by the
twenty-first day following the release thereof, unless (i) the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Certificate Account or (ii) the Owner Mortgage Loan File
or such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially. Upon receipt of two copies of a Request for
Release stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Certificate Account have been so deposited, or
that such Mortgage Loan has become an REO Mortgage Loan, the Custodian shall
amend its records.
Upon written certification of the Master Servicer or the Servicer
pursuant to clause (ii) of the preceding paragraph, the Trustee shall execute
and deliver to the Master Servicer or such Servicer, as directed by the Master
Servicer, court pleadings, requests for trustee's sale or other documents
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such certification shall
include a request that such pleadings or documents be executed by the Trustee
and a statement as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure proceeding or trustee's sale.
Section 3.05 Reports to the Trustee; Annual Compliance Statements.
(a) Not later than 15 days after each Distribution Date, the Master
Servicer shall deliver to the Trustee a statement setting forth the status of
the Certificate Account as of the close of business on such Distribution Date
stating that all distributions required to be made by the Master Servicer under
this Agreement have been made (or, if any required distribution has not been
made by the Master Servicer, specifying the nature and status thereof) and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from such account for each category of deposit and
withdrawal specified in Sections 3.01 and 3.02. Such statement may be in the
form of the then current ▇▇▇▇▇▇ Mae monthly accounting report for its Guaranteed
Mortgage Pass-Through Program with appropriate additions and changes, and shall
also include information as to the aggregate unpaid principal balance of all of
the Mortgage Loans as of the close of business as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon written
request, provided such statement is delivered, or caused to be delivered, by the
Master Servicer to the Trustee. Not later than 15 days after each Distribution
Date, the Master Servicer shall deliver to the Trustee a report identifying (i)
all requests made by Servicers for the release of documents by the Custodian
during the immediately preceding calendar month and (ii) all documents released
by the Custodian during the immediately preceding calendar month.
(b) The Master Servicer shall deliver to the Trustee on or before
April 30 of each year, a certificate signed by an officer of the Master
Servicer, certifying that (i) such officer has reviewed the activities of the
Master Servicer during the preceding calendar year or portion thereof and its
performance under this agreement and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has performed and fulfilled
its duties, responsibilities and obligations under this agreement in all
material respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such officer and the nature and status thereof, and, (iii)
(A) the Master Servicer has received from each Servicer any financial
statements, officer's certificates, accountant's statements or other information
required to be provided to the Master Servicer pursuant to the related Servicing
Agreement and (B) to the best of such officer's knowledge, based on a review of
the information provided to the Master Servicer by each Servicer as described in
(iii)(A) above, each Servicer has performed and fulfilled its duties,
responsibilities and obligations under the related Servicing Agreement in all
material respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such officer and the nature and status thereof. Copies of
such officers' certificate shall be provided by the Trustee to any
Certificateholder upon written request provided such certificate is delivered,
or caused to be delivered, by the Master Servicer to the Trustee.
Section 3.06 Title, Management and Disposition of Any REO Mortgage
Loan.
The Master Servicer shall ensure that each REO Mortgage Loan is
administered by the related Servicer at all times so that it qualifies as
"foreclosure property" under the REMIC Provisions and that it does not earn any
"net income from foreclosure property" which is subject to tax under the REMIC
Provisions. In the event that a Servicer is unable to dispose of any REO
Mortgage Loan within the period mandated by each of the Servicing Agreements,
the Master Servicer shall monitor such Servicer to verify that such REO Mortgage
Loan is auctioned to the highest bidder within the period so specified. In the
event of any such sale of a REO Mortgage Loan, the Custodian shall, at the
written request of the Master Servicer and upon being supported with appropriate
forms therefor, within five Business Days of the deposit by the Master Servicer
of the proceeds of such sale or auction into the Certificate Account, release or
cause to be released to the entity identified by the Master Servicer the related
Owner Mortgage Loan File and Servicer Mortgage Loan File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary to vest in the auction purchaser title to the
REO Mortgage Loan and the Custodian shall have no further responsibility with
regard to such Owner Mortgage Loan File or Servicer Mortgage Loan File. Neither
the Trustee, the Master Servicer nor any Servicer, acting on behalf of the Trust
Estate, shall provide financing from the Trust Estate to any purchaser of an REO
Mortgage Loan.
Section 3.07 Amendments to Servicing Agreements, Modification of
Standard Provisions.
(a) Subject to the prior written consent of the Trustee pursuant to
Section 3.07(b), the Master Servicer from time to time may, to the extent
permitted by the applicable Servicing Agreement, make such modifications and
amendments to such Servicing Agreement as the Master Servicer deems necessary or
appropriate to confirm or carry out more fully the intent and purpose of such
Servicing Agreement and the duties, responsibilities and obligations to be
performed by the Servicer thereunder. Such modifications may only be made if
they are consistent with the REMIC Provisions, as evidenced by an Opinion of
Counsel. Prior to the issuance of any modification or amendment, the Master
Servicer shall deliver to the Trustee such Opinion of Counsel and an Officer's
Certificate setting forth (i) the provision that is to be modified or amended,
(ii) the modification or amendment that the Master Servicer desires to issue and
(iii) the reason or reasons for such proposed amendment or modification.
(b) The Trustee shall consent to any amendment or supplement to a
Servicing Agreement proposed by the Master Servicer pursuant to Section 3.07(a),
which consent and amendment shall not require the consent of any
Certificateholder if it is (i) for the purpose of curing any mistake or
ambiguity or to further effect or protect the rights of the Certificateholders
or (ii) for any other purpose, provided such amendment or supplement for such
other purpose cannot reasonably be expected to adversely affect
Certificateholders. The lack of reasonable expectation of an adverse effect on
Certificateholders may be established through the delivery to the Trustee of (i)
an Opinion of Counsel to such effect or (ii) written notification from each
Rating Agency to the effect that such amendment or supplement will not result in
reduction of the current rating assigned by that Rating Agency to the
Certificates. Notwithstanding the two immediately preceding sentences, the
Trustee may, in its discretion, decline to enter into or consent to any such
supplement or amendment if its own rights, duties or immunities shall be
adversely affected.
(c)(i) Notwithstanding anything to the contrary in this Section
3.07, the Master Servicer from time to time may, without the consent of any
Certificateholder or the Trustee, enter into an amendment (A) to an Other
Servicing Agreement for the purpose of (i) eliminating or reducing Month End
Interest and (ii) providing for the remittance of Full Unscheduled Principal
Receipts by the applicable Servicer to the Master Servicer not later than the
24th day of each month (or if such day is not a Business Day, on the previous
Business Day) or (B) to the WFHM Servicing Agreement for the purpose of changing
the applicable Remittance Date to the 18th day of each month (or if such day is
not a Business Day, on the previous Business Day).
(ii) The Master Servicer may direct WFHM to enter into an amendment
to the WFHM Servicing Agreement for the purposes described in Sections
3.07(c)(i)(B) and 10.01(b)(iii).
Section 3.08 Oversight of Servicing.
The Master Servicer shall supervise, monitor and oversee the
servicing of the Mortgage Loans by each Servicer and the performance by each
Servicer of all services, duties, responsibilities and obligations (including
the obligation to maintain an Errors and Omissions Policy and Fidelity Bond)
that are to be observed or performed by the Servicer under its respective
Servicing Agreement. In performing its obligations hereunder, the Master
Servicer shall act in a manner consistent with Accepted Master Servicing
Practices and with the Trustee's and the Certificateholders' reliance on the
Master Servicer, and in a manner consistent with the terms and provisions of any
insurance policy required to be maintained by the Master Servicer or any
Servicer pursuant to this Agreement or any Servicing Agreement. The Master
Servicer acknowledges that prior to taking certain actions required to service
the Mortgage Loans, each Servicing Agreement provides that the Servicer
thereunder must notify, consult with, obtain the consent of or otherwise follow
the instructions of the Master Servicer. The Master Servicer is also given
authority to waive compliance by a Servicer with certain provisions of its
Servicing Agreement. In each such instance, the Master Servicer shall promptly
instruct such Servicer or otherwise respond to such Servicer's request. In no
event will the Master Servicer instruct such Servicer to take any action, give
any consent to action by such Servicer or waive compliance by such Servicer with
any provision of such Servicer's Servicing Agreement if any resulting action or
failure to act would be inconsistent with the requirements of the Rating
Agencies that rated the Certificates or would otherwise have an adverse effect
on the Certificateholders. Any such action or failure to act shall be deemed to
have an adverse effect on the Certificateholders if such action or failure to
act either results in (i) the downgrading of the rating assigned by either
Rating Agency to the Certificates, (ii) the loss by the Trust Estate of REMIC
status for federal income tax purposes or (iii) the imposition of any Prohibited
Transaction Tax or any federal taxes on the REMIC or the Trust Estate. The
Master Servicer shall have full power and authority in its sole discretion to
take any action with respect to the Trust Estate as may be necessary or
advisable to avoid the circumstances specified including clause (ii) or (iii) of
the preceding sentence.
For the purposes of determining whether any modification of a
Mortgage Loan shall be permitted by the Master Servicer, such modification shall
be construed as a substitution of the modified Mortgage Loan for the Mortgage
Loan originally deposited in the Trust Estate if it would be a "significant
modification" within the meaning of Section 1.860G-2(b) of the regulations of
the U.S. Department of the Treasury. No modification shall be approved unless
(i) the modified Mortgage Loan would qualify as a Substitute Mortgage Loan under
Section 2.02 and (ii) with respect to any modification that occurs more than
three months after the Closing Date and is not the result of a default or a
reasonably foreseeable default under the Mortgage Loan, there is delivered to
the Trustee an Opinion of Counsel (at the expense of the party seeking to modify
the Mortgage Loan) to the effect that such modification would not be treated as
giving rise to a new debt instrument for federal income tax purposes as
described in the preceding sentence; provided, however, that no such Opinion of
Counsel need be delivered if the sole purpose of the modification is to reduce
the Monthly Payment on a Mortgage Loan as a result of a Curtailment such that
the Mortgage Loan is fully amortized by its original maturity date.
During the term of this Agreement, the Master Servicer shall consult
fully with each Servicer as may be necessary from time to time to perform and
carry out the Master Servicer's obligations hereunder and otherwise exercise
reasonable efforts to encourage such Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by it under
its Servicing Agreement.
The relationship of the Master Servicer 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.
The Master Servicer shall administer the Trust Estate on behalf of
the Trustee and shall have full power and authority, acting alone or (subject to
Section 6.06) through one or more subcontractors, to do any and all things in
connection with such administration which it may deem necessary or desirable.
Upon the execution and delivery of this Agreement, and from time to time as may
be required thereafter, the Trustee shall furnish the Master Servicer or its
subcontractors with any powers of attorney and such other documents as may be
necessary or appropriate to enable the Master Servicer to carry out its
administrative duties hereunder.
The Seller shall have a limited option to repurchase any defaulted
Mortgage Loan or REO Mortgage Loan during the following time periods: (i)
beginning on the first day of the second month following the month in which the
Master Servicer has reported that a Servicer has initiated foreclosure
proceedings with respect to such a defaulted Mortgage Loan, with such repurchase
option expiring on the last day of such second following month; (ii) beginning
on the first day of the second month following the month in which the Master
Servicer has reported that such defaulted Mortgage Loan has become an REO
Mortgage Loan, with such repurchase option expiring on the last day of such
second following month; and (iii) beginning on the day on which a Servicer
accepts a contractual commitment by a third party to purchase the Mortgaged
Property related to the defaulted Mortgage Loan or REO Mortgage Loan, with such
repurchase option expiring on the earlier of the last day of the month in which
such contractual commitment was accepted by the Servicer or the day immediately
prior to the day on which the closing occurs with respect to such third party
purchase of the Mortgaged Property related to the defaulted Mortgage Loan or REO
Mortgage Loan. The Seller shall be entitled to repurchase at its option any
Mortgage Loan in the Trust Estate which, pursuant to paragraph 5(b) of the
Mortgage Loan Purchase Agreement, WFHM requests the Seller to repurchase and to
sell to WFHM to facilitate the exercise of WFHM's rights against the originator
or a prior holder of such Mortgage Loan. The purchase price for any Mortgage
Loan repurchased pursuant to this paragraph shall be 100% of the unpaid
principal balance of such Mortgage Loan plus accrued interest thereon at the
Mortgage Interest Rate for such Mortgage Loan, through the last day of the month
in which such repurchase occurs. Upon the receipt of such purchase price, the
Master Servicer shall provide to the Trustee the certification required by
Section 3.04 and the Trustee and the Custodian, if any, shall promptly release
to the Seller the Owner Mortgage Loan File relating to the Mortgage Loan being
repurchased.
In the event that (i) the Master Servicer determines at any time
that, notwithstanding the representations and warranties set forth in Section
2.03(b), any Mortgage Loan is not a "qualified mortgage" within the meaning of
Section 860G of the Code and (ii) the Master Servicer is unable to enforce the
obligation of the Seller to purchase such Mortgage Loan pursuant to Section 2.02
within two months of such determination, the Master Servicer shall cause such
Mortgage Loan to be auctioned to the highest bidder and sold out of the Trust
Estate no later than the date 90 days after such determination. In the event of
any such sale of a Mortgage Loan, the Custodian shall, at the written request of
the Master Servicer and upon being supported with appropriate forms therefor,
within five Business Days of the deposit by the Master Servicer of the proceeds
of such auction into the Certificate Account, release or cause to be released to
the entity identified by the Master Servicer the related Owner Mortgage Loan
File and Servicer Mortgage Loan File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the auction purchaser title to the Mortgage Loan and the
Custodian shall have no further responsibility with regard to such Owner
Mortgage Loan File or Servicer Mortgage Loan File. Neither the Trustee, the
Custodian, the Master Servicer nor any Servicer, acting on behalf of the
Trustee, shall provide financing from the Trust Estate to any purchaser of a
Mortgage Loan.
The Master Servicer, on behalf of the Trustee, shall, pursuant to
the Servicing Agreements, object to the foreclosure upon, or other related
conversion of the ownership of, any Mortgaged Property by the related Servicer
if (i) the Master Servicer believes such Mortgaged Property may be contaminated
with or affected by hazardous wastes or hazardous substances or (ii) such
Servicer does not agree to administer such Mortgaged Property, once the related
Mortgage Loan becomes an REO Mortgage Loan, in a manner which would not result
in a federal tax being imposed upon the Trust Estate or the REMIC.
The Master Servicer may enter into a special servicing agreement
with an unaffiliated holder of 100% Percentage Interest of a Class of Class B
Certificates or a holder of a class of securities representing interests in the
Class B Certificates and/or other subordinated mortgage asset-backed
pass-through certificates, such agreement to be substantially in the form of
Exhibit M hereto or subject to each Rating Agency's acknowledgment that the
ratings of the Certificates in effect immediately prior to the entering into of
such agreement would not be qualified, downgraded or withdrawn and the
Certificates would not be placed on credit review status (except for possible
upgrading) as a result of such agreement. Any such agreement may contain
provisions whereby such holder may instruct the Master Servicer to instruct a
Servicer to the extent provided in the applicable Servicing Agreement to
commence or delay foreclosure proceedings with respect to delinquent Mortgage
Loans and will contain provisions for the deposit of cash by the holder that
would be available for distribution to Certificateholders if Liquidation
Proceeds are less than they otherwise may have been had the Servicer acted in
accordance with its normal procedures.
Section 3.09 Termination and Substitution of Servicing Agreements.
Upon the occurrence of any event for which a Servicer may be
terminated pursuant to its Servicing Agreement, the Master Servicer shall
promptly deliver to the Seller and the Trustee an Officer's Certificate
certifying that an event has occurred which may justify termination of such
Servicing Agreement, describing the circumstances surrounding such event and
recommending what action should be taken by the Trustee with respect to such
Servicer. If the Master Servicer recommends that such Servicing Agreement be
terminated, the Master Servicer's certification must state that the breach is
material and not merely technical in nature. Upon written direction of the
Master Servicer, based upon such certification, the Trustee shall promptly
terminate such Servicing Agreement. Notwithstanding the foregoing, in the event
that (i) WFHM fails to make any advance, as a consequence of which the Trustee
is obligated to make an advance pursuant to Section 3.03 and (ii) the Trustee
provides WFHM written notice of the failure to make such advance and such
failure shall continue unremedied for a period of 15 days after receipt of such
notice, the Trustee shall terminate the WFHM Servicing Agreement without the
recommendation of the Master Servicer. The Master Servicer shall indemnify the
Trustee and hold it harmless from and against any and all claims, liabilities,
costs and expenses (including, without limitation, reasonable attorneys' fees)
arising out of, or assessed against the Trustee in connection with termination
of such Servicing Agreement at the direction of the Master Servicer. If the
Trustee terminates such Servicing Agreement, the Trustee may enter into a
substitute Servicing Agreement with the Master Servicer or, at the Master
Servicer's nomination, with another mortgage loan service company acceptable to
the Trustee, the Master Servicer and each Rating Agency under which the Master
Servicer or such substitute servicer, as the case may be, shall assume, satisfy,
perform and carry out all liabilities, duties, responsibilities and obligations
that are to be, or otherwise were to have been, satisfied, performed and carried
out by such Servicer under such terminated Servicing Agreement. Until such time
as the Trustee enters into a substitute servicing agreement with respect to the
Mortgage Loans previously serviced by such Servicer, the Master Servicer shall
assume, satisfy, perform and carry out all obligations which otherwise were to
have been satisfied, performed and carried out by such Servicer under its
terminated Servicing Agreement. However, in no event shall the Master Servicer
be deemed to have assumed the obligations of a Servicer to advance payments of
principal and interest on a delinquent Mortgage Loan in excess of the Master
Servicer's independent Periodic Advance obligation under Section 3.03 of this
Agreement. As compensation for the Master Servicer of any servicing obligations
fulfilled or assumed by the Master Servicer, the Master Servicer shall be
entitled to any servicing compensation to which a Servicer would have been
entitled if the Servicing Agreement with such Servicer had not been terminated.
Section 3.10 Application of Net Liquidation Proceeds.
For all purposes under this agreement, Net Liquidation Proceeds
received from a Servicer shall be allocated first to accrued and unpaid interest
on the related Mortgage Loan and then to the unpaid principal balance thereof.
Section 3.11 Act Reports.
The Master Servicer shall, on behalf of the Seller, make all filings
required to be made by the Seller with respect to the Class A Certificates and
the Class B-1, Class B-2 and Class B-3 Certificates pursuant to the Securities
Exchange Act of 1934, as amended. The Master Servicer shall file directly with
the Securities and Exchange Commission the certification required under the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, which shall be signed by a senior officer in charge
of the master servicing function of the Master Servicer.
ARTICLE IV
DISTRIBUTIONS IN RESPECT OF CERTIFICATES;
PAYMENTS TO CERTIFICATEHOLDERS;
STATEMENTS AND REPORTS
Section 4.01 Distributions.
(a) On each Distribution Date, the Group I Pool Distribution Amount
and the Group II Pool Distribution Amount will be applied in the following
amounts, to the extent the Group I Pool Distribution Amount and the Group II
Pool Distribution Amount are sufficient therefor, in the manner and in the order
of priority as follows, subject to adjustment in accordance with Section
4.01(b)(iii) below:
(i) with respect to the Group I-A Certificates and Group II-A
Certificates, from the Group I Pool Distribution Amount and Group II Pool
Distribution Amount, respectively, as follows:
first, (A) to the Classes of Group I-A Certificates, pro rata, based
upon their respective Interest Accrual Amounts, in an aggregate amount up to the
Group I-A Interest Accrual Amount with respect to such Distribution Date; or (B)
to the Class of Group II-A Certificates, based upon its Interest Accrual Amount,
in an aggregate amount up to the Group II-A Interest Accrual Amount with respect
to such Distribution Date;
second, (A) to the Classes of Group I-A Certificates, pro rata,
based upon their respective Class A Unpaid Interest Shortfalls, in an aggregate
amount up to the Aggregate Group I-A Unpaid Interest Shortfall; or (B) to the
Class of Group II-A Certificates, based upon its Class A Unpaid Interest
Shortfall, in an aggregate amount up to the Aggregate Group II-A Unpaid Interest
Shortfall;
third, (A) concurrently, to the Group I-A Certificates (other than
the Class A-PO Certificates with respect to the Class I-A-PO Component) and the
Class I-A-PO Component, pro rata, based on their respective Group I-A Non-PO
Optimal Principal Amount and Class I-A-PO Optimal Principal Amount, (1) to the
Classes of Group I-A Certificates (other than the Class A-PO Certificates with
respect to the Class I-A-PO Component), in an aggregate amount up to the Group
I-A Non-PO Optimal Principal Amount, such distribution to be allocated among
such Classes in accordance with Section 4.01(b)(i) or Section 4.01(c), as
applicable, and (2) to the Class A-PO Certificates with respect to the Class
I-A-PO Component in an amount up to the Class I-A-PO Optimal Principal Amount;
or (B) concurrently, to the Group II-A Certificates (other than the Class A-PO
Certificates with respect to the Class II-A-PO Component) and the Class II-A-PO
Component, pro rata, based on their respective Group II-A Non-PO Optimal
Principal Amount and Class II-A-PO Optimal Principal Amount, (1) to the Classes
of Group II-A Certificates (other than the Class A-PO Certificates with respect
to the Class II-A-PO Component), in an aggregate amount up to the Group II-A
Non-PO Optimal Principal Amount, such distribution to be allocated among such
Classes in accordance with Section 4.01(b)(ii) or Section 4.01(c), as
applicable, and (2) to the Class II-A-PO Component in an amount up to the Class
II-A-PO Optimal Principal Amount;
fourth, (A) to the Class A-PO Certificates with respect to the Class
I-A-PO Component in an amount up to the Class A-PO Deferred Amount for such
Component from amounts otherwise distributable (without regard to this clause
(i) Paragraph fourth) first to the Class B-6 Certificates pursuant to clause
(ii) Paragraph eighteenth, below, second to the Class B-5 Certificates pursuant
to clause (ii) Paragraph fifteenth, below, third to the Class B-4 Certificates
pursuant to clause (ii) Paragraph twelfth, below, fourth to the Class B-3
Certificates pursuant to clause (ii) Paragraph ninth, below, fifth to the Class
B-2 Certificates pursuant to clause (ii) Paragraph sixth below, and sixth to the
Class B-1 Certificates pursuant to clause (ii) Paragraph third below; or (B) to
the Class A-PO Certificates with respect to the Class II-A-PO Component in an
amount up to the Class A-PO Deferred Amount for such Component from amounts
otherwise distributable (without regard to this clause (i) Paragraph fourth)
first to the Class B-6 Certificates pursuant to clause (ii) Paragraph
eighteenth, below, second to the Class B-5 Certificates pursuant to clause (ii)
Paragraph fifteenth, below, third to the Class B-4 Certificates pursuant to
clause (ii) Paragraph twelfth, below, fourth to the Class B-3 Certificates
pursuant to clause (ii) Paragraph ninth, below, fifth to the Class B-2
Certificates pursuant to clause (ii) Paragraph sixth below, and sixth to the
Class B-1 Certificates pursuant to clause (ii) Paragraph third below; provided,
however, to the extent necessary to reduce the Class A-PO Deferred Amounts to
zero, any amounts otherwise distributable to a Class of Class B Certificates
will be allocated pro rata between the Class A-PO Deferred Amounts for such
Components; and
(ii) to the Class B Certificates, from the Group I Pool Distribution
Amount and Group II Pool Distribution Amount, subject to Section
4.01(b)(iii), as follows:
first, to the Class B-1 Certificates in an amount up to the Interest
Accrual Amount for the Class B-1 Certificates with respect to such Distribution
Date;
second, to the Class B-1 Certificates in an amount up to the Class
B-1 Unpaid Interest Shortfall;
third, to the Class B-1 Certificates in an amount up to the Class
B-1 Optimal Principal Amount; provided, however, that the amount distributable
to the Class B-1 Certificates pursuant to this clause (ii) Paragraph third will
be reduced by the amount, if any, that would have been distributable to the
Class B-1 Certificates hereunder used to pay the Class A-PO Deferred Amounts as
provided in clause (i) Paragraph fourth above;
fourth, to the Class B-2 Certificates in an amount up to the
Interest Accrual Amount for the Class B-2 Certificates with respect to such
Distribution Date;
fifth, to the Class B-2 Certificates in an amount up to the Class
B-2 Unpaid Interest Shortfall;
sixth, to the Class B-2 Certificates in an amount up to the Class
B-2 Optimal Principal Amount; provided, however, that the amount distributable
to the Class B-2 Certificates pursuant to this clause (ii) Paragraph sixth will
be reduced by the amount, if any, that would have been distributable to the
Class B-2 Certificates hereunder used to pay the Class A-PO Deferred Amounts as
provided in clause (i) Paragraph fourth above;
seventh, to the Class B-3 Certificates in an amount up to the
Interest Accrual Amount for the Class B-3 Certificates with respect to such
Distribution Date;
eighth, to the Class B-3 Certificates in an amount up to the Class
B-3 Unpaid Interest Shortfall;
ninth, to the Class B-3 Certificates in an amount up to the Class
B-3 Optimal Principal Amount; provided, however, that the amount distributable
to the Class B-3 Certificates pursuant to this clause (ii) Paragraph ninth will
be reduced by the amount, if any, that would have been distributable to the
Class B-3 Certificates hereunder used to pay the Class A-PO Deferred Amounts as
provided in clause (i) Paragraph fourth above;
tenth, to the Class B-4 Certificates in an amount up to the Interest
Accrual Amount for the Class B-4 Certificates with respect to such Distribution
Date;
eleventh, to the Class B-4 Certificates in an amount up to the Class
B-4 Unpaid Interest Shortfall;
twelfth, to the Class B-4 Certificates in an amount up to the Class
B-4 Optimal Principal Amount; provided, however, that the amount distributable
to the Class B-4 Certificates pursuant to this clause (ii) Paragraph twelfth
will be reduced by the amount, if any, that would have been distributable to the
Class B-4 Certificates hereunder used to pay the Class A-PO Deferred Amounts as
provided in clause (i) Paragraph fourth above;
thirteenth, to the Class B-5 Certificates in an amount up to the
Interest Accrual Amount for the Class B-5 Certificates with respect to such
Distribution Date;
fourteenth, to the Class B-5 Certificates in an amount up to the
Class B-5 Unpaid Interest Shortfall;
fifteenth, to the Class B-5 Certificates in an amount up to the
Class B-5 Optimal Principal Amount; provided, however, that the amount
distributable to the Class B-5 Certificates pursuant to this clause (ii)
Paragraph fifteenth will be reduced by the amount, if any, that would have been
distributable to the Class B-5 Certificates hereunder used to pay the Class A-PO
Deferred Amounts as provided in clause (i) Paragraph fourth above;
sixteenth, to the Class B-6 Certificates in an amount up to the
Interest Accrual Amount for the Class B-6 Certificates with respect to such
Distribution Date;
seventeenth, to the Class B-6 Certificates in an amount up to the
Class B-6 Unpaid Interest Shortfall;
eighteenth, to the Class B-6 Certificates in an amount up to the
Class B-6 Optimal Principal Amount; provided, however, that the amount
distributable to the Class B-6 Certificates pursuant to this clause (ii)
Paragraph eighteenth will be reduced by the amount, if any, that would have been
distributable to the Class B-6 Certificates hereunder used to pay the Class A-PO
Deferred Amounts as provided in clause (i) Paragraph fourth above; and
nineteenth, to the Holder of the Class I-A-R Certificate, any
amounts remaining in the Payment Account.
