EXHIBIT 4.1
FORM OF POOLING AND
SERVICING AGREEMENT
POOLING AND SERVICING AGREEMENT
Dated as of ___________
by and among
________________________
as Depositor
and
________________________
as Servicer
and
________________________
as Trustee
________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ........................................................................................... 1
Section 1.01 Certain Defined Terms.......................................................................... 1
Section 1.02 Provisions of General Application..............................................................39
Section 1.03 Business Day Certificate.......................................................................39
ARTICLE II ESTABLISHMENT OF THE TRUST SALE AND CONVEYANCE OF THE TRUST FUND......................................40
Section 2.01 Establishment of the Trust.....................................................................40
Section 2.02 Purchase and Sale of Initial Mortgage Loans....................................................40
Section 2.03 Purchase and Sale of Subsequent Mortgage Loans.................................................40
Section 2.04 Possession of Mortgage Files; Access to Mortgage Files.........................................42
Section 2.05 Delivery of Mortgage Loan Documents............................................................43
Section 2.06 Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by
Trustee.....................................................................................46
Section 2.07 Designations under REMIC Provisions; Designation of Startup Day................................48
Section 2.08 Execution of Certificates......................................................................48
Section 2.09 Application of Principal and Interest..........................................................48
Section 2.10 Grant of Security Interest.....................................................................48
Section 2.11 Further Action Evidencing Assignments..........................................................49
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................................49
Section 3.01 Representations of the Servicer................................................................49
Section 3.02 Representations, Warranties and Covenants of the Depositor.....................................51
Section 3.03 Purchase and Substitution......................................................................52
ARTICLE IV THE CERTIFICATES......................................................................................53
Section 4.01 The Certificates...............................................................................53
Section 4.02 Registration of Transfer and Exchange of Certificates..........................................54
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates..............................................59
Section 4.04 Persons Deemed Owners..........................................................................59
ARTICLE V ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS.....................................................59
Section 5.01 REMIC Matters; The Servicer....................................................................59
Section 5.02 Collection of Certain Mortgage Loan Payments; Collection Account...............................61
Section 5.03 Permitted Withdrawals from the Collection Account..............................................62
Section 5.04 Hazard Insurance Policies; Property Protection Expenses........................................63
Section 5.05 Assumption and Modification Agreements.........................................................64
Section 5.06 Realization Upon Defaulted Mortgage Loans......................................................65
Section 5.07 Trustee to Cooperate...........................................................................66
Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer................................66
Section 5.09 Annual Statement as to Compliance..............................................................67
Section 5.10 Annual Independent Public Accountants' Servicing Report........................................67
Section 5.11 Access to Certain Documentation................................................................67
Section 5.12 Maintenance of Fidelity Bond...................................................................68
Section 5.13 The Subservicers...............................................................................68
Section 5.14 Reports to the Trustee; Collection Account Statements..........................................68
Section 5.15 Optional Purchase of Defaulted Mortgage Loans..................................................68
Section 5.16 Reports to be Provided by the Servicer.........................................................69
Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans......................69
Section 5.18 Periodic Advances; Special Advance.............................................................70
Section 5.19 Indemnification; Third Party Claims............................................................70
Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the
Servicer....................................................................................71
Section 5.21 Assignment of Agreement by Servicer; Servicer Not to Resign....................................71
Section 5.22 Periodic Filings with the Securities and Exchange Commission; Additional Information...........72
ARTICLE VI DISTRIBUTIONS AND PAYMENTS............................................................................72
Section 6.01 Establishment of Accounts; Withdrawals from Accounts; Deposits to the Certificate
Account.....................................................................................72
Section 6.02 Permitted Withdrawals From the Certificate Account.............................................74
Section 6.03 Collection of Money............................................................................74
Section 6.04 The Certificate Insurance Policy...............................................................74
Section 6.05 Distributions..................................................................................76
Section 6.06 Investment of Accounts.........................................................................77
Section 6.07 Reports by the Trustee.........................................................................78
Section 6.08 Additional Reports by Trustee..................................................................80
Section 6.09 Compensating Interest..........................................................................80
Section 6.10 Effect of Payments by the Certificate Insurer; Subrogation.....................................80
ARTICLE VII DEFAULT .............................................................................................81
Section 7.01 Events of Default..............................................................................81
Section 7.02 Trustee to Act; Appointment of Successor.......................................................83
Section 7.03 Waiver of Defaults.............................................................................85
Section 7.04 Rights of the Certificate Insurer to Exercise Rights of Class A Certificateholders.............85
Section 7.05 Trustee To Act Solely with Consent of the Certificate Insurer..................................86
Section 7.06 Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Certificate Insurer............86
Section 7.07 Certificate Insurer Default....................................................................87
ARTICLE VIII TERMINATION.........................................................................................87
Section 8.01 Termination....................................................................................87
Section 8.02 Additional Termination Requirements............................................................88
Section 8.03 Accounting Upon Termination of Servicer........................................................89
Section 8.04 Retention and Termination of the Servicer......................................................90
ARTICLE IX THE TRUSTEE...........................................................................................90
Section 9.01 Duties of Trustee..............................................................................90
Section 9.02 Certain Matters Affecting the Trustee..........................................................95
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans..........................................96
Section 9.04 Trustee May Own Certificates...................................................................96
Section 9.05 Trustee's Fees and Expenses; Indemnity.........................................................97
Section 9.06 Eligibility Requirements for Trustee...........................................................97
Section 9.07 Resignation and Removal of the Trustee.........................................................97
Section 9.08 Successor Trustee..............................................................................98
Section 9.09 Merger or Consolidation of Trustee.............................................................99
Section 9.10 Appointment of Co-Trustee or Separate Trustee..................................................99
Section 9.11 Tax Returns...................................................................................100
Section 9.12 Retirement of Certificates....................................................................100
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................100
Section 10.01 Limitation on Liability of the Depositor and the Servicer.....................................100
Section 10.02 Acts of Certificateholders....................................................................100
Section 10.03 Amendment.....................................................................................101
Section 10.04 Recordation of Agreement......................................................................102
Section 10.05 Duration of Agreement.........................................................................102
Section 10.06 Notices.......................................................................................102
Section 10.07 Severability of Provisions....................................................................102
Section 10.08 No Partnership................................................................................103
Section 10.09 Counterparts..................................................................................103
Section 10.10 Successors and Assigns........................................................................103
Section 10.11 Headings......................................................................................103
Section 10.12 The Certificate Insurer Default...............................................................103
Section 10.13 Third Party Beneficiary.......................................................................103
Section 10.14 Intent of the Parties.........................................................................103
Section 10.15 Appointment of Tax Matters Person.............................................................103
Section 10.16 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL..................................104
EXHIBITS
EXHIBIT A Class A Certificate
EXHIBIT B Class R Certificate
EXHIBIT C Contents of the Mortgage File
EXHIBIT D Certificate Re: Prepaid Loans
EXHIBIT E Trustee's Acknowledgement of Receipt
EXHIBIT F Initial Certification of Trustee
EXHIBIT G Final Certification of Trustee
EXHIBIT H Request for Release of Documents
EXHIBIT I Transfer Affidavit and Agreement
EXHIBIT J Transferor's Certificate
EXHIBIT K ERISA Investment Representation Letter
EXHIBIT L Form of Subsequent Transfer Agreement
SCHEDULES
SCHEDULE I Mortgage Loan Schedule
POOLING AND SERVICING AGREEMENT, dated as of ____________
(this "Agreement"), by and among ________________________, a ____________
corporation, in its capacity as depositor (the "Depositor"),
_______________________, a ____________ corporation, in its capacity as servicer
(the "Servicer"), and ____________________, a ____________ banking corporation,
in its capacity as trustee (the "Trustee").
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 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 Servicer and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings.
ACCEPTED SERVICING PRACTICES: The Servicer's normal servicing
practices, 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.
ACCOUNT: Any of the Collection Account, the Certificate
Account, the Capitalized Interest Account, the Certificate Insurance Payment
Account or the Pre-Funding Account.
ACCRUAL PERIOD: With respect to the Fixed Rate Certificates
and any Distribution Date, the prior calendar month; with respect to the
Adjustable Rate Certificates and any Distribution Date, the period from and
including the prior Distribution Date (or, in the case
of the first Distribution Date, from and including the Startup Day) to and
including the day immediately preceding such Distribution Date.
ADDITION NOTICE: A written notice from the Depositor to the
Trustee, the Rating Agencies and the Certificate Insurer that the Depositor
desires to make a Subsequent Transfer.
ADJUSTABLE RATE CERTIFICATES: The Class A-1 Certificates.
ADJUSTED PASS-THROUGH RATE: With respect to any Distribution
Date, the percentage equal to (i) the Weighted Average Class A Pass-Through Rate
plus (ii) the Premium Percentage.
ADMINISTRATIVE COSTS: With respect to any Distribution Date,
the sum of the Trustee Fee, the Premium Amount and the Servicing Fee for such
Distribution Date.
