POOLING AND SERVICING AGREEMENT
Dated as of __________, 199_
by and among
PaineWebber Mortgage Acceptance Corporation IV
(Depositor)
and
-------------------------------
(Transferor)
-------------------------------
(Master Servicer)
and
-------------------------------
(Trustee)
_______ Home Equity Trust 199_ - _
_______ Home Equity Asset Backed Certificates,
Series 199_ - _
Class _ and Class _
TABLE OF CONTENTS
ARTICLE I
Definitions
Section 1.1 Certain Defined Terms.........................................
Section 1.2 Provisions of General Application.............................
ARTICLE II
Establishment of the Trust;
Sale and Conveyance of Trust Fund
Section 2.1 Sale and Conveyance of Trust Fund; Priority and
Subordination of Ownership Interests; Establishment of
the Trust....................................................
Section 2.2 Possession of Mortgage Files; Access to Mortgage Files........
Section 2.3 Delivery of Mortgage Loan Documents...........................
Section 2.4 Acceptance by Trustee of the Trust Fund; Certain
Substitutions;
Certification by Trustee.....................................
Section 2.5 Designations under REMIC Provisions; Designation of
Startup Date.................................................
Section 2.6 Execution of Certificates.....................................
Section 2.7 Application of Principal and Interest.........................
Section 2.8 Grant of Security Interest....................................
Section 2.9 Further Assurances; Powers of Attorney........................
ARTICLE III
Representations and Warranties
Section 3.1 Representations of the Master Servicer........................
Section 3.2 Representations, Warranties and Covenants of the Depositor....
Section 3.3 Purchase and Substitution.....................................
Section 3.4 Master Servicer Covenants.....................................
ARTICLE IV
The Certificates
Section 4.1 The Certificates..............................................
Section 4.2 Registration of Transfer and Exchange of Certificates.........
Section 4.3 Mutilated, Destroyed, Lost or Stolen Certificates.............
Section 4.4 Persons Deemed Owners.........................................
ARTICLE V
Administration and Servicing of the Mortgage Loans
Section 5.1 Appointment of the Master Servicer............................
Section 5.2 Subservicing Agreements Between the Master Servicer and
Subservicers.................................................
Section 5.3 Collection of Certain Mortgage Loan Payments; Collection
Account......................................................
Section 5.4 Permitted Withdrawals from the Collection Account and
Trustee Collection Account...................................
Section 5.5 Payment of Taxes, Insurance and Other Charges.................
Section 5.6 Maintenance of Casualty Insurance.............................
Section 5.7 Master Servicer Account.......................................
Section 5.8 Fidelity Bond; Errors and Omissions Policy....................
Section 5.9 Collection of Taxes, Assessments and Other Items..............
Section 5.10 Periodic Filings with the Securities and Exchange
Commission; Additional Information...........................
Section 5.11 Enforcement of Due-on-Sale Clauses; Assumption Agreements.....
Section 5.12 Realization upon Defaulted Mortgage Loans.....................
Section 5.13 Trustee to Cooperate; Release of Mortgage Files...............
Section 5.14 Servicing Fee; Servicing Compensation.........................
Section 5.15 Reports to the Trustee; Collection Account Statements.........
Section 5.16 Annual Statement as to Compliance.............................
Section 5.17 Annual Independent Public Accountants' Servicing Report.......
Section 5.18 Reports to be Provided by the Master Servicer.................
Section 5.19 Adjustment of Servicing Compensation in Respect of
Prepaid Mortgage Loans.......................................
Section 5.20 Periodic Advances.............................................
Section 5.21 Indemnification; Third Party Claims...........................
Section 5.22 Maintenance of Corporate Existence and Licenses; Merger
or Consolidation of the Master Servicer......................
Section 5.23 Assignment of Agreement by Master Servicer; Master
Servicer Not to Resign.......................................
ARTICLE VI
Distributions and Payments
Section 6.1 Establishment of Certificate Account, Deposits to the
Certificate Account..........................................
Section 6.2 Permitted Withdrawals From the Certificate Account............
Section 6.3 Collection of Money...........................................
[Section 6.4 The Certificate Insurance Policy..............................
Section 6.5 Distributions.................................................
Section 6.6 Investment of Accounts........................................
Section 6.7 Reports by Trustee............................................
Section 6.8 Additional Reports by Trustee and by Master Servicer..........
Section 6.9 Compensating Interest.........................................
[Section 6.10 Effect of Payments by the Certificate Insurer; Subrogation....
ARTICLE VII
Default
Section 7.1 Events of Default.............................................
Section 7.2 Trustee to Act; Appointment of Successor......................
Section 7.3 Waiver of Defaults............................................
Section 7.4 Mortgage Loans, Trust Fund and Accounts Held for Benefit
of the Certificate Insurer...................................
ARTICLE VIII
Termination
Section 8.1 Termination...................................................
Section 8.2 Additional Termination Requirements...........................
Section 8.3 Accounting Upon Termination of Master Servicer................
ARTICLE IX
The Trustee
Section 9.1 Duties of Trustee.............................................
Section 9.2 Certain Matters Affecting the Trustee.........................
Section 9.3 Not Liable for Certificates or Mortgage Loans.................
Section 9.4 Trustee May Own Certificates..................................
Section 9.5 Trustee's Fees and Expenses; Indemnity........................
Section 9.6 Eligibility Requirements for Trustee..........................
Section 9.7 Resignation and Removal of the Trustee........................
Section 9.8 Successor Trustee.............................................
Section 9.9 Merger or Consolidation of Trustee............................
Section 9.10 Appointment of Co-Trustee or Separate Trustee.................
Section 9.11 Tax Returns; OID Interest Reporting...........................
[Section 9.12 Retirement of Certificates....................................
ARTICLE X
Miscellaneous Provisions
Section 10.1 Limitation on Liability of the Depositor and the Master
Servicer.....................................................
Section 10.2 Acts of Certificateholders; Certificateholders' Rights........
Section 10.3 Amendment or Supplement.......................................
Section 10.4 Recordation of Agreement......................................
Section 10.5 Duration of Agreement.........................................
Section 10.6 Notices.......................................................
Section 10.7 Severability of Provisions....................................
Section 10.8 No Partnership................................................
Section 10.9 Counterparts..................................................
Section 10.10 Successors and Assigns........................................
Section 10.11 Headings......................................................
[Section 10.12 The Certificate Insurer Default..............................
Section 10.13 Third Party Beneficiary.......................................
Section 10.14 Intent of the Parties.........................................
Section 10.15 Appointment of Tax Matters Person.............................
Section 10.16 GOVERNING LAW CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL........................................................
EXHIBITS
[EXHIBIT A Specimen Certificate Insurance Policy]
EXHIBIT B-1 Specimen Class A-1 Certificate
EXHIBIT B-2 Specimen Class A-2 Certificate
EXHIBIT B-3 Specimen Class A-3 Certificate
EXHIBIT B-4 Specimen Class A-4 Certificate
EXHIBIT B-5 Specimen Class A-5 Certificate
EXHIBIT B-6 Specimen Class R Certificate
EXHIBIT C Contents of Mortgage File
EXHIBIT D Mortgage Loan Schedule
EXHIBIT E Trustee's Certificate as to Mortgage Files
EXHIBIT F Form of Initial Certification of Trustee
EXHIBIT G Form of Final Certification of Trustee
EXHIBIT H Form of Request for Release of Mortgage Files
EXHIBIT I Form of Transfer Affidavit and Agreement
EXHIBIT J Form of Certificate to Be Delivered by Transferring Holder
EXHIBIT K Form of ERISA Investment Representation Letter
EXHIBIT L Form of Officer's Certificate of the Transferor: Prepaid Loans
EXHIBIT M Form of Transferee's Letter
This Pooling and Servicing Agreement, relating to _______ Home Equity Trust
199_ - _ (the "Trust"), dated as of __________, 199_ by and among PaineWebber
Mortgage Acceptance Corporation IV, as depositor of the Trust (the "Depositor"),
__________________, as Transferor (the "Transferor"), ____________________, as
Master Servicer, (the "Master Servicer"), and ____________________, in its
capacity as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor wishes to establish a trust which provides for the
allocation and sale of the beneficial interests therein and the maintenance and
distribution of the trust estate;
WHEREAS, the Master Servicer has agreed to service the Mortgage Loans,
which constitute the principal assets of the trust estate;
WHEREAS, ____________________, is willing to serve in the capacity of
Trustee hereunder; and
[WHEREAS, ____________________ (the "Certificate Insurer") is intended to
be a third-party beneficiary of this Agreement and is hereby recognized by the
parties hereto to be a third-party beneficiary of this Agreement.]
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Depositor, the Transferor, the Master Servicer and the
Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 CERTAIN DEFINED TERMS. Whenever used herein the following words
and phrases, unless the context otherwise requires, shall have the following
meanings.
"ACCEPTED SERVICING PRACTICES" shall mean the Master Servicer's normal
servicing practices in servicing and administering mortgage loans for its own
account, which in general will conform to the mortgage servicing practices of
prudent mortgage lending institutions which service for their own account
mortgage loans of the same type as the Mortgage Loans in the jurisdictions in
which the related Mortgaged Properties are located and will give due
consideration to [the Certificate Insurer's and] the Certificateholders'
reliance on the Master Servicer.
"ACCOUNT" shall mean any Eligible Account established hereunder.
"ACCRUAL PERIOD" shall mean (i) with respect to the Class A-1 Certificates
and any Remittance Date, the period commencing on the immediately preceding
Remittance Date or, in the case of the first Remittance Date, the Closing Date,
and ending on the day preceding such Remittance Date and (ii) with respect to
the Certificates other than the Class A-1 Certificates and any Remittance Date,
the period commencing on the ___ day of the month immediately preceding the
month in which such Remittance Date occurs and ending on the last day of the
month immediately preceding the month in which such Remittance Date occurs.
"ADVERSE REMIC EVENT" shall have the meaning set forth in Section 5.1(c).
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AGREEMENT" shall mean this Pooling and Servicing Agreement, including the
Exhibits hereto, as amended or supplemented from time to time in accordance
herewith.
"AGGREGATE PRINCIPAL BALANCE" shall mean the aggregated sum of the
Principal Balances of each of the Mortgage Loans as of any date of
determination.
"APPRAISED VALUE" shall mean the appraised value of any Mortgaged Property,
based upon the appraisal or other property valuation made at the time the
related Mortgage Loan is originated; provided that if no such appraisal was
required to be made in accordance with the Underwriting Guidelines, Appraised
Value shall mean the stated value of the Mortgaged Property as set forth in the
loan application submitted by the related Mortgagor.
"ASSIGNMENT OF MORTGAGE" shall mean, with respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument (which
may be in blank) sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect of record the sale of the
Mortgage to the Trustee for the benefit of the Certificateholders and the
Certificate Insurer.
"AUTHORIZED DENOMINATIONS" shall mean, in the case of the Class A
Certificates, $1,000 or integral multiples of $1,000 in excess thereof;
PROVIDED, HOWEVER, that one Class A-1 Certificate, one Class A-2 Certificate,
one Class A-3 Certificate, one Class A-4 Certificate and one Class A-5
Certificate each is issuable in a denomination equal to an amount less than
$1,000 such that the aggregate denomination of all Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates or Class A-5
Certificates, as the case may be, shall be equal to the applicable Original
Class A-1 Principal Balance, Original Class A-2 Principal Balance, Original
Class A-3 Principal Balance, Original Class A-4 Principal Balance or Original
Class A-5 Principal Balance.
"AVAILABLE AMOUNT" shall mean for any Remittance Date, the (i) the Master
Servicer Remittance Amount for such Remittance Date minus (ii) the Proportional
Share of the Trustee Fee [and the Certificate Insurance Premium Amount].
"BASE PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with respect to the Class
A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the
Class A-4 Certificates for any Remittance Date, (A) the sum of the amounts
referred to in clauses (i), (ii), (iii), (iv), (vi) and (vii) of clause (b) of
the definition of Principal Distribution Amount for such Remittance Date minus
(B) any Overcollateralization Release Amount and such Remittance Date.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to be closed.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"CERTIFICATE" shall mean any Series 199_ - _ Class A Certificate or Series
199_ - _ Class R Certificate executed by the Trustee on behalf of the Trust Fund
and authenticated by the Trustee.
"CERTIFICATE ACCOUNT" shall mean the Certificate Account established in
accordance with Section 6.1(a) hereof and maintained by the Trustee.
"CERTIFICATEHOLDER" shall mean, except as provided in Article X, each
Person in whose name a Certificate is registered in the Certificate Register,
except that, solely for the purposes of giving any consent (except any consent
required to be obtained pursuant to Section 10.2), waiver, requestor demand
pursuant to this Agreement, any Certificate registered in the name of the Master
Servicer or any Subservicer or the Transferor, or any Affiliate of any of them,
shall be deemed not to be outstanding and the undivided interest in the Trust
Fund evidenced thereby shall not be taken into account in determining whether
the requisite percentage of Certificates necessary to effect any such consent,
waiver, request or demand has been obtained. For purposes of any consent,
waiver, request or demand of Certificateholders pursuant to this Agreement, upon
the Trustee's request, the Master Servicer and the Transferor shall provide to
the Trustee a notice identifying any of their respective Affiliates or the
Affiliates of any Subservicer that is a Certificateholder as of the date(s)
specified by the Trustee in such request. [Any Certificates on which payments
are made under the Certificate Insurance Policy shall be deemed to be
outstanding and held by the Certificate Insurer to the extent of such payment.]
["CERTIFICATE INSURANCE POLICY" shall mean the certificate guaranty
insurance policy no. _________, and all endorsements thereto dated the Closing
Date, issued by the Certificate Insurer for the benefit of the Class A
Certificateholders, a copy of which is attached hereto as Exhibit A.]
["CERTIFICATE INSURANCE PREMIUM AMOUNT" shall mean the product of the
Premium Percentage and the Certificate Principal Balance for the related
Remittance Date.]
["CERTIFICATE INSURER" shall mean ____________________, a _______________
organized and created under the laws of the State of __________, and any
successors thereto.
["CERTIFICATE INSURER DEFAULT" shall mean the existence and continuance of
any of the following: (i) a failure by the Certificate Insurer to make a payment
required under a Certificate Insurance Policy in accordance with its terms; (ii)
the entry of a decree or order of a court or agency having jurisdiction in
respect of the Certificate Insurer in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law appointing a
conservator or receiver or liquidator or other similar official of the
Certificate Insurer or of any substantial part of its property, or the entering
of an order for the winding up or liquidation of the affairs of the Certificate
Insurer and the continuance of any such decree or order undischarged or unstayed
and in force for a period of 90 consecutive days; (iii) the Certificate Insurer
shall consent to the appointment of a conservator or receiver or liquidator or
other similar proceedings or of relating to the Certificate Insurer or of or
relating to all or substantially all of its property; or (iv) the Certificate
Insurer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of or otherwise voluntarily
commence a case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment of its obligations.]
"CERTIFICATE PRINCIPAL BALANCE" shall mean the sum of the Class A-1
Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal
Balance, the Class A-4 Principal Balance and the Class A-5 Principal Balance.
"CERTIFICATE REGISTER" shall have the meaning described in Section
4.2(a).
"CIVIL RELIEF ACT" shall mean the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended.
"CLASS" shall mean any designated Class of Certificates of this Series or
of any new Series issued hereunder.
"CLASS A CERTIFICATE" shall mean any Class A-1 Certificate, any Class A-2
Certificate, any Class A-3 Certificate, any Class A-4 Certificate or any Class
A-5 Certificate.
"CLASS A CERTIFICATEHOLDER" shall mean a Holder of a Class A-1 Certificate,
a Class A-2 Certificate, a Class A-3 Certificate, a Class A-4 Certificate or a
Class A-5 Certificate.
"CLASS A-1 CERTIFICATE" shall mean any Certificate designated as a "CLASS
A-1 CERTIFICATE" on the face thereof, in the form of Exhibit B-1 hereto, and
authenticated by the Trustee in accordance with the procedures set forth herein.
"CLASS A-1 CERTIFICATEHOLDER" shall mean a Holder of a Class A-1
Certificate.
"CLASS A-1 DISTRIBUTION AMOUNT" shall mean, with respect to the Class A-1
Certificates for any Remittance Date, the amount distributed to the Holders of
the Class A-1 Certificates on such Remittance Date pursuant to Sections
6.5(a)(iv), (v), (vi) and (viii) and 6.5(b)(vi) hereof.
"CLASS A-1 FINAL SCHEDULED MATURITY DATE" shall mean the ________, 20__
Remittance Date.
"CLASS A-1 INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to the
Class A-1 Certificates for any Remittance Date an amount equal to the aggregate
of interest accrued at the Class A-1 Pass-Through Rate during the Accrual Period
on the Class A-1 Principal Balance excluding (i) any Mortgage Loan Interest
Shortfall and (ii) any reductions in interest resulting from the application of
the Civil Relief Act, in each case allocable to the Class A-1 Certificates and
as of such Remittance Date.
"CLASS A-1 PASS-THROUGH RATE" with respect to any Remittance Date, will be
equal to a per annum rate (calculated on the basis of actual days elapsed
divided by 360) equal to the lesser of (i) the sum of (a) LIBOR on the Interest
Determination Date plus (b) ____% per annum and (ii) the Weighted Average Rate
Cap.
"CLASS A-1 PRINCIPAL BALANCE" shall mean, as of any date of determination,
the Original Class A-1 Principal Balance less any Principal Distribution Amount
distributed on the Class A-1 Certificates on all prior Remittance Dates.
"CLASS A-2 CERTIFICATE" shall mean any Certificate designated as a "CLASS
A-2 CERTIFICATE" on the face thereof, in the form of Exhibit B-2 hereto, and
authenticated by the Trustee in accordance with the procedures set forth herein.
"CLASS A-2 CERTIFICATEHOLDER" shall mean a Holder of a Class A-2
Certificate.
"CLASS A-2 DISTRIBUTION AMOUNT" shall mean, with respect to the Class A-2
Certificates for any Remittance Date, the amount distributed to the Holders of
the Class A-2 Certificates on such Remittance Date pursuant Sections 6.5(a)(iv),
(v), (vi) and (viii) and 6.5(b)(vi) hereof.
"CLASS A-2 FINAL SCHEDULED MATURITY DATE" shall mean the __________,
20__ Remittance Date.
"CLASS A-2 INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to the
Class A-2 Certificates for any Remittance Date an amount equal to the aggregate
of interest accrued at the Class A-2 Pass-Through Rate during the Accrual Period
on the Class A-2 Principal Balance excluding (i) any Mortgage Loan Interest
Shortfall and (ii) any reductions in interest resulting from the application of
the Civil Relief Act, in each case allocable to the Class A-2 Certificates and
as of such Remittance Date.
"CLASS A-2 PASS-THROUGH RATE" with respect to any Remittance Date, will be
equal to a ____% per annum rate (calculated on the basis of an assumed month of
30 days and an assumed year of 360 days).
"CLASS A-2 PRINCIPAL BALANCE" shall mean, as of any date of determination,
the Original Class A-2 Principal Balance less any Principal Distribution Amount
distributed on the Class A-2 Certificates on all prior Remittance Dates.
"CLASS A-3 CERTIFICATE" shall mean any Certificate designated as a "CLASS
A-3 CERTIFICATE" on the face thereof, in the form of Exhibit B-3 hereto, and
authenticated by the Trustee in accordance with the procedures set forth herein.
"CLASS A-3 CERTIFICATEHOLDER" shall mean a Holder of a Class A-3
Certificate.
"CLASS A-3 DISTRIBUTION AMOUNT" shall mean, with respect to the Class A-3
Certificates for any Remittance Date, the amount distributed to the Holders of
the Class A-3 Certificates on such Remittance Date pursuant to Sections
6.5(a)(iv), (v), (vi) and (viii) and 6.5(b)(vi) hereof.
"CLASS A-3 FINAL SCHEDULED MATURITY DATE" shall mean the __________, 20__
Remittance Date.
"CLASS A-3 INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to the
Class A-3 Certificates for any Remittance Date an amount equal to the aggregate
of interest accrued at the Class A-3 Pass-Through Rate during the Accrual Period
on the Class A-3 Principal Balance excluding (i) any Mortgage Loan Interest
Shortfall and (ii) any reductions in interest resulting from the application of
the Civil Relief Act, in each case allocable to the Class A-3 Certificates and
as of such Remittance Date.
"CLASS A-3 PASS-THROUGH RATE" with respect to any Remittance Date, will be
equal to a ____% per annum rate (calculated on the basis of an assumed month of
30 days and an assumed year of 360 days).
"CLASS A-3 PRINCIPAL BALANCE" shall mean, as of any date of determination,
the Original Class A-3 Principal Balance less any Principal Distribution Amounts
distributed on the Class A-3 Certificates on all prior Remittance Dates.
"CLASS A-4 CERTIFICATE" shall mean any Certificate designated as a "Class
A-4 Certificate" on the face thereof, in the form of Exhibit B-4 hereto, and
authenticated by the Trustee in accordance with the procedures set forth herein.
"CLASS A-4 CERTIFICATEHOLDER" shall mean a Holder of a Class A-4
Certificate.
"CLASS A-4 DISTRIBUTION AMOUNT" shall mean, with respect to the Class A-4
Certificates for any Remittance Date, the amount distributed to the Holders of
the Class A-4 Certificates on such Remittance Date pursuant Sections 6.5(a)(iv),
(v), (vi) and (viii) and 6.5(b)(vi) hereof.
"CLASS A-4 FINAL SCHEDULED MATURITY DATE" shall mean the ________, 20__
Remittance Date.
"CLASS A-4 INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to the
Class A-4 Certificates for any Remittance Date an amount equal to the aggregate
of interest accrued at the Class A-4 Pass-Through Rate during the Accrual Period
on the Class A-4 Principal Balance excluding (i) any Mortgage Loan Interest
Shortfall and (ii) any reductions in interest resulting from the application of
the Civil Relief Act, in each case allocable to the Class A-4 Certificates and
as of such Remittance Date.
"CLASS A-4 PASS-THROUGH RATE" with respect to any Remittance Date prior to
the Optional Termination Date, will be equal to a ____% per annum rate and with
respect to any other Remittance Date, will be equal to a ____% per annum rate
(in each case calculated on the basis of an assumed month of 30 days and an
assumed year of 360 days).
"CLASS A-4 PRINCIPAL BALANCE" shall mean, as of any date of determination,
the Original Class A-4 Principal Balance less any Principal Distribution Amounts
distributed on the Class A-4 Certificates on all prior Remittance Dates.
"CLASS A-5 BASE PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with respect to
the Class A-5 Certificates for any Remittance Date, (A) the sum of the amounts
referred to in clauses (i), (ii), (iii), (iv), (vi) and (vii) of clause (b) of
the definition of Class A-5 Principal Distribution Amount for such Remittance
Date minus (B) any Overcollateralization Release Amount for such Remittance
Date.
"CLASS A-5 CERTIFICATE" shall mean any Certificate designated as a "CLASS
A-5 CERTIFICATE" on the face thereof, in the form of Exhibit B-5 hereto, and
authenticated by the Trustee in accordance with the procedures set forth herein.
"CLASS A-5 CERTIFICATEHOLDER" shall mean a Holder of a Class A-5
Certificate.
"CLASS A-5 DISTRIBUTION AMOUNT" shall mean, with respect to the Class A-5
Certificates for any Remittance Date, the amount distributed to the Holders of
the Class A-5 Certificates on such Remittance Date pursuant to Sections
6.5(a)(vi) and 6.5(b)(iv), (v), (vi) and (viii) hereof.
"CLASS A-5 FINAL SCHEDULED MATURITY DATE" shall mean the ________, 20__
Remittance Date.
"CLASS A-5 INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to the
Class A-5 Certificates for any Remittance Date an amount equal to the aggregate
of interest accrued at the Class A-5 Pass-Through Rate during the Accrual Period
on the Class A-5 Principal Balance excluding (i) any Mortgage Loan Interest
Shortfall and (ii) any reductions in interest resulting from the application of
the Civil Relief Act, in each case allocable to the Class A-5 Certificates and
as of such Remittance Date.
"CLASS A-5 PASS-THROUGH RATE" with respect to any Remittance Date prior to
the Optional Termination Date, will be equal to a ____% per annum rate and with
respect to any other Remittance Date, will be equal to a ____% per annum rate
(in each case calculated on the basis of an assumed month of 30 days and an
assumed year of 360 days).
"CLASS A-5 PRINCIPAL BALANCE" shall mean, as of any date of determination,
the Original Class A-5 Principal Balance less any Class A-5 Principal
Distribution Amounts distributed on the Class A-5 Certificates on all prior
Remittance Dates.
"CLASS A-5 PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with respect to the
Class A-5 Certificates for any Remittance Date, the lesser of:
(a) the excess of (1) the sum of the Available Amount, any Excess Spread
and the applicable portion of any Insured Payment over (2) the Class A-5
Interest Distribution Amount; and
(b) the sum, without duplication, of:
(i) that portion of all scheduled installments of principal in respect of
the Mortgage Loans which is received (or advanced) during the related Due Period
together with all unscheduled recoveries of principal (including Principal
Prepayments, Curtailments and Deficient Valuations) on such Mortgage Loans
actually collected by the Master Servicer during the prior calendar month;
(ii) the Principal Balance of each Mortgage Loan that either was, effective
on such Remittance Date, repurchased by the Transferor or by the Depositor or
purchased by the Master Servicer during the preceding Due Period, but only to
the extent the amount equal to such Principal Balance is actually received by
the Trustee;
(iii) any Substitution Adjustment amounts delivered by the Depositor on the
related Remittance Date in connection with a substitution of a Mortgage Loan, to
the extent such Substitution Adjustments are actually received by the Trustee;
(iv) with respect to each Mortgage Loan that became a Liquidated Mortgage
Loan during the prior calendar month, the Principal Balance of such Mortgage
Loan immediately prior to the time when such Mortgage Loan became a Liquidated
Mortgage Loan;
(v) any Overcollateralization Increase Amount;
(vi) to the extent of any Subordination Deficit the excess, if any of the
Class A-5 Principal Balance over the aggregate Principal Balance of the Mortgage
Loans;
(vii) the portion of the proceeds relating to the Mortgage Loans received
by the Trust Fund following any termination of the 199_ - _ REMIC carried out in
accordance with a plan of complete liquidation pursuant to Section 8.2 hereof or
pursuant to the optional termination of either of the Trust Fund or the 199_ - _
REMIC by either the Master Servicer [or Certificate Insurer] in accordance with
Section 8.1 hereof, up to the then outstanding Class A-5 Principal Balance;
minus
(viii) any Overcollateralization Release Amount.
"CLASS R CERTIFICATE" shall mean any Certificate denominated as a Class R
Certificate and subordinate to the Class A Certificates in right of payment to
the extent set forth herein, which Certificate shall be in the form of Exhibit
B-6 hereto.
"CLASS R CERTIFICATEHOLDER" shall mean a Holder of a Class R Certificate.
"CLOSING DATE" shall mean __________, 199_.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLECTION ACCOUNT" shall mean the Eligible Account established and
maintained by the Master Servicer for the benefit of the Certificateholders [and
the Certificate Insurer] pursuant to Section 5.3(a) hereof.
"COMBINED LOAN-TO-VALUE RATIO" shall mean with respect to any Mortgage
Loan, (i) the sum of (x) the outstanding principal balance of any mortgage loan
senior to such Mortgage Loan and secured by the related Mortgaged Property as of
the date of origination of the related Mortgage Loan, plus (y) the Principal
Balance of the related Mortgage Loan as of the Cut-Off Date, divided by (ii) the
Appraised Value of such Mortgaged Property.
"COMMISSION" shall mean the Securities and Exchange Commission.
"COMPENSATING INTEREST" shall have the meaning defined in Section 6.9
hereof.
"CURTAILMENT" shall mean, with respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is neither
intended to satisfy the Mortgage Loan in full, intended as an advance payment of
an amount due in a subsequent Due Period, nor intended to cure a delinquency.
"CUSTODIAN" shall have the meaning defined in Section 2.2(c).
"CUT-OFF DATE" shall mean the close of business on __________, 199_.
"DEBT SERVICE REDUCTION" shall mean, with respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.