Notwithstanding the foregoing, after the Principal Balance of any
Class (other than the Class I-A-R Certificate) has been reduced to zero, such
Class will be entitled to no further distributions of principal or interest
(including, without limitation, any Unpaid Interest Shortfalls).
With respect to any Distribution Date, the amount of the Principal
Adjustment, if any, attributable to any Class of Class B Certificates will be
allocated to the Classes of Class A Certificates (other than the Class A-PO
Certificates) and any Class of Class B Certificates with a lower numerical
designation pro rata based on their outstanding Principal Balances.
On each Distribution Date, any Reimbursement Amount shall be
distributed sequentially to the Classes of Certificates then outstanding which
bore the loss to which such Reimbursement Amount relates beginning with the most
senior of such Class of Certificates, up to, with respect to each Class, the
amount of loss borne by such Class. Any Reimbursement Amount remaining after the
application described in the preceding sentence shall be included in the
Applicable Pool Distribution Amount.
(b) (i) Group I-A Certificates
On each Distribution Date occurring prior to the Subordination Depletion
Date, the Class A Non-PO Principal Distribution Amount for the Group I-A
Certificates will be allocated among and distributed in reduction of the
Principal Balances of the Group I-A Certificates, sequentially, as follows:
first, to the Class I-A-R Certificates;
second, to the Class I-A-3 Certificates, up to the
Priority Amount for such Distribution Date; and
third, sequentially, to the Class I-A-1, Class I-A-2 and
Class I-A-3 Certificates.
(ii) Group II-A Certificates
On each Distribution Date prior to the Subordination Depletion Date, the
Class A Non-PO Principal Distribution Amount for the Group II-A Certificates
will be distributed to the Class II-A-1 Certificates.
(iii) Notwithstanding the foregoing, (X) on any Distribution Date
occurring prior to the Subordination Depletion Date but on or after the date on
which the Principal Balances of the Group I-A Certificates or the Principal
Balance of the Group II-A Certificates have been reduced to zero and on which
(a) the Aggregate Subordinate Percentage for such Distribution Date is less than
5.10% or (b) the average outstanding principal balance of the Mortgage Loans
delinquent 60 days or more over the preceding six months as a percentage of the
Class B Principal Balance is greater than or equal to 100%, the remaining Group
of Class A Certificates (but not the Class A-PO Component) will be entitled to
receive as principal, in addition to any principal payments described in Section
4.01(a) above, in accordance with the priorities set forth in Section 4.01(b)(i)
or (ii) above and until the aggregate Principal Balance of each such Group of
Class A Certificates has been reduced to zero, amounts otherwise distributable
(without regard to this clause (iii)) first to the Class B-6 Certificates
pursuant to Paragraph eighteenth of 4.01(a)(ii) above, second to the Class B-5
Certificates pursuant to Paragraph fifteenth of 4.01(a)(ii) above, third to the
Class B-4 Certificates pursuant to Paragraph twelfth of 4.01(a)(ii) above,
fourth to the Class B-3 Certificates pursuant to Paragraph ninth of 4.01(a)(ii)
above, fifth to the Class B-2 Certificates pursuant to Paragraph sixth of
4.01(a)(ii) above and sixth to the Class B-1 Certificates pursuant to Paragraph
third of 4.01(a)(ii) above but in each case only up to the applicable
Apportioned Class B Principal Distribution Amount for such Class of Class B
Certificates and (Y) if on any Distribution Date the Group I-A Non-PO Principal
Balance or Group II-A Non-PO Principal Balance (after giving effect to all
distributions on such Distribution Date) is greater than the Group I-A Pool
Balance (Non-PO Portion) or Group II-A Pool Balance (Non-PO Portion),
respectively (the Group I-A Certificates or Group II-A Certificates, as
applicable, in such instance, the "Undercollateralized Group"), the Class A
Certificates of the Undercollateralized Group will be entitled to receive first
in respect of any Class A Unpaid Interest Shortfalls therefor (including any
Group I Interest Shortfall Amount or Group II Interest Shortfall Amount, as
applicable, arising on such Distribution Date) and second as principal, in
addition to any principal payments described in Section 4.01(a)(i) above, in
accordance with the priorities set forth in Section 4.01(b)(i) or (ii) above and
until the aggregate Principal Balance of the Class A Certificates (but not the
Class A-PO Component) of the Undercollateralized Group equals the Group I Pool
Balance (Non-PO Portion) or Group II Pool Balance (Non-PO Portion), as
applicable (such amount, the "Undercollateralized Amount"), all amounts
otherwise distributable (without regard to this clause (iii)) first to the Class
B-6 Certificates pursuant to Paragraph eighteenth of 4.01(a)(ii) above, second
to the Class B-5 Certificates pursuant to Paragraph fifteenth of 4.01(a)(ii)
above, third to the Class B-4 Certificates pursuant to Paragraph twelfth of
4.01(a)(ii) above, fourth to the Class B-3 Certificates pursuant to Paragraph
ninth of 4.01(a)(ii) above, fifth to the Class B-2 Certificates pursuant to
Paragraph sixth of 4.01(a)(ii) above and sixth to the Class B-1 Certificates
pursuant to Paragraph third of 4.01(a)(ii) above (less any amounts used to pay
any Class A-PO Deferred Amounts).
(c) Notwithstanding the foregoing, on each Distribution Date
occurring on or subsequent to the Subordination Depletion Date, (x) the Group
I-A Non-PO Principal Distribution Amount shall be distributed among the Classes
of Group I-A Certificates, and (y) the Group II-A Non-PO Principal Distribution
Amount shall be distributed among the Classes of Group II-A Certificates pro
rata in accordance with their outstanding Principal Balances without regard to
either the proportions or the priorities set forth in Section 4.01(b)(i) and
(ii).
(d) (i) For purposes of determining whether the Classes of Class B
Certificates are eligible to receive distributions of principal with respect to
any Distribution Date, the following tests shall apply:
(A) if the Current Class B-1 Fractional Interest is less than the
Original Class B-1 Fractional Interest and the Class B-1 Principal Balance
is greater than zero, the Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates shall not be eligible to receive distributions of
principal; or
(B) if the Current Class B-2 Fractional Interest is less than the
Original Class B-2 Fractional Interest and the Class B-2 Principal Balance
is greater than zero, the Class B-3, Class B-4, Class B-5 and Class B-6
Certificates shall not be eligible to receive distributions of principal;
or
(C) if the Current Class B-3 Fractional Interest is less than the
Original Class B-3 Fractional Interest and the Class B-3 Principal Balance
is greater than zero, the Class B-4, Class B-5 and Class B-6 Certificates
shall not be eligible to receive distributions of principal; or
(D) if the Current Class B-4 Fractional Interest is less than the
Original Class B-4 Fractional Interest and the Class B-4 Principal Balance
is greater than zero, the Class B-5 and Class B-6 Certificates shall not
be eligible to receive distributions of principal; or
(E) if the Current Class B-5 Fractional Interest is less than the
Original Class B-5 Fractional Interest and the Class B-5 Principal Balance
is greater than zero, the Class B-6 Certificates shall not be eligible to
receive distributions of principal.
(ii) Notwithstanding the foregoing, if on any Distribution Date the
aggregate distributions to Holders of the Classes of Class B Certificates
entitled to receive distributions of principal would reduce the Principal
Balances of the Classes of Class B Certificates entitled to receive
distributions of principal below zero, first the Group I Class B Prepayment
Percentage and Group II Class B Prepayment Percentage of any affected Class of
Class B Certificates for such Distribution Date beginning with the affected
Class with the lowest numerical Class designation and then, if necessary, the
Group I Class B Percentage and Group II Class B Percentage of such Class of the
Class B Certificates for such Distribution Date shall be reduced to the
respective percentages necessary to bring the Principal Balance of such Class of
Class B Certificates to zero. The Class B Prepayment Percentages and the Class B
Percentages of the remaining Classes of Class B Certificates will be recomputed
substituting for the Group I Subordinated Prepayment Percentage and Group II
Subordinated Prepayment Percentage and Group I Subordinated Percentage and Group
II Subordinated Percentage in such computations the difference between (A) the
Group I Subordinated Prepayment Percentage or Group II Subordinated Prepayment
Percentage or Group I Subordinated Percentage or Group II Subordinated
Percentage, as the case may be, and (B) the percentages determined in accordance
with the preceding sentence necessary to bring the Principal Balances of the
affected Classes of Class B Certificates to zero; provided, however, that if the
Principal Balances of all the Classes of Class B Certificates eligible to
receive distributions of principal shall be reduced to zero on such Distribution
Date, the Group I Class B Prepayment Percentage, Group II Class B Prepayment
Percentage, Group I Class B Percentage and Group II Class B Percentage of the
Class of Class B Certificates with the lowest numerical Class designation which
would otherwise be ineligible to receive distributions of principal in
accordance with this Section shall equal the remainder of the Group I
Subordinated Prepayment Percentage and Group II Subordinated Prepayment
Percentage for such Distribution Date minus the sum of the Group I Class B
Prepayment Percentages and Group II Class B Prepayment Percentages of the
Classes of Class B Certificates having lower numerical Class designations, if
any, and the remainder of the Group I Subordinated Percentage and Group II
Subordinated Percentage for such Distribution Date minus the sum of the Group I
Class B Percentages and Group II Class B Percentages of the Classes of Class B
Certificates having lower numerical Class designations, if any, respectively.
Any entitlement of any Class of Class B Certificates to principal payments
solely pursuant to this clause (ii) shall not cause such Class to be regarded as
being eligible to receive principal distributions for the purpose of applying
the definition of its Group I Class B Percentage, Group II Class B Percentage,
Group I Class B Prepayment Percentage or Group II Class B Prepayment Percentage.
(e) On each Distribution Date other than the Final Distribution Date
(if such Final Distribution Date is in connection with a purchase of the assets
of the Trust Estate by the Seller), the Paying Agent shall, on behalf of the
Master Servicer, from funds remitted to it by the Master Servicer, distribute to
each Certificateholder of record on the preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution to Certificateholders
or in the last paragraph of this Section 4.01(e) respecting the final
distribution in respect of any Class) either in immediately available funds by
wire transfer to the account of such Certificateholder at a bank or other entity
having appropriate facilities therefor, if such Certificateholder holds
Certificates having a Denomination at least equal to that specified in Section
11.17, and has so notified the Master Servicer or, if applicable, the Paying
Agent at least seven Business Days prior to the Distribution Date or, if such
Holder holds Certificates having, in the aggregate, a Denomination less than the
requisite minimum Denomination or if such Holder holds the Class I-A-R
Certificate or has not so notified the Paying Agent, by check mailed to such
Holder at the address of such Holder appearing in the Certificate Register, such
Holder's share of the Group I-A Distribution Amount or Group II-A Distribution
Amount, as applicable, with respect to each Class of Class A Certificates and
the Class B Distribution Amount with respect to each Class of Class B
Certificates.
In the event that, on any Distribution Date prior to the Final
Distribution Date, the Principal Balance of any Class of Class A Certificates
(other than the Class I-A-R Certificate) or the Principal Balance of any Class
of Class B Certificates would be reduced to zero, the Master Servicer shall, as
soon as practicable after the Determination Date relating to such Distribution
Date, send a notice to the Trustee. The Trustee will then send a notice to each
Certificateholder of such Class with a copy to the Certificate Registrar,
specifying that the final distribution with respect to such Class will be made
on such Distribution Date only upon the presentation and surrender of such
Certificateholder's Certificates at the office or agency of the Trustee therein
specified; provided, however, that the failure to give such notice will not
entitle a Certificateholder to any interest beyond the interest payable with
respect to such Distribution Date in accordance with Section 4.01(a)(i).
(f) The Paying Agent (or if no Paying Agent is appointed by the
Master Servicer, the Master Servicer) shall withhold or cause to be withheld
such amounts as may be required by the Code (giving full effect to any
exemptions from withholding and related certifications required to be furnished
by Certificateholders and any reductions to withholding by virtue of any
bilateral tax treaties and any applicable certification required to be furnished
by Certificateholders with respect thereto) from distributions to be made to
Persons other than U.S. Persons ("Non-U.S. Persons"). Amounts withheld pursuant
to this Section 4.01(f) shall be treated as having been distributed to the
related Certificateholder for all purposes of this Agreement. For the purposes
of this paragraph, a "U.S. Person" is a citizen or resident of the United
States, a corporation or partnership (unless, in the case of a partnership,
Treasury regulations are adopted that provide otherwise) created or organized in
or under the laws of the United States, any state thereof or the District of
Columbia, including an entity treated as a corporation or partnership for
federal income tax purposes, an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust, and one or more such U.S. Persons have the authority to control all
substantial decisions of such trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons).
Section 4.02 Allocation of Realized Losses.
(a) With respect to any Distribution Date, the principal portion of
Realized Losses (other than Debt Service Reductions) occurring with respect to
Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows:
first, to the Class B-6 Certificates until the Class B-6 Principal
Balance has been reduced to zero;
second, to the Class B-5 Certificates until the Class B-5 Principal
Balance has been reduced to zero;
third, to the Class B-4 Certificates until the Class B-4 Principal
Balance has been reduced to zero;
fourth, to the Class B-3 Certificates until the Class B-3 Principal
Balance has been reduced to zero;
fifth, to the Class B-2 Certificates until the Class B-2 Principal
Balance has been reduced to zero;
sixth, to the Class B-1 Certificates until the Class B-1 Principal
Balance has been reduced to zero; and
seventh, (i) with respect to such losses occurring with respect to
Group I Mortgage Loans, concurrently, to the Group I-A Certificates and Class
I-A-PO Component, pro rata, based on the Non-PO Fraction and the PO Fraction of
such Mortgage Loans, respectively; and (ii) with respect to such losses
occurring with respect to Group II Mortgage Loans, concurrently, to the Group
II-A Certificates and Class II-A-PO Component, pro rata, based on the Non-PO
Fraction and the PO Fraction of such Mortgage Loans, respectively.
This allocation of Realized Losses will be effected through the
reduction of the applicable Class's or Component's Principal Balance.
(b) Any Realized Losses allocated to a Class of Class A Certificates
or Class B Certificates pursuant to Section 4.02(a) shall be allocated among the
Certificates of such Class based on their Percentage Interests.
(c) After the Class B Principal Balance has been reduced to zero,
the interest portion of Realized Losses occurring with respect to any Group I
Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding
Classes of Group I-A and Group II-A Certificates, respectively, based upon their
Group I-A and Group II-A Interest Percentages.
(d) Realized Losses allocated in accordance with this Section 4.02
will be allocated as follows: (i) Liquidated Loan Losses on Liquidated Loans for
which the Liquidation Proceeds were received during, and Bankruptcy Losses
incurred in a period corresponding to, an Unscheduled Principal Receipt Period
for Full Unscheduled Principal Receipts that is a Mid-Month Receipt Period will
be allocated on the Determination Date in the month following the month in which
such Mid-Month Receipt Period ended and (ii) Liquidated Loan Losses on
Liquidated Loans for which the Liquidation Proceeds were received during, and
Bankruptcy Losses incurred in a period corresponding to, an Unscheduled
Principal Receipt Period for Full Unscheduled Principal Receipts that is a Prior
Month Receipt Period will be allocated on the Determination Date in the second
month following the month which is such Prior Month Receipt Period.
Section 4.03 Paying Agent.
(a) The Master Servicer hereby appoints the Trustee as initial
Paying Agent to make distributions to Certificateholders and to forward to
Certificateholders the periodic statements and the annual statements required by
Section 4.04 as agent of the Master Servicer.
The Master Servicer may, at any time, remove or replace the Paying
Agent.
The Master Servicer shall cause any Paying Agent that is not the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent agrees with the Trustee that such Paying Agent shall:
(i) hold all amounts remitted to it by the Master Servicer for
distribution to Certificateholders in trust for the benefit of
Certificateholders until such amounts are distributed to
Certificateholders or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Master Servicer
in remitting any required amount; and
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
amounts held in trust by such Paying Agent.
(b) The Paying Agent shall establish and maintain a Payment Account,
which shall be a separate trust account and an Eligible Account, in which the
Master Servicer shall cause to be deposited from funds in the Certificate
Account or, to the extent required hereunder, from its own funds (i) at or
before 10:00 a.m., New York time, on the Business Day preceding each
Distribution Date, by wire transfer of immediately available funds, any Periodic
Advance for such Distribution Date, pursuant to Section 3.03 and (ii) at or
before 10:00 a.m., New York time, on the Business Day preceding each
Distribution Date, by wire transfer of immediately available funds, an amount
equal to the Pool Distribution Amount. The Master Servicer may cause the Paying
Agent to invest the funds in the Payment Account. Any such investment shall be
in Eligible Investments, which shall mature not later than the Business Day
preceding the related Distribution Date (unless the Eligible Investments are
obligations of the Trustee or an affiliate of the Trustee, in which case such
Eligible Investments shall mature not later than the Distribution Date), and
shall not be sold or disposed of prior to maturity. All income and gain realized
from any such investment shall be for the benefit of the Master Servicer and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments shall be deposited in the
Payment Account by the Master Servicer out of its own funds immediately as
realized. The Paying Agent may withdraw from the Payment Account any amount
deposited in the Payment Account that was not required to be deposited therein
and may clear and terminate the Payment Account pursuant to Section 9.01.
Section 4.04 Statements to Certificateholders; Reports to the
Trustee and the Seller.
Concurrently with each distribution pursuant to Section 4.01(e), the
Master Servicer, or the Paying Agent appointed by the Master Servicer (upon
receipt of such statement from the Master Servicer), shall forward or cause to
be forwarded by mail to each Holder of a Certificate and the Seller a statement
setting forth:
(i) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to principal, separately identifying the
aggregate amount of any Unscheduled Principal Receipts included therein;
(ii) (a) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to interest, (b) the amount of the Current
Group I-A Interest Distribution Amount allocated to each Class of Group
I-A Certificates and Current Group II-A Interest Distribution Amount
allocated to each Class of Group II-A Certificates, (c) any Group I
Interest Shortfall Amounts or Group II Interest Shortfall Amounts arising
with respect to such Distribution Date and any remaining Class A Unpaid
Interest Shortfall with respect to each Class after giving effect to such
distribution, (d) the amount of any Non-Supported Interest Shortfall
allocated to each Class of Class A Certificates for such Distribution Date
and (e) the amount of any Relief Act Shortfall allocated to each Class of
Class A Certificates for such Distribution Date;
(iii) the amount of such distribution to Holders of each Class of
Class B Certificates allocable to principal, separately identifying the
aggregate amount of any Unscheduled Principal Receipts included therein;
(iv) (a) the amount of such distribution to Holders of each Class of
Class B Certificates allocable to interest, (b) the amount of the Current
Class B Interest Distribution Amount allocated to each Class of Class B
Certificates, (c) any Class B Interest Shortfall Amounts arising with
respect to such Distribution Date and any remaining Class B Unpaid
Interest Shortfall with respect to each Class of Class B Certificates
after giving effect to such distribution, (d) the amount of any
Non-Supported Interest Shortfall allocated to each Class of Class B
Certificates for such Distribution Date, and (e) the amount of any Relief
Act Shortfalls allocated to each Class of Class B Certificates for such
Distribution Date;
(v) the amount of any Periodic Advance by any Servicer, the Master
Servicer or the Trustee pursuant to the Servicing Agreements or this
Agreement;
(vi) the number of Group I Mortgage Loans and Group II Mortgage
Loans outstanding as of the preceding Determination Date;
(vii) the Group I-A Principal Balance, the Group II-A Principal
Balance, the Principal Balance of each Class of Class A Certificates, the
Principal Balance of each Class A-PO Component, the Class B Principal
Balance and the Principal Balance of each Class of Class B Certificates as
of the following Determination Date after giving effect to the
distributions of principal made, and the principal portion of Realized
Losses, if any, allocated with respect to such Distribution Date;
(viii) the Group I Adjusted Pool Amount, the Group II Adjusted Pool
Amount, the Group I Adjusted Pool Amount (PO Portion), the Group II
Adjusted Pool Amount (PO Portion), the Group I Pool Scheduled Principal
Balance of the Group I Mortgage Loans for such Distribution Date, the
Group II Pool Scheduled Principal Balance of the Group II Mortgage Loans
for such Distribution Date, the aggregate Scheduled Principal Balance of
the Group I Discount Mortgage Loans for such Distribution Date and the
aggregate Scheduled Principal Balance of the Group II Discount Mortgage
Loans for such Distribution Date;
(ix) the aggregate Scheduled Principal Balances of the Group I
Mortgage Loans and Group II Mortgage Loans serviced by WFHM and,
collectively, by the Other Servicers as of such Distribution Date;
(x) the Group I-A Percentage and Group II-A Percentage for such
Distribution Date;
(xi) the Group I-A Prepayment Percentage and Group II-A Prepayment
Percentage for such Distribution Date;
(xii) the Group I Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Percentages; and Group II Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 and Class B-6 Percentages; for such Distribution
Date;
(xiii) the Group I Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Prepayment Percentages; and Group II Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Prepayment Percentages;
for such Distribution Date;
(xiv) the number and aggregate principal balances of Group I
Mortgage Loans and Group II Mortgage Loans delinquent (a) one month, (b)
two months and (c) three months or more;
(xv) the number and aggregate principal balances of the Group I
Mortgage Loans and Group II Mortgage Loans in foreclosure as of the
preceding Determination Date;
(xvi) the book value of any real estate with respect to Group I
Mortgage Loans or Group II Mortgage Loans acquired through foreclosure or
grant of a deed in lieu of foreclosure;
(xvii) the principal and interest portions of Realized Losses with
respect to Group I Mortgage Loans and Group II Mortgage Loans allocated as
of such Distribution Date;
(xviii) the aggregate amount of Bankruptcy Losses allocated to each
Class of Class B Certificates in accordance with Section 4.02(a) since the
Relevant Anniversary;
(xix) the amount by which the Principal Balance of each Class of
Class B Certificates has been reduced as a result of Realized Losses with
respect to Group I Mortgage Loans and Group II Mortgage Loans allocated as
of such Distribution Date;
(xx) the unpaid principal balance of any Group I Mortgage Loan or
Group II Mortgage Loan as to which the Servicer of such Mortgage Loan has
determined not to foreclose because it believes the related Mortgaged
Property may be contaminated with or affected by hazardous wastes or
hazardous substances;
(xxi) the amount of the aggregate Servicing Fees and Master
Servicing Fees paid (and not previously reported) with respect to the
related Distribution Date and the amount by which the aggregate Available
Master Servicer Compensation has been reduced by the Prepayment Interest
Shortfall for the related Distribution Date;
(xxii) the Class A-PO Deferred Amounts, if any; and
(xxiii) the amount of PMI Advances made by a Servicer, if any with
respect to each Loan Group;
(xxiv) such other customary information as the Master Servicer deems
necessary or desirable to enable Certificateholders to prepare their tax
returns;
and shall deliver a copy of each type of statement to the Trustee, who
shall provide copies thereof to Persons making written request therefor at the
Corporate Trust Office.