AFFILIATE: 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: This Pooling and Servicing Agreement, including the
Exhibits hereto, and all amendments hereof and supplements hereto.
APPRAISED VALUE: As to any Mortgaged Property and time
referred to herein, the appraised value of the Mortgaged Property based upon the
appraisal made by or on behalf of the related Originator at the time referred to
herein or, in the case of a Mortgage Loan that is a purchase money mortgage
loan, the sales price of the Mortgaged Property, if such sales price is less
than such appraised value.
ASSIGNMENT OF MORTGAGE: With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument
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.
AUTHORIZED DENOMINATIONS: Each Class of the Class A
Certificates is issuable only in the minimum Percentage Interest corresponding
to a minimum denomination of $1,000 or integral multiples of $1,000 in excess
thereof; provided, however, that one Certificate of each Class is issuable in a
denomination equal to any such multiple plus an additional amount such that the
aggregate denomination of all Class A Certificates of such Class shall be equal
to the applicable Original Certificate Principal Balance.
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AVAILABLE FUNDS: As defined in Section 6.04(a).
AVAILABLE FUNDS SHORTFALL: With respect to any Distribution
Date, an amount equal to the excess of the Insured Distribution Amount for such
Distribution Date over the Available Funds for such Distribution Date available
for distribution in respect of such Insured Distribution Amount.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, or
(b) a day on which banking institutions in the States of Pennsylvania, New York
or New Jersey are authorized or obligated by law or executive order to be
closed.
BUSINESS PURPOSE PROPERTY: Any mixed-use properties,
commercial properties, or four or more unit multifamily properties.
CAPITALIZED INTEREST ACCOUNT: The Capitalized Interest Account
established in accordance with Section 6.01(a) hereof and maintained by the
Trustee.
CAPITALIZED INTEREST REQUIREMENT: With respect to the
Distribution Dates occurring in ____________ and ____________, (A) the product
of (i) one-twelfth of the Adjusted Pass-Through Rate as calculated as of such
Distribution Date and (ii) the Pre-Funded Amount as of the first day of the
related Due Period, minus (B) 30 days' interest, at the related Mortgage
Interest Rate, on the Subsequent Mortgage Loans transferred to the Trust during
the related Due Period which had a Due Date after the related Subsequent Cut-Off
Date during the related Due Period, minus (C) the amount of any Pre-Funding
Earnings earned from the last Distribution Date (or the Closing Date with
respect to the ____________ Distribution Date). In no event will the Capitalized
Interest Requirement be less than zero.
CERCLA: The Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
CERTIFICATE: Any Class A-1 Certificate, Class A-2 Certificate,
Class A-3 Certificate, Class A-4 Certificate, Class A-5 Certificate, Class A-6
Certificate or Class R Certificate executed by the Trustee on behalf of the
Trust Fund and authenticated by the Trustee.
CERTIFICATE ACCOUNT: The Certificate Account established in
accordance with Section 6.01(a) hereof and maintained by the Trustee.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Certificate registered in the name of the Servicer or any
Subservicer or the Depositor, or any Affiliate of any of them, shall be deemed
not to be outstanding and the undivided Percentage Interest 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
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consent, waiver, request or demand of Certificateholders pursuant to this
Agreement, upon the Trustee's request, the Servicer and the Depositor 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 PAYMENT ACCOUNT: The Certificate
Insurance Payment Account established in accordance with Section 6.04(c) hereof
and maintained by the Trustee.
CERTIFICATE INSURANCE POLICY: The Financial Guaranty Insurance
Policy No. _________, and all endorsements thereto dated the Closing Date,
issued by the Certificate Insurer for the benefit of the Certificateholders.
CERTIFICATE INSURER: _________________, a ____________stock
insurance company organized and created under the laws of the State of
____________, and any successors thereto.
CERTIFICATE INSURER DEFAULT: The existence and continuance of
any of the following:
(a) the Certificate Insurer shall have failed to make a
required payment when due under the Certificate Insurance Policy;
(b) the Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the United
States Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization, (ii) made a general assignment for the benefit
of its creditors or (iii) had an order for relief entered against it under the
United States Bankruptcy Code, the New York State Insurance Law or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a custodian,
trustee, agent, or receiver for the Certificate Insurer or for all or any
material portion of its property or (ii) authorizing the taking of possession by
a custodian, trustee, agent, or receiver of the Certificate Insurer or of all or
any material portion of its property.
CERTIFICATE PRINCIPAL BALANCE: As to any particular Class A
Certificate and date of determination, the product of the Percentage Interest
evidenced thereby and the applicable Class A Certificate Principal Balance of
all Certificates of the same Class as of such date. The Class R Certificates do
not have a "Certificate Principal Balance".
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CERTIFICATE REGISTER: As described in Section 4.02.
CIVIL RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act
of 1940, as amended.
CIVIL RELIEF ACT INTEREST SHORTFALL: With respect to any
Distribution Date, for any Mortgage Loan as to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Civil Relief Act, the amount, if
any, by which (a) interest collectible on such Mortgage Loan during the most
recently ended calendar month is less than (b) the sum of one month's interest
on the Principal Balance of such Mortgage Loan, calculated at a rate equal to
the Mortgage Interest Rate.
CLASS: Each class of Certificates designated as 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, the Class A-6 Certificates or the
Class R Certificates.
CLASS A CERTIFICATE: Any one of the Class A-1 Certificates,
any one of the Class A-2 Certificates, any one of the Class A-3 Certificates,
any one of the Class A-4 Certificates, any one of the Class A-5 Certificates and
any one of the Class A-6 Certificates, as the case may be.
CLASS A CERTIFICATE PRINCIPAL BALANCE: The sum of the Class
A-1 Certificate Principal Balance, the Class A-2 Certificate Principal Balance,
the Class A-3 Certificate Principal Balance, the Class A-4 Certificate Principal
Balance, the Class A-5 Certificate Principal Balance and the Class A-6
Certificate Principal Balance.
CLASS A DISTRIBUTION AMOUNT: The sum of the Class A-1
Distribution Amount, the Class A-2 Distribution Amount, the Class A-3
Distribution Amount, the Class A-4 Distribution Amount, the Class A-5
Distribution Amount and the Class A-6 Distribution Amount.
CLASS A INTEREST DISTRIBUTION AMOUNT: 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 Distribution Amount, the
Class A-5 Distribution Amount and the Class ▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇ ▇-▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇: As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Class A-1 Formula
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the Class A-1 Distribution Amount on such immediately preceding
Distribution Date and (b) interest on the amount described in clause (a) for the
actual number of days in the Accrual Period, calculated at an interest rate
equal to the Class A-1 Pass-Through Rate applicable to such Distribution Date.
5
CLASS A-1 CERTIFICATE: Any Certificate designated as a "Class
A-1 Certificate" on the face thereof, in the form of Exhibit A hereto. The Class
A-1 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A-1 CERTIFICATE PRINCIPAL BALANCE: As of any time of
determination, the Original Certificate Principal Balance of the Class A-1
Certificates less any amounts actually distributed with respect to principal
thereon on all prior Distribution Dates for such Class.
CLASS A-1 CERTIFICATE TERMINATION DATE: The Distribution Date
on which the Class A-1 Certificate Principal Balance is reduced to zero.
CLASS A-1 CURRENT INTEREST: With respect to the Class A-1
Certificates for any Distribution Date and the related Accrual Period, the
interest accrued at the Class A-1 Pass-Through Rate applicable to such
Distribution Date and such Accrual Period on the Class A-1 Certificate Principal
Balance as of such Distribution Date (and prior to making any distributions on
such Distribution Date).
CLASS A-1 DISTRIBUTION AMOUNT: With respect to the Class A-1
Certificates for any Distribution Date, the amount to be distributed to the
Holders of the Class A-1 Certificates on such Distribution Date, applied first
to interest and then to principal, which amount shall be the sum of (i) the pro
rata portion of any moneys released from the Pre-Funding Account as a prepayment
of principal on the Class A-1 Certificates pursuant to Section 6.01(g) hereof,
and (ii) the lesser of (x) the Class A-1 Formula Distribution Amount for such
Distribution Date and (y) the amount (including any applicable portion of any
Insured Payment) available for distribution on account of the Class A-1
Certificates for such Distribution Date.
CLASS A-1 FINAL SCHEDULED MATURITY DATE: The ____________
Distribution Date.
CLASS A-1 FORMULA DISTRIBUTION AMOUNT: With respect to the
Class A-1 Certificates for any Distribution Date, the sum of the Class A-1
Interest Distribution Amount and the Class A-1 Principal Distribution Amount.
CLASS A-1 INTEREST DISTRIBUTION AMOUNT: With respect to the
Class A-1 Certificates for any Distribution Date an amount equal to (a) the
related Class A-1 Current Interest, minus (b) the pro rata portion of any
Mortgage Loan Interest Shortfalls allocable to the Class A-1 Certificates, on
the basis of accrued interest thereon, plus (c) any Class A-1 Carry-Forward
Amount, minus (d) any amounts paid by the Certificate Insurer in respect of such
Class A-1 Carry-Forward Amount, in each case as of such Distribution Date.
