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PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV,
Depositor
PROVIDENT FUNDING ASSOCIATES, L.P.
Originator
PROVIDENT FUNDING ASSOCIATES, L.P.,
Servicer
and
THE CHASE MANHATTAN BANK,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2000
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MORTGAGE PASS-THROUGH CERTIFICATES, Series 2000-1
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.02. Certain Calculations..........................................27
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans..................................27
Section 2.02. Acceptance by Trustee of the Mortgage Loans...................29
Section 2.03. Representations, Warranties and Covenants of the
Originator...................................................31
Section 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans...............................................33
Section 2.05. [Reserved.]...................................................33
Section 2.06. Execution and Delivery of Certificates........................33
Section 2.07. REMIC Matters.................................................34
Section 2.08. Covenants of the Servicer.....................................34
Section 2.09. Representations and Warranties of the Servicer................34
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage Loans............................35
Section 3.02. Subservicing; Enforcement of the Obligations of Servicers.....36
Section 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.....................................................37
Section 3.04. Trustee to Act as Servicer....................................37
Section 3.05. Collection of Mortgage Loan Payments; Collection Account;
Distribution Account.........................................38
Section 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..............................................41
Section 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................41
Section 3.08. Permitted Withdrawals from the Collection Account and
Distribution Account.........................................42
Section 3.09. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies...........................................43
Section 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements.....45
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Section 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.......................................46
Section 3.12. Trustee to Cooperate; Release of Mortgage Files...............48
Section 3.13. Documents Records and Funds in Possession of Servicer to
be Held for the Trustee......................................49
Section 3.14. Servicing Compensation........................................49
Section 3.15. Access to Certain Documentation...............................50
Section 3.16. Annual Statement as to Compliance.............................50
Section 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements..............................50
Section 3.18. Errors and Omissions Insurance; Fidelity Bonds................51
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01. Advances......................................................51
Section 4.02. Priorities of Distribution....................................52
Section 4.03. Allocation of Realized Losses.................................55
Section 4.04. Monthly Statements to Certificateholders......................56
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates..............................................58
Section 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.....................................59
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............64
Section 5.04. Persons Deemed Owners.........................................64
Section 5.05. Access to List of Certificateholders' Names and Addresses.....64
Section 5.06. Maintenance of Office or Agency...............................64
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Servicer......65
Section 6.02. Merger or Consolidation of the Depositor or the Servicer......65
Section 6.03. Limitation on Liability of the Depositor, the Seller, the
Originator, the Servicer and Others..........................65
Section 6.04. Limitation on Resignation of Servicer.........................66
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ARTICLE VII
DEFAULT
Section 7.01. Events of Default.............................................66
Section 7.02. Trustee to Act; Appointment of Successor......................68
Section 7.03. Notification to Certificateholders............................69
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.............................................69
Section 8.02. Certain Matters Affecting the Trustee.........................70
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........72
Section 8.04. Trustee May Own Certificates..................................72
Section 8.05. Trustee's Fees and Expenses...................................73
Section 8.06. Eligibility Requirements for Trustee..........................73
Section 8.07. Resignation and Removal of Trustee............................74
Section 8.08. Successor Trustee.............................................74
Section 8.09. Merger or Consolidation of Trustee............................75
Section 8.10. Appointment of Co-Trustee or Separate Trustee.................75
Section 8.11. Tax Matters...................................................76
Section 8.12. Periodic Filings..............................................78
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of all Mortgage
Loans........................................................79
Section 9.02. Final Distribution on the Certificates........................79
Section 9.03. Additional Termination Requirements...........................80
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment....................................................81
Section 10.02. Recordation of Agreement; Counterparts.......................82
Section 10.03. Governing Law................................................83
Section 10.04. Intention of Parties.........................................83
Section 10.05. Notices......................................................83
Section 10.06. Severability of Provisions...................................84
Section 10.07. Assignment...................................................84
Section 10.08. Limitation on Rights of Certificateholders...................85
Section 10.09. Inspection and Audit Rights..................................85
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Section 10.10. Certificates Nonassessable and Fully Paid....................86
SCHEDULES
Schedule I: Mortgage Loan Schedule.....................................S-I-1
Schedule II: Representations and Warranties of the Seller/Servicer.....S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans..S-III-1
Schedule IV: Form of Monthly Servicer Report...........................S-IV-1
EXHIBITS
Exhibit A: Form of Senior Certificate (excluding Class X
Certificates)...............................................A-1
Exhibit B: Form of Junior Certificate...................................B-1
Exhibit C: Form of Class A-R Certificate................................C-1
Exhibit D: Form of Class X Certificate..................................D-1
Exhibit E: Form of Reverse of Certificates..............................E-1
Exhibit F: Form of Initial Certification................................F-1
Exhibit G: Form of Final Certification of Trustee.......................G-1
Exhibit H: Transfer Affidavit...........................................H-1
Exhibit I: Form of Transferor Certificate...............................I-1
Exhibit J: Form of Investment Letter (Non-Rule 144A)....................J-1
Exhibit K: Form of Rule 144A Letter.....................................K-1
Exhibit L: Request for Release (for Trustee)............................L-1
Exhibit M: Request for Release (Mortgage Loan) Paid in Full,
Repurchased and Replaced)...................................M-1
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THIS POOLING AND SERVICING AGREEMENT, dated as of July 1, 2000,
among PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV, a Delaware corporation, as
depositor (the "Depositor"), PROVIDENT FUNDING ASSOCIATES, L.P., a California
limited partnership, as originator (the "Originator"), and as servicer (in such
capacity, the "Servicer"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. The Trust Fund is being conveyed
to the Trustee to create a trust for the benefit of the Certificateholders. The
Trust Fund for federal income tax purposes will consist of a single REMIC. The
Certificates will represent the entire beneficial ownership interest in the
Trust Fund. The Regular Certificates will represent the "regular interests" in
the Trust Fund and the Residual Certificates will represent the single "residual
interest" in the Trust Fund. The "latest possible maturity date" for federal
income tax purposes of all interests created hereby will be the Latest Possible
Maturity Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different amount):
INITIAL CLASS
CERTIFICATE
BALANCE OR INTEGRAL
CLASS NOTIONAL MULTIPLES
PRINCIPAL PASS-THROUGH MINIMUM IN EXCESS OF
BALANCE RATE DENOMINATION MINIMUM
---------------- ------------ ------------ -------------------
Class A-1 $82,721,000 7.75% $25,000 $1,000
Class A-2 $30,000,000 7.75% $1,000 $1,000
Class A-3 $23,444,000 7.75% $1,000 $1,000
Class A-4 $10,000,000 7.75% $25,000 $1,000
Class A-5 $17,000,000 7.75% $25,000 $1,000
Class X (1) (2) $25,000(3) $1,000(3)
Class PO $388,257 (4) $25,000 $1,000
Class A-R $100 7.75% $100 N/A
Class M $3,234,000 7.75% $25,000 $1,000
Class B-1 $1,276,000 7.75% $25,000 $1,000
Class B-2 $766,000 7.75% $25,000 $1,000
Class B-3 $596,000 7.75% $100,000 $1,000
Class B-4 $340,000 7.75% $100,000 $1,000
Class B-5 $426,055 7.75% $100,000 $1,000
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(1) The Class X Certificates will be notional amount certificates, will have no
principal balance and will bear interest on their Notional Principal
Balance (initially, $147,878,310).
(2) The Pass-Through Rate for the Class X Certificates for any Distribution
Date will be equal to the excess of (a) the average of the Net Mortgage
Rates of the Non-Discount Mortgage Loans, weighted on the basis of their
respective Scheduled Principal Balances over (b) 7.75% per annum. The
Pass-Through Rate of the Class X Certificates for the first Distribution
Date is 0.460458%.
(3) Minimum Denomination is based on the Notional Principal Balance of such
Class.
(4) The Class PO Certificates will be Principal Only Certificates and will not
bear interest.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Offered Certificates other than the
Physical Certificates.
Class A Certificates......... The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-R Certificates.
Class B Certificates......... The Class B-1, Class B-2, Class B-3, Class B-4 and
Class B-5 Certificates.
ERISA-Restricted
Certificates............... The Residual Certificates and the Junior
Certificates.
Junior Certificates.......... The Class M, Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates.
Notional Amount
Certificates............... Class X Certificates.
Offered Certificates......... All Classes of Certificates other than the Private
Certificates.
Physical Certificates........ The Private Certificates and the Residual
Certificates.
Principal Only
Certificates............... The Class PO Certificates.
Private Certificates......... The Class X, Class B-3, Class B-4 and Class B-5
Certificates.
Rating Agencies.............. Fitch and S&P
Regular Certificates......... All Classes of Certificates, other than the
Residual Certificates.
Residual Certificates........ The Class A-R Certificates.
Scheduled Principal
Classes.................... None.
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Senior Certificates.......... The Class A-1, Class A-2, Class A-3, Class ▇-▇,
▇▇▇▇▇ ▇-▇, Class X, Class PO and Class A-R
Certificates.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accrued Certificate Interest: With respect to any Distribution Date
and interest bearing Class, the sum of (i) one month's interest accrued during
the related Interest Accrual Period at the Pass-Through Rate for such Class on
the related Class Principal Balance or Notional Principal Balance, as
applicable, subject to reduction as provided in Section 4.02(d) and (ii) any
Class Unpaid Interest Amounts for such Class.
Adjusted Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Adjustment Amount: With respect to each anniversary of the Cut-off
Date, the amount, if any, by which the Special Hazard Loss Coverage Amount
(without giving effect to the deduction of the Adjustment Amount for such
anniversary) exceeds the lesser of:
(1) an amount calculated by the Servicer and approved by each of
Fitch and S&P, which amount shall not be less than $500,000; and
(2) the greater of (x) 1% (or if greater than 1%, the highest
percentage of Mortgage Loans by principal balance secured by Mortgaged
Properties in any California zip code) of the outstanding principal
balance of all the Mortgage Loans on the Distribution Date immediately
preceding such anniversary and (y) twice the outstanding principal balance
of the Mortgage Loan which has the largest outstanding principal balance
on the Distribution Date immediately preceding such anniversary.
Advance: The payment required to be made by the Servicer with
respect to any Distribution Date pursuant to Section 4.01, the amount of any
such payment being equal to the aggregate of payments of principal and interest
(net of the Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Servicer has
determined would constitute a Nonrecoverable Advance if advanced.
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Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Allocable Share: As to any Distribution Date, the Junior Optimal
Principal Amount and any Class of Junior Certificates, the portion of the Junior
Optimal Principal Amount allocable to such Class, equal to the product of the
Junior Optimal Principal Amount on such Distribution Date and a fraction, the
numerator of which is the related Class Principal Balance thereof and the
denominator of which is the aggregate of the Class Principal Balances of the
Junior Certificates.
Amount Available for Senior Principal: As to any Distribution Date,
Available Funds for such Distribution Date reduced by the aggregate amount
distributable on such Distribution Date in respect of interest on the Senior
Certificates pursuant to Section 4.02(a)(ii).
Amount Held for Future Distribution: As to any Distribution Date,
the aggregate amount held in the Collection Account at the close of business on
the related Determination Date on account of (i) Principal Prepayments received
after the related Prepayment Period, and Liquidation Proceeds and Insurance
Proceeds received in the month of such Distribution Date and (ii) all Scheduled
Payments due after the related Due Date.
Applicable Credit Support Percentage: As defined in Section 4.02(e).
Appraised Value: With respect to any Mortgage Loan, the Appraised
Value of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made-at the time of the origination of such Refinancing Mortgage Loan
as modified by an updated appraisal.
Available Funds: As to any Distribution Date, the sum of (a) the
aggregate amount held in the Collection Account at the close of business on the
related Determination Date net of the Amount Held for Future Distribution and
net of amounts permitted to be withdrawn from the Collection Account pursuant to
clauses (i)-(viii), inclusive, of Section 3.08(a) and amounts permitted to be
withdrawn from the Distribution Account pursuant to clauses (i)-(iii) inclusive
of Section 3.08(b), (b) the amount of the related Advance and (c) in connection
with Defective Mortgage Loans, as applicable, the aggregate of the Purchase
Prices and Substitution Adjustment Amounts deposited on the related Distribution
Account Deposit Date.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
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
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Bankruptcy Loss hereunder so long as the Servicer has notified the Trustee in
writing that the Servicer is diligently pursuing any remedies that may exist in
connection with 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
related escrow payments in respect of such Mortgage Loan are being advanced on a
current basis by the Servicer, in either case without giving effect to any Debt
Service Reduction or Deficient Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading of the then current ratings assigned to the Classes of Certificates
rated by it.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the City of New York, New York, or the
State of California or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: With respect to any Certificate at
any date, the maximum dollar amount of principal to which the Holder thereof is
then entitled hereunder, such amount being equal to the Denomination thereof
minus the sum of (i) all distributions of principal previously made with respect
thereto and (ii) all Realized Losses allocated thereto and, in the case of any
Junior Certificates, all other reductions in Certificate Principal Balance
previously allocated thereto pursuant to Section 4.03.
Certificate Register: The register maintained pursuant to Section
5.02 hereof.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Servicer or the Depositor or any affiliate of the Servicer or
the Depositor, as applicable, shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Servicer or the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action
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hereunder. The Trustee is entitled to rely conclusively on a certification of
the Servicer or the Depositor or any affiliate of the Servicer or the Depositor,
as applicable, in determining which Certificates are registered in the name of
an affiliate of the Servicer or the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A-5 Distribution Amount: For any Distribution Date, (i) the
Class A-5 Scheduled Distribution Percentage of the applicable Non-PO Percentage
of all amounts described in clauses (a) through (d) of the definition of "Non-PO
Formula Principal Amount" for such Distribution Date, (ii) with respect to each
Mortgage Loan that became a Liquidated Loan during the calendar month preceding
the month of such Distribution Date, the lesser of (A) the Class A-5 Scheduled
Distribution Percentage of the applicable Non-PO Percentage of the Scheduled
Principal Balance of such Mortgage Loan, or (B) either (a) the Class A-5
Prepayment Distribution Percentage, or (b) if an Excess Loss was sustained with
respect to such Liquidated Loan during such prior calendar month, the Class A-5
Scheduled Distribution Percentage of the applicable Non-PO Percentage of the
amount of the Liquidation Proceeds allocable to principal received with respect
to such Mortgage Loan, and (iii) the Class A-5 Prepayment Distribution
Percentage, of the applicable Non-PO Percentage of the amounts described in
clause (f) of the definition of "Non-PO Formula Principal Amount" for such
Distribution Date; provided, however, that if a Bankruptcy Loss that is an
Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Loan, the Class A-5 Distribution Amount will be reduced on the
related Distribution Date by the Class A-5 Scheduled Distribution Percentage of
the applicable Non-PO Percentage of the principal portion of such Bankruptcy
Loss.
Class A-5 Percentage: A fraction, the numerator of which is the
Class Principal Balance of the Class A-5 Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Class Principal
Balance of all Classes of Certificates (other than the Class PO Certificates)
immediately prior to such Distribution Date.
Class A-5 Prepayment Distribution Percentage: For any Distribution
Date, the Class A-5 Percentage multiplied by (i) 0% until and including the
Distribution Date in July 2005, (ii) 30% from the Distribution Date in August
2005 until and including the Distribution Date in July 2006, (iii) 40% from the
Distribution Date in August 2006 until and including the Distribution Date in
July 2007, (iv) 60% from the Distribution Date in August 2007 until and
including the Distribution Date in July 2008, (v) 80% from the Distribution Date
in August 2008 until and including the Distribution Date in July 2009 and (vi)
100% thereafter.
Class A-5 Scheduled Distribution Percentage: For any Distribution
Date is equal to (i) 0% until and including the Distribution Date in July 2005
and (ii) the Distribution Date in July 2005 and thereafter, the Class A-5
Percentage.
Class Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the definition of Accrued
Certificate Interest for such Class exceeds the amount of interest actually
distributed on such Class on such Distribution Date pursuant to such clause (i).
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Class PO Deferred Amount: As to any Distribution Date, the aggregate
of the applicable PO Percentage of the principal portion of each Realized Loss
on a Discount Mortgage Loan, other than any Excess Loss, to be allocated to the
Class PO Certificates on such Distribution Date on or prior to the Cross-Over
Date or previously allocated to the Class PO Certificates and not yet paid to
the Holders of the Class PO Certificates.
Class PO Principal Distribution Amount: As to any Distribution Date,
the sum of the applicable PO Percentage of (a) the principal portion of each
Scheduled Payment (without giving effect, prior to the Bankruptcy Coverage
Termination Date, to any reductions thereof caused by any Debt Service
Reductions or Deficient Valuations) due on each Mortgage Loan on the related Due
Date, (b) the Scheduled Principal Balance of each Mortgage Loan that was
repurchased by the Originator or the Servicer pursuant to this Agreement as of
such Distribution Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Mortgage Loan received with respect to such Distribution Date,
(d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans that are not yet Liquidated Loans received during
the calendar month preceding the month of such Distribution Date, (e) with
respect to each Mortgage Loan that became a Liquidated Loan during the month
preceding the calendar month of such Distribution Date, the amount of
Liquidation Proceeds allocable to principal received during the month preceding
the month of such Distribution Date with respect to such Mortgage Loan and (f)
the sum of (i) all Principal Prepayments in full received during the related
Prepayment Period and (ii) all partial Principal Prepayments applied during the
related Prepayment Period; provided, however, that if a Bankruptcy Loss that is
an Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Loan, the Class PO Principal Distribution Amount will be reduced on
the related Distribution Date by the applicable PO Percentage of the principal
portion of such Bankruptcy Loss.
Class Prepayment Distribution Trigger: With respect to any Class of
the Class B Certificates and any Distribution Date, if the fraction, the
numerator of which is the Class Principal Balance of such Class immediately
prior to such Distribution Date and each Class subordinate thereto, and
denominator of which is the Pool Scheduled Principal Balance with respect to
that Distribution Date, equals or exceeds such percentage calculated as of the
Closing Date.
Class Principal Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Principal Balances of
all Certificates of such Class as of such date.
Class Unpaid Interest Amounts: As to any Distribution Date and Class
of interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to clause
(ii) of the definition of Accrued Certificate Interest.
Closing Date: July 26, 2000.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
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Collection Account: The separate Eligible Account or Accounts
created and maintained by the Servicer pursuant to Section 3.05 with a
depository institution in the name of the Servicer for the benefit of the
Trustee on behalf of Certificateholders and designated "The Chase Manhattan Bank
in trust for the registered holders of PaineWebber Mortgage Acceptance
Corporation IV Mortgage Pass-Through Certificates Series 2000-1."