In the case of information furnished with respect to a Class of
Class A Certificates pursuant to clauses (i) and (ii) above and with respect to
a Class of Class B Certificates pursuant to clauses (iii) and (iv) above, the
amounts shall be expressed as a dollar amount per Class A or Class B Certificate
(other than the Class I-A-R Certificate) with a $1,000 Denomination, and as a
dollar amount per Class I-A-R Certificate with a $100 Denomination.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon request, furnish or cause to be furnished to each
Person who at any time during the calendar year was the Holder of a Certificate
a statement containing the information set forth in clauses (i) and (ii)(a)
above in the case of a Class A Certificateholder and the information set forth
in clauses (iii) and (iv)(a) above in the case of a Class B Certificateholder
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Master Servicer of the Trustee pursuant to
any requirements of the Code from time to time in force.
Prior to the close of business on the third Business Day preceding
each Distribution Date, the Master Servicer shall furnish a statement to the
Trustee, any Paying Agent and the Seller (the information in such statement to
be made available to Certificateholders by the Master Servicer on written
request) setting forth the Group I-A Distribution Amount or Group II-A
Distribution Amount, as applicable, with respect to each Class of Class A
Certificates and the Class B Distribution Amount with respect to each Class of
Class B Certificates. The determination by the Master Servicer of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct
for all purposes hereunder and the Trustee and the Paying Agent shall be
protected in relying upon the same without any independent check or
verification.
In addition to the reports required pursuant to this Section 4.04,
the Paying Agent shall make available upon request to each Holder and each
proposed transferee of a Class B-4, Class B-5 or Class B-6 Certificate such
additional information, if any, as may be required to permit the proposed
transfer to be effected pursuant to Rule 144A, which information shall be
provided on a timely basis to the Paying Agent by the Master Servicer.
Section 4.05 Reports to Mortgagors and the Internal Revenue Service.
The Master Servicer shall, in each year beginning after the Cut-Off
Date, make the reports of foreclosures and abandonments of any Mortgaged
Property as required by Code Section 6050J. In order to facilitate this
reporting process, the Master Servicer shall request that each Servicer, on or
before January 15th of each year, shall provide to the Internal Revenue Service,
with copies to the Master Servicer, reports relating to each instance occurring
during the previous calendar year in which such Servicer (i) on behalf of the
Trustee acquires an interest in a Mortgaged Property through foreclosure or
other comparable conversion in full or partial satisfaction of a Mortgage Loan
serviced by such Servicer, or (ii) knows or has reason to know that a Mortgaged
Property has been abandoned. Reports from the Servicers shall be in form and
substance sufficient to meet the reporting requirements imposed by Code Section
6050J. In addition, each Servicer shall provide the Master Servicer with
sufficient information to allow the Master Servicer to, for each year ending
after the Cut-Off Date, provide, or cause to be provided, to the Internal
Revenue Service and the Mortgagors such information as is required under Code
Sections 6050H (regarding payment of interest) and 6050P (regarding cancellation
of indebtedness).
Section 4.06 Calculation of Amounts; Binding Effect of
Interpretations and Actions of Master Servicer.
The Master Servicer will compute the amount of all distributions to
be made on the Certificates and all losses to be allocated to the Certificates.
In the event that the Master Servicer concludes that any ambiguity or
uncertainty exists in any provisions of this Agreement relating to distributions
to be made on the Certificates, the allocation of losses to the Certificates or
otherwise, the interpretation of such provisions and any actions taken by the
Master Servicer in good faith to implement such interpretation shall be binding
upon Certificateholders.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Class A and Class B Certificates shall be issued only in
minimum Denominations of a Single Certificate and, except for the Class I-A-R
Certificate, integral multiples of $1,000 in excess thereof (except, if
necessary, for one Certificate of each Class (other than the Class I-A-R
Certificate) that evidences one Single Certificate plus such additional
principal portion as is required in order for all Certificates of such Class to
equal the aggregate Original Principal Balance of such Class), and shall be
substantially in the respective forms set forth as Exhibits ▇-▇-▇-▇, ▇-▇-▇-▇,
▇-▇-▇-▇, ▇-▇-▇-▇, ▇-▇▇-▇-▇, A-A-PO, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, B-6 and C (reverse
side of Certificates) hereto. On original issue the Certificates shall be
executed and delivered by the Trustee to or upon the order of the Seller upon
receipt by the Trustee or the Custodian of the documents specified in Section
2.01. The aggregate principal portion evidenced by the Class A and Class B
Certificates shall be the sum of the amounts specifically set forth in the
respective Certificates. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee by any Responsible Officer thereof.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless manually countersigned by a Responsible Officer of the Trustee, or unless
there appears on such Certificate a certificate of authentication executed by
the Authenticating Agent by manual signature, and such countersignature or
certificate upon a Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Until such time as Definitive Certificates are issued pursuant to
Section 5.07, each Book-Entry Certificate shall bear the following legend:
"Unless this certificate is presented by an authorized
representative of [the Clearing Agency] to the Seller or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of [the Clearing Agency] or such other name as requested
by an authorized representative of [the Clearing Agency] and any payment is made
to [the Clearing Agency], any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful since the registered owner hereof,
[the Clearing Agency], has an interest herein."
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Seller or to, and deposited with the Certificate Custodian, on behalf of The
Depository Trust Company, if directed to do so pursuant instructions from The
Depository Trust Company. Such Certificates shall initially be registered in the
Certificate Register in the name of the nominee of the initial Clearing Agency,
and no Beneficial Owner will receive a definitive certificate representing such
Beneficial Owner's interest in the Book-Entry Certificates, except as provided
in Section 5.07. Unless and until definitive, fully registered certificates
("Definitive Certificates") have been issued to Beneficial Owners pursuant to
Section 5.07:
(i) the provisions of this Section 5.01(b) shall be in full force
and effect;
(ii) the Seller, the Master Servicer, the Certificate Registrar and
the Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on the Book-Entry Certificates and the taking
of actions by the Holders of Book-Entry Certificates) as the authorized
representative of the Beneficial Owners;
(iii) to the extent that the provisions of this Section 5.01(b)
conflict with any other provisions of this Agreement, the provisions of
this Section 5.01(b) shall control;
(iv) the rights of Beneficial Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law, the
rules, regulations and procedures of the Clearing Agency and agreements
between such Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants, and all references in this Agreement to actions by
Certificateholders shall, with respect to the Book-Entry Certificates,
refer to actions taken by the Clearing Agency upon instructions from the
Clearing Agency Participants, and all references in this Agreement to
distributions, notices, reports and statements to Certificateholders
shall, with respect to the Book-Entry Certificates, refer to
distributions, notices, reports and statements to the Clearing Agency or
its nominee, as registered holder of the Book-Entry Certificates, as the
case may be, for distribution to Beneficial Owners in accordance with the
procedures of the Clearing Agency; and
(v) the initial Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Certificates to the Clearing Agency
Participants, for distribution by such Clearing Agency Participants to the
Beneficial Owners or their nominees.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Book-Entry Certificates evidencing specified Voting Interests, such direction or
consent shall be given by Beneficial Owners having the requisite Voting
Interests, acting through the Clearing Agency.
Unless and until Definitive Certificates have been issued to
Beneficial Owners pursuant to Section 5.07, copies of the reports or statements
referred to in Section 4.04 shall be available to Beneficial Owners upon written
request to the Trustee at the Corporate Trust Office.
Section 5.02 Registration of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or
agencies to be maintained in accordance with the provisions of Section 5.06 a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee shall
act as, or shall appoint, a Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at
any office or agency maintained for such purpose pursuant to Section 5.06 (and
subject to the provisions of this Section 5.02) the Trustee shall execute, and
shall date, authenticate (or cause the Authenticating Agent to authenticate) and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of a like aggregate principal portion or Percentage Interest
and of the same Class.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized Denominations of a like aggregate
principal portion or Percentage Interest and of the same Class upon surrender of
the Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and
shall date, authenticate (or cause the Authenticating Agent to authenticate) and
deliver, the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar or the Trustee) be
duly endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar, 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
Certificates, but the Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be
canceled by the Certificate Registrar, the Trustee or the Authenticating Agent
in accordance with their standard procedures.
(b) No transfer of a Class B-4, Class B-5 or Class B-6 Certificate
shall be made unless the registration requirements of the Securities Act of
1933, as amended, and any applicable State securities laws are complied with, or
such transfer is exempt from the registration requirements under said Act and
laws. In the event that a transfer is to be made in reliance upon an exemption
from said Act or laws, (i) unless such transfer is made in reliance on Rule
144A, the Trustee or the Seller may, if such transfer is to be made within three
years after the later of (i) the date of the initial sale of Certificates or
(ii) the last date on which the Seller or any affiliate thereof was a Holder of
the Certificates proposed to be transferred, require a Class B-4, Class B-5 or
Class B-6 Certificateholder to deliver a written Opinion of Counsel acceptable
to and in form and substance satisfactory to the Trustee and the Seller, to the
effect that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from said 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, the Seller or the Master Servicer, and (ii) the Trustee
shall require the transferee (other than an affiliate of the Seller on the
Closing Date) to execute an investment letter in the form of Exhibit J hereto
certifying to the Seller and the Trustee the facts surrounding such transfer,
which investment letter shall not be an expense of the Trustee, the Seller or
the Master Servicer. The Holder of a Class B-4, Class B-5 or Class B-6
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Seller, the Master Servicer and any Paying Agent
acting on behalf of the Trustee against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws. Neither the Seller nor the Trustee is under an obligation to
register the Class B-4, Class B-5 or Class B-6 Certificates under said Act or
any other securities law.
(c) No transfer of a Class B-4, Class B-5 or Class B-6 Certificate
shall be made unless the Trustee and the Seller shall have received (i) a
representation letter from the transferee in the form of Exhibit J hereto, to
the effect that either (a) such transferee is not an employee benefit plan or
other retirement arrangement subject to Title I of ERISA or Code Section 4975,
or a governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, state or local law ("Similar Law") which is to a material extent
similar to the foregoing provisions of ERISA or the Code (collectively, a
"Plan") and is not a person acting on behalf of or using the assets of any such
Plan, which representation letter shall not be an expense of the Trustee, the
Seller or the Master Servicer or (b) with respect to the Class B Certificates
only, if such transferee is an insurance company, (A) the source of funds used
to purchase the Class B-4, Class B-5 or Class B-6 Certificate is an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTE 95-60"), 60 Fed. Reg. 35925 (July 12,
1995)), (B) there is no Plan with respect to which the amount of such general
account's reserves and liabilities for the contract(s) held by or on behalf of
such Plan and all other Plans maintained by the same employer (or affiliate
thereof as defined in Section V(a)(1) of PTE 95-60) or by the same employee
organization exceeds 10% of the total of all reserves and liabilities of such
general account (as such amounts are determined under Section I(a) of PTE 95-60)
at the date of acquisition and (C) the purchase and holding of such Class B-4,
Class B-5 or Class B-6 Certificates are covered by Sections I and III of PTE
95-60 or (ii) in the case of any such Class B Certificate presented for
registration in the name of a Plan, or a trustee of any such Plan, (A) an
Opinion of Counsel satisfactory to the Trustee and the Seller to the effect that
the purchase or holding of such Class B-4, Class B-5 or Class B-6 Certificate
will not result in the assets of the Trust Estate being deemed to be "plan
assets" and subject to the prohibited transaction provisions of ERISA, the Code
or Similar Law and will not subject the Trustee, the Seller or the Master
Servicer to any obligation in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller or
the Master Servicer and (B) such other opinions of counsel, officer's
certificates and agreements as the Seller or the Master Servicer may require in
connection with such transfer, which opinions of counsel, officers' certificates
and agreements shall not be an expense of the Trustee, the Seller or the Master
Servicer. The Class B-4, Class B-5 and Class B-6 Certificates shall bear a
legend referring to the foregoing restrictions contained in this paragraph.
(d) No legal or beneficial interest in all or any portion of the
Class I-A-R Certificate may be transferred directly or indirectly to a
"disqualified organization" within the meaning of Code Section 860E(e)(5) or an
agent of a disqualified organization (including a broker, nominee, or
middleman), to a Plan or a Person acting on behalf of or investing the assets of
a Plan (such Plan or Person, an "ERISA Prohibited Holder") or to an individual,
corporation, partnership or other person unless such transferee (i) is not a
Non-U.S. Person or (ii) is a Non-U.S. Person that holds the Class I-A-R
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Trustee with an effective
Internal Revenue Service Form W-8ECI or (iii) is a Non-U.S. Person that has
delivered to both the transferor and the Trustee an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class I-A-R
Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class I-A-R
Certificate will not be disregarded for federal income tax purposes (any such
person who is not covered by clauses (i), (ii) or (iii) above being referred to
herein as a "Non-permitted Foreign Holder"), and any such purported transfer
shall be void and have no effect. The Trustee shall not execute, and shall not
authenticate (or cause the Authenticating Agent to authenticate) and deliver, a
new Class I-A-R Certificate in connection with any such transfer to a
disqualified organization or agent thereof (including a broker, nominee or
middleman), an ERISA Prohibited Holder or a Non-permitted Foreign Holder, and
neither the Certificate Registrar nor the Trustee shall accept a surrender for
transfer or registration of transfer, or register the transfer of, the Class
I-A-R Certificate, unless the transferor shall have provided to the Trustee an
affidavit, substantially in the form attached as Exhibit H hereto, signed by the
transferee, to the effect that the transferee is not such a disqualified
organization, an agent (including a broker, nominee, or middleman) for any
entity as to which the transferee has not received a substantially similar
affidavit, an ERISA Prohibited Holder or a Non-permitted Foreign Holder, which
affidavit shall contain the consent of the transferee to any such amendments of
this Agreement as may be required to further effectuate the foregoing
restrictions on transfer of the Class I-A-R Certificate to disqualified
organizations, ERISA Prohibited Holders or Non-permitted Foreign Holders. Such
affidavit shall also contain the statement of the transferee that (i) the
transferee has historically paid its debts as they have come due and intends to
do so in the future, (ii) the transferee understands that it may incur
liabilities in excess of cash flows generated by the residual interest, (iii)
the transferee intends to pay taxes associated with holding the residual
interest as they become due, (iv) the transferee will not cause income from the
Class I-A-R Certificate to be attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty, of such
transferee or any other Person, and (v) the transferee will not transfer the
Class I-A-R Certificate to any Person who does not provide an affidavit
substantially in the form attached as Exhibit H hereto.
The affidavit described in the preceding paragraph, if not executed
in connection with the initial issuance of the Class I-A-R Certificate, shall be
accompanied by a written statement in the form attached as Exhibit I hereto,
signed by the transferor, to the effect that as of the time of the transfer, the
transferor has no actual knowledge that the transferee is a disqualified
organization, ERISA Prohibited Holder or Non-permitted Foreign Holder, and has
no knowledge or reason to know that the statements made by the transferee with
respect to clauses (i) and (iii) of the last sentence of the preceding paragraph
are not true. The Class I-A-R Certificate shall bear a legend referring to the
foregoing restrictions contained in this paragraph and the preceding paragraph.
Upon notice to the Master Servicer that any legal or beneficial
interest in any portion of the Class I-A-R Certificate has been transferred,
directly or indirectly, to a disqualified organization or agent thereof
(including a broker, nominee, or middleman) in contravention of the foregoing
restrictions, (i) such transferee shall be deemed to hold the Class I-A-R
Certificate in constructive trust for the last transferor who was not a
disqualified organization or agent thereof, and such transferor shall be
restored as the owner of such Class I-A-R Certificate as completely as if such
transfer had never occurred, provided that the Master Servicer may, but is not
required to, recover any distributions made to such transferee with respect to
the Class I-A-R Certificate, and (ii) the Master Servicer agrees to furnish to
the Internal Revenue Service and to any transferor of the Class I-A-R
Certificate or such agent (within 60 days of the request therefor by the
transferor or agent) such information necessary to the application of Code
Section 860E(e) as may be required by the Code, including but not limited to the
present value of the total anticipated excess inclusions with respect to the
Class I-A-R Certificate (or portion thereof) for periods after such transfer. At
the election of the Master Servicer, the cost to the Master Servicer of
computing and furnishing such information may be charged to the transferor or
such agent referred to above; however, the Master Servicer shall in no event be
excused from furnishing such information.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee or
the Authenticating Agent, or the Trustee or the Authenticating Agent receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee or the Authenticating
Agent such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Trustee or the Authenticating
Agent that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and authenticate (or cause the Authenticating Agent to
authenticate) and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
principal portion or Percentage Interest and of the same Class. Upon the
issuance of any new Certificate under this Section, the Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expense (including the fees and expenses of the Trustee or the
Authenticating Agent) in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the Trust Estate, as if originally issued, whether or not the lost,
stolen, or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
Prior to the due presentation of a Certificate for registration of
transfer, the Seller, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of the Seller, the Master Servicer, the Trustee or the
Certificate Registrar 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 4.01, and for all other purposes whatsoever,
and neither the Seller, the Master Servicer, the Trustee, the Certificate
Registrar nor any agent of the Seller, the Master Servicer, the Trustee or the
Certificate Registrar shall be affected by notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar shall furnish or cause to be furnished to the Trustee,
within 15 days after receipt by the Certificate Registrar of a request by the
Trustee in writing, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Certificateholders of each Class as of the
most recent Record Date.
(b) If five or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application states that
the applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days following the
receipt of such application, afford such applicants access during normal
business hours to the most recent list of Certificateholders held by the
Trustee. If such a list is as of the date more than 90 days prior to the date of
receipt of such applicants' request and the Trustee is not the Certificate
Registrar, the Trustee shall promptly request from the Certificate Registrar a
current list as provided in paragraph (a) hereof, and shall afford such
applicants access to such list promptly upon receipt.
(c) Every Certificateholder, by receiving and holding a Certificate,
agrees with the Seller, the Master Servicer, the Certificate Registrar and the
Trustee that neither the Seller, the Master Servicer, the Certificate Registrar
nor the Trustee shall be held accountable by reason of the disclosure of any
such information as to the names, addresses and Percentage Interests of the
Certificateholders hereunder, regardless of the source from which such
information was delivered.
Section 5.06 Maintenance of Office or Agency.
The Trustee will maintain, at its expense, an office or agency where
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Certificate Registrar in respect of the
Certificates and this Agreement may be served. The Trustee initially designates
the Corporate Trust Office and the principal corporate trust office of the
Authenticating Agent, if any, as its offices and agencies for said purposes.
Section 5.07 Definitive Certificates.
If (i)(A) the Master Servicer advises the Trustee in writing that
the Clearing Agency is no longer willing or able properly to discharge its
responsibilities as depository with respect to the Book-Entry Certificates, and
(B) the Master Servicer is unable to locate a qualified successor, (ii) the
Master Servicer, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of dismissal or resignation of the Master Servicer, Beneficial Owners
representing aggregate Voting Interests of not less than 51% of the aggregate
Voting Interests of each outstanding Class of Book-Entry Certificates advise the
Trustee through the Clearing Agency and Clearing Agency Participants in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Beneficial Owners, the Trustee shall notify
the Beneficial Owners, through the Clearing Agency, of the occurrence of any
such event and of the availability of Definitive Certificates to Beneficial
Owners requesting the same. Upon surrender to the Trustee by the Clearing Agency
of the Certificates held of record by its nominee, accompanied by reregistration
instructions and directions to execute and authenticate new Certificates from
the Master Servicer, the Trustee shall execute and authenticate Definitive
Certificates for delivery at its Corporate Trust Office. The Master Servicer
shall arrange for, and will bear all costs of, the printing and issuance of such
Definitive Certificates. Neither the Seller, the Master Servicer nor the Trustee
shall be liable for any delay in delivery of such instructions by the Clearing
Agency and may conclusively rely on, and shall be protected in relying on, such
instructions.
Section 5.08 Notices to Clearing Agency.
Whenever notice or other communication to the Holders of Book-Entry
Certificates is required under this Agreement, unless and until Definitive
Certificates shall have been issued to Beneficial Owners pursuant to Section
5.07, the Trustee shall give all such notices and communications specified
herein to be given to Holders of Book-Entry Certificates to the Clearing Agency.
ARTICLE VI
THE SELLER AND THE MASTER SERVICER
Section 6.01 Liability of the Seller and the Master Servicer.
The Seller and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Seller and the Master
Servicer.
Section 6.02 Merger or Consolidation of the Seller or the Master
Servicer.
Subject to the following paragraph, the Seller and the Master
Servicer each will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its incorporation, and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Seller or the Master Servicer may be merged or consolidated with
or into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Seller or Master Servicer shall be a party, or any Person succeeding
to the business of the Seller or Master Servicer, shall be the successor of the
Seller or Master Servicer 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; provided, however, that, in the case of
the Master Servicer, any such successor or resulting Person shall be qualified
to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Section 6.03 Limitation on Liability of the Seller, the Master
Servicer and Others.
Neither the Seller nor the Master Servicer nor any subcontractor nor
any of the partners, directors, officers, employees or agents of any of them
shall be under any liability to the Trust Estate or the Certificateholders and
all such Persons shall be held harmless for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect any
such Person against any breach of warranties or representations made herein or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Seller,
the Master Servicer, any subcontractor, and any partner, director, officer,
employee or agent of any of them shall be entitled to indemnification by the
Trust Estate and will be held harmless against any loss, liability or expense
incurred in connection with the performance of its duties and obligations and
any legal action relating to this Agreement or the Certificates, including,
without limitation, any legal action against the Trustee in its capacity as
Trustee hereunder, other than any loss, liability or expense (including, without
limitation, expenses payable by the Master Servicer under Section 8.06) incurred
by reason of willful misfeasance, bad faith or gross negligence in the
performance of his or its duties hereunder or by reason of reckless disregard of
his or its obligations and duties hereunder. The Seller, the Master Servicer and
any of the directors, officers, employees or agents of either may rely in good
faith on any document of any kind which, prima facie, is properly executed and
submitted by any Person respecting any matters arising hereunder. Neither the
Seller nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and which in its opinion does not involve
it in any expense or liability; provided, however, that the Seller or the Master
Servicer may in its discretion undertake any such action which it may deem
necessary or desirable with respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder if
the Certificateholders offer to the Seller or the Master Servicer, as the case
may be, reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Estate, and the Seller or the
Master Servicer shall be entitled to be reimbursed therefor out of the
Certificate Account, and such amounts shall, on the following Distribution Date
or Distribution Dates, be allocated in reduction of distributions on the Class A
Certificates and Class B Certificates in the same manner as Realized Losses are
allocated pursuant to Section 4.02(a).