"DEFICIENT VALUATION" shall mean, with respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
"DELETED MORTGAGE LOAN" shall mean a Mortgage Loan replaced by a Qualified
Substitute Mortgage Loan or repurchased pursuant to Sections 2.4(c) or 3.3
hereof.
"DELINQUENT," a Mortgage Loan is "DELINQUENT" if any payment due thereon is
not made by the close of business on the day such payment is scheduled to be
due. A Mortgage Loan is "30 days delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
"DEPOSITOR" shall mean PaineWebber Mortgage Acceptance Corporation IV and
any successor thereto.
"DEPOSITORY" shall mean the Depository Trust Company, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and any successor Depository hereafter named.
"DETERMINATION DATE" shall mean the third Business Day prior to the
Remittance Date.
"DIRECT PARTICIPANT" shall mean any broker-dealer, bank or other financial
institution for which the Depository holds Class A Certificates from time to
time as a securities depositary.
"DISQUALIFIED ORGANIZATION" shall mean any of (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the FHLMC, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable income), or
cooperatives engaged in furnishing electric energy, or providing telephone
service, to persons in rural areas as described in Section 1381(a)(2)(C) of the
Code and (iv) any other Person so designated by the Trustee based upon an
Opinion of Counsel provided to the Trustee that the holding of an ownership
interest in a Class R Certificate by such Person may cause the 199_ - _ REMIC or
any Person having an ownership interest in any Class of Certificates (other than
such Person) to incur liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the transfer of an ownership interest in
the Class R Certificate to such Person. The terms "UNITED STATES", "STATE" and
"INTERNATIONAL ORGANIZATION" shall have the meanings set forth in Section 7701
of the Code.
"DUE DATE" shall mean, with respect to any Mortgage Loan, the day of the
month upon which payment is due from the related Mortgagor under the terms of
the related Mortgage Note.
"DUE PERIOD" shall mean, with respect to each Remittance Date, the period
beginning on the opening of business on the first day of the calendar month
preceding the calendar month in which such Remittance Date occurs, and ending at
the close of business on the last day of the calendar month preceding the
calendar month in which such Remittance Date occurs.
"ELIGIBLE ACCOUNT" shall mean either (i) a segregated trust account or
accounts maintained with a depositary institution which is acceptable to the
Certificate Insurer and to each Rating Agency, which institution shall be the
Bank of the West until notice to the contrary is given to the Master Servicer by
the Certificate Insurer and such trust account shall be held in (a) the
corporate trust account department of such depositary institution or (b) an
institution with capital and surplus of not less than $50,000,000, and a minimum
unsecured debt rating of ___ by ____ or ____ by __________; or (ii) an account
or accounts maintained with an institution acceptable to the Certificate Insurer
and whose deposits are insured by the FDIC, the unsecured and uncollateralized
debt obligations of which institution shall be rated ___ or better by ___ and
___ or better by _______ and the highest short-term rating by _______ and
_______, and which is (a) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (b) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (c) a national banking association duly
organized, validly existing and in good standing under the federal banking laws
institution (including the Trustee), (d) a principal subsidiary of a bank
holding company, or (e) approved in writing by [the Certificate Insurer,] _____
and _____, having capital and surplus of not less than $50,000,000, acting in
its fiduciary capacity.
"ERISA" shall have the meaning defined in Section 4.2(i)(x) hereof.
"EVENT OF DEFAULT" shall have the meaning described in Section 7.1.
"EXCESS SPREAD" shall mean the excess, if any, of the Available Amount over
the sum of the Class A-1 Interest Distribution Amount, the Class A-2 Interest
Distribution Amount, the Class A-3 Interest Distribution Amount, the Class A-4
Interest Distribution Amount, the Class A-5 Interest Distribution Amount and the
Base Principal Distribution Amount.
"FDIC" shall mean the Federal Deposit Insurance Corporation and any
successor thereto.
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation and any
successor thereto.
"FNMA" shall mean the Federal National Mortgage Association and any
successor thereto.
"FORECLOSURE PROFITS" shall mean, as to any Remittance Date, the excess, if
any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the month immediately preceding the
month of such Remittance Date over (ii) the sum of the unpaid principal balance
of each such Liquidated Mortgage Loan plus accrued and unpaid interest at the
applicable Mortgage Interest Rate on the unpaid principal balance thereof from
the Due Date to which interest was last paid by the Mortgagor (or, in the case
of a Liquidated Mortgage Loan that had been an REO Mortgage Loan, from the Due
Date to which interest was last deemed to have been paid pursuant to Section
5.12) to the first day of the month following the month in which such Mortgage
Loan became a Liquidated Mortgage Loan.
"HAZARDOUS MATERIALS" shall mean any dangerous, toxic or hazardous
pollutants, chemical wastes or substances, including, without limitation, those
identified pursuant to CERCLA or any other federal, state or local environmental
related laws now existing or hereafter enacted.
"HOLDER" shall mean each Person in whose name a Certificate is registered
in the Certificate Register, except that solely for the purposes of giving any
consent (except any consent required to be obtained pursuant to Section 10.2),
waiver, request or demand pursuant to this Agreement, any Certificate registered
in the name of the Master Servicer or any Subservicer or the Transferor, or any
Affiliate of any of them, shall be deemed not to be outstanding and in the case
of any Certificate, the undivided interest in the Trust Fund evidenced thereby
shall not be taken into account in determining whether the requisite percentage
of Certificates necessary to effect any such consent, waiver, request or demand
has been obtained.
"INDIRECT PARTICIPANT" shall mean any financial institution for who many
Direct Participant holds an interest in a Class A Certificate.
"INSURANCE AGREEMENT" shall mean that certain agreement between [the
Certificate Insurer], the Depositor, the Transferor, the Master Servicer,
____________________, as Originator and the Trustee dated as of ___________,
199_.
"INSURANCE PROCEEDS" shall mean proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan to the extent such proceeds are
not applied to the restoration of the related Mortgaged Property or released
to the related Mortgagor in accordance with Accepted Servicing Practices.
"INSURANCE PROCEEDS" do not include "INSURED PAYMENTS."
["INSURED PAYMENT" shall have the meaning assigned thereto in the
Certificate Insurance Policy.]
"INTEREST COLLECTIONS" shall mean all amounts (including, without
limitation, Monthly Payments (or Periodic Advances in respect thereof) and
Liquidation Proceeds) collected on any Mortgage Loan allocable to interest
pursuant to the terms of the related Mortgage Note, or if no provision for
allocation is made therein, pursuant to the terms hereof.
"INTEREST DETERMINATION DATE" shall mean, with respect to any Accrual
Period applicable to the Class A-1 Certificates, the second LIBOR Business Day
preceding the first day of such Accrual Period.
"INTEREST DISTRIBUTION AMOUNT" shall mean for any Remittance Date, the sum
of the Class A-1 Interest Distribution Amount, the Class A-2 Interest
Distribution Amount, the Class A-3 Interest Distribution Amount and the Class
A-4 Interest Distribution Amount.
"LATE PAYMENT RATE" shall have the meaning assigned thereto in the
Certificate Insurance Agreement.
"LIBOR" shall mean, for any Interest Period other than the first Interest
Period, the rate for United States dollar deposits for one month that appears on
the Telerate Screen Page 3750 as of 11:00 a.m., London, England time, on the
second LIBOR Business Day prior to the first day of such Interest Period. With
respect to the first Interest Period, "LIBOR" shall mean the rate for United
States dollar deposits for one month that appears on the Telerate Screen Page
3750 as of 11:00 a.m., London, England time, two LIBOR Business Days prior to
the Closing Date. If such rate does not appear on such page (or such other page
as may replace such page on such service, or if such service is no longer
offered, such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Trustee after consultation with the Master Servicer),
the rate will be the Reference Bank Rate. If no such quotations can be obtained
and no Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Remittance Date.
The establishment of LIBOR on each Interest Determination Date by the
Trustee and the Trustee's calculation of the rate of interest applicable to the
Class A-1 Certificates for the related Accrual Period shall (in the absence of
manifest error) be final and binding. Each such rate of interest may be obtained
by telephoning the Trustee.
"LIBOR BUSINESS DAY" shall mean any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the city of London,
England are required or authorized by law to be closed.
"LIEN" means any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), claim, charge, preference, priority, right, interest or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financial statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing.
"LIQUIDATED LOAN LOSS" shall mean, with respect to any Remittance Date, the
aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan in the Due Period prior to such Remittance
Date, equal to the excess of (i) the unpaid principal balance of each such
Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Mortgage
Interest Rate from the Due Date as to which interest was last paid with respect
thereto through the last day of the month in which such Mortgage Loan became a
Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to
such Liquidated Mortgage Loan.
"LIQUIDATED MORTGAGE LOAN" shall mean a Mortgage Loan (i) with respect to
which the related Mortgaged Property has been acquired, liquidated and/or
foreclosed upon by the Master Servicer or (ii) which the Master Servicer has
elected to write down the outstanding Principal Balance of such Mortgage Loan
that has been delinquent for a period equal to or greater than 270 days to zero
and, in either case, with respect to which the Master Servicer determines that
all Liquidation Proceeds which it expects to recover have been recovered.
"LIQUIDATION EXPENSES" shall mean expenses incurred by the Master Servicer
in connection with the liquidation of any defaulted Mortgage Loan, REO Mortgage
Loan or REO Property (including, without limitation, legal fees and expenses,
committee or referee fees, and, if applicable, brokerage commissions and
conveyance taxes), any unreimbursed amount expended by the Master Servicer
pursuant to Sections 5.5, 5.6 and 5.12 respecting the related Mortgage Loan and
any unreimbursed expenditures for real property taxes or for property
restoration or preservation of the related Mortgaged Property. Liquidation
Expenses shall not include any previously incurred expenses in respect of an REO
Mortgage Loan which have been netted against related REO Proceeds.
"LIQUIDATION PROCEEDS" shall mean amounts received (or, in the case of
Liquidated Mortgage Loans written-down by the Master Servicer, amounts
deposited) by the Master Servicer (including Insurance Proceeds) in connection
with the liquidation of defaulted or written-down Mortgage Loans or property
acquired in respect thereof, whether through foreclosure, sale or otherwise,
including payments in connection with such Mortgage Loans received from the
Mortgagor, other than amounts required to be paid to the Mortgagor pursuant to
the terms of the applicable Mortgage or to be applied otherwise pursuant to law.
"LOAN REPURCHASE PRICE" shall have the meaning defined in Section 2.4(c).
"MAJORITY CERTIFICATEHOLDERS" shall mean the Holder or Holders of Class A
Certificates evidencing an undivided beneficial ownership interest in the Class
A Certificates in excess of 50% in the aggregate.
"MASTER SERVICER" shall mean ___________________, an ___________________,
or any successor appointed as herein provided.
"MASTER SERVICER ACCOUNT" shall mean the account created and maintained
pursuant to Section 5.7.
"MASTER SERVICER EMPLOYEES" shall have the meaning as defined in Section
5.8 hereof.
"MASTER SERVICER REMITTANCE AMOUNT" shall mean, with respect to any
Determination Date, an amount equal to the sum of (i) all unscheduled
collections of principal and interest on the Mortgage Loans (including Principal
Prepayments and any prepayment penalties received in connection with such
Principal Prepayments or Curtailments, Net REO Proceeds and Net Liquidation
Proceeds, if any, and any amounts deposited in the Collection Account or
Certificate Account in connection with are purchase of the Mortgage Loans)
collected by the Master Servicer during the Due Period and all scheduled Monthly
Payments due on the Mortgage Loans on the Due Date and received by the Master
Servicer on or prior to the _____ Business Day preceding the related
Determination Date, plus (ii) all Periodic Advances made by the Master Servicer
with respect to payments due to be received on the Mortgage Loans on the related
Due Date plus (iii) the amount of Compensating Interest due with respect to
Mortgage Loans with respect to the related Due Period, plus (iv) any other
amounts required to be placed in the Collection Account with respect to Mortgage
Loans by the Master Servicer pursuant to this Pooling and Servicing Agreement
but excluding, without duplication, the following:
(a) amounts received on a particular Mortgage as late payments of principal
or interest and respecting which the Master Servicer has previously made an
unreimbursed Periodic Advance;
(b) the portion of Liquidation Proceeds used to reimburse any unreimbursed
Periodic Advances by the Master Servicer;
(c) those portions of each payment of interest on a particular Mortgage
Loan which represent the Servicing Fee;
(d) that portion of Liquidation Proceeds and REO Proceeds which represents
any unpaid Servicing Fee;
(e) all income from Permitted Investments that is held in the Collection
Account for the account of the Master Servicer;
(f) all amounts in respect of late fees, assumption fees, fees associated
with prepayments other than prepayment penalties, demand statement fees,
reconveyance and recording fees and other service related fees;
(g) all other amounts which are explicitly reimbursable to the Master
Servicer hereunder with respect to the Mortgage Loans, including (1) as provided
in Section 5.4 hereof; and (2) any unreimbursed and accrued Liquidation
Expenses; and
(h) the portion of Net Foreclosure Profits representing any unpaid
Servicing Fee.
"MASTER SERVICER TERMINATION DELINQUENCY RATE TRIGGER" shall have the
meaning assigned thereto in the Insurance Agreement.
"MASTER SERVICER TERMINATION LOSS TRIGGER" shall have the meaning
assigned thereto in the [Insurance Agreement.]
"MATURITY DATE" shall mean the latest possible maturity date as defined in
Section 1.860G-1(a)(4)(iii) of the proposed Treasury regulations, by which the
Certificates representing a regular interest in the 199_ - _ REMIC would be
reduced to zero as determined under a hypothetical scenario that assumes, among
other things, that (i) scheduled interest and principal payments on the Mortgage
Loans are received in a timely manner, with no delinquencies or losses, (ii)
there are no principal prepayments on the Mortgage Loans, (iii) the Transferor
and the Master Servicer will not repurchase any Mortgage Loan and neither the
Transferor, the Master Servicer [nor the Certificate Insurer] will exercise its
option to purchase the Mortgage Loans and thereby cause a termination of the
199_ - _ REMIC, and (iv) certain of the Mortgage Loans have an original term to
maturity of up to 360 months and, on a latest maturing loan basis, a remaining
term to maturity of up to 360 months.
"MONTHLY PAYMENT" shall mean, as to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the scheduled payment of principal and interest
due thereon by such Due Date (after adjustment for any Curtailments and
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than Deficient
Valuations or similar proceeding or any moratorium or similar waiver or grace
period).
"MORTGAGE" shall mean the mortgage, deed of trust or other instrument
creating a lien on the Mortgaged Property to secure the Mortgage Loan.
"MORTGAGE DOCUMENTS" shall mean the documents described in Section 2.3
hereof or on Exhibit C required to be contained in a Mortgage File.
"MORTGAGE FILE" shall include the Mortgage Loan documents described in
Section 2.3 hereof and such documents as are applicable from those listed on
Exhibit C attached hereto.
"MORTGAGE INTEREST RATE" shall mean, as to any Mortgage Loan, the per annum
rate at which interest accrues on the unpaid principal balance thereof as set
forth in the related Mortgage Note.
"MORTGAGE LOAN" shall mean (i) each fixed rate, closed end mortgage loan
identified on the Mortgage Loan Schedule on the Closing Date secured by alien on
the related Mortgaged Property, (ii) any additional fixed rate, closed end
mortgage loans identified on the Mortgage Loan Schedule after the Closing Date,
as such schedule is amended and supplemented from time to time to reflect the
deletion of the Deleted Mortgage Loans and the substitution of Qualified
Substitute Mortgage Loans for Deleted Mortgage Loans, (iii) each Mortgage Note
evidencing any loan referred to in (i) or (ii) above, including all amounts now
or hereafter due under such Mortgage Notes, whether relating to such loans or
other loans which may be made from time to time, and (iv) the related Mortgage.
Unless otherwise clearly indicated by the context, Mortgage Loan shall be deemed
to refer to the related REO Mortgage Loan and REO Property.
"MORTGAGE LOAN INTEREST SHORTFALL" shall mean, with respect to any
Remittance Date, as to any Mortgage Loan, any Prepayment Interest Shortfall
for which no payment of Compensating Interest is paid.
"MORTGAGE LOAN SALE AGREEMENT" shall mean the Mortgage Loan Sale Agreement
dated as of __________, 199_, between ____________________, as seller
thereunder, and ____________________, as purchaser thereunder, as such agreement
may be amended, modified or supplemented from time to time.
"MORTGAGE LOAN SCHEDULE" shall mean the list of the Mortgage Loans
transferred to the Trustee on the Closing Date as part of the Trust Fund and
attached hereto as Exhibit D (and also provided to the Certificate Insurer and
the Trustee on a computer readable magnetic tape or disk). The Mortgage Loan
Schedule shall set forth at a minimum the following information as to each
Mortgage Loan:
(a) the Mortgage Loan identifying number;
(b) the Principal Balance of the Mortgage Loan;
(c) the city, state and ZIP code of the Mortgaged Property;
(d) the type of property;
(e) the current Monthly Payment as of the Cut-Off Date;
(f) the original number of months to maturity;
(g) the scheduled maturity date;
(h) the Combined Loan-to-Value Ratio as of the Cut-Off Date;
(i) the Mortgage Interest Rate as of the Cut-Off Date;
(j) the Appraised Value;
(k) the documentation type (as described in the Underwriting
Guidelines); and
(l) the loan classification (as described in the Underwriting
Guidelines).
Such "MORTGAGE LOAN SCHEDULE" may consist of multiple reports that collectively
set forth all of the information required, including the aggregate number of
Mortgage Loans and the Aggregate Principal Balance as of the Cut-Off Date. In
addition, a summary of the information regarding the Mortgage Loans shall be
included as a part of the Mortgage Loan Schedule which summary shall include
such consolidated and aggregated information as may be requested by the Trustee
[or the Certificate Insurer] from time to time.
"MORTGAGE NOTE" shall mean the original, executed note, loan agreement or
other evidence of indebtedness evidencing the indebtedness of a Mortgagor under
a Mortgage Loan.
"MORTGAGED PROPERTY" shall mean the underlying property securing a Mortgage
Loan, consisting of a fee simple estate in a single parcel of land improved by a
Residential Dwelling.
"MORTGAGED PROPERTY STATE" shall mean any state in which any Mortgaged
Property is located.
"MORTGAGOR" shall mean the obligor on a Mortgage Note.
"NET FORECLOSURE PROFITS" shall mean, as to any Remittance Date, the
excess, if any, of (i) the aggregate Foreclosure Profits for such Remittance
Date, over (ii) the Liquidated Loan Loss for such Remittance Date.
"NET LIQUIDATION PROCEEDS" shall mean, as to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed
Periodic Advances made by the Master Servicer. For all purposes of this
Agreement, Net Liquidation Proceeds shall be allocated first to accrued and
unpaid interest on the related Mortgage Loan and then to the unpaid principal
balance thereof.
"NET REO PROCEEDS" shall mean, as to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Master Servicer.
"199_ - _REMIC" shall mean the segregated pool of assets in the Trust Fund,
consisting of: (i) the Mortgage Loans which are from time to time subject to
this Agreement, together with the Mortgage Files relating thereto and all
collections thereon and proceeds thereof, (ii) such assets as from time to time
are identified as REO Property of the 199_ - _ REMIC and collections thereon and
proceeds thereof, (iii) assets deposited in the Certificate Account including
any such amounts on deposit in the Certificate Account invested in Permitted
Investments, (iv) the Trustee's rights with respect to the Mortgage Loans under
all insurance policies [(other than the Certificate Insurance Policy)] required
to be maintained pursuant to this Agreement and any Insurance Proceeds, (v)
Liquidation Proceeds, and (vi) Released Mortgaged Property Proceeds.
"NONRECOVERABLE ADVANCE" shall mean, with respect to any Mortgage Loan, (i)
any Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 5.4(b), or (ii) a Periodic Advance proposed to be made in
respect of a Mortgage Loan or REO Property either of which, in the good faith
business judgment of the Master Servicer, as evidenced by an Officer's
Certificate delivered to [the Certificate Insurer and] the Trustee no later than
the Business Day following such determination, would not be ultimately
recoverable pursuant to Section 5.4.
"NON-UNITED STATES PERSON" shall mean any Person other than a United
States Person.
"OFFICER'S CERTIFICATE" shall mean a certificate signed by the Chairman of
the Board, the President or a Vice President and the Treasurer, the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Transferor
and/or the Master Servicer, or the Depositor, as required by this Agreement.
"OPINION OF COUNSEL" shall mean a written opinion of counsel, who may,
without limitation, be counsel for the Transferor, the Master Servicer, the
Trustee, a Certificateholder or a Certificateholder's prospective transferee [or
the Certificate Insurer] (including, except as otherwise provided herein,
in-house counsel) reasonably acceptable to each addressee of such opinion and
experienced in matters relating to the subject of such opinion; except that any
opinion of counsel relating to (i) the qualification of the 199_ - _ REMIC as a
REMIC, or (ii) compliance with the REMIC Provisions must bean opinion of counsel
who (a) is in fact independent of the Transferor, the Master Servicer and the
Trustee, (b) does not have any direct financial interest or any material
indirect financial interest in the Transferor or the Master Servicer or the
Trustee or in an Affiliate thereof, (c) is not connected with the Transferor or
the Master Servicer or the Trustee as an officer, employee, director or person
performing similar functions, [and (d) is reasonably acceptable to the
Certificate Insurer.] [The Certificate Insurer shall be an addressee on each
Opinion of Counsel relating to, or otherwise affecting, the Series 199_ - _
Certificates].
"OPTIONAL TERMINATION DATE" shall mean the first date upon which the
Aggregate Principal Balance is less than __% of the Aggregate Principal Balance
as of the Cut-Off Date.
"ORIGINAL CLASS A-1 PRINCIPAL BALANCE" shall mean, as of the Startup Date
and as to the Class A-1 Certificates, $__________.
"ORIGINAL CLASS A-2 PRINCIPAL BALANCE" shall mean, as of the Startup Date
and as to the Class A-2 Certificates, $__________.
"ORIGINAL CLASS A-3 PRINCIPAL BALANCE" shall mean, as of the Startup Date
and as to the Class A-3 Certificates, $__________.
"ORIGINAL CLASS A-4 PRINCIPAL BALANCE" shall mean, as of the Startup Date
and as to the Class A-4 Certificates, $__________.
"ORIGINAL CLASS A-5 PRINCIPAL BALANCE" shall mean, as of the Startup Date
and as to the Class A-1 Certificates, $__________.
"ORIGINATOR" shall mean _____________________, a __________________.
"OUTSTANDING MORTGAGE LOAN" shall mean, as to any Due Date, a Mortgage Loan
(including an REO Mortgage Loan) which has not been paid in full prior to such
Due Date, which did not become a Liquidated Mortgage Loan prior to such Due Date
and which was not repurchased by the Transferor prior to such Due Date pursuant
to Sections 2.4 or 3.3.
"OVERCOLLATERALIZATION AMOUNT" shall mean, with respect to any Remittance
Date, the excess, if any, of (i) the aggregate Principal Balance of all Mortgage
Loans as of the close of business on the last day of the related Due Period over
(ii) (a) the sum of the Class A-1 Principal Balance, Class A-2 Principal
Balance, Class A-3 Principal Balance, Class A-4 Principal Balance and the Class
A-5 Principal Balance as of such Remittance Date (after taking into account
Class A-5 Principal Distribution Amount, other than the Overcollateralization
Increase Amount, for such Remittance Date).
["OVERCOLLATERALIZATION DEFICIENCY AMOUNT" shall mean, with respect to any
date of determination, the excess, if any, of the Overcollateralization Target
Amount over the Overcollateralization Amount.
"OVERCOLLATERALIZATION INCREASE AMOUNT" shall mean the lesser of (i) the
related Excess Spread and (ii) the related Overcollateralization Deficiency
Amount.
"OVERCOLLATERALIZATION TARGET AMOUNT" shall have the meaning assigned
thereto in the Insurance Agreement.
Notwithstanding the above, the Certificate Insurer may, in its sole
discretion, modify the definition of Overcollateralization Target Amount. The
Trustee and the Rating Agencies shall be notified in writing of such
modification prior to the related Remittance Date and any such modification
shall not result in a downgrading of the then-current ratings of any Class A
Certificate without regard to the Certificate Insurance Policy.]
"OWNER-OCCUPIED MORTGAGED PROPERTY" shall mean a Residential Dwelling as to
which (i) the related Mortgagor represented an intent to occupy as such
Mortgagor's primary, secondary or vacation residence at the origination of the
Mortgage Loan, and (ii) the Transferor has no actual knowledge that such
Residential Dwelling is not so occupied.
"OWNERSHIP INTEREST" shall mean, as to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"PERCENTAGE INTEREST" shall mean, with respect to a Class A-1 Certificate,
Class A-2 Certificate, Class A-3 Certificate, Class A-4 Certificate or Class A-5
Certificate, the portion of the total beneficial ownership interest in the
Mortgage Loans evidenced by such Certificate, expressed as a percentage rounded
to four decimal places, equal to a fraction the numerator of which is the
original denomination of such Certificate and the denominator of which is the
Original Class A-1 Principal Balance, the Original Class A-2 Principal Balance,
the Original Class A-3 Principal Balance or the Original Class A-4 Principal
Balance as applicable. With respect to a Class R Certificate, the portion
evidenced thereby as stated on the face of such Certificate.
"PERIODIC ADVANCE" shall mean the aggregate of the advances required to be
made by the Master Servicer on any Determination Date pursuant to Section 5.20
hereof, the amount of any such advances being equal to the sum of: (i) all
Monthly Payments (net of the related Servicing Fee and any amount excluded from
the Master Servicer Remittance Amount pursuant to clauses (a) -(h) of the
definition of "Master Servicer Remittance Amount") on the Mortgage Loans that
are not received by the Master Servicer as of the close of business on the
second Business Day preceding the related Determination Date and have not been
determined by the Master Servicer to be Nonrecoverable Advances, plus (ii) with
respect to each REO Property which was acquired during or prior to the related
Due Period and as to which an REO Disposition did not occur during the related
Due Period, an amount equal to the excess, if any, of (a) interest on the
Principal Balance of the related REO Mortgage Loan at the related Mortgage
Interest Rate, net of the Servicing Fee, for the most recently ended Due Period
for the related Mortgage Loan over (b) the net income from the REO Property
transferred to the Certificate Account for such Remittance Date.
"PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with respect to the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the
Class A-4 Certificates, for any Remittance Date, the lesser of:
(a) the excess of (1) the sum of the Available Amount, any Excess Spread
and the applicable portion of any Insured Payment over (2) the Interest
Distribution Amount; and
(b) the sum, without duplication, of:
(i) that portion of all scheduled installments of principal in respect of
the Mortgage Loans which is received (or advanced) during the related Due Period
together with all unscheduled recoveries of principal (including Principal
Prepayments, Curtailments and Deficient Valuations) on such Mortgage Loans
actually collected by the Master Servicer during the prior calendar month,
(ii) the Principal Balance of each Mortgage Loan that either was, effective
on such Remittance Date, repurchased by the Transferor or by the Depositor or
purchased by the Master Servicer during the preceding Due Period, but only to
the extent the amount equal to such Principal Balance is actually received by
the Trustee,
(iii) any Substitution Adjustment amounts delivered by the Depositor on the
related Remittance Date in connection with a substitution of a Mortgage Loan, to
the extent such Substitution Adjustments are actually received by the Trustee,
(iv) with respect to each Mortgage Loan that became a Liquidated Mortgage
Loan during the prior calendar month, the Principal Balance of such Mortgage
Loan immediately prior to the time when such Mortgage Loan became a Liquidated
Mortgage Loan,
(v) any Overcollateralization Increase Amount,
(vi) to the extent of any Subordination Deficit the excess, if any of the
sum of the Class A-1 Principal Balance, Class A-2 Principal Balance, Class A-3
Principal Balance, Class A-4 Principal Balance and Class A-5 Principal Balance
over the aggregate Principal Balance of the Mortgage Loans,
(vii) the portion of the proceeds relating to the Mortgage Loans received
by the Trust Fund following any termination of the 199_ - _ REMIC carried out in
accordance with a plan of complete liquidation pursuant to Section 8.2 hereof or
pursuant to the optional termination of any of the Trust Fund, the 199_ - _
REMIC Trust Fund by either the Master Servicer [or Certificate Insurer] in
accordance with Section 8.1 hereof, up to the then outstanding Class A-1
Principal Balance, Class A-2 Principal Balance, Class A-3 Principal Balance
and/or Class A-4 Principal Balance, as applicable minus
(viii) any Overcollateralization Release Amount.