Corporate Trust Office: The designated office of the Trustee in the
State of New York at which at any particular time its corporate trust business
with respect to this Agreement shall be administered, which office at the date
of the execution of this Agreement is located at The Chase Manhattan Bank, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Structured Finance
Services, PaineWebber Mortgage Acceptance Corporation IV, Mortgage Pass-Through
Certificates, Series 2000-1, and which is the address to which notices to and
correspondence with the Trustee should be directed.
Cross-Over Date: The Distribution date on which the Class Principal
Balances of the Junior Certificates have been reduced to zero.
Cut-off Date: July 1, 2000.
Cut-off Date Pool Balance: $170,191,412.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Scheduled Principal Balance thereof as of the close of business on the Cut-off
Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
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 Payment
that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court which is final and non-appealable
in a proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(c) hereof.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Principal Balance of this
Certificate" or the "Initial Notional
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Principal Balance of this Certificate" or, if neither of the foregoing, the
Percentage Interest appearing on the face thereof.
Depositor: PaineWebber Mortgage Acceptance Corporation IV, a
Delaware corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the 22nd day of
each month or if such 22nd day is not a Business Day the next preceding Business
Day; provided, however, that if such 22nd day or such Business Day, whichever is
applicable, is less than two Business Days prior to the related Distribution
Date, the Determination Date shall be the first Business Day which is two
Business Days preceding such Distribution Date.
Discount Mortgage Loan: Any Mortgage Loan with a Net Mortgage Rate
that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Chase Manhattan
Bank in trust for registered holders of PaineWebber Mortgage Acceptance
Corporation IV Mortgage Pass-Through Certificates, Series 2000-1." Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:30 p.m. Eastern time on the fourth day immediately preceding such
Distribution Date, or if such day is not a Business Day the next preceding
Business Day.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in August 2000.
Due Date: With respect to any Distribution Date, the first day of
the month in which the related Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts
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are insured by the FDIC (to the limits established by the FDIC) and the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating
Agency, the Certificateholders have a claim with respect to the funds in such
account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution or trust company in which such account is maintained, or (iii) a
trust account or accounts maintained with (a) the trust department of a federal
or state chartered depository institution or (b) a trust company, acting in its
fiduciary capacity or (iv) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by
the Originator for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit L, (i) have a Scheduled Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than the Scheduled Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more than one
year less than that of) the Deleted Mortgage Loan; (v) comply with each
representation and warranty set forth in Section 2.03 hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.06(a) hereof.
Excess Loss: The amount of any (i) Fraud Loss realized after the
Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss realized after
the Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss realized
after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Loan, the amount, if
any, by which the sum of any Liquidation Proceeds of such Mortgage Loan received
in the calendar month in which such Mortgage Loan became a Liquidated Loan,
exceeds (i) the Scheduled Principal Balance of such Liquidated Loan as of the
Due Date in the month in which such Mortgage Loan became a Liquidated Loan plus
(ii) accrued interest at the Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the Due Date applicable to the Distribution Date immediately following the
calendar month during which such liquidation occurred.
Exchange Act: The Securities Exchange Act of 1934, as amended from
time to time.
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Expense Rate: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate and the Trustee Fee Rate (adjusted as specified in the
definition thereof).
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance
Group, or such other address as Fitch may hereafter furnish to the Depositor and
the Servicer.
Fraud Loan: A Liquidated Loan as to which a Fraud Loss has occurred.
Fraud Loss Coverage Amount: As of the Closing Date, $170,191.41,
subject to reduction from time to time by the amount of Fraud Losses allocated
to the Certificates. In addition, on each anniversary of the Cut-off Date, the
Fraud Loss Coverage Amount will be reduced as follows: (a) on the first and
second anniversaries of the Cut-off Date, to an amount equal to the lesser of
(i) 1% of the then current Pool Principal Balance and (ii) the excess of the
Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off Date
over the cumulative amount of Fraud Losses that would have been allocated to the
Certificates in the absence of the Loss Allocation Limitation since such
preceding anniversary; (b) on the third and fourth anniversaries of the Cut-off
Date, to an amount equal to the lesser of (i) 0.5% of the then current Pool
Principal Balance and (ii) the excess of the Fraud Loss Coverage Amount as of
the preceding anniversary of the Cut-off Date over the cumulative amount of
Fraud Losses that would have been allocated to the Certificates in the absence
of the Loss Allocation Limitation since such preceding anniversary; and (c) on
the earlier to occur of the Cross-Over Date and the fifth anniversary of the
Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss
is sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act of
1970, as amended, or any successor thereto.
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HUD: The United States Department of Housing and Urban Development
or any successor thereto.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Bankruptcy Coverage Amount: $100,000.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses, to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
borrower in accordance with the Servicer's normal servicing procedures.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Certificates
and any Distribution Date, the calendar month prior to the month of such
Distribution Date.
Junior Certificates: As specified in the Preliminary Statement.
Junior Optimal Principal Amount: For any Distribution Date, (i) the
Junior Percentage of the applicable Non-PO Percentage of all amounts described
in clauses (a) through (d) of the definition of "Non-PO Formula Principal
Amount" for such Distribution Date, (ii) with respect to each Mortgage Loan that
became a Liquidated Loan during the calendar month preceding the month of such
Distribution Date, the lesser of (A) the Junior Percentage of the applicable
Non-PO Percentage of the Scheduled Principal Balance of such Mortgage Loan, or
(B) either (a) the Junior Prepayment Percentage, or (b) if an Excess Loss was
sustained with respect to such Liquidated Loan during such prior calendar month,
the Junior Percentage, of the applicable Non-PO Percentage of the amount of the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, and (iii) the Junior Prepayment Percentage of the applicable
Non-PO Percentage of the amounts described in clause (f) of the definition of
"Non-PO Formula Principal Amount" for such Distribution Date; provided, however,
that if a Bankruptcy Loss that is an Excess Loss is sustained with respect to a
Mortgage Loan that is not a Liquidated Loan, the Junior Optimal Principal Amount
will be reduced on the related Distribution Date by the Junior Percentage of the
applicable Non-PO Percentage of the principal portion of such Bankruptcy Loss.
Junior Percentage: As to any Distribution Date, 100% minus the
Senior Percentage for such Distribution Date.
Junior Prepayment Percentage: As to any Distribution Date, 100%
minus the Senior Prepayment Percentage for such Distribution Date.
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Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan (including any REO Property) which was liquidated in the calendar
month preceding the month of such Distribution Date and as to which the Servicer
has determined (in accordance with this Agreement) that it has received all
amounts it expects to receive in connection with the liquidation of such
Mortgage Loan, including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Servicing Fees, Servicing
Advances and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Loss Allocation Limitation: As defined in Section 4.03(d) hereof.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least 51%
of the Percentage Interests evidenced by all Certificates of such Class.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.04.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Purchase Agreement: The Master Mortgage Loan Purchase
and Servicing Agreement, dated as of June 1, 1998, between PWRES and Provident,
as the same may be amended from time to time.
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Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Servicer to reflect the addition of Eligible Substitute
Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is either (a)
a detached single family dwelling (b) a dwelling in a de minimis PUD, (c)
a condominium unit or PUD (other than a de minimis PUD), or (d) a two- to
four-unit residential property;
(xi) the Mortgage Rate;
(xii) the purpose for the Mortgage Loan;
(xiii) the type of documentation program pursuant to which the
Mortgage Loan was originated; and
(xiv) the Servicing Fee for the Mortgage Loan.
Such schedule shall also set forth the total of the amounts
described under (iv) and (v) above for all of the Mortgage Loans.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the Trustee pursuant to the provisions hereof as from time to time are held
as a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property.
-14-
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the related Expense Rate. For
purposes of determining whether any Eligible Substitute Mortgage Loan is a
Discount Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of
calculating the applicable PO Percentage and applicable Non-PO Percentage, each
Eligible Substitute Mortgage Loan shall be deemed to have a Net Mortgage Rate
equal to the Net Mortgage Rate of the Deleted Mortgage Loan for which it is
substituted.
Net Prepayment Interest Shortfalls: As to any Distribution Date, the
amount by which the aggregate of Prepayment Interest Shortfalls during the
related Prepayment Period exceeds an amount equal to one-half of the aggregate
Servicing Fee for such Distribution Date before reduction of the Servicing Fee
in respect of such Prepayment Interest Shortfalls.
Non-Discount Mortgage Loan: Any Mortgage Loan with a Net Mortgage
Rate that is greater than or equal to the Required Coupon.
Non-PO Formula Principal Amount: As to any Distribution Date, the
sum of the applicable Non-PO Percentage of (a) the principal portion of each
Scheduled Payment (without giving effect, prior to the Bankruptcy Coverage
Termination Date, to any reductions thereof caused by any Debt Service
Reductions or Deficient Valuations) due on each Mortgage Loan on the related Due
Date, (b) the Scheduled Principal Balance of each Mortgage Loan that was
repurchased by the Originator or the Servicer pursuant to this Agreement as of
such Distribution Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Mortgage Loan received with respect to such Distribution Date,
(d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans that are not yet Liquidated Loans received during
the calendar month preceding the month of such Distribution Date, (e) with
respect to each Mortgage Loan that became a Liquidated Loan during the calendar
month preceding the month of such Distribution Date, the amount of the
Liquidation Proceeds allocable to principal received during the calendar month
preceding the month of such Distribution Date with respect to such Mortgage Loan
and (f) the sum of (i) all Principal Prepayments in full received during the
related Prepayment Period and (ii) all partial Principal Prepayments applied
during the related Prepayment Period.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the Net Mortgage Rate of
such Discount Mortgage Loan and the denominator of which is the Required Coupon.
As to any Non-Discount Mortgage Loan, 100%.
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Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Notional Principal Balance: With respect to any Distribution Date
and the Class X Certificates, the aggregate of the Scheduled Principal Balances
of the Non-Discount Mortgage Loans as of the Due Date in the month of such
Distribution Date (prior to giving effect to any Scheduled Payments due on such
Mortgage Loans on such Due Date).
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate (i) signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Servicer, or (ii), if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor and the Trustee, as the case may be, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, including, in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i) in
fact be independent of the Depositor and the Servicer, (ii) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either, and (iii) not be connected with the-Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the trust created hereunder
in connection with the purchase of the Mortgage Loans pursuant to Section
9.01(a) hereof.
Original Junior Principal Balance: The aggregate of the Class
Principal Balances of the Junior Certificates as of the Closing Date.
Original Mortgage Loan: The mortgage loan refinanced in connection
with the origination of a Refinancing Mortgage Loan.
Originator: Provident Funding Associates, L.P., a California limited
partnership, and its successors and assigns, in its capacity as seller of the
Mortgage Loans to PWRES.
OTS: The Office of Thrift Supervision.
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Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Scheduled Principal Balance greater than zero-which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
Pass-Through Rate: For any interest bearing Class of Certificates,
the per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower rating
as will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating
Agency, or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each Rating
Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust company (or in
the case of the principal depository institution in a holding company
system, the commercial
-17-
paper or long-term unsecured debt obligations of such holding company) are
then rated one of the two highest long-term and the highest short-term
ratings of each Rating Agency for such securities, or such lower ratings
as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by either Rating Agency;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time of the
issuance of such agreements, such terms and conditions as will not result
in the downgrading or withdrawal of the rating then assigned to the
Certificates by either Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into with
a depository institution or trust company (acting as principal) described
in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest ratings
of each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates
by either Rating Agency, as evidenced by a signed writing delivered by
each Rating Agency;
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if Fitch is a Rating Agency
and has not rated the portfolio, the highest rating assigned by Moody's)
and restricted to obligations issued or guaranteed by the United States of
America or entities whose obligations are backed by the full faith and
credit of the United States of America and repurchase agreements
collateralized by such obligations; and
(x) such other investments bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by either
Rating Agency, as evidenced by a signed writing delivered by each Rating
Agency.
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess
-18-
inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
citizen or resident of the United States, a corporation, partnership (except as
provided in applicable Treasury Regulations), or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, an estate whose income is subject to United States federal income tax
purposes regardless of its source or a trust if a court within the United States
is able to exercise primary supervision over the administration of the trust and
one or more persons described in this clause (v) have the authority to control
all substantial decisions of the 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 United States persons) unless such Person has
furnished the transferor and the Trustee with a duly completed Internal Revenue
Service Form 4224 or any applicable successor form, and (vi) any other Person so
designated by the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Residual Certificate to such Person may cause the
REMIC hereunder to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Physical Certificate: As specified in the Preliminary Statement.
PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the excess of the Required
Coupon over the Net Mortgage Rate of such Discount Mortgage Loan and the
denominator of which is the Required Coupon. As to any Non-Discount Mortgage
Loan, 0%.
Pool Principal Balance: As to any Distribution Date, the aggregate
of the Scheduled Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the Due Date in the month preceding the month of such
Distribution Date.
Prepayment Interest Excess: As to any Principal Prepayment received
or, in the case of partial Principal Prepayments, applied, by the Servicer from
the first day through the fifteenth day of any calendar month (other than the
calendar month in which the Cut-off Date occurs), all amounts paid by the
related Mortgagor in respect of interest on such Principal Prepayment. All
Prepayment Interest Excess shall be paid to the Servicer as additional servicing
compensation.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received or, in the case of partial Principal
Prepayments, applied, on or after the sixteenth day of the month preceding the
month of such Distribution Date (or, in the
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case of the first Distribution Date, on or after the Cut-off Date) and on or
before the last day of the month preceding the month of such Distribution Date,
the amount, if any, by which one month's interest at the related Mortgage Rate,
net of the Servicing Fee Rate, on such Principal Prepayment exceeds the amount
of interest paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period from the
16th day of the calendar month preceding the month of such Distribution Date
(or, in the case of the first Distribution Date, from the Cut-off Date) through
the 15th of the month of such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Servicer in accordance with the
terms of the related Mortgage Note, and to the extent the Mortgage Note does not
provide otherwise, shall not be applied in the Prepayment Period preceding the
receipt thereof.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date and any Mortgage Loan
(i) with respect to the Class X Certificates, (a) the ratio that (x) the excess,
if any, of the Net Mortgage Rate with respect to such Mortgage Loan over the
Required Coupon bears to (y) such Net Mortgage Rate or (b) if the Net Mortgage
Rate with respect to such Mortgage Loan does not exceed the Required Coupon,
zero, (ii) with respect to the Class PO Certificates, zero and (iii) with
respect to each other Class of Certificates the product of (a) the lesser of (I)
the ratio that the Required Coupon bears to such Net Mortgage Rate and (II) one,
multiplied by (b) the ratio that the amount calculated with respect to such
Distribution Date for such Class pursuant to clause (i) of the definition of
Accrued Certificate Interest (without giving effect to any reduction of such
amount pursuant to Section 4.02(d)) bears to the amount calculated with respect
to such Distribution Date for all Class of Certificates pursuant to clause (i)
of the definition of Accrued Certificate Interest (without giving effect to any
reduction of such amount pursuant to Section 4.02(d)).
Prospectus Supplement: The Prospectus Supplement dated July 21, 2000
relating to the Offered Certificates.
PUD: Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Originator pursuant to Section 2.02 or 2.03 hereof or purchased
at the option of the Servicer pursuant to Section 3.11, an amount equal to the
sum of (i) 100% of the unpaid principal balance
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of the Mortgage Loan on the date of such purchase, and (ii) accrued and unpaid
interest thereon at the applicable Mortgage Rate (or at the applicable Adjusted
Mortgage Rate if the purchaser is the Servicer) from the date through which
interest was last paid by the Mortgagor or the Servicer made an Advance in
respect thereof (which was not reimbursed) to the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders.
PWRES: ▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Securities Inc., a Delaware
corporation, seller of the Mortgage Loans to the Depositor pursuant to the PWRES
Mortgage Loan Purchase Agreement.
PWRES Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of July 1, 2000, between PWRES and the Depositor, as the
same may be amended from time to time.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
▇▇▇▇▇▇ Mae-approved mortgage insurer and having a claims paying ability rating
of at least "AA" or equivalent rating by a nationally recognized statistical
rating organization. Any replacement insurer with respect to a Mortgage Loan
must have at least as high a claims paying ability rating as the insurer it
replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If any such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an amount (not
less than zero or more than the Scheduled Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Scheduled Principal
Balance of the Liquidated Loan as of the date of such liquidation, plus (ii)
interest at the Net Mortgage Rate from the Due Date as to which interest was
last paid or advanced (and not reimbursed) to Certificateholders up to the Due
Date in the month in which Liquidation Proceeds are required to be distributed
on the Scheduled Principal Balance of such Liquidated Loan from time to time,
minus (iii) the Liquidation Proceeds, if any, received during the month in which
such liquidation occurred, to the extent applied as recoveries of interest at
the Net Mortgage Rate and to principal of the Liquidated Loan. With respect to
each Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
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Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which such
Distribution Date occurs.
Refinancing Mortgage Loan Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than (ii) interest accrued thereon for such month pursuant to the Mortgage
Note.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibits L and M, as
appropriate.
Required Coupon: 7.75% per annum.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
having direct responsibility for the administration of this
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Agreement and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Restricted Classes: As defined in Section 4.02(e).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Scheduled Principal Balance: As to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous partial Principal
Prepayments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Loan), and to the payment of principal due on such Due
Date and irrespective of any delinquency in payment by the related Mortgagor.
Securities Act: The Securities Act of 1933, as amended.
Senior Certificates: As specified in the Preliminary Statement.
Senior Optimal Principal Amount: For any Distribution Date, (i) the
Senior Percentage of the applicable Non-PO Percentage of all amounts described
in clauses (a) through (d) of the definition of "Non-PO Formula Principal
Amount" for such Distribution Date, (ii) with respect to each Mortgage Loan that
became a Liquidated Loan during the calendar month preceding the month of such
Distribution Date, the lesser of (A) the Senior Percentage of the applicable
Non-PO Percentage of the Scheduled Principal Balance of such Mortgage Loan, or
(B) either (a) the Senior Prepayment Percentage, or (b) if an Excess Loss was
sustained with respect to such Liquidated Loan during such prior calendar month,
the Senior Percentage, of the applicable Non-PO Percentage of the amount of the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, and (iii) the Senior Prepayment Percentage of the applicable
Non-PO Percentage of the amounts described in clause (f) of the definition of
"Non-PO Formula Principal Amount" for such Distribution Date; provided, however,
that if a Bankruptcy Loss that is an Excess Loss is sustained with respect to a
Mortgage Loan that is not a Liquidated Loan, the Senior Optimal Principal Amount
will be reduced on the related Distribution Date by the Senior Percentage of the
applicable Non-PO Percentage of the principal portion of such Bankruptcy Loss.
Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the aggregate of the Class
Principal Balances of each Class of Senior Certificates (other than the Class X
and Class PO Certificates) immediately preceding such Distribution Date and the
denominator of which is the aggregate of the Class Principal Balances of all
Classes of Certificates (other than the Class X and Class PO Certificates)
immediately preceding such Distribution Date.
Senior Prepayment Percentage: For any Distribution Date during the
five years beginning on the first Distribution Date, 100%. The Senior Prepayment
Percentage for any
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Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date will, except as provided herein, be as follows: for any
Distribution Date in the first year thereafter, the Senior Percentage plus 70%
of the Junior Percentage for such Distribution Date; for any Distribution Date
in the second year thereafter, the Senior Percentage plus 60% of the Junior
Percentage for such Distribution Date; for any Distribution Date in the third
year thereafter, the Senior Percentage plus 40% of the Junior Percentage for
such Distribution Date; for any Distribution Date in the fourth year thereafter,
the Senior Percentage plus 20% of the Junior Percentage for such Distribution
Date; and for any Distribution Date thereafter, the Senior Percentage for such
Distribution Date (unless on any Distribution Date the Senior Percentage exceeds
the initial Senior Percentage, in which case the Senior Prepayment Percentage
for such Distribution Date will once again equal 100%). Notwithstanding the
foregoing, no decrease in the Senior Prepayment Percentage will occur unless
both of the Senior Step Down Conditions are satisfied.
Senior Step Down Conditions: As of the last day of the month
preceding the applicable Distribution Date as to which any decrease in the
Senior Prepayment Percentage applies, (i) the aggregate Scheduled Principal
Balance of all Mortgage Loans delinquent 60 days or more, as a percentage of the
aggregate principal balance of the Junior Certificates on such Distribution
Date, does not equal or exceed 50% and (ii) cumulative Realized Losses with
respect to the Mortgage Loans do not exceed (a) with respect to the Distribution
Date on the fifth anniversary of the first Distribution Date, 30% of the
Original Junior Principal Balance, (b) with respect to the Distribution Date on
the sixth anniversary of the first Distribution Date, 35% of the Original Junior
Principal Balance, (c) with respect to the Distribution Date on the seventh
anniversary of the first Distribution Date, 40% of the Original Junior Principal
Balance, (d) with respect to the Distribution Date on the eighth anniversary of
the first Distribution Date, 45% of the Original Junior Principal Balance and
(e) with respect to the Distribution Date on the ninth anniversary of the first
Distribution Date, 50% of the Original Junior Principal Balance.
Servicer: Provident Funding Associates, L.P., a California limited
partnership, and its successors and assigns, in its capacity as servicer
hereunder.
Servicer Advance Date: As to any Distribution Date, 12:30 p.m.
Eastern time on the Business Day immediately preceding such Distribution Date.
Servicer Event of Termination: As defined in Section 7.01 hereof.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount payable out of each full payment of interest received on such Mortgage
Loan and equal to one-twelfth of the Servicing Fee Rate multiplied by the
Scheduled Principal Balance of such Mortgage Loan as of the Due Date in the
month of such Distribution Date (prior to giving effect
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to any Scheduled Payments due on such Mortgage Loan on such Due Date), subject
to reduction as provided in Section 3.14.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.25% per
annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
S&P: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If S&P is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for notices
to S&P shall be Standard & Poor's Ratings Services, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance Monitoring, or such other
address as S&P may hereafter furnish to the Depositor and the Servicer.
Special Hazard Coverage Termination Date: The point in time at which
the Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss but not including (i) any loss of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained with respect to such Mortgaged Property pursuant to Section
3.09 to the extent of the amount of such loss covered thereby, or (ii) any loss
caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Servicer or any of their agents or employees (without regard
to any portion of the loss not covered by any errors and omissions
policy);
(c) errors in design, faulty workmanship or faulty materials, unless
the collapse of the property or a part thereof ensues and then only for
the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled, and
whether such loss be direct or indirect, proximate or remote or be in
whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss";
(e) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending
or expected attack:
1. by any government or sovereign power, de jure or de
facto, or by any authority maintaining or using
military, naval or air forces; or
2. by military, naval or air forces; or
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3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any government
or public authority or risks of contraband or illegal transportation or
trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $2,939,767, less (i) the aggregate amount of Special Hazard
Losses that would have been previously allocated to the Junior Certificates in
the absence of the Loss Allocation Limitation and (ii) the Adjustment Amount.
All principal balances for the purpose of this definition will be calculated as
of the first day of the calendar month preceding the month of such Distribution
Date after giving effect to Scheduled Payments on the Mortgage Loans then due,
whether or not paid. As of any Distribution after the Cross-Over Date, the
Special Hazard Loss Coverage Amount will be zero.
Special Hazard Mortgage Loan: A Liquidated Loan as to which a
Special Hazard Loss has occurred.
Startup Day: The Closing Date.
Subservicer: Any person to whom the Servicer has contracted for the
servicing of all or a portion of the Mortgage Loans pursuant to Section 3.02
hereof.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the PWRES Mortgage Loan Purchase Agreement, (ii) the Mortgage Loans and all
interest and principal received on or with respect thereto after the Cut-off
Date to the extent not applied in computing the Cut-off Date Principal Balance
thereof; (iii) the Collection Account and the Distribution Account all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iv)
property that secured a Mortgage Loan and has been acquired by foreclosure,
deed-in-lieu of foreclosure or otherwise; and (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.
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Trustee: The Chase Manhattan Bank, a New York banking corporation,
and its successors and, if a successor trustee is appointed hereunder, such
successor.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Principal Balance
with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate equal to 0.005%; provided that in December of any year, such per annum rate
shall be adjusted, if necessary, to ensure that the aggregate Trustee Fee Rate
for such calendar year is equal to at least $5,000.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (b) the remaining Voting Rights (or 100% of the Voting Rights if
there is no Class of Class X Certificates) shall be allocated among Holders of
the remaining Classes of Certificates in proportion to the Certificate Principal
Balances of their respective Certificates on such date.
Section 1.02. Certain Calculations.
Unless otherwise specified herein, for purposes of determining
amounts with respect to the Certificates and the rights and obligations of the
parties hereto, all calculations of interest (other than as provided in the
Mortgage Loan documents) provided for herein shall be made on the basis of a
360-day year consisting of twelve 30-day months.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund together
with all rights assigned by PWRES to the Depositor, pursuant to the PWRES
Mortgage Loan Purchase Agreement, under the Mortgage Loan Purchase Agreement and
the related Confirmation (as defined in the Mortgage Loan Purchase Agreement)
solely with respect to the Mortgage Loans. With respect to any Mortgage Loan
that does not have a first payment date on or before the Due Date in the month
of the first Distribution Date, the Depositor shall, or shall cause PWRES to,
deposit into the Distribution Account on or before the Distribution Account
Deposit Date relating to the first Distribution Date, an amount equal to one
month's interest at the related Adjusted Mortgage Rate on the Cut-off Date
Principal Balance of such Mortgage Loan.
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(b) In connection with the transfer and assignment set forth in
clause (a) above, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of ___________
without recourse," with all intervening endorsements showing a complete
chain of endorsement from the originator to the Person endorsing the
Mortgage Note (each such endorsement being sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or
assignee thereof, in and to that Mortgage Note); or, with respect to any
Lost Mortgage Note, a lost note affidavit from the Originator stating that
the original Mortgage Note was lost or destroyed, together with a copy of
such Mortgage Note;
(ii) except as provided below, the original recorded Mortgage or
a copy of such Mortgage certified by the Originator as being a true and
complete copy of the Mortgage;
(iii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with, except as
provided below, all interim recorded assignments of such mortgage (each
such assignment, when duly and validly completed, to be in recordable form
and sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates); provided
that, if the related Mortgage has not been returned from the applicable
public recording office, such assignment of the Mortgage may exclude the
information to be provided by the recording office;
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) except as provided below, the original or duplicate original
lender's title policy and all riders thereto.
In the event that in connection with any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage, (b) all interim recorded
assignments or (c) the lender's title policy (together with all riders thereto)
satisfying the requirements of clause (ii), (iii) or (v) above, respectively,
concurrently with the execution and delivery hereof because such document or
documents have not been returned from the applicable public recording office in
the case of clause (ii) or (iii) above, or because the title policy has not been
delivered to either the Servicer or the Depositor by the applicable title
insurer in the case of clause (v) above, the Depositor shall promptly deliver to
the Trustee, in the case of clause (ii) or (iii) above, such original Mortgage
or such interim assignment, as the case may be, with evidence of recording
indicated thereon upon receipt thereof from the public recording office, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery of the original Mortgage and each such
interim assignment or a copy thereof, certified, if appropriate, by the relevant
recording office, be made later than one year following the Closing Date, or, in
the case of clause (v) above, no later than 120 days following the Closing Date;
provided, however, in the event the Depositor is unable to deliver by such date
each Mortgage
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and each such interim assignment by reason of the fact that any such documents
have not been returned by the appropriate recording office, or, in the case of
each such interim assignment, because the related Mortgage has not been returned
by the appropriate recording office, the Depositor shall deliver such documents
to the Trustee as promptly as possible upon receipt thereof and, in any event,
within 720 days following the Closing Date. The Depositor shall forward or cause
to be forwarded to the Trustee (a) from time to time additional original
documents evidencing an assumption or modification of a Mortgage Loan and (b)
any other documents required to be delivered by the Depositor or the Servicer to
the Trustee. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan and the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Servicer
shall execute and deliver or cause to be executed and delivered such a document
to the public recording office. In the case where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, the Originator shall deliver to
the Trustee a copy of such Mortgage certified by such public recording office to
be a true and complete copy of the original recorded Mortgage.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Servicer
shall (i) cause the Trustee to affix the Trustee's name to each assignment of
Mortgage, as the assignee thereof, (ii) cause such assignment to be in proper
form for recording in the appropriate public office for real property records
and (iii) cause to be delivered for recording in the appropriate public office
for real property records the assignments of the Mortgages to the Trustee,
except that, with respect to any assignments of Mortgage as to which the
Servicer has not received the information required to prepare such assignment in
recordable form, the Servicer's obligation to do so and to deliver the same for
such recording shall be as soon as practicable after receipt of such information
and in any event within thirty (30) days after receipt thereof and that the
Servicer need not cause to be recorded any assignment which relates to a
Mortgage Loan (a) the Mortgaged Property and Mortgage File relating to which are
located in California or (b) in any other jurisdiction under the laws of which
in the opinion of counsel the recordation of such assignment is not necessary to
protect the Trustee's and the Certificateholders' interest in the related
Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full as of
the Closing Date, the Depositor, in lieu of delivering the above documents to
the Trustee, will deposit in the Collection Account the portion of such payment
that is required to be deposited in the Collection Account pursuant to Section
3.08 hereof.
Section 2.02. Acceptance by Trustee of the Mortgage Loans.
The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit F and declares that
it holds and will hold such documents and the other documents delivered to it
constituting the Mortgage Files, and that it holds or will hold such other
assets as are included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders. The Trustee acknowledges
that it will maintain possession of the Mortgage Notes in the State of New York
or Texas, unless otherwise permitted by the Rating Agencies.
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The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Servicer and the Originator an Initial Certification in the form
annexed hereto as Exhibit F. Based on its review and examination, and only as to
the documents identified in such Initial Certification, the Trustee acknowledges
that such documents appear regular on their face and relate to such Mortgage
Loan. The Trustee shall be under no duty or obligation to (i) inspect, review or
examine said documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face or (ii) determine
whether the Mortgage File should include any of the documents specified in
Section 2.01(b)(iv) unless the Mortgage Loan Schedule indicates that such
documents are applicable.
Not later than 90 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Servicer and the Originator a Final Certification
in the form annexed hereto as Exhibit G, with any applicable exceptions noted
thereon.
If, in the course of such review, the Trustee finds any document
constituting a part of a Mortgage File which does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification; provided, however that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note, (ii) any assignment is in recordable form
or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates or (iii) the Mortgage
File should include any of the documents specified in Section 2.01(b)(iv) unless
the Mortgage Loan Schedule indicates that such documents are applicable. The
Originator shall promptly correct or cure such defect within 90 days from the
date it was so notified of such defect and, if the Originator does not correct
or cure such defect within such period, the Originator shall either (a)
substitute for the related Mortgage Loan a Eligible Substitute Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03, or (b) purchase such Mortgage Loan from
the Trustee within 90 days from the date the Originator was notified of such
defect in writing at the Purchase Price of such Mortgage Loan; provided,
however, that in no event shall such substitution or purchase occur more than
540 days from the Closing Date, except that if the substitution or purchase of a
Mortgage Loan pursuant to this provision is required by reason of a delay in
delivery of any documents by the appropriate recording office, and there is a
dispute between either the Servicer or the Originator and the Trustee over the
location or status of the recorded document, then such substitution or purchase
shall occur within 720 days from the Closing Date. The Trustee shall deliver
written notice to each Rating Agency within 270 days from the Closing Date
indicating each Mortgage Loan (a) which has not been returned by the appropriate
recording office or (b) as to which there is a dispute as to location or status
of such Mortgage Loan. Such notice shall be delivered every 90 days thereafter
until the related Mortgage Loan is returned to the Trustee. Any such
substitution pursuant to (a) above or purchase pursuant to (b) above shall not
be effected prior to the delivery to the Trustee of a Request for Release
substantially in the form of Exhibit M. No substitution is permitted to be made
in any calendar month after the Determination Date for such month. The Purchase
Price for any such Mortgage Loan shall be deposited by the Originator in the
Collection Account on or prior to the Distribution Account Deposit Date for the
Distribution Date in the month following the month of repurchase and, upon
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receipt of such deposit and certification with respect thereto in the form of
Exhibit M hereto, the Trustee shall release the related Mortgage File to the
Originator and shall execute and deliver at the Originator's request such
instruments of transfer or assignment prepared by the Originator, in each case
without recourse, as shall be necessary to vest in the Originator, or a
designee, the Trustee's interest in any Mortgage Loan released pursuant hereto.
The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the Servicer from
time to time.
It is understood and agreed that the obligation of the Originator to
substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 above shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Originator.
Section 2.03. Representations, Warranties and Covenants of the
Originator.
(a) The Originator hereby makes the representations and warranties
set forth in Schedule II hereto, and by this reference incorporated herein, to
the Depositor and the Trustee, as of the Closing Date, or if so specified
therein, as of the Cut-off Date.
(b) The Originator hereby makes the representations and warranties
set forth in Schedule III hereto with respect to the Mortgage Loans, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(a) or 2.03(b) that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties. A breach which causes a Mortgage Loan not to
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, will be deemed automatically to materially and adversely affect the
interests of the Certificateholders in such Mortgage Loan. The Originator hereby
covenants that within 90 days of the earlier of its discovery or its receipt of
written notice from any party of a breach of any representation or warranty made
pursuant to Section 2.03(a) or 2.03(b) which materially and adversely affects
the interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects, and if such breach is not so cured, shall, (i)
if such 90- day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Eligible Substitute Mortgage Loan, in the manner
and subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided, however, that any such substitution
pursuant to (i) above shall not be effected prior to the delivery to the Trustee
of a Request for Release substantially in the form of Exhibit M and the Mortgage
File for any such Eligible Substitute Mortgage Loan. The Originator shall
promptly reimburse the Servicer and the Trustee for any expenses reasonably
incurred by the
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Servicer or the Trustee in respect of enforcing the remedies for such breach.
With respect to the representations and warranties described in this Section
which are made to the best of the Originator's knowledge, if it is discovered by
either the Depositor, the Originator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interests of the
Certificateholders therein, notwithstanding the Originator's lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Eligible Substitute Mortgage Loan or Loans, the
Originator shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Eligible Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Originator on the next
succeeding Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Originator shall be entitled to retain
all amounts received in respect of such Deleted Mortgage Loan. The Servicer
shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the substitution of the
Eligible Substitute Mortgage Loan or Loans and the Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Eligible Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Originator shall be deemed to have made with
respect to such Eligible Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Collection Account of the amount required to be deposited therein
in connection with such substitution as described in the following paragraph,
the Trustee shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to the Originator and
shall execute and deliver at the Originator's direction such instruments of
transfer or assignment prepared by the Originator, in each case without
recourse, as shall be necessary to vest title in the Originator, or its
designee, the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
For any month in which the Originator substitutes one or more
Eligible Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Eligible Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Scheduled Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the monthly payments due in the month of substitution). The amount of such
shortage (the "Substitution Adjustment Amount") plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be deposited in the Collection Account by the Originator on or
before the Distribution Account Deposit Date for the Distribution Date in the
month succeeding the calendar month during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
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In the event that the Originator shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Collection Account
pursuant to Section 3.05 on or before the Distribution Account Deposit Date for
the Distribution Date in the month following the month during which the
Originator became obligated hereunder to repurchase or replace such Mortgage
Loan and upon such deposit of the Purchase Price and receipt of a Request for
Release in the form of Exhibit M hereto, the Trustee shall release the related
Mortgage File held for the benefit of the Certificateholders to such Person, and
the Trustee shall execute and deliver at such Person's direction such
instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee. It
is understood and agreed that the obligation under this Agreement of any Person
to cure, repurchase or replace any Mortgage Loan as to which a breach has
occurred and is continuing shall constitute the sole remedy against such Persons
respecting such breach available to Certificateholders, the Depositor or the
Trustee on their behalf.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Mortgage Files to the Trustee for
the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor as
to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date hereof or such other date set forth
herein that as of the Closing Date, and following the transfer of the Mortgage
Loans to it by PWRES, the Depositor had good title to the Mortgage Loans and the
Mortgage Notes were subject to no offsets, defenses or counterclaims.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the Mortgage Files to
the Trustee. Upon discovery by the Depositor, the Originator, the Servicer or
the Trustee of a breach of any of the foregoing representations and warranties
set forth in this Section 2.04 (referred to herein as a "breach"), which breach
materially and adversely affects the interest of the Certificateholders, the
party discovering such breach shall give prompt written notice to the others and
to each Rating Agency.
Section 2.05. [Reserved.]
Section 2.06. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
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Section 2.07. REMIC Matters.
The Preliminary Statement sets forth the designations as "regular
interests" or "residual interests" and "latest possible maturity date" for
federal income tax purposes of all interests created hereby. The "Startup Day"
for purposes of the REMIC Provisions shall be the Closing Date. The REMIC's
fiscal year shall be the calendar year.
Section 2.08. Covenants of the Servicer.
The Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor or the Trustee and prepared by the Servicer pursuant to this
Agreement will contain any untrue statement of a material fact or omit to state
a material fact necessary to make such information, certificate, statement or
report not misleading.
Section 2.09. Representations and Warranties of the Servicer.
The Servicer hereby represents and warrants to the Depositor and the
Trustee, as of the Closing Date, or if so specified herein, as of the Cut-off
Date:
(a) The Servicer is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the State of California
and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Mortgage Loan, to service the Mortgage Loans
in accordance with the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms thereof.
(b) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of the Servicer the execution,
delivery and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
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(c) The execution and delivery of this Agreement by the Servicer,
and the servicing of the Mortgage Loans by the Servicer under this Agreement,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of the Servicer and will not (A) result in a
material breach of any term or provision of the limited partnership agreement of
the Servicer or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the terms
of any other material agreement or instrument to which the Servicer is a party
or by which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Servicer's ability to perform or meet any of
its obligations under this Agreement.
(d) The Servicer is an approved servicer of conventional mortgage
loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(e) No litigation is pending or threatened against the Servicer that
would materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Servicer to service the Mortgage Loans
or to perform any of its other obligations under this Agreement in accordance
with the terms thereof.
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated thereby, or if
any such consent, approval, authorization or order is required, the Servicer has
obtained the same.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage loan
servicers. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
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Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Mortgage Loan, and shall not
make or permit any modification, waiver or amendment of any Mortgage Loan which
would cause the Trust Fund to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by either or
both of them as are necessary or appropriate to enable the Servicer to service
and administer the Mortgage Loans to the extent that the Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. The costs incurred by the Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Scheduled Principal Balances of the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
Section 3.02. Subservicing; Enforcement of the Obligations of
Servicers.
(a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a Subservicer pursuant to a subservicing agreement; provided, however,
that such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. The Servicer
shall send to the Trustee a copy of any such subservicing agreement within 30
days of execution thereof. Unless the context otherwise requires, references in
this Agreement to actions taken or to be taken by the Servicer in servicing the
Mortgage Loans include actions taken or to be taken by a Subservicer on behalf
of the Servicer. Notwithstanding the provisions of any subservicing agreement,
any of the provisions of this Agreement relating to agreements or arrangements
between the Servicer and a Subservicer or reference to actions taken
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through a Subservicer or otherwise, the Servicer shall remain obligated and
liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such subservicing agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. All actions of each Subservicer performed pursuant to the
related subservicing agreement shall be performed as an agent of the Servicer
with the same force and effect as if performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Servicer.
(c) If the Servicer shall for any reason no longer act in such
capacity hereunder (including, without limitation, by reason of a Servicer Event
of Termination), the Trustee, its designee or any successor servicer appointed
pursuant to Section 6.04 hereof may assume all of the rights and, except to the
extent they arose prior to the date of assumption, obligations of the Servicer
under any subservicing agreements. If so requested by the successor servicer,
the predecessor Servicer shall terminate all subservicers at its sole cost and
expense.
Section 3.03. Rights of the Depositor and the Trustee in Respect
of the Servicer.
The Depositor may, but is not obligated to, enforce the obligations
of the Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
the Servicer hereunder; provided that the Servicer shall not be relieved of any
of its obligations hereunder by virtue of such performance by the Depositor or
its designee. Neither the Trustee nor the Depositor shall have any
responsibility or liability for any action or failure to act by the Servicer nor
shall the Trustee or the Depositor be obligated to supervise the performance of
the Servicer hereunder or otherwise.
Section 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of a Servicer Event of Termination), the
Trustee or its successor shall in accordance with Section 7.02 thereupon assume
all of the rights and obligations of the Servicer hereunder arising thereafter
(except that the Trustee shall not be (i) liable for losses of the Servicer
pursuant to Section 3.09 hereof or any acts or omissions of the predecessor
Servicer hereunder), (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder including, but not limited to,
repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 or 2.03
hereof, (iv) responsible for expenses of the Servicer pursuant to Section 2.03
or (v) deemed to have made any representations and warranties of the Servicer
pursuant to Section 2.09 hereunder). Any such assumption shall be subject to
Section 7.02 hereof. If the Servicer shall
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for any reason no longer be the Servicer (including by reason of any Servicer
Event of Termination), the Trustee or its successor may, but shall not be
obligated to, succeed to any rights and obligations of the Servicer under each
subservicing agreement.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement and
the Mortgage Loans then being serviced thereunder and an accounting of amounts
collected or held by it and otherwise use its best efforts to effect the orderly
and efficient transfer of the substitute subservicing agreement to the assuming
party.
The Trustee or successor servicer shall be entitled to be reimbursed
from the Servicer for all costs associated with the transfer of servicing from
the Servicer, including, without limitation, any costs or expenses associated
with the complete transfer of all servicing data and the completion, correction
or manipulation of such servicing data as may be required by the Trustee or
successor servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Trustee or successor servicer to service the
Mortgage Loans properly and effectively.
Section 3.05. Collection of Mortgage Loan Payments; Collection
Account; Distribution Account.
(a) The Servicer shall make reasonable efforts in accordance with
the customary and usual standards of practice of prudent mortgage servicers to
collect all payments called for under the terms and provisions of the Mortgage
Loans to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Required Insurance Policy. Consistent
with the foregoing, the Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in connection with
the prepayment of a Mortgage Loan and (ii) extend the due dates for payments due
on a Mortgage Note for a period not greater than 180 days; provided, however,
that the Servicer cannot extend the maturity of any such Mortgage Loan past the
date on which the final payment is due on the latest maturing Mortgage Loan as
of the Cut-off Date. In the event of any such arrangement, the Servicer shall
make Advances on the related Mortgage Loan in accordance with the provisions of
Section 4.01 during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain a Collection Account
into which the Servicer shall deposit or cause to be deposited on a daily basis
within one Business Day of receipt, except as otherwise specifically provided
herein, the following payments and collections remitted by Subservicers or
received by it in respect of Mortgage Loans subsequent to the Cut-off Date
(other than in respect of principal and interest due on the Mortgage Loans on or
before the Cut-off Date) and the following amounts required to be deposited
hereunder:
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(i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the related Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures;
(iv) any amount required to be deposited by the Servicer pursuant
to Section 3.05(e) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Servicer pursuant
to Section 3.09(b), 3.09(d), and in respect of net monthly rental income
from REO Property pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to Section 4.01;
and
(viii) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Servicer shall cause funds to be
deposited into the Collection Account in an amount required to cause an amount
of interest to be paid with respect to such Mortgage Loan equal to the amount of
interest that has accrued on such Mortgage Loan from the preceding Due Date at
the Mortgage Rate net of the related Servicing Fee on such date.
The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of prepayment penalties, late payment
charges or assumption fees, if collected, need not be remitted by the Servicer.
In the event that the Servicer shall remit any amount not required to be
remitted, it may at any time withdraw or direct the institution maintaining the
Collection Account to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the Trustee or such
other institution maintaining the Collection Account which describes the amounts
deposited in error in the Collection Account. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08.
(c) (Reserved)
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
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(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Servicer or the Trustee pursuant
to Section 3.05(e) in connection with any losses on Permitted Investments;
and
(iii) any other amounts deposited hereunder which are required to
be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee to withdraw such amount
from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Servicer.
(e) Each institution at which the Collection Account or Distribution
Account is maintained shall invest the funds on deposit in the Collection
Account or Distribution Account as directed in writing by the Servicer, in the
case of the Collection Account, and by the Trustee, in the case of the
Distribution Account, in Permitted Investments. Funds invested in the Collection
Account shall mature not later than the second Business Day next preceding the
related Distribution Account Deposit Date (except that if such Permitted
Investment is an obligation of the institution that maintains such account, then
such Permitted Investment shall mature not later than the Business Day next
preceding such Distribution Account Deposit Date). The Trustee shall invest
funds on deposit in the Distribution Account in Permitted Investments which
shall mature not later than the Business Day next preceding the Distribution
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such fund or account, then such Permitted Investment
shall mature not later than such Distribution Date). Permitted Investments in
respect of the Collection Account or the Distribution Account shall not be sold
or disposed of prior to their maturity. All such Permitted Investments shall be
made in the name of the Trustee, for the benefit of the Certificateholders. All
income and gain net of any losses realized from any such investment of funds on
deposit in the Collection Account shall be for the benefit of the Servicer as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any realized losses in the Collection Account incurred in any such
account in respect of any such investments shall promptly be deposited by the
Servicer in the Collection Account or paid to the Trustee by wire transfer of
immediately available funds for deposit into the Distribution Account, as
applicable. All income and gain net of any losses realized from any such
investment of funds on deposit in the Distribution Account shall be for the
benefit of the Trustee as additional compensation and shall be remitted to it
monthly as provided herein. The amount of any realized losses in the
Distribution Account incurred in any such account in respect of any such
investments shall promptly be deposited by the Trustee in the Distribution
Account. The Trustee shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Collection
Account (except to the extent the Trustee is the obligor and has defaulted
thereon) and made in accordance with
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this Section 3.05. In the absence of written instructions by the Servicer to
invest funds held in the Collection Account, all funds on deposit thereon shall
remain uninvested.
(f) The Servicer shall give notice to the Trustee, the Originator,
each Rating Agency and the Depositor of any proposed change of the location of
the Collection Account prior to any change thereof. The Trustee shall give
notice to the Servicer, the Originator, each Rating Agency and the Depositor of
any proposed change of the location of the Distribution Account prior to any
change thereof.
Section 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Servicer shall establish and maintain one or more
accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Servicer) for the payment of
taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.09 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums determined to be overages, to pay interest, if required by
law or the terms of the related Mortgage or Mortgage Note, to Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow Account at
the termination of this Agreement in accordance with Section 9.01 hereof. The
Escrow Accounts shall not be a part of the Trust Fund.
(c) The Servicer shall advance any payments referred to in Section
3.06(a) that are not timely paid by the Mortgagors on the date when the tax,
premium or other cost for which such payment is intended is due, but the
Servicer shall be required so to advance only to the extent that such advances,
in the good faith judgment of the Servicer, will be recoverable by the Servicer
out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Servicer.
Upon reasonable advance notice in writing, the Servicer will provide
to each Certificateholder which is a savings and loan association, bank or
insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or
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other regulatory authorities with respect to investment in the Certificates;
provided that the Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Servicer in providing such
reports and access.
Section 3.08. Permitted Withdrawals from the Collection Account
and Distribution Account.
(a) The Servicer may from time to time make withdrawals from the
Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously retained
by the Servicer) the servicing compensation to which it is entitled
pursuant to Section 3.14, and to pay to the Servicer, as additional
servicing compensation, earnings on or investment income with respect to
funds in or credited to the Collection Account;
(ii) to reimburse the Servicer for unreimbursed Advances made by
it, such right of reimbursement pursuant to this subclause (ii) being
limited to amounts received on the Mortgage Loan(s) in respect of which
any such Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse the Servicer for Insured Expenses from the
related Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed Servicing
Advances, the Servicer's right to reimbursement pursuant to this clause
(a) with respect to any Mortgage Loan being limited to amounts received on
such Mortgage Loan(s) which represent late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section 3.06 and
(b) for unpaid Servicing Fees as provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each Mortgage Loan
or property acquired in respect thereof that has been purchased pursuant
to Section 2.02, 2.03 or 3.11, all amounts received thereon after the date
of such purchase;
(vii) to reimburse the Originator, the Servicer or the Depositor
for expenses incurred by any of them and reimbursable pursuant to Section
6.03 hereof;
(viii) to withdraw any amount deposited in the Collection Account
and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Available Funds and the Trustee
Fee for such Distribution Date and remit by wire transfer of immediately
available funds such amount to the Trustee for deposit in the Distribution
Account; and
(x) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
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The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi). Prior to making any withdrawal from the Collection Account
pursuant to subclause (iii), the Servicer shall deliver to the Trustee an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans(s), and their respective portions of such
Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account
for distributions to Certificateholders, in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to withhold pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related Distribution
Date;
(ii) to pay to itself, as additional compensation, earnings on or
investment income with respect to funds in or credited to the Distribution
Account;
(iii) to withdraw and return to the Servicer any amount deposited
in the Distribution Account and not required to be deposited therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Servicer shall cause to be maintained, as and to the extent
required by each Mortgage Loan, hazard insurance with extended coverage in an
amount that is at least equal to the lesser of (i) the maximum insurable value
of the improvements securing such Mortgage Loan or (ii) the greater of (y) the
outstanding principal balance of the Mortgage Loan and (z) an amount such that
the proceeds of such policy shall be sufficient to prevent the Mortgagor and/or
the mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. Any amounts collected by the Servicer under any such
policies shall be held in an escrow account (until applied to the restoration or
repair of the related Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's normal servicing procedures) until applied to
payment on the Mortgage Loan and deposited in the Collection Account. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating monthly distributions to the Certificateholders or
remittances to the Trustee for their benefit, be added to the principal balance
of the Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so
permit. Such costs shall be recoverable by the Servicer out of late payments by
the related Mortgagor or out of Liquidation Proceeds to the extent permitted by
Section 3.08 hereof. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such
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additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Servicer shall cause flood insurance to be maintained with respect to such
Mortgage Loan. Such flood insurance shall be in an amount equal to the least of
(i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements which are part of such Mortgaged Property,
and (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program.
(b) In the event that the Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section, and there shall have been a
loss on the Mortgage Loan that would have been covered by such policy, deposit
in the Collection Account the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
Servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of
itself, the Depositor, and the Trustee for the benefit of the
Certificateholders, claims under any such blanket policy.
(c) The Servicer shall not take any action which would result in
non-coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Servicer, would have been covered thereunder. The
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
that is in effect at the date of the initial issuance of the Certificates and is
required to be kept in force hereunder unless the replacement Primary Insurance
Policy for such canceled or non-renewed policy is maintained with a Qualified
Insurer.
The Servicer shall not be required to maintain any Primary Insurance
Policy (i) with respect to any Mortgage Loan with a Loan-to-Value Ratio less
than or equal to 80% as of any date of determination or, based on a new
appraisal, the principal balance of such Mortgage Loan represents 80% or less of
the new appraised value or (ii) if maintaining such Primary Insurance Policy is
prohibited by applicable law.
The Servicer agrees to effect the timely payment of the premiums on
each Primary Insurance Policy, and such costs not otherwise recoverable shall be
recoverable by the Servicer from the related liquidation proceeds.
(d) In connection with its activities as Servicer of the Mortgage
Loans, the Servicer agrees to present on behalf of itself, the Trustee and
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policies respecting defaulted
Mortgage Loans. Any amounts collected by the Servicer under any Primary
Insurance Policies shall be deposited in the Collection Account.
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Section 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall to
the extent that it has knowledge of such conveyance, enforce any due-on-sale or
due-on encumbrance clauses contained in any Mortgage Note or Mortgage, to the
extent permitted under applicable law and governmental regulations, but only to
the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing, the
Servicer is not required to exercise such rights with respect to a Mortgage Loan
if the Person to whom the related Mortgaged Property has been conveyed,
encumbered or is proposed to be conveyed or encumbered satisfies the terms and
conditions contained in the Mortgage Note and Mortgage related thereto and the
consent of the mortgagee under such Mortgage Note or Mortgage is not otherwise
so required under such Mortgage Note or Mortgage as a condition to such
transfer. In the event that the Servicer is prohibited by law from enforcing any
such due-on-sale or due-on-encumbrance clauses, or if coverage under any
Required Insurance Policy would be adversely affected, or if nonenforcement is
otherwise permitted hereunder, the Servicer is authorized, subject to Section
3.10(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed or
encumbered, pursuant to which such person becomes liable under the Mortgage Note
and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if-so
covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.10(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this Section by reason of any transfer or assumption which the Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale and
due-on-encumbrance clauses to the extent set forth in Section 3.10(a) hereof, in
any case in which a Mortgaged Property has been conveyed or encumbered to a
Person by a Mortgagor, and such Person is to enter into an assumption agreement
or modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed by
the Trustee is required releasing the Mortgagor from liability on the Mortgage
Loan, the Servicer shall prepare and deliver or cause to be prepared and
delivered to the Trustee for signature and shall direct, in writing, the Trustee
to execute the assumption agreement with the Person to whom the Mortgaged
Property is to be conveyed or encumbered and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection with any such
assumption, no material term of the Mortgage Note may be changed. In addition,
the substitute Mortgagor and the Mortgaged Property must be acceptable to the
Servicer in accordance with its underwriting standards as then in effect.
Together with each such substitution, assumption or other agreement or
instrument delivered to the Trustee for execution by it, the Servicer shall
deliver an Officer's Certificate
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signed by a Servicing Officer stating that the requirements of this subsection
have been met in connection therewith. The Servicer shall notify the Trustee and
the Custodian, if any, that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Servicer for entering into
an assumption or substitution of liability agreement will be retained by the
Servicer as additional servicing compensation.
Section 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.
The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and meet
the requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Collection Account). The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the liquidation proceeds with respect to the related Mortgaged
Property, as provided in the definition of Liquidation Proceeds. If the Servicer
has knowledge that a Mortgaged Property which the Servicer is contemplating
acquiring in foreclosure or by deed in lieu of foreclosure is located within a 1
mile radius of any site listed in the Expenditure Plan for the Hazardous
Substance Clean Up Bond Act of 1984 or other site with environmental or
hazardous waste risks known to the Servicer, the Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that the title to such REO Property references the Pooling and Servicing
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Certificateholders for the period prior to the
sale of such REO Property. The Servicer shall prepare for and deliver to the
Trustee a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses
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incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding required by Sections 1445 and 6050J of
the Code with respect to foreclosures and abandonments, the tax reporting
required by Section 6050H of the Code with respect to the receipt of mortgage
interest from individuals and any tax reporting required by Section 6050P of the
Code with respect to the cancellation of indebtedness by certain financial
entities, by preparing such tax and information returns as may be required, in
the form required, and delivering the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the close of the third calendar year after the year in which the Trust Fund
acquires such Mortgaged Property unless the Servicer shall have applied for and
received an extension of such period from the Internal Revenue Service, in which
case the Trust Fund may continue to hold such Mortgaged Property for the period
of such extension. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC
hereunder to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under Section 860G(c) of the Code or
otherwise, unless the Servicer has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose
obligor is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.