Section 6.04 Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
servicer shall have assumed the Master Servicer's responsibilities, duties,
liabilities and obligations hereunder.
Section 6.05 Compensation to the Master Servicer.
The Master Servicer shall be entitled to receive a monthly fee equal
to the Master Servicing Fee, as compensation for services rendered by the Master
Servicer under this Agreement. The Master Servicer also will be entitled to any
late reporting fees paid by a Servicer pursuant to its Servicing Agreement, any
investment income on funds on deposit in the Certificate Account and any
Liquidation Profits to which a Servicer is not entitled under its Servicing
Agreement.
Section 6.06 Assignment or Delegation of Duties by Master Servicer.
The Master Servicer shall not assign or transfer any of its rights,
benefits or privileges under this Agreement to any other Person, or delegate to
or subcontract with, or authorize or appoint any other Person to perform any of
the duties, covenants or obligations to be performed by the Master Servicer
without the prior written consent of the Trustee, and any agreement, instrument
or act purporting to effect any such assignment, transfer, delegation or
appointment shall be void. Notwithstanding the foregoing, the Master Servicer
shall have the right without the prior written consent of the Trustee (i) to
assign its rights and delegate its duties and obligations hereunder; provided,
however, that (a) the purchaser or transferee accepting such assignment or
delegation is qualified to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac,
is satisfactory to the Trustee, in the exercise of its reasonable judgment, and
executes and delivers to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
purchaser or transferee of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Master Servicer
hereunder from and after the date of such agreement; and (b) each applicable
Rating Agency's rating of any Certificates in effect immediately prior to such
assignment, sale or transfer is not reasonably likely to be qualified,
downgraded or withdrawn as a result of such assignment, sale or transfer and the
Certificates are not reasonably likely to be placed on credit review status by
any such Rating Agency; and (ii) to delegate to, subcontract with, authorize, or
appoint an affiliate of the Master Servicer to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Master Servicer
under this Agreement and hereby agrees so to delegate, subcontract, authorize or
appoint to an affiliate of the Master Servicer any duties, covenants or
obligations to be performed and carried out by the Master Servicer to the extent
that such duties, covenants or obligations are to be performed in any state or
states in which the Master Servicer is not authorized to do business as a
foreign corporation but in which the affiliate is so authorized. In no case,
however, shall any permitted assignment and delegation relieve the Master
Servicer of any liability to the Trustee or the Seller under this Agreement,
incurred by it prior to the time that the conditions contained in clause (i)
above are met.
Section 6.07 Indemnification of Trustee and Seller by Master
Servicer.
The Master Servicer shall indemnify and hold harmless the Trustee
and the Seller and any director, officer or agent thereof against any loss,
liability or expense, including reasonable attorney's fees, arising out of, in
connection with or incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties of the Master Servicer under this
Agreement or by reason of reckless disregard of its obligations and duties under
this Agreement. Any payment pursuant to this Section made by the Master Servicer
to the Trustee or the Seller shall be from such entity's own funds, without
reimbursement therefor. The provisions of this Section 6.07 shall survive the
termination of this Agreement.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
In case one or more of the following Events of Default by the Master
Servicer shall occur and be continuing, that is to say:
(i) any failure by the Master Servicer (a) to remit any funds to the
Paying Agent as required by Section 4.03 or (b) to distribute or cause to
be distributed to Certificateholders any payment required to be made by
the Master Servicer under the terms of this Agreement which, in either
case, continues unremedied for a period of three business days after the
date upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee or
to the Master Servicer and the Trustee by the holders of Certificates
evidencing in the aggregate not less than 25% of the aggregate Voting
Interest represented by all Certificates;
(ii) any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer in the Certificates or in
this Agreement which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, or
to the Master Servicer and the Trustee by the holders of Certificates
evidencing in the aggregate not less than 25% of the aggregate Voting
Interest represented by all Certificates;
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
trustee, conservator, receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged and unstayed for a period
of 60 days;
(iv) the Master Servicer shall consent to the appointment of a
trustee, conservator, receiver or liquidator or liquidating committee in
any bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities, voluntary liquidation or similar proceedings of or relating
to the Master Servicer, or of or relating to all or substantially all of
its property;
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency, bankruptcy or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations;
(vi) the Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets; or consolidate with or merge into
another entity or shall permit another entity to consolidate or merge into
it, such that the resulting entity does not meet the criteria for a
successor servicer, as specified in Section 6.02 hereof; or
(vii) the Master Servicer and any subservicer appointed by it
becomes ineligible to service for both ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, which
ineligibility continues unremedied for a period of 90 days.
then, and in each and every such case, subject to applicable law, so long as an
Event of Default shall not have been remedied, either the Trustee or the holders
of Certificates evidencing in the aggregate not less than 66 2/3% of the
aggregate Voting Interest represented by all Certificates, by notice in writing
to the Master Servicer (and to the Trustee if given by the Certificateholders)
may terminate all of the rights and obligations of the Master Servicer under
this Agreement and in and to the Mortgage Loans, but without prejudice to any
rights which the Master Servicer may have to the aggregate Master Servicing Fees
due prior to the date of transfer of the Master Servicer's responsibilities
hereunder, reimbursement of expenses to the extent permitted by this Agreement,
Periodic Advances and other advances of its own funds. Upon receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section, subject to the provisions of Section 7.05; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder and shall promptly provide the
Trustee all documents and records reasonably requested by it to enable it to
assume the Master Servicer's functions hereunder and shall promptly also
transfer to the Trustee all amounts which then have been or should have been
deposited in the Certificate Account by the Master Servicer or which are
thereafter received by the Master Servicer with respect to the Mortgage Loans.
Section 7.02 Other Remedies of Trustee.
During the continuance of any Event of Default, so long as such
Event of Default shall not have been remedied, the Trustee, in addition to the
rights specified in Section 7.01, shall have the right, in its own name as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filing of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 7.03 Directions by Certificateholders and Duties of Trustee
During Event of Default.
During the continuance of any Event of Default, Holders of
Certificates evidencing in the aggregate not less than 25% of the aggregate
Voting Interest represented by all Certificates may direct 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;
provided, however, that the Trustee shall be under no obligation to pursue any
such remedy, or to exercise any of the rights or powers vested in it by this
agreement (including, without limitation, (i) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto and (ii) the
terminating of the Master Servicer from its rights and duties as servicer
hereunder) at the request, order or direction of any of the Certificateholders,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the cost, expenses and liabilities which may be
incurred therein or thereby and, provided further, that, subject to the
provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the nonassenting Certificateholders.
Section 7.04 Action upon Certain Failures of the Master Servicer and
upon Event of Default.
In the event that the Trustee shall have knowledge of any failure of
the Master Servicer specified in Section 7.01(i) or (ii) which would become an
Event of Default upon the Master Servicer's failure to remedy the same after
notice, the Trustee may, but need not if the Trustee deems it not in the
Certificateholders' best interest, give notice thereof to the Master Servicer.
For all purposes of this Agreement, in the absence of actual knowledge by a
corporate trust officer of the Trustee, the Trustee shall not be deemed to have
knowledge of any failure of the Master Servicer as specified in Section 7.01(i)
and (ii) or any Event of Default unless notified thereof in writing by the
Master Servicer or by a Certificateholder.
Section 7.05 Trustee to Act; Appointment of Successor.
When the Master Servicer receives notice of termination pursuant to
Section 7.01 or the Trustee receives the resignation of the Master Servicer
evidenced by an Opinion of Counsel pursuant to Section 6.04, the Trustee shall
be the successor in all respects to the Master Servicer in its capacity as
master servicer under this Agreement and the transactions set forth or provided
for herein and shall have the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof and in its capacity as such
successor shall have the same limitation of liability herein granted to the
Master Servicer. In the event that the Trustee is succeeding to the Master
Servicer as the Master Servicer, as compensation therefor, the Trustee shall be
entitled to receive monthly such portion of the Master Servicing Fee, together
with such other servicing compensation as is agreed to at such time by the
Trustee and the Master Servicer, but in no event more than 25% thereof until the
date of final cessation of the Master Servicer's servicing activities hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act or to obtain a qualifying bid as described
below, appoint, or petition a court of competent jurisdiction to appoint, any
housing and home finance institution, bank or mortgage servicing institution
having a net worth of not less than $10,000,000 and meeting such other standards
for a successor servicer as are set forth herein, as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder; provided, however, that
until such a successor master servicer is appointed and has assumed the
responsibilities, duties and liabilities of the Master Servicer hereunder, the
Trustee shall continue as the successor to the Master Servicer as provided
above. The compensation of any successor master servicer so appointed shall not
exceed the compensation specified in Section 6.05 hereof. In the event the
Trustee is required to solicit bids as provided above, the Trustee shall
solicit, by public announcement, bids from housing and home finance
institutions, banks and mortgage servicing institutions meeting the
qualifications set forth in the preceding sentence for the purchase of the
master servicing functions. Such public announcement shall specify that the
successor master servicer shall be entitled to the full amount of the Master
Servicing Fee as compensation together with the other servicing compensation in
the form of late reporting fees or otherwise as provided in Section 6.05. Within
30 days after any such public announcement, the Trustee shall negotiate and
effect the sale, transfer and assignment of the master servicing rights and
responsibilities hereunder to the qualified party submitting the highest
qualifying bid. The Trustee shall deduct all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities hereunder from any sum received by the Trustee from the
successor to the Master Servicer in respect of such sale, transfer and
assignment. After such deductions, the remainder of such sum shall be paid by
the Trustee to the Master Servicer at the time of such sale, transfer and
assignment to the Master Servicer's successor. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Master Servicer agrees to cooperate with the
Trustee and any successor servicer in effecting the termination of the Master
Servicer's servicing responsibilities and rights hereunder and shall promptly
provide the Trustee or such successor master servicer, as applicable, all
documents and records reasonably requested by it to enable it to assume the
Master Servicer's function hereunder and shall promptly also transfer to the
Trustee or such successor master servicer, as applicable, all amounts which then
have been or should have been deposited in the Certificate Account by the Master
Servicer or which are thereafter received by the Master Servicer with respect to
the Mortgage Loans. Neither the Trustee nor any other successor master servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in delivering,
cash, documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer. Notwithstanding anything
to the contrary contained in Section 7.01 above or this Section 7.05, the Master
Servicer shall retain all of its rights and responsibilities hereunder, and no
successor (including the Trustee) shall succeed thereto, if the assumption
thereof by such successor would cause the rating assigned to any Certificates to
be revoked, downgraded or placed on credit review status (other than for
possible upgrading) by either Rating Agency and the retention thereof by the
Master Servicer would avert such revocation, downgrading or review.
Section 7.06 Notification to Certificateholders.
Upon any termination of the Master Servicer or appointment of a
successor master servicer, in each case as provided herein, the Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register. The Trustee shall also, within
45 days after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register, unless such Event of Default shall have
been cured or waived within said 45 day period.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 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. In case an Event of Default has occurred (which has not been cured),
the Trustee, subject to the provisions of Sections 7.01, 7.03, 7.04 and 7.05,
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in its exercise as a prudent investor
would exercise or use under the circumstances in the conduct of such investor's
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 are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any certificate, statement,
instrument, report, notice or other document furnished by the Master Servicer or
the Servicers pursuant to Articles III, IV and IX.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of 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 with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of holders of Certificates which evidence in
the aggregate not less than 25% of the Voting Interest represented by all
Certificates 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
(iii) The Trustee shall not be liable for any error of judgment made
in good faith by any of its Responsible Officers, unless it shall be
proved that the Trustee or such Responsible Officer, as the case may be,
was negligent in ascertaining the pertinent facts.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal 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
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may request and rely and shall be protected in
acting or refraining from acting upon any resolution, Officers'
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 and the manner of
obtaining consents and evidencing the authorization of the execution
thereof shall be subject to such reasonable regulations as the Trustee may
prescribe;
(ii) The Trustee may consult with counsel, and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(iii) The Trustee shall 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;
(iv) Subject to Section 7.04, the Trustee shall not be accountable,
shall have no liability and makes no representation as to any acts or
omissions hereunder of the Master Servicer until such time as the Trustee
may be required to act as Master Servicer pursuant to Section 7.05 and
thereupon only for the acts or omissions of the Trustee as successor
Master Servicer; and
(v) 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.
Section 8.03 Trustee Not Required to Make Investigation.
Prior to the occurrence of an Event of Default hereunder 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, appraisal, bond, Mortgage, Mortgage Note or other paper
or document (provided the same appears regular on its face), unless requested in
writing to do so by holders of Certificates evidencing in the aggregate not less
than 51% of the Voting Interest represented by all Certificates; 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 expense or liability as a
condition to so proceeding. The reasonable expense of every such investigation
shall be paid by the Master Servicer or, if paid by the Trustee, shall be repaid
by the Master Servicer upon demand.
Section 8.04 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the certificate of authentication on the Certificates) shall be taken as the
statements of the Seller, and the Trustee assumes no responsibility as to the
correctness of the same. The Trustee makes no representation for the correctness
of the same. The Trustee makes no representation as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. Subject to Section 2.04, the Trustee shall not be accountable
for the use or application by the Seller of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Master Servicer in respect of the Mortgage Loans deposited into the
Certificate Account by the Master Servicer or, in its capacity as trustee, for
investment of any such amounts.
Section 8.05 Trustee May Own Certificates.
The Trustee, and any agent thereof, in its individual or any other
capacity, may become the owner or pledgee of Certificates with the same rights
it would have if it were not Trustee or such agent and may transact banking
and/or trust business with the Seller, the Master Servicer or their Affiliates.
Section 8.06 The Master Servicer to Pay Fees and Expenses.
The Master Servicer covenants and agrees to pay to the Trustee from
time to time, from its own funds, and the Trustee shall be entitled to receive,
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,
except as otherwise agreed by the Master Servicer and the Trustee, the Master
Servicer will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by it 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. The Trustee shall have no right of
reimbursement from the Trust Estate for any such expenses, disbursements and
advances not paid or reimbursed to it by the Master Servicer.
Section 8.07 Eligibility Requirements.
The Trustee hereunder shall at all times (i) be a corporation or
association having its principal office in a state and city acceptable to the
Seller, 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, or shall
be a member of a bank holding system, the aggregate combined capital and surplus
of which is at least $50,000,000, provided that its separate capital and surplus
shall at all times be at least the amount specified in Section 310(a)(2) of the
Trust Indenture Act of 1939, (ii) be subject to supervision or examination by
federal or state authority and (iii) have a credit rating or be otherwise
acceptable to the Rating Agencies such that neither of the Rating Agencies would
reduce their respective then current ratings of the Certificates (or have
provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 8.08.
Section 8.08 Resignation and Removal.
The Trustee may at any time resign and be discharged from the trust
hereby created by giving written notice of resignation to the Master Servicer,
such resignation to be effective upon the appointment of a successor trustee.
Upon receiving such notice of resignation, the Master Servicer shall promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning entity and one copy to its
successor. If no successor trustee shall have been appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 and shall fail to resign after written
request for its resignation by the Master Servicer, or if at any time the
Trustee shall become incapable of acting, or an order for relief shall have been
entered in any bankruptcy or insolvency proceeding with respect to such entity,
or a receiver of such entity or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of the property or
affairs of the Trustee for the purpose of rehabilitation, conversion or
liquidation, or the Master Servicer shall deem it necessary in order to change
the situs of the Trust Estate for state tax reasons, then the Master Servicer
shall remove the Trustee and appoint a successor trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate not less
than 51% of the Voting Interests represented by all Certificates (except that
any Certificate registered in the name of the Seller, the Master Servicer or any
affiliate thereof will not be taken into account in determining whether the
requisite Voting Interests has been obtained) may at any time remove the Trustee
and appoint a successor by written instrument or instruments, in triplicate,
signed by such holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Master Servicer, one complete
set of which shall be delivered to the entity or entities so removed and one
complete set of which shall be delivered to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a
successor pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor as provided in Section
8.09.
Section 8.09 Successor.
Any successor trustee appointed as provided in Section 8.08 shall
execute, acknowledge and deliver to the Master 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, without any further act, deed or reconveyance, shall become
fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to its successor all documents and
statements held by it hereunder, and the Seller, the Master Servicer and the
predecessor entity shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations. No successor shall accept appointment as provided in this Section
unless at the time of such acceptance such successor shall be eligible under the
provisions of Section 8.07.
Upon acceptance of appointment by a successor as provided in this
Section, the Master 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 Master Servicer fails to mail such notice within
ten days after acceptance of the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Master Servicer.
Section 8.10 Merger or Consolidation.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole or any Person
resulting from any merger, sale, transfer, conversion or consolidation to which
the Trustee shall be a party, or any Person succeeding to the business of such
entity, shall be the successor of the Trustee hereunder; provided, however, that
(i) such Person shall be eligible under the provisions of Section 8.07, 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, and (ii)
the Trustee shall deliver an Opinion of Counsel to the Seller and the Master
Servicer to the effect that such merger, consolidation, sale or transfer will
not subject the REMIC to federal, state or local tax or cause the Trust Estate
to fail to qualify as a REMIC, which Opinion of Counsel shall be at the sole
expense of the Trustee.
Section 8.11 Authenticating Agent.
The Trustee may appoint an Authenticating Agent, which shall be
authorized to act on behalf of the Trustee in authenticating Certificates.
Wherever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's countersignature, such reference
shall be deemed to include authentication on behalf of the Trustee by the
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by the Authenticating Agent. The Authenticating Agent must be
acceptable to the Seller and the Master Servicer and must be a corporation
organized and doing business under the laws of the United States of America or
of any state, having a principal office and place of business in a state and
city acceptable to the Seller and the Master Servicer, having a combined capital
and surplus of at least $15,000,000, authorized under such laws to do a trust
business and subject to supervision or examination by federal or state
authorities.
Any corporation into which the Authenticating Agent 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 Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of the Authenticating Agent, shall be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee, the Seller and
the Master Servicer. The Trustee may at any time terminate the agency of the
Authenticating Agent by giving written notice thereof to the Authenticating
Agent, the Seller and the Master Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time the
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 8.11, the Trustee promptly shall appoint a successor
Authenticating Agent, which shall be acceptable to the Master Servicer, and
shall give written notice of such appointment to the Seller, and shall mail
notice of such appointment to all Certificateholders. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein. No successor Authenticating Agent shall be appointed unless
eligible under the provisions of this Section 8.11.
The Authenticating Agent shall have no responsibility or liability
for any action taken by it as such at the direction of the Trustee. Any
reasonable compensation paid to the Authenticating Agent shall be a reimbursable
expense under Section 8.06.
Section 8.12 Separate Trustees and Co-Trustees.
The Trustee shall have the power from time to time to appoint one or
more persons or corporations to act either as co-trustees jointly with the
Trustee, or as separate trustees, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan outside
the state where the Trustee has its principal place of business, where such
separate trustee or co-trustee is necessary or advisable (or the Trustee is
advised by the Master Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a Mortgaged
Property is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a Mortgaged Property
is located or in any state in which any portion of the Trust Estate is located.
The Master Servicer shall advise the Trustee when, in its good faith opinion, a
separate trustee or co-trustee is necessary or advisable as aforesaid. The
separate trustees or co-trustees so appointed shall be trustees for the benefit
of all of the Certificateholders and shall have such powers, rights and remedies
as shall be specified in the instrument of appointment; provided, however, that
no such appointment shall, or shall be deemed to, constitute the appointee an
agent of the Trustee. The Seller and the Master Servicer shall join in any such
appointment, but such joining shall not be necessary for the effectiveness of
such appointment.
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 powers, duties, obligations and rights conferred upon the
Trustee, in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other 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, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding
of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee;
(iii) no separate trustee or co-trustee hereunder shall be
personally liable by reason of any act or omission of any other separate
trustee or co-trustee hereunder; and
(iv) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee so appointed by it, if such resignation
or removal does not violate the other terms of this Agreement.
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, co-trustee, or custodian shall refer to this Agreement and the
conditions of this Article. 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 furnished to the Trustee.
Any separate trustee, co-trustee, or custodian 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.
No separate trustee or co-trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.07
hereunder and no notice to Certificateholders of the appointment thereof shall
be required under Section 8.09 hereof.
The Trustee agrees to instruct its co-trustees, if any, to the
extent necessary to fulfill such entity's obligations hereunder.
The Master Servicer shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 8.06 hereof.
Section 8.13 Tax Matters; Compliance with REMIC Provisions.
(a) Each of the Trustee and the Master Servicer covenants and agrees
that it shall perform its duties hereunder in a manner consistent with the REMIC
Provisions and shall not knowingly take any other action or fail to take any
action that would (i) affect the determination of the Trust Estate's status as a
REMIC; or (ii) cause the imposition of any federal, state or local income,
prohibited transaction, contribution or other tax on either the REMIC or the
Trust Estate. The Master Servicer, or, in the case of any tax return or other
action required by law to be performed directly by the Trustee, the Trustee,
shall (i) prepare or cause to be prepared, timely cause to be signed by the
Trustee and file or cause to be filed annual federal and applicable state and
local income tax returns using a calendar year as the taxable year for the REMIC
and the accrual method of accounting; (ii) in the first such federal tax return,
make, or cause to be made, elections satisfying the requirements of the REMIC
Provisions, on behalf of the Trust Estate, to treat the Trust Estate as a REMIC;
(iii) prepare, execute and forward, or cause to be prepared, executed and
forwarded, to the Certificateholders all information reports or tax returns
required with respect to the REMIC, as and when required to be provided to the
Certificateholders, and to the Internal Revenue Service and any other relevant
governmental taxing authority in accordance with the REMIC Provisions and any
other applicable federal, state or local laws, including without limitation
information reports relating to "original issue discount" and "market discount"
as defined in the Code based upon the issue prices, prepayment assumption and
cash flows provided by the Seller to the Trustee and calculated on a monthly
basis by using the issue prices of the Certificates; (iv) make available
information necessary for the application of any tax imposed on transferors of
residual interests to "disqualified organizations" (as defined in the REMIC
Provisions); (v) file Form 8811 and apply for an Employee Identification Number
with a Form SS-4 or any other permissible method and respond to inquiries by
Certificateholders or their nominees concerning information returns, reports or
tax returns; (vi) maintain (or cause to be maintained by the Servicers) such
records relating to the REMIC, including but not limited to the income,
expenses, individual Mortgage Loans (including REO Mortgage Loans), other assets
and liabilities of the REMIC, and the fair market value and adjusted basis of
the property of the REMIC determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns or information
reports; (vii) exercise reasonable care not to allow the creation of any
"interests" in the REMIC within the meaning of Code Section 860D(a)(2) other
than the interests represented by the Class I-A-1, Class I-A-2, Class I-A-3,
Class I-A-R, Class II-A-1, Class A-PO, Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates; (viii) exercise reasonable care not
to allow the occurrence of any "prohibited transactions" within the meaning of
Code Section 860F(a), unless the Master Servicer shall have provided an Opinion
of Counsel to the Trustee that such occurrence would not (a) result in a taxable
gain, (b) otherwise subject either the Trust Estate or the REMIC to tax or (c)
cause the Trust Estate to fail to qualify as a REMIC; (ix) exercise reasonable
care not to allow the REMIC to receive income from the performance of services
or from assets not permitted under the REMIC Provisions to be held by a REMIC;
(x) pay (on behalf of the REMIC) the amount of any federal income tax,
including, without limitation, prohibited transaction taxes, taxes on net income
from foreclosure property, and taxes on certain contributions to a REMIC after
the Startup Day, imposed on the REMIC when and as the same shall be due and
payable (but such obligation shall not prevent the Master Servicer or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Master Servicer from withholding or depositing payment of
such tax, if permitted by law, pending the outcome of such proceedings); and
(xi) if required or permitted by the Code and applicable law, act as "tax
matters person" for the REMIC within the meaning of Treasury Regulations Section
1.860F-4(d), and the Master Servicer is hereby designated as agent of the Class
I-A-R Certificateholder for such purpose (or if the Master Servicer is not so
permitted, the Holder of the Class I-A-R Certificate shall be the tax matters
person in accordance with the REMIC Provisions). The Master Servicer shall be
entitled to be reimbursed pursuant to Section 3.02 for any taxes paid by it
pursuant to clause (x) of the preceding sentence, except to the extent that such
taxes are imposed as a result of the bad faith, willful misfeasance or gross
negligence of the Master Servicer in the performance of its obligations
hereunder. The Trustee shall sign the tax returns referred to in clause (i) of
the second preceding sentence.