"PRINCIPAL PREPAYMENT" shall mean any payment or other recovery of
principal on a Mortgage Loan equal to the outstanding Principal Balance thereof,
received in advance of the final scheduled Due Date which is not intended as an
advance payment of a Scheduled Monthly Payment.
"PROPORTIONAL SHARE" shall mean, (a) the sum of the Class A-1 Principal
Balance, Class A-2 Principal Balance, Class A-3 Principal Balance, Class A-4
Principal Balance and the Class A-5 Principal Balance divided by (b) the
Certificate Principal Balance.
"PROSPECTUS SUPPLEMENT" shall mean the Prospectus Supplement dated
__________, 199_, as amended and supplemented, relating to the Class A
Certificates and filed with the Commission in connection with the Registration
Statement heretofore filed or to be filed with the Commission pursuant to Rule
424(b)(2) or 424(b)(5).
"PURCHASE AND SALE AGREEMENT" shall mean the Purchase and Sale Agreement,
dated as of the date hereof, between the Transferor and the Depositor and
relating to the sale of the Mortgage Loans to the Depositor.
"QUALIFIED APPRAISER" shall mean an appraiser, duly appointed by the Master
Servicer, who had no interest, direct or indirect, in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not affected
by the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
"QUALIFIED MORTGAGE" shall have the meaning set forth from time to time in
the definition of "Qualified Mortgage" at Section 860G(a)(3) of the Code (or any
successor statute thereto).
"QUALIFIED SUBSTITUTE MORTGAGE LOAN" shall mean a mortgage loan or mortgage
loans which (i) has an interest rate at least equal to the Deleted Mortgage Loan
for which it is to be substituted (ii) relates or relate to a detached
one-family residence or to the same type of Residential Dwelling as the Deleted
Mortgage Loan for which it is to be substituted and in each case has or have the
same occupancy status or is an Owner-Occupied Mortgaged Property, (iii) matures
or mature no later than (and not more than one year earlier than) the Deleted
Mortgage Loan for which it is to be substituted, (iv) has or have a Combined
Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such
substitution no higher than the Combined Loan-to-Value Ratio of the Deleted
Mortgage Loan for which it is to be substituted, (v) has or have a principal
balance or principal balances (after application of all payments received on or
prior to the date of substitution) not substantially less and not more than the
Principal Balance of the Deleted Mortgage Loan for which it is to be substituted
as of such date, (vi) satisfies or satisfy the criteria set forth from time to
time in the definition of "qualified replacement mortgage" at Section 860G(a)(4)
of the Code (or any successor statute thereto), (vii) has or have an applicable
borrower or borrowers with the same or better traditionally ranked credit status
as the borrower or borrowers under the Deleted Mortgage Loan for which it is to
be substituted, and (viii) complies or comply as of the date of substitution
with each representation and warranty set forth in Sections 3.1 and 3.2 of the
Purchase and Sale Agreement.
"RATING AGENCY" shall mean _______ or _______.
"RECORD DATE" shall mean, with respect to any Remittance Date other than
the initial Remittance Date, the close of business on the ____ day of the
calendar month immediately preceding the month in which such Remittance Date
occurs and with respect to the initial Remittance Date, the Closing Date.
"REFERENCE BANK RATE" shall mean, with respect to any Interest Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest one
sixteenth of one percent) of the offered rates for United States dollar deposits
for one month which are offered by the Reference Banks as of 11:00 a.m., London,
England time, on the second LIBOR Business Day prior to the first day of such
Interest Period to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the then outstanding Certificate
Principal Balance; provided, that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean of the rates quoted by one or more major banks in New York
City, selected by the Trustee after consultation with the Master Servicer, as of
11:00 a.m., New York time, on such date for loans in U.S. Dollars to leading
European Banks for a period of one month in amounts approximately equal to the
then outstanding Certificate Principal Balance. If no such quotations can be
obtained, the Reference Bank Rate will be the Reference Bank Rate applicable to
the preceding Interest Period.
"REFERENCE BANKS" shall mean Bankers Trust Company, ▇▇▇▇▇▇▇'▇ Bank PLC, The
Bank of Tokyo and National Westminster Bank PLC; PROVIDED that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Trustee which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, (ii) not controlling, under the control of or under
common control with the Depositor or any affiliate thereof, (iii) whose
quotations appear on the Reuters Screen LIBO Page on the relevant Interest
Determination Date and (iv) which have been designated as such by the Trustee
after consultation with the Master Servicer.
["REIMBURSEMENT AMOUNT" shall mean, as of any Remittance Date, the sum of
(i) all Insured Payments previously paid by the Certificate Insurer and in each
case not previously repaid to the Certificate Insurer pursuant to Section
6.5(a)(vii) or 6.5(b)(vii) hereof plus (ii) interest accrued on such Insured
Payments not previously repaid calculated at the Late Payment Rate from the date
such Insured Payment was paid, plus (iii) any amounts then due and owing to the
Certificate Insurer under the Certificate Insurance Agreement, as certified to
the Trustee by the Certificate Insurer, plus (iv) interest on such amounts at
the Late Payment Rate. The Certificate Insurer shall notify the Trustee and the
Depositor of the amount of any Reimbursement Amount.]
"RELEASED MORTGAGED PROPERTY PROCEEDS" shall mean, as to any Mortgage Loan,
proceeds received by the Master Servicer in connection with (i) a taking of an
entire Mortgaged Property by exercise of the power of eminent domain or
condemnation or (ii) any release of part of the Mortgaged Property from the lien
of the related Mortgage, whether by partial condemnation, sale or otherwise;
which are not released to the Mortgagor in accordance with applicable law,
Accepted Servicing Practices and this Agreement.
"REMIC" shall mean a "real estate mortgage investment conduit "within the
meaning of Section 860D of the Code.
"REMIC CHANGE OF LAW" shall mean any proposed, temporary or final
regulation, revenue ruling, revenue procedure or other official announcement or
interpretation relating to the REMIC and the REMIC Provisions issued after the
Closing Date.
"REMIC PROVISIONS" shall mean 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 I of the Code, and related
provisions, and temporary and final regulations promulgated thereunder and
published rulings, notices and announcements, as the foregoing may be in effect
from time to time.
"REMITTANCE DATE" shall mean the ____ day of any month or if such ____ day
is not a Business Day, the first Business Day immediately following, commencing
on ________, 199_
"REO DISPOSITION" shall mean the final sale by the Master Servicer of a
Mortgaged Property acquired by the Master Servicer in foreclosure or by deed in
lieu of foreclosure.
"REO MORTGAGE LOAN" shall mean any Mortgage Loan that is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage
Note is discharged and the related Mortgaged Property is held as part of the
Trust Fund.
"REO PROCEEDS" shall mean proceeds received in respect of any REO Mortgage
Loan (including, without limitation, proceeds from the rental of the related
Mortgaged Property).
"REO PROPERTY" shall have the meaning described in Section 5.12.
"REPRESENTATION LETTER" shall mean letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Class A
Certificates registered in the Certificate Register under the nominee name of
the Depository.
"REQUEST FOR RELEASE" shall mean a request for release in substantially the
form attached as Exhibit H hereto.
"RESERVE INTEREST RATE" shall mean, with respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 0.0625%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.
"RESIDENTIAL DWELLING" shall mean a one- to four-family dwelling, a unit in
a planned unit development, a unit in a condominium development, a townhouse or
a manufactured housing unit.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the Trustee,
any officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Senior Trust Officer, Trust Officer, Assistant
Trust Officer, 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 and 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. When used with respect to the
Transferor or the Master Servicer, the President or any Vice President,
Assistant Vice President, or any Secretary or Assistant Secretary.
"SERIES" shall mean any designated Series of certificates issued hereunder
and governed by this Agreement. When used herein, "this Series" shall refer to
the _______ Home Equity Asset Backed Certificates, Series 199_ - _.
"SERVICING ADVANCES" shall mean all reasonable and customary
"out-of-pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations, including, but not limited to, the cost
of (i) the preservation, restoration and protection of the Mortgaged Property,
(ii) any enforcement proceedings, including foreclosures, (iii) expenditures
relating to the purchase or maintenance of a first or second lien not included
in the Trust Fund on the Mortgaged Property, (iv) the management and liquidation
of the REO Property, including reasonable fees paid to any independent
contractor in connection therewith, (v) compliance with the obligations
(including indemnification obligations) under Sections 5.2 (limited solely to
the reasonable and customary out-of-pocket expenses of the Subservicer), 5.5,
5.6 or 5.9, all of which reasonable and customary out-of-pocket costs and
expenses are reimbursable to the Master Servicer to the extent provided in
Section 5.4(a).
"SERVICING COMPENSATION" shall mean the Servicing Fee and other amounts to
which the Master Servicer is entitled pursuant to Section 5.14.
"SERVICING FEE" shall mean, as to each Mortgage Loan, the annual fee
payable to the Master Servicer, which is calculated as an amount equal to the
product of (i) 0.50% per annum in the case of any Mortgage Loan that is first
priority Mortgage Loan as of the Cut-Off Date and ____% in the case of any other
Mortgage Loan, or up to ____% or ____% respectively in the event that
____________________ is succeeded by the Trustee or any other successor Master
Servicer appointed as herein provided, and (ii) the Principal Balance thereof.
Such fee shall be calculated and payable monthly only on amounts actually
received in respect of interest on such Mortgage Loan and shall be computed on
the basis of the same principal amount and for the period respecting which any
related interest payment on a Mortgage Loan is computed. The Servicing Fee
includes any servicing fees owed or payable to any Subservicer.
"SERVICING OFFICER" shall mean any officer of the Master Servicer or the
Originator involved in, or responsible for, the administration and servicing of
the Mortgage Loans whose name and specimen signature appear on a list of
servicing officers furnished to the Trustee [and the Certificate Insurer] by the
Master Servicer, as such list may from time to time be amended.
"STARTUP DATE" shall mean the day designated as such pursuant to Section
2.5 hereof.
"SUBORDINATION DEFICIT" shall mean, with respect to any Remittance Date,
the excess, if any, of (i) the aggregate of the Certificate Principal Balance on
such Remittance Date, after taking into account the payment of the Principal
Distribution Amount on such Remittance Date [(except for amounts payable under
the Certificate Insurance Policy)] over (ii) the Aggregate Principal Balance as
of the end of the related Due Period.
"SUBSERVICER" shall mean any Person with whom the Master Servicer has
entered into a Subservicing Agreement and who satisfies the requirements set
forth in Section 5.2(a) hereof in respect of the qualification of a Subservicer.
"SUBSERVICING AGREEMENT" shall mean any agreement between the Master
Servicer and any Subservicer relating to subservicing and/or administration of
certain Mortgage Loans as provided in Section 5.2(b), a copy of which shall be
delivered, along with any modifications thereto, to the Trustee and the
Certificate Insurer.
"SUBSTITUTION ADJUSTMENT" shall mean, as to any date on which a
substitution occurs pursuant to Section 2.4 or 3.3, the amount (if any) by which
the aggregate principal balances (after application of principal payments
received on or before the date of substitution of any Qualified Substitute
Mortgage Loans as of the date of substitution) are less than the aggregate of
the Principal Balances of the related Deleted Mortgage Loans together with 30
days' interest thereon at the Mortgage Interest Rate.
"TAX MATTERS PERSON" shall mean the Person or Persons appointed pursuant to
Section 10.15 from time to time to act as the "tax matters person" (within the
meaning of the REMIC Provisions) of the 199_ - _ REMIC.
"TAX RETURN" shall mean the federal income tax return on Internal Revenue
Service Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income Tax
Return," including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provision of federal, state or local tax laws.
"TELERATE PAGE 3750" shall mean the display page so designated on the
Bridge Telerate Service (or such other page as may replace page 3750 on such
service for the purpose of displaying London interbank offered rates of major
banks). If such rate does not appear on such page (or such other page as may
replace such page on such service, or if such service is no longer offered, such
other service for displaying LIBOR or comparable rates as may be selected by the
Issuer after consultation with the Trustee), the rate will be the Reference Bank
Rate.
"TRANSFER" shall mean any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"TRANSFER AFFIDAVIT AND AGREEMENT" shall have the meaning as defined in
Section 4.2(i)(ii).
"TRANSFEREE" shall mean any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TRANSFEROR" shall mean ____________________, a Delaware corporation.
"TRUST" shall mean _______ Home Equity Trust 199_ - _, the trust created
hereunder.
"TRUST FUND" shall mean (i) each Mortgage transferred to the Trust pursuant
to the provisions hereof, (ii) all rights of or assigned to the Depositor under
the Purchase and Sale Agreement (and exclusive of any of its obligations), (iii)
such assets as from time to time are identified as REO Property and collections
thereon and proceeds thereof, (iv) all assets deposited in the Accounts,
including any amounts on deposit in the Collection Account, the Trustee
Collection Account, and the Certificate Account and all amounts in the Accounts
invested in Permitted Investments, (v) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies (other than the Certificate
Insurance Policy) required to be maintained pursuant to this Agreement and any
Insurance Proceeds, (vi) all Liquidation Proceeds and (vii) all Released
Mortgaged Property Proceeds and (viii) all rights against the Transferor arising
under the Purchase and Sale Agreement.
"TRUSTEE" shall mean _____________________, or its successor in interest,
or any successor trustee appointed as herein provided.
"TRUSTEE COLLECTION ACCOUNT" shall mean any Eligible Account established
and maintained by the Trustee for the benefit of the Certificateholders pursuant
to Section 5.3(a) hereof.
"TRUSTEE FEE" shall mean, as to any Remittance Date, the fee payable to the
Trustee in respect of its services as Trustee that accrues at a monthly rate
equal to 1/12 of _____% of the Certificate Principal Balance as of such
Remittance Date together with its out-of-pocket expenses, 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 to correct any errors or insufficiencies
in the servicing data or otherwise enable the Trustee to service the Mortgage
Loans properly and effectively.
"TRUSTEE'S MORTGAGE FILE" shall mean the documents delivered to the Trustee
or its designated agent pursuant to Section 2.3.
"TRUSTEE'S REMITTANCE REPORT" shall have the meaning as defined in
Section 6.7.
"UNDERWRITER" shall mean PaineWebber Incorporated and ____________________.
"UNDERWRITING GUIDELINES" shall mean the underwriting guidelines of the
Transferor, ____________________ and of the Originator, a copy of which is
attached as an exhibit to the Purchase and Sale Agreement.
"UNITED STATES PERSON" shall mean a beneficial owner of a Certificate that
is for United States federal income tax purposes (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations), (iii) an estate whose
income is subject to United States federal income tax regardless of its source
or (iv) 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 United States
persons have the authority to control all substantial decisions of the trust.
"UNPAID REO AMORTIZATION" shall mean, as to any REO Mortgage Loan and any
month, the aggregate of the installments of principal and accrued interest
deemed to be due in such month and in any prior months that remain unpaid,
calculated in accordance with Section 5.12.
"WEIGHTED AVERAGE RATE CAP" shall mean with respect to the Class A-1
Certificates, on any Remittance Date, that maximum interest rate computed to
equal one-twelfth the weighted average Mortgage Interest Rate for the Mortgage
Loans, net of the [Premium Percentage and] the rates at which the Servicing Fee
and the Trustee's Fee are calculated.
Section 1.2 PROVISIONS OF GENERAL APPLICATION.
(a) All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles.
(b) The terms defined in this Article include the plural as well as the
singular.
(c) The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole. All references to Articles and
Sections shall be deemed to refer to Articles and Sections of this Agreement.
(d) Reference to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute to which reference
is made and all regulations promulgated pursuant to such statutes.
(e) All calculations of interest relating to the Class A-1 Certificates
(other than with respect to the Mortgage Loans, or as otherwise specifically set
forth herein) provided for herein shall be made on the basis of actual days
elapsed divided by a year comprised of 360 days. All calculations of interest
relating to the Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates or Class A-5 Certificates (other than with respect to the Mortgage
Loans, or as otherwise specifically set forth herein) provided for herein, shall
be made on the basis of an assumed year of 360 days consisting of twelve 30 day
months. All calculations of interest with respect to any Mortgage Loan provided
for herein shall be made in accordance with the terms of the related Mortgage
Note and Mortgage or, if such documents do not specify the basis upon which
interest accrues thereon, on the basis of dividing actual days elapsed by a 365
day year.
(f) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Master Servicer; PROVIDED, HOWEVER, that for
purposes of calculating distributions on the Certificates prepayments with
respect to any Mortgage Loan are deemed to be received on the date they are
applied in accordance with customary servicing practices consistent with the
terms of the related Mortgage Note and Mortgage to reduce the outstanding
principal balance of such Mortgage Loan on which interest accrues.
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ARTICLE II
ESTABLISHMENT OF THE TRUST;
SALE AND CONVEYANCE OF TRUST FUND
Section 2.1 SALE AND CONVEYANCE OF TRUST FUND; PRIORITY AND SUBORDINATION
OF OWNERSHIP INTERESTS; ESTABLISHMENT OF THE TRUST.
(a) The Depositor does hereby sell, transfer, assign, set over and convey
to the Trust for the benefit of the Certificateholders [and the Certificate
Insurer] without recourse but subject to the provisions in this Section 2.1 and
the other terms and provisions of this Agreement, all of the right, title and
interest of the Depositor in and to the Trust Fund, exclusive of the obligations
of the Depositor, Transferor or any other party with respect to the Mortgage
Loans. In connection with such transfer and assignment, and pursuant to Section
2.5 of the Purchase and Sale Agreement, the Depositor does hereby also
irrevocably transfer, assign, set over and otherwise convey to the Trustee all
of its rights (exclusive of its obligations) under the Purchase and Sale
Agreement, including, without limitation, its right to exercise the remedies
created by Section 3.4 of the Purchase and Sale Agreement for breaches of
representations and warranties, agreements and covenants of the Transferor
contained in Sections 3.1 and 3.2 of the Purchase and Sale Agreement.
(b) The rights of the Certificateholders to receive payments with respect
to the Mortgage Loans in respect of the Certificates and all ownership interests
of the Certificateholders, shall be as set forth in this Agreement. In this
regard, all rights of the Class R Certificateholders to receive payments in
respect of the Class R Certificates, are subject and subordinate to the
preferential rights of the Class A Certificateholders to receive payments in
respect of the Class A Certificates and to the Certificate Insurer's rights to
receive the Reimbursement Amount.
(c) The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "_______ HOME EQUITY TRUST 199_ - _" and does hereby
appoint ____________________ as Trustee in accordance with the provisions of
this Agreement.
Section 2.2 POSSESSION OF MORTGAGE FILES; ACCESS TO MORTGAGE FILES.
(a) Upon the issuance of the Certificates, the ownership of each Mortgage
Note, the Mortgage and the contents of the related Mortgage File related to each
Mortgage Loan shall be vested in the Trustee for the benefit of the
Certificateholders [and the Certificate Insurer, as their respective interests
may appear].
(b) Pursuant to Section 2.4 of the Mortgage Loan Sale Agreement,
____________________ has delivered or caused to be delivered the Trustee's
Mortgage File related to each Mortgage Loan to the Trustee.
(c) The Trustee may enter into a custodial agreement pursuant to which the
Trustee will appoint a custodian (a "CUSTODIAN") to hold the Mortgage Files in
trust for the benefit of the Trustee; PROVIDED, HOWEVER, that the custodian so
appointed shall in no event be the Depositor, the Transferor or the Master
Servicer or any Person known to a Responsible Officer of the Trustee to be an
Affiliate of any of them.
(d) The Custodian shall afford the Depositor[, the Certificate Insurer and]
the Master Servicer reasonable access to all records and documentation regarding
the Mortgage Loans relating to this Agreement, such access being afforded at
customary charges, upon reasonable request and during normal business hours at
the offices of the Custodian.
Section 2.3 DELIVERY OF MORTGAGE LOAN DOCUMENTS.
(a) In connection with each conveyance pursuant to Section 2.1 or 2.2
hereof, the Depositor has delivered or does hereby agree to deliver or cause to
be delivered to the Trustee [the Certificate Insurance Policy and] each of the
following documents for each Mortgage Loan sold by the Transferor to the
Depositor and sold by the Depositor to the Trust Fund:
(i)The original Mortgage Note, endorsed by the holder of record
without recourse in the following form: "Pay to the order of ___________,
without recourse" and signed by manual or facsimile signature in the name
of an authorized officer of the holder of record, ____________________,
and if by the Transferor, by an authorized officer;
(ii) The original Mortgage with evidence of recording indicated
thereon; PROVIDED, HOWEVER, that if such Mortgage has not been returned
from the applicable recording office, then such recorded Mortgage shall be
delivered when so returned;
(iii) An assignment of the original Mortgage, in suitable form
for recordation in the jurisdiction in which the related Mortgaged
Property is located, in the name of the holder of record of the Mortgage
Loan by an authorized officer (with evidence of submission for recordation
of such assignment in the appropriate real estate recording office for
such Mortgaged Property to be received by the Trustee within 60 days of
the Closing Date); PROVIDED, HOWEVER, that Assignments of Mortgages shall
not be required to be submitted for recording with respect to any Mortgage
Loan which relates to the Trustee's Mortgage File if the Trustee, each of
the Rating Agencies [and the Certificate Insurer] shall have received an
opinion of counsel satisfactory to the Trustee, each of the Rating
Agencies [and the Certificate Insurer] stating that, in such counsel's
opinion, the failure to record such Assignment of Mortgage shall not have
a materially adverse effect on the security interest of the Trustee in the
Mortgage); PROVIDED, further, that any Assignment of Mortgage for which an
opinion has been delivered shall be recorded by the Master Servicer upon
the earlier to occur of (a) receipt by the Trustee of the Certificate
Insurer's written direction to record such Mortgage, (b) the occurrence of
any Event of Default, as such term is defined in this Agreement, or (c) a
bankruptcy or insolvency proceeding involving the Mortgagor is initiated
or foreclosure proceedings are initiated against the Mortgaged Property as
a consequence of an event of default under the Mortgage Loan; PROVIDED,
HOWEVER, that if the related Mortgage has not been returned from the
applicable recording office within 120 days of the Closing Date, then such
assignment shall be delivered when so returned (and a blanket assignment
with respect to each unrecorded Mortgage shall be delivered on the Closing
Date);
(iv) Any recorded intervening Assignments of the Mortgage with
evidence of recording thereon; and
(v)Any assumption, modification, consolidation or extension
agreements;
PROVIDED, HOWEVER, that in the case of any Mortgage Loans which have been
prepaid in full after the Cut-Off Date and prior to the date of the execution of
this Agreement, the Depositor, in lieu of delivering the above documents, hereby
delivers to the Trustee a certification of an officer of the Transferor of the
nature set forth in Exhibit M attached hereto; and PROVIDED, FURTHER, however,
that as to certain Mortgages or assignments thereof which have been delivered or
are being delivered to recording offices for recording and have not been
returned to the Transferor in time to permit their delivery hereunder at the
time of such transfer, in lieu of delivering such original documents, the
Depositor is delivering to the Trustee a true copy thereof with a certification
by the Transferor on the face of such copy substantially as follows: "certified
true and correct copy of original which has been transmitted for recordation."
The Transferor has agreed pursuant to the Purchase and Sale Agreement that it
will deliver such original documents on behalf of the Depositor to the Trustee
promptly after they are received, and no later than 90 days after the Closing
Date; PROVIDED, HOWEVER, that in those instances where the public recording
office retains the original Mortgage or Assignment of Mortgage after it has been
recorded or such original document has been lost by the recording office, the
Transferor shall be deemed to have satisfied its obligations hereunder if it
shall have delivered to the Trustee a copy of such original Mortgage or
Assignment of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof. The Transferor has agreed pursuant to the
Purchase and Sale Agreement, at its own expense, to record (or to provide the
Trustee with evidence of recordation thereof) each assignment within 60 days of
the Closing Date in the appropriate public office for real property records,
provided that such assignments are redelivered by the Trustee to the Transferor
upon the Transferor's written request and at the Transferor's expense, unless
the Transferor (at its expense) furnishes to the Trustee[, [the Certificate
Insurer] and the Rating Agencies an unqualified Opinion of Counsel reasonably
acceptable to the Trustee to the effect that recordation of such assignment is
not necessary under applicable state law to preserve the Trustee's interest in
the related Mortgage Loan against the claim of any subsequent transferee of such
Mortgage Loan or any successor to, or creditor of, the Transferor.
On or prior to the Closing Date the Master Servicer, at its own expense
shall complete the endorsement of each Mortgage Note such that the final
endorsement appears in the following form:
"Pay to the order of _________, without recourse, ______________________."
The Master Servicer, at its own expense shall also complete each Assignment
of Mortgage either in blank or such that the final Assignment of Mortgage
appears in the following form:
"____________________, as Trustee for _______ Home Equity Trust 199_
- _ formed pursuant to the Pooling and Servicing Agreement dated as
of __________, 199_, among PaineWebber Mortgage Acceptance
Corporation IV as Depositor, ____________________, as Transferor,
____________________, as Master Servicer and ____________________,
as Trustee"
(b) Without diminution of the requirements of Sections 2.2(c) and this
Section 2.3, all original documents relating to the Mortgage Loans that are not
delivered to the Trustee are and shall be delivered to the Master Servicer by
the Transferor on behalf of the Depositor pursuant to the Purchase and Sale
Agreement, and shall be held by the Master Servicer in trust for the benefit of
the Trustee on behalf of the Certificateholders and the Certificate Insurer. In
the event that any such original document is required pursuant to the terms of
this Section 2.3 to be a part of a Mortgage File, the Master Servicer shall
promptly deliver such original document to the Trustee. In acting as custodian
of any such original document, the Master Servicer agrees further that it does
not and will not have or assert any beneficial ownership interest in the
Mortgage Loans or the Mortgage Files. Promptly upon the Depositor's and the
Trust's acquisition thereof and the Master Servicer's receipt thereof, the
Master Servicer on behalf of the Trust shall ▇▇▇▇ conspicuously each original
document not delivered to the Trustee, and the Transferor's master data
processing records evidencing each Mortgage Loan with a legend, acceptable to
the Trustee [and the Certificate Insurer], evidencing that the Trust has
purchased the Mortgage Loans and all right and title thereto and interest
therein pursuant to the Purchase and Sale Agreement and this Agreement.
(c) In the event that any Mortgage Note required to be delivered pursuant
to this Section 2.3 is conclusively determined by any of the Transferor, the
Master Servicer, the Custodian or the Trustee to be lost, stolen or destroyed,
the Transferor shall, within 14 days of the Closing Date or the later date upon
which such Mortgage Note has been conclusively determined to be lost, deliver to
the Trustee a "lost note affidavit" in form and substance acceptable to the
Trustee, and shall simultaneously therewith request the obligor on such Mortgage
Note to execute and return a replacement Mortgage Note, and shall further agree
to hold the Trustee [and the Certificate Insurer] harmless from any loss or
damage resulting from any action taken in reliance on the delivery and
possession by the Trustee of such lost note affidavit. Upon the receipt of such
replacement Mortgage Note, the Trustee shall return the lost note affidavit.
Delivery by the Transferor of such lost note affidavit shall not affect the
obligations of the Transferor under the Purchase and Sale Agreement with respect
to the related Mortgage Loan.
Section 2.4 ACCEPTANCE BY TRUSTEE OF THE TRUST FUND; CERTAIN SUBSTITUTIONS;
CERTIFICATION BY TRUSTEE.
(a) The Trustee agrees to execute and deliver to the Depositor[, the
Certificate Insurer], the Master Servicer and the Transferor on or prior to the
Closing Date [an acknowledgment of receipt of the Certificate Insurance Policy
and,] with respect to each initial Mortgage Loan, the original Mortgage Note
(with any exceptions noted), in the form attached as Exhibit E hereto and
declares that it will hold such documents and any amendments, replacements or
supplements thereto, as well as any other assets included in the definition of
Trust Fund and delivered to the Trustee, as Trustee in trust upon and subject to
the conditions set forth herein for the benefit of the Certificateholders [and
the Certificate Insurer].