The decision of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Servicer that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Advances and Servicing Advances, shall be applied to the payment
of principal of and interest on the related defaulted Mortgage Loans (with
interest accruing as though such Mortgage Loans were still current) and all such
income shall be deemed, for all purposes in this Agreement, to be payments on
account of principal and interest on the related Mortgage Notes and shall be
deposited into the Collection Account. To the extent the net income received
during any calendar month is in excess of the amount attributable to amortizing
principal and accrued
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interest at the related Mortgage Rate on the related Mortgage Loan for such
calendar month, such excess shall be considered to be a partial prepayment of
principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Servicer for any related unreimbursed Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any unreimbursed
Advances; third, to reimburse the Collection Account for any Nonrecoverable
Advances (or portions thereof) that were previously withdrawn by the Servicer
pursuant to Section 3.08(a)(iii) that related to such Mortgage Loan; fourth, to
accrued and unpaid interest (to the extent no Advance has been made for such
amount or any such Advance has been reimbursed) on the Mortgage Loan or related
REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in
which such amounts are required to be distributed; and fifth, as a recovery of
principal of the Mortgage Loan. Excess Proceeds, if any, from the liquidation of
a Liquidated Loan will be distributed to the holders of the Class A-R
Certificates.
The Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust Fund any Mortgage Loan which is 91
days or more delinquent at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan purchased hereunder shall be deposited in the
Collection Account and the Trustee, upon receipt of a certificate from the
Servicer in the form of Exhibit M hereto, shall release or cause to be released
to the purchaser of such Mortgage Loan the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
Section 3.12. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee by
delivering, or causing to be delivered a "Request for Release" substantially in
the form of Exhibit M. Upon receipt of such request, the Trustee shall promptly
release the related Mortgage File to the Servicer, and the Trustee shall at the
Servicer's direction execute and deliver to the Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by the
Servicer, together with the Mortgage Note with written evidence of cancellation
thereon. Expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the related Mortgagor. From time to
time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the
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Mortgage or any of the other documents included in the Mortgage File, the
Trustee shall, upon delivery to the Trustee of a Request for Release in the form
of Exhibit L signed by a Servicing Officer, release the Mortgage File to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
when the need therefor by the Servicer no longer exists, unless the Mortgage
Loan is liquidated and the proceeds thereof are deposited in the Collection
Account, in which case the Servicer shall deliver to the Trustee a Request for
Release in the form of Exhibit M, signed by a Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.
Section 3.13. Documents Records and Funds in Possession of Servicer
to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time and shall account fully to the Trustee for any funds
received by the Servicer or which otherwise are collected by the Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Collection Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of this
Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in the Collection Account,
Distribution Account or any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.
Section 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account an amount equal to
the Servicing Fee for each Mortgage Loan, provided that the aggregate Servicing
Fee with respect to any Distribution Date shall be reduced (i) by an amount
equal to the aggregate of the Prepayment Interest Shortfalls, if any, with
respect to such Distribution Date, but not below an amount equal to one-half of
the aggregate Servicing Fee for such Distribution Date before reduction thereof
in respect of such
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Prepayment Interest Shortfalls, and (ii) with respect to the first Distribution
Date, an amount equal to any amount to be deposited into the Distribution
Account by the Depositor pursuant to Section 2.01(a) and not so deposited.
Additional servicing compensation in the form of Prepayment Interest
Excess, prepayment penalties, assumption fees, late payment charges and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Servicer to the extent not required to be deposited in the
Collection Account pursuant to Section 3.05 hereof. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance and
any Primary Insurance Policy and maintenance of the other forms of insurance
coverage required by this Agreement) and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement.
Section 3.15. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Junior Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices designated by the Servicer. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
Section 3.16. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor and the Trustee on or
before 120 days after the end of the Servicer's fiscal year, commencing with its
2000 fiscal year, an Officer's Certificate, signed by 2 officers of the
Servicer, stating, as to the signers thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of the
performance of the Servicer under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. The Trustee shall forward a copy of each such
statement to each Rating Agency.
Section 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before 120 days after the end of the Servicer's fiscal year,
commencing with its 2000 fiscal year, the Servicer at its expense shall cause a
nationally or regionally recognized firm of independent public accountants (who
may also render other services to the Servicer, the Depositor, the Trustee or
any affiliate thereof) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee and the Depositor
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to the effect that-such firm has examined certain documents and records relating
to the servicing of the Mortgage Loans under this Agreement or of mortgage loans
under pooling and servicing agreements substantially similar to this Agreement
(such statement to have attached thereto a schedule setting forth the pooling
and servicing agreements covered thereby) and that, on the basis of such
examination, conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, such servicing has been conducted in
compliance with such pooling and servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program
for Mortgages serviced for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac requires it to report. In
rendering such statement, such firm may rely, as to matters relating to direct
servicing of mortgage loans by Subservicers, upon comparable statements for
examinations conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac (rendered within one year of such
statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided such
statement is delivered by the Servicer to the Trustee.
Section 3.18. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Servicer
hereunder and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac for persons
performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
In the event that any such policy or bond ceases to be in effect, the Servicer
shall obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01. Advances.
The Servicer shall determine on or before each Servicer Advance Date
whether it is required to make an Advance pursuant to the definition thereof. If
the Servicer determines it is required to make an Advance, it shall, on or
before the Servicer Advance Date, either (i) deposit into the Collection Account
an amount equal to the Advance or (ii) make an appropriate entry in its records
relating to the Collection Account that any Amount Held for Future Distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance. Any funds so applied shall be replaced by the Servicer by deposit in
the Collection Account no later than the close of business on the next Servicer
Advance Date. The Servicer shall be entitled to be reimbursed from the
Collection Account for all Advances of its own funds made pursuant to this
Section as provided in Section 3.08. The obligation to make Advances with
respect to any
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Mortgage Loan shall continue if such Mortgage Loan has been foreclosed or
otherwise terminated and the related Mortgaged Property has not been liquidated.
The Servicer shall deliver to the Trustee on the related Servicer
Advance Date an Officer's Certificate of a Servicing Officer indicating the
amount of any proposed Advance determined by the Servicer to be a Nonrecoverable
Advance and detailing the reasons for such determination.
Section 4.02. Priorities of Distribution.
(a) On each Distribution Date, the Trustee shall withdraw the
Available Funds from the Distribution Account and apply such funds to
distributions on the Certificates in the following order and priority and, in
each case, to the extent of Available Funds remaining:
(i) (Reserved);
(ii) to each interest-bearing Class of Senior Certificates, an
amount allocable to interest equal to the related Accrued Certificate
Interest, any shortfall being allocated among such Classes in proportion
to the amount of the Accrued Certificate Interest that would have been
distributed in the absence of such shortfall;
(iii) (Reserved)
(iv) to each Class of Senior Certificates, concurrently as
follows:
(x) to the Class PO Certificates, an amount allocable to
principal equal to the Class PO Principal Distribution Amount, up to
the outstanding Class Principal Balance of the Class PO
Certificates; and
(y) on each Distribution Date prior to the Cross-Over Date,
the Non-PO Formula Principal Amount, up to the amount of the Senior
Optimal Principal Amount for such Distribution Date, will be
distributed in accordance with the following priorities:
(A) to the Class A-5 Certificates, in an amount equal to the
Class A-5 Principal Distribution Amount for that Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(B) to the Class A-R Certificates until the Class Principal
Balance thereof is reduced to zero;
(C) to the Class A-1 Certificates until the Class Principal
Balance thereof is reduced to zero;
(D) to the Class A-3 Certificates until the Class Principal
Balance thereof is reduced to zero;
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(E) to the Class A-2 Certificates until the Class Principal
Balance thereof is reduced to zero;
(F) to the Class A-4 Certificates until the Class Principal
Balances thereof is reduced to zero; and
(G) to the Class A-5 Certificates until the Class Principal
Balances thereof is reduced to zero;
(v) to the Class PO Certificates, any Class PO Deferred Amount, up
to an amount not to exceed the amount calculated pursuant to clause (A) of
the definition of the Junior Optimal Principal Amount actually received or
advanced for such Distribution Date (with such amount to be allocated
first from amounts calculated pursuant to (A)(i) and (ii) then (iii) of
the definition of Junior Optimal Principal Amount);
(vi) to each Class of Junior Certificates, subject to
paragraph (e) below, in the following order of priority:
(A) to the Class M Certificates, an amount allocable to
interest equal to the Accrued Certificate Interest for such
Distribution Date;
(B) to the Class M Certificates, an amount allocable to
principal equal to its Allocable Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(C) to the Class B-1 Certificates, an amount allocable to
interest equal to the Accrued Certificate Interest for such Class
for such Distribution Date;
(D) to the Class B-1 Certificates, an amount allocable to
principal equal to its Allocable Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(E) to the Class B-2 Certificates, an amount allocable to
interest equal to the Accrued Certificate Interest for such Class
for such Distribution Date;
(F) to the Class B-2 Certificates, an amount allocable to
principal equal to its Allocable Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(G) to the Class B-3 Certificates, an amount allocable to
interest equal to the amount of the Accrued Certificate Interest for
such Class for such Distribution Date;
(H) to the Class B-3 Certificates, an amount allocable to
principal equal to its Allocable Share for such Distribution Date
until the Class Principal Balance thereof has been reduced to zero;
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(I) to the Class B-4 Certificates, an amount allocable to
interest equal to the amount of the Accrued Certificate Interest for
such Class for such Distribution Date;
(J) to the Class B-4 Certificates, an amount allocable to
principal equal to its Allocable Share for such Distribution Date
until the Class Principal Balance thereof has been reduced to zero;
(K) to the Class B-5 Certificates, an amount allocable to
interest equal to the Accrued Certificate Interest for such Class
for such Distribution Date; and
(L) to the Class B-5 Certificates, an amount allocable to
principal equal to its Allocable Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero.
(vii) to the Class A-R Certificates, any remaining funds in the
Trust Fund.
On any Distribution Date, amounts distributed in respect of Class PO Deferred
Amounts will not reduce the Class Principal Balance of the Class PO
Certificates.
On any Distribution Date, to the extent the Amount Available for
Senior Principal is insufficient to make the full distribution required to be
made pursuant to clause (iv)(x) above, (A) the amount distributable on the Class
PO Certificates in respect of principal shall be equal to the product of (1) the
Amount Available for Senior Principal and (2) a fraction, the numerator of which
is the Class PO Principal Distribution Amount and the denominator of which is
the sum of the Class PO Principal Distribution Amount and the Senior Optimal
Principal Amount and (B) the amount distributable on the Senior Certificates,
other than the Class PO Certificates, in respect of principal shall be equal to
the product of (1) the Amount Available for Senior Principal and (2) a fraction,
the numerator of which is the Senior Optimal Principal Amount and the
denominator of which is the sum of the Senior Optimal Principal Amount and the
Class PO Principal Distribution Amount.
(b) (Reserved)
(c) On each Distribution Date on or after the Cross-Over Date,
notwithstanding the allocation and priority set forth in Section 4.02(a)(iv)(y),
the portion of Available Funds available to be distributed as principal of the
Senior Certificates (other than the Class PO Certificates) shall be distributed
concurrently, as principal, on such Classes, pro rata, on the basis of their
respective Class Principal Balances, until the Class Principal Balances thereof
are reduced to zero. On each Distribution Date on or after the Cross-Over Date,
notwithstanding the allocation and priority set forth in Section 4.02(a)(v), no
distribution will be made on the Class PO Certificates in respect of the Class
PO Deferred Amount.
(d) On each Distribution Date, the amount referred to in clause (i)
of the definition of Accrued Certificate Interest for each Class of Certificates
for such Distribution Date shall be reduced by (i) the related Class' pro rata
share of Net Prepayment Interest Shortfalls based on such Class' Accrued
Certificate Interest for such Distribution Date without taking into account such
Net Prepayment Interest Shortfalls and (ii) the related Class' Pro Rata Share of
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(A) after the Special Hazard Coverage Termination Date, with respect to each
Mortgage Loan that became a Special Hazard Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the excess of one month's
interest at the related Net Mortgage Rate on the Scheduled Principal Balance of
such Mortgage Loan as of the Due Date in such month over the amount of
Liquidation Proceeds applied as interest on such Mortgage Loan with respect to
such month, (B) after the Bankruptcy Coverage Termination Date, with respect to
each Mortgage Loan that became subject to a Bankruptcy Loss during the calendar
month preceding the month of such Distribution Date, the interest portion of the
related Debt Service Reduction or Deficient Valuation, (C) each Relief Act
Reduction incurred during the calendar month preceding the month of such
Distribution Date and (D) after the Fraud Coverage Termination Date, with
respect to each Mortgage Loan that became a Fraud Loan during the calendar month
preceding the month of such Distribution Date, the excess of one month's
interest at the related Net Mortgage Rate on the Scheduled Principal Balance of
such Mortgage Loan as of the Due Date in such month over the amount of
Liquidation Proceeds applied as interest on such Mortgage Loan with respect to
such month.
(e) Notwithstanding the priority and allocation contained in Section
4.02(a)(vi), if with respect to any Class of Class B Certificates on any
Distribution Date, such Class has not satisfied the Class Prepayment
Distribution Trigger, no distribution of amounts pursuant to clauses (ii)(B)(a)
and (iii) of the definition of Junior Optimal Principal Amount will be made to
any such Classes (the "Restricted Classes") and the amount of such amounts
pursuant to clauses (ii)(B)(a) and (iii) of the definition of Junior Optimal
Principal Amount otherwise distributable to the Restricted Classes shall be
distributed to any Classes of Junior Certificates having lower numerical Class
designations than such Class, pro rata, based on their respective Class
Principal Balances immediately prior to such Distribution Date and shall be
distributed in the sequential order provided in Section 4.02(a)(vi).
Section 4.03. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Trustee shall
determine the total amount of Realized Losses, including Excess Losses, with
respect to the related Distribution Date. For purposes of allocating losses to
the Junior Certificates, the Class M Certificates will be deemed to have a lower
numerical class designation, and to be of a higher relative payment priority,
than each other Class of Junior Certificates.
Realized Losses with respect to any Distribution Date shall be
allocated as follows:
(i) the applicable PO Percentage of any Realized Loss, including
any Excess Loss, shall be allocated to the Class PO Certificates until the
Class Principal Balance thereof is reduced to zero; and
(ii) (1) the applicable Non-PO Percentage of any Realized Loss
(other than an Excess Loss) shall be allocated first to the Junior
Certificates in reverse order of their respective numerical Class
designations (beginning with the Class of Junior Certificates then
outstanding with the highest numerical Class designation) until the
respective Class Principal Balance of each such Class is reduced to zero,
and second to
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the Senior Certificates (other than the Class X Certificates and the Class
PO Certificates), pro rata on the basis of their respective Class
Principal Balances immediately prior to the related Distribution Date
until the respective Class Principal Balance of each such Class has been
reduced to zero; and
(2) the applicable Non-PO Percentage of any Excess Losses
shall be allocated to the Senior Certificates (other than the Class X
Certificates and the Class PO Certificates) and the Junior Certificates
then outstanding, pro rata, on the basis of their respective Class
Principal Balances.
(b) The Class Principal Balance of the Class of Junior Certificates
then outstanding with the highest numerical Class designation shall be reduced
on each Distribution Date by the sum of (i) the amount of any payments on the
Class PO Certificates in respect of Class PO Deferred Amounts and (ii) the
amount, if any, by which the aggregate of the Class Principal Balances of all
outstanding Classes of Certificates (after giving effect to the distribution of
principal and the allocation of Realized Losses and payments of the Class PO
Deferred Amounts on such Distribution Date) exceeds the Pool Principal Balance
for the following Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Principal Balance of a Class of Certificates pursuant to
Section 4.03(a) above shall be allocated among the Certificates of such Class in
proportion to their respective Certificate Principal Balances.
(d) Any allocation of Realized Losses to a Certificate or any
reduction in the Certificate Principal Balance of a Certificate, pursuant to
Section 4.03(a) above shall be accomplished by reducing the Certificate
Principal Balance thereof, as applicable, immediately following the
distributions made on the related Distribution Date in accordance with the
definition of "Certificate Principal Balance" herein; provided that no Realized
Loss shall be allocated to reduce the Certificate Principal Balance of a
Certificate to the extent that such allocation would reduce the aggregate
Certificate Principal Balance of all classes of Certificates to an amount less
than the Scheduled Principal Balance of all Outstanding Mortgage Loans as of the
Due Date occurring in the month of such Distribution Date, less any Deficiency
Valuations occurring before the Bankruptcy Loss Coverage Termination Date (such
limitation, the "Loss Allocation Limitation").
Section 4.04. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and make available to each Certificateholder, the Servicer and the Depositor a
statement based solely on information provided by the Servicer setting forth the
following information with respect to the related distribution (in the case of
information furnished pursuant to (i), (ii) and (vii) below, the amounts shall
be expressed as a dollar amount per minimum denomination Certificate, such
minimum denominations being as set forth in the Preliminary Statement):
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(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Class Unpaid
Interest Shortfall included in such distribution and any remaining Class
Unpaid Interest Shortfall after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest;
(iv) the Certificate Principal Balance as a dollar amount per
minimum denomination Certificate and the Class Principal Balance of each
Class of Certificates, after giving effect to the distribution of
principal on such Distribution Date;
(v) the Pool Principal Balance on such Distribution Date, the
Pool Principal Balance minus the principal portion of all monthly payments
due but unpaid as of the Date of Determination on such Distribution Date
and the Pool Principal Balance for the following Distribution Date;
(vi) the Senior Percentage and Junior Percentage for the
following Distribution Date;
(vii) the amount of the Trustee Fees and Servicing Fees paid to
or retained by the Trustee or Servicer, as applicable, with respect to
such Distribution Date;
(viii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances outstanding as of
the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage Loans
(A) delinquent (exclusive of Mortgage Loans in foreclosure) (1) 1 to 30
days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days and (B)
in foreclosure and delinquent (1) 1 to 30 days (2) 31 to 60 days (3) 61 to
90 days and (4) 91 or more days, as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
Scheduled Principal Balance of such Mortgage Loan as of the close of
business on the Determination Date preceding such Distribution Date and
the date of acquisition thereof;
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(xii) the total number and principal balance of any REO
Properties (and market value, if available) as of the close of business on
the Determination Date preceding such Distribution Date;
(xiii) the Senior Prepayment Percentage for the following
Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred during the
preceding calendar month; and
(xv) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, in each case as
of the related Determination Date and the Junior Percentage as of such
Distribution Date.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information provided by the Servicer. The Trustee will make
a copy of each statement provided pursuant to this Section 4.04 (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders, and other parties to this
Agreement via the Trustee's internet website located at "▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇".