6
CLASS A-1 PASS-THROUGH RATE: With respect to any Distribution
Date, the lesser of (i) LIBOR plus ____% per annum or (ii) the Net Weighted
Average Mortgage Interest Rate for the Mortgage Loans for such Distribution
Date.
CLASS A-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to the
Class A-1 Certificates for any Distribution Date, the lesser of (x) the
Remaining Principal Distribution Amount for such Distribution Date, and (y) the
Class A-1 Certificate Principal Balance as of such Distribution Date.
On the Class A-1 Certificate Termination Date, any excess of
(a) the amount described in clause (x) of the preceding paragraph over (b) the
amount described in clause (y) of the preceding paragraph shall be distributed
as principal with respect to the Class A-2 Certificates, as elsewhere provided
herein.
CLASS A-2 CARRY-FORWARD AMOUNT: As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Class A-2 Formula
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the Class A-2 Distribution Amount on such immediately preceding
Distribution Date and (b) 30 days' interest on the amount described in clause
(a), calculated at an interest rate equal to the Class A-2 Pass-Through Rate
applicable to such Distribution Date.
CLASS A-2 CERTIFICATE: Any Certificate designated as a "Class
A-2 Certificate" on the face thereof, in the form of Exhibit A hereto. The Class
A-2 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A-2 CERTIFICATE PRINCIPAL BALANCE: As of any time of
determination, the Original Certificate Principal Balance of the Class A-2
Certificates less any amounts actually distributed with respect to principal
thereon on all prior Distribution Dates for such Class.
CLASS A-2 CERTIFICATE TERMINATION DATE: The Distribution Date
on which the Class A-2 Certificate Principal Balance is reduced to zero.
CLASS A-2 CURRENT INTEREST: With respect to the Class A-2
Certificates for any Distribution Date and the related Accrual Period, the
interest accrued at the Class A-2 Pass-Through Rate applicable to such
Distribution Date and such Accrual Period on the Class A-2 Certificate Principal
Balance as of such Distribution Date (and prior to making any distributions on
such Distribution Date).
CLASS A-2 DISTRIBUTION AMOUNT: With respect to the Class A-2
Certificates for any Distribution Date, the amount to be distributed to the
Holders of the Class A-2 Certificates on such Distribution Date, applied first
to interest and then to principal, which amount shall be the sum of (i) the pro
rata portion of any moneys released from the Pre-Funding
7
Account as a prepayment of principal on the Class A-2 Certificates pursuant to
Section 6.01(g) hereof, and (ii) the lesser of (x) the Class A-2 Formula
Distribution Amount for such Distribution Date and (y) the amount (including any
applicable portion of any Insured Payment) available for distribution on account
of the Class A-2 Certificates for such Distribution Date.
CLASS A-2 FINAL SCHEDULED MATURITY DATE: The ____________
Distribution Date.
CLASS A-2 FORMULA DISTRIBUTION AMOUNT: With respect to the
Class A-2 Certificates for any Distribution Date, the sum of the Class A-2
Interest Distribution Amount and the Class A-2 Principal Distribution Amount.
CLASS A-2 INTEREST DISTRIBUTION AMOUNT: With respect to the
Class A-2 Certificates for any Distribution Date an amount equal to (a) the
related Class A-2 Current Interest, minus (b) the pro rata portion of any
Mortgage Loan Interest Shortfalls allocable to the Class A-2 Certificates, on
the basis of accrued interest thereon, plus (c) any Class A-2 Carry-Forward
Amount, minus (d) any amounts paid by the Certificate Insurer in respect of such
Class A-2 Carry-Forward Amount, in each case as of such Distribution Date.
CLASS A-2 PASS-THROUGH RATE: With respect to any Distribution
Date, the per annum rate equal to _____%.
CLASS A-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to the
Class A-2 Certificates for any Distribution Date prior to the Class A-1
Certificate Termination Date, zero.
On the Class A-1 Certificate Termination Date, the lesser of
(i) the excess of (x) the Remaining Principal Distribution Amount as of the
Class A-1 Certificate Termination Date over (y) the Class A-1 Certificate
Principal Balance on the Class A-1 Certificate Termination Date before making
distributions on such date and (ii) the Class A-2 Certificate Principal Balance.
With respect to the Class A-2 Certificates for any
Distribution Date following the Class A-1 Certificate Termination Date, the
lesser of (x) the Remaining Principal Distribution Amount for such Distribution
Date and (y) the Class A-2 Certificate Principal Balance as of such Distribution
Date. On the Class A-2 Certificate Termination Date any remaining portion of the
Remaining Principal Distribution Amount shall be distributed with respect to the
Class A-3 Certificates.
CLASS A-3 CARRY-FORWARD AMOUNT: As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Class A-3 Formula
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the Class A-3 Distribution Amount on such immediately preceding
Distribution Date and (b) 30 days' interest on the amount described
8
in clause (a), calculated at an interest rate equal to the Class A-3
Pass-Through Rate applicable to such Distribution Date.
CLASS A-3 CERTIFICATE: Any Certificate designated as a "Class
A-3 Certificate" on the face thereof, in the form of Exhibit A hereto. The Class
A-3 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A-3 CERTIFICATE PRINCIPAL BALANCE: As of any time of
determination, the Original Certificate Principal Balance of the Class A-3
Certificates less any amounts actually distributed with respect to principal
thereon on all prior Distribution Dates for such Class.
CLASS A-3 CERTIFICATE TERMINATION DATE: The Distribution Date
on which the Class A-3 Certificate Principal Balance is reduced to zero.
CLASS A-3 CURRENT INTEREST: With respect to the Class A-3
Certificates for any Distribution Date and the related Accrual Period, the
interest accrued at the Class A-3 Pass-Through Rate applicable to such
Distribution Date and such Accrual Period on the Class A-3 Certificate Principal
Balance as of such Distribution Date (and prior to making any distributions on
such Distribution Date).
CLASS A-3 DISTRIBUTION AMOUNT: With respect to the Class A-3
Certificates for any Distribution Date, the amount to be distributed to the
Holders of the Class A-3 Certificates on such Distribution Date, applied first
to interest and then to principal, which amount shall be the sum of (i) the pro
rata portion of any moneys released from the Pre-Funding Account as a prepayment
of principal on the Class A-3 Certificates pursuant to Section 6.01(g) hereof
and (ii) the lesser of (x) the Class A-3 Formula Distribution Amount for such
Distribution Date and (y) the amount (including any applicable portion of any
Insured Payment) available for distribution on account of the Class A-3
Certificates for such Distribution Date.
CLASS A-3 FINAL SCHEDULED MATURITY DATE: The ________________
Distribution Date.
CLASS A-3 FORMULA DISTRIBUTION AMOUNT: With respect to the
Class A-3 Certificates for any Distribution Date, the sum of the Class A-3
Interest Distribution Amount and the Class A-3 Principal Distribution Amount.
CLASS A-3 INTEREST DISTRIBUTION AMOUNT: With respect to the
Class A-3 Certificates for any Distribution Date an amount equal to (a) the
related Class A-3 Current Interest, minus (b) the pro rata portion of any
Mortgage Loan Interest Shortfalls allocable to the Class A-3 Certificates, on
the basis of accrued interest thereon, plus (c) any Class A-3 Carry-Forward
Amount, minus (d) any amounts paid by the Certificate Insurer in respect of such
Class A-3 Carry-Forward Amount, in each case as of such Distribution Date.
9
CLASS A-3 PASS-THROUGH RATE: With respect to any Distribution
Date, the per annum rate equal to ______%.
CLASS A-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to the
Class A-3 Certificates for any Distribution Date prior to the Class A-2
Certificate Termination Date, zero.
On the Class A-2 Certificate Termination Date, the lesser of
(i) the excess of (x) the Remaining Principal Distribution Amount as of the
Class A-2 Certificate Termination Date over (y) the Class A-2 Certificate
Principal Balance on the Class A-2 Certificate Termination Date before making
distributions on such date and (ii) the Class A-3 Certificate Principal Balance.
With respect to the Class A-3 Certificates for any
Distribution Date following the Class A-2 Certificate Termination Date, the
lesser of (x) the Remaining Principal Distribution Amount as of such
Distribution Date and (y) the Class A-3 Certificate Principal Balance as of such
Distribution Date. On the Class A-3 Certificate Termination Date any remaining
portion of the Remaining Principal Distribution Amount shall be distributed with
respect to the Class A-4 Certificates.
CLASS A-4 CARRY-FORWARD AMOUNT: As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Class A-4 Formula
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the Class A-4 Distribution Amount on such immediately preceding
Distribution Date and (b) 30 days' interest on the amount described in clause
(a), calculated at an interest rate equal to the Class A-4 Pass-Through Rate
applicable to such Distribution Date.
CLASS A-4 CERTIFICATE: Any Certificate designated as a "Class
A-4 Certificate" on the face thereof, in the form of Exhibit A hereto. The Class
A-4 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A-4 CERTIFICATE PRINCIPAL BALANCE: As of any time of
determination, the Original Certificate Principal Balance of the Class A-4
Certificates less any amounts actually distributed with respect to principal
thereon on all prior Distribution Dates for such Class.