(b) The Trustee agrees, for the benefit of the Certificateholders [and the
Certificate Insurer], to review (or cause to be reviewed) each Trustee's
Mortgage File within 45 Business Days after the Closing Date and to deliver to
the Transferor, the Master Servicer, the Depositor [and the Certificate Insurer]
a certification in the form attached hereto as Exhibit F to the effect that, as
to each Mortgage Loan listed in Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), (1) all documents required
to be delivered to it pursuant to Section 2.3 hereof and the Purchase and Sale
Agreement are in its possession, (2) each such document has been reviewed by it,
has been, to the extent required, executed and has not been mutilated, damaged,
torn or otherwise physically altered (handwritten additions, changes or
corrections shall not constitute physical alteration if initialed by the
Mortgagor), appears regular on its face and relates to such Mortgage Loan. The
Trustee shall be under no duty or obligation to (1) inspect, review or examine
any such documents, instruments, certificates or other papers to determine that
they are genuine, enforceable, or appropriate for the represented purpose or
that they are other than what they purport to be on their face or (2) determine
whether any Trustee's Mortgage File should contain any of the documents referred
to in Section 2.3(a)(v).
On or prior to the first anniversary of the Closing Date, the Trustee shall
deliver (or cause to be delivered) to the Master Servicer, the Transferor, the
Depositor [and the Certificate Insurer] a final certification in the form
attached hereto as Exhibit G to the effect that, as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), and as to any document noted in an exception included in
the Trustee's initial certification, (i) all documents required to be delivered
to it pursuant to Section 2.3 hereof and the Purchase and Sale Agreement are in
its possession, (ii) each such document has been reviewed by it, has been, to
the extent required, executed and has not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan.
(c) If [the Certificate Insurer or] the Trustee during the process of
reviewing the Trustee's Mortgage Files finds any document constituting a part of
a Trustee's Mortgage File which is not executed, has not been received, is
unrelated to the Mortgage Loan identified in the related Mortgage Loan Schedule,
or does not conform to the requirements of Section 2.3 or the description
thereof as set forth in the related Mortgage Loan Schedule, the Trustee [or the
Certificate Insurer, as applicable,] shall promptly so notify the Master
Servicer, the Transferor, [the Certificate Insurer] and the Trustee. In
performing any such review, the Trustee may conclusively rely on the Transferor
as to the purported genuineness of any such document and any signature thereon.
It is understood that the scope of the Trustee's review of the Mortgage Files is
limited solely to confirming that the documents listed in Section 2.3 have been
executed and received and relate to the Mortgage Files identified in the related
Mortgage Loan Schedule. Pursuant to the Purchase and Sale Agreement, the
Transferor has agreed to use reasonable efforts to cause to be remedied a
material defect in a document constituting part of a Mortgage File of which it
is so notified by the Trustee. If, however, within 120 days after the Trustee's
notice to it respecting such defect the Transferor has not caused to be remedied
the defect and the defect materially and adversely affects the interest of the
Certificateholders in the related Mortgage Loan [or the interests of the
Certificate Insurer (in either case in the reasonable determination of the
Certificate Insurer)], the Trustee shall enforce the Transferor's obligation
pursuant to the Purchase and Sale Agreement to either (1) substitute in lieu of
such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner and
subject to the conditions set forth in Section 3.3 hereof or (2) purchase such
Mortgage Loan at a purchase price equal to the outstanding Principal Balance of
such Mortgage Loan as of the date of purchase, plus the greater of (x) all
accrued and unpaid interest thereon and (y) 30 days' interest thereon, computed
at the related Mortgage Interest Rate, plus the amount of any unreimbursed
Servicing Advances made by the Master Servicer with respect to such Mortgage
Loan, which purchase price shall be deposited in the Certificate Account prior
to the next succeeding Determination Date, after deducting therefrom any amounts
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Collection Account or Trustee Collection Account for future distribution to
the extent such amounts have not yet been applied to principal or interest on
such Mortgage Loan (the "Loan Repurchase Price"); PROVIDED, HOWEVER, that the
Transferor may not, pursuant to clause (ii) preceding, purchase the Principal
Balance of any Mortgage Loan that is not in default or as to which no default is
imminent unless the Transferor has theretofore delivered an Opinion of Counsel
knowledgeable in federal income tax matters which states that such a purchase
would not constitute a prohibited transaction under the Code.
(d) Upon receipt by the Trustee of a certification of a Servicing Officer
of such substitution or purchase and, in the case of a substitution, upon
receipt of the related Trustee's Mortgage File, and the deposit of the amounts
described above into the Certificate Account (which certification shall be in
the form of Exhibit H hereto), the Trustee shall release to the Master Servicer
for release to the Transferor the related Trustee's Mortgage File and shall
execute, without recourse, and deliver such instruments of transfer furnished by
the Transferor as may be necessary to transfer such Mortgage Loan to the
Transferor. [The Trustee shall notify the Certificate Insurer if the Transferor
fails to repurchase or substitute for a Mortgage Loan in accordance with the
foregoing.]
Section 2.5 DESIGNATIONS UNDER REMIC PROVISIONS; DESIGNATION OF STARTUP
DATE.
(a) The Class A Certificates are hereby designated as the "regular
interests", and the Class R Certificates are designated the single Class of
"residual interests" in the 199_ - _ REMIC for the purposes of the REMIC
Provisions. The 199_ - _ REMIC shall be designated as the "_______ HOME EQUITY
TRUST 199_ - _ REMIC."
(b) The Closing Date will be the "startup day" of the 199_ - _ REMIC within
the meaning of Section 860G(a)(9) of the Code (the "STARTUP DATE").
Section 2.6 EXECUTION OF CERTIFICATES. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the delivery to it of the Trustee's
Mortgage Files relating thereto and, concurrently with such delivery, has
executed, authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, the Trustee's Mortgage Files and the other
assets included in the definition of Trust Fund, Certificates duly authenticated
by the Trustee, and, in the case of the Class A Certificates, in Authorized
Denominations, evidencing the entire beneficial ownership interest in the Trust
Fund.
Section 2.7 APPLICATION OF PRINCIPAL AND INTEREST. In the event that Net
Liquidation Proceeds on a Liquidated Mortgage Loan are less than the outstanding
Principal Balance of the related Mortgage Loan plus accrued interest thereon, or
any Mortgagor makes a partial payment of any Monthly Payment due on a Mortgage
Loan, such Net Liquidation Proceeds or partial payment shall be applied to
payment of the related Mortgage Note as provided therein, and if not so
provided, first to interest accrued at the Mortgage Interest Rate, then to the
principal owed on such Mortgage Loan.
Section 2.8 GRANT OF SECURITY INTEREST.
(a) It is the intention of the parties hereto that the conveyance by the
Depositor of the Trust Fund to the Trustee on behalf of the Trust shall
constitute a purchase and sale of such Trust Fund and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that the
transaction evidenced hereby constitutes a loan and not a purchase and sale, it
is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that the Depositor shall be deemed
to have granted and hereby grants to the Trustee, on behalf of the Trust, a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under the Trust Fund to secure a loan in an amount
equal to the purchase price of the Mortgage Loans. The conveyance by the
Depositor of the Trust Fund to the Trustee on behalf of the Trust shall not
constitute and are not intended to result in an assumption by the Trustee[, the
Certificate Insurer] or any Certificateholder of any obligation of the
Transferor, _______________________ or any other Person in connection with the
Trust Fund.
(b) The Depositor and the Master Servicer shall take no action inconsistent
with the Trust's ownership of the Trust Fund and shall indicate or shall cause
to be indicated in its records and records held on its behalf that ownership of
each Mortgage Loan and the assets in the Trust Fund are held by the Trustee on
behalf of the Trust. In addition, the Depositor and the Master Servicer shall
respond to any inquiries from third parties with respect to ownership of a
Mortgage Loan or any other asset in the Trust Fund by stating that it is not the
owner of such asset and that ownership of such Mortgage Loan or other Trust Fund
asset is held by the Trustee on behalf of the Trust.
Section 2.9 FURTHER ASSURANCES; POWERS OF ATTORNEY.
(a) The Master Servicer agrees that, from time to time, at its expense, it
shall cause the Transferor (and the Depositor also agrees that it shall),
promptly to execute and deliver all further instruments and documents, and take
all further action, that may be necessary or appropriate, or that the Master
Servicer or the Trustee may reasonably request, in order to perfect, protect or
more fully evidence the transfer of ownership of the Trust Fund or to enable the
Trustee to exercise or enforce any of its rights hereunder. Without limiting the
generality of the foregoing, the Master Servicer and the Depositor will, upon
the request of the Master Servicer or of the Trustee execute and file (or cause
to be executed and filed) such real estate filings, financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate.
(b) In the event that the Depositor in unable to fulfill its obligations in
subsection (a) above, the Depositor hereby grants to the Master Servicer and the
Trustee powers of attorney to execute all documents on its behalf under this
Agreement and the Purchase and Sale Agreement as may be necessary or desirable
to effectuate the foregoing.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS OF THE MASTER SERVICER. The Master Servicer
hereby represents and warrants to the Trustee, the Depositor[, the Certificate
Insurer] and the Certificateholders as of the Closing Date and during the term
of this Agreement:
(a) the Master Servicer is a ______ duly organized, validly existing and in
good standing under the laws of the State of _______, and has full power and
authority to own its assets and to transact the business in which it is
currently engaged. The Master Servicer is duly qualified to do business and is
in good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such qualification
and in which the failure to so qualify would have a material adverse effect on
the business, properties, assets or condition (financial or otherwise) of the
Master Servicer;
(b) the Master Servicer has full power and authority to make, execute,
deliver and perform this Agreement and all of the transactions contemplated
hereunder, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement;
(c) the Master Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization or
registration or declaration as shall have been obtained or filed, as the case
may be;
(d) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby by the Master Servicer will not violate any
material provision of any existing law or regulation or any order or decree of
any court applicable to the Master Servicer or any provision of the articles or
bylaws of the Master Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Master Servicer is a party
or by which it may be bound; and
(e) no suit in equity, action at law or other judicial or administrative
proceeding of or before any court, tribunal or governmental body is currently
pending or, to the knowledge of the Master Servicer, threatened against the
Master Servicer or any of its properties or with respect to this Agreement or
the Securities that in the opinion of the Master Servicer has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement.
It is understood and agreed that the representations, warranties and covenants
set forth in this Section 3.1 shall survive the delivery of the respective
Mortgage Files to the Trustee or to a custodian, as the case may be, and inure
to the benefit of the Trustee [and the Certificate Insurer].
Section 3.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR. The
Depositor hereby represents, warrants and covenants to the Trustee that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the Master
Servicer and the Trustee, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of, or registration or
filing with, or notice to, any governmental authority or court is required for
the execution, delivery and performance of or compliance by the Depositor with
this Agreement or the consummation by the Depositor of any of the transactions
contemplated hereby, except as have been received or obtained on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby or thereby, or the fulfillment of or
compliance with the terms and conditions of this Agreement, (1) conflicts or
will conflict with or results or will result in a breach of, or constitutes or
will constitute a default or results or will result in an acceleration under (i)
the charter or bylaws of the Depositor, or (ii) of any term, condition or
provision of any material indenture, deed of trust, contract or other agreement
or instrument to which the Depositor or any of its subsidiaries is a party or by
which it or any of its subsidiaries is bound; (2) results or will result in a
violation of any law, rule, regulation, order, judgment or decree applicable to
the Depositor of any court or governmental authority having jurisdiction over
the Depositor or its subsidiaries; or (3) results in the creation or imposition
of any lien, charge or encumbrance which would have a material adverse effect
upon the Mortgage Loans or any documents or instruments evidencing or securing
the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement; and
(g) The Depositor is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency that would materially and adversely affect its performance
hereunder.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.2 shall survive delivery of the respective
Mortgage Files to the Trustee or to a custodian, as the case maybe, and shall
inure to the benefit of the Trustee and the Certificate Insurer.
Section 3.3 PURCHASE AND SUBSTITUTION.
(a) It is understood and agreed that the representations and warranties set
forth in Sections 3.1 and 3.2 of the Purchase and Sale Agreement shall survive
delivery of the Certificates to the Certificateholders. Pursuant to the Purchase
and Sale Agreement, with respect to any representation or warranty contained in
Sections 3.1 or 3.2 of the Purchase and Sale Agreement that is made to the best
of the Transferor's knowledge, if it is discovered by the Master Servicer, any
Subservicer, the Trustee[, [the Certificate Insurer] or any Certificateholder
that the substance of such representation and warranty was inaccurate as of the
Closing Date and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan, then notwithstanding the Transferor's lack of
knowledge with respect to the inaccuracy at the time the representation or
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty. Upon discovery by the Transferor, the Master
Servicer, any Subservicer, the Trustee [or the Certificate Insurer] of a breach
of any of such representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the
Certificateholders, or which materially and adversely affects the interests of
the [Certificate Insurer or the] Certificateholders in the related Mortgage Loan
in the case of a representation and warranty relating to a particular Mortgage
Loan (notwithstanding that such representation and warranty was made to the
Transferor's best knowledge), the party discovering such breach shall give
prompt written notice to the others. Subject to the last paragraph of this
Section 3.3, within 60 days of the earlier of its discovery or its receipt of
notice of any breach of a representation or warranty, pursuant to the Purchase
and Sale Agreement, the Transferor shall be required to (1) promptly cure such
breach in all material respects, (2) purchase such Mortgage Loan in the manner
and at the price specified in Section 2.4(c) (in which case the Mortgage Loan
shall become a Deleted Mortgage Loan), (3) remove such Mortgage Loan from the
Trust Fund (in which case the Mortgage Loan shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans; provided,
that, such substitution is effected not later than the date which is two years
after the Startup Date or at such later date, if the Trustee [and the
Certificate Insurer] receive an Opinion of Counsel to the effect that such
substitution will not constitute a prohibited transaction for the purposes of
the REMIC provisions of the Code or cause the 199_ - _ REMIC to fail to qualify
as a REMIC at any time any Certificates are outstanding. Pursuant to the
Purchase and Sale Agreement, any such substitution shall be accompanied by
payment by the Transferor of the Substitution Adjustment, if any, to the Master
Servicer to be deposited in the Certificate Account.
(b) As to any Deleted Mortgage Loan for which the Transferor substitutes a
Qualified Substitute Mortgage Loan or Loans, the Transferor shall be required
pursuant to the Purchase and Sale Agreement to effect such substitution by
delivering to the Trustee a certification in the form attached hereto as Exhibit
H, executed by a Servicing Officer and the documents described in Sections
2.3(a)(i)-(v) for such Qualified Substitute Mortgage Loan or Loans.
(c) The Master Servicer shall deposit in the Collection Account all
payments received in connection with such Qualified Substitute Mortgage Loan or
Loans after the date of such substitution. Monthly Payments received with
respect to Qualified Substitute Mortgage Loans on or before the date of
substitution will be retained by the Transferor. The Trust Fund will own all
payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Transferor shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
Master Servicer shall give written notice to the Trustee and the Certificate
Insurer that such substitution has taken place and shall amend the Mortgage Loan
Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of
this Agreement and the substitution of the Qualified Substitute Mortgage Loan.
Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
be subject to the terms of this Agreement in all respects.
(d) It is understood and agreed that the obligation of the Transferor set
forth in Section 3.4 of the Purchase and Sale Agreement to cure, purchase,
substitute or otherwise pay amounts to the Trust [or the Certificate Insurer]
for a defective Mortgage Loan as provided in such Section 3.4 constitutes the
sole remedies of the Trustee[, [the Certificate Insurer] and the
Certificateholders with respect to a breach of the representations and
warranties of the Transferor set forth in Sections 3.1 and 3.2 of the Purchase
and Sale Agreement. The Trustee shall give prompt written notice to the
[Certificate Insurer,] _______ and _______ of any repurchase or substitution
made pursuant to Section 3.3 or Section 2.4(b) hereof.
(e) Upon discovery by the Master Servicer, the Trustee[, [the Certificate
Insurer] or any Certificateholder that any Mortgage Loan does not constitute a
Qualified Mortgage, the Person discovering such fact shall promptly (and in any
event within 5 days of the discovery) give written notice thereof to the others
of such Persons. In connection therewith, pursuant to the Purchase and Sale
Agreement, the Transferor shall be required to repurchase or substitute a
Qualified Substitute Mortgage Loan for the affected Mortgage Loan within 60 days
of the earlier of such discovery by any of the foregoing parties, or the
Trustee's or the Transferor's receipt of notice, in the same manner as it would
a Mortgage Loan for a breach of representation or warranty contained in Section
3.1 or 3.2 of the Purchase and Sale Agreement. The Trustee shall reconvey to the
Transferor the Mortgage Loan to be released pursuant hereto in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan repurchased
for breach of a representation or warranty contained in Section 3.1 or 3.2 of
the Purchase and Sale Agreement.
Section 3.4 MASTER SERVICER COVENANTS. The Master Servicer hereby covenants
to the Trustee, the Depositor [and the Certificate Insurer] and the
Certificateholders that as of the Closing Date and during the term of this
Agreement:
(a) The Master Servicer shall deliver on the Closing Date an opinion from
the general counsel or the corporate counsel of the Master Servicer as to
general corporate matters in form and substance reasonably satisfactory to
Underwriter's counsel [and counsel to the Certificate Insurer]; and
(b) The Master Servicer may in its discretion (1) waive any prepayment
penalty or other charge, assumption fee, late payment charge or other charge in
connection with a Mortgage Loan, and (2) arrange a schedule, running for no more
than 180 days after the Due Date for payment of any installment on any Mortgage
Note, for the liquidation of delinquent items; provided, that the Master
Servicer shall not agree to the modification or waiver of any provision of a
Mortgage Loan at a time when such Mortgage Loan is not in default or such
default is not imminent, if such modification or waiver would be treated as a
taxable exchange under Code Section 1001, unless such exchange would not be
considered a "prohibited transaction" under the REMIC Provisions.
It is understood and agreed that the covenants set forth in this Section 3.4
shall survive the delivery of the respective Mortgage Files to the Trustee or to
a custodian, as the case may be, and inure to the benefit of the Trustee [and
the Certificate Insurer].
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ARTICLE IV
THE CERTIFICATES
Section 4.1 THE CERTIFICATES. The Certificates shall be substantially in
the forms annexed hereto as, in the case of the Class A-1 Certificate, Exhibit
B-1, in the case of the Class A-2 Certificate, Exhibit B-2, in the case of the
Class A-3 Certificate, Exhibit B-3, in the case of the Class A-4 Certificate,
Exhibit B-4, in the case of the Class A-5 Certificate, Exhibit B-5 and in the
case of the Class R Certificate, Exhibit B-6. All Certificates shall be executed
by manual or facsimile signature on behalf of the Trustee by an authorized
officer and authenticated by the manual or facsimile signature of an authorized
officer. Any Certificates bearing the signatures of individuals who were at the
time of the execution thereof the authorized officers of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the delivery of such Certificates or did not hold
such offices at the date of such Certificates. All Certificates issued hereunder
shall be dated the date of their authentication.
Section 4.2 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee, as registrar, shall cause to be kept a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and the registration of transfer of Certificates. The Trustee is hereby
appointed registrar for the purpose of registering and transferring
Certificates, as herein provided. The [Certificate Insurer and the] Master
Servicer shall be entitled to inspect and copy the Certificate Register and the
records of the Trustee relating to the Certificates during normal business hours
upon reasonable notice.
(b) All Certificates issued upon any registration of transfer or exchange
of Certificates shall be valid evidence of the same ownership interests in the
Trust and entitled to the same benefits under this Agreement as the Certificates
surrendered upon such registration of transfer or exchange.
(c) Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by the Holder or
holder thereof or his attorney duly authorized in writing. [Every Certificate
shall include a statement of insurance provided by the Certificate Insurer.]
(d) No service charge shall be made to a Holder or holder for any
registration of transfer or exchange of Certificates, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates; any other expenses in connection with such transferor
exchange shall be an expense of the Trust.
(e) It is intended that the Class A Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. The Class A-1 Certificates shall, except as otherwise provided in the
next paragraph, be initially issued in the form of a single fully registered
Class A-1 Certificate with a denomination equal to the Original Class A-1
Principal Balance. The Class A-2 Certificates shall, except as otherwise
provided in the next paragraph, be initially issued in the form of a single
fully registered Class A-2 Certificate with a denomination equal to the Original
Class A-2 Principal Balance. The Class A-3 Certificates shall, except as
otherwise provided in the next paragraph, be initially issued in the form of a
single fully registered Class A-3 Certificate with a denomination equal to the
Original Class A-3 Principal Balance. The Class A-4 Certificates shall, except
as otherwise provided in the next paragraph, be initially issued in the form of
a single fully registered Class A-4 Certificate with a denomination equal to the
Original Class A-4 Principal Balance. The Class A-5 Certificates shall, except
as otherwise provided in the next paragraph, be initially issued in the form of
a single fully registered Class A-5 Certificate with a denomination equal to the
Original Class A-5 Principal Balance. Upon initial issuance, the ownership of
each such Class A Certificate shall be registered in the Certificate Register in
the name of Cede & Co., or any successor thereto, as nominee for the Depository.
The Depositor and the Trustee are hereby authorized to execute and deliver the
Representation Letter with the Depository. With respect to Class A Certificates
registered in the Certificate Register in the name of Cede & Co., as nominee of
the Depository, the Depositor, the Transferor, the Master Servicer, the Trustee
[and the Certificate Insurer] shall have no responsibility or obligation to
Direct or Indirect Participants or beneficial owners for which the Depository
holds Class A Certificates from time to time as a Depository. Without limiting
the immediately preceding sentence, the Depositor, the Transferor, the Master
Servicer, the Trustee [and the Certificate Insurer] shall have no responsibility
or obligation with respect to (1) the accuracy of the records of the Depository,
Cede & Co., or any Direct or Indirect Participant with respect to any Ownership
Interest, (2) the delivery to any Direct or Indirect Participant or any other
Person, other than a Certificateholder, of any notice with respect to the Class
A Certificates or (3) the payment to any Direct or Indirect Participant or any
other Person, other than a Certificateholder, of any amount with respect to any
distribution of principal or interest on the Class A Certificates. No Person
other than a Certificateholder shall receive a certificate evidencing such Class
A Certificate. Upon delivery by the Depository to the Trustee of written notice
to the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of interest by the mailing of checks or drafts to the Certificateholders
appearing as Certificateholders at the close of business on a Record Date, the
name "Cede &Co." in this Agreement shall refer to such new nominee of the
Depository.
(f) In the event that (1) the Depository or the Master Servicer advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Class A Certificates and the Master Servicer or the Depository is unable to
locate a qualified successor or (2) the Master Servicer at its sole option
elects to terminate the book-entry system through the Depository, the Class A
Certificates shall no longer be restricted to being registered in the
Certificate Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. At that time, the Master Servicer may determine that
the Class A Certificates shall be registered in the name of and deposited with a
successor depository operating a global book-entry system, as may be acceptable
to the Master Servicer, or such depository's agent or designee but, if the
Master Servicer does not select such alternative global book-entry system, then
the Class A Certificates may be registered in whatever name or names
Certificateholders transferring Class A Certificates shall designate, in
accordance with the provisions hereof; PROVIDED, HOWEVER, that any such
reregistration shall be at the expense of the Master Servicer.
(g) Notwithstanding any other provision of this Agreement to the contrary,
so long as any Class A Certificate is registered in the name of Cede & Co., as
nominee of the Depository, all distributions of principal or interest on such
Class A Certificates as the case may be and all notices with respect to such
Class A Certificates as the case may be shall be made and given, respectively,
in the manner provided in the Representation Letter.
(h) No transfer, sale, pledge or other disposition of any Class R
Certificate shall be made unless such disposition is made pursuant to an
effective registration statement under the Securities Act of 1933 and effective
registration or qualification under applicable state securities laws or "Blue
Sky" laws, or is made in a transaction that does not require such registration
or qualification. None of the Master Servicer, the Depositor, the Transferor or
the Trustee is obligated under this Agreement to register the Certificates under
the Securities Act of 1933, as amended or any other securities law or to take
any action not otherwise required under this Agreement to permit the transfer of
the Class R Certificates without such registration or qualification. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Transferor, the Master Servicer
[and the Certificate Insurer] against any liability that may result if the
transfer is not exempt or is not made in accordance with such applicable federal
and state laws. Promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this paragraph, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this paragraph. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to appoint counsel
reasonably satisfactory to such indemnified party to represent the indemnified
party in such action; PROVIDED, HOWEVER, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are in conflict
with or contrary to the interests of the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
appoint counsel to defend such action and approval by the indemnified party of
such counsel, the indemnifying party will not be liable to such indemnified
party under this paragraph for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (1) the
indemnified party shall have employed separate counsel in accordance with the
proviso of the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel for any indemnified party), (2) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (3) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. Under no
circumstances shall the indemnified party enter into a settlement agreement with
respect to any lawsuit, claim or other proceeding without the prior written
consent of the indemnifying party.
(i) Each Person who has or who acquires any Ownership Interest in a Class 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 to have
irrevocably appointed the Master Servicer or its designee as its
attorney-in-fact to negotiate the terms of any mandatory sale under subclause
(vii) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale, and the rights of each Person
acquiring any Ownership Interest in a Class R Certificate are expressly subject
to the following provisions:
(i)Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and a United States
Person and shall promptly notify the Trustee of any change or impending
change in its status as either a United States Person or a Permitted
Transferee;
(ii) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to
it, and shall not register the Transfer of any Class R Certificate until
its receipt of, an affidavit and agreement (a "Transfer Affidavit and
Agreement") attached hereto as Exhibit I from the proposed Transferee,
representing and warranting, among other things, that such Transferee is a
Permitted Transferee, that it is not acquiring its Ownership Interest in
the Class R Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 4.2(i) and agrees
to be bound by them;
(iii) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (ii) above, if a
Responsible Officer of the Trustee has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership
Interest in a Class R Certificate to such proposed Transferee shall be
effected;
(iv) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer
its Ownership Interest in a Class R Certificate and (y) not to transfer
its Ownership Interest unless it provides a certificate (attached hereto
as Exhibit J) to the Trustee stating that, among other things, it has no
actual knowledge that such other Person is not a Permitted Transferee;
(v) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of temporary Treasury
Regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Class R Certificate, if it is, or is holding an
Ownership Interest in a Class R Certificate on behalf of, a "pass-through
interest holder";
(vi) The Trustee will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement. In addition, no Transfer of a Class R Certificate shall be made
unless the Trustee shall have received a representation letter, the form
of which is attached hereto as Exhibit N from the Transferee of such
Certificate to the effect that such Transferee is a United States Person
and is not a "disqualified organization" (as defined in Section 860E(e)(5)
of the Code)(such Person, a "Permitted Transferee");
(vii) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this
Section 4.2 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 R Certificate in violation of the provisions of this
Section 4.2, 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 R Certificate. The Trustee shall
notify the Master Servicer upon receipt of written notice or discovery by
a Responsible Officer that the registration of transfer of a Class R
Certificate was not in fact permitted by this Section 4.2. Knowledge shall
not be imputed to the Trustee with respect to an impermissible transfer in
the absence of such a written notice or discovery by a Responsible
Officer. The Trustee shall be under no liability to any Person for any
registration of transfer of a Class R Certificate that is in fact not
permitted by this Section 4.2 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
and Transfer Certificate. The Trustee shall be entitled, but not obligated
to recover from any Holder of a Class 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 R 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 Holder of such Certificate;
(viii) If any purported transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section 4.2,
then the Master Servicer or its designee shall have the right, without
notice to the Holder or any prior Holder of such Class R Certificate, to
sell such Class R Certificate to a purchaser selected by the Master
Servicer or its designee on such reasonable terms as the Master Servicer
or its designee may choose. Such purchaser may be the Master Servicer
itself or any Affiliate of the Master Servicer. The proceeds of such sale,
net of commissions, expenses and taxes due, if any, will be remitted by
the Master Servicer to the last preceding purported transferee of such
Class R Certificate, except that in the event that the Master Servicer
determines that the Holder or any prior Holder of such Class R Certificate
may be liable for any amount due under this Section 4.2 or any other
provision of this Agreement, the Master Servicer may withhold a
corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this subclause (viii) shall be
determined in the sole discretion of the Master Servicer or its designee,
and it shall not be liable to any Person having an Ownership Interest in a
Class R Certificate as a result of its exercise of such discretion;
(ix) The provisions of Section 4.2(i) may be modified, added to
or eliminated (solely to amend the transfer restrictions contained in this
Section), provided that there shall have been delivered to the Trustee and
the Certificate Insurer an Opinion of Counsel to the effect that such
modification of, addition to or elimination of such provisions will not
cause the 199_ - _ REMIC to cease to qualify as a REMIC and will not cause
(x) the 199_ - _ REMIC to be subject to an entity-level tax caused by the
Transfer of any Ownership Interest in a Class R Certificate to a Person
that is not a Permitted Transferee or (y) a Person other than the
prospective transferee to be subject to a REMIC-related tax caused by the
Transfer of an Ownership Interest in a Class R Certificate to a Percentage
that is not a Permitted Transferee;
(x) No transfer of a Class R Certificate or any interest therein
shall be made to any employee benefit plan or other retirement
arrangement, including individual retirement accounts and annuities, ▇▇▇▇▇
plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
the Code (each, a "Plan"), unless the prospective transferee of such Class
R Certificate provides the Master Servicer and the Trustee with a
certification of facts and, at the prospective transferee's expense, an
Opinion of Counsel which establish to the satisfaction of the Master
Servicer and the Trustee that such transfer will not result in a violation
of Section 406 of ERISA or Section 4975 of the Code or cause the Master
Servicer or the Trustee to be deemed a fiduciary of such Plan or result in
the imposition of an excise tax under Section 4975 of the Code. In the
absence of their having received the certification of facts or Opinion of
Counsel contemplated by the preceding sentence, the Trustee and the Master
Servicer shall require the prospective transferee of any Class R
Certificate to certify (in the form of Exhibit K hereto) that (A) it is
neither (i) a Plan nor (ii) a Person who is directly or indirectly
purchasing a Class R Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets, of a Plan and (B) all funds used by such
transferee to purchase such Certificates will be funds held by it in its
general account which it reasonably believes do not constitute "plan
assets" of any Plan; and
(xi) Subject to the restrictions set forth in this Agreement,
upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office of the Trustee, the Trustee shall execute,
authenticate and deliver in the name of the designated transferee or
transferees, a new Certificate of the same Class and evidencing, in the
case of a Class A-1 Certificate, Class A-2 Certificate, Class A-3
Certificate, Class A-4 Certificate or Class A-5 Certificate, the same
Percentage Interest, and in any other case, the equivalent undivided
beneficial ownership interest in the 199_ - _ REMIC and dated the date of
authentication by the Trustee. At the option of the Certificateholders,
Certificates may be exchanged for other Certificates of Authorized
Denominations of a like aggregate undivided beneficial ownership interest,
upon surrender of the Certificates to be exchanged at such office.