(c) On or before the fifth Business Day following the end of each
Prepayment Period (but in no event later than the fifth Business Day prior to
the related Distribution Date), the Servicer shall deliver to the Trustee (which
delivery may be by electronic data transmission) a report in substantially the
form set forth as Schedule IV hereto.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished upon request to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i), (a)(ii) and
(a)(vii) of this Section 4.04 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 Trustee
pursuant to any requirements of the Code as from time to time in effect.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
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Subject to Section 9.02 hereof respecting the final distribution on
the Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at a
bank or other entity having appropriate facilities therefor, if (i) such Holder
has so notified the Trustee in writing at least five Business Days prior to the
related Record Date and (ii) such Holder shall hold (A) a Class X Certificate,
(B) 100% of the Class Principal Balance of any Class of Certificates or (C)
Certificates of any Class with aggregate principal Denominations of not less
than $1,000,000 or (y) by check mailed by first class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of such Certificates
or did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless countersigned by the Trustee by manual signature, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their countersignature. On the
Closing Date, the Trustee shall countersign the Certificates to be issued at the
direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and 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. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
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No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but 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 may be required.
All Certificates surrendered for registration of transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer and
such Certificateholder's prospective transferee (other than the Depositor or an
affiliate of the Depositor) shall each certify to the Trustee in writing the
facts surrounding the transfer in substantially the forms set forth in Exhibit I
(the "Transferor Certificate") and (i) deliver a letter in substantially the
form of either Exhibit J (the "Investment Letter") or Exhibit K (the "Rule 144A
Letter") or (ii) there shall be delivered to the Trustee at the expense of the
transferor an Opinion of Counsel that such transfer may be made pursuant to an
exemption from the Securities Act. The Depositor shall provide to any Holder of
a Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee and
the Depositor, the Originator and the Servicer 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.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Trustee shall have received (other than the Depositor or an affiliate of the
Depositor) either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate, such requirement is satisfied
only by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit J or Exhibit K), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA or a plan or arrangement subject to Section 4975 of the Code, nor a
person acting on behalf of any such plan or arrangement, nor using the assets of
any such plan or arrangement to effect such transfer, (ii) if the purchaser is
an insurance company, a representation that the purchaser is an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are
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covered under PTCE 95-60 or (iii) in the case of any such ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement,
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee, which Opinion of Counsel shall not be an expense of either the
Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee to any obligation in addition to those expressly undertaken in this
Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Private Certificate, in
the event the representation letter referred to in the preceding sentence is not
so furnished, such representation shall be deemed to have been made to the
Trustee by the transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee (other than the Depositor of an affiliate thereof) in the form
attached hereto as Exhibit H.
(iii) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to
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Transfer its Ownership Interest in a Residual Certificate or to cause the
Transfer of an Ownership Interest in a Residual Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of this
Section 5.02(c) shall be absolutely null and void and shall vest no rights
in the purported Transferee. If any purported transferee shall become a
Holder of a Residual Certificate in violation of the provisions of this
Section 5.02(c), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such Residual Certificate. The Trustee shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and either the Rule 144A Letter or the Investment Letter. The
Trustee shall be entitled but not obligated to recover from any Holder of
a Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code as
a result of a Transfer of an Ownership Interest in a Residual Certificate
to any Holder who is not a Permitted Transferee described in clauses (i)
through (iv) of the definition thereof.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller,
the Originator or the Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Residual Certificate is
not transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Residual
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
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(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book- entry system
through the Depository or (z) after the occurrence of a Servicer Event of
Termination, Certificate Owners representing at least 51% of the Certificate
Principal Balance of the Book-Entry Certificates together advise the Trustee and
the Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of definitive, fully-registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. Neither the Servicer, the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Servicer shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
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Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Servicer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, 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.
The Servicer, the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and neither the
Servicer, the Trustee nor any agent of the Servicer or the Trustee shall be
affected by any notice to the contrary.
Section 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office for such purposes. The Trustee
will give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01. Respective Liabilities of the Depositor and the
Servicer.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor or the
Servicer.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or limited partnership, as the
case may be, under the laws of the United States or under the laws of one of the
states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation or legal entity, as the case may be, in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac.
Section 6.03. Limitation on Liability of the Depositor, the Seller,
the Originator, the Servicer and Others.
None of the Depositor, the Seller, the Originator, the Servicer or
any of the directors, officers, employees or agents of the Depositor, the
Seller, the Originator or the Servicer shall be under any liability to the
Certificateholders 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 the Depositor, the
Seller, the Originator, the Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Seller, the Originator, the Servicer or any such Person from any liability which
would otherwise be imposed by reasons 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 Depositor, the Seller, the Originator, the
Servicer and any director, officer, employee or agent of the Depositor, the
Seller, the Originator or the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Depositor, the Seller, the Originator, the
Servicer and any director, officer, employee or agent of the Depositor, the
Seller, the Originator or the Servicer shall be indemnified by the Trust Fund
and held harmless against
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any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Seller, the
Originator or the Servicer shall be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor, the Seller, the Originator or the
Servicer may in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Trustee and the Certificateholders
hereunder. 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 Fund, and the Depositor, the Seller, the Originator and the Servicer shall
be entitled to be reimbursed therefor out of the Collection Account.
Section 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer and receipt by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates, without regard to the guaranty provided by the Policies, or (b)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination under clause (b) permitting the
resignation of the 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 Servicer's
responsibilities, duties, liabilities and obligations hereunder.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
"Servicer Event of Termination," wherever used herein, means any one
of the following events:
(i) any failure by the Servicer to deposit in the Collection
Account or remit to the Trustee any payment required to be made under the
terms of this Agreement, which failure shall continue unremedied for five
days after the date upon which written notice of such failure shall have
been given to the Servicer by the Trustee or the Depositor or to the
Servicer and the Trustee by the Holders of Certificates having not less
than 25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this
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Agreement which failure continues unremedied for a period of 60 days after
the date on which written notice of such failure shall have been given to
the Servicer by the Trustee or the Depositor, or to the Servicer and the
Trustee by the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates (or immediately upon such
failure in the case of the covenant in Section 6.05); provided, that the
failure to observe or perform the obligations of the Servicer pursuant to
Section 6.05 hereof shall not be considered a Servicer Event of
Termination unless (1) any Class of Certificates has been put on a credit
watch by any Rating Agency, (2) any Rating Agency indicates an intention
to downgrade, qualify or withdraw the ratings of any Class of
Certificates, or (3) any Class of Certificates has been subject to a
downgrade, qualification or withdrawal of a rating, in each case, as the
result of the failure of the Servicer to comply with Section 6.05 hereof;
or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Servicer shall consent to the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or all or substantially all of the property of the Servicer; or
(v) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations.
If a Servicer Event of Termination described in clauses (i) to (vi)
of this Section shall occur, then, and in each and every such case, so long as
such Servicer Event of Termination shall not have been remedied, the Trustee
may, or at the direction of the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates, the Trustee shall by
notice in writing to the Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On and after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. The Trustee, in its capacity as successor servicer, shall thereupon
make any Advance which the Servicer failed to make subject to Section 3.04
hereof. The Trustee is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The
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Servicer agrees to cooperate with the Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Collection Account, or thereafter be received with
respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii),and any other
amounts payable to such Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, subject to and to the extent
provided in Section 3.04, be the successor to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make Advances pursuant to Section
4.01. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans that the Servicer would have been entitled to
charge to the Collection Account or Distribution Account if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, or if it has been requested in writing by Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates to do so, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any successor to the Servicer shall be an institution
which is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing,
which has a net worth of at least $15,000,000, and which is willing to service
the Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, which contains an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, without regard to the guaranty provided by the
Policies, as a result of such assignment and delegation. Pending appointment of
a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.04 hereof, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on
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Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of the Servicing Fee permitted the Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor 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 or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 3.09.
The Trustee or successor servicer shall be entitled to be reimbursed
from the Servicer for all costs associated with the transfer of servicing from
the predecessor servicer, including, without limitation, any costs or expenses
(including but not limited to personnel time) associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trustee or successor servicer to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee or successor servicer to service the Mortgage Loans properly
and effectively.
Section 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Servicer Event of
Termination, the Trustee shall transmit by mail to all Certificateholders notice
of each such Servicer Event of Termination hereunder known to the Trustee,
unless such Servicer Event of Termination shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination and after the curing of all Events of Default that may have
occurred, shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement. In case a Servicer Event of
Termination has occurred and remains uncured, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
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The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that 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 such resolution,
certificate, statement, opinion, report, document, order or other instrument. If
any such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee shall notify the Certificateholders
of such non-conforming instrument in the event the Trustee, after so requesting,
does not receive a satisfactorily corrected instrument.
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) unless a Servicer Event of Termination the Trustee has actual
knowledge of shall have occurred and be continuing, 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 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 which it
believed in good faith to be genuine and to have been duly executed by the
proper authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be finally proven that the Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Trustee shall not be 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 evidencing not less than 25%
of the Voting Rights of Certificates relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising or omitting to exercise any trust or power
conferred upon the Trustee under this Agreement; and
(iv) Subject to Section 7.02, the Trustee shall not be
accountable, shall have no liability and makes no representation as to any
acts or omissions hereunder of the Servicer until such time as the Trustee
may be required to act as Servicer pursuant to Section 7.02 and thereupon
only for the acts or omissions of the Trustee as successor Servicer.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or
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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 Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any advice or 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) prior to the occurrence of a Servicer Event of Termination
and after the curing of all Servicer Events of Termination which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of 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 examination shall be paid by the Servicer or, if paid by the Trustee,
shall be reimbursed by the Servicer upon demand. Nothing in this clause
(iv) shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
(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 or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed by the Trustee with due care;
(vi) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers hereunder
if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not assured
to it, and none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this
Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges
of, the Servicer in accordance with the terms of this Agreement;
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(vii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement, except as specified herein
with respect to Permitted Investments of funds in the Distribution Account
(other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of a
Servicer Event of Termination until a Responsible Officer of the Trustee
obtains actual knowledge of such failure or the Trustee receives written
notice of such failure from the Servicer or the holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates. In the
absence of such receipt of such notice, the Trustee may conclusively
assume that there is no Servicer Event of Termination; and
(ix) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred therein or thereby.
The Trustee shall have no duty (A) to see to any recording, filing,
or depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other than
from funds available in the Distribution Account.
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Depositor or the Originator, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and counter-signature of the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor or
the Servicer of any funds paid to the Depositor or the Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Collection Account by
the Depositor or the Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
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Section 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Distribution Account on each Distribution Date an
amount equal to the Trustee Fee for such Distribution Date. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the
Servicer and held harmless against any loss, liability or expense (including
reasonable attorney's fees) (i) incurred in connection with any claim or legal
action relating to (a) this Agreement, (b) the Certificates or (c) in connection
with the performance of any of the Trustee's duties hereunder, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of any of the Trustee's duties hereunder or
incurred by reason of any action of the Trustee taken at the direction of the
Certificateholders and (ii) resulting from any error in any tax or information
return prepared by the Servicer. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee hereunder. Without
limiting the foregoing, the Servicer covenants and agrees, except as otherwise
agreed upon in writing by the Depositor and the Trustee, and except for any such
expense, disbursement or advance as may arise from the Trustee's negligence, bad
faith or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to: (A) the
reasonable compensation and the expenses and disbursements of its counsel not
associated with the closing of the issuance of the Certificates, (B) the
reasonable compensation, expenses and disbursements of any accountant, engineer
or appraiser that is not regularly employed by the Trustee, to the extent that
the Trustee must engage such persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. Except as otherwise provided herein, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, registrar or
paying agent hereunder or for any other expenses.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a 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, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction). 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 8.06 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 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07 hereof.
The entity serving as Trustee may have normal banking and trust relationships
with the Depositor and its affiliates or the Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Servicer other
than the Trustee in its role as successor to the Servicer.
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Section 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor and the
Servicer and each Rating Agency not less than 60 days before the date specified
in such notice when, subject to Section 8.08, such resignation is to take
effect, and acceptance by a successor trustee in accordance with Section 8.08
meeting the qualifications set forth in Section 8.06. If no successor trustee
meeting such qualifications shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or 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 8.06 hereof and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Servicer may
remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Servicer and one copy to the successor
trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee 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 by the successor Trustee to the Servicer, one complete set to
the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to each Rating Agency by the
Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicer and the predecessor trustee
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.
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No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation or other entity into which the Trustee may be merged
or converted or with which it may be consolidated or any corporation or other
entity resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or other entity succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation or other entity shall be eligible under the
provisions of Section 8.06 hereof without the execution or filing of any paper
or further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case a Servicer Event of Termination shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee under
this Agreement to advance funds on behalf of the Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee
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and such separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the 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 applicable Trust Fund
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such
separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Servicer, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. Tax Matters.
It is intended that the assets with respect to which a REMIC
election is to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to such assets shall be
such as to qualify such assets as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of such REMIC and
that in such capacity it shall:
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(a) prepare and file, or cause to be prepared and filed, in a timely manner, a
U.S. Real Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file or
cause to be prepared and filed with the Internal Revenue Service and applicable
state or local tax authorities income tax or information returns for each
taxable year with respect to such REMIC, containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (b)
apply for an Employee Identification Number from the Internal Revenue Service
via Form SS-4 or other acceptable method for such REMIC and within thirty days
of the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code; (c) make or
cause to be made elections that such assets be treated as a REMIC on the federal
tax return for its first taxable year (and, if necessary, under applicable state
law); (d) provide information necessary for the computation of tax imposed on
the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee described in clauses (i)-(iv) of the definition thereof, or an agent
(including a broker, nominee or other middleman) of a non-Permitted Transferee
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (e) to the extent that they are under its
control, conduct matters relating to such assets at all times that any
Certificates are outstanding so as to maintain the status as a REMIC under the
REMIC Provisions; (f) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status; (g) pay,
from the sources specified in the last paragraph of this Section 8.11, the
amount of any federal or state tax, including prohibited transaction taxes as
described below, imposed on such REMIC prior to its termination when and as the
same shall be due and payable (but such obligation shall not prevent the Trustee
or any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Trustee from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings); (h) ensure
that federal, state or local income tax or information returns shall be signed
by the Trustee or such other person as may be required to sign such returns by
the Code or state or local laws, regulations or rules; and (i) maintain records
relating to such REMIC, including but not limited to the income, expenses,
assets and liabilities thereof and the fair market value and adjusted basis of
the assets determined at such intervals as may be required by the Code, as may
be necessary to prepare the foregoing returns, schedules, statements or
information. The Holder of the largest Percentage Interest of the Class A-R
Certificates shall act as "tax matters person" for the REMIC within the meaning
of Treasury Regulations Section 1.860F-4(d), and the Trustee is hereby
designated as agent of such Class A-R Certificateholder for such purpose (or if
the Trustee is not so permitted, such Holder shall be the tax matters person in
accordance with the REMIC Provisions). In such capacity, the Trustee shall, as
and when necessary and appropriate, represent the REMIC in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year of
the REMIC, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to
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any tax item of the REMIC, and otherwise act on behalf of the REMIC in relation
to any tax matter or controversy involving it.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee requests in writing and 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
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the REMIC as defined in Section 860G(c) of the Code, on
any contribution to the REMIC after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, including, without limitation, any
minimum tax imposed upon the REMIC pursuant to Sections 23153 and 24874 of the
California Revenue and Taxation Code, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) the Servicer, in the case of any such minimum tax, or if
such tax arises out of or results from a breach by the Servicer or Originator of
any of their obligations under this Agreement, (iii) the Originator, if any such
tax arises out of or results from the Originator's obligation to repurchase a
Mortgage Loan pursuant to Section 2.02 or 2.03 or (iv) in all other cases, or in
the event that the Trustee, the Servicer or the Originator fails to honor its
obligations under the preceding clauses (i),(ii) or (iii), any such tax will be
paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 3.08(b).
Section 8.12. Periodic Filings.
The Trustee shall file with the Commission, in respect of the Trust
Fund and the Certificates, copies of the information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
(including Monthly Statements to Certificateholders issued pursuant to Section
4.04(a) by means of a Current Report on Form 8-K and an Annual Report on Form
10-K). In connection with the preparation and filing of such periodic reports,
the Servicer shall timely provide to the Trustee all material information
available to it which is required to be included in such reports and not known
to it to be in the possession of the Trustee and such other information as the
Trustee reasonably may request from the Servicer and otherwise reasonably shall
cooperate with the Trustee.
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ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of all
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the purchase by the Servicer of all
Mortgage Loans (and REO Properties) remaining in the Trust Fund at the price
equal to the sum of (i) 100% of the Scheduled Principal Balance of each Mortgage
Loan (other than Mortgage Loans for which the related Mortgaged Property has
become REO Property) plus one month's accrued interest thereon at the applicable
Adjusted Mortgage Rate and (ii) the lesser of (x) the appraised value of any REO
Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at the expense of the Servicer
and (y) the Scheduled Principal Balance of each Mortgage Loan related to any REO
Property plus accrued and unpaid interest thereon at the applicable Adjusted
Mortgage Rate and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date. The right to purchase all Mortgage Loans and REO Properties
pursuant to clause (a) above shall be conditioned upon the Pool Principal
Balance, at the time of any such repurchase, aggregating less than ten percent
of the aggregate Cut-off Date Principal Balance of the Mortgage Loans.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Servicer determines that there are
no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Servicer shall direct the
Trustee promptly to send a final distribution notice to each Certificateholder.
If the Servicer elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, at least 20 days prior to the date notice is to be mailed to the
affected Certificateholders, the Servicer shall notify the Depositor and the
Trustee of the date the Servicer intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
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 and no later than the 10th day of the month next preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record
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Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Servicer will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in the
order set forth in Section 4.02 hereof, on the final Distribution Date, in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates, the Certificate Principal Balance thereof plus (a) accrued
interest thereon (or on their Notional Principal Balance, if applicable) in the
case of an interest bearing Certificate and (b) any Class PO Deferred Amounts in
the case of the Class PO Certificates, and (ii) as to the Residual Certificates,
the amount, if any, which remains on deposit in the Distribution Account (other
than the amounts retained to meet claims) after application pursuant to clause
(i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, 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 six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take reasonable steps, or may appoint an agent to take reasonable steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class A-R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on any REMIC as defined
in section 860F of the Code, or (ii) cause any REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(i) The notice given by the Servicer under Section 9.02 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 Trustee shall also specify such date in a statement attached to the
final tax return of the REMIC; and
(ii) 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
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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.