In order to enable the Master Servicer or the Trustee, as the case
may be, to perform its duties as set forth above, the Seller shall provide, or
cause to be provided, to the Master Servicer within ten days after the Closing
Date all information or data that the Master Servicer determines to be relevant
for tax purposes to the valuations and offering prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flows of each Class of Certificates and the Mortgage Loans in the
aggregate. Thereafter, the Seller shall provide to the Master Servicer or the
Trustee, as the case may be, promptly upon request therefor, any such additional
information or data that the Master Servicer or the Trustee, as the case may be,
may from time to time request in order to enable the Master Servicer to perform
its duties as set forth above. The Seller hereby indemnifies the Master Servicer
or the Trustee, as the case may be, for any losses, liabilities, damages, claims
or expenses of the Master Servicer or the Trustee arising from any errors or
miscalculations by the Master Servicer or the Trustee pursuant to this Section
that result from any failure of the Seller to provide, or to cause to be
provided, accurate information or data to the Master Servicer or the Trustee, as
the case may be, on a timely basis. The Master Servicer hereby indemnifies the
Seller and the Trustee for any losses, liabilities, damages, claims or expenses
of the Seller or the Trustee arising from the Master Servicer's willful
misfeasance, bad faith or gross negligence in preparing any of the federal,
state and local tax returns of the REMIC as described above. In the event that
the Trustee prepares any of the federal, state and local tax returns of the
REMIC as described above, the Trustee hereby indemnifies the Seller and the
Master Servicer for any losses, liabilities, damages, claims or expenses of the
Seller or the Master Servicer arising from the Trustee's willful misfeasance,
bad faith or negligence in connection with such preparation.
(b) Notwithstanding anything in this Agreement to the contrary, each
of the Master Servicer and the Trustee shall pay from its own funds, without any
right of reimbursement therefor, the amount of any costs, liabilities and
expenses incurred by the Trust Estate (including, without limitation, any and
all federal, state or local taxes, including taxes imposed on "prohibited
transactions" within the meaning of the REMIC Provisions) if and to the extent
that such costs, liabilities and expenses arise from a failure of the Master
Servicer or the Trustee, respectively, to perform its obligations under this
Section 8.13.
Section 8.14 Monthly Advances.
In the event that WFHM fails to make a Periodic Advance required to
be made pursuant to the WFHM Servicing Agreement on or before the Distribution
Date, the Trustee shall make a Periodic Advance as required by Section 3.03
hereof; provided, however, the Trustee shall not be required to make such
Periodic Advances if prohibited by law or if it determines that such Periodic
Advance would be a Nonrecoverable Advance. With respect to those Periodic
Advances which should have been made by WFHM, the Trustee shall be entitled,
pursuant to Section 3.02(a)(i), (ii) or (v) hereof, to be reimbursed from the
Certificate Account for Periodic Advances and Nonrecoverable Advances made by
it.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Purchase by the Seller or Liquidation
of All Mortgage Loans.
Subject to Section 9.02, the respective obligations and
responsibilities of the Seller, the Master Servicer and the Trustee created
hereby (other than the obligation of the Trustee to make certain payments after
the Final Distribution Date to Certificateholders and the obligation of the
Master Servicer to send certain notices as hereinafter set forth and the tax
reporting obligations under Sections 4.05 and 8.13 hereof) shall terminate upon
the last action required to be taken by the Trustee on the Final Distribution
Date pursuant to this Article IX following the earlier of (i) the purchase by
the Seller of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust Estate at a price equal to the sum of (x)
100% of the unpaid principal balance of each Mortgage Loan (other than any REO
Mortgage Loan) as of the Final Distribution Date, (y) the fair market value of
the Mortgaged Property related to any REO Mortgage Loan, plus any accrued and
unpaid interest through the last day of the month preceding the month of such
purchase at the applicable Mortgage Interest Rate less any Fixed Retained Yield
on each Mortgage Loan (including any REO Mortgage Loan) and (z) any
Reimbursement Amount owed to the Trust pursuant to Section 2.03, and (ii) the
final payment or other liquidation (or any advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Estate (including for this purpose the
discharge of any Mortgagor under a defaulted Mortgage Loan on which a Servicer
is not obligated to foreclose due to environmental impairment) or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan; 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.
The right of the Seller to purchase all the assets of the Trust
Estate pursuant to clause (i) of the preceding paragraph are subject to Section
9.02 and conditioned upon (A) the Pool Scheduled Principal Balance of the
Mortgage Loans as of the Final Distribution Date being less than the amount set
forth in Section 11.16 and (B) the sum of clause (i)(x) and (y) of the preceding
paragraph being less than or equal to the aggregate fair market value of the
Mortgage Loans (other than any REO Mortgage Loans) and the Mortgaged Properties
related to the REO Mortgage Loans; provided, however, that this clause (B) shall
not apply to any purchase by the Seller if, at the time of the purchase, the
Seller is no longer subject to regulation by the Office of the Comptroller of
the Currency, the FDIC, the Federal Reserve or the Office of Thrift Supervision.
Fair market value for purposes of this paragraph and the preceding paragraph
will be determined by the Master Servicer as of the close of business on the
third Business Day next preceding the date upon which notice of any termination
is furnished to Certificateholders pursuant to the third paragraph of this
Section 9.01. In the case of any purchase by the Seller pursuant to said clause
(i) of the preceding paragraph, the Seller shall provide to the Trustee the
certification required by Section 3.04 and the Trustee and the Custodian shall,
promptly following payment of the purchase price, release to the Seller the
Owner Mortgage Loan Files pertaining to the Mortgage Loans being purchased.
Notice of any termination, specifying the Final Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders mailed not earlier than the 15th day
of the month preceding the month of such final distribution and not later than
the twentieth day of the month of such final distribution specifying (A) the
Final Distribution Date upon which final payment of the Certificates will be
made upon presentation and surrender of Certificates at the office or agency of
the Trustee therein designated, (B) the amount of any such final payment and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made (except in the case of any Class A Certificate
surrendered on a prior Distribution Date pursuant to Section 4.01) only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified. If the Seller is exercising its right to purchase,
the Seller shall deposit in the Certificate Account on or before the Final
Distribution Date in immediately available funds an amount equal to the purchase
price for the assets of the Trust Estate computed as above provided. Failure to
give notice of termination as described herein shall not entitle a
Certificateholder to any interest beyond the interest payable on the Final
Distribution Date.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders on the Final Distribution
Date in proportion to their respective Percentage Interests an amount equal to
(i) as to the Classes of Class A Certificates, the respective Principal Balance
together with any related Class A Unpaid Interest Shortfall and one month's
interest in an amount equal to the respective Interest Accrual Amount, (ii) as
to the Classes of Class B Certificates, the respective Principal Balance
together with any related Class B Unpaid Interest Shortfall and one month's
interest in an amount equal to the respective Interest Accrual Amount and (iii)
as to the Class I-A-R Certificate, the amounts, if any, which remain on deposit
in the Certificate Account (other than amounts retained to meet claims) after
application pursuant to clauses (i), (ii) and (iii) above and payment to the
Master Servicer of any amounts it is entitled as reimbursement or otherwise
hereunder. Notwithstanding the foregoing, if the price paid pursuant to clause
(i) of the first paragraph of this Section 9.01, after reimbursement to the
Servicers, the Master Servicer and the Trustee of any Periodic Advances, is
insufficient to pay in full the amounts set forth in clauses (i), (ii) and (iii)
of this paragraph, then any shortfall in the amount available for distribution
to Certificateholders shall be allocated in reduction of the amounts otherwise
distributable on the Final Distribution Date in the same manner as Realized
Losses are allocated pursuant to Section 4.02(a) hereof. Such distribution on
the Final Distribution Date shall be in lieu of the distribution otherwise
required to be made on such Distribution Date in respect of each Class of
Certificates.
In the event that all of the Certificateholders shall not surrender
their Certificates for final payment and cancellation within three months
following the Final Distribution Date, the Trustee shall on such date cause all
funds, if any, in the Certificate Account not distributed in final distribution
to Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders. The Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
three months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds on deposit in such escrow account.
Section 9.02 Additional Termination Requirements.
In the event of a termination of the Trust Estate upon the exercise
by the Seller of its purchase option as provided in Section 9.01, the Trust
Estate shall be terminated in accordance with the following additional
requirements, unless the Trustee has received an Opinion of Counsel to the
effect that any other manner of termination (i) will constitute a "qualified
liquidation" of the Trust Estate within the meaning of Code Section
860F(a)(4)(A) and (ii) will not subject the REMIC to federal tax or cause the
Trust Estate to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(ii) The notice given by the Trustee under Section 9.01 shall
provide that such notice constitutes the adoption of a plan of complete
liquidation of the REMIC as of the date of such notice (or, if earlier,
the date on which the first such notice is mailed to Certificateholders).
The Master Servicer shall also specify such date in a statement attached
to the final tax return of the REMIC; and
(iii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the Final Distribution Date, the Trustee
shall sell all of the assets of the Trust Estate to the Seller for cash at
the purchase price specified in Section 9.01 and shall distribute such
cash within 90 days of such adoption in the manner specified in Section
9.01.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
(a) This Agreement or the Custodial Agreement may be amended from
time to time by the Seller, the Master Servicer and the Trustee 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 or in the related
Prospectus, (iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary to maintain the qualification of the Trust Estate
as a REMIC at all times that any Certificates are outstanding or to avoid or
minimize the risk of the imposition of any federal tax on the Trust Estate or
the REMIC pursuant to the Code that would be a claim against the Trust Estate,
provided that (a) the Trustee has received an Opinion of Counsel to the effect
that such action is necessary or desirable to maintain such qualification or to
avoid or minimize the risk of the imposition of any such tax and (b) such action
shall not, as evidenced by such Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder, (iv) to change the
timing and/or nature of deposits into the Certificate Account provided that such
change shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder, (v) to modify,
eliminate or add to the provisions of Section 5.02 or any other provisions
hereof restricting transfer of the Certificates, provided that the Master
Servicer for purposes of Section 5.02 has determined in its sole discretion that
any such modifications to this Agreement will neither adversely affect the
rating on the Certificates nor give rise to a risk that either the Trust Estate
or the REMIC or any of the Certificateholders will be subject to a tax caused by
a transfer to a non-permitted transferee and (vi) to make any other provisions
with respect to matters or questions arising under this Agreement or such
Custodial Agreement which shall not be materially inconsistent with the
provisions of this Agreement, provided that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Certificateholder. Notwithstanding the foregoing, any amendment pursuant
to clause (iv) or (vi) shall not be deemed to adversely affect in any material
respect the interest of Certificateholders and no Opinion of Counsel to that
effect shall be required if the person requesting the amendment instead obtains
a letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates.
This Agreement or the Custodial Agreement may also be amended from
time to time by the Seller, the Master Servicer and the Trustee with the consent
of the Holders of Certificates evidencing in the aggregate not less than 66-2/3%
of the aggregate Voting Interests of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or such Custodial Agreement
or of modifying in any manner the rights of the Holders of Certificates of such
Class; provided, however, that no such amendment shall (i) reduce in any manner
the amount of, or delay the timing of, payments received on Mortgage Loans which
are required to be distributed on any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interest of the Holders of Certificates of any Class in a manner other than as
described in clause (i) hereof without the consent of Holders of Certificates of
such Class evidencing, as to such Class, Voting Interests aggregating not less
than 66-2/3% or (iii) reduce the aforesaid percentage of Certificates of any
Class the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all Certificates of such Class then
outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not subject the REMIC to tax or cause the Trust Estate to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment requiring the consent
of Certificateholders, 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 10.01(a) to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
(b) [Reserved]
Section 10.02 Recordation of Agreement.
This Agreement (or an abstract hereof, if acceptable to the
applicable recording office) is subject to recordation in all appropriate public
offices for real property records in all the towns or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public office or elsewhere, such recordation to be
effected by the Master Servicer and at its expense on direction by the Trustee,
but only upon direction accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Estate, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of the
Trust Estate, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
Except as otherwise expressly provided herein, no Certificateholder,
solely by virtue of its status as a Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust Estate, 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, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision 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 Certificates evidencing not less than 25% of the Voting Interest
represented by all Certificates 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 cost, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such 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 benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York (without regard to conflicts of laws principles), and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 10.05 Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by certified or registered mail, return receipt requested (i) in the
case of the Seller, to ▇▇▇▇▇ Fargo Asset Securities Corporation, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President Structured
Finance, or such other address as may hereafter be furnished to the Master
Servicer and the Trustee in writing by the Seller, (ii) in the case of the
Master Servicer, to ▇▇▇▇▇ Fargo Bank Minnesota, National Association, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President, Master
Servicer or such other address as may hereafter be furnished to the Seller and
the Trustee in writing by the Master Servicer and (iii) in the case of the
Trustee, to the Corporate Trust Office, or such other address as may hereafter
be furnished to the Seller and the Master Servicer in writing by the Trustee, in
each case Attention: Corporate Trust Department. 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 mailed or transmitted within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the addressee receives such notice, provided, however, that any demand, notice
or communication to or upon the Seller, the Master Servicer or the Trustee shall
not be effective until received.
For all purposes of this Agreement, in the absence of actual
knowledge by an officer of the Master Servicer, the Master Servicer shall not be
deemed to have knowledge of any act or failure to act of any Servicer unless
notified thereof in writing by the Trustee, the Servicer or a Certificateholder.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Special Notices to Rating Agencies.
(a) The Trustee shall give prompt notice to each Rating Agency of
the occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 10.01(a);
(ii) any sale or transfer of the Class B Certificates pursuant to
Section 5.02 to an affiliate of the Seller;
(iii) any assignment by the Master Servicer of its rights and
delegation of its duties pursuant to Section 6.06;
(iv) any resignation of the Master Servicer pursuant to Section
6.04;
(v) the occurrence of any of the Events of Default described in
Section 7.01;
(vi) any notice of termination given to the Master Servicer pursuant
to Section 7.01;
(vii) the appointment of any successor to the Master Servicer
pursuant to Section 7.05; or
(viii) the making of a final payment pursuant to Section 9.01.
(b) The Master Servicer shall give prompt notice to each Rating
Agency of the occurrence of any of the following events:
(i) the resignation of the Custodian or the appointment of a
successor Custodian pursuant to the Custodial Agreement;
(ii) the resignation or removal of the Trustee pursuant to Section
8.08;
(iii) the appointment of a successor trustee pursuant to Section
8.09; or
(iv) the sale, transfer or other disposition in a single transaction
of 50% or more of the equity interests in the Master Servicer.
(c) The Master Servicer shall deliver to each Rating Agency:
(i) reports prepared pursuant to Section 3.05; and
(ii) statements prepared pursuant to Section 4.04.
Section 10.08 Covenant of Seller.
The Seller shall not amend Article Third of its Certificate of
Incorporation without the prior written consent of each Rating Agency rating the
Certificates.
Section 10.09 Recharacterization.
The Parties intend the conveyance by the Seller to the Trustee of
all of its right, title and interest in and to the Mortgage Loans pursuant to
this Agreement to constitute a purchase and sale and not a loan. Notwithstanding
the foregoing, to the extent that such conveyance is held not to constitute a
sale under applicable law, it is intended that this Agreement shall constitute a
security agreement under applicable law and that the Seller shall be deemed to
have granted to the Trustee a first priority security interest in all of the
Seller's right, title and interest in and to the Mortgage Loans.
ARTICLE XI
TERMS FOR CERTIFICATES
Section 11.01 Cut-Off Date.
The Cut-Off Date for the Certificates is August 1, 2003.
Section 11.02 Cut-Off Date Aggregate Principal Balance.
The Cut-Off Date Aggregate Principal Balance is
$235,020,224.00.
Section 11.03 Original Group I-A Percentage.
The Original Group I-A Percentage is 95.06821056%.
Section 11.04 Original Group II-A Percentage.
The Original Group II-A Percentage is 95.00814095%.
Section 11.05 Original Principal Balances of the Classes of Class A
Certificates.
As to the following Classes of Class A Certificates, the Principal
Balance of such Class as of the Cut-Off Date, as follows:
Original
Class Principal Balance
----- -----------------
Class I-A-1 $170,844,000.00
Class I-A-2 $ 11,276,000.00
Class I-A-3 $ 21,565,000.00
Class I-A-R $ 100.00
Class II-A-1 $ 18,080,000.00
Original Component
Component Principal Balance
--------- -----------------
Class I-A-PO Component $ 1,397,738.00
Class II-A-PO Component $ 341,003.00
Section 11.06 Original Aggregate Non-PO Principal Balance.
The Original Aggregate Non-PO Principal Balance is $233,280,582.75.
Section 11.07 Original Aggregate Percentages.
Section 11.07(a) Original Aggregate Subordinate Percentage.
The Original Aggregate Subordinate Percentage is 4.93670867%.
Section 11.07(b) Original Aggregate Class A Percentage.
The Original Aggregate Class A Percentage is 95.06329133%.
Section 11.08 Original Class B Principal Balance.
The Original Class B Principal Balance is $11,516,382.75.
Section 11.09 Original Principal Balances of the Classes of Class B
Certificates.
As to the following Classes of Class B Certificate, the Principal
Balance of such Class as of the Cut-Off Date, is as follows:
Original
Class Principal Balance
----- -----------------
Class B-1 $ 5,053,000.00
Class B-2 $ 2,233,000.00
Class B-3 $ 1,175,000.00
Class B-4 $ 1,292,000.00
Class B-5 $ 823,000.00
Class B-6 $ 940,382.75
Section 11.10 Original Class B-1 Fractional Interest.
The Original Class B-1 Fractional Interest is 2.77063686%.
Section 11.11 Original Class B-2 Fractional Interest.
The Original Class B-2 Fractional Interest is 1.81342415%.
Section 11.12 Original Class B-3 Fractional Interest.
The Original Class B-3 Fractional Interest is 1.30974080%.
Section 11.13 Original Class B-4 Fractional Interest.
The Original Class B-4 Fractional Interest is 0.75590344%.
Section 11.14 Original Class B-5 Fractional Interest.
The Original Class B-5 Fractional Interest is 0.40311076%.
Section 11.15 Closing Date.
The Closing Date is August 28, 2003.
Section 11.16 Right to Purchase.
The right of the Seller to purchase all of the Mortgage Loans
pursuant to Section 9.01 hereof shall be conditioned upon the aggregate
Scheduled Principal Balance of the Mortgage Loans being less than $23,502,022.40
(10% of the Cut-Off Date Aggregate Principal Balance) at the time of any such
purchase.
Section 11.17 Wire Transfer Eligibility.
With respect to the Class A Certificates (other than the Class I-A-R
Certificate) and the Class B Certificates, the minimum Denomination eligible for
wire transfer on each Distribution Date is $100,000. The Class I-A-R Certificate
is not eligible for wire transfer.
Section 11.18 Single Certificate.
A Single Certificate for the Class I-A-1, Class I-A-2, Class I-A-3
and Class II-A-1 Certificates represent a $25,000 Denomination. A Single
Certificate for the Class A-PO, Class B-1, Class B-2 and Class B-3 Certificates
represents a $100,000 Denomination. A Single Certificate for the Class I-A-R
Certificate represents a $100 Denomination. A Single Certificate for the Class
B-4, Class B-5 and Class B-6 Certificates represents a $250,000 Denomination.
Section 11.19 Servicing Fee Rate.
The rate used to calculate the Servicing Fee is equal to such rate
as is set forth on the Mortgage Loan Schedule with respect to a Mortgage Loan.
Section 11.20 Master Servicing Fee Rate.
The rate used to calculate the Master Servicing Fee for each
Mortgage Loan shall be 0.010% per annum.
IN WITNESS WHEREOF, the Seller, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
▇▇▇▇▇ FARGO ASSET SECURITIES
CORPORATION
as Seller
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Master Servicer
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION
as Trustee
By:
-------------------------------------
Name:
Title:
Attest:
By: ___________________________________
Name: _________________________________
Title: ________________________________
STATE OF MARYLAND )
ss.:
COUNTY OF ▇▇▇▇▇▇▇▇▇ )
On this 28th day of August, 2003, before me, a notary public in and
for the State of Maryland, personally ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me who, being by
me duly sworn, did depose and say that he resides at Frederick, Maryland; that
he is Senior Vice President of ▇▇▇▇▇ Fargo Asset Securities Corporation, a
Delaware corporation, one of the parties that executed the foregoing instrument;
and that he signed his name thereto by order of the Board of Directors of said
corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MARYLAND )
ss.:
COUNTY OF FREDERICK )
On this 28th day of August, 2003, before me, a notary public in and
for the State of Maryland, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, known to me
who, being by me duly sworn, did depose and say that he resides at Frederick,
Maryland; that he is a Vice President of ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, a national banking association, one of the parties that executed
the foregoing instrument; and that he signed her name thereto by order of the
Board of Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NORTH CAROLINA )
ss.:
COUNTY OF )
On this 28th day of August, 2003, before me, a notary public in and
for the State of North Carolina, personally appeared ___________________, known
to me who, being by me duly sworn, did depose and say that s/he resides at
_________________, North Carolina; that s/he is a ____________________ of
Wachovia Bank, National Association, a national banking association, one of the
parties that executed the foregoing instrument; and that s/he signed his/her
name thereto by order of the Board of Directors of said corporation.
STATE OF NORTH CAROLINA )
ss.:
COUNTY OF )
On this 28th day of August, 2003, before me, a notary public in and
for the State of North Carolina, personally appeared _____________________,
known to me who, being by me duly sworn, did depose and say that he resides at
__________________, North Carolina; that he is a _____________________ of
Wachovia Bank, National Association, a national banking association, one of the
parties that executed the foregoing instrument; and that s/he signed his name
thereto by order of the Board of Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
EXHIBIT A-I-A-1
[FORM OF FACE OF CLASS I-A-1 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO.,
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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS I-A-1
evidencing an interest in a pool of fixed
interest rate, conventional, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AA 7 First Distribution Date: September 25, 2003
Denomination: $________________
Percentage Interest evidenced
by this Certificate: ______% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class I-A-1 Certificates with respect to a Trust Estate
consisting of two pools of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, other
than the Fixed Retained Yield, if any, with respect thereto (the "Group I
Mortgage Loans" and "Group II Mortgage Loans", respectively), formed by ▇▇▇▇▇
Fargo Asset Securities Corporation (hereinafter called the "Seller", which term
includes any successor entity under the Agreement referred to below). The Trust
Estate was created pursuant to a Pooling and Servicing Agreement dated as of
August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (the "Master Servicer") and Wachovia
Bank, National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereinafter. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the Group
I-A Distribution Amount for the Class I-A-1 Certificates required to be
distributed to Holders of the Class I-A-1 Certificates on such Distribution
Date, subject to adjustment in certain events as specified in the Agreement.
Distributions in reduction of the Principal Balance of certain Classes of Class
A Certificates may not commence on the first Distribution Date specified above.