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. No service
charge shall be made for any transfer or exchange of Certificates, but the
Trustee may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates. All Certificates surrendered for transfer and
exchange shall be canceled by the Trustee.
Section 4.3 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (i) If any
mutilated Certificate is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Master Servicer[, the
Certificate Insurer] and the Trustee such security or indemnity as may
reasonably be required by each of them to save each of them harmless, then, in
the absence of notice to the Master Servicer[, the Certificate Insurer] and the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and representing an equivalent beneficial ownership interest, but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section 4.3, the Master Servicer and 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 their fees and expenses
connected therewith. Any duplicate Certificate issued pursuant to this Section
4.3 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the mutilated, destroyed,
lost or stolen Certificate shall be found at any time.
Section 4.4 PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer and subject to the provisions of
Section 4.2 and Article X, the Master Servicer, the Depositor, the Transferor[,
the Certificate Insurer] and the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving remittances pursuant to Section 6.5 and for all other purposes
whatsoever, and the Master Servicer, the Depositor, the Transferor[, the
Certificate Insurer] and the Trustee shall not be affected by notice to the
contrary.
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ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.1 APPOINTMENT OF THE MASTER SERVICER.
(a) _______________________ agrees to act as the Master Servicer and to
perform all servicing duties under this Agreement subject to the terms hereof.
(b) The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee [and the Certificate Insurer] and shall have full power
and authority, acting alone or through one or more Subservicers, to do any and
all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing,
the Master Servicer, in its own name or the name of a Subservicer, may, and is
hereby authorized and empowered by the Trustee to, execute and deliver, on
behalf of itself, the Certificateholders[, the Certificate Insurer] and the
Trustee or any of them, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge and all other comparable instruments,
with respect to the Mortgage Loans, the insurance policies and accounts related
thereto and the properties subject to the Mortgages. Upon the execution and
delivery of this Agreement, and from time to time as may be required thereafter,
the Trustee shall furnish the Master Servicer or its Subservicers with any
powers of attorney and such other documents (that have been prepared by the
Master Servicer for execution by the Trustee) as may be necessary or appropriate
to enable the Master Servicer to carry out its servicing and administrative
duties hereunder.
In servicing and administering the Mortgage Loans, the Master Servicer
shall employ procedures consistent with Accepted Servicing Practices and in a
manner consistent with recovery under any insurance policy required to be
maintained by the Master Servicer pursuant to this Agreement.
Costs incurred by the Master Servicer in effectuating the timely payment of
taxes and assessments on the property securing a Mortgage Note and foreclosure
costs may be added by the Master Servicer to the amount owing under such
Mortgage Note where the terms of such Mortgage Note so permit; PROVIDED,
HOWEVER, that the addition of any such cost shall not be taken into account for
purposes of calculating the principal amount of the Mortgage Note and the
Mortgage Loan secured by the Mortgage Note or distributions to be made to
Certificateholders. Such costs shall be recoverable by the Master Servicer
pursuant to Section 5.4. Notwithstanding any other provision of this Agreement,
the Master Servicer shall at all times service the Mortgage Loans in a manner
consistent with the provisions of Sections 5.1(b) and 5.1(c).
(c) It is intended that the 199_ - _ REMIC formed hereunder shall
constitute, and that the affairs of the 199_ - _ REMIC shall be conducted so as
to qualify it as, a "real estate mortgage investment conduit" ("REMIC") as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intentions, the Master Servicer covenants and agrees that it shall not take any
action or omit to take any action reasonably within the Master Servicer's
control and the scope of its duties more specifically set forth herein that
would (1) result in a taxable event to the Holders of the Certificates or
endanger the REMIC status of the 199_ - _ REMIC or (2) result in the imposition
on the 199_ - _ REMIC or the Trust Fund of a tax on "prohibited transactions"
(either clause (1) or (2) shall be an "Adverse REMIC Event"); PROVIDED, HOWEVER,
that the Master Servicer may allow reductions in the rate of interest on any
Mortgage Loan so long as the amount of any such reduction does not exceed the
greater of (i) ____% and (ii) __% of the total coupon on such Mortgage Loan. The
Master Servicer shall not take any action or fail to take any action (whether or
not authorized hereunder) as to which the Trustee has advised it in writing that
it has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action, and the Master Servicer shall have no
liability hereunder for any action taken by it in accordance with the written
instructions of the Trustee. In addition, prior to taking any action with
respect to the Trust Fund that is not expressly permitted under the terms of
this Agreement (other than interest rate modifications referred to in the
provision to the second preceding sentence),the Master Servicer will consult
with the Trustee or its designee [and the Certificate Insurer], in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur. The
Trustee may consult with counsel to make such written advice, and the cost of
same shall be borne by the party seeking to take the action not permitted by
this Agreement. At all times as may be required by the Code, the Master Servicer
shall use its best efforts to ensure that substantially all of the assets of the
Trust will consist of "qualified mortgages" as defined in Section 860G(a)(3) of
the Code and "permitted investments" as defined in Section 860G(a)(5) of the
Code. In the event any specified time period or other requirement set forth in
this Agreement in respect of compliance with the REMIC Provisions becomes
inconsistent with the REMIC Provisions as the same may be amended, such
specified time period or other requirement shall also be deemed amended to
comply with the requirements of this Section, unless such amended time period or
other requirements shall be less protective of the interests of the
Certificateholders and the Certificate Insurer, in which case, to the extent
consistent with the REMIC Provisions, the former time period or requirement
shall continue in force.
(d) Subject to Section 5.12, the Master Servicer is hereby authorized and
empowered to execute and deliver on behalf of the Trustee and each
Certificateholder, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Master Servicer, each Certificateholder and the
Trustee shall execute any powers of attorney furnished to the Trustee by the
Master Servicer and other documents necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties under this
Agreement.
(e) On and after such time as the Trustee receives the resignation of, or
notice of the removal of, the Master Servicer from its rights and obligations
under this Agreement, and with respect to resignation pursuant to Section 5.23,
after receipt by the Trustee [and the Certificate Insurer] of the Opinion of
Counsel required pursuant to Section 5.23, the Trustee or its designee approved
by the Certificate Insurer shall, within a period not to exceed 90 days, assume
all of the rights and obligations of the Master Servicer, subject to Section 7.2
hereof. The Master Servicer shall, upon request of the Trustee but at the
expense of the Master Servicer, deliver to the Trustee all documents and records
relating to the Mortgage Loans and an accounting of amounts collected and held
by the Master Servicer and otherwise use its best efforts to effect the orderly
and efficient transfer of servicing rights and obligations to the assuming
party.
(f) The Master Servicer shall deliver a list of Servicing Officers to the
Trustee [and the Certificate Insurer] by the Closing Date, which list may, from
time to time, be amended, modified or supplemented by the subsequent delivery to
the Trustee [and the Certificate Insurer] of any superseding list of Servicing
Officers.
Section 5.2 SUBSERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND
SUBSERVICERS.
(a) The Master Servicer may[, subject to the prior written approval of the
Certificate Insurer,] enter into Subservicing Agreements with Subservicers for
the servicing and administration of the Mortgage Loans and for the performance
of any and all other activities of the Master Servicer hereunder. The
[Certificate Insurer,] Trustee and Depositor acknowledge that the Master
Servicer has the authority to appoint the Originator as Subservicer. Each
Subservicer shall be either (1) a depository institution the accounts of which
are insured by the FDIC or (2) another entity that engages in the business of
originating, acquiring or servicing loans, and in either case shall be
authorized to transact business in the state or states where the related
Mortgaged Properties it is to service are situated if state law requires such
authorization. In addition, each Subservicer will obtain and preserve its
qualifications to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates and any of the Mortgage Loans
and to perform or cause to be performed its duties under the related
Subservicing Agreement which shall provide that the Subservicer's rights shall
automatically terminate upon the termination, resignation or other removal of
the Master Servicer under this Agreement. Each account used by any Subservicer
for the deposit of payments on any of the Mortgage Loans shall be an Eligible
Account.
(b) Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee[, the Certificate Insurer] and the Certificateholders for the
servicing and administering 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 Master Servicer alone were servicing and
administering the Mortgage Loans. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on Mortgage Loans when the
Subservicer has received such payments.
In the event the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of an Event of Default), the Trustee or its
designee may[, with the prior written consent of the Certificate Insurer, or
shall, at the direction of the Certificate Insurer,] either (i) assume all of
the rights and obligations of the Master Servicer under each Subservicing
Agreement that the Master Servicer may have entered into or (ii) notwithstanding
anything to the contrary contained in each such Subservicing Agreement,
terminate the related Subservicer without being required to pay any fee in
connection therewith.
Section 5.3 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS; COLLECTION
ACCOUNT.
(a) The Master Servicer shall use its best efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and any
applicable primary mortgage insurance policy, follow such collection procedures
as shall constitute Accepted Servicing Practices.
The Master Servicer shall establish and maintain in the name of the Trustee
one or more Collection Accounts (collectively, the "Collection Account"), in
trust for the benefit of the Holders of the Certificates and the Certificate
Insurer, one of which may be established and maintained with the Trustee (the
"Trustee Collection Account"). The Master Servicer shall promptly provide notice
to the Certificate Insurer, the Trustee and each Rating Agency of any creation
and establishment of a Collection Account hereunder. Each Collection Account
shall be established and maintained as an Eligible Account, and one Collection
Account may be maintained at the _______________. The Certificate Insurer, in
its sole discretion, may direct the Master Servicer to close such Collection
Account and to establish and maintain a replacement Collection Account that is
an Eligible Account.
(b) On the Closing Date, the Master Servicer shall deposit in the
Collection Account any amounts representing the principal portion of Monthly
Payments on the Mortgage Loans made in respect of any Due Date occurring in
_________, 199_ that are received on or prior to the Cut-Off Date and were not
reflected in the Cut-Off Date Principal Balance of the related Mortgage Loan. On
the third Business Day prior to the first Remittance Date, the Master Servicer
shall have deposited into the Certificate Account all of the following
collections and payments received or made by the Master Servicer in respect of
monies due under the Mortgage Loans (other than in respect of interest on the
Mortgage Loans accrued on or before the Due Date immediately preceding the
Cut-Off Date), and shall, on a daily basis thereafter (except as otherwise
provided herein), deposit such collections and payments into the Collection
Account:
(i)all payments received after the Cut-Off Date on account of
principal on the Mortgage Loans and all Principal Prepayments,
Curtailments, associated prepayment penalties and all Net REO Proceeds
collected after the Cut-Off Date;
(ii) all payments received after the Cut-Off Date on account of
interest on the Mortgage Loans (other than payments of interest that
accrued on each Mortgage Loan up to and including the Due Date immediately
preceding the Cut-Off Date);
(iii) all Net Liquidation Proceeds;
(iv) all Insurance Proceeds;
(v)all Released Mortgaged Property Proceeds;
(vi) any amounts payable in connection with the repurchase of any
Mortgage Loan and the amount of any Substitution Adjustment pursuant to
Sections 2.4 and 3.3 hereof; and
(vii) any amount expressly required to be deposited in the
Collection Account or Certificate Account in accordance with certain
provisions of this Agreement, including, without limitation amounts in
respect of the termination of the Trust Fund (which shall be deposited in
the Certificate Account), and amounts referenced in Sections 2.4(c),
3.3(a), 3.3(c), 5.6, and 6.6(b) of this Agreement;
PROVIDED, HOWEVER, that the Master Servicer shall be entitled, at its election,
either (a) to withhold and to pay to itself the applicable Servicing Fee from
any payment on account of interest or other recovery (including Net REO
Proceeds) as received and prior to deposit of such payments in the Collection
Account or (b) to withdraw the applicable Servicing Fee from the Collection
Account after the entire payment or recovery has been deposited therein;
PROVIDED, FURTHER, that with respect to any payment of interest received by the
Master Servicer in respect of a Mortgage Loan (whether paid by the Mortgagor or
received as Liquidation Proceeds, Insurance Proceeds or otherwise) which is less
than the full amount of interest then due with respect to such Mortgage Loan,
only that portion of such payment that bears the same relationship to the total
amount of such payment of interest as the rate used to determine the Servicing
Fee bears to the Mortgage Interest Rate borne by such Mortgage Loan shall be
allocated to the Servicing Fee with respect to such Mortgage Loan. All other
amounts shall be deposited in the Collection Account not later than the Business
Day following the day of receipt and posting by the Master Servicer.
Notwithstanding any regularly scheduled transfer of funds to the Certificate
Account, the Master Servicer shall, not later than 3 Business Days prior to each
Remittance Date transfer to the Certificate Account all funds in each Collection
Account that are to be included in the Master Servicer Remittance Amount on the
Determination Date immediately preceding the Remittance Date.
The Master Servicer shall direct, in writing, the institution maintaining
each Collection Account to invest the funds in the Collection Account only in
Permitted Investments. No Permitted Investment shall be sold or disposed of at a
gain prior to maturity unless the Master Servicer has obtained an Opinion of
Counsel (at the Master Servicer's expense) that such sale or disposition will
not cause the Trust Fund to be subject to the tax on income from prohibited
transactions imposed by Code Section 860F(a)(1),otherwise subject the Trust Fund
to tax or cause the 199_ - _ REMIC to fail to qualify as a REMIC. All income
(other than any gain from a sale or disposition of the type referred to in the
preceding sentence) realized from any such Permitted Investment shall be for the
benefit of the Master Servicer as additional servicing compensation. The amount
of any losses incurred in respect of any such investments shall be deposited in
the Collection Account by the Master Servicer out of its own funds immediately
as realized.
The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of those described in the last
paragraph of Section 5.14 and payments in the nature of prepayment charges other
than prepayment penalties, late payment charges or assumption fees need not be
deposited by the Master Servicer in the Collection Account. Notwithstanding any
provision herein to the contrary, the Master Servicer shall not deposit in any
Collection Account any amount other than amounts required to be deposited
therein in accordance with the terms of this Agreement, and the Master Servicer
shall have the right at all times to transfer funds from the Collection Account
to the Certificate Account. All funds deposited by the Master Servicer in the
Collection Account and the Certificate Account shall be held therein for the
account of the Trustee in trust for the Certificateholders [and the Certificate
Insurer] until disbursed in accordance with Section 6.1 or withdrawn in
accordance with Section 5.4.
(c) Prior to the time of their required deposit in the Collection Account,
all amounts required to be deposited therein may be deposited in an account in
the name of Master Servicer, provided that such account is an Eligible Account.
All such funds shall be held by the Master Servicer in trust for the benefit of
the Certificateholders and the Certificate Insurer pursuant to the terms hereof.
(d) The Collection Account may[, upon written notice by the Trustee to the
Certificate Insurer,] be transferred to a different depository so long as such
transfer is to an Eligible Account.
Section 5.4 PERMITTED WITHDRAWALS FROM THE COLLECTION ACCOUNT AND TRUSTEE
COLLECTION ACCOUNT. The Master Servicer is hereby authorized by the Trustee
(such authorization to be revocable by the Trustee at any time), from time to
time, to make withdrawals from the Collection Account or, as applicable, the
Trustee Collection Account but only for the following purposes:
(a) to reimburse itself from any funds in the Collection Account and the
Trustee Collection Account for any accrued unpaid Servicing Fees and for
unreimbursed Periodic Advances and Servicing Advances. The Master Servicer's
right to reimbursement for unpaid Servicing Fees and unreimbursed Servicing
Advances shall be limited to late collections on the related Mortgage Loan,
including Liquidation Proceeds, Released Mortgaged Property Proceeds, Insurance
Proceeds and such other amounts on deposit in the Collection Account as may be
collected by the Master Servicer from the related Mortgagor or otherwise
relating to the Mortgage Loan in respect of which such unreimbursed amounts are
owed. The Master Servicer's right to reimbursement for unreimbursed Periodic
Advances shall be limited to late collections of interest on any Mortgage Loan
and to Liquidation Proceeds and Insurance Proceeds on related Mortgage Loans;
(b) to reimburse itself for any Periodic Advances determined in good faith
to have become Nonrecoverable Advances, such reimbursement to be made from any
funds in the Collection Account and the Trustee Collection Account;
(c) to withdraw from the Collection Account or the Trustee Collection
Account any Preference Amount received from a Mortgagor;
(d) to withdraw any funds deposited in the Collection Account or Trustee
Collection Account that were mistakenly deposited therein;
(e) to withdraw from the Collection Account or the Trustee Collection
Account any funds needed to pay itself Servicing Compensation pursuant to
Section 5.14 hereof to the extent not retained or paid pursuant to Section 5.3,
5.4 or 5.14;
(f) to withdraw from the Collection Account or the Trustee Collection
Account to pay to the Transferor with respect to each Mortgage Loan or property
acquired in respect thereof that has been repurchased or replaced pursuant to
Section 2.4 or 3.3 or to pay to itself with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to Section
8.1 all amounts received thereon and not required to be deposited into the
Collection Account or the Trustee Collection Account as a result of such
repurchase or replacement;
(g) subject to the provisions of Section 5.20, to reimburse itself from the
Collection Account or the Trustee Collection Account for (1) Nonrecoverable
Advances that are not, with respect to aggregate Servicing Advances on any
single Mortgage Loan or REO Property, in excess of the Principal Balance thereof
and (2) for amounts to be reimbursed to the Master Servicer pursuant to Section
5.21;
(h) to withdraw from the Collection Account or the Trustee Collection
Account to pay to the Transferor with respect to each Mortgage Loan the excess,
if any, of (1) interest accrued and unpaid on such Mortgage Loan on the Cut-Off
Date, over (2) interest on such Mortgage Loan from the Due Date for such
Mortgage Loan immediately preceding the Cut-Off Date to the Cut-Off Date;
(i) to transfer funds from the Collection Account into the Trustee
Collection Account and to withdraw funds from the Collection Account and the
Trustee Collection Account necessary to make deposits to the Certificate Account
(which shall include the Trustee Fee) in the amounts and in the manner provided
for in Section 6.1 hereof;
(j) to pay itself any interest earned on or investment income earned with
respect to funds in the Collection Account or Trustee Collection Account; or
(k) to clear and terminate the Collection Account and Trustee Collection
Account upon the termination of this Agreement.
The Master Servicer shall keep and maintain a separate accounting for each
Mortgage Loan for the purpose of accounting for withdrawals from the Collection
Account pursuant to subclause (a).
Section 5.5 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES. With respect to
each Mortgage Loan, the Master Servicer shall maintain accurate records
reflecting casualty insurance coverage.
With respect to each Mortgage Loan as to which the Master Servicer
maintains escrow accounts, the Master Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and other
charges which are or may become a lien upon the Mortgaged Property and the
status of primary mortgage guaranty insurance premiums, if any, and casualty
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in any escrow account which shall have been estimated
and accumulated by the Master Servicer in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage. To the extent that a Mortgage does
not provide for escrow payments, the Master Servicer shall, if it has received
notice of a default or deficiency, monitor such payments to determine if they
are made by the Mortgagor.
Section 5.6 MAINTENANCE OF CASUALTY INSURANCE. For each Mortgage Loan, the
Master Servicer shall maintain or cause to be maintained in accordance with the
Master Servicer's loan servicing policies and procedures and to the extent
required by the related Mortgage Loan to be maintained by the Mortgagor, fire
and casualty insurance with a standard mortgagee clause and extended coverage in
an amount which is not less than the replacement value of the improvements
securing such Mortgage Loan or the unpaid principal balance of such Mortgage
Loan, whichever is less. If, upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and flood
insurance has been made available) the Master Servicer will cause to be
maintained in accordance with the Master Servicer's loan servicing policies and
procedures and to the extent required by the related Mortgage Loan to be
maintained by the Mortgagor, a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration with a
generally acceptable insurance carrier, in an amount representing coverage not
less than the least of (i) the unpaid principal balance of the Mortgage Loan,
(ii) the full insurable value of the Mortgaged Property or (iii) the maximum
amount of insurance available under the Flood Disaster Protection Act of 1973.
With respect to each Mortgage Loan, the Master Servicer shall in accordance with
the Master Servicer's loan servicing policies and procedures also maintain fire
insurance with extended coverage and, if applicable, flood insurance on REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the principal balance owing on such Mortgage Loan at the time of such
foreclosure or grant of deed in lieu of foreclosure plus accrued interest and
related Liquidation Expenses. It is understood and agreed that such insurance
shall be with insurers approved by the Master Servicer and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. The parties acknowledge
that the Master Servicer does not monitor maintenance of insurance with respect
to every Mortgage Loan. Pursuant to Section 5.3, any amounts collected by the
Master Servicer under any insurance policies maintained pursuant to this Section
5.6 (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or released to the Mortgagor in accordance with
Accepted Servicing Practices) shall be deposited into the Collection Account,
subject to withdrawal pursuant to Section 5.4. Any cost incurred by the Master
Servicer in maintaining any such insurance shall be added to the amount owing
under the Mortgage Loan where the terms of the Mortgage Loan so permit;
PROVIDED, HOWEVER, that the addition of any such cost shall not be taken into
account for purposes of calculating the principal amount of the Mortgage Note or
the Mortgage Loan secured by the Mortgage Note or the distributions to be made
to the Certificateholders. Such costs shall be recoverable by the Master
Servicer pursuant to Section 5.4. In the event that the Master Servicer shall
obtain and maintain a blanket policy issued by an insurer that is acceptable to
FNMA or FHLMC, insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligation as set forth in
the first sentence of this Section 5.6, it being understood and agreed that such
policy may contain a deductible clause, in which case the Master Servicer shall,
in the event that there shall not have been maintained on the related mortgaged
or acquired property an insurance policy complying with the first sentence of
this Section 5.6 and there shall have been a loss which would have been covered
by such a policy had it been maintained, be required to deposit from its own
funds into the Collection Account the amount not otherwise payable under the
blanket policy because of such deductible clause.
Section 5.7 MASTER SERVICER ACCOUNT. In addition to the Collection Account,
the Master Servicer shall be permitted to establish and maintain one or more
Master Servicer Accounts (collectively, the "Master Servicer Account"), each of
which shall be an Eligible Account, in which the Master Servicer may deposit all
payments by, and collections from, the Mortgagors received in connection with
the Mortgage Loans prior to the Master Servicer's deposit of all such funds
required to be deposited into the Collection Account. Withdrawals may be made
out of such collections in the Master Servicer Account to reimburse the Master
Servicer for any advances not otherwise required to be made from the Collection
Account or for any refunds made by the Master Servicer of any sums determined to
be overages, or to pay any interest owed to Mortgagors on such account to the
extent required by law, and in order to terminate and clear the Master Servicer
Account upon the termination of this Agreement upon the termination of the Trust
Fund.
Section 5.8 FIDELITY BOND; ERRORS AND OMISSIONS POLICY.
(a) The Master Servicer shall maintain with a responsible company, and at
its own expense, a blanket fidelity bond (a "Fidelity Bond") and an errors and
omissions insurance policy (an "Errors and Omissions Policy"), in a minimum
amount acceptable to FNMA or otherwise in an amount as is commercially available
at a cost that is not generally regarded as excessive by industry standards,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Master Servicer Employees"). Any such fidelity
bond and errors and omissions insurance shall protect and insure the Master
Servicer against losses, including losses resulting from forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Master
Servicer Employees. Such fidelity bond shall also protect and insure the Master
Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 5.8 requiring such fidelity bond
and errors and omissions insurance shall diminish or relieve the Master Servicer
from its duties and obligations as set forth in this Agreement. Upon the request
of the Trustee[, the Certificate Insurer] or any Certificateholder, the Master
Servicer shall cause to be delivered to the Trustee, such Certificateholder [or
the Certificate Insurer] a certified true copy of such fidelity bond and
insurance policy. On the Closing Date, such bond and insurance is maintained
with certain underwriters as may be specified in writing to [the Certificate
Insurer and] the Trustee, from time to time. Any such fidelity bond or insurance
policy shall not be canceled or modified in a materially adverse manner without
written notice to the Trustee [and the Certificate Insurer].
(b) The Master Servicer shall be deemed to have complied with this
provision if one of its respective Affiliates has such a Fidelity Bond and
Errors and Omissions Policy and, by the terms of such fidelity bond and errors
and omission policy, the coverage afforded thereunder extends to the Master
Servicer. The Master Servicer shall cause each and every Subservicer for it to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet the requirements of Section 5.8(a) hereof. Any such Fidelity
Bond and Errors and Omissions Policy shall not be canceled or modified in a
materially adverse manner without written notice to the Certificate Insurer.
Section 5.9 COLLECTION OF TAXES, ASSESSMENTS AND OTHER ITEMS. The Master
Servicer shall deposit all payments by Mortgagors for taxes, assessments,
primary mortgage or hazard insurance premiums or comparable items in the
Collection Account. Withdrawals from the Collection Account may be made to
effect payment of taxes, assessments, primary mortgage or hazard insurance
premiums or comparable items, to reimburse the Master Servicer out of related
collections for any advances made in the nature of any of the foregoing, to
refund to any Mortgagors any sums determined to be overages, or to pay any
interest owed to Mortgagors on such account to the extent required by law. The
Master Servicer shall advance the payments referred to in the first sentence of
this Section 5.9 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
Master Servicer shall be required to so advance only to the extent that such
advances, in the good faith judgment of the Master Servicer, will be recoverable
by the Master Servicer pursuant to Section 5.3 out of Liquidation Proceeds,
Insurance Proceeds or otherwise.