This Agreement may be amended from time to time by the Depositor,
the Servicer and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller, the Originator or the Servicer, (iv) to add any other
provisions with respect to matters or questions arising hereunder or (v) to
modify, alter, amend, add to or rescind any of the terms or provisions contained
in this Agreement; provided that any action pursuant to clauses (iv) or (v)
above shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund), adversely affect in
any material respect the interests of any Certificateholder; provided, however,
that the amendment shall not be deemed to adversely affect in any material
respect the interests of the Certificate holders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating. The Trustee, the Depositor and the Servicer
also may at any time and from time to time amend this Agreement without the
consent of the Certificateholders to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or helpful to (i) maintain the
qualification of any REMIC as a REMIC under the Code, (ii) avoid or minimize the
risk of the imposition of any tax on any REMIC pursuant to the Code that would
be a claim at any time prior to the final redemption of the Certificates or
(iii) comply with any other requirements of the Code, provided that the Trustee
has been provided an Opinion of Counsel, which opinion shall be an expense of
the party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Holders of a
Majority in Interest 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 of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in the
preceding clause (i), without the consent of the Holders of Certificates of such
Class evidencing, as to such Class, Percentage Interests aggregating 66% or
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(iii) reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates 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, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 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.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund, satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02. Recordation of Agreement; Counterparts.
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 Servicer and at its expense on direction by the Trustee (acting
at the written direction of a Majority in Interest of the Certificateholders),
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.
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Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance
of the Trust Fund by the Depositor to the Trustee be, and be construed as, an
absolute sale thereof to the Trustee. It is, further, not the intention of the
parties that such conveyance be deemed a pledge thereof by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Depositor, or if for any other
reason this Agreement is held or deemed to create a security interest in such
assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyance provided for in this Agreement shall be deemed to be an
assignment and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholder.
Section 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicer Event of Termination that has
not been cured;
3. The resignation or termination of the Servicer or the Trustee
and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
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In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each annual statement as to compliance described in Section
3.16;
2. Each annual independent public accountants' servicing report
described in Section 3.17; and
3. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, PaineWebber Mortgage Acceptance Corporation IV, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.,
(b) in the case of the Servicer, Provident Funding Associates, L.P., ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
or such other address as may be hereafter furnished to the Depositor and the
Trustee by the Servicer in writing, (c) in the case of the Trustee, The Chase
Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Capital Markets Fiduciary Services, PMAC IV 2000-1, or such other
address as the Trustee may hereafter furnish to the Depositor or Servicer, (d)
in the case of the Originator, Provident Funding Associates, L.P., ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and (e) in
the case of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
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. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02 and this Section 10.07, this Agreement may not be
assigned by the Servicer without the prior written consent of the Trustee and
Depositor. The Servicer shall be permitted to pledge its rights as servicer
hereunder to a lender provided that no such pledge shall permit the termination
of the Servicer as Servicer unless a successor servicer meeting the requirements
of Section 6.04 and 7.02 hereunder shall have assumed the rights and obligations
of the Servicer hereunder.
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Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of a Servicer Event of Termination and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit
and will cause each Subservicer to permit any representative of the Depositor or
the Trustee during the Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested.
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Any out-of- pocket expense incident to the exercise by the Depositor or the
Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the
Servicer or the related Subservicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Originator and
the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
PAINEWEBBER MORTGAGE ACCEPTANCE
CORPORATION IV,
as Depositor
By:____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Name:
Title:
PROVIDENT FUNDING ASSOCIATES, L.P.,
as Originator
By: PROVIDENT FUNDING GROUP, INC.,
its general partner
By: ___________________________
Name:
Title:
PROVIDENT FUNDING ASSOCIATES, L.P., as
Servicer
By: PROVIDENT FUNDING GROUP, INC.,
its general partner
By: ___________________________
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of July, 2000 before me, a notary public in and for
said State, personally appeared _________________ known to me to be a
__________________ of PaineWebber Mortgage Acceptance Corporation IV, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of July, 2000 before me, a notary public in and for
said State, personally appeared _________________ known to me to be a
__________________ of The Chase Manhattan Bank, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of such corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of July, 2000 before me, a notary public in and for
said State, personally appeared _________________ known to me to be a
__________________ of Provident Funding Group, Inc., the general partner of
Provident Funding Associates, L.P., a limited partnership, which executed the
within instrument on behalf of such general partnership on behalf of such
limited partnership, and also known to me to be the person who executed it on
behalf of such general partnership on behalf of such limited partnership, and
acknowledged to me that such general partnership on behalf of such limited
partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of July, 2000 before me, a notary public in and for
said State, personally appeared _________________ known to me to be a
__________________ of Provident Funding Group, Inc., the general partner of
Provident Funding Associates, L.P., a limited partnership, which executed the
within instrument on behalf of such general partnership on behalf of such
limited partnership, and also known to me to be the person who executed it on
behalf of such general partnership on behalf of such limited partnership, and
acknowledged to me that such general partnership on behalf of such limited
partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
SCHEDULE I
Mortgage Loan Schedule
The Mortgage Loan Schedule is available upon request of The Chase Manhattan
Bank, as Trustee, at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Capital Markets Fiduciary Services.
S-I-1
SCHEDULE II
PaineWebber Mortgage Acceptance Corporation IV
Mortgage Pass-Through Certificates
Series 2000-1
Representations and Warranties of the Originator
------------------------------------------------
Provident Funding Associates, L.P. (the "Originator") hereby makes
the representations and warranties set forth in this Schedule II to the
Depositor and the Trustee, as of the Closing Date, or if so specified herein, as
of the Cut-off Date. Capitalized terms used but not otherwise defined in this
Schedule II shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among the Originator as Originator and as servicer,
PaineWebber Mortgage Acceptance Corporation IV, as depositor, and The Chase
Manhattan Bank, as trustee.
(i) The Originator is duly organized, validly existing and in good
standing under the laws of the state of California and is and will remain in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loan in accordance with the terms of this
Agreement;
(ii) The Originator has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate, all transactions contemplated by this
Agreement. The Originator has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this Agreement,
and this Agreement, assuming due authorization, execution and delivery by the
Purchaser, constitutes a legal, valid and binding obligation of the Originator,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;
(iii) The execution and delivery of this Agreement by the Originator
and the performance of and compliance with the terms of this Agreement will not
violate the Originator's certificate of limited partnership and limited
partnership agreement or constitute a default under or result in a breach or
acceleration of, any material contract, agreement or other instrument to which
the Originator is a party or which may be applicable to the Originator or its
assets;
(iv) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
S-II-1
(v) The Originator is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved mortgagee pursuant to Section
203 of the National Housing Act. No event has occurred, including but not
limited to a change in insurance coverage, which would make the Originator
unable to comply with ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD eligibility requirements or
which would require notification to ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD;
(vi) The Originator does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(vii) There are no actions or proceedings against, or investigations
of, the Originator before any court, administrative or other tribunal (A) that
might prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the
Originator of its obligations under, or validity or enforceability of, this
Agreement;
(viii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date; and
(ix) Neither this Agreement nor any written statement, report or
other document prepared and furnished or to be prepared and furnished by the
Originator pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.
S-II-2
SCHEDULE III
PaineWebber Mortgage Acceptance Corporation IV
Mortgage Pass-Through Certificates
Series 2000-1
Representations and Warranties as to the Mortgage Loans
-------------------------------------------------------
Provident Funding Associates, L.P. (the "Originator") hereby makes
the representations and warranties set forth in this Schedule III to the
Depositor and the Trustee, as of the Closing Date, or if so specified herein, as
of the Cut-off Date. Capitalized terms used but not otherwise defined in this
Schedule III shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among the Originator, as Originator and as servicer,
PaineWebber Mortgage Acceptance Corporation IV, as depositor, and The Chase
Manhattan Bank, as trustee
(i) The information set forth in the related Mortgage Loan Schedule
is complete, true and correct;
(ii) The Mortgage Loan is in compliance with all requirements set
forth in the related Confirmation (as defined in the Mortgage Loan Purchase
Agreement), and the characteristics of the related Mortgage Loan Package (as
defined in the Mortgage Loan Purchase Agreement) as set forth in the related
Confirmation are true and correct;
(iii) All payments required to be made up to the close of business
on the Cut-off Date for such Mortgage Loan under the terms of the Mortgage Note
have been made; the Originator has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage; and there has been no
delinquency, exclusive of any period of grace, in any payment by the Mortgagor
thereunder during the last twelve months;
(iv) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Trustee; the substance of any such waiver, alteration or modification has been
approved by the insurer under the Primary Insurance Policy, if any, the title
insurer, to the extent required by the related policy, and is reflected on the
related Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement approved by the
insurer under the Primary Insurance Policy, if any, the title insurer, to the
extent required by the policy, and which assumption agreement has been delivered
to the Trustee and the terms of which are reflected in the related Mortgage Loan
Schedule;
S-III-1
(vi) The Mortgage Note and the Mortgage are not 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 and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject 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;
(vii) The Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written consent
of the mortgagee thereunder, and such provision is enforceable;
(viii) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, pursuant to insurance policies conforming to the requirements of the
▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac. All such insurance policies contain a
standard mortgagee clause naming the Originator, its successors and assigns as
mortgagee and all premiums thereon have been paid. If the Mortgaged Property is
in an area identified on a Flood Hazard Map or Flood Insurance Rate Map issued
by the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements of ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇▇▇ Mac. The Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;
(ix) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the origination and servicing of Mortgage Loan have been
complied with;
(x) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination,
rescission or release;
(xi) The Mortgage is a valid, existing and enforceable first lien on
the Mortgaged Property, including all improvements on the Mortgaged Property
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 the public record as of the date of recording
being acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the originator
of the Mortgage Loan and which do not adversely affect the Appraised Value of
the Mortgaged Property, and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or
S-III-2
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, existing and enforceable first lien and
first priority security interest on the property described therein and the
Originator has full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secured debt or other security
instrument creating a lien subordinate to the lien of the Mortgage;
(xii) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;
(xiii) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties;
(xiv) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the mortgagee
to advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the mortgagee pursuant to the Mortgage Note or Mortgage;
(xv) As of the date of the sale of the Mortgage Loan to PWRES, the
Originator is the sole legal, beneficial and equitable owner of the Mortgage
Note and the Mortgage and has full right to transfer and sell the Mortgage Loan
to the PWRES free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest;
(xvi) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) in compliance with any
and all applicable "doing business" and licensing requirements of the laws of
the state wherein the Mortgaged Property is located;
(xvii) The Mortgage Loan is covered by an ALTA lender's title
insurance policy acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title
insurer acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (x)(a) and (b) above) the Originator, its successors
and assigns as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress to and from the
Mortgaged Property, and against encroachments by or upon the Mortgaged Property
or any interest therein. The Originator is the sole insured of such lender's
title insurance policy, and such lender's title insurance policy is in full
force and effect and will be in full force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Originator, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy;
S-III-3
(xviii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the 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, and the Originator has not waived any default, breach, violation
or event of acceleration;
(xix) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(xx) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(xxi) The Mortgage Loan was originated by the Originator or by a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD.
(xxii) Principal payments on the Mortgage Loan commenced no more
than sixty days after the proceeds of the Mortgage Loan were disbursed. Each
Mortgage Loan provides for payment of interest at a fixed rate. With respect to
each Mortgage Loan, the Mortgage Note is payable on the first day of each month
in monthly payments, which are sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Rate. The Mortgage Note does not permit negative amortization.;
(xxiii) The origination and collection practices used by the
Originator with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage origination and
servicing industry. The Mortgage Loan has been serviced by the Originator and
any predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and escrow payments, if any, all such payments are in
the possession of, or under the control of, the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow payments or
other charges or payments due the Originator have been capitalized under any
Mortgage or the related Mortgage Note;
(xxiv) The Mortgaged Property is free of damage and waste and there
is no proceeding pending for the total or partial condemnation thereof;
(xxv) The Mortgage and related Mortgage Note contain 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 provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. The Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed
for protection
S-III-4
under applicable bankruptcy laws. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
The Mortgagor has not notified the Originator and the Originator has no
knowledge of any relief requested or allowed to the Mortgagor under the Soldiers
and Sailors Civil Relief Act of 1940;
(xxvi) the Mortgage Loan was underwritten in accordance with the
underwriting standards of the Originator in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on forms acceptable to
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac;
(xxvii) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxviii) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the Mortgage Loan
application, by a qualified appraiser, duly appointed by the Originator, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, whose compensation is not affected by the approval or
disapproval of the Mortgage Loan and who met the minimum qualifications of
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. Each appraisal of the Mortgage Loan was made in
accordance with the relevant provisions of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989;
(xxix) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the purchaser thereof to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxx) No Mortgage Loan contains provisions pursuant to which monthly
payments are (a) paid or partially paid with funds deposited in any separate
account established by the Originator, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(xxxi) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of fixed rate mortgage loans, and rescission materials
with respect to Refinancing Mortgage Loans, and such statement is and will
remain in the Mortgage File;
(xxxii) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(xxxiii) The Originator has no knowledge of any circumstances or
condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or
the Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable
S-III-5
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value of the Mortgage Loan;
(xxxiv) Each Mortgage Loan with an LTV at origination in excess of
80% is and will be subject to a Primary Insurance Policy, issued by a Qualified
Insurer, which insures that portion of the Mortgage Loan in excess of 75% of the
Appraised Value of the Mortgaged Property. All provisions of such Primary
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Insurance Policy obligates the Mortgagor thereunder
to maintain such insurance and to pay all premiums and charges in connection
therewith. The Mortgage Rate for the Mortgage Loan does not include any such
insurance premium;
(xxxv) Each Mortgage Loan constitutes a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code (but without regard to the rule in
Treasury Regulations 1.860G-2(f)(2) that treats a defective obligation as a
qualified mortgage, or any substantially similar successor provision);
(xxxvi) The Mortgaged Property is lawfully occupied under applicable
law; 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, have been made or obtained from the appropriate
authorities;
(xxxvii) No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any person, including without limitation the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(xxxviii) The assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxix) Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(xl) No Mortgage Loan has a balloon payment feature; and
(xli) The Mortgaged Property consists of a single parcel of real
property with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any condominium unit, planned unit development or
S-III-6
manufactured housing unit shall conform with the applicable ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac requirements regarding such dwellings and that no Mortgage Loan is
secured by a single parcel of real property with a cooperative housing
corporation, a log home, a mobile home that does not meet the requirements
herein for manufactured housing units or by a mixed-use property, a property in
excess of 10 acres, or other unique property types. With respect to any Mortgage
Loan secured by a Mortgaged Property improved by a manufactured housing unit,
(i) the related manufactured housing unit is permanently affixed to the land,
and (ii) the related manufactured housing unit and the related land are subject
to a Mortgage properly filed in the appropriate public recording office and
naming the Originator as mortgagee.
S-III-7
SCHEDULE IV
Form of Monthly Servicer Report
Transaction Name: PaineWebber Mortgage Acceptance Corporation IV
Mortgage Pass-Through Certificates, Series 2000-1
Servicer: Provident Funding Associates, L.P.
Distribution Date:
-------------------------------------------------------- -----------------------
GENERAL
-------------------------------------------------------- -----------------------
Weighted Average Gross Mortgage Rate
-------------------------------------------------------- -----------------------
Weighted Average Remaining Term of Loans
-------------------------------------------------------- -----------------------
Relief Act Reductions
-------------------------------------------------------- -----------------------
Service Fee Collected
-------------------------------------------------------- -----------------------
-------------------------------------------------------- -----------------------
LOAN COUNT
-------------------------------------------------------- -----------------------
Beginning Collateral Loan Count
-------------------------------------------------------- -----------------------
Number of Loan Payoffs
-------------------------------------------------------- -----------------------
Substitutions/Repurchases
-------------------------------------------------------- -----------------------
Ending Collateral Loan Count
-------------------------------------------------------- -----------------------
-------------------------------------------------------- -----------------------
SECURITY BALANCE
-------------------------------------------------------- -----------------------
Beginning Scheduled Collateral Balance
-------------------------------------------------------- -----------------------
Scheduled Principal Amount
-------------------------------------------------------- -----------------------
Unscheduled Principal Payments (Curtailments)
-------------------------------------------------------- -----------------------
Principal Prepayment Amount (payoffs)
-------------------------------------------------------- -----------------------
Ending Scheduled Collateral Balance
-------------------------------------------------------- -----------------------
-------------------------------------------------------- -----------------------
COLLECTION ACCOUNT
-------------------------------------------------------- -----------------------
Scheduled Principal & Interest Payments (Including
Delinquency Advances)
-------------------------------------------------------- -----------------------
Principal Prepayments (Payoffs)
-------------------------------------------------------- -----------------------
Unscheduled Principal Payments (Curtailments &
Curtailment Adj's)
-------------------------------------------------------- -----------------------
Substitution Adjustment Amounts
-------------------------------------------------------- -----------------------
Other (Explain)
-------------------------------------------------------- -----------------------
Total Funds Deposited To Collection Account:
-------------------------------------------------------- -----------------------
Total Funds Deposited to Distribution Account:
-------------------------------------------------------- -----------------------
Current Month Delinquency Advance:
-------------------------------------------------------- -----------------------
Prior Months Delinquency Advance Outstanding:
-------------------------------------------------------- -----------------------
S-IV-1
-------------------------------------------------------- -----------------------
REO PROPERTIES
-------------------------------------------------------- -----------------------
Aggregate Principal Balance of REO Properties
-------------------------------------------------------- -----------------------
Aggregate Market Value of REO Properties
--------------------------------------------------------------------------------
Note: Provide Information Regarding Each REO Property That Became An REO In
The Current Month
--------------------------------------------------------------------------------
-------------------------------------------------------- -----------------------
DELINQUENT LOANS
-------------------------------------------------------- -----------------------
1 - 30 Days
-------------------------------------------------------- -----------------------
31 - 60 Days
-------------------------------------------------------- -----------------------
61 - 90 Days
-------------------------------------------------------- -----------------------
90+ Days
-------------------------------------------------------- -----------------------
Delinquency Report as of
-------------------------------------------------------- -----------------------
-------------------------------------------------------- -----------------------
FORECLOSED LOANS
-------------------------------------------------------- -----------------------
1 - 30 Days
-------------------------------------------------------- -----------------------
31 - 60 Days
-------------------------------------------------------- -----------------------
61 - 90 Days
-------------------------------------------------------- -----------------------
90+ Days
-------------------------------------------------------- -----------------------
S-IV-2
EXHIBIT A
(FORM OF SENIOR CERTIFICATE)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No.:
Cut-off Date:
First Distribution Date:
Pass-Through Rate:
Initial Certificate Principal Balance of this Certificate ("Denomination"): $
Initial Certificate Principal Balances of all Certificates of this Class: $
CUSIP:
A-1
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Mortgage Pass-Through Certificates, Series 2000-1
Class ( )
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one- to
four-family residential properties
PaineWebber Mortgage Acceptance Corporation IV, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate initial Class Principal
Balances of all Certificates of the Class to which this Certificate belongs) in
certain monthly distributions with respect to a Trust Fund consisting primarily
of the Mortgage Loans deposited by PaineWebber Mortgage Acceptance Corporation
IV (the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Provident Funding Associates, L.P., as
originator and servicer (the "Servicer"), and The Chase Manhattan Bank, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 200_
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Countersigned:
By:_________________________________
Authorized Signatory of
THE CHASE MANHATTAN BANK,
as Trustee
A-3
EXHIBIT B
(FORM OF JUNIOR CERTIFICATE)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN
CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION
EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
[THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH
ALL APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT IN
A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO THE COMPLETION
B-1
AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE OF A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR DELIVERS TO
THE TRUSTEE A REPRESENTATION LETTER OR AN OPINION OF COUNSEL IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. (SUCH REPRESENTATION SHALL
BE DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF A
CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL OWNER'S ACCEPTANCE OF ITS INTEREST
IN A CERTIFICATE OF THIS CLASS.) NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No.:
Cut-off Date:
First Distribution Date:
Pass-Through Rate:
Initial Certificate Principal Balance of this Certificate ("Denomination"): $
Initial Certificate Principal Balances of all Certificates of this Class: $
CUSIP:
B-2
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Mortgage Pass-Through Certificates, Series 2000-1
Class ( )
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of conventional loans (the
"Mortgage Loans") secured by first liens on one- to four-family
residential properties
PaineWebber Mortgage Acceptance Corporation IV, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate initial Class Principal
Balances of all Certificates of the Class to which this Certificate belongs) in
certain monthly distributions with respect to a Trust Fund consisting primarily
of the Mortgage Loans deposited by PaineWebber Mortgage Acceptance Corporation
IV (the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Provident Funding Associates, L.P., as
originator and servicer (the "Servicer"), and The Chase Manhattan Bank, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
[No transfer of a Certificate of this Class shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act and
such laws, in order to assure compliance with the Securities Act and such laws,
the Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee shall each certify to the Trustee in
writing the facts surrounding the transfer. In the event that such a transfer is
to be made within three years from the date of the initial issuance of
Certificates pursuant hereto, there shall also be delivered (except in the case
of a transfer pursuant to Rule 144A of the Securities Act) to the Trustee an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Securities Act and such state securities laws, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Servicer, or the
Depositor. The Holder hereof desiring to effect such transfer shall, and does
hereby agree
B-3
to, indemnify the Trustee and the Depositor 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.]