Distributions of principal will be allocated among the Classes of Group I-A
Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class I-A-1 Certificates applicable to each
Distribution Date will be 5.750% per annum. The amount of interest which accrues
on this Certificate in any month will be subject to reduction with respect to
any Non-Supported Interest Shortfall, any Relief Act Shortfall and the interest
portion of certain Realized Losses allocated to the Class I-A-1 Certificates, as
described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By
---------------------------------
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By
---------------------------------
Authorized Officer
EXHIBIT A-I-A-2
[FORM OF FACE OF CLASS I-A-2 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO.,
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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS I-A-2
evidencing an interest in a pool of fixed
interest rate, conventional, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AB 5 First Distribution Date: September 25, 2003
Denomination: $______________
Percentage Interest evidenced
by this Certificate:_________% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class I-A-2 Certificates with respect to a Trust Estate
consisting of two pools of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, other
than the Fixed Retained Yield, if any, with respect thereto (the "Group I
Mortgage Loans" and "Group II Mortgage Loans", respectively), formed by ▇▇▇▇▇
Fargo Asset Securities Corporation (hereinafter called the "Seller", which term
includes any successor entity under the Agreement referred to below). The Trust
Estate was created pursuant to a Pooling and Servicing Agreement dated as of
August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (the "Master Servicer") and Wachovia
Bank, National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereinafter. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the Group
I-A Distribution Amount for the Class I-A-2 Certificates required to be
distributed to Holders of the Class I-A-2 Certificates on such Distribution
Date, subject to adjustment in certain events as specified in the Agreement.
Distributions in reduction of the Principal Balance of certain Classes of Class
A Certificates may not commence on the first Distribution Date specified above.
Distributions of principal will be allocated among the Classes of Group I-A
Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class I-A-2 Certificates applicable to each
Distribution Date will be 5.750% per annum. The amount of interest which accrues
on this Certificate in any month will be subject to reduction with respect to
any Non-Supported Interest Shortfall, any Relief Act Shortfall and the interest
portion of certain Realized Losses allocated to the Class I-A-2 Certificates, as
described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By ________________________
Authorized Officer
EXHIBIT A-I-A-3
[FORM OF FACE OF CLASS I-A-3 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO.,
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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS I-A-3
evidencing an interest in a pool of fixed
interest rate, conventional, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AC 3 First Distribution Date: September 25, 2003
Denomination: $________________
Percentage Interest evidenced
by this Certificate: ______% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class I-A-3 Certificates with respect to a Trust Estate
consisting of two pools of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, other
than the Fixed Retained Yield, if any, with respect thereto (the "Group I
Mortgage Loans" and "Group II Mortgage Loans", respectively), formed by ▇▇▇▇▇
Fargo Asset Securities Corporation (hereinafter called the "Seller", which term
includes any successor entity under the Agreement referred to below). The Trust
Estate was created pursuant to a Pooling and Servicing Agreement dated as of
August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (the "Master Servicer") and Wachovia
Bank, National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereinafter. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the Group
I-A Distribution Amount for the Class I-A-3 Certificates required to be
distributed to Holders of the Class I-A-3 Certificates on such Distribution
Date, subject to adjustment in certain events as specified in the Agreement.
Distributions in reduction of the Principal Balance of certain Classes of Class
A Certificates may not commence on the first Distribution Date specified above.
Distributions of principal will be allocated among the Classes of Group I-A
Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class I-A-3 Certificates applicable to each
Distribution Date will be 5.750% per annum. The amount of interest which accrues
on this Certificate in any month will be subject to reduction with respect to
any Non-Supported Interest Shortfall, any Relief Act Shortfall and the interest
portion of certain Realized Losses allocated to the Class I-A-3 Certificates, as
described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By ________________________
Authorized Officer
EXHIBIT A-I-A-R
[Form of Face of Class I-A-R Certificate]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G(a)(2) AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"). A TRANSFEREE OF THIS CERTIFICATE, BY ACCEPTANCE
HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFERABILITY, AS SET FORTH IN SECTION 5.02(d) OF THE
AGREEMENT, AND SHALL BE REQUIRED TO FURNISH AN AFFIDAVIT TO THE TRANSFEROR AND
THE TRUSTEE TO THE EFFECT THAT, AMONG OTHER THINGS, IT IS NOT A DISQUALIFIED
ORGANIZATION, AS SUCH TERM IS DEFINED IN CODE SECTION 860E(e)(5), AN AGENT
(INCLUDING A BROKER, NOMINEE OR OTHER MIDDLEMAN) FOR A DISQUALIFIED ORGANIZATION
OR A NON-PERMITTED FOREIGN HOLDER, AS DEFINED IN SECTION 5.02(d) OF THE
AGREEMENT AND TO HAVE AGREED TO SUCH AMENDMENTS TO THE AGREEMENT AS MAY BE
REQUIRED TO FURTHER EFFECTUATE THE RESTRICTIONS ON TRANSFERS TO DISQUALIFIED
ORGANIZATIONS, AGENTS THEREOF OR NON-PERMITTED FOREIGN HOLDERS.
THE HOLDER OF THIS CLASS I-A-R CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO
HAVE AGREED TO THE DESIGNATION OF THE MASTER SERVICER AS ITS AGENT TO ACT AS
"TAX MATTERS PERSON" OF THE REMIC TO PERFORM THE FUNCTIONS OF A "TAX MATTERS
PARTNER" FOR PURPOSES OF SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE,
OR, IF SO REQUESTED BY THE MASTER SERVICER, TO ACT AS TAX MATTERS PERSON OF THE
REMIC.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON WHICH IS
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF
ERISA SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A
"PLAN"), OR ANY PERSON ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN.
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS I-A-R
evidencing an interest in a pool of fixed
interest rate, conventional, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AD 1 First Distribution Date: September 25, 2003
Denomination: $___________
Percentage Interest evidenced
by this Certificate: ______% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT __________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate in monthly
distributions to the Holder of the Class I-A-R Certificate with respect to a
Trust Estate consisting of two pools of fixed interest rate, conventional,
monthly pay, fully amortizing, first lien, one- to four-family residential
mortgage loans, other than the Fixed Retained Yield, if any, with respect
thereto (the "Group I Mortgage Loans" and "Group II Mortgage Loans,"
respectively), formed by ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter
called the "Seller", which term includes any successor entity under the
Agreement referred to below). The Trust Estate was created pursuant to a Pooling
and Servicing Agreement dated as of August 28, 2003 (the "Agreement") among the
Seller, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer
(the "Master Servicer") and Wachovia Bank, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the Group
I-A Distribution Amount for the Class I-A-R Certificate required to be
distributed to the Holder of the Class I-A-R Certificate on such Distribution
Date, subject to adjustment in certain events as specified in the Agreement.
Distributions in reduction of the Principal Balance of certain Classes of Class
A Certificates may not commence on the first Distribution Date specified above.
Distributions of principal will be allocated among the Classes of Group I-A
Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class I-A-R Certificate applicable to each Distribution
Date will be 5.750% per annum. The amount of interest which accrues on this
Certificate in any month will be subject to reduction with respect to any
Non-Supported Interest Shortfall, any Relief Act Shortfall and the interest
portion of certain Realized Losses allocated to the Class I-A-R Certificate, as
described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency specified by the Trustee for that
purpose in the notice of final distribution.
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.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT A-A-PO
[FORM OF FACE OF CLASS A-PO CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO.,
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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS A-PO
evidencing an interest in two pools of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien,
one- to four-family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AF 6 First Distribution Date: September 25, 2003
Denomination: $________________
Percentage Interest evidenced
by this Certificate: ____% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT ________________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class A-PO Certificates with respect to a Trust Estate
consisting of two pools of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, other
than the Fixed Retained Yield, if any, with respect thereto (the "Group I
Mortgage Loans" and "Group II Mortgage Loans," respectively), formed by ▇▇▇▇▇
Fargo Asset Securities Corporation (hereinafter called the "Seller", which term
includes any successor entity under the Agreement referred to below). The Trust
Estate was created pursuant to a Pooling and Servicing Agreement dated as of
August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (the "Master Servicer") and Wachovia
Bank, National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereinafter. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the Group
I-A Distribution Amount and the Group II-A Distribution Amount for the Class
A-PO Certificates required to be distributed to Holders of the Class A-PO
Certificates on such Distribution Date, subject to adjustment in certain events
as specified in the Agreement. For the purposes of determining distributions in
reduction of Principal Balance, the Class A-PO Certificates consist of two
components (each, a "Component" and individually, the "Class I-A-PO Component"
and the "Class I-A-PO Component"). The Class A-PO Components are principal only
Components and will not be entitled to distributions in respect of interest.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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.
Each Component of this Certificate constitutes a "regular interest" in
a "real estate mortgage investment conduit" as those terms are defined in
Section 860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code
of 1986, as amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT A-II-A-1
[FORM OF FACE OF CLASS II-A-1 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO.,
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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS II-A-1
evidencing an interest in a pool of fixed
interest rate, conventional, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AE 9 First Distribution Date: September 25, 2003
Denomination: $________________
Percentage Interest evidenced
by this Certificate: ______% Final Scheduled Maturity Date: September 25, 2018
THIS CERTIFIES THAT _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class II-A-1 Certificates with respect to a Trust Estate
consisting of two pools of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, other
than the Fixed Retained Yield, if any, with respect thereto (the "Group I
Mortgage Loans" and "Group II Mortgage Loans", respectively), formed by ▇▇▇▇▇
Fargo Asset Securities Corporation (hereinafter called the "Seller", which term
includes any successor entity under the Agreement referred to below). The Trust
Estate was created pursuant to a Pooling and Servicing Agreement dated as of
August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (the "Master Servicer") and Wachovia
Bank, National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereinafter. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the Group
II-A Distribution Amount for the Class II-A-1 Certificates required to be
distributed to Holders of the Class II-A-1 Certificates on such Distribution
Date, subject to adjustment in certain events as specified in the Agreement.
Distributions in reduction of the Principal Balance of certain Classes of Class
A Certificates may not commence on the first Distribution Date specified above.
Distributions of principal will be allocated among the Classes of Group II-A
Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class II-A-1 Certificates applicable to each
Distribution Date will be 5.750% per annum. The amount of interest which accrues
on this Certificate in any month will be subject to reduction with respect to
any Non-Supported Interest Shortfall, any Relief Act Shortfall and the interest
portion of certain Realized Losses allocated to the Class II-A-1 Certificates,
as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT B-1
[FORM OF FACE OF CLASS B-1 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., 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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS B-1
evidencing an interest in two pools of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien, one- to four-
family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AG 4 First Distribution Date: September 25, 2003
Denomination: $_________________
Percentage Interest evidenced
by this Certificate: ________% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT __________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate in monthly
distributions to the Holders of the Class B-1 Certificates with respect to a
Trust Estate consisting of two pools of fixed interest rate, conventional,
monthly pay, fully amortizing, first lien, one- to four-family residential
mortgage loans, other than the Fixed Retained Yield, if any, with respect
thereto (the "Group I Mortgage Loans" and "Group II Mortgage Loans,"
respectively), formed by ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter
called the "Seller", which term includes any successor entity under the
Agreement referred to below). The Trust Estate was created pursuant to a Pooling
and Servicing Agreement dated as of August 28, 2003 (the "Agreement") among the
Seller, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer
(the "Master Servicer") and Wachovia Bank, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and, subject to
the prior rights of the Class A Certificates as specified in the Agreement, any
Class B-1 Distribution Amount required to be distributed to Holders of the Class
B-1 Certificates on such Distribution Date, subject to adjustment, in certain
events, as specified in the Agreement. The pass-through rate on the Class B-1
Certificates applicable to each Distribution Date will be 5.750% per annum. The
amount of interest which accrues on this Certificate in any month will be
subject to reduction with respect to any Non-Supported Interest Shortfall and
any Relief Act Shortfall allocated to the Class B-1 Certificates, as described
in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT B-2
[FORM OF FACE OF CLASS B-2 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AND THE CLASS B-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., 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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS B-2
evidencing an interest in a pool of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien, one- to four-
family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AH 2 First Distribution Date: September 25, 2003
Denomination: $________________
Percentage Interest evidenced
by this Certificate: ____% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT _________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate in monthly
distributions to the Holders of the Class B-2 Certificates with respect to a
Trust Estate consisting of two pools of fixed interest rate, conventional,
monthly pay, fully amortizing, first lien, one- to four-family residential
mortgage loans, other than the Fixed Retained Yield, if any, with respect
thereto (the "Group I Mortgage Loans" and "Group II Mortgage Loans,"
respectively), formed by ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter
called the "Seller", which term includes any successor entity under the
Agreement referred to below). The Trust Estate was created pursuant to a Pooling
and Servicing Agreement dated as of August 28, 2003 (the "Agreement") among the
Seller, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer
(the "Master Servicer") and Wachovia Bank, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and, subject to
the prior rights of the Class A Certificates and each Class of Class B
Certificates bearing a lower numerical designation as specified in the
Agreement, any Class B-2 Distribution Amount required to be distributed to
Holders of the Class B-2 Certificates on such Distribution Date, subject to
adjustment, in certain events, as specified in the Agreement. The pass-through
rate on the Class B-2 Certificates applicable to each Distribution Date will be
5.750% per annum. The amount of interest which accrues on this Certificate in
any month will be subject to reduction with respect to any Non-Supported
Interest Shortfall and any Relief Act Shortfall allocated to the Class B-2
Certificates, as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT B-3
[FORM OF FACE OF CLASS B-3 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE CLASS B-2 CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE SELLER 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 REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., 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.]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS B-3
evidencing an interest in two pools of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien, one- to four-
family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AJ 8 First Distribution Date: September 25, 2003
Denomination: $________________
Percentage Interest evidenced
by this Certificate: ____% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT ________________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class B-3 Certificates with respect to a Trust Estate
consisting of two pools of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, other
than the Fixed Retained Yield, if any, with respect thereto (the "Group I
Mortgage Loans" and "Group II Mortgage Loans," respectively), formed by ▇▇▇▇▇
Fargo Asset Securities Corporation (hereinafter called the "Seller", which term
includes any successor entity under the Agreement referred to below). The Trust
Estate was created pursuant to a Pooling and Servicing Agreement dated as of
August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (the "Master Servicer") and Wachovia
Bank, National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereinafter. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and, subject to
the prior rights of the Class A Certificates and each Class of Class B
Certificates bearing a lower numerical designation as specified in the
Agreement, any Class B-3 Distribution Amount required to be distributed to
Holders of the Class B-3 Certificates on such Distribution Date, subject to
adjustment, in certain events, as specified in the Agreement. The pass-through
rate on the Class B-3 Certificates applicable to each Distribution Date will be
5.750% per annum. The amount of interest which accrues on this Certificate in
any month will be subject to reduction with respect to any Non-Supported
Interest Shortfall and any Relief Act Shortfall allocated to the Class B-3
Certificates, as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT B-4
[FORM OF FACE OF CLASS B-4 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES AND THE
CLASS B-3 CERTIFICATES AS DESCRIBED IN THE 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 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(C) OF THE AGREEMENT REFERRED TO HEREIN, THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS NOT
DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT."
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS B-4
evidencing an interest in two pools of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien, one- to four-
family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AM 1 First Distribution Date: September 25, 2003
Denomination: $_______________
Percentage Interest evidenced
by this Certificate: _____% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT ___________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate in monthly
distributions to the Holders of the Class B-4 Certificates with respect to a
Trust Estate consisting of two pools of fixed interest rate, conventional,
monthly pay, fully amortizing, first lien, one- to four-family residential
mortgage loans, other than the Fixed Retained Yield, if any, with respect
thereto (the "Group I Mortgage Loans" and "Group II Mortgage Loans,"
respectively), formed by ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter
called the "Seller", which term includes any successor entity under the
Agreement referred to below). The Trust Estate was created pursuant to a Pooling
and Servicing Agreement dated as of August 28, 2003 (the "Agreement") among the
Seller, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer
(the "Master Servicer") and Wachovia Bank, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and, subject to
the prior rights of the Class A Certificates and each Class of Class B
Certificates bearing a lower numerical designation as specified in the
Agreement, any Class B-4 Distribution Amount required to be distributed to
Holders of the Class B-4 Certificates on such Distribution Date, subject to
adjustment, in certain events, as specified in the Agreement. The pass-through
rate on the Class B-4 Certificates applicable to each Distribution Date will be
5.750% per annum. The amount of interest which accrues on this Certificate in
any month will be subject to reduction with respect to any Non-Supported
Interest Shortfall and any Relief Act Shortfall allocated to the Class B-4
Certificates, as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
No transfer of a Class B-4 Certificate will 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. In the event that such a
transfer is desired to be made by the Holder hereof, (i) the transferee will be
required to execute an investment letter in the form described in the Agreement
and (ii) if such transfer is to be made within three years from the later of (a)
the date of initial issuance of the Certificates or (b) the last date on which
the Seller or any affiliate thereof was a Holder of the Certificates proposed to
be transferred, and unless such transfer is made in reliance on Rule 144A of the
Securities Act of 1933, as amended, the Trustee or the Seller may require the
Holder to deliver an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee and the Seller that such transfer is exempt
(describing the applicable exemption and the basis therefor) from or is being
made pursuant to the registration requirements of the Securities Act of 1933, as
amended, and of any applicable statute of any state. The Holder hereof desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Seller, the Master Servicer, and any Paying Agent acting on behalf of the
Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws. In connection
with any such transfer, the Trustee will also require (i) a representation
letter, in the form as described in the Agreement, stating either (a) that the
transferee is not a Plan and is not acting on behalf of a Plan or using the
assets of a Plan to effect such purchase or (b) subject to certain conditions
described in the Agreement, that the source of funds used to purchase this
Certificate is an "insurance company general account," or (ii) if such
transferee is a Plan, (a) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee and the Seller with respect to certain
matters and (b) such other documentation as the Seller or the Master Servicer
may require, as described in the Agreement.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT B-5
[FORM OF FACE OF CLASS B-5 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS
B-3 CERTIFICATES AND THE CLASS B-4 CERTIFICATES AS DESCRIBED IN THE 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 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(C) OF THE AGREEMENT REFERRED TO HEREIN, THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS NOT
DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT."
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS B-5
evidencing an interest in two pools of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien, one- to four-
family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AN 9 First Distribution Date: September 25, 2003
Denomination: $_____________
Percentage Interest evidenced
by this Certificate: _____% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT _________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate in monthly
distributions to the Holders of the Class B-5 Certificates with respect to a
Trust Estate consisting of two pools of fixed interest rate, conventional,
monthly pay, fully amortizing, first lien, one- to four-family residential
mortgage loans, other than the Fixed Retained Yield, if any, with respect
thereto (the "Group I Mortgage Loans" and "Group II Mortgage Loans,"
respectively), formed by ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter
called the "Seller", which term includes any successor entity under the
Agreement referred to below). The Trust Estate was created pursuant to a Pooling
and Servicing Agreement dated as of August 28, 2003 (the "Agreement") among the
Seller, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer
(the "Master Servicer") and Wachovia Bank, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and, subject to
the prior rights of the Class A Certificates and each Class of Class B
Certificates bearing a lower numerical designation as specified in the
Agreement, any Class B-5 Distribution Amount required to be distributed to
Holders of the Class B-5 Certificates on such Distribution Date, subject to
adjustment, in certain events, as specified in the Agreement. The pass-through
rate on the Class B-5 Certificates applicable to each Distribution Date will be
5.750% per annum. The amount of interest which accrues on this Certificate in
any month will be subject to reduction with respect to any Non-Supported
Interest Shortfall and any Relief Act Shortfall allocated to the Class B-5
Certificates, as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
No transfer of a Class B-5 Certificate will 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. In the event that such a
transfer is desired to be made by the Holder hereof, (i) the transferee will be
required to execute an investment letter in the form described in the Agreement
and (ii) if such transfer is to be made within three years from the later of (a)
the date of initial issuance of the Certificates or (b) the last date on which
the Seller or any affiliate thereof was a Holder of the Certificates proposed to
be transferred, and unless such transfer is made in reliance on Rule 144A of the
Securities Act of 1933, as amended, the Trustee or the Seller may require the
Holder to deliver an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee and the Seller that such transfer is exempt
(describing the applicable exemption and the basis therefor) from or is being
made pursuant to the registration requirements of the Securities Act of 1933, as
amended, and of any applicable statute of any state. The Holder hereof desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Seller, the Master Servicer, and any Paying Agent acting on behalf of the
Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws. In connection
with any such transfer, the Trustee will also require (i) a representation
letter, in the form as described in the Agreement, stating either (a) that the
transferee is not a Plan and is not acting on behalf of a Plan or using the
assets of a Plan to effect such purchase or (b) subject to certain conditions
described in the Agreement, that the source of funds used to purchase this
Certificate is an "insurance company general account," or (ii) if such
transferee is a Plan, (a) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee and the Seller with respect to certain
matters and (b) such other documentation as the Seller or the Master Servicer
may require, as described in the Agreement.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT B-6
[FORM OF FACE OF CLASS B-6 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS
B-3 CERTIFICATES, THE CLASS B-4 CERTIFICATES AND THE CLASS B-5 CERTIFICATES AS
DESCRIBED IN THE 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 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(C) OF THE AGREEMENT REFERRED TO HEREIN, THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS NOT
DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT."
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES 2003-1, CLASS B-6
evidencing an interest in two pools of fixed interest rate,
conventional, monthly pay, fully amortizing, first lien, one- to four-
family residential mortgage loans sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, AND IS
NOT INSURED OR GUARANTEED BY THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR ANY
OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: August 1, 2003
CUSIP No.: 949912 AP 4 First Distribution Date: September 25, 2003
Denomination: $_______________
Percentage Interest evidenced
by this Certificate: _____% Final Scheduled Maturity Date: September 25, 2033
THIS CERTIFIES THAT ______________________________ is the registered
owner of the Percentage Interest evidenced by this Certificate in monthly
distributions to the Holders of the Class B-6 Certificates with respect to a
Trust Estate consisting of two pools of fixed interest rate, conventional,
monthly pay, fully amortizing, first lien, one- to four-family residential
mortgage loans, other than the Fixed Retained Yield, if any, with respect
thereto (the "Group I Mortgage Loans" and "Group II Mortgage Loans,"
respectively), formed by ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter
called the "Seller", which term includes any successor entity under the
Agreement referred to below). The Trust Estate was created pursuant to a
Agreement dated as of August 28, 2003 (the "Agreement") among the Seller, ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as master servicer (the "Master
Servicer") and Wachovia Bank, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereinafter. To the extent not defined herein, the capitalized terms used herein
have the meanings ascribed to such terms 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.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 Business Day of
the month preceding the month of such distribution, in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and, subject to
the prior rights of the Class A Certificates and each Class of Class B
Certificates bearing a lower numerical designation as specified in the
Agreement, any Class B-6 Distribution Amount required to be distributed to
Holders of the Class B-6 Certificates on such Distribution Date, subject to
adjustment, in certain events, as specified in the Agreement. The pass-through
rate on the Class B-6 Certificates applicable to each Distribution Date will be
5.750% per annum. The amount of interest which accrues on this Certificate in
any month will be subject to reduction with respect to any Non-Supported
Interest Shortfall and any Relief Act Shortfall allocated to the Class B-6
Certificates, as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee
either by the Master Servicer or by a Paying Agent appointed by the Master
Servicer by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Master Servicer
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency specified by the Trustee
for that purpose in the notice of final distribution.
No transfer of a Class B-6 Certificate will 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. In the event that such a
transfer is desired to be made by the Holder hereof, (i) the transferee will be
required to execute an investment letter in the form described in the Agreement
and (ii) if such transfer is to be made within three years from the later of (a)
the date of initial issuance of the Certificates or (b) the last date on which
the Seller or any affiliate thereof was a Holder of the Certificates proposed to
be transferred, and unless such transfer is made in reliance on Rule 144A of the
Securities Act of 1933, as amended, the Trustee or the Seller may require the
Holder to deliver an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee and the Seller that such transfer is exempt
(describing the applicable exemption and the basis therefor) from or is being
made pursuant to the registration requirements of the Securities Act of 1933, as
amended, and of any applicable statute of any state. The Holder hereof desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Seller, the Master Servicer, and any Paying Agent acting on behalf of the
Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws. In connection
with any such transfer, the Trustee will also require (i) a representation
letter, in the form as described in the Agreement, stating either (a) that the
transferee is not a Plan and is not acting on behalf of a Plan or using the
assets of a Plan to effect such purchase or (b) subject to certain conditions
described in the Agreement, that the source of funds used to purchase this
Certificate is an "insurance company general account," or (ii) if such
transferee is a Plan, (a) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee and the Seller with respect to certain
matters and (b) such other documentation as the Seller or the Master Servicer
may require, as described in the Agreement.