Section 5.10 PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION;
ADDITIONAL INFORMATION. The Trustee shall prepare or cause to be prepared for
filing with the Commission (other than the Current Report on Form 8-K to be
filed by the Depositor in connection with computational materials and the
initial Current Report on Form 8-K to be filed by the Depositor in connection
with the issuance of the Certificates) any and all reports, statements and
information respecting the Trust Fund and/or the Certificates required to be
filed with the Commission pursuant to the Securities Exchange Act of 1934, and
shall solicit any and all proxies of the Certificateholders whenever such
proxies are required to be solicited pursuant to the Securities Exchange Act of
1934. The Depositor shall promptly file, and exercise its reasonable best
efforts to obtain a favorable response to, no-action requests with, or other
appropriate exemptive relief from, the Commission seeking the usual and
customary exemption from such reporting requirements granted to issuers of
securities similar to the Certificates. Fees and expenses incurred by the
Depositor in connection with this Section shall not be reimbursable from the
Trust Fund.
The Master Servicer and the Depositor each agree to promptly furnish the
Trustee, from time to time upon request, such further information, reports and
financial statements within their respective control related to this Agreement
and the Mortgage Loans as the Trustee reasonably deems appropriate to prepare
and file all necessary reports with the Commission.
Section 5.11 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. In
any case in which a Mortgaged Property is about to be conveyed by the Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable thereon) and the Master Servicer has knowledge of such
prospective conveyance, the Master Servicer shall effect assumptions in
accordance with the terms of any due-on-sale provision contained in the related
Mortgage Note or Mortgage. The Master Servicer shall enforce any due-on-sale
provision contained in such Mortgage Note or Mortgage to the extent the
requirements thereunder for an assumption of the Mortgage Loan have not been
satisfied to the extent permitted under the terms of the related Mortgage Note,
unless such provision is not exercisable under applicable law and governmental
regulations or in the Master Servicer's judgment, such exercise is reasonably
likely to result in legal action by the Mortgagor, or such conveyance is in
connection with a permitted assumption of the related Mortgage Loan. Subject to
the foregoing, the Master Servicer is authorized to take or enter into an
assumption agreement from or with the Person to whom such property is about to
be conveyed, pursuant to which such person becomes liable under the related
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Interest Rate with respect to
such Mortgage Loan shall remain unchanged. The Master Servicer is also
authorized to release the original Mortgagor from liability upon the Mortgage
Loan and substitute the new Mortgagor as obligor thereon. In connection with
such assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual for mortgage loans similar to the Mortgage Loans and as it
applies to mortgage loans owned solely by it. The Master Servicer shall notify
the Trustee that any such assumption or substitution agreement has been
completed by forwarding to the Trustee the original copy of such assumption or
substitution agreement, which copy shall be added by the Trustee 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. In connection with any such assumption or substitution agreement,
the Mortgage Interest Rate of the related Mortgage Note and the payment terms
shall not be changed. Any fee collected by the Master Servicer for entering into
an assumption or substitution of liability agreement will be retained by the
Master Servicer as servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any conveyance by
the Mortgagor of the property subject to the Mortgage or any assumption of a
Mortgage Loan by operation of law which the Master Servicer in good faith
determines it may be restricted by law from preventing, for any reason
whatsoever, or if the exercise of such right would impair or threaten to impair
any recovery under any applicable insurance policy or, in the Master Servicer's
judgment, be reasonably likely to result in legal action by the Mortgagor.
Section 5.12 REALIZATION UPON DEFAULTED MORTGAGE LOANS. Except as provided
in the last two paragraphs of this Section 5.12, the Master Servicer shall, on
behalf of the Trust, 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 pursuant to Section 5.1. In connection with
such foreclosure or other conversion, the Master Servicer shall follow Accepted
Servicing Practices. The foregoing is subject to the proviso that the Master
Servicer shall not be required to expend its own funds in connection with any
foreclosure or to restore any damaged property unless it shall determine that
(i) such foreclosure and/or restoration will increase the proceeds of
liquidation of the Mortgage Loan to Certificateholders after reimbursement to
itself for such expenses and (ii) such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall reimburse itself for
such expense prior to the deposit in the Collection Account of such proceeds).
The Master Servicer shall be entitled to reimbursement of the Servicing Fee and
other amounts due it, if any, to the extent, but only to the extent, that
withdrawals from the Collection Account and the Trustee Collection Account with
respect thereto are permitted under Section 5.3.
The Master Servicer may foreclose against the Mortgaged Property securing a
defaulted Mortgage Loan either by foreclosure, by sale or by strict foreclosure,
and in the event a deficiency judgment is available against the Mortgagor or any
other person, may proceed for the deficiency.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be issued to the Trustee, or to the Master Servicer on
behalf of the Trustee and the Certificateholders. Notwithstanding any such
acquisition of title and cancellation of the related Mortgage Loan, such REO
Mortgage Loan shall be considered to be a Mortgage Loan held in the applicable
REMIC of the Trust Fund until such time as the related Mortgaged Property shall
be sold and such REO Mortgage Loan becomes a Liquidated Mortgage Loan.
Consistent with the foregoing, for purposes of all calculations hereunder, so
long as such REO Mortgage Loan shall be considered to be an Outstanding Mortgage
Loan:
(a) Notwithstanding that the indebtedness evidenced by the related Mortgage
Note shall have been discharged, such Mortgage Note and the related amortization
schedule in effect at the time of any such acquisition of title (after giving
effect to any previous Curtailments and before any adjustment thereto by reason
of any bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period) shall be assumed to remain in effect, except that such schedule
shall be adjusted to reflect the application of Net REO Proceeds received in any
month pursuant to the succeeding clause.
(b) Net REO Proceeds received in any month shall be deemed to have been
received first in payment of the accrued interest that remained unpaid on the
date that such Mortgage Loan became an REO Mortgage Loan of the applicable REMIC
of the Trust Fund, with the excess thereof, if any, being deemed to have been
received in respect of the delinquent principal installments that remained
unpaid on such date. Thereafter, Net REO Proceeds received in any month shall be
applied to the payment of installments of principal and accrued interest on such
Mortgage Loan deemed to be due and payable in accordance with the terms of such
Mortgage Note and such amortization schedule. If such Net REO Proceeds exceed
the then Unpaid REO Amortization, the excess shall be treated as a Curtailment
received in respect of such Mortgage Loan.
(c) The Net REO Proceeds allocated to the payment of a related Servicing
Fee shall be limited to an amount equal to the product of (x) the total amount
of Net REO Proceeds allocable to interest multiplied by (y) the fraction, the
numerator of which is the interest rate at which the Servicing Fee is determined
and the denominator of which is the Mortgage Interest Rate borne by such
Mortgage Loan.
In the event that the 199_ - _ REMIC acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, such Mortgaged Property shall be disposed of by or on behalf of
such 199_ - _ REMIC within three years after its acquisition thereby unless (i)
the Master Servicer shall have provided to the Trustee an Opinion of Counsel to
the effect that the holding by such 199_ - _ REMIC of the Trust Fund of such
Mortgaged Property subsequent to three years after its acquisition (and
specifying the period beyond such three-year period for which the Mortgaged
Property may be held) will not cause such 199_ - _ REMIC to be subject to the
tax on prohibited transactions imposed by Code Section 860F(a)(1), otherwise
subject such 199_ - _ REMIC or the Trust Fund to tax or cause the 199_ - _ REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding,
or (ii) the Master Servicer or the Trustee (at the Master Servicer's expense)
shall have applied for, at least 60 days prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Code Section 856(e)(3), in which case the three-year period
shall be extended by the applicable period. The Master Servicer shall further
ensure that the Mortgaged Property is administered so that it constitutes
"foreclosure property" within the meaning of Code Section 860G(a)(8) at all
times, that the sale of such property does not result in the receipt by the 199_
- _ REMIC of any income from non-permitted assets as described in Code Section
860F(a)(2)(B), and that the 199_ - _ REMIC does not derive any "net income from
foreclosure property" within the meaning of Code Section 860G(c)(2) with respect
to such property.
In lieu of foreclosing upon any defaulted Mortgage Loan, the Master
Servicer may, in its discretion, permit the assumption of such Mortgage Loan if,
in the Master Servicer's judgment, such default is unlikely to be cured and if
the assuming borrower satisfies the Master Servicer's underwriting guidelines
with respect to mortgage loans owned by the Master Servicer. In connection with
any such assumption, the Mortgage Interest Rate of the related Mortgage Note and
the payment terms shall not be changed. Any fee collected by the Master Servicer
for entering into an assumption agreement will be retained by the Master
Servicer as servicing compensation. Alternatively, the Master Servicer may
encourage the refinancing of any defaulted Mortgage Loan by the Mortgagor.
Notwithstanding the foregoing, prior to instituting foreclosure proceedings
or accepting a deed-in-lieu of foreclosure with respect to any Mortgaged
Property, the Master Servicer shall make, or cause to be made, inspection of the
Mortgaged Property in accordance with the Accepted Servicing Practices and, with
respect to environmental hazards, such procedures as are required by the
provisions of the FNMA's selling and servicing guide applicable to single-family
homes and in effect on the date hereof. The Master Servicer shall be entitled to
rely upon the results of any such inspection made by others. In cases where the
inspection reveals that such Mortgaged Property is potentially contaminated with
or affected by hazardous wastes or hazardous substances, the Master Servicer
shall promptly give written notice of such fact to [the Certificate Insurer,]
the Trustee and each Class A Certificateholder. The Master Servicer shall not
commence foreclosure proceedings or accept a deed-in-lieu of foreclosure for
such Mortgaged Property [without obtaining the consent of the Certificate
Insurer].
Section 5.13 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES. Upon the
payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer shall (i) immediately deliver to the Trustee
two copies of a notice substantially in the form of the Request for Release
attached hereto as Exhibit H (which request shall include a statement to the
effect that all amounts received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 5.3 have
been or shall be so deposited) and executed by a Servicing Officer and (ii)
request delivery to it of the Mortgage File. Upon receipt of such Request for
Release, or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from an Authorized Officer, the Trustee, or the
Custodian on its behalf, shall promptly release the related Mortgage File to the
Master Servicer. Upon any such payment in full, the Master Servicer is
authorized to give, as agent for the Trustee and the mortgagee under the
Mortgage which secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the property subject to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account. In connection
therewith, the Trustee shall execute and return to the Master Servicer any
required power of attorney provided to the Trustee by the Master Servicer and
other required documentation in accordance with Section 5.1(d). From time to
time and as appropriate for the servicing or foreclosure of any Mortgage Loan
and in accordance with Accepted Servicing Practices, the Trustee shall, upon
request of the Master Servicer and delivery to the Trustee of a Request for
Release signed by a Servicing Officer, release, or cause the Custodian to
release, the related Mortgage File to the Master Servicer and shall execute such
documents as shall be necessary to the prosecution of any such proceedings. Such
Request for Release shall obligate the Master Servicer to return the Mortgage
File to the Trustee when the need therefor by the Master Servicer no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt
of a certificate of a Servicing Officer similar to the Request for Release
herein above specified, the Mortgage File shall be delivered by the Trustee to
the Master Servicer.
Section 5.14 SERVICING FEE; SERVICING COMPENSATION.
(a) The Master Servicer shall be entitled, at its election, either (1) to
pay itself the Servicing Fee out of any Mortgagor payment on account of interest
or Net REO Proceeds actually collected prior to the deposit of such payment in
the Collection Account or (2) to withdraw from the Collection Account or Trustee
Collection Account such Servicing Fee pursuant to Section 5.4. The Master
Servicer shall also be entitled, at its election, either (i) to pay itself the
Servicing Fee in respect of each delinquent Mortgage Loanout of Liquidation
Proceeds in respect of such Mortgage Loan or other recoveries with respect
thereto to the extent permitted in Section 5.3(a) or (ii) to withdraw from the
Collection Account the Servicing Fee in respect of each such Mortgage Loan to
the extent of such Liquidation Proceeds or other recoveries, to the extent
permitted by Section 5.4(a).
The aggregate Servicing Fee is reserved for the administration of the Trust
Fund and, in the event of replacement of the Master Servicer as Master Servicer
of the Mortgage Loans, for the payment of other expenses related to such
replacement. The aggregate Servicing Fee shall be offset as provided in Section
5.19. The Master Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including maintenance of
the hazard insurance required by Section 5.5) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
(b) Servicing compensation in the form of assumption fees, late payment
charges, tax service fees, fees for statement of account or payoff of the
Mortgage Loan (to the extent permitted by applicable law) or otherwise shall be
retained by the Master Servicer and are not required to be deposited in the
Collection Account.
Section 5.15 REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS. Not
later than 15 days after each Remittance Date, the Master Servicer shall provide
to the Trustee and the Certificate Insurer a statement, certified by a Servicing
Officer, setting forth the status of the Collection Account as of the close of
business on the related Determination Date, stating that all distributions
required by this Agreement to be made by the Master Servicer on behalf of the
Trustee have been made (or if any required distribution has not been made by the
Master Servicer, specifying the nature and status thereof) and showing, for the
period covered by such statement, the aggregate of deposits into and withdrawals
from the Collection Account for each category of deposit specified in Section
5.3 and each category of withdrawal specified in Section 5.4, the allocation of
such amounts between principal and interest collected on the Mortgage Loans and
the aggregate of deposits into the Certificate Account as specified in Section
6.1(c). Such statement shall also state the aggregate unpaid Principal Balance
of all the Mortgage Loans as of the close of business on the last day of the
month preceding the month in which such Remittance Date occurs. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request.
Section 5.16 ANNUAL STATEMENT AS TO COMPLIANCE. The Master Servicer will
deliver to the Trustee, [the Certificate Insurer,] _______ and _______ not later
than the last day of the fifth month (as of the Closing Date, May 31st)
subsequent to the end of the Master Servicer's fiscal year, an Officers'
Certificate stating as to each signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of its
performance under this Agreement has been made under such officer's supervision,
and (ii) to the best of such officer's knowledge, based on such review, the
Master Servicer has fulfilled all 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 first such Officers' Certificate shall be
delivered in _______ 20__. Such Officers' Certificate shall be accompanied by
the statement described in Section 5.17 of this Agreement. Copies of such
statement shall, upon request, be provided to any Certificateholder by the
Master Servicer, or by the Trustee at the Master Servicer's expense if the
Master Servicer shall fail to provide such copies.
Section 5.17 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. Not
later than the last day of the fifth month (as of the Closing Date, __________)
subsequent to the end of the Master Servicer's fiscal year, the Master Servicer,
at its expense, shall cause a firm of nationally recognized independent public
accountants to furnish a statement to the Trustee, [the Certificate Insurer,]
_______ and _______ to the effect that, on the basis of an examination of
certain documents and records relating to the servicing of the mortgage loans
being serviced by the Master Servicer under pooling and servicing agreements
similar to this Agreement (which agreements shall be described in a schedule to
such statement), conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that such
servicing has been conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers and that such examination has disclosed no
exceptions or errors relating to the servicing activities of the Master Servicer
(including servicing of Mortgage Loans subject to this Agreement) that, in the
opinion of such firm, are material, except for such exceptions as shall be set
forth in such statement. The first such statement shall be delivered in _______
20__. Copies of such statement shall, upon request, be provided to
Certificateholders by the Master Servicer, or by the Trustee at the Master
Servicer's expense if the Master Servicer shall fail to provide such copies. For
purposes of such statement, such firm may conclusively presume that any pooling
and servicing agreement which governs mortgage pass-through certificates offered
by the Depositor (or any predecessor or successor thereto) in a registration
statement under the Securities Act of 1933, as amended, is similar to this
Agreement, unless such other pooling and servicing agreement expressly states
otherwise. In the event such firm requires the Trustee to agree to the
procedures performed by such firm, the Master Servicer shall direct the Trustee
in writing to agree; it being understood and agreed that the Trustee will
deliver such letter of agreement in conclusive reliance upon the direction of
the Master Servicer, and the Trustee shall not make any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only, and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from the information
contained therein, including the Master Servicer's compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely exclusively on
the Officer's Certificates).
Section 5.18 REPORTS TO BE PROVIDED BY THE MASTER SERVICER.
(a) In connection with the transfer of the Certificates, the Trustee on
behalf of any Certificateholder may request that the Master Servicer make
available to any prospective Certificateholder annual unaudited financial
statements of the Master Servicer (or, upon request, audited annual financial
statements of the Master Servicer's ultimate parent corporation) for one or more
of the most recently completed fiscal years for which such statements are
available, which request shall not be unreasonably denied or unreasonably
delayed. [Such annual unaudited financial statements also shall be made
available to the Certificate Insurer upon request.] In the event such firm
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to agree; it being
understood and agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
shall not make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures. Delivery of such reports, information and documents to the
Trustee is for informational purposes only, and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from the information contained therein, including the Master
Servicer's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on the Officer's Certificates).
(b) The Master Servicer also agrees to make available on a reasonable basis
to [the Certificate Insurer,] the Trustee or any prospective Certificateholder a
knowledgeable financial or accounting officer for the purpose of answering
reasonable questions respecting recent developments affecting the Master
Servicer or the financial statements of the Master Servicer and to permit [the
Certificate Insurer or] any prospective Certificateholder to inspect the Master
Servicer's servicing facilities during normal business hours for the purpose of
satisfying [the Certificate Insurer,] the Trustee or such prospective
Certificateholder that the Master Servicer has the ability to service the
Mortgage Loans in accordance with this Agreement.
Section 5.19 ADJUSTMENT OF SERVICING COMPENSATION IN RESPECT OF PREPAID
MORTGAGE LOANS. The aggregate amount of the Servicing Fees that the Master
Servicer shall be entitled to receive with respect to all of the Mortgage Loans
and each Remittance Date shall be offset on such Remittance Date by an amount
equal to the aggregate Prepayment Interest Shortfall with respect to all
Mortgage Loans which were subjects of Principal Prepayments during the Due
Period applicable to such Remittance Date. The amount of any offset against the
aggregate Servicing Fee with respect to any Remittance Date under this Section
5.19 shall be limited to the aggregate amount of the Servicing Fees otherwise
payable to the Master Servicer (without adjustment on account of Prepayment
Interest Shortfalls) with respect to (i) scheduled payments having the Due Date
occurring in the Due Period applicable to such Remittance Date received by the
Master Servicer prior to the Determination Date, and (ii) Principal Prepayments,
Curtailments and Liquidation Proceeds received in the Due Period applicable to
such Remittance Date, and the rights of the Certificateholders to the offset of
the aggregate Prepayment Interest Shortfalls shall not be cumulative.
Section 5.20 PERIODIC ADVANCES. If, on the Business Day prior to any
Determination Date, the Master Servicer determines that any Monthly Payments due
on the Due Date immediately preceding such Determination Date have not been
received as of the close of business on the second Business Day preceding such
Determination Date, the Master Servicer shall determine the amount of any
Periodic Advance required to be made with respect to such unpaid Monthly
Payments on the related Determination Date. The Master Servicer shall, on the
Business Day preceding such Determination Date, certify and deliver a magnetic
tape or diskette to the Trustee indicating the payment status of each Mortgage
Loan as of the second Business Day preceding such Determination Date and shall
cause to be deposited in the Collection Account an amount equal to the Periodic
Advance for the related Determination Date, which deposit may be made in whole
or in part from funds in the Collection Account being held for future
distribution or withdrawal on or in connection with Remittance Dates in
subsequent months. Any funds being held for future distribution to
Certificateholders and so used shall be replaced by the Master Servicer from its
own funds by deposit into the Collection Account on or before the Determination
Date corresponding to any such future Determination Date to the extent that
funds in the Collection Account for such future Determination Date shall
otherwise be less than the amount required to be transferred to the Certificate
Account in respect of payments to Certificateholders required to be made on the
Remittance Date related to such future Determination Date.
The Master Servicer shall designate on its records the specific Mortgage
Loans and related installments (or portions thereof) as to which such Periodic
Advance shall be deemed to have been made, such designation, except in cases of
manifest error, being conclusive for purposes of withdrawals from the Collection
Account or Trustee Collection Account pursuant to Section 5.4.
Section 5.21 INDEMNIFICATION; THIRD PARTY CLAIMS.
(a) Each of the Master Servicer, the Depositor, and the Transferor (solely
for the purpose of this Section 5.21, the "Indemnifying Parties") agrees to
indemnify and to hold each of the Master Servicer, the Depositor, the Trustee,
the Transferor[, the Certificate Insurer] and each Certificateholder (solely for
the purpose of this Section 5.21, the "Indemnified Parties") harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Indemnified Parties may, respectively, sustain in any way related to the failure
of any one or more of the Indemnifying Parties to perform its respective duties
in compliance with the terms of this Agreement. Each Indemnified Party and the
Master Servicer shall promptly notify the other Indemnified Parties if a claim
is made by a third party with respect to this Agreement, and the Master Servicer
shall [with the consent of the Certificate Insurer, such consent not to be
unreasonably withheld,] assume the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees [approved by
the Certificate Insurer], and promptly pay, discharge and satisfy any judgment
or decree which may be entered against the Indemnified Parties in respect of
such claim. The Trustee shall, out of the assets of the Trust Fund, reimburse
the Master Servicer in accordance with Section 5.14 hereof for all amounts
advanced by it pursuant to the preceding sentence except when the claim relates
directly to the failure of the Master Servicer to service and administer the
Mortgages in compliance with the terms of this Agreement; provided, that the
Master Servicer's indemnity hereunder shall not be in any manner conditioned on
the availability of funds for such reimbursement.
(b) The Trustee, at the written request of the Master Servicer (which the
Trustee may conclusively rely on) shall reimburse the Transferor from amounts
otherwise distributable on the Class R Certificates for all amounts advanced by
the Transferor pursuant to the second sentence of Section 4.3 of the Purchase
and Sale Agreement except when the relevant claim relates directly to the
failure of the Transferor to perform its duties in compliance with the terms of
the Purchase and Sale Agreement.
Section 5.22 MAINTENANCE OF CORPORATE EXISTENCE AND LICENSES; MERGER OR
CONSOLIDATION OF THE MASTER SERVICER.
(a) The Master Servicer will keep in full effect its existence, rights and
franchises as a corporation, will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement and will otherwise operate its
business so as to cause the representations and warranties under Section 3.1 to
be true and correct at all times under this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be an established
mortgage loan servicing institution [acceptable to the Certificate Insurer] that
has a net worth of at least $15,000,000 and is a Permitted Transferee, and in
all events shall be the successor of the Master Servicer 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. The Master Servicer
shall send notice of any such merger or consolidation to the Trustee [and the
Certificate Insurer].
Section 5.23 ASSIGNMENT OF AGREEMENT BY MASTER SERVICER; MASTER SERVICER
NOT TO RESIGN. The Master Servicer shall not assign this Agreement nor resign
from the obligations and duties hereby imposed on it except by mutual written
consent of the Master Servicer, the Transferor[, the Certificate Insurer] and
the Trustee or upon the determination that the Master Servicer's duties
hereunder are no longer permissible under applicable law and that such
incapacity cannot be cured by the Master Servicer without the incurrence [, in
the reasonable judgment of the Certificate Insurer,] of unreasonable expense.
Any such determination that the Master Servicer's duties hereunder are no longer
permissible under applicable law permitting the resignation of the Master
Servicer shall be evidenced by a written Opinion of Counsel (who may be counsel
for the Master Servicer) to such effect delivered to the Trustee, the
Transferor, the Depositor [and the Certificate Insurer]. No such resignation
shall become effective until the Trustee or another successor appointed in
accordance with the terms of this Agreement has assumed the Master Servicer's
responsibilities and obligations hereunder in accordance with Section 7.2. The
Master Servicer shall provide the Trustee, _______ and _______ [and the
Certificate Insurer] with 30 days prior written notice of its intention to
resign pursuant to this Section 5.23.
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ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.1 ESTABLISHMENT OF CERTIFICATE ACCOUNT, DEPOSITS TO THE
CERTIFICATE ACCOUNT.
(a) The Trustee shall establish and maintain the Certificate Account which
shall be titled "Certificate Account, ____________________, as trustee for the
registered holders of _______ Home Equity Asset Backed Certificates, Series 199_
- _, Class A and Class R" and which shall be an Eligible Account. Notice of the
establishment of the Certificate Account shall be promptly provided in writing
to each of the Master Servicer, the Rating Agencies [and the Certificate
Insurer].
(b) The Trustee shall control and receive the income from the investment of
funds in the Certificate Account. The Trustee shall deposit the amount of any
losses incurred in respect of any such investments in the Certificate Account
out of its own funds immediately as realized.
(c) On each Determination Date, the Master Servicer shall cause to be
deposited in the Certificate Account from funds on deposit in the Collection
Account, an amount equal to the Master Servicer Remittance Amount (net of the
amount to be deposited pursuant to clause (ii) below) and (ii) from funds on
deposit in the Collection Account or the Trustee Collection Account, the Net
Foreclosure Profits, if any with respect to the related Remittance Date, minus
any portion thereof payable to the Master Servicer pursuant to Section 5.3.
Section 6.2 PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT. The Trustee
shall, in accordance with the Master Servicer's written directions (in the case
of (a), (b), (d) or (e) below) to the Trustee as described in Section 6.5,
withdraw or cause to be withdrawn funds from the Certificate Account for the
following purposes:
(a) to effect the distributions described in Section 6.5(a) and 6.5(b);
(b) to pay to or upon the direction of the Transferor with respect to each
Mortgage Loan or property acquired in respect thereof that has been repurchased
or replaced pursuant to Section 2.4 or 3.3 or to pay to the Master Servicer with
respect to each Mortgage Loan or property acquired in respect thereof that has
been purchased all amounts received thereon deposited in the Certificate Account
that do not constitute property of the Trust Fund;
(c) to pay the Trustee any interest earned on or investment income earned
with respect to funds in the Certificate Account;
(d) to return to the Collection Account any amount deposited in the
Certificate Account that was not required to be deposited therein; and
(e) to clear and terminate the Certificate Account upon termination of the
Trust Fund pursuant to Article VIII.
The Trustee shall keep and maintain a separate accounting for withdrawals
from the Certificate Account pursuant to each of subclauses (a) through (e)
listed above.
Section 6.3 COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Trustee may demand payment or delivery of all money and other
property payable to or receivable by the Trustee pursuant to this Agreement,
including, but not limited to, (i) all payments due from the Master Servicer or
any Subservicer on the Mortgage Loans in accordance with the respective terms
and conditions of such Mortgage Loans and required to be paid over to the
Trustee by the Master Servicer or by any Subservicer [and (ii) Insured Payments
from the Certificate Insurer]. The Trustee shall hold all such money and
property received by it as part of the Trust Fund and shall apply it as provided
in this Agreement.
[Section 6.4 The Certificate Insurance Policy.
(a) Not later than two Business Days prior to the Remittance Date, the
Trustee, based on the information provided to it by the Master Servicer pursuant
to Section 6.5 hereof, shall determine with respect to the immediately following
Remittance Date the amount to be on deposit in the Certificate Account reduced
by (x) the sum of the amounts described in clauses (i) and (ii) of Section
6.5(a) and the amounts described in clauses (i) and (ii) of Section 6.5(b) for
the related Remittance Date, and further not including (y) any Insured Payment.
(b) Not later than 12:00 noon New York City time on the second Business Day
preceding each Remittance Date, the Trustee shall, if the Trustee, based solely
on information provided by the Master Servicer, determines that the Available
Amount for the related Remittance Date is less than the sum of the Class A-1
Interest Distribution Amount, Class A-2 Interest Distribution Amount, Class A-3
Interest Distribution Amount, Class A-4 Interest Distribution Amount and Class
A-5 Interest Distribution Amount and any Subordination Deficit for such
Remittance Date, complete a Notice in the form of Exhibit A to the Class A
Certificate Insurance Policy, and submit such notice to the Certificate Insurer
and such notice shall serve as a claim for an Insured Payment in an amount equal
to the Insured Payment due with respect to the Class A Certificates for and on
such Remittance Date. The Insured Payment shall be deposited directly into the
Certificate Account in accordance with the Notice and the Certificate Insurance
Policy.
(c) The Trustee shall keep a complete and accurate record of the amount of
interest and principal paid in respect of any Certificate from moneys received
under the Certificate Insurance Policy. The Certificate Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon one Business Day's prior notice to the Trustee.