CLASS A-4 CERTIFICATE TERMINATION DATE: The Distribution Date
on which the Class A-4 Certificate Principal Balance is reduced to zero.
CLASS A-4 CURRENT INTEREST: With respect to the Class A-4
Certificates for any Distribution Date and the related Accrual Period, the
interest accrued at the Class A-4 Pass-Through Rate applicable to such
Distribution Date an such Accrual Period on the Class A-4
10
Certificate Principal Balance as of such Distribution Date (and prior to making
any distributions on such Distribution Date).
CLASS A-4 DISTRIBUTION AMOUNT: With respect to the Class A-4
Certificates for any Distribution Date, the amount to be distributed to the
Holders of the Class A-4 Certificates on such Distribution Date, applied first
to interest and then to principal, which amount shall be the sum of (i) the pro
rata portion of any moneys released from the Pre-Funding Account as a prepayment
of principal on the Class A-4 Certificates pursuant to Section 6.01(g) hereof
and (ii) the lesser of (x) the Class A-4 Formula Distribution Amount for such
Distribution Date and (y) the amount (including any applicable portion of any
Insured Payment) available for distribution on account of the Class A-4
Certificates for such Distribution Date.
CLASS A-4 FINAL SCHEDULED MATURITY DATE: The _______________
Distribution Date.
CLASS A-4 FORMULA DISTRIBUTION AMOUNT: With respect to the
Class A-4 Certificates for any Distribution Date, the sum of the Class A-4
Interest Distribution Amount and the Class A-4 Principal Distribution Amount.
CLASS A-4 INTEREST DISTRIBUTION AMOUNT: With respect to the
Class A-4 Certificates for any Distribution Date an amount equal to (a) the
related Class A-4 Current Interest, minus (b) the pro rata portion of any
Mortgage Loan Interest Shortfalls allocable to the Class A-4 Certificates, on
the basis of accrued interest thereon, plus (c) any Class A-4 Carry-Forward
Amount, minus (d) any amounts paid by the Certificate Insurer in respect of such
Class A-4 Carry-Forward Amount, in each case as of such Distribution Date.
CLASS A-4 PASS-THROUGH RATE: With respect to any Distribution
Date, the per annum rate equal to _______%.
CLASS A-4 PRINCIPAL DISTRIBUTION AMOUNT: With respect to the
Class A-4 Certificates for any Distribution Date prior to the Class A-3
Certificate Termination Date, zero.
On the Class A-3 Certificate Termination Date, the lesser of
(i) the excess of (x) the Remaining Principal Distribution Amount as of the
Class A-3 Certificate Termination Date over (y) the Class A-3 Certificate
Principal Balance on the Class A-3 Certificate Termination Date before making
distributions on such date and (ii) the Class A-4 Certificate Principal Balance.
With respect to the Class A-4 Certificates for any
Distribution Date following the Class A-3 Certificate Termination Date, the
lesser of (x) the Remaining Principal Distribution Amount as of such
Distribution Date and (y) the Class A-4 Certificate Principal Balance as of such
Distribution Date. On the Class A-4 Certificate Termination Date any remaining
portion of
11
the Remaining Principal Distribution Amount shall be distributed with respect to
the Class A-5 Certificates.
CLASS A-5 CARRY-FORWARD AMOUNT: As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Class A-5 Formula
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the Class A-5 Distribution Amount on such immediately preceding
Distribution Date and (b) 30 days' interest on the amount described in clause
(a), calculated at an interest rate equal to the Class A-5 Pass-Through Rate
applicable to such Distribution Date.
CLASS A-5 CERTIFICATE: Any Certificate designated as a "Class
A-5 Certificate" on the face thereof, in the form of Exhibit A hereto. The Class
A-5 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A-5 CERTIFICATE PRINCIPAL BALANCE: As of any time of
determination, the Original Certificate Principal Balance of the Class A-5
Certificates less any amounts actually distributed with respect to principal
thereon on all prior Distribution Dates for such Class.
CLASS A-5 CERTIFICATE TERMINATION DATE: The Distribution Date
on which the Class A-5 Certificate Principal Balance is reduced to zero.
CLASS A-5 CURRENT INTEREST: With respect to the Class A-5
Certificates for any Distribution Date and the related Accrual Period, the
interest accrued at the Class A-5 Pass-Through Rate applicable to such
Distribution Date and such Accrual Period on the Class A-5 Certificate Principal
Balance as of such Distribution Date (and prior to making any distributions on
such Distribution Date).
CLASS A-5 DISTRIBUTION AMOUNT: With respect to the Class A-5
Certificates for any Distribution Date, the amount to be distributed to the
Holders of the Class A-5 Certificates on such Distribution Date, applied first
to interest and then to principal, which amount shall be the sum of (i) the pro
rata portion of any moneys released from the Pre-Funding Account as a prepayment
of principal on the Class A-5 Certificates pursuant to Section 6.01(g) hereof
and (ii) the lesser of (x) the Class A-5 Formula Distribution Amount for such
Distribution Date and (y) the amount (including any applicable portion of any
Insured Payment) available for distribution on account of the Class A-3
Certificates for such Distribution Date.
CLASS A-5 FINAL SCHEDULED MATURITY DATE: The
__________________ Distribution Date.
CLASS A-5 FORMULA DISTRIBUTION AMOUNT: With respect to the
Class A-5 Certificates for any Distribution Date, the sum of the Class A-5
Interest Distribution Amount and the Class A-5 Principal Distribution Amount.
12
CLASS A-5 INTEREST DISTRIBUTION AMOUNT: With respect to the
Class A-5 Certificates for any Distribution Date an amount equal to (a) the
related Class A-5 Current Interest, minus (b) the pro rata portion of any
Mortgage Loan Interest Shortfalls allocable to the Class A-5 Certificates, on
the basis of accrued interest thereon, plus (c) any Class A-5 Carry-Forward
Amount, minus (d) any amounts paid by the Certificate Insurer in respect of such
Class A-5 Carry-Forward Amount, in each case as of such Distribution Date.
CLASS A-5 PASS-THROUGH RATE: With respect to any Distribution
Date, the per annum rate equal to ____% plus, with respect to any Distribution
Date after the Clean-Up Call Date, _____%.
CLASS A-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to the
Class A-5 Certificates for any Distribution Date prior to the Class A-4
Certificate Termination Date, zero.
On the Class A-4 Certificate Termination Date, the lesser of
(i) the excess of (x) the Remaining Principal Distribution Amount as of the
Class A-4 Certificate Termination Date over (y) the Class A-4 Certificate
Principal Balance on the Class A-4 Certificate Termination Date before making
distributions on such date and (ii) the Class A-5 Certificate Principal Balance.
With respect to the Class A-5 Certificates for any
Distribution Date following the Class A-4 Certificate Termination Date, the
lesser of (x) the Remaining Principal Distribution Amount as of such
Distribution Date and (y) the Class A-5 Certificate Principal Balance as of such
Distribution Date. On the Class A-5 Certificate Termination Date any remaining
portion of the Remaining Principal Distribution Amount shall be distributed with
respect to the Class A-6 Certificates.
CLASS A-6 CARRY-FORWARD AMOUNT: As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Class A-6 Formula
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the Class A-6 Distribution Amount on such immediately preceding
Distribution Date and (b) 30 days' interest on the amount described in clause
(a), calculated at an interest rate equal to the Class A-6 Pass-Through Rate
applicable to such Distribution Date.
CLASS A-6 CERTIFICATE: Any Certificate designated as a "Class
A-6 Certificate" on the face thereof, in the form of Exhibit A hereto. The Class
A-6 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A-6 CERTIFICATE PRINCIPAL BALANCE: As of any time of
determination, the Original Certificate Principal Balance of the Class A-6
Certificates less any amounts actually distributed with respect to principal
thereon on all prior Distribution Dates for such Class.
13
CLASS A-6 CERTIFICATE TERMINATION DATE: The Distribution Date
on which the Class A-6 Certificate Principal Balance is reduced to zero.
CLASS A-6 CURRENT INTEREST: With respect to the Class A-6
Certificates for any Distribution Date and the related Accrual Period, the
interest accrued at the Class A-6 Pass-Through Rate applicable to such
Distribution Date and such Accrual Period on the Class A-6 Certificate Principal
Balance as of such Distribution Date (and prior to making any distributions on
such Distribution Date).
CLASS A-6 DISTRIBUTION AMOUNT: With respect to the Class A-6
Certificates for any Distribution Date, the amount to be distributed to the
Holders of the Class A-6 Certificates on such Distribution Date, applied first
to interest and then to principal, which amount shall be the sum of (i) the pro
rata portion of any moneys released from the Pre-Funding Account as a prepayment
of principal on the Class A-6 Certificates pursuant to Section 6.01(g) hereof
and (ii) the lesser of (x) the Class A-6 Formula Distribution Amount for such
Distribution Date and (y) the amount (including any applicable portion of any
Insured Payment) available for distribution on account of the Class A-6
Certificates for such Distribution Date.