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 constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
Unless this Certificate has been countersigned by an authorized officer
of the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Dated:
Wachovia Bank, National Association,
Trustee
By____________________________
Authorized Officer
Countersigned:
Wachovia Bank, National Association,
Trustee
By________________________
Authorized Officer
EXHIBIT C
[Form of Reverse of Series 2003-1 Certificates]
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2003-1
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Asset-Backed Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event funds are advanced with respect to any
Mortgage Loan by a Servicer, the Master Servicer or the Trustee, such advances
are reimbursable to such Servicer, the Master Servicer or the Trustee to the
extent provided in the Agreement, from related recoveries on such Mortgage Loan
or from other cash that would have been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Certificate Account
created for the benefit of Certificateholders may be made by the Master Servicer
from time to time for purposes other than distributions to Certificateholders,
such purposes including reimbursement to a Servicer, the Master Servicer or the
Trustee, as applicable, of advances made by such Servicer, the Master Servicer
or the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Seller, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Seller, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Voting Interests of
each Class of Certificates affected thereby. 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 hereof or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the 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 upon surrender of this Certificate for registration of transfer at the
office or agency appointed by the Trustee, duly endorsed by, or accompanied by
an assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar, 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 evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and 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 authorized Denominations evidencing the same Class and
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 Seller, the Master Servicer, the Trustee and the Certificate
Registrar, and any agent of the Seller, the Master Servicer, the Trustee or the
Certificate Registrar, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Seller, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement in respect of the Certificates
and the Trust Estate created thereby shall terminate upon the last action
required to be taken by the Trustee on the Final Distribution Date pursuant to
the Agreement following the earlier of (i) the payment or other liquidation (or
advance with respect thereto) of the last Mortgage Loan subject thereto or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Seller from the
Trust Estate of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans; provided, however, that the Trust Estate will in
no event 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 of the Agreement.
The Agreement permits, but does not require, the Seller to purchase all
remaining Mortgage Loans and all property acquired in respect of any Mortgage
Loan at a price determined as provided in the Agreement. The exercise of such
option will effect early retirement of the Certificates, the Seller's right to
exercise such option being subject to the Pool Scheduled Principal Balance of
the Mortgage Loans as of the Distribution Date upon which the proceeds of such
repurchase are distributed being less than ten percent of the Cut-Off Date
Aggregate Principal Balance.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Estate.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like Denomination or Percentage Interest and Class, to the
above named assignee and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Social Security or other Identifying Number of Assignee:
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, if the assignee is eligible to receive
distributions in immediately available funds, by wire transfer or otherwise, in
immediately available funds to _____________________________________________ for
the account of _______________________________________________ account number
_____________, or, if mailed by check, to ________________________________.
Applicable statements should be mailed to ______________________
_____________________________________.
This information is provided by ______________________, the assignee
named above, or ___________________________________, as its agent.
EXHIBIT D
RESERVED
EXHIBIT E
[Intentionally Omitted]
EXHIBIT F-1A
[Schedule of Mortgage Loans in Group I]
[Intentionally Omitted]
EXHIBIT F-1B
[Schedule of Mortgage Loans in Group II]
[Intentionally Omitted]
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇., ▇▇ ▇▇▇▇▇
Attn: ________________
Re: Custodial Agreement, dated as of August 28, 2003, among
Wachovia Bank, National Association, as Trustee, ▇▇▇▇▇ Fargo
Asset Securities Corporation, as Seller, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Master Servicer, and ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as Custodian,
relating to the ▇▇▇▇▇ Fargo Asset Securities Corporation;
Mortgage Asset-Backed Pass-Through Certificates, Series
2003-1.
In connection with the administration of the Mortgage Loans
held by you as Custodian for the Trust Estate pursuant to the above-captioned
Custodial Agreement, we request the r0elease, and hereby acknowledge receipt, of
the Custodian's Owner Mortgage Loan File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_________ 1. Mortgage Paid in Full
_________ 2. Foreclosure
_________ 3. Substitution
_________ 4. Other Liquidation (Repurchases, etc.)
_________ 5. Nonliquidation
Reason:____________________________________
By:________________________________________
(authorized signer)
Issuer:____________________________________
Address:___________________________________
___________________________________
Date:______________________________________
Custodian
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature
and date below:
_____________________________________ __________________
Signature Date
Documents returned to Custodian:
_____________________________________ __________________
Custodian Date
EXHIBIT H
AFFIDAVIT PURSUANT TO SECTION
860E(e)(4) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND FOR
NON-ERISA INVESTORS
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Purchaser] (the
"Purchaser"), a [description of type of entity] duly organized and existing
under the laws of the [State of _____] [United States], on behalf of which he
makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5),of the Internal Revenue Code of 1986, as amended
(the "Code"), or an ERISA Prohibited Holder, and will not be a "disqualified
organization" or an ERISA Prohibited Holder, as of [date of transfer], and that
the Purchaser is not acquiring ▇▇▇▇▇ Fargo Asset Securities Corporation Mortgage
Asset-Backed Pass-Through Certificates, Series 2003-1, Class I-A-R Certificate
(the "Class I-A-R Certificate") for the account of, or as agent (including a
broker, nominee, or other middleman) for, any person or entity from which it has
not received an affidavit substantially in the form of this affidavit. For these
purposes, a "disqualified organization" means the United States, any state or
political subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the foregoing (other than
an instrumentality if all of its activities are subject to tax and a majority of
its board of directors is not selected by such governmental entity), any
cooperative organization furnishing electric energy or providing telephone
service to persons in rural areas as described in Code Section 1381(a)(2)(C), or
any organization (other than a farmers' cooperative described in Code Section
521) that is exempt from taxation under the Code unless such organization is
subject to the tax on unrelated business income imposed by Code Section 511. For
these purposes, an "ERISA Prohibited Holder" means an employee benefit plan or
other retirement arrangement subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Code Section 4975 or a
governmental plan, as defined in Section 3(32) of ERISA, subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (collectively, a "Plan") or a Person acting on
behalf of or investing the assets of such a Plan.
4. That the Purchaser historically has paid its debts as they have come
due and intends to pay its debts as they come due in the future and the
Purchaser intends to pay taxes associated with holding the Class I-A-R
Certificate as they become due.
5. That the Purchaser understands that it may incur tax liabilities
with respect to the Class I-A-R Certificate in excess of cash flows generated by
the Class I-A-R Certificate.
6. That the Purchaser will not transfer the Class I-A-R Certificate to
any person or entity from which the Purchaser has not received an affidavit
substantially in the form of this affidavit and as to which the Purchaser has
actual knowledge that the requirements set forth in paragraph 3, 4 or 10 hereof
are not satisfied or that the Purchaser has reason to know does not satisfy the
requirements set forth in paragraph 4 hereof.
7. That the Purchaser is aware that the Class I-A-R Certificate may be
a "noneconomic residual interest" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
8. That the Purchaser will not cause income from the Class I-A-R
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Purchaser or
any other person.
9. That, if the Purchaser is purchasing the Class I-A-R Certificate in
a transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections
1.860E-1(c), the Purchaser has executed and attached Attachment A hereto.
10. That the Purchaser (i) is a U.S. Person or (ii) is a person other
than a U.S. Person (a "Non-U.S. Person") that holds the Class I-A-R Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Trustee with an effective Internal
Revenue Service Form W-8ECI or successor form at the time and in the manner
required by the Code or (iii) is a Non-U.S. Person that has delivered to both
the transferor and the Trustee an opinion of a nationally recognized tax counsel
to the effect that the transfer of the Class I-A-R Certificate to it is in
accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Class I-A-R Certificate will not be
disregarded for federal income tax purposes. "U.S. Person" means a citizen or
resident of the United States, a corporation or partnership (unless, in the case
of a partnership, Treasury regulations are adopted that provide otherwise)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, including an entity treated as a
corporation or partnership for federal income tax purposes, an estate whose
income is subject to United States federal income tax regardless of its source,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of such trust, and one or more such U.S.
Persons have the authority to control all substantial decisions of such trust
(or, to the extent provided in applicable Treasury regulations, certain trusts
in existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons).
11. That the Purchaser agrees to such amendments of the Pooling and
Servicing Agreement as may be required to further effectuate the restrictions on
transfer of the Class I-A-R Certificate to such a "disqualified organization,"
an agent thereof, an ERISA Prohibited Holder or a person that does not satisfy
the requirements of paragraph 4, paragraph 5 and paragraph 7 hereof.
12. That the Purchaser consents to the designation of the Master
Servicer as its agent to act as "tax matters person" of the REMIC pursuant to
Section 8.14 of the Pooling and Servicing Agreement, and if such designation is
not permitted by the Code and applicable law, to act as tax matters person if
requested to do so.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ___ day of , 20__.
[Name of Purchaser]
By: ___________________________________
[Name of Officer]
[Title of Officer]
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer], of the Purchaser, and acknowledged to me that he
[she] executed the same as his [her] free act and deed and the free act and deed
of the Purchaser.
Subscribed and sworn before me this __ day of , 20__.
Notary Public
COUNTY OF____________________
STATE OF_____________________
My commission expires the __ day of __________, 20__.
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, AND FOR NON-ERISA INVESTORS
Check the appropriate box:
o The consideration paid to the Purchaser to acquire the Class I-A-R
Certificate equals or exceeds the excess of (a) the present value of
the anticipated tax liabilities over (b) the present value of the
anticipated savings associated with holding such Certificate, in each
case calculated in accordance with U.S. Treasury Regulations Sections
1.860E-1(c)(7) and (8), computing present values using a discount rate
equal to the short-term Federal rate prescribed by Section 1274(d) of
the Code and the compounding period used by the Purchaser.
OR
o The transfer of the Class I-A-R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Purchaser is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which
income from Class I-A-R Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Purchaser's two fiscal years preceding the year of the
transfer, the Purchaser had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Purchaser within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Purchaser will transfer the Class I-A-R Certificate only
to another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations;
(iv) the Purchaser has determined the consideration paid to it to
acquire the Class I-A-R Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Purchaser) that it has determined in good faith; and
(v) in the event of any transfer of the Class I-A-R Certificate by
the Purchaser, the Purchaser will require its transferee to
complete a representation in the form of this Attachment A as
a condition of the transferee's purchase of the Class I-A-R
Certificate.
EXHIBIT I
[Letter from Transferor of Class I-A-R Certificate]
[Date]
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇ Fargo Asset Securities Corporation,
Series 2003-1, Class I-A-R
Ladies and Gentlemen:
[Transferor] has reviewed the attached affidavit of [Transferee], and
has no actual knowledge that such affidavit is not true and has no reason to
know that the information contained in paragraph 4 thereof is not true.
Very truly yours,
[Transferor]
______________________
EXHIBIT J
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
MORTGAGE Asset-Backed PASS-THROUGH CERTIFICATES
SERIES 2003-1
CLASS [B-4] [B-5] [B-6] CERTIFICATES
TRANSFEREE'S LETTER
______________ __, _____
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned (the "Purchaser") proposes to purchase ▇▇▇▇▇ Fargo
Asset Securities Corporation Mortgage Asset-Backed Pass-Through Certificates,
Series 2003-1, Class [B-4] [B-5] [B-6] Certificates (the "Class [B-4] [B-5]
[B-6] Certificates") in the principal amount of $___________. In doing so, the
Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Pooling
and Servicing Agreement, dated as of August 28, 2003 (the "Pooling and Servicing
Agreement") among ▇▇▇▇▇ Fargo Asset Securities Corporation, as seller (the
"Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer
(the "Master Servicer") and Wachovia Bank, National Association, as trustee (the
"Trustee"), of ▇▇▇▇▇ Fargo Asset Securities Corporation Mortgage Asset-Backed
Pass-Through Certificates, Series 2003-1.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
the Seller, the Master Servicer and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which the Purchaser is organized,
is authorized to invest in the Class [B-4] [B-5] [B-6] Certificates, and to
enter into this Agreement, and duly executed and delivered this Agreement.
(b) The Purchaser is acquiring the Class [B-4] [B-5] [B-6]
Certificates for its own account as principal and not with a view to the
distribution thereof, in whole or in part.
(c) [The Purchaser has knowledge of financial and business matters
and is capable of evaluating the merits and risks of an investment in the Class
[B-4] [B-5] [B-6] Certificates; the Purchaser has sought such accounting, legal
and tax advice as it has considered
necessary to make an informed investment decision; and the Purchaser is able to
bear the economic risk of an investment in the Class [B-4] [B-5] [B-6]
Certificates and can afford a complete loss of such investment.]
[(d) The Purchaser is a "Qualified Institutional Buyer" within the
meaning of Rule 144A of the Act.]
(e) The Purchaser confirms that (a) it has received and reviewed a
copy of the Private Placement Memorandum dated _______________, relating to the
Class [B-4] [B-5] [B-6] Certificates and reviewed, to the extent it deemed
appropriate, the documents attached thereto or incorporated by reference
therein, (b) it has had the opportunity to ask questions of, and receive answers
from the Seller concerning the Class [B-4] [B-5] [B-6] Certificates and all
matters relating thereto, and obtain any additional information (including
documents) relevant to its decision to purchase the Class [B-4] [B-5] [B-6]
Certificates that the Seller possesses or can possess without unreasonable
effort or expense and (c) it has undertaken its own independent analysis of the
investment in the Class [B-4] [B-5] [B-6] Certificates. The Purchaser will not
use or disclose any information it receives in connection with its purchase of
the Class [B-4] [B-5] [B-6] Certificates other than in connection with a
subsequent sale of Class [B-4] [B-5] [B-6] Certificates.
(f) Either (i) the Purchaser is not an employee benefit plan or
other retirement arrangement subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended, ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a governmental plan,
as defined in Section 3(32) of ERISA subject to any federal, state or local law
("Similar Law") which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (collectively, a "Plan"), an agent acting on
behalf of a Plan, or a person utilizing the assets of a Plan or (ii) if the
Purchaser is an insurance company, (A) the source of funds used to purchase the
Class [B-4] [B-5] [B-6] Certificate is an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), (B) there is
no Plan with respect to which the amount of such general account's reserves and
liabilities for the contract(s) held by or on behalf of such Plan and all other
Plans maintained by the same employer (or affiliate thereof as defined in
Section V(a)(1) of PTE 95-60) or by the same employee organization exceeds 10%
of the total of all reserves and liabilities of such general account (as such
amounts are determined under Section I(a) of PTE 95-60) at the date of
acquisition and (C) the purchase and holding of such Class [B-4] [B-5] [B-6]
Certificates are covered by Sections I and III of PTE 95-60 or (iii) the
Purchaser has provided (a) a "Benefit Plan Opinion" satisfactory to the Seller
and the Trustee of the Trust Estate and (b) such other opinions of counsel,
officers' certificates and agreements as the Seller or the Master Servicer may
have required. A Benefit Plan Opinion is an opinion of counsel to the effect
that the proposed transfer will not cause the assets of the Trust Estate to be
regarded as "plan assets" and subject to the prohibited transaction provisions
of ERISA, the Code or Similar Law and will not subject the Trustee, the Seller
or the Master Servicer to any obligation in addition to those undertaken in the
Pooling and Servicing Agreement (including any liability for civil penalties or
excise taxes imposed pursuant to ERISA, Section 4975 of the Code or Similar
Law).
(g) If the Purchaser is a depository institution subject to the
jurisdiction of the Office of the Comptroller of the Currency ("OCC"), the Board
of Governors of the Federal Reserve System ("FRB"), the Federal Deposit
Insurance Corporation ("FDIC"), the Office of Thrift Supervision ("OTS") or the
National Credit Union Administration ("NCUA"), the Purchaser has reviewed the
"Supervisory Policy Statement on Securities Activities" dated January 28, 1992
of the Federal Financial Institutions Examination Council and the April 15, 1994
Interim Revision thereto as adopted by the OCC, FRB, FDIC, OTS and NCUA (with
modifications as applicable), as appropriate, other applicable investment
authority, rules, supervisory policies and guidelines of these agencies and, to
the extent appropriate, state banking authorities and has concluded that its
purchase of the Class [B-4] [B-5] [B-6] Certificates is in compliance therewith.
Section 3. Transfer of Class [B-4] [B-5] [B-6] Certificates.
(a) The Purchaser understands that the Class [B-4][B-5][B-6]
Certificates have not been registered under the Securities Act of 1933 (the
"Act") or any state securities laws and that no transfer may be made unless the
Class [B-4][B-5][B-6] Certificates are registered under the Act and applicable
state law or unless an exemption from registration is available. The Purchaser
further understands that neither the Seller, the Master Servicer nor the Trustee
is under any obligation to register the Class [B-4][B-5][B-6] Certificates or
make an exemption available. In the event that such a transfer is to be made in
reliance upon an exemption from the Act or applicable state securities laws, (i)
the Trustee shall require, in order to assure compliance with such laws, that
the Certificateholder's prospective transferee certify to the Seller and the
Trustee as to the factual basis for the registration or qualification exemption
relied upon, and (ii) unless the transferee is a "Qualified Institutional Buyer"
within the meaning of Rule 144A of the Act, the Trustee or the Seller may, if
such transfer is made within three years from the later of (a) the Closing Date
or (b) the last date on which the Seller or any affiliate thereof was a holder
of the Certificates proposed to be transferred, require an Opinion of Counsel
that such transfer may be made pursuant to an exemption from the Act and state
securities laws, which Opinion of Counsel shall not be an expense of the
Trustee, the Master Servicer or the Seller. Any such Certificateholder desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Master Servicer, any Paying Agent acting on behalf of the Trustee and the
Seller against any liability that may result if the transfer is not so exempt or
is not made in accordance with such federal and state laws.
(b) No transfer of a Class [B-4][B-5][B-6] Certificate shall be
made unless the transferee provides the Seller and the Trustee with a
Transferee's Letter, substantially in the form of this Agreement.
(c) The Purchaser acknowledges that its Class [B-4][B-5][B-6]
Certificates bear a legend setting forth the applicable restrictions on
transfer.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
validly executed by its duly authorized representative as of the day and the
year first above written.
[PURCHASER]
By: ________________________________
Its:________________________________
EXHIBIT K
[Reserved]
EXHIBIT L
SERVICING AGREEMENTS
WFHM Servicing Agreement
EXHIBIT M
[FORM OF SPECIAL SERVICING AGREEMENT]
SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the "Agreement")
is made and entered into as of , between ▇▇▇▇▇ Fargo Bank Minnesota, National
Association (the "Company" and "▇▇▇▇▇ Fargo Bank") and (the "Purchaser").
PRELIMINARY STATEMENT
___________________________ is the holder of the entire interest in
▇▇▇▇▇ Fargo Asset Securities Corporation Mortgage Asset-Backed Pass-Through
Certificates, Series 2003-1, Class ____ (the "Class B Certificates"). The Class
B Certificates were issued pursuant to a Pooling and Servicing Agreement dated
as of August 28, 2003 among ▇▇▇▇▇ Fargo Asset Securities Corporation, as seller
(the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Master
Servicer and Wachovia Bank, National Association, as Trustee.
___________________________ intends to resell all of the Class B
Certificates directly to the Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed that the
Company will cause, to the extent that the Company as Master Servicer is granted
such authority in the related Servicing Agreements, the related servicers (each
a related "Servicer"), which service the Mortgage Loans which comprise the Trust
Estate related to the above referenced series under the related servicing
agreements (each a related "Servicing Agreement"), to engage in certain special
servicing procedures relating to foreclosures for the benefit of the Purchaser,
and that the Purchaser will deposit funds in a collateral fund to cover any
losses attributable to such procedures as well as all advances and costs in
connection therewith, as set forth herein.
In consideration of the mutual agreements herein contained, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree that the following provisions shall become effective and shall be binding
on and enforceable by the Company and the Purchaser:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York are required or
authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant to
Section 3.01 hereof.
Collateral Fund Permitted Investments: Either (i) obligations of, or
obligations fully guaranteed as to principal and interest by, the United States,
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States, (ii) a money market fund
rated in the highest rating category by a nationally recognized rating agency
selected by the Company, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by Government National Mortgage Association, FNMA or FHLMC,
(v) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date), the
issuer of which may be an affiliate of the Company, having at the time of such
investment a rating of at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") or at least or at least F-1 by Fitch Ratings ("Fitch") or (vi)
demand and time deposits in, certificates of deposit of, any depository
institution or trust company (which may be an affiliate of the Company)
incorporated under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment either (x) the long-term
debt obligations of such depository institution or trust company have a rating
of at least AA by Fitch or Aa2 by Moody's, (y) the certificate of deposit or
other unsecured short-term debt obligations of such depository institution or
trust company have a rating of at least F-1 by Fitch or P-1 by Moody's or (z)
the depository institution or trust company is one that is acceptable to either
Fitch or Moody's and, for each of the preceding clauses (i), (iv), (v) and (vi),
the maturity thereof shall be not later than the earlier to occur of (A) 30 days
from the date of the related investment and (B) the next succeeding Distribution
Date as defined in the related Pooling and Servicing Agreement.
Commencement of Foreclosure: The first official action required under
local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a mortgage,
any filing or service of process necessary to commence an action to foreclose,
or (ii) in the case of a deed of trust, posting, the publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of
default, notice of intent to foreclose or sell or any other action prerequisite
to the actions specified in (i) or (ii) above, (y) the acceptance of a
deed-in-lieu of foreclosure (whether in connection with a sale of the related
property or otherwise) or (z) initiation and completion of a short pay-off.
Current Appraisal: With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property obtained by the Purchaser at its own expense from an
independent appraiser (which shall not be an affiliate of the Purchaser)
acceptable to the Company as nearly contemporaneously as practicable to the time
of the Purchaser's election, prepared based on the Company's customary
requirements for such appraisals.
Election to Delay Foreclosure: Any election by the Purchaser to delay
the Commencement of Foreclosure, made in accordance with Section 2.02(b).
Election to Foreclose: Any election by the Purchaser to proceed with
the Commencement of Foreclosure, made in accordance with Section 2.03(a).
Monthly Advances: Principal and interest advances and servicing
advances including costs and expenses of foreclosure.
Required Collateral Fund Balance: As of any date of determination, an
amount equal to the aggregate of all amounts previously required to be deposited
in the Collateral Fund pursuant to Section 2.02(d) (after adjustment for all
withdrawals and deposits pursuant to Section 2.02(e)) and Section 2.03(b) (after
adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.02 to be reduced by all withdrawals therefrom pursuant to Section
2.02(g) and Section 2.03(d).
Section 1.02 Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement shall
have the meanings assigned in the Pooling and Servicing Agreement.
ARTICLE II
SPECIAL SERVICING PROCEDURES
Section 2.01 Reports and Notices.
(a) In connection with the performance of its duties under the
Pooling and Servicing Agreement relating to the realization upon defaulted
Mortgage Loans, the Company as Master Servicer shall provide to the Purchaser
the following notices and reports:
(i) Within five Business Days after each Distribution Date (or
included in or with the monthly statements to Certificateholders pursuant
to the Pooling and Servicing Agreement), the Company, shall provide to the
Purchaser a report, using the same methodology and calculations in its
standard servicing reports, indicating for the Trust Estate the number of
Mortgage Loans that are (A) thirty days, (B) sixty days, (C) ninety days or
more delinquent or (D) in foreclosure, and indicating for each such
Mortgage Loan the loan number and outstanding principal balance.