(d) In the event that the Trustee has received a certified copy of an order
of the appropriate court that any amount distributed on the Class A
Certificates, including any amounts represented by an Insured Payment, has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Trustee shall so notify the Certificate Insurer, shall comply with the
provisions of the Certificate Insurance Policy to obtain payment by the
Certificate Insurer of such voided amount distributed, and shall, at the time it
provides notice to the Certificate Insurer, notify, by mail to
Certificateholders of the affected Certificates that, in the event any
Certificateholder's amount distributed is so recovered, such Certificateholder
will be entitled to payment pursuant to the Certificate Insurance Policy, a copy
of which shall be made available through the Trustee, the Certificate Insurer or
the Certificate Insurer's fiscal agent, if any, and the Trustee shall furnish to
the Certificate Insurer or its fiscal agent, if any, its records evidencing the
payments which have been made by the Trustee and subsequently recovered from
Certificateholders, and dates on which such payments were made.
(e) The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any distribution made with respect to the Certificates.
Each Certificateholder, by its purchase of Certificates, the Master Servicer and
the Trustee agree that, the Certificate Insurer (so long as no Certificate
Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (1) the direction of any appeal
of any order relating to such Preference Claim and (2) the posting of any
surety, supersedes or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be subrogated
to, and each Certificateholder, the Master Servicer and the Trustee hereby
delegate and assign to the Certificate Insurer, to the fullest extent permitted
by law, the rights of the Master Servicer, the Trustee and each
Certificateholder in the conduct of any such Preference Claim, including,
without limitation, all rights of any party to any adversary proceeding or
action with respect to any court order issued in connection with any such
Preference Claim.]
Section 6.5 DISTRIBUTIONS. No later than 12:00 noon California time on the
Business Day preceding each Determination Date, the Master Servicer shall
deliver to the Trustee and to the Certificate Insurer a report in a mutually
agreed upon format specifying (x) the outstanding Principal Balances of each of
the Mortgage Loans as of the last day of the calendar month immediately
preceding the Due Period applicable to such Determination Date, (y) such of the
information included in Section 6.7(c) as to the Mortgage Loans as the Trustee
may reasonably require [or the Certificate Insurer may reasonably request] and
(z) such information as to each Mortgage Loan as of the Record Date immediately
preceding such Determination Date and such other information as the Trustee
shall reasonably require [or the Certificate Insurer may reasonably request].
The Master Servicer shall include written direction to the Trustee [(with a copy
delivered to the Certificate Insurer)] specifying the following information
(which need not be in computer-readable form): (i) each amount to be transferred
from the Collection Account to the Certificate Account, including (a) the Master
Servicer Remittance Amount, (b) the Net Foreclosure Profits (net of any portion
payable to the Master Servicer) and (c) the Periodic Advances for the related
Remittance Date; and (ii) instructions to the Trustee specifying the amounts to
be withdrawn from the Certificate Account pursuant to Section 6.2(a) (including
therein an itemization of the amounts to be distributed pursuant to Section
6.2(a)(i) as specified in Sections 6.5(a)(i)-(ix) and 6.5(b)(i)-(ix)). The
information with respect to the Remittance Date provided by the Master Servicer
to the Trustee [and the Certificate Insurer] on the Business Day preceding each
Determination Date shall also include the Class A-1 Pass-Through Rate, the
Premium Percentage, the Class A-1 Principal Balance, the Class A-2 Principal
Balance, the Class A-3 Principal Balance, the Class A-4 Principal Balance, the
Class A-5 Principal Balance, the aggregate Principal Balance of the Mortgage
Loans, the Overcollateralization Deficit; the Overcollateralization Increase
Amount, the Overcollateralization Amount; the Overcollateralization Target
Amount; and any Subordinate Deficit. The Master Servicer shall also calculate
and provide the Available Amount, the Excess Spread, and the amount of any
Insured Payment. Simultaneous with the delivery of the foregoing information to
the Trustee, the Master Servicer shall provide the Trustee [and the Certificate
Insurer] with a report including information specified in each of Sections
6.7(a)(i)-(xi) and in Section 6.7(c)(i)-(vii).
(a) With respect to the Certificate Account (including, if deposited into
such Certificate Account, any Insured Payments), on each Remittance Date, the
Trustee shall make the following allocations, disbursements and transfers in the
following order of priority, in accordance with the information received
pursuant to the immediately preceding paragraph and each such allocation,
transfer and disbursement shall be treated as having occurred only after all
preceding allocations, transfers and disbursements have occurred:
(i)from the Master Servicer Remittance Amount, to the Holders of
the Class R Certificates, any prepayment penalties collected during the
related Due Period with respect to a Mortgage Loan;
(ii) from the Master Servicer Remittance Amount, to the
Certificate Insurer, a Proportional Share of the [Certificate Insurance
Premium Amount];
(iii) from the Master Servicer Remittance Amount Available
Amount, to the Trustee, a Proportional Share of the Trustee Fees then due
to it;
(iv) from the Available Amount plus any Excess Spread plus the
applicable portion of any Insured Payment, to the Class A-1
Certificateholders an amount equal to the Class A-1 Interest Distribution
Amount, to the Class A-2 Certificateholders an amount equal to the Class
A-2 Interest Distribution Amount, to the Class A-3 Certificateholders an
amount equal to the Class A-3 Interest Distribution Amount, to the Class
A-4 Certificateholders an amount equal to the Class A-4 Interest
Distribution Amount and to the Class A-5 Certificateholders and amount
equal to the Class A-5 Interest Distribution Amount, PRO RATA;
(v)from the Available Amount plus any Excess Spread plus the
applicable portion of any Insured Payment, to the Class A-1
Certificateholders an amount equal to the Principal Distribution Amount
net of any Overcollateralization Increase Amount included therein until
the Class A-1 Principal Balance has been reduced to zero, then to the
Class A-2 Certificateholders an amount equal to the Principal Distribution
Amount net of any Overcollateralization Increase Amount included therein
until the Class A-2 Principal Balance has been reduced to zero, then to
the Class A-3 Certificateholders an amount equal to the remaining
Principal Distribution Amount net of any Overcollateralization Increase
Amount included therein until the Class A-3 Principal Balance has been
reduced to zero, to the Class A-4 Certificateholders an amount equal to
the remaining Principal Distribution Amount net of any
Overcollateralization Increase Amount included therein until the Class A-4
Principal Balance has been reduced to zero and finally to the Class A-5
Certificateholders an amount equal to the remaining Principal Distribution
Amount net of any Overcollateralization Increase Amount included therein
until the Class A-5 Principal Balance has been reduced to zero;
(vi) from the Excess Spread to the Class A-1 Certificateholders,
Class A-2 Certificateholders, Class A-3 Certificateholders, Class A-4
Certificateholders or Class A-5 Certificateholders, as applicable, an
amount equal to the excess of (a) the sum of the Class A-1 Interest
Distribution Amount, the Class A-2 Interest Distribution Amount, the Class
A-3 Interest Distribution Amount, the Class A-4 Interest Distribution
Amount, the Class A-5 Interest Distribution Amount and any Principal
Distribution Amount net of any Overcollateralization Increase Amount
included therein over (b) the Available Amount until the Class A-1
Principal Balance, Class A-2 Principal Balance, Class A-3 Principal
Balance, Class A-4 Principal Balance or the Class A-5 Principal Balance,
as applicable, has been reduced to zero;
[(vii) to the Certificate Insurer the lesser of (x) the excess of
(a) the amount in the Certificate Account (excluding Insured Payments)
over (b) the amount of Insured Payments for such Remittance Date and (y)
the outstanding Reimbursement Amount, if any, as of such Remittance Date;]
(viii) from the Excess Spread, first to the Class A-1
Certificateholders an amount equal to any outstanding
Overcollateralization Increase Amount until the Class A-1 Principal
Balance has been reduced to zero, next to the Class A-2 Certificateholders
an amount equal to any outstanding Overcollateralization Increase Amount
until the Class A-2 Principal Balance has been reduced to zero, next to
the Class A-3 Certificateholders an amount equal to any outstanding
Overcollateralization Increase Amount until the Class A-3 Principal
Balance has been reduced to zero, next to the Class A-4 Certificateholders
an amount equal to any outstanding Overcollateralization Increase Amount
until the Class A-4 Principal Balance has been reduced to zero and then to
the Class A-5 Certificateholders an amount equal to any outstanding
Overcollateralization Increase Amount until the Class A-5 Principal
Balance has been reduced to zero; and
(ix) to the Holders of the Class R Certificates, the remaining
Available Amount on deposit in the Certificate Account on such Remittance
Date, if any.
Notwithstanding the foregoing, the aggregate amounts distributed on all
Remittance Dates to the Holders of the Class A-1 Certificates, the Holders of
the Class A-2 Certificates, the Holders of the Class A-3 Certificates, the
Holders of the Class A-4 Certificates and the Holders of the Class A-5
Certificates on account of principal shall not exceed the Original Class A-1
Principal Balance, Original Class A-2 Principal Balance, Original Class A-3
Principal Balance, Original Class A-4 Principal Balance or Original Class A-5
Principal Balance, as applicable.
Section 6.6 INVESTMENT OF ACCOUNTS.
(a) So long as no Event of Default shall have occurred and be continuing,
and consistent with any requirements of the Code, all or a portion of any
Account held by the Trustee may be invested and reinvested by the Trustee, in
one or more Permitted Investments bearing interest or sold at a discount and
maturing not later than the next Remittance Date. [Notwithstanding anything to
the contrary in this Section 6.6(a), all amounts received under the Certificate
Insurance Policy shall remain uninvested.]
If any amounts are needed for disbursement from any Account held by the
Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in such Account. The Trustee shall be
liable for any investment loss or other charge resulting therefrom.
(b) So long as no Event of Default shall have occurred and be continuing,
all net income and gain realized from investment of, and all earnings on, funds
deposited in any Collection Account shall be for the benefit of the Master
Servicer as servicing compensation (in addition to the Servicing Fee). The
Master Servicer shall deposit in the related Account the amount of any loss
incurred in respect of any Permitted Investment held therein which is in excess
of the income and gain thereon immediately upon realization of such loss,
without any right to reimbursement therefor from its own funds.
Section 6.7 REPORTS BY TRUSTEE.
(a) On each Remittance Date the Trustee shall forward a report delivered to
it by the Master Servicer on the Business Day preceding each Determination Date,
as described in Section 6.5 hereof, to each Holder, [to the Certificate
Insurer,] to the Depositor, to the Master Servicer, to _______ and to _______
(the "Trustee Remittance Report"). Such report shall set forth the following
information:
(i)the amount of the distributions made on such Remittance Date
with respect to the Class A-1 Certificates, the Class A-2 Certificates,
the Class A-3 Certificates, the Class A-4 Certificates, the Class A-5
Certificates and the Class R Certificates;
(ii) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Principal Prepayments
or other unscheduled recoveries of principal included therein;
(iii) the amount of such distributions allocable to interest and
the calculation thereof;
(iv) the amount of any Net Liquidation Proceeds included in such
distributions and the calculation thereof;
(v)the principal amount of the Class A-1 Certificates (based on a
Certificate in an original principal amount of $1,000), the principal
amount of the Class A-2 Certificates (based on a Certificate in an
original principal amount of $1,000), the principal amount of the Class
A-3 Certificates (based on a Certificate in an original principal amount
of $1,000), the principal amount of the Class A-4 Certificates (based on a
Certificate in an original principal amount of $1,000) and the principal
amount of the Class A-5 Certificates (based on a Certificate in an
original principal amount of $1,000) then outstanding, and the outstanding
amount of the Principal Balances, after giving effect to any principal
payments made on such Remittance Date;
(vi) the amount of any Insured Payment included in the amounts
distributed to the Class A Certificateholders on such Remittance Date;
(vii) (a) the amount of the Overcollateralization Amount, the
Overcollateralization Target Amount, the Overcollateralization Increase
Amount and (b) any Subordination Deficit on such Remittance
Date;
(viii) the total of any Substitution Adjustments and any Loan
Repurchase Price amounts included in each such distribution; and
(ix) the amounts, if any, of any related Liquidation Loan Losses
for the related Due Period.
Items (i), (ii) and (iii) above shall, with respect to the Class A Certificates,
be presented on the basis of a Certificate having a $1,000 denomination. In
addition, by __________ of each calendar year following any year during which
the Certificates are outstanding, the Trustee shall furnish a report to each
Holder of record if so requested in writing at any time during each calendar
year as to the aggregate of amounts reported pursuant to (i), (ii) and (iii)
with respect to the Certificates for such calendar year.
(b) All distributions made to the Certificateholders according to Class or
type of Certificate on each Remittance Date will be made on a PRO RATA basis
among the Certificateholders as of the next preceding Record Date based on the
proportional beneficial ownership interest in the 199_ - _ REMIC as are
represented by their respective Certificates, and shall be made by wire transfer
of immediately available funds to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if, in the case of
a Class A Certificateholder, such Certificateholder shall own of record
Certificates of the same Class which have denominations aggregating at least
$5,000,000 appearing in the Certificate Register and shall have provided
complete wiring instructions at least five Business Days prior to the Record
Date, and otherwise by check mailed to the address of such Certificateholder
appearing in the Certificate Register.
(c) In addition, on each Remittance Date the Trustee will distribute to
each Holder, [to the Certificate Insurer,] to the Underwriter, to the Depositor,
to _______ and to _______, together with the information described in subsection
(a) preceding, the following information with respect to the Mortgage Loans as
of the close of business on the last Business Day of the prior calendar month
(except as otherwise provided in clause (v) below), which is hereby required to
be prepared by the Master Servicer and furnished to the Trustee for such purpose
on or prior to the related Determination Date:
(i)the total number of Mortgage Loans and the aggregate Principal
Balances thereof, together with the number, aggregate principal balances
of such Mortgage Loans and the percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of the aggregate Principal
Balances of such Mortgage Loans to the aggregate Principal Balance of all
Mortgage Loans (A) 30-59 days Delinquent, (B) 60-89 days Delinquent and
(C) 90 or more days Delinquent;
(ii) the number, aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage Loans
to the aggregate Principal Balance of all Mortgage Loans in foreclosure
proceedings and the number, aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of any such Mortgage Loans also included in any of the
statistics described in the foregoing clause (i);
(iii) the number, aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage Loans
to the aggregate Principal Balance of all Mortgage Loans relating to
Mortgagors in bankruptcy proceedings and the number, aggregate Principal
Balances of all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of any such Mortgage Loans are
also included in any of the statistics described in the foregoing clause
(i);
(iv) the number, aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage Loans
to the aggregate Principal Balance of all Mortgage Loans relating to REO
Mortgage Loans and the number, aggregate Principal Balances of all
Mortgage Loans and percentage (based on the aggregate Principal Balances
of the Mortgage Loans) of any such Mortgage Loans that are also included
in any of the statistics described in the foregoing clause (i);
(v)the weighted average of the Mortgage Interest Rate for the
Mortgage Loans on the Due Date occurring in the Due Period related to such
Remittance Date;
(vi) the weighted average remaining term to stated
maturity of all Mortgage Loans; and
(vii) the book value of any REO Property.
Section 6.8 ADDITIONAL REPORTS BY TRUSTEE AND BY MASTER SERVICER.
(a) The Trustee shall report to the Depositor, the Master Servicer [and the
Certificate Insurer] with respect to the amount then held in the Certificate
Account (including investment earnings accrued or scheduled to accrue) held by
the Trustee and the identity of the investments included therein, as the
Depositor, the Master Servicer [or the Certificate Insurer] may from time to
time request in writing.
[(b) From time to time, at the request of the Certificate Insurer, the
Trustee shall report to the Certificate Insurer with respect to its actual
knowledge, without independent investigation, of any breach of any of the
representations or warranties relating to individual Mortgage Loans set forth in
the Purchase and Sale Agreement, the Mortgage Loan Sale Agreement or in Section
3.1 or 3.2 hereof.]
(c) On each Remittance Date, the Trustee shall forward to Bloomberg
Financial Markets, L.P. ("BLOOMBERG") and the Underwriter information prepared
by the Master Servicer with respect to the Mortgage Loan and the Certificates as
of such Remittance Date, using a format and media mutually acceptable to the
Trustee, the Underwriter and Bloomberg.
Section 6.9 COMPENSATING INTEREST. Not later than the close of business on
the third Business Day prior to the Remittance Date, the Master Servicer shall
remit to the Trustee (without right or reimbursement therefor) for deposit into
the Certificate Account an amount equal to the lesser of (i) the aggregate of
the Prepayment Interest Shortfalls for the related Remittance Date resulting
from Principal Prepayments during the related Due Period and (ii) its aggregate
Servicing Fees received in the related Due Period (the "COMPENSATING INTEREST").
[Section 6.10 EFFECT OF PAYMENTS BY THE CERTIFICATE INSURER; SUBROGATION.
Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on the Certificates which is made with moneys received
pursuant to the terms of the Certificate Insurance Policy shall not be
considered payment of the Certificates from the Trust. The Depositor, the Master
Servicer and the Trustee acknowledge, and each Holder by its acceptance of a
Certificate agrees, that without the need for any further action on the part of
the Certificate Insurer, the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar (i) to the extent the Certificate Insurer makes payments,
directly or indirectly, on account of principal of or interest on the
Certificates to the Holders of such Certificates, the Certificate Insurer will
be fully subrogated to, and each Certificateholder, the Master Servicer and the
Trustee hereby delegate and assign to the Certificate Insurer, to the fullest
extent permitted by law, the rights of such Holders to receive such principal
and interest from the Trust Fund, including, without limitation, any amounts due
to the Certificateholders in respect of securities law violations arising from
the offer and sale of the Certificates, and (ii) the Certificate Insurer shall
be paid such amounts but only from the sources and in the manner provided herein
for the payment of such amounts. The Trustee and the Master Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the
Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.]
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ARTICLE VII
DEFAULT
Section 7.1 EVENTS OF DEFAULT.
(a) In case one or more of the following Events of Default by the Master
Servicer shall occur and be continuing, that is to say:
(i)any failure by the Master Servicer to remit to the Trustee any
payment required to be made by the Master Servicer under the terms of this
Agreement or to deliver the report required by Section 6.5 of this
Agreement;
(ii) the failure by the Master Servicer to make any
required Servicing Advance or Periodic Advance;
(iii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in this Agreement,
or the breach of any representation and warranty made pursuant to Section
3.1 to be true and correct which continues unremedied for a period of 30
days after the date on which written notice of such failure or breach,
requiring the same to be remedied, shall have been given to the Master
Servicer, as the case maybe, by the Depositor or the Trustee or to the
Master Servicer and the Trustee by any Certificateholder [or the
Certificate Insurer];
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or for the
appointment of a conservator or 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 Master Servicer and such decree or order
shall have remained in force, undischarged or unstayed for a period of 60
days;
(v) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or substantially
all of the Master Servicer's property;
(vi) the Master Servicer shall admit in writing its inability to
pay its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations;
(vii) the continuation of a Master Servicer Termination
Delinquency Rate Trigger or a Master Servicer Termination Loss Trigger;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied with respect to (i) - (viii) above, the Trustee shall, but
only at the direction of the Certificate Insurer or the Majority
Certificateholders with the consent of the Certificate Insurer, by notice in
writing to the Master Servicer and a Responsible Officer of the Trustee, (x)
remove the Master Servicer, (y) terminate all the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, as Master Servicer; and (z) with respect to clauses (vii) and
(viii) above, the Trustee shall[, but only at the direction of the Certificate
Insurer,] after notice in writing to the Master Servicer and a Responsible
Officer of the Trustee, terminate all the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, as Master Servicer. Upon receipt by the Master Servicer and the Trustee
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 7.2, pass to and be vested in the Trustee or its designee
[approved by the Certificate Insurer] and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, at the expense of the Master Servicer, any and
all documents and other instruments and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Mortgage Loans and related documents. The Master Servicer
agrees to cooperate (and pay any related costs and expenses) with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee or its
designee for administration by it of all amounts which shall at the time be
credited by the Master Servicer to the Collection Account or thereafter received
with respect to the Mortgage Loans. The Trustee shall promptly notify [the
Certificate Insurer,] _______ and _______ upon receiving notice of, or its
discovery of, the occurrence of an Event of Default.
Section 7.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.1, or the Trustee [and the Certificate
Insurer] receive the resignation of the Master Servicer evidenced by an Opinion
of Counsel pursuant to Section 5.23, or the Master Servicer is removed as Master
Servicer pursuant to Article VII, in which event the Trustee shall promptly
notify [the Certificate Insurer] and _______ and _______, except as otherwise
provided in Section 7.1, the Trustee or its designee shall be the successor in
all respects to the Master Servicer in its capacity as Master Servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof arising on or
after the date of succession; PROVIDED, HOWEVER, that the Trustee shall not be
liable for any actions or the representations and warranties of any Master
Servicer prior to it and including, without limitation, the obligations of the
Master Servicer set forth in Sections 2.4 and 3.3. The parties hereto
acknowledge that during a period not to exceed 90 days, the successor Master
Servicer will not be able to fully service the Mortgage Loans until the
transition of servicing is complete. Such 90-day period shall be extended as
necessary in the event that the Master Servicer does not cooperate with such
successor or the data provided by the Master Servicer is incomplete or faulty.
The Trustee, as Successor Master Servicer, or any other successor Master
Servicer shall be obligated to pay Compensating Interest pursuant to Section 6.9
hereof; the Trustee, as Successor Master Servicer is obligated to make advances
pursuant to Section 5.20 unless, and only to the extent the Trustee, as
Successor Master Servicer determines reasonably and in good faith that such
advances would not be recoverable pursuant to Sections 5.4(b), 5.4(g) or 5.4(j),
such determination to be evidenced by a certification of a Responsible Officer
of the Trustee, as Successor Master Servicer [delivered to the Certificate
Insurer].
(b) Notwithstanding the above, the Trustee may, if it shall be unwilling to
so act, or shall, if it is unable to so act or if the Majority
Certificateholders [with the consent of the Certificate Insurer or the
Certificate Insurer] so requests in writing to the Trustee, appoint, pursuant to
the provisions set forth in paragraph (c) below, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution [acceptable to the Certificate Insurer] that has a net worth of not
less than $15,000,000 as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder.
(c) Any Successor Master Servicer shall be entitled to the Servicing
Compensation (including a fee not to exceed the Servicing Fee) and other funds
pursuant to Section 5.14 hereof as the Master Servicer if the Master Servicer
had continued to act as Master Servicer hereunder.
(d) The Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. The
Master Servicer agrees to cooperate with the Trustee and any successor Master
Servicer in effecting the termination of the Master Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee or
such successor Master Servicer, as applicable, at the Master Servicer's cost and
expense, all documents and records reasonably requested by it to enable it to
assume the Master Servicer's functions hereunder and shall promptly also
transfer to the Trustee or such successor Master Servicer, as applicable, all
amounts that then have been or should have been deposited in the Collection
Account by the Master Servicer or that are thereafter received with respect to
the Mortgage Loans. Any collections received by the Master Servicer after such
removal or resignation shall be endorsed by it to the Trustee and remitted
directly to the Trustee or, at the direction of the Trustee, to the successor
Master Servicer. Neither the Trustee nor any other successor Master Servicer
shall be held liable by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof caused by (1) the failure of
the Master Servicer to deliver, or any delay in delivering, cash, documents or
records to it, or (2) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer hereunder. No appointment of a successor
to the Master Servicer hereunder shall be effective until the Trustee [and the
Certificate Insurer] shall have consented thereto, and written notice of such
proposed appointment shall have been provided by the Trustee [to the Certificate
Insurer and] to each Certificateholder. The Trustee shall not resign as Master
Servicer until a successor Master Servicer [reasonably acceptable to the
Certificate Insurer] has been appointed.
(e) Pending appointment of a successor to the Master Servicer hereunder,
the Trustee shall act in such capacity as herein above provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; PROVIDED, HOWEVER, that no such compensation shall
be in excess of that permitted the Master Servicer pursuant to Section 5.14,
together with other Servicing Compensation. The Master Servicer, the Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
Section 7.3 WAIVER OF DEFAULTS. The [Certificate Insurer or the] Majority
Certificateholders may, on behalf of all Certificateholders, [and subject to the
consent of the Certificate Insurer,] waive any events permitting removal of the
Master Servicer as Master Servicer pursuant to this Article VII; PROVIDED,
HOWEVER, that the Majority Certificateholders may not waive a default in making
a required distribution on a Certificate without the consent of the holder of
such Certificate. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived. Notice of any such waiver shall be given by the
Trustee to _______ and _______.
Section 7.4 MORTGAGE LOANS, TRUST FUND AND ACCOUNTS HELD FOR BENEFIT OF THE
CERTIFICATE INSURER.
[(a) The Trustee shall hold the Trust Fund and the Mortgage Files for the
benefit of the Certificateholders and the Certificate Insurer and all references
in this Agreement and in the Certificates to the benefit of Holders of the
Certificates shall be deemed to include the Certificate Insurer. The Trustee
shall cooperate in all reasonable respects with any reasonable request by the
Certificate Insurer for action to preserve or enforce the Certificate Insurer's
rights or interests under this Agreement and the Certificates unless, as stated
in an Opinion of Counsel addressed to the Trustee and the Certificate Insurer,
such action is adverse to the interests of the Certificateholders or diminishes
the rights of the Certificateholders or imposes additional burdens or
restrictions on the Certificateholders.
(b) The Master Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders and for the
benefit of the Certificate Insurer, and all references in this Agreement to the
benefit of or actions on behalf of the Certificateholders shall be deemed to
include the Certificate Insurer.]
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ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION.
(a) This Agreement shall terminate upon written notice to the Trustee of
either: (1) the later of the distribution to Certificateholders of the final
payment or collection with respect to the last Mortgage Loan (or Periodic
Advances of same by the Master Servicer), or the disposition of all funds with
respect to the last Mortgage Loan and the remittance of all funds due hereunder
and the payment of all amounts due and payable to [the Certificate Insurer and]
the Trustee or (2) mutual consent of the Master Servicer[, the Certificate
Insurer] and all Certificateholders in writing; PROVIDED, HOWEVER, that in no
event shall the Trust established by this Agreement terminate later than
twenty-one years after the death of the last survivor of the descendants of ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇, alive as of the date hereof.
(b) In addition, the Master Servicer may, at its option and at its sole
cost and expense [(or, if the Master Servicer does not exercise this option, the
Certificate Insurer may, at its sole cost and expense)], repurchase all of the
Mortgage Loans on the Optional Termination Date, on the next succeeding
Remittance Date, at a price equal to the sum of (1) the greater of (i) 100% of
the Principal Balance of each outstanding Mortgage Loan and each REO Mortgage
Loan, and (ii) the fair market value (disregarding accrued interest) of the
Mortgage Loans and REO Properties, determined as the average of three written
bids (copies of which shall be delivered to the Trustee [and the Certificate
Insurer] by the Master Servicer and the reasonable cost of which may be deducted
from the final purchase price) made by nationally recognized dealers and based
on a valuation process which would be used to value comparable mortgage loans
and REO property, plus (2) the aggregate amount of accrued and unpaid interest
on the Mortgage Loans through the related Due Period and 30 days' interest
thereon at a rate equal to the weighted average of the Mortgage Interest Rates
for the Mortgage Loans, net of the Servicing Fee, plus (3) [any unreimbursed
amounts due to the Certificate Insurer under this Agreement or the Certificate
Insurer Agreement or] any Trustee Fee then due (the "Termination Price"). Any
such purchase shall be accomplished by deposit into the Certificate Account the
Termination Price. [No such termination is permitted without the prior written
consent of the Certificate Insurer (i) if it would result in a draw on the
Certificate Insurance Policy, or (ii) unless the Master Servicer shall have
delivered to the Certificate Insurer an Opinion of Counsel reasonably
satisfactory to the Certificate Insurer stating that no amounts paid hereunder
are subject to recapture as preferential transfers under the United States
Bankruptcy Code, 11 U.S.C. Sections 101 ET SEQ., as amended.]
(c) If on any Remittance Date, the Master Servicer determines that there
are no outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than funds in the Certificate Account, the Master Servicer shall send a
final distribution notice promptly to each such Certificateholder in accordance
with paragraph (d) below.