CLASS A-6 FINAL SCHEDULED MATURITY DATE: The ____________
Distribution Date.
CLASS A-6 FORMULA DISTRIBUTION AMOUNT: With respect to the
Class A-6 Certificates for any Distribution Date, the sum of the Class A-6
Interest Distribution Amount and the Class A-6 Principal Distribution Amount.
CLASS A-6 INTEREST DISTRIBUTION AMOUNT: With respect to the
Class A-6 Certificates for any Distribution Date an amount equal to (a) the
related Class A-6 Current Interest, minus (b) the pro rata portion of any
Mortgage Loan Interest Shortfalls allocable to the Class A-6 Certificates, on
the basis of accrued interest thereon, plus (c) any Class A-6 Carry-Forward
Amount, minus (d) any amounts paid by the Certificate Insurer in respect of such
Class A-6 Carry-Forward Amount, in each case as of such Distribution Date.
CLASS A-6 LOCKOUT DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of (i) the applicable Class A-6 Lockout
Percentage for such Distribution Date and (ii) the Class A-6 Lockout Pro Rata
Distribution Amount for such Distribution Date.
CLASS A-6 LOCKOUT PERCENTAGE: For each Distribution Date shall
be as follows:
Payment Dates Lockout Percentage
14
CLASS A-6 LOCKOUT PRO RATA DISTRIBUTION AMOUNT: For any
Distribution Date will be an amount equal to the product of (x) a fraction, the
numerator of which is the Class A-6 Certificate Principal Balance immediately
prior to such Distribution Date and the denominator of which is the Class A
Certificate Principal Balance immediately prior to such Distribution Date and
(y) the Principal Distribution Amount for such Distribution Date.
CLASS A-6 PASS-THROUGH RATE: With respect to any Distribution
Date, the per annum rate equal to ______%.
CLASS A-6 PRINCIPAL DISTRIBUTION AMOUNT: With respect to the
Class A-6 Certificates for any Distribution Date prior to the Class A-5
Certificate Termination Date, the Class A-6 Lockout Distribution Amount.
On the Class A-5 Certificate Termination Date, the lesser of
(i) the excess of (x) the Principal Distribution Amount as of the Class A-5
Certificate Termination Date over (y) the Class A-5 Certificate Principal
Balance on the Class A-5 Certificate Termination Date before making
distributions on such date and (ii) the Class A-6 Certificate Principal Balance.
With respect to the Class A-6 Certificates for any
Distribution Date following the Class A-5 Certificate Termination Date, the
lesser of (x) the Principal Distribution Amount for such Distribution Date and
(y) the Class A-6 Certificate Principal Balance as of such Distribution Date. On
the Class A-6 Certificate Termination Date any remaining portion of the
Principal Distribution Amount shall be distributed with respect to the Class R
Certificates.
CLASS R CERTIFICATE: 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
hereto.
CLASS R CERTIFICATEHOLDER: A Holder of a Class R Certificate.
CLEAN-UP CALL DATE: As defined in Section 8.01(b).
CLOSING DATE: _________.
CODE: The Internal Revenue Code of 1986, as amended.
COLLECTION ACCOUNT: The Eligible Account established and
maintained by the Servicer pursuant to Section 5.02(b).
COMBINED LOAN-TO-VALUE RATIO or CLTV: As to any Mortgage Loan
at any time, the fraction, expressed as a percentage, the numerator of which is
the sum of (i) the Principal Balance thereof at such time and (ii) if such
Mortgage Loan is subject to a second mortgage, the unpaid principal balance of
any related first mortgage loan or loans, if any, as of
15
such time, and the denominator of which is the Appraised Value of any related
Mortgaged Property or Properties as of the date of the appraisal used by or on
behalf of the Depositor to underwrite such Mortgage Loan.
COMMISSION: The Securities and Exchange Commission.
COMPENSATING INTEREST: As defined in Section 6.09 hereof.
CUMULATIVE LOSS PERCENTAGE: As of any date of determination
thereof, the aggregate of all Liquidated Loan Losses since the Startup Date as a
percentage of the sum of (i) the aggregate Principal Balance of the Initial
Mortgage Loans as of the Initial Cut-Off Date and (ii) the aggregate Principal
Balance of any Subsequent Mortgage Loans transferred to the Trust as of the
related Subsequent Cut-Off Date.
CUMULATIVE LOSS TEST: The Cumulative Loss Test for each period
indicated below is satisfied if the Cumulative Loss Percentage for such period
does not exceed the percentage set out for such period below:
Period Cumulative Loss Percentage
-------------------------------------------- --------------------------
1st - 24th Distribution Date _____%
25th - 36th Distribution Date _____%
37th - 48th Distribution Date _____%
49th - 60th Distribution Date
and thereafter _____%
CURTAILMENT: 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 not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
delinquency.
CUSTODIAN: As defined in Section 2.04(c).
CUT-OFF DATE: With respect to the Initial Mortgage Loans, the
Initial Cut-Off Date, and with respect to the Subsequent Mortgage Loans, the
Subsequent Cut-Off Date.
DEBT SERVICE REDUCTION: 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 United States Bankruptcy Code,
except such a reduction that constitutes a Deficient Valuation or a permanent
forgiveness of principal.
DEFICIENT VALUATION: 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
16
then outstanding principal balance of the Mortgage Loan, which valuation results
from a proceeding initiated under the United States Bankruptcy Code.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced by or to be
replaced by a Qualified Substitute Mortgage Loan.
DELINQUENCY RATIO: With respect to any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which equals the
aggregate Principal Balances of all Mortgage Loans that are 60 or more days
Delinquent, in foreclosure or converted to REO Property as of the last day of
such Due Period and (b) the denominator of which is the aggregate Principal
Balance of the Mortgage Loans as of the last day of such Due Period.
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: _______________________________, a ____________
corporation, and any successor thereto.
DEPOSITORY: The Depository Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and any successor Depository hereafter named.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Class A Certificates from time to
time as a securities depositary.
DISTRIBUTION DATE: The ____ day of any month or if such ____
day is not a Business Day, the first Business Day immediately following,
commencing on ____________.
DUE DATE: With respect to each Mortgage Loan and any
Distribution Date, the day of the calendar month preceding the calendar month in
which such Distribution Date occurs on which the Monthly Payment for such
Mortgage Loan was due.
DUE PERIOD: With respect to each Distribution Date, the
calendar month preceding the related Distribution Date.
ELIGIBLE ACCOUNT: Either (A) an account or accounts maintained
with an institution (which may include the Trustee, provided such institution
otherwise meets these requirements) whose deposits are insured by the FDIC, the
unsecured and uncollateralized debt
17
obligations of which institution shall be rated AA or better by S&P and Aa2 or
better by ▇▇▇▇▇'▇ and in the highest short term rating category by S&P and
▇▇▇▇▇'▇, and which is (i) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (ii) an
institution (including the Trustee) duly organized, validly existing and in good
standing under the applicable banking laws of any state, (iii) a national
banking association duly organized, validly existing and in good standing under
the federal banking laws, (iv) a principal subsidiary of a bank holding company,
or (v) approved in writing by the Certificate Insurer and the Rating Agencies or
(B) a trust account or accounts maintained with the trust department of a
federal or state chartered depository institution or trust company (which may
include the Trustee, provided that the Trustee otherwise meets these
requirements), having capital and surplus of not less than $50,000,000, acting
in its fiduciary capacity.
ERISA: As defined in Section 4.02(m) hereof.
EVENT OF DEFAULT: As described in Section 7.01.
EXCESS SUBORDINATED AMOUNT: With respect to the Mortgage Loans
and any Distribution Date, the excess, if any, of (x) the Subordinated Amount
that would apply on such Distribution Date after taking into account the payment
of the related Class A Distribution Amount on such Distribution Date (except for
any distributions of related Subordination Reduction Amounts on such
Distribution Date) over (y) the related Specified Subordinated Amount for such
Distribution Date; provided, however, that the Excess Subordinated Amount for
the period beginning with the Distribution Date as to which clause (b)(i)(y)(A)
of "Specified Subordinated Amount" applies (the "Trigger Date") and ending on
the Distribution Date occurring in the month six months subsequent to the
Trigger Date (inclusive) shall be limited to the amount obtained using the
following formula.
n
6 X E.S.A.
Where "n" is equal to the number of Distribution Dates that
have occurred since the Trigger Date and "E.S.A." is equal to the amount of
Excess Subordinated Amount that would otherwise be obtained for such
Distribution Date without regard to the provisions of this proviso.
FDIC: The Federal Deposit Insurance Corporation, and any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, and any
successor thereto.
FIXED RATE CERTIFICATES: The Class A-2 Certificates, the Class
A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates and the
Class A-6 Certificates.
FNMA: The Federal National Mortgage Association, and any
successor thereto.