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation (letter) from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee or the Servicer, (ii) if the
purchaser is an insurance company, a representation that the purchaser is an
insurance company which is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, or (iii) in the case of any such Certificate presented for
registration in the name of an employee benefit plan subject to ERISA or Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan,
an Opinion of Counsel satisfactory to the Trustee and the Servicer to the effect
that the purchase or holding of such Certificate will not result in the assets
of the Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in the Agreement, which Opinion
of Counsel shall not be an expense of the Trustee or the Servicer. (Such
representation shall be deemed to have been made to the Trustee by the
Transferee's acceptance of a Certificate of this Class and by a beneficial
owner's acceptance of its interest in a Certificate of this Class.)
Notwithstanding anything else to the contrary herein, any purported transfer of
a Certificate of this Class to or on behalf of an employee benefit plan subject
to ERISA or to the Code without the opinion of counsel satisfactory to the
Trustee as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 200_
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Countersigned:
By:_________________________________
Authorized Signatory of
THE CHASE MANHATTAN BANK,
as Trustee
B-5
EXHIBIT C
(FORM OF CLASS 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 AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
Certificate No.:
Cut-off Date:
First Distribution Date:
Pass-Through Rate:
Initial Certificate Principal Balance of this Certificate ("Denomination"): $
Initial Certificate Principal Balances of all Certificates of this Class: $
CUSIP:
C-1
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Mortgage Pass-Through Certificates, Series 2000-1 evidencing the
distributions allocable to the Class A-R Certificates with respect
to a Trust Fund consisting primarily of a pool of conventional loans
(the "Mortgage Loans") secured by first liens on one- to four-family
residential properties
PaineWebber Mortgage Acceptance Corporation IV, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that ______________ is the registered owner of the
Percentage Interest (obtained by dividing the Denomination of this Certificate
by the aggregate initial Class Principal Balances of all Certificates of the
Class to which this Certificate belongs) in certain monthly distributions with
respect to a Trust Fund consisting of the Mortgage Loans deposited by
PaineWebber Mortgage Acceptance Corporation IV (the "Depositor"). The Trust Fund
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among the Depositor, Provident
Funding Associates, L.P., as originator and servicer (the "Servicer"), and The
Chase Manhattan Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class A-R
Certificate at the Office of the Trustee or the office or agency maintained by
the Trustee in New York, New York.
No transfer of a Class A-R Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee or the Servicer, or (ii) in the
case of any such Class A-R Certificate presented for registration in the name of
an employee benefit plan subject to ERISA, or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Trustee and the Servicer to the effect that the
purchase or holding of such Class A-R Certificate will not result in the assets
of the Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee or
the
C-2
Servicer to any obligation in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee or the Servicer.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Class A-R Certificate to or on behalf of an employee benefit plan subject to
ERISA or to the Code without the opinion of counsel satisfactory to the Trustee
as described above shall be void and of no effect.
Each Holder of this Class A-R Certificate will be deemed to have
agreed to be bound by the restrictions of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class A-R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class A-R Certificate may be transferred
without delivery to the Trustee of (a) a transfer affidavit of the proposed
transferee and (b) a transfer certificate of the transferor, each of such
documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class A-R Certificate must
agree to require a transfer affidavit and to deliver a transfer certificate to
the Trustee as required pursuant to the Agreement, (iv) each person holding or
acquiring an Ownership Interest in this Class A-R Certificate must agree not to
transfer an Ownership Interest in this Class A-R Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class A-R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 200_
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Countersigned:
By:_________________________________
Authorized Signatory of
THE CHASE MANHATTAN BANK,
as Trustee
C-4
EXHIBIT D
(FORM OF CLASS X CERTIFICATE)
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
Certificate No.:
Cut-off Date:
First Distribution Date:
Pass-Through Rate:
Initial Certificate Principal Balance of this Certificate ("Denomination"): $
Initial Certificate Principal Balances of all Certificates of this Class: $
CUSIP:
D-1
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Mortgage Pass-Through Certificates, Series 2000-1
Class ( )
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of conventional loans (the
"Mortgage Loans") secured by first liens on one- to four-family
residential properties
PaineWebber Mortgage Acceptance Corporation IV, as Depositor
This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer or the Trustee referred
to below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Certificate specified above in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by PaineWebber Mortgage Acceptance Corporation IV (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of Cut-off Date specified above (the "Agreement") among the
Depositor, Provident Funding Associates, L.P., as originator and servicer (the
"Servicer"), and The Chase Manhattan Bank, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
D-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 200_
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Countersigned:
By:_________________________________
Authorized Signatory of
THE CHASE MANHATTAN BANK,
as Trustee
D-3
EXHIBIT E
(Form of Reverse of Certificates)
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Mortgage Pass-Through Certificates, Series 2000-1
This Certificate is one of a duly authorized issue of Certificates
designated as PaineWebber Mortgage Acceptance Corporation IV Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
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 on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Office of the Trustee or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Originator, the Depositor, the Servicer and the Trustee with the consent
of the Holders of Certificates affected by such amendment
E-1
evidencing the requisite Percentage Interest, as provided in the Agreement. 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 therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Office of the Trustee or the office or agency
maintained by the Trustee in New York, New York, accompanied by a 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 the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the Pool Principal Balance is less
than 10% of the aggregate Cut-off Date Principal Balances of the Mortgage Loans,
the Servicer will have the option to repurchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-2
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 Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
_____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
_______________________________________________________________________________
______________________________________________________________________________
for the account of____________________________________________________________,
account number___________, or, if mailed by check, to ________________________.
Statements should be mailed to________________________________________________
______________________________________________________________________________
______________________________________________________________________________
This information is provided by,__________________________________
the assignee named above, or_________________________________________________,
as its agent.
E-3
STATE OF )
) ss.:
COUNTY OF )
On the day of _______, 200_ before me, a notary public in and for
said State, personally appeared ___________________________________, known to me
who, being by me duly sworn, did depose and say that he executed the foregoing
instrument.
________________________________
Notary Public
[Notarial Seal]
E-4
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
PaineWebber Mortgage Acceptance Corporation IV
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Provident Funding Associates, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement among PaineWebber Mortgage
Acceptance Corporation IV, as Depositor, Provident Funding
Associates, L.P., as Originator and Servicer, and The Chase
Manhattan Bank, as Trustee, Mortgage Pass-Through Certificates,
Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
listed on the attached schedule) it has received:
(i) (a) the original Mortgage Note endorsed in the following form:
"Pay to the order of __________, without recourse" or (b) with respect to any
Lost Mortgage Note, a lost note affidavit from the Depositor stating that the
original Mortgage Note was lost or destroyed; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
F-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Name:
Title:
F-2
EXHIBIT G
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
PaineWebber Mortgage Acceptance Corporation IV
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Provident Funding Associates, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement among PaineWebber Mortgage
Acceptance Corporation IV, as Depositor, Provident Funding
Associates, L.P., as Originator and Servicer, and The Chase
Manhattan Bank, as Trustee, Mortgage Pass-Through Certificates,
Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) the original Mortgage Note endorsed in the form provided in
Section 2.01(c) of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator to the
Depositor.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01(c) of the Pooling and Servicing Agreement, or, if the
Depositor has certified or the Trustee otherwise knows that the related Mortgage
has not been returned from the applicable recording office, a copy of the
assignment of the Mortgage (excluding information to be provided by the
recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the Depositor.
(v) The original or duplicate original lender's title policy and
all riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company.
G-1
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (vi), and (xi) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________________________
Name:
Title:
G-2
EXHIBIT H
TRANSFER AFFIDAVIT
PaineWebber Mortgage Acceptance Corporation IV
Mortgage Pass-Through Certificates
Series 2000-1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______, the proposed Transferee of
an Ownership Interest in a Class A-R Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, (the "Agreement"), relating to
the above-referenced Series, by and among PaineWebber Mortgage Acceptance
Corporation IV, as depositor (the "Depositor"), Provident Funding Associates,
L.P., as originator and servicer, and The Chase Manhattan Bank, as trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual
H-1
knowledge that such affidavit is false; provided, that a pass-through entity
which is an "electing large partnership" under the Code will be subject to tax
in all events. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.) The Transferee further understands
that it may incur tax liabilities with respect to the holding of the Certificate
in excess of cash flows generated thereby.
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate. The Transferee historically has paid its debts as they have become
due and intends to do so in the future.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10.The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed 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.
11.The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the Transferee
is not acting on behalf of such a plan.
* * *
H-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____________ day of __________________, 200_.
_______________________________________
PRINT NAME OF TRANSFEREE
By:____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_______________________________________
[Assistant] Secretary
Personally appeared before me the above-named _______, known or
proved to me to be the same person who executed the foregoing instrument and to
be the __________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ______ day of _______, 200_.
_______________________________
NOTARY PUBLIC
My Commission expires the ______ day of
________________, 200_.
H-3
EXHIBIT 1
to EXHIBIT H
Certain Definitions
"Ownership Interest": As to any Residual Certificate, any ownership
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
citizen or resident of the United States, a corporation, partnership (except as
provided in applicable Treasury Regulations), or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, an estate whose income is subject to United States federal income tax
purposes regardless of its source or a trust if a court within the United States
is able to exercise primary supervision over the administration of the trust and
one or more persons described in this clause (v) have the authority to control
all substantial decisions of the 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 United States persons) unless such Person has
furnished the transferor and the Trustee with a duly completed Internal Revenue
Service Form 4224 or any applicable successor form, and (vi) any other Person so
designated by the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Residual Certificate to such Person may cause the
REMIC hereunder to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the ▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not selected by such
government unit.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Residual Certificate.
H-4
EXHIBIT 2
to EXHIBIT H
Section 5.02(c) of the Agreement
(a) Each Person who has or who acquires any Ownership Interest in
a Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee shall
not register the Transfer of any Class A-R Certificate unless, in addition to
the certificates required to be delivered to the Trustee under subparagraph (b)
above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form attached
hereto as Exhibit H.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class A-R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class A-R Certificate and (C) not to Transfer its Ownership
Interest in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class A-R Certificate in violation of the provisions of this Section 5.02(c),
then the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
A-R Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class A-R Certificate that is in fact not
permitted by Section 5.02(b) and this Section 5.02(c) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
Transfer was registered after receipt of the related Transfer Affidavit,
Transferor Certificate and either the Rule 144A Letter or the Investment Letter.
The Trustee shall be entitled but not obligated to recover from any Holder of a
Class A-R Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class A-R Certificate at and after either
such time. Any such payments
H-5
so recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Class A-R Certificate to any Holder who
is not a Permitted Transferee described in clauses (i) through (iv) of the
definition thereof.
H-6
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
______________________
Date
PaineWebber Mortgage Acceptance Corporation IV
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Attention:
The Chase Manhattan Bank
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: PaineWebber Mortgage Acceptance Corporation IV, Mortgage
Pass-Through Certificates, Series 2000-1, Class [ ]
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Class A-R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
_______________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
I-1
EXHIBIT J
FORM OF INVESTMENT LETTER (NON-RULE 144A)
______________________
Date
PaineWebber Mortgage Acceptance Corporation IV
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Attention:
The Chase Manhattan Bank
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: PaineWebber Mortgage Acceptance Corporation IV, Mortgage
Pass-Through Certificates, Series 2000-1, Class [ ]
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if we are an insurance company, a
representation that we are an insurance company which is purchasing such
Certificates with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and that the purchase and holding of such Certificates are
covered under Sections I and III of PTCE 95-60, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration
J-1
statement under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
Very truly yours,
_______________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
J-2
EXHIBIT K
FORM OF RULE 144A LETTER
______________________
Date
PaineWebber Mortgage Acceptance Corporation IV
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Attention:
The Chase Manhattan Bank
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: PaineWebber Mortgage Acceptance Corporation IV, Mortgage
Pass-Through Certificates, Series 2000-1, Class [ ]
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if we are an insurance company, a
representation that we are an insurance company which is purchasing such
Certificates with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and that the purchase and holding of such Certificates are
covered under PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or
K-1
require registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
K-2
ANNEX 1
to EXHIBIT K
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
(For Transferees Other Than Registered Investment Companies)
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a foreign
bank or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy of
which is attached hereto.
Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the reinsuring
of risks underwritten
K-3
by insurance companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory or the
District of Columbia.
State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958.
Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors Act of
1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information
K-4
and conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Buyer is a bank or savings and loan
is provided above, the Buyer agrees that it will furnish to such parties updated
annual financial statements promptly after they become available.
_______________________________________
Print Name of Buyer
By:____________________________________
Name:
Title:
Date:
K-5
ANNEX 2
to EXHIBIT K
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
(For Transferees That are Registered Investment Companies)
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations,
K-6
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
________________________________________
Print Name of Buyer or Adviser
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:
K-7
EXHIBIT L
REQUEST FOR RELEASE
(for Trustee)
PaineWebber Mortgage Acceptance Corporation IV
Mortgage Pass-Through Certificates
Series 2000-1
Loan Information
----------------
Name of Mortgagor: _______________________________
Servicer _______________________________
Loan No.: _______________________________
Trustee
-------
Name: _______________________________
Address: _______________________________
Trustee: _______________________________
Mortgage File No.: _______________________________
The undersigned Servicer hereby acknowledges that it has received
from The Chase Manhattan Bank, as Trustee for the Holders of Mortgage
Pass-Through Certificates, of the above-referenced Series, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among the Trustee, Provident Funding Associates, L.P.,
as Originator and Servicer, and PaineWebber Mortgage Acceptance Corporation IV,
as Depositor.
( ) Mortgage Note dated ________________, ____, in the original
principal sum of $______________________, made by ____________
______________________________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on ______________________________ as
instrument no. ____________________________________________
in the County Recorder's Office of the County of
_________________________, State of ________________________
in book/reel/docket ______________________________ of official
records at page/image_______________________________________.
L-1
( ) Deed of Trust recorded on __________________________________
as instrument no. _________________________ in the County
Recorder's Office of the County of __________________________
________, State of _____________________ in book/reel/docket
__________________of official records at page/image.
( ) Assignment of Mortgage or Deed of Trust to the Trustee,
recorded on _______________________ as instrument no.________
______________ in the County Recorder's Office of the County
of ___________________, State of ___________________________
in book/reel/docket ___________________________ of official
records at page/image _____________________________________.
( ) Other documents, including any amendments, assignments or
other assumptions of the Mortgage Note or Mortgage.
( )______________________________________________________
( )______________________________________________________
( )______________________________________________________
( )______________________________________________________
The undersigned Servicer hereby acknowledges and agrees as follows:
(1) The Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Servicer assert or seek to assert any claims or rights
of setoff to or against the Documents or any proceeds thereof.
(3) The Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided
in the Agreement.
(4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the possession or control of
the Servicer shall at all times be earmarked for the account of the
Trustee, and the Servicer shall keep the Documents and any proceeds
separate and distinct from all other property in the Servicer's
possession, custody or control.
L-2
PROVIDENT FUNDING ASSOCIATES, L.P.
By:____________________________________
Its:___________________________________
Date: _______, 200_
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
To: The Chase Manhattan Bank
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: The Pooling & Servicing Agreement dated July 1, 2000 among
PaineWebber Mortgage Acceptance Corporation IV, as Depositor,
Provident Funding Associates, L.P., as Originator and Servicer, and
The Chase Manhattan Bank, as Trustee
-------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by
you as Trustee for PaineWebber Mortgage Acceptance Corporation IV, we request
the release of the Mortgage Loan File for the Mortgage Loan(s) described below,
for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1. Mortgage Loan paid in full ([Servicer] hereby certifies
that all amounts have been received.)
2. Mortgage Loan Liquidated ([Servicer] hereby certifies that all
proceeds of foreclosure, insurance, or other liquidation have
been finally received.)
3. Mortgage Loan in Foreclosure.
4. Other (explain):
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Mortgage Loan. If item 3 or 4 is checked, upon return of
all of the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
M-1
PROVIDENT FUNDING ASSOCIATES, L.P.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:__________________________
Name:_____________________
Title:____________________
Date:_____________________
TRUSTEE CONSENT TO RELEASE
AND ACKNOWLEDGMENT OF RECEIPT
THE CHASE MANHATTAN BANK
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
M-2