(d) Notice of any termination, specifying the Remittance Date upon which
the Trust Fund and the 199_ - _ REMIC will terminate and the Certificateholders
shall surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer by
letter to each of the Certificateholders identified to the Master Servicer by
the Trustee as the Certificateholders of record as of the most recent Record
Date, and shall be mailed during the month of such final distribution before the
Determination Date in such month, specifying (1) the Remittance Date upon which
final payment of such Certificates will be made upon presentation and surrender
of Certificates at the office of the Trustee therein designated, (2) the amount
of any such final payment and (3) that the Record Date otherwise applicable to
such Remittance Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Master Servicer shall give such notice to the Trustee
therein specified. The Master Servicer shall give such notice to the Trustee at
the time such notice is given to Certificateholders. [The obligations of the
Certificate Insurer hereunder shall terminate upon the deposit by the Master
Servicer with the Trustee of a sum sufficient to purchase all of the Mortgage
Loans and REO Properties as set forth above and when the Class A-1 Principal
Balance, Class A-2 Principal Balance, Class A-3 Principal Balance, Class A-4
Principal Balance and Class A-5 Principal Balance has been reduced to zero.]
(e) In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned written notice, the Master Servicer 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 of the affected
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates and the cost thereof shall be paid out of the funds and other
assets which remain subject hereto. If within nine months after the second
notice all the affected Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds and the
Certificateholders shall look only to the Class R Certificateholders for
payment. Such funds shall remain uninvested.
Section 8.2 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event that the Master Servicer exercises its purchase option as
provided in Section 8.1, the 199_ - _ REMIC shall be terminated in accordance
with the following additional requirements, unless the Trustee has been
furnished with an Opinion of Counsel (which shall not be an expense of the
Trustee) to the effect that the failure of the 199_ - _ REMIC (or of any other
REMIC of the Trust Fund) to comply with the requirements of this Section 8.3
will not (1) result in the imposition of taxes on "prohibited transactions" of
such REMIC as defined in Section 860F of the Code or (2) cause such REMIC to
fail to qualify as a REMIC at any time that any Class A Certificates are
outstanding:
(i) Within 90 days prior to the final Remittance Date the Master
Servicer shall adopt and the Trustee shall sign, a plan of complete
liquidation of the 199_ - _ REMIC (or the applicable REMIC of the Trust
Fund) meeting the requirements of a "Qualified Liquidation" under Section
860F of the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of complete
liquidation, which plan shall include a description of the method for such
liquidation and the price to be conveyed for all of the assets of the 199_
- _ REMIC at the time of such liquidation, and at or prior to the final
Remittance Date, the Trustee shall sell all of the assets of the 199_ - _
REMIC (or the applicable REMIC of the Trust Fund) to the Master Servicer
for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited (a) to the Class A Certificateholders the
Certificate Principal Balance, plus one month's interest thereon at the
related Class A Pass-Through Rate, and (b) to the Class R
Certificateholders, all of such REMIC's cash on hand after such payment to
the Class A Certificateholders (other than cash retained to meet claims)
and the 199_ - _ REMIC shall terminate at such time.
(b) By their acceptance of the Certificates, the Holders thereof hereby
agree to appoint the Master Servicer as their attorney in fact to: (1) adopt
such a plan of complete liquidation (and the Certificateholders hereby appoint
the Trustee as their attorney in fact to sign such plan) as appropriate or upon
the written request of the Certificate Insurer and (2) to take such other action
in connection therewith as may be reasonably required to carry out such plan of
complete liquidation all in accordance with the terms hereof.
Section 8.3 ACCOUNTING UPON TERMINATION OF MASTER SERVICER. Upon
termination of the Master Servicer, the Master Servicer shall, at its expense:
(a) deliver to its successor or, if none shall yet have been appointed, to
the Trustee, the funds in any Account;
(b) deliver to its successor or, if none shall yet have been appointed, to
the Trustee all Mortgage Files and related documents and statements held by it
hereunder and a Mortgage Loan portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been appointed, to
the Trustee and, upon request, to the Certificateholders a full accounting of
all funds, including a statement showing the Monthly Payments collected by it
and a statement of monies held in trust by it for the payments or charges with
respect to the Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts reasonably
requested in order to effect the orderly and efficient transfer of servicing of
the Mortgage Loans to its successor and to more fully and definitively vest in
such successor all rights, powers, duties, responsibilities, obligations and
liabilities of the "MASTER SERVICER" under this Agreement.
ARTICLE IX
THE TRUSTEE
Section 9.1 DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Default has occurred and has not been cured or waived,
the Trustee shall exercise such of the rights and power vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement; PROVIDED, HOWEVER,
that the Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer or the Transferor hereunder. If any
such instrument is found not to conform on its face to the requirements of this
Agreement, the Trustee shall take action as it deems appropriate to have the
instrument corrected [and, if the instrument is not corrected to the Trustee's
satisfaction, the Trustee will, at the expense of the Master Servicer notify the
Certificate Insurer and request written instructions as to the action it deems
appropriate to have the instrument corrected, and if the instrument is not so
corrected, the Trustee will provide notice thereof to the Certificate Insurer
who shall then direct the Trustee as to the action, if any, to be taken.]
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or other officers of
the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith [in
accordance with the direction of the Certificate Insurer or with the
consent of the Certificate Insurer,] any Class of the Class A
Certificateholders holding Class A Certificates evidencing Percentage
Interests of such Class of at least 25%, relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or actual knowledge of any default or Event of
Default (except an Event of Default with respect to the nonpayment of any
amount described in Section 7.1(a)), unless a Responsible Officer of the
Trustee shall have received written notice thereof. In the absence of
receipt of such notice, the Trustee may conclusively assume that there is
no default or Event of Default (except a failure to make a Periodic
Advance);
(v) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability for the performance of any of
its duties hereunder or the exercise of any of its rights or powers if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it and none of the provisions contained in this Agreement shall
in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Master Servicer
under this Agreement except during such time, if any, as the Trustee shall
be the successor to, and be vested with the rights, duties powers and
privileges of, the Master Servicer in accordance with the terms of this
Agreement; and
(vi) Subject to the other provisions of this Agreement and
without limiting the generality of this Section, 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, (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, the
Trust Fund, the Certificateholders or the Mortgage Loans, (d) to confirm
or verify the contents of any reports or certificates of the Master
Servicer delivered to the Trustee pursuant to this Agreement believed by
the Trustee to be genuine and to have been signed or presented by the
proper party or parties.
(d) It is intended that the 199_ - _ REMIC formed hereunder shall
constitute, and that the affairs of the 199_ - _ REMIC shall be conducted so as
to qualify it as, a REMIC 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)
and as Tax Matters Person on behalf of the 199_ - _ REMIC, and that in such
capacities it shall:
(i)prepare, sign 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) and any other Tax Return required to be filed by the
199_ - _ REMIC, using a calendar year as the taxable year for the 199_ - _
REMIC;
(ii) make, or cause to be made, an election, on behalf of the
199_ - _ REMIC, to be treated as a REMIC on the federal tax return of the
199_ - _ REMIC for its first taxable year;
(iii) prepare and forward, or cause to be prepared and forwarded,
to the Trustee, the Certificateholders and to the Internal Revenue Service
and any other relevant governmental taxing authority all information
returns or reports as and when required to be provided to them in
accordance with the REMIC Provisions;
(iv) to the extent that the affairs of the 199_ - _ REMIC are
within its control, conduct such affairs of the 199_ - _ REMIC at all
times that any Certificates are outstanding so as to maintain the status
of the 199_ - _ REMIC as a REMIC under the REMIC Provisions and any other
applicable federal, state and local laws, including, without limitation,
information reports relating to "original issue discount," as defined in
the Code, based upon the Prepayment Assumption and calculated by using the
issue price of the Certificates;
(v)not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of the
199_ - _ REMIC;
(vi) pay the amount of any and all federal, state, and local
taxes imposed on the Trust Fund, prohibited transaction taxes as defined
in Section 860F of the Code, other than any amount due as a result of a
transfer or attempted or purported transfer in violation of Section 4.2,
imposed on the Trust Fund 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). The Trustee
shall be entitled to reimbursement in accordance with Sections 9.1(c) and
9.5 hereof;
(vii) ensure that any such returns or reports filed on behalf of
the Trust Fund by the Trustee are properly executed by the appropriate
person and submitted in a timely manner;
(viii) represent the Trust Fund 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 Trust Fund, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any item of
the Trust Fund and otherwise act on behalf of the Trust Fund in relation
to any tax matter involving the Trust Fund;
(ix) as provided in Section 5.18 hereof, make available
information necessary for the computation of any tax imposed (1) on
transferors of residual interests to transferees that are not Permitted
Transferees or (2) on pass-through entities, any interest in which is held
by an entity which is not a Permitted Transferee. The Trustee covenants
and agrees that it will cooperate with the Master Servicer in the
foregoing matters and that it will sign, as Trustee, any and all Tax
Returns required to be filed by the Trust Fund. Notwithstanding the
foregoing, at such time as the Trustee becomes the successor Master
Servicer, the holder of the largest percentage of the Class R Certificates
shall serve as Tax Matters Person until such time as an entity is
appointed to succeed the Trustee as Master Servicer;
(x)make available to the Internal Revenue Service and those
Persons specified by the REMIC Provisions all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership
Interest in a Class R Certificate to any Person who is not a Permitted
Transferee, including the information described in Treasury regulations
sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Class R Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in Section 1381
of the Code that holds an Ownership Interest in a Class R Certificate
having as among its record holders at anytime any Person that is not a
Permitted Transferee. Reasonable compensation for providing such
information may be accepted by the Trustee;
(xi) pay out of its own funds, without any right of reimbursement
from the assets of the Trust Fund, any and all tax related expenses of the
Trust Fund (including, but not limited to, tax return preparation and
filing expenses and any professional fees or expenses related to audits or
any administrative or judicial proceedings with respect to the Trust Fund
that involve the Internal Revenue Service or state tax authorities), other
than the expense of obtaining any Opinion of Counsel required pursuant to
Sections 3.3, 5.12 and 8.2 and other than taxes except as specified
herein;
(xii) upon filing with the Internal Revenue Service, the Trustee
shall furnish to the Holders of the Class R Certificates the Form 1066 and
each Form 1066Q and shall respond promptly to written requests made not
more frequently than quarterly by any Holder of Class R Certificates with
respect to the following matters:
(1) the original projected principal and interest cash flows
on the Closing Date on the regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(2) the projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to the regular
and residual interests created hereunder and the Mortgage Loans,
based on the Prepayment Assumption;
(3) the Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest
cash flows described above;
(4) the original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to the regular
or residual interests created hereunder and with respect to the
Mortgage Loans, together with each constant yield to maturity used
in computing the same;
(5) the treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of
the 199_ - _ REMIC with respect to such regular interests or bad
debt deductions claimed with respect to the Mortgage Loans;
(6) the amount and timing of any non-interest expenses of the
199_ - _ REMIC; and
(7) any taxes (including penalties and interest) imposed on
the 199_ - _ REMIC, including, without limitation, taxes on
"prohibited transactions," "contributions" or "net income from
foreclosure property" or state or local income or franchise taxes;
and
(xiii) make any other required reports in respect of interest
payments in respect of the Mortgage Loans and acquisitions and
abandonments or Mortgaged Property to the Internal Revenue Service and/or
the borrowers, as applicable.
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 Date pursuant to Section 860G(d)
of the Code, or any other tax is imposed, such tax shall be paid by (i) the
Trustee, if such tax arises out of or results from a breach by the Trustee of
any of its obligations under this Agreement, (ii) the Master Servicer, if such
tax arises out of or results from a breach by the Master Servicer of any of its
obligations under this Agreement, or otherwise (iii) the holders of the Class R
Certificates in proportion to their undivided beneficial ownership interest in
the related REMIC as are represented by such Class R Certificates. To the extent
such tax is chargeable against the holders of the Class R Certificates,
notwithstanding anything to the contrary contained herein, the Trustee is hereby
authorized to retain from amounts otherwise distributable to the Holders of the
Class R Certificates on any Remittance Date sufficient funds to reimburse the
Trustee for the payment of such tax (to the extent that the Trustee has paid the
tax and not been previously reimbursed or indemnified therefor).
Section 9.2 CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 9.1:
(i)the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, Opinion
of Counsel, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such opinion of counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend by litigation hereunder or in relation hereto at the
request, or direction of the Certificate Insurer or any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders [or the Certificate Insurer, as applicable,] shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v)prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by [the
Certificate Insurer or] Holders of any Class of Class A Certificates
evidencing Percentage Interests aggregating not less than 25% of such
class; 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 taking any such
action. The reasonable expense of every such examination shall be paid by
the Master Servicer or, if paid by the Trustee, shall be repaid by the
Master Servicer upon demand from the Master Servicer's own funds;
(vi) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(vii) the Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust created hereby or the
powers granted hereunder; and
(viii) 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.
(b) Following the Startup Date, the Trustee shall not knowingly accept any
contribution of assets to the Trust Fund, unless the Trustee shall have received
an Opinion of Counsel (at the expense of the Master Servicer) to the effect that
the inclusion of such assets in the Trust Fund will not cause the 199_ - _ REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding
or subject the 199_ - _ REMIC to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances. The Trustee
agrees to indemnify the Trust Fund and the Master Servicer for any taxes and
costs, including any attorney's fees, imposed or incurred by the Trust Fund or
the Master Servicer as a result of the breach of the Trustee's covenants set
forth within this subsection (b).
Section 9.3 NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS. The recitals
contained herein (other than the certificate of authentication on the
Certificates) shall be taken as the statements of the Transferor or the Master
Servicer, 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 any Mortgage Loan or related document. The
Trustee shall not be accountable for the use or application of any funds paid to
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Master Servicer. The Trustee shall
not be responsible for the legality or validity of the Agreement or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder.
Section 9.4 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its individual or
any other capacity may become the owner or pledgor of Certificates with the same
rights it would have if it were not Trustee, and may otherwise deal with the
parties hereto.
Section 9.5 TRUSTEE'S FEES AND EXPENSES; INDEMNITY.
(a) The Trustee acknowledges that in consideration of the performance of
its duties hereunder it is entitled to receive the Trustee Fee in accordance
with the provision of Section 6.5(a) and Section 6.5(b). The Trustee shall not
be entitled to compensation for any expense, disbursement or advance as may
arise from its negligence or bad faith, and, prior to the occurrence of an Event
of Default, the Trustee shall have no lien on the Trust Fund for the payment of
its fees and expenses.
(b) The Trust Fund, the Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Master Servicer and held
harmless against any loss, liability, claim, damage or expense arising out of,
or imposed upon the Trust or the Trustee, other than any loss, liability or
expense incurred by reason of (i) the acts of the Trustee not authorized or
required pursuant to this Agreement or taken pursuant to written instructions
received from the Master Servicer[, [the Certificate Insurer] or the Majority
Holders, or (ii) by reason of the Trustee's reckless disregard of obligations
and duties hereunder. The obligation of the Master Servicer under this Section
9.5 arising prior to any resignation or termination of the Master Servicer
hereunder shall survive termination of the Master Servicer and payment of the
Certificates, and shall extend to any co-trustee appointed pursuant to this
Article IX.
Section 9.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee hereunder
shall at all times be (a) a banking association organized and doing business
under the laws of any state or the United States of America subject to
supervision or examination by federal or state authority, (b) authorized under
such laws to exercise corporate trust powers, including taking title to the
Trust Fund assets on behalf of the Certificateholders (c) having a combined
capital and surplus of at least $50,000,000, (d) whose long-term deposits, if
any, shall be rated at least ____ by _______ and ____ by _______ (except as
provided herein) or such lower long-term deposit [rating as may be approved in
writing by the Certificate Insurer,] [and (e) reasonably acceptable to the
Certificate Insurer.] If such banking 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 shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 9.7.
Section 9.7 RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Master Servicer[, the
Certificate Insurer] and to all Certificateholders. Upon receiving such notice
of resignation, the Master Servicer shall promptly appoint a successor trustee
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee and to the successor trustee. A copy of such instrument shall
be delivered to the Depositor, the Certificateholders[, the Certificate Insurer]
and the Transferor by the Master Servicer. Unless a successor trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.6 and shall fail to resign after written
request therefor by the Master Servicer or the Certificate Insurer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Master Servicer [or the Certificate Insurer] may remove
the Trustee, and the Master Servicer shall, within 30 days after such removal,
appoint[, subject to the approval of the Certificate Insurer, which approval
shall not be unreasonably delayed,] a successor trustee by written instrument,
in duplicate, which instrument shall be delivered to the Trustee so removed and
to the successor trustee. A copy of such instrument shall be delivered to the
Depositor, the Certificateholders[, the Certificate Insurer] and the Transferor
by the Master Servicer.
(c) If the Trustee fails to perform in accordance with the terms of this
Agreement, the Majority Certificateholders [or the Certificate Insurer] may
remove the Trustee and appoint a successor trustee [acceptable to the
Certificate Insurer] by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Master Servicer, one complete set to
the Trustee so removed and one complete set to the successor Trustee so
appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 9.8.
Section 9.8 SUCCESSOR TRUSTEE. Any successor trustee appointed as provided
in Section 9.7 shall execute, acknowledge and deliver to the Depositor[, the
Certificate Insurer], the Transferor, the Master Servicer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor 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 predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements held by it hereunder, and
the Master 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. No successor trustee shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee shall be eligible under the provisions of Section 9.6.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Master Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register and to _______ and _______. If the Master Servicer fails to
mail such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Master Servicer.
Section 9.9 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which the
Trustee may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 9.6, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. Notwithstanding
any other provisions hereof, 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 the same may at the time be located, the Master 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, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 9.10, such powers,
duties, obligations, rights and trusts as the Master Servicer and the Trustee
may consider necessary or desirable. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 9.6 hereunder, and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 9.8 hereof.
(a) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(b) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(c) 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. The Trustee shall not be responsible
for any action or inaction of any such separate trustee or co-trustee, provided
that the Trustee appointed such separate trustee or co-trustee with due care. If
any separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 9.11 TAX RETURNS; OID INTEREST REPORTING. The Master Servicer and
the Depositor, as applicable, upon request, will promptly furnish the Trustee
with all such information as may be reasonably required in connection with the
Trustee's preparation of all Tax Returns of the Trust Fund (including all such
loan level information as the Trustee may reasonably request) or for the purpose
of the Trustee responding to reasonable requests for information made by
Certificateholders in connection with tax matters, and, upon request within
seven (7) Business Days after its receipt thereof, the Master Servicer shall (i)
sign on behalf of the Trust Fund any Tax Return that the Master Servicer is
required to sign pursuant to applicable federal, state or local tax laws, and
(ii) cause such Tax Return to have been returned to the Trustee for filing and
for distribution to Certificateholders if required.
[Section 9.12 RETIREMENT OF CERTIFICATES. The Trustee shall, upon the
retirement of the Certificates pursuant hereto or otherwise, furnish to the
Certificate Insurer a notice of such retirement, and, upon retirement of the
Certificates and the expiration of the term of the Certificate Insurance Policy,
shall surrender the Certificate Insurance Policy to the Certificate Insurer for
cancellation.]
[Remainder of this page intentionally left blank]
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 LIMITATION ON LIABILITY OF THE DEPOSITOR AND THE MASTER
SERVICER. Neither the Depositor nor the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust, the Certificateholders [or the
Certificate Insurer] 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 or the
Master Servicer or any such Person against any breach of warranties or
representations made herein, or against any specific liability imposed on each
such party pursuant to this Agreement or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
or duties hereunder. The Depositor or the Master Servicer and any director,
officer, employee or agent of the Depositor or the Master Servicer may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any appropriate Person respecting any matters arising
hereunder.
Section 10.2 ACTS OF CERTIFICATEHOLDERS; CERTIFICATEHOLDERS' RIGHTS.
(a) Except as otherwise specifically provided herein, whenever
Certificateholder action, consent or approval is required under this Agreement,
such action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Certificateholders if the Majority
Certificateholders [or the Certificate Insurer] agrees to take such action or
give such consent or approval.
(b) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heir to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(c) No Certificateholder shall have any right to vote (except as expressly
provided for 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 person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof or thereof.
(d) The rights of the Certificateholders of Series 199_ - _ will be
determined pursuant to this Agreement. The rights of the Holders of any
certificates or other instruments which may be issued by the Trustee pursuant to
Section 4.2 of this Agreement shall be determined by a supplement with respect
thereto. Such supplement may provide for any other agreements between the
parties hereto as long as such agreements do not violate, as to any Certificate,
certificates or other instruments, Section 10.3.
Section 10.3 AMENDMENT OR SUPPLEMENT.
(a) This Agreement may be amended or supplemented from time to time by the
Master Servicer, the Depositor and the Trustee by written agreement[, upon the
prior written consent of the Certificate Insurer (which consent shall not be
withheld if, in the Opinion of Counsel addressed to the Trustee and the
Certificate Insurer, failure to amend would adversely affect the interests of
the Certificateholders and such consent would not adversely affect the interests
of the Certificate Insurer),] without notice to or consent of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, to comply with any changes in the Code, or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel, at
the expense of the party requesting the change, delivered to the Trustee [and
the Certificate Insurer], adversely affect in any material respect the interests
of any Certificateholder, adversely affect the status of the 199_ - _ REMIC as a
REMIC or cause a tax to be imposed on such REMIC; and PROVIDED, FURTHER, that no
such amendment shall reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, or change the
rights or obligations of any other party hereto without the consent of such
party; and provided, finally, that any such amendment shall, as evidenced by an
Opinion of Counsel, at the expense of the party requesting the change, delivered
to the Trustee [and the Certificate Insurer], comply with the terms of this
Agreement. The Trustee shall give prompt written notice to _______ and _______
of any amendment made pursuant to this Section 10.3 or pursuant to Section 6.10
of the Purchase and Sale Agreement.
(b) This Agreement may be amended or supplemented from time to time by the
Master Servicer, the Depositor and the Trustee [with the consent of the
Certificate Insurer] (which consent shall not be withheld if, in the Opinion of
Counsel addressed to the Trustee [and the Certificate Insurer,] failure to amend
would adversely affect the interests of the Certificateholders and such consent
would not adversely affect the interests of the Certificate Insurer),the
Majority Certificateholders and the Holders of the majority of the undivided
beneficial ownership interest in the 199_ - _ REMIC as is represented by the
Class R Certificates 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; PROVIDED, HOWEVER, that no
such amendment shall be made unless the Trustee [and the Certificate Insurer]
receive an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not adversely affect the status of the 199_ - _
REMIC as a REMIC or cause a tax to be imposed on such REMIC; and PROVIDED,
FURTHER, that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate or reduce the percentage for the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of
Certificates affected thereby; and provided, finally, that any such amendment
shall, as evidenced by an Opinion of Counsel, at the expense of the party
requesting the change, delivered to the Trustee [and the Certificate Insurer],
comply with the terms of this Agreement.
(c) It shall not be necessary for the consent of Holders 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.
Section 10.4 RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Master Servicer at the Certificateholders' expense on
direction and at the expense of Majority Certificateholders requesting such
recordation, but only when accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders or is necessary for the administration or servicing of the
Mortgage Loans.
Section 10.5 DURATION OF AGREEMENT. This Agreement shall
continue in existence and effect until terminated as herein provided.
Section 10.6 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
to (i) in the case of the Master Servicer,
________________________________________________________, with a copy to
_______________________________________________________________ (with copies to
the Transferor), (ii) in the case of the Transferor, _____________________
_________________________________, with an additional copy of such notice
simultaneously delivered to the Master Servicer, (iii) in the case of the
Trustee, ________________________
___________________________________________________, _______ Home Equity Trust
199_ - _, (iv) in the case of the Certificateholders, as set forth in the
Certificate Register, (v) in the case of _______,
_______________________________________________________________, (vi) in the
case of _____________________________________________________________, [(vii) in
the case of the Certificate Insurer, ______________________________________
______________, (viii) in the case of PaineWebber Mortgage Acceptance
Corporation IV, 1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq. Any such notices shall be deemed to be
effective with respect to any party hereto upon the receipt of such notice by
such party, except that notices to the Certificateholders shall be effective
upon mailing or personal delivery.
Section 10.7 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, 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 covenants, agreements, provisions or terms of this
Agreement.
Section 10.8 NO PARTNERSHIP. Nothing herein contained shall be deemed or
construed to create a co-partnership or joint venture between the parties hereto
and the services of the Master Servicer shall be rendered as an independent
contractor and not as agent for the Certificateholders.
Section 10.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same agreement.
Section 10.10 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the Master Servicer, the Depositor, the Trustee
and the Certificateholders and their respective successors and permitted
assigns.
Section 10.11 HEADINGS. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
[Section 10.12 THE CERTIFICATE INSURER DEFAULT. Any right conferred to the
Certificate Insurer shall be suspended during any period in which a Certificate
Insurer Default exists. At such time as the Certificates are no longer
outstanding hereunder, and no amounts owed to the Certificate Insurer hereunder
remain unpaid, the Certificate Insurer's rights hereunder shall terminate.]
Section 10.13 THIRD PARTY BENEFICIARY. The parties agree that each of the
Transferor [and the Certificate Insurer] is intended and shall have all rights
of a third-party beneficiary of this Agreement.
Section 10.14 INTENT OF THE PARTIES. It is the intent of the Depositor and
Certificateholders that, for federal income taxes, state and local income or
franchise taxes and other taxes imposed on or measured by income, the
Certificates will be treated as evidencing beneficial ownership interests in a
REMIC. The parties to this Agreement and the holder of each Certificate, by
acceptance of its Certificate, and each beneficial owner thereof, agree to
treat, and to take no action inconsistent with the treatment of, the
Certificates in accordance with the preceding sentence for purposes of federal
income taxes, state and local income and franchise taxes and other taxes imposed
on or measured by income.
Section 10.15 APPOINTMENT OF TAX MATTERS PERSON. The Holders of the Class R
Certificates hereby appoint the Trustee to act as the Tax Matters Person for the
199_ - _ REMIC for all purposes of the Code. The Tax Matters Person will
perform, or cause to be performed, such duties and take, or cause to be taken,
such actions as are required to be performed or taken by the Tax Matters Person
under the code. The Holders of the Class R Certificates may hereafter appoint a
different entity as their agent, or may appoint one of the Class R
Certificateholders to be the Tax Matters Person.
Section 10.16 GOVERNING LAW CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
NEW YORK.
(b) THE MASTER SERVICER AND THE TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET
FORTH IN SECTION 10.6 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE
PREPAID. THE DEPOSITOR, THE MASTER SERVICER AND THE TRUSTEE EACH HEREBY WAIVE
ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE DEPOSITOR, THE MASTER SERVICER OR THE TRUSTEE TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR
RIGHTS TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.
(c) THE DEPOSITOR, THE MASTER SERVICER AND THE TRUSTEE EACH HEREBY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE WILL BE RESOLVED IN A
BENCH TRIAL WITHOUT A JURY.
[End of Agreement - Signature Pages Follow]
EXHIBIT B-2
(FORM OF CLASS A-1 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:
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Home Equity Asset Backed Certificates, Series 199_-_
Class A-1
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 residential 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 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, _______________________, as originator and servicer (the
"SERVICER"), and ______________________________, 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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 19__
________________________, as Trustee
By:____________________________________
Countersigned:
By: ________________________________
Authorized Signatory of
_______________________________,
as Trustee
(Form of Reverse of Certificates)
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Home Equity Asset Backed Certificates, Series 199_-_
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
__th day of each month or, if such __th 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 Depositor, the Servicer and the Trustee with the consent of the Holders
of Certificates affected by such amendment 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.
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.
STATE OF )
) ss.:
COUNTY OF )
On the day of _______, 19 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]
EXHIBIT B-6
(FORM OF CLASS 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:
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Home Equity Asset Backed Certificates, Series 199_-_ evidencing the
distributions allocable to the Class R Certificates with respect to
a Trust Fund consisting primarily of a pool of residential 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, _______________________, as
originator and servicer (the "SERVICER"), and ____________________, 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 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 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 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 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 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 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 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 R Certificate must be a Permitted Transferee, (ii) no Ownership
Interest in this Class 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 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 R Certificate must agree not to transfer an Ownership Interest in this
Class 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 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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 19__
_________________________, as Trustee
By:____________________________________
Countersigned:
By: _____________________________
Authorized Signatory of
____________________________,
as Trustee
(Form of Reverse of Certificates)
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
Home Equity Asset Backed Certificates, Series 199_-_
This Certificate is one of a duly authorized issue of Certificates
designated as _________ Home Equity Trust, Home Equity Asset Backed
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
__th day of each month or, if such __th 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 Depositor, the Servicer and the Trustee with the consent of the Holders
of Certificates affected by such amendment 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.
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.
STATE OF )
) ss.:
COUNTY OF )
On the day of _______, 19 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]