18
FORECLOSURE PROFITS: As to any Distribution Date, the excess,
if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the related Due Period 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 5.06 to the first day of the month
following the month in which such Mortgage Loan became a Liquidated Mortgage
Loan).
GAAP: Generally accepted accounting principles, consistently
applied.
I & I PAYMENTS: Payments due and owing under the Insurance and
Indemnity Agreement other than pursuant to Section 3.02(b) of such Agreement.
INDIRECT PARTICIPANT: Any financial institution for whom any
Direct Participant holds an interest in a Class A Certificate.
INITIAL CUT-OFF DATE: The close of business on ____________
(or with respect to any Initial Mortgage Loan originated or otherwise acquired
by an Originator after ____________, the date of origination or acquisition of
such Initial Mortgage Loan).
INITIAL MORTGAGE LOANS: The Mortgage Loans delivered by the
Depositor on the Startup Date.
INITIAL SUBORDINATED AMOUNT: An amount equal to _____% of the
Maximum Collateral Amount.
INSURANCE AND INDEMNITY AGREEMENT: The Insurance and Indemnity
Agreement dated as of ____________ among the Certificate Insurer, the Depositor,
the Servicer, _____________________________________ as such agreement may be
amended or supplemented in accordance with the provisions thereof.
INSURANCE PROCEEDS: 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 DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the sum of (a) the Class A Interest Distribution Amount with respect to
such Distribution Date, (b) the Subordination Deficit, if any, as of such
Distribution Date and (c) (i) on the Class A-1 Final Scheduled Maturity Date,
the Class A-1 Certificate Principal Balance, (ii) on the Class A-2 Final
Scheduled Maturity Date, the Class A-2 Certificate Principal Balance, (iii) on
the Class ▇-
▇▇
▇ Final Scheduled Maturity Date, the Class A-3 Certificate Principal Balance,
(iv) on the Class A-4 Final Scheduled Maturity Date, the Class A-4 Certificate
Principal Balance, (v) on the Class A-5 Final Scheduled Maturity Date, the Class
A-5 Certificate Principal Balance and (iv) on the Class A-6 Final Scheduled
Maturity Date, the Class A-6 Certificate Principal Balance.
INSURED PAYMENT: With respect to any Distribution Date, the
Available Funds Shortfall.
INTEREST DETERMINATION DATE: With respect to any Accrual
Period for the Adjustable Rate Certificates, the second London Business Day
preceding the first day of such Accrual Period; provided, however, that with
respect to the _______ Distribution Date, the Interest Determination Date shall
be the second London Business Day preceding the Closing Date.
LATE PAYMENT RATE: Has the meaning ascribed thereto in the
Insurance and Indemnity Agreement.
LIBOR: With respect to any Accrual Period for the Adjustable
Rate Certificates, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the offered rates of the Reference Banks for
one-month U.S. dollar deposits, as such rates appear on Telerate Page 3750, as
of 11:00 a.m. (London time) on such Interest Determination Date. On each
Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest
Rate.
LIQUIDATED MORTGAGE LOAN: A Mortgage Loan with respect to
which the related Mortgaged Property has been acquired, liquidated or foreclosed
and with respect to which the Servicer determines that all Liquidation Proceeds
which it expects to recover have been recovered.
LIQUIDATED LOAN LOSS: With respect to any Distribution Date,
the aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan prior to the Due Date preceding such
Distribution 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
20
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.
LIQUIDATION EXPENSES: Expenses incurred by the Servicer in
connection with the liquidation of any defaulted Mortgage Loan or property
acquired in respect thereof (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions
and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant
to Sections 5.04 and 5.06 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: The amount (other than Insurance
Proceeds) received by the Servicer in connection with (i) the taking of all or a
part of Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a
trustee's sale, foreclosure sale, REO Disposition or otherwise or (iii) the
liquidation of any other security for such Mortgage Loan, including, without
limitation, pledged equipment, inventory and working capital and assignments of
rights and interests made by the related mortgagor.
LOAN REPURCHASE PRICE: As defined in Section 2.06(b).
LOAN SALE AGREEMENT: The Loan Sale Agreement, dated as of the
date hereof, among the Originators and the Depositor relating to the sale of the
Mortgage Loans from the Originators to the Depositor.
LONDON BUSINESS DAY: A day on which banks are open for dealing
in foreign currency and exchange in London and New York City.
MAJORITY CERTIFICATEHOLDERS: The Holder or Holders of Class A
Certificates evidencing Percentage Interests in excess of 51% in the aggregate.
MAXIMUM COLLATERAL AMOUNT: The Original Pool Principal Balance
plus the Original Pre-Funded Amount.
MONTHLY PAYMENT: As to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon as specified for such Due Date in the related amortization schedule at
the time applicable thereto (after adjustment for any Curtailments and Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other
21
than Deficient Valuations or similar proceeding or any moratorium or similar
waiver or grace period).
MONTHLY SERVICING FEE: As defined in Section 5.08 hereof.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., a corporation
organized and existing under Delaware law, or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized rating agency designated by the Certificate Insurer.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a first or second lien on the Mortgaged Property.
MORTGAGE FILE: As described in Exhibit C.
MORTGAGE INTEREST RATE: As to any Mortgage Loan, the per annum
fixed rate at which interest accrues on the unpaid principal balance thereof.
MORTGAGE LOANS: The Initial Mortgage Loans and the Subsequent
Mortgage Loans, together with any Qualified Replacement Mortgages substituted
therefor in accordance with this Agreement, as from time to time are held as a
part of the Trust Fund, the Initial Mortgage Loans originally so held being
identified in the initial Mortgage Loan Schedule. When used in respect of any
Distribution Date, the term Mortgage Loans shall mean all Mortgage Loans
(including those in respect of which the Trustee has acquired the related
Mortgaged Property) which have not been repaid in full prior to the related Due
Period, did not become Liquidated Mortgage Loans prior to such related Due
Period or were not repurchased or replaced by the Depositor prior to such
related Due Period.
MORTGAGE LOAN INTEREST SHORTFALL: With respect to any
Distribution Date, as to any Mortgage Loan, the sum of (a) any Prepayment
Interest Shortfall for which no payment of Compensating Interest is paid and (b)
any Civil Relief Act Interest Shortfall in respect of such Mortgage Loan for
such Distribution Date.
MORTGAGE LOAN SCHEDULE: The initial schedule of Initial
Mortgage Loans as of the Initial Cut-Off Date as attached hereto as Schedule I,
which will be deemed to be modified automatically upon any replacement, sale,
substitution, liquidation, transfer or addition of any Mortgage Loan, including
the addition of a Subsequent Mortgage Loan, pursuant to the terms hereof. The
initial Mortgage Loan Schedule sets forth as to each Initial Mortgage Loan, and
any subsequent Mortgage Loan Schedule provided in connection with the Subsequent
Mortgage Loans will set forth as to each Subsequent Mortgage Loan: (i) its
identifying number and the name of the related Mortgagor; (ii) the billing
address for the related Mortgaged Property including the state and zip code;
(iii) its date of origination; (iv) the original number of months to stated
maturity; (v) the original stated maturity; (vi) the original Principal Balance;
(vii) its Cut-
22
Off Date Balance; (viii) the Mortgage Interest Rate; and (ix) the scheduled
monthly payment of principal and interest.
MORTGAGE NOTE: The original, executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
MORTGAGE PORTFOLIO PERFORMANCE TEST: The Mortgage Portfolio
Performance Test is satisfied for any date of determination thereof if (i) the
Rolling Six Month Delinquency Rate is less than or equal to _______%, (ii) the
Subordination Loss Test is satisfied and (iii) if the Twelve Month Loss Amount
is not greater than or equal to _______% of the Pool Principal Balance as of the
first day of the twelfth preceding calendar month.
MORTGAGED PROPERTY: The underlying property or properties
securing a Mortgage Loan, consisting of a fee simple estate in one or more
parcels of land.
MORTGAGOR: The obligor on a Mortgage Note.
NET FORECLOSURE PROFITS: As to any Distribution Date, the
excess, if any, of (i) the aggregate Foreclosure Profits with respect to such
Distribution Date over (ii) Liquidated Loan Losses with respect to such
Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed
Periodic Advances made by the 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 MONTHLY EXCESS CASHFLOW: As of any Distribution Date, the
excess of (x) the Available Funds then on deposit in the Certificate Account
over (y) the sum of (i) Class A Distribution Amount, calculated for this purpose
without regard to any Subordination Increase Amount or portion thereof included
therein, (ii) the Reimbursement Amount, if any, for such Distribution Date,
(iii) the Premium Amount, and (iv) the Trustee Fees.
NET REO PROCEEDS: As to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Servicer.
NET WEIGHTED AVERAGE MORTGAGE INTEREST RATE: With respect to
any Due Period, the weighted average Mortgage Interest Rates (weighted by
Principal Balances) of the Mortgage Loans, calculated at the opening of business
on the first day of such Due Period, less the rate at which the Servicing Fee is
then calculated, less the rate at which the Trustee Fee is then calculated and
less the Premium Percentage.
23
NONRECOVERABLE ADVANCES: With respect to any Mortgage Loan,
(a) any Periodic Advance previously made and not reimbursed from late
collections pursuant to Section 5.04, or (b) 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 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 ultimately be
recoverable pursuant to Sections 5.04 and Section 6.04.
OFFICER'S CERTIFICATE: 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 Servicer, or the
Depositor, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may,
without limitation, be counsel for the Depositor, the 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 (a) the qualification of the REMIC Trust as a REMIC or (b)
compliance with the REMIC Provisions must be an opinion of counsel who (i) is in
fact independent of the Depositor, the Servicer and the Trustee, (ii) does not
have any direct financial interest or any material indirect financial interest
in the Depositor or the Servicer or the Trustee or in an Affiliate thereof,
(iii) is not connected with the Depositor or the Servicer or the Trustee as an
officer, employee, director or person performing similar functions and (iv) is
reasonably acceptable to the Certificate Insurer.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: As of the Startup Day
and as 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 A-6 Certificates,
$_______.
The Class R Certificates do not have an Original Certificate Principal Balance.
ORIGINAL POOL PRINCIPAL BALANCE: The Pool Principal Balance as
of the Initial Cut-Off Date, which amount is equal to $_______.
ORIGINAL PRE-FUNDED AMOUNT: $_______.
ORIGINATORS: _______.
OVERFUNDED INTEREST AMOUNT: With respect to each Subsequent
Transfer Date occurring in _______, the excess of (i) the amount on deposit in
the Capitalized Interest Account, over (ii) two-months' interest calculated at
the Adjusted Pass-Through Rate on the amount on deposit in the Pre-Funding
Account (net of any Pre-Funding Earnings)
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immediately following such Subsequent Transfer Date (disregarding any amount
applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not
have a Due Date in _______).
With respect to each Subsequent Transfer Date occurring in _______, the excess
of (i) the amount on deposit in the Capitalized Interest Account, over (ii)
one-month's interest calculated at the Adjusted Pass-Through Rate on the amount
on deposit in the Pre-Funding Account (net of any Pre-Funding Earnings)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not
have a Due Date in _______).
OWNERSHIP INTEREST: 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.
OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as
to which (a) 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 (b) the Depositor has no actual knowledge that such
Residential Dwelling is not so occupied.
PERCENTAGE INTEREST: With respect to a Class A Certificate of
any Class, the portion evidenced by such Certificate, expressed as a percentage
rounded to four decimal places, equal to a fraction the numerator of which is
the denomination represented by such Certificate and the denominator of which is
the Original Certificate Principal Balance of such Class. With respect to a
Class R Certificate, the portion evidenced thereby as stated on the face of such
Certificate.
PERIODIC ADVANCE: The aggregate of the advances required to be
made by the Servicer on any Servicer Distribution Date pursuant to Section 5.18
hereof, the amount of any such advances being equal to the sum of:
(a) with respect to each Mortgage Loan that was Delinquent as
of the close of business on the last day of the Due Period preceding
the related Servicer Distribution Date, the product of (i) the
Principal Balance of such Mortgage Loan and (ii) one-twelfth of the
Mortgage Interest Rate for such Mortgage Loan net of the Servicing Fee,
and
(b) 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 (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee, for the most recently ended Due
Period over (ii) the net income from the REO Property transferred to
the Certificate Account for such Distribution Date;
25
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
PERMITTED INVESTMENTS: As used herein, Permitted Investments
shall include the following:
(i) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) reLoan Sale Agreements on obligations specified in clause
(i) maturing not more than three months from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated in one of the two highest rating categories by
the Rating Agencies;
(iii) certificates of deposit, time deposits and bankers'
acceptances (which, in the case of bankers' acceptances, shall in no event have
an original maturity of more than 365 days) of any U.S. depository institution
or trust company, incorporated under the laws of the United States or any state;
provided, that the debt obligations of such depository institution or trust
company at the date of acquisition thereof have been rated in one of the two
highest rating categories by the Rating Agencies;
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been rated in
the highest short-term rating category by the Rating Agencies;
(v) the VISTA U.S. Government Money Market Fund, the VISTA
Prime Money Market Fund and the VISTA Treasury Plus Fund, so long as any such
fund is rated in the highest rating category by Moody's or S&P;
provided, that, each such Permitted Investment shall be a "permitted investment"
within the meaning of Section 860G(a)(5) of the Code and that no instrument
described hereunder shall evidence either the right to receive (x) only interest
with respect to the obligations underlying such instrument or (y) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provided a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations; and provided, further, that no instrument described
hereunder may be purchased at a price greater than par if such instrument may be
prepaid or called at a price less than its purchase price prior to stated
maturity.
PERMITTED TRANSFEREE: Any Person other than (a) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (b) a foreign government, International
Organization or any agency or instrumentality of either
26
of the foregoing, (c) an organization (except certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from tax imposed by
Chapter I of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income) on any excess inclusions (as defined in
Section 860E(c)(1) of the Code) with respect to any Class R Certificate, (d)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code and (e) any other Person so designated by the Trustee based upon an
Opinion of Counsel to the Trustee and the Certificate Insurer that the transfer
of an Ownership Interest in a Class R Certificate to such Person may cause
either (i) the REMIC Trust to fail to qualify as a REMIC at any time that the
Class A Certificates are outstanding or (ii) the Trust Fund or any Person having
an Ownership Interest in any Class of Certificates, other than such Person, to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a 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 or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of FHLMC, a majority of its board of directors is not selected by
such governmental unit.
PERSON: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN: As defined in Section 4.02(m).
POOL CUMULATIVE LOAN LOSSES: With respect to any period, the
sum of all Liquidated Loan Losses which occurred during such period.
POOL PRINCIPAL BALANCE: The aggregate Principal Balances as of
any date of determination.
PREFERENCE AMOUNT: Any amounts distributed in respect of the
Class A Certificates which are recovered from any Holder of a Class A
Certificate as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code or other similar law in accordance with a final,
nonappealable order of a court having competent jurisdiction and which have not
theretofore been repaid to such Holder.
PREFERENCE CLAIM: As defined in Section 6.04(f).
PRE-FUNDING ACCOUNT: The Pre-Funding Account established in
accordance with Section 6.01(a) hereof and maintained by the Trustee.
PRE-FUNDING AMOUNT: With respect to any date, the amount on
deposit in the Pre-Funding Account.
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PRE-FUNDING EARNINGS: The actual investment earnings realized
on amounts deposited in the Pre-Funding Account.
PRE-FUNDING PERIOD: The period commencing on the Startup Date
and ending on the earliest to occur of (i) the date on which the amount on
deposit in the Pre-Funding Account (exclusive of any investment earnings) is
less than $100,000, (ii) the date on which any Servicer Default occurs and (iii)
_______.
PREMIUM AMOUNT: The product of the Premium Percentage and the
Class A Certificate Principal Balance for the related Distribution Date.
PREMIUM PERCENTAGE: The rate at which the "Premium" is
determined as described in the letter dated _______ between the Servicer and the
Certificate Insurer.
PREMIUM SUPPLEMENT EVENT: Means any Event of Default hereunder
or an "Event of Default" as defined in the Insurance and Indemnity Agreement.
PREPAYMENT ASSUMPTION: A constant prepayment rate of __% HEP,
used solely for determining the accrual of original issue discount and market
discount on the Certificates for federal income tax purposes.
PREPAYMENT INTEREST SHORTFALL: With respect to any
Distribution Date, for each Mortgage Loan that was the subject during the
related Due Period of a Principal Prepayment, an amount equal to the excess, if
any, of (a) 30 days' interest on the Principal Balance of such Mortgage Loan at
a per annum rate equal to (i) the Mortgage Interest Rate (or at such lower rate
as may be in effect for such Mortgage Loan pursuant to application of the Civil
Relief Act, any Deficient Valuation and/or any Debt Service Reduction) minus
(ii) the rate at which the Servicing Fee is calculated over (b) the amount of
interest actually remitted by the Mortgagor in connection with such Principal
Prepayment less the Servicing Fee for such Mortgage Loan in such month.
PRINCIPAL BALANCE: As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to prepayments received prior to
the end of the related Due Period and Deficient Valuations incurred prior to
such Due Date. The Principal Balance of a Mortgage Loan which becomes a
Liquidated Mortgage Loan on or prior to such Due Date shall be zero.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to the Class A
Certificates for any Distribution Date, the lesser of:
(a) the excess of (i) the sum, as of such Distribution Date,
of (A) the Available Funds and (B) any Insured Payment plus if the Certificate
Insurer shall so elect in its sole discretion, an amount of principal (including
Liquidated Loan Losses) that would have been
28
payable pursuant to clauses (b)(i)-(viii) below if sufficient funds were made
available to the Trustee in accordance with the terms of the Certificate
Insurance Policy over (ii) the sum of (w) the Class A Interest Distribution
Amount, (x) the Trustee Fees, (y) the Reimbursement Amount, if any, and (z) the
Premium Amount; and
(b) the sum, without duplication, of:
(i) all principal in respect of the Mortgage Loans
actually collected during the related Due Period,
(ii) the Principal Balance of each Mortgage Loan that
either was repurchased by the Depositor or purchased by the
Servicer on the related Servicer Distribution Date, to the
extent such Principal Balance is actually received by the
Trustee,
(iii) any Substitution Adjustments delivered by the
Depositor on the related Servicer Distribution Date in
connection with a substitution of a Mortgage Loan, to the
extent such Substitution Adjustments are actually received by
the Trustee,
(iv) the Net Liquidation Proceeds actually collected by
the Servicer of all Mortgage Loans during the related Due
Period (to the extent such Net Liquidation Proceeds relate to
principal),
(v) with respect to the _______ or the _______
Distribution Date, moneys released from the Pre-Funding
Account, if any, (to the extent such funds are less than 1% of
the Pool Principal Balance on _______ or __________,
respectively),
(vi) the amount of any Subordination Deficit for such
Distribution Date,
(vii) the proceeds received by the Trustee of any
termination of the Trust Fund (to the extent such proceeds
relates to principal),
(viii) the amount of any Subordination Increase Amount for
such Distribution Date, and
(ix) if the Certificate Insurer shall so elect in its sole
discretion, an amount of principal (including Liquidated Loan
Losses) that would have been payable pursuant to clauses
(i)-(viii) above if sufficient funds were made available to
the Trustee in accordance with the terms of the Certificate
Insurance Policy,
minus
29
(x) the amount of any Subordination Reduction Amount for
such Distribution Date.
PRINCIPAL PREPAYMENT: Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date.
PRINCIPAL REMITTANCE AMOUNT: As of any Distribution Date, the
sum, without duplication of the amounts specified in clauses (b)(i) through
(b)(iv) and (b)(vii) of the definition of the Principal Distribution Amount.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated _______
relating to the Class A Certificates 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).
QUALIFIED APPRAISER: An appraiser, duly appointed by the
Depositor, 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: "Qualified Mortgage" shall have the
meaning set forth from time to time in the definition thereof at Section
860G(a)(3) of the Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan or
mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section
2.06(c) or 3.03 hereof, which (a) has or have an interest rate at least equal to
those applicable to the Deleted Mortgage Loan, (b) relates or relate to a
detached one-family residence or to the same type of Residential Dwelling or
Business Purpose Property, or any combination thereof, as the Deleted Mortgage
Loan and in each case has or have the same or a better lien priority as the
Deleted Mortgage Loan and has the same occupancy status or is an Owner Occupied
Mortgaged Property, (c) matures or mature no later than (and not more than one
year earlier than) the Deleted Mortgage Loan, (d) 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, (e) 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 as of such date, (f) 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), and (g)
complies or comply as of the date of substitution with each representation and
warranty set forth in Sections 3.01 and 3.02 of the Loan Sale Agreement.
30
RATING AGENCY: S&P or ▇▇▇▇▇'▇.
RECORD DATE: With respect to the Fixed Rate Certificates, the
last Business Day of the month immediately preceding a month in which a
Distribution Date occurs, and with respect to the Adjustable Rate Certificates,
the Business Day immediately preceding the related Distribution Date.
REFERENCE BANKS: 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 Depositor 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 Telerate Page 3750 on the relevant Interest
Determination Date and (iv) which have been designated as such by the Trustee.
REIMBURSEMENT AMOUNT: As of any Distribution Date, the sum of
(a)(i) all Insured Payments previously received by the Trustee and all
Preference Amounts previously paid by the Certificate Insurer and in each case
not previously repaid to the Certificate Insurer pursuant to Sections
6.05(a)(ii) hereof plus (ii) interest accrued on each such Insured Payment and
Preference Amounts not previously repaid calculated at the Late Payment Rate
from the date the Trustee received the related Insured Payment or Preference
Amounts were paid by the Certificate Insurer and (b)(i) any amounts then due and
owing to the Certificate Insurer under the Insurance and Indemnity Agreement
(excluding the Premium Amount due on such Distribution Date), as certified to
the Trustee by the Certificate Insurer plus (ii) interest on such amounts at the
rate specified in the Insurance and Indemnity Agreement. The Certificate Insurer
shall notify the Trustee and the Depositor of the amount of any Reimbursement
Amount.
REMAINING PRINCIPAL DISTRIBUTION AMOUNT: As of any
Distribution Date, the Principal Distribution Amount less the Class A-6 Lockout
Distribution Amount.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 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.
REMIC TRUST: The segregated Pool of assets consisting of the
Trust Fund. The Pre-Funding Account and the Capitalized Interest Account shall
not be part of the REMIC Trust.
31
REO DISPOSITION: The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.
REO MORTGAGE LOAN: Any Mortgage Loan which 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: Proceeds received in respect of any REO Mortgage
Loan (including, without limitation, proceeds from the rental of the related
Mortgaged Property).
REO PROPERTY: A Mortgaged Property acquired by the Servicer in
the name of the Trustee on behalf of the Certificateholders through foreclosure
or deed-in-lieu of foreclosure.
REPRESENTATION LETTER: 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: A request for release in substantially
the form attached as Exhibit H hereto.
RESERVE INTEREST RATE: 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 1/16%) of the one-month U.S. dollar lending rates which three 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 three
New York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.
RESIDENTIAL DWELLING: 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 which is non-mobile.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
any officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Second 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 Depositor or the Servicer, the President or any Vice
President, Assistant Vice President, or any Secretary or Assistant Secretary.
32
ROLLING SIX MONTH DELINQUENCY RATE: For any Distribution Date,
the fraction, expressed as a percentage, equal to the average of the Delinquency
Ratio for each of the six (1, 2, 3, 4 or 5 in the case of the first six
Distribution Dates, as the case may be) immediately preceding Due Periods.
S&P: Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor thereto and if such corporation no
longer for any reason performs the services of a securities rating agency, "S&P"
shall be deemed to refer to any other nationally recognized statistical rating
organization designated by the Certificate Insurer.
SERVICER: _______, a _______corporation, or any successor
appointed as herein provided.
SERVICER DISTRIBUTION DATE: With respect to any Distribution
Date, the 20th day of the month in which such Distribution Date occurs, or if
such 20th day is not a Business Day, the Business Day preceding such 20th day.
SERVICER EXTENSION NOTICE: Has the meaning set forth in
Section 8.04 hereof.
SERVICER REMITTANCE AMOUNT: With respect to any Servicer
Distribution Date, an amount equal to the sum of (i) all collections of
principal and interest on the Mortgage Loans (including Principal Prepayments,
Net REO Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer
during the related Due Period, (ii) all Periodic Advances made by the Servicer
with respect to interest payments due to be received on the Mortgage Loans on
the related Due Date and (iii) any other amounts required to be placed in the
Collection Account by the Servicer pursuant to this Agreement but excluding the
following:
(a) amounts received on particular Mortgage Loans as late
payments of interest and respecting which the Servicer has previously made an
unreimbursed Periodic Advance;
(b) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(c) that portion of Liquidation Proceeds and REO Proceeds to
the extent of any unpaid Servicing Fee;
(d) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
(e) all amounts in respect of late fees, assumption fees,
prepayment fees and similar fees;
33
(f) certain other amounts which are reimbursable to the
Servicer, as provided in this Pooling and Servicing Agreement; and
(g) Net Foreclosure Profits.
SERVICING ADVANCES: All reasonable and customary
"out-of-pocket" costs and expenses incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the REO Property, including reasonable fees paid to any
independent contractor in connection therewith, (d) compliance with the
obligations under Section 5.22, all of which reasonable and customary
out-of-pocket costs and expenses are reimbursable to the Servicer to the extent
provided in Sections 5.03 and 5.22.
SERVICING COMPENSATION: The Servicing Fee and other amounts to
which the Servicer is entitled pursuant to Section 5.08.
SERVICING FEE: As to each Mortgage Loan, the annual fee
payable to the Servicer, which is calculated as an amount equal to the product
of (a) _______% per annum, and (b) the Principal Balance thereof. Such fee shall
be calculated and payable monthly only from the amounts 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: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee and the Certificateholders by the Servicer, as such list may from
time to time be amended.
SPECIAL ADVANCE: As defined in Section 5.18(b) hereof.
SPECIFIED SUBORDINATED AMOUNT: Means:
(a) With respect to a Distribution Date occurring on or
prior to the Stepdown Date and after the Stepdown Date, if the
Depositor has given five days written notice of its election not to
"step down" as in described in clause (b) below to the Trustee and the
Certificate Insurer, the amount which is equal to _______% of the
Maximum Collateral Amount;
(b) With respect to a Distribution Date after the Stepdown
Date unless the Depositor has given five days written notice of its
election not to "step down" as in described in this clause to the
Trustee and the Certificate Insurer, (i) if the Stepdown Requirement is
satisfied, the lesser of (x) the amount equal to _______% of the
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Maximum Collateral Amount and (y) the greater of (A) the amount equal
to _______% of the then outstanding aggregate Principal Balances of the
Mortgage