(ii) Prior to the Commencement of Foreclosure in connection with
any Mortgage Loan, the Company shall cause (to the extent that the Company
as Master Servicer is granted such authority in the related Servicing
Agreement) the Servicer to provide the Purchaser with a notice (sent by
telecopier) of such proposed and imminent foreclosure, stating the loan
number and the aggregate amount owing under the Mortgage Loan. Such notice
may be provided to the Purchaser in the form of a copy of a referral letter
from such Servicer to an attorney requesting the institution of
foreclosure.
(b) If requested by the Purchaser, the Company shall cause the
Servicer (to the extent that the Company as Master Servicer is granted such
authority in the related Servicing Agreement) to make its servicing personnel
available (during their normal business hours) to respond to reasonable
inquiries, by phone or in writing by facsimile, electronic, or overnight mail
transmission, by the Purchaser in connection with any Mortgage Loan identified
in a report under subsection (a) (i) (B), (a) (i) (C), (a) (i) (D), or (a) (ii)
which has been given to the Purchaser; provided, that (1) the related Servicer
shall only be required to provide information that is readily
accessible to its servicing personnel and is non-confidential and (2) the
related Servicer shall respond within five Business Days orally or in writing by
facsimile transmission.
(c) In addition to the foregoing, the Company shall cause the
Servicer (to the extent that the Company as Master Servicer is granted such
authority in the related Servicing Agreement) to provide to the Purchaser such
information as the Purchaser may reasonably request provided, however, that such
information is consistent with normal reporting practices, concerning each
Mortgage Loan that is at least ninety days delinquent and each Mortgage Loan
which has become real estate owned, through the final liquidation thereof;
provided, that the related Servicer shall only be required to provide
information that is readily accessible to its servicing personnel and is
non-confidential provided, however, that the Purchaser will reimburse the
Company and the related Servicer for any out of pocket expenses.
Section 2.02 Purchaser's Election to Delay Foreclosure Proceedings.
(a) The Purchaser shall be deemed to direct the Company to direct
(to the extent that the Company as Master Servicer is granted such authority in
the related Servicing Agreement) the related Servicer that in the event that the
Company does not receive written notice of the Purchaser's election pursuant to
subsection (b) below within 24 hours (exclusive of any intervening non-Business
Days) of transmission of the notice provided by the Company under Section 2.01
(a) (ii) subject to extension as set forth in Section 2.02(b), the related
Servicer may proceed with the Commencement of Foreclosure in respect of such
Mortgage Loan in accordance with its normal foreclosure policies without further
notice to the Purchaser. Any foreclosure that has been initiated may be
discontinued (i) without notice to the Purchaser if the Mortgage Loan has been
brought current or if a refinancing or prepayment occurs with respect to the
Mortgage Loan (including by means of a short payoff approved by the related
Servicer) or (ii) if the related Servicer has reached the terms of a forbearance
agreement with the borrower. In the latter case, the related Servicer may
complete such forbearance agreement unless instructed otherwise by the Purchaser
within two Business Days notification.
(b) In connection with any Mortgage Loan with respect to which a
notice under Section 2.01(a)(ii) has been given to the Purchaser, the Purchaser
may elect to instruct the Company to cause, to the extent that the Company as
Master Servicer is granted such authority in the related Servicing Agreement,
the related Servicer to delay the Commencement of Foreclosure until such time as
the Purchaser determines that the related Servicer may proceed with the
Commencement of Foreclosure. Such election must be evidenced by written notice
received within 24 hours (exclusive of any intervening non-Business Days) of
transmission of the notice provided by the Company under Section 2.01(a)(ii).
Such 24 hour period shall be extended for no longer than an additional four
Business Days after the receipt of the information if the Purchaser requests
additional information related to such foreclosure; provided, however, that the
Purchaser will have at least one Business Day to respond to any requested
additional information. Any such additional information shall be provided only
to the extent it (i) is not confidential in nature and (ii) is obtainable by the
related Servicer from existing reports, certificates or statements or is
otherwise readily accessible to its servicing personnel. The Purchaser agrees
that it has no right to deal with the mortgagor during such period. However, if
such servicing activities include acceptance of a deed-in-lieu of foreclosure or
short payoff, the Purchaser will be notified and given two Business Days to
respond.
(c) With respect to any Mortgage Loan as to which the Purchaser
has made an Election to Delay Foreclosure, the Purchaser shall obtain a Current
Appraisal as soon as practicable, but in no event more than 15 business days
thereafter, and shall provide the Company with a copy of such Current Appraisal.
(d) Within two Business Days of making any Election to Delay
Foreclosure, the Purchaser shall remit by wire transfer to the Company, for
deposit in the Collateral Fund, an amount, as calculated by the Company, equal
to the sum of (i) 125% of the greater of the unpaid principal balance of the
Mortgage Loan and the value shown in the Current Appraisal referred to in
subsection (c) above (or, if such Current Appraisal has not yet been obtained,
the Company's estimate thereof, in which case the required deposit under this
subsection shall be adjusted upon obtaining such Current Appraisal), and (ii)
three months' interest on the Mortgage Loan at the applicable Mortgage Interest
Rate. If any Election to Delay Foreclosure extends for a period in excess of
three months (such excess period being referred to herein as the "Excess
Period"), within two Business Days the Purchaser shall remit by wire transfer in
advance to the Company for deposit in the Collateral Fund the amount of each
additional month's interest, as calculated by the Company, equal to interest on
the Mortgage Loan at the applicable Mortgage Interest Rate for the Excess
Period. The terms of this Agreement will no longer apply to the servicing of any
Mortgage Loan upon the failure of the Purchaser to deposit any of the above
amounts relating to the Mortgage Loan within two Business Days of the Election
to Delay Foreclosure or within two Business Days of the commencement of the
Excess Period subject to Section 3.01.
(e) With respect to any Mortgage Loan as to which the Purchaser
has made an Election to Delay Foreclosure, the Company may withdraw from the
Collateral Fund from time to time amounts necessary to reimburse the related
Servicer for all related Monthly Advances and Liquidation Expenses thereafter
made by such Servicer in accordance with the Pooling and Servicing Agreement and
the related Servicing Agreement. To the extent that the amount of any such
Liquidation Expenses is determined by the Company based on estimated costs, and
the actual costs are subsequently determined to be higher, the Company may
withdraw the additional amount from the Collateral Fund. In the event that the
Mortgage Loan is brought current by the mortgagor and the foreclosure action is
discontinued, the amounts so withdrawn from the Collateral Fund shall be
redeposited if and to the extent that reimbursement therefor from amounts paid
by the mortgagor is not prohibited pursuant to the Pooling and Servicing
Agreement or the related Servicing Agreement, applicable law or the related
mortgage note. Except as provided in the preceding sentence, amounts withdrawn
from the Collateral Fund to cover Monthly Advances and Liquidation Expenses
shall not be redeposited therein or otherwise reimbursed to the Purchaser. If
and when any such Mortgage Loan is brought current by the mortgagor, all amounts
remaining in the Collateral Fund in respect of such Mortgage Loan (after
adjustment for all permitted withdrawals and deposits pursuant to this
subsection) shall be released to the Purchaser.
(f) With respect to any Mortgage Loan as to which the Purchaser
has made an Election to Delay Foreclosure, the related Servicer shall continue
to service the Mortgage Loan in accordance with its customary procedures (other
than the delay in Commencement of Foreclosure as provided herein). If and when
the Purchaser shall notify the Company that it believes that it is appropriate
to do so, the related Servicer may proceed with the Commencement of Foreclosure.
In any event, if the Mortgage Loan is not brought current by the mortgagor by
the time the loan becomes 6 months delinquent, the Purchaser's election shall no
longer be effective and at the Purchaser's option, either (i) the Purchaser
shall purchase the Mortgage Loan from the related Trust
Estate at a purchase price equal to the fair market value as shown on the
Current Appraisal, to be paid by (x) applying any balance in the Collateral Fund
to such to such purchase price, and (y) to the extent of any deficiency, by wire
transfer of immediately available funds from the Purchaser to the Company for
deposit in the related Certificate Account; or (ii) the related Servicer shall
proceed with the Commencement of Foreclosure.
(g) Upon the occurrence of a liquidation with respect to any
Mortgage Loan as to which the Purchaser made an Election to Delay Foreclosure
and as to which the related Servicer proceeded with the Commencement of
Foreclosure in accordance with subsection (f) above, the Company shall calculate
the amount, if any, by which the value shown on the Current Appraisal obtained
under subsection (c) exceeds the actual sales price obtained for the related
Mortgaged Property (net of Liquidation Expenses and accrued interest related to
the extended foreclosure period), and the Company shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Estate
and in its capacity as Master Servicer shall apply such amount as additional
Liquidation Proceeds pursuant to the Pooling and Servicing Agreement. After
making such withdrawal, all amounts remaining in the Collateral Fund in respect
of such Mortgage Loan (after adjustment for all permitted withdrawals and
deposits pursuant to this Agreement) shall be released to the Purchaser.
Section 2.03 Purchaser's Election to Commence Foreclosure Proceedings.
(a) In connection with any Mortgage Loan identified in a report
under Section 2.01(a)(i)(B), the Purchaser may elect to instruct the Company to
cause, to the extent that the Company as Master Servicer is granted such
authority in the related Servicing Agreement, the related Servicer to proceed
with the Commencement of Foreclosure as soon as practicable. Such election must
be evidenced by written notice received by the Company by 5:00 p.m., New York
City time, on the third Business Day following the delivery of such report under
Section 2.01(a)(i).
(b) Within two Business Days of making any Election to Foreclose,
the Purchaser shall remit to the Company, for deposit in the Collateral Fund, an
amount, as calculated by the Company, equal to 125% of the current unpaid
principal balance of the Mortgage Loan and three months interest on the Mortgage
Loan at the applicable Mortgage Interest Rate. If and when any such Mortgage
Loan is brought current by the mortgagor, all amounts in the Collateral Fund in
respect of such Mortgage Loan (after adjustment for all permitted withdrawals
and deposits pursuant to this Agreement) shall be released to the Purchaser if
and to the extent that reimbursement therefor from amounts paid by the mortgagor
is not prohibited pursuant to the Pooling and Servicing Agreement or the related
Servicing Agreement, applicable law or the related mortgage note. The terms of
this Agreement will no longer apply to the servicing of any Mortgage Loan upon
the failure of the Purchaser to deposit the above amounts relating to the
Mortgage Loan within two Business Days of the Election to Foreclose subject to
Section 3.01.
(c) With respect to any Mortgage Loan as to which the Purchaser
has made an Election to Foreclose, the related Servicer shall continue to
service the Mortgage Loan in accordance with its customary procedures (other
than Commencement of Foreclosure as provided herein). In connection therewith,
the Company shall have the same rights to make withdrawals for Monthly Advances
and Liquidations Expenses from the Collateral Fund as are provided under Section
2.02(e), and the Company shall make reimbursements thereto to the limited extent
provided under such subsection in accordance with its customary procedures. The
Company shall not be
required to cause, to the extent that the Company as Master Servicer is granted
such authority in the related Servicing Agreement, the related Servicer to
proceed with the Commencement of Foreclosure if (i) the same is stayed as a
result of the mortgagor's bankruptcy or is otherwise barred by applicable law,
or to the extent that all legal conditions precedent thereto have not yet been
complied with, or (ii) the Company believes there is a breach of representations
or warranties by the Company, a Servicer, or a Seller, which may result in a
repurchase or substitution of such Mortgage Loan, or (iii) the Company or
related Servicer reasonably believes the Mortgaged Property may be contaminated
with or affected by hazardous wastes or hazardous substances (and, without
limiting the related Servicer's right not to proceed with the Commencement of
Foreclosure, the Company supplies the Purchaser with information supporting such
belief). Any foreclosure that has been initiated may be discontinued (x) without
notice to the Purchaser if the Mortgage Loan has been brought current or if a
refinancing or prepayment occurs with respect to the Mortgage Loan (including by
means of a short payoff approved by the Purchaser) or (y) with notice to the
Purchaser if the related Servicer has reached the terms of a forbearance
agreement unless instructed otherwise by the Purchaser within two Business Days
of such notification. Any such instruction shall be based upon a decision that
such forbearance agreement is not in conformity with reasonable servicing
practices.
(d) Upon the occurrence of a liquidation with respect to any
Mortgage Loan as to which the Purchaser made an Election to Foreclose and as to
which the related Servicer proceeded with the Commencement of Foreclosure in
accordance with subsection (c) above, the Company shall calculate the amount, if
any, by which the unpaid principal balance of the Mortgage Loan at the time of
liquidation (plus all unreimbursed interest and servicing advances and
Liquidation Expenses in connection therewith other than those paid from the
Collateral Fund) exceeds the actual sales price obtained for the related
Mortgaged Property, and the Company shall withdraw the amount of such excess
from the Collateral Fund, shall remit the same to the Trust Estate and in its
capacity as Master Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund (after adjustment for
all withdrawals and deposits pursuant to subsection (c) in respect of such
Mortgage Loan shall be released to the Purchaser.
Section 2.04 Termination.
(a) With respect to all Mortgage Loans included in the Trust
Estate, the Purchaser's right to make any Election to Delay Foreclosure or any
Election to Foreclose and the Company's obligations under Section 2.01 shall
terminate (i) at such time as the Principal Balance of the Class B Certificates
has been reduced to zero, (ii) if the greater of (x) 43% (or such lower or
higher percentage that represents the related Servicer's actual historical loss
experience with respect to the Mortgage Loans in the related pool as determined
by the Company) of the aggregate principal balance of all Mortgage Loans that
are in foreclosure or are more than 90 days delinquent on a contractual basis
and REO properties or (y) the aggregate amount that the Company estimates
through the normal servicing practices of the related Servicer will be required
to be withdrawn from the Collateral Fund with respect to Mortgage Loans as to
which the Purchaser has made an Election to Delay Foreclosure or an Election to
Foreclosure, exceeds (z) the then-current principal balance of the Class B
Certificates, (iii) upon any transfer by the Purchaser of any interest (other
than the minority interest therein, but only if the transferee provides written
acknowledgment to the Company of the Purchaser's right hereunder and that such
transferee will have no rights hereunder) in the Class B Certificates (whether
or not such transfer is registered under the Pooling and
Servicing Agreement), including any such transfer in connection with a
termination of the Trust Estate or (iv) upon any breach of the terms of this
Agreement by the Purchaser.
(b) Except as set forth in 2.04(a), this Agreement and the
respective rights, obligations and responsibilities of the Purchaser and the
Company hereunder shall terminate upon the later to occur of (i) the final
liquidation of the last Mortgage Loan as to which the Purchaser made any
Election to Delay Foreclosure or any Election to Foreclose and the withdrawal of
all remaining amounts in the Collateral Fund as provided herein and (ii) ten
Business Days' notice. The Purchaser's right to make an election pursuant to
Section 2.02 or Section 2.03 hereof with respect to a particular Mortgage Loan
shall terminate if the Purchaser fails to make any deposit required pursuant to
Section 2.02(d) or 2.03(b) or if the Purchaser fails to make any other deposit
to the Collateral Fund pursuant to this Agreement.
ARTICLE III
COLLATERAL FUND; SECURITY INTEREST
Section 3.01 Collateral Fund.
Upon receipt from the Purchaser of the initial amount required to be
deposited in the Collateral Fund pursuant to Article II, the Company shall
establish and maintain with Bankers Trust Company as a segregated account on its
books and records an account (the "Collateral Fund"), entitled "▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Master Servicer, for the benefit of
registered holders of ▇▇▇▇▇ Fargo Asset Securities Corporation Mortgage
Asset-Backed Pass-Through Certificates, Series 2003-1." Amounts held in the
Collateral Fund shall continue to be the property of the Purchaser, subject to
the first priority security interest granted hereunder for the benefit of the
Certificateholders, until withdrawn from the Collateral Fund pursuant to Section
2.02 or 2.03 hereof. The Collateral Fund shall be an "outside reserve fund"
within the meaning of the REMIC Provisions, beneficially owned by the Purchaser
for federal income tax purposes. All income, gain, deduction or loss with
respect to the Collateral Fund shall be that of the Purchaser. All distributions
from the Trust Fund to the Collateral Fund shall be treated as distributed to
the Purchaser as the beneficial owner thereof.
Upon the termination of this Agreement and the liquidation of all
Mortgage Loans as to which the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose pursuant to Section 2.04 hereof, the
Company shall distribute or cause to be distributed to the Purchaser all amounts
remaining in the Collateral Fund (after adjustment for all deposits and
permitted withdrawals pursuant to this Agreement) together with any investment
earnings thereon. In the event the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose, prior to any distribution to the
Purchaser of all amounts remaining in the Collateral Fund, funds in the
Collateral Fund shall be applied consistent with the terms of this Agreement.
Section 3.02 Collateral Fund Permitted Investments.
The Company shall, at the written direction of the Purchaser, invest
the funds in the Collateral Fund in Collateral Fund Permitted Investments. Such
direction shall not be changed more frequently than quarterly. In the absence of
any direction, the Company shall select such
investments in accordance with the definition of Collateral Fund Permitted
Investments in its discretion.
All income and gain realized from any investment as well as any
interest earned on deposits in the Collateral Fund (net of any losses on such
investments) and any payments of principal made in respect of any Collateral
Fund Permitted Investment shall be deposited in the Collateral Fund upon
receipt. All costs and realized losses associated with the purchase and sale of
Collateral Fund Permitted Investments shall be borne by the Purchaser and the
amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund promptly upon realization. The Company shall periodically (but
not more frequently than monthly) distribute to the Purchaser upon request an
amount of cash, to the extent cash is available therefore in the Collateral
Fund, equal to the amount by which the balance of the Collateral Fund, after
giving effect to all other distributions to be made from the Collateral Fund on
such date, exceeds the Required Collateral Fund Balance. Any amounts so
distributed shall be released from the lien and security interest of this
Agreement.
Section 3.03 Grant of Security Interest.
The Purchaser hereby grants to the Company for the benefit of the
Certificateholders under the Pooling and Servicing Agreement a security interest
in and lien on all of the Purchaser's right, title and interest, whether now
owned or hereafter acquired, in and to: (1) the Collateral Fund, (2) all amounts
deposited in the Collateral Fund and Collateral Fund Permitted Investments in
which such amounts are invested (and the distributions and proceeds of such
investments) and (3) all cash and non-cash proceeds of any of the foregoing,
including proceeds of the voluntary conversion thereof (all of the foregoing
collectively, the "Collateral").
The Purchaser acknowledges the lien on and the security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall take
all actions requested by the Company as may be reasonably necessary to perfect
the security interest created under this Agreement in the Collateral and cause
it to be prior to all other security interests and liens, including the
execution and delivery to the Company for filing of appropriate financing
statements in accordance with applicable law. The Company shall file appropriate
continuation statements, or appoint an agent on its behalf to file such
statements, in accordance with applicable law.
Section 3.04 Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at any time
are insufficient to cover any withdrawals therefrom that the Company is then
entitled to make hereunder, the Purchaser shall be obligated to pay such amounts
to the Company immediately upon demand. Such obligation shall constitute a
general corporate obligation of the Purchaser. The failure to pay such amounts
within two Business Days of such demand (except for amounts to cover interest on
a Mortgage Loan pursuant to Sections 2.02(d) and 2.03 (b)), shall cause an
immediate termination of the Purchaser's right to make any Election to Delay
Foreclosure or Election to Foreclose and the Company's obligations under this
Agreement with respect to all Mortgage Loans to which such insufficiencies
relate, without the necessity of any further notice or demand on the part of the
Company.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
Section 4.02 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 4.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 4.04 Notices.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
(a) in the case of the Company,
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President, Master Servicing
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) in the case of the Purchaser,
_________________________________
_________________________________
_________________________________
Attention: ______________________
Section 4.05 Severability of Provisions.
If any one or more of the covenants, agreements, provision or terms of
this Agreement shall be for any reason whatsoever, including regulatory, held
invalid, then such 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.
Section 4.06 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders; provided,
however, that the rights under this Agreement cannot be assigned by the
Purchaser without the consent of the Company.
Section 4.07 Article and Section Headings.
The article and section headings herein are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Section 4.08 Confidentiality.
The Purchaser agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.01 or 2.02, including individual account
information, is the property of the Company and the Purchaser agrees to hold
such information confidential and not to disclose such information.
Each party hereto agrees that neither it, nor any officer, director,
employee, affiliate or independent contractor acting at such party's direction
will disclose the terms of Section 4.09 of this Agreement to any person or
entity other than such party's legal counsel except pursuant to a final,
non-appealable order of court, the pendency of such order the other party will
have received notice of at least five business days prior to the date thereof,
or pursuant to the other party's prior express written consent.
Section 4.09 Indemnification.
The Purchaser agrees to indemnify and hold harmless the Company, the
Seller, and each Servicer and each person who controls the Company, the Seller,
or a Servicer and each of their respective officers, directors, affiliates and
agents acting at the Company's, the Seller's, or a Servicer's direction (the
"Indemnified Parties") against any and all losses, claims, damages or
liabilities to which they may be subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of, or are
based upon, actions taken by, or actions not taken by, the Company, the Seller,
or a Servicer, or on their behalf, in accordance with the provisions of this
Agreement and (i) which actions conflict with the Company's, the Seller's, or a
Servicer's obligations under the Pooling and Servicing Agreement or the related
Servicing Agreement, or (ii) give rise to securities law liability under federal
or state securities laws with respect to the Certificates. The Purchaser hereby
agrees to reimburse the Indemnified Parties for the reasonable legal or other
expenses incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action. The indemnification obligations of the
Purchaser hereunder shall survive the termination or expiration of this
Agreement.
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
▇▇▇▇▇ Fargo Bank Minnesota,
National Association
By: ________________________________
Name:
Title:
________________________________
By: ________________________________
Name:
Title:
EXHIBIT N
FORM OF INITIAL CERTIFICATION OF THE CUSTODIAN
August 28, 2003
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: The Pooling and Servicing Agreement, dated August 28, 2003,
among ▇▇▇▇▇ Fargo Asset Securities Corporation, as Seller,
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Master
Servicer, and Wachovia Bank, National Association, as Trustee,
relating to ▇▇▇▇▇ Fargo Asset Securities Corporation; Mortgage
Asset-Backed Pass-Through Certificates, Series 2003-1.
Ladies and Gentlemen:
In accordance with the provisions of Section 2.02 of the
above-referenced Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), the undersigned, as Custodian on behalf of the Trustee, hereby
certifies that, except as specified in any list of exceptions attached hereto,
it has received the original Mortgage Note relating to each of the Mortgage
Loans listed on the Mortgage Loan Schedule.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement in connection with this initial certification.
The Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability, recordability or genuineness of any of the
documents contained in each Mortgage File or any of the Mortgage Loans
identified in the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Custodian on behalf of the Trustee
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT O
FORM OF FINAL CERTIFICATION OF THE CUSTODIAN
[____________ __, _____]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: The Pooling and Servicing Agreement, dated August 28, 2003,
among ▇▇▇▇▇ Fargo Asset Securities Corporation, as Seller,
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Master
Servicer, and Wachovia Bank, National Association, as Trustee,
relating to the ▇▇▇▇▇ Fargo Asset Securities Corporation;
Mortgage Asset-Backed Pass-Through Certificates, Series 2003-1
Ladies and Gentlemen:
In accordance with the provisions of Section 2.02 of the
above-referenced Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), the undersigned, as Custodian on behalf of the Trustee, hereby
certifies that, as to each Mortgage Loan listed in the Mortgage Loan Schedule,
except as may be specified in any list of exceptions attached hereto, such
Mortgage File contains all of the items required to be delivered pursuant to
Section 2.01 of the Pooling and Servicing Agreement.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement in connection with this final certification. The
Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability, recordability or genuineness of any of the
documents contained in each Mortgage File or any of the Mortgage Loans
identified in the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Custodian on behalf of the Trustee
By:_____________________________
Name:___________________________
Title:__________________________
SCHEDULE I
▇▇▇▇▇ Fargo Asset Securities Corporation,
Mortgage Asset-Backed Pass-Through Certificates, Series 2003-1
Applicable Unscheduled Principal Receipt Period
Full Unscheduled Partial Unscheduled
Servicer Principal Receipts Principal Receipt
----------------------------- ------------------ -----------------
WFHM (Exhibits F-1A and F-1B) Mid-Month Mid-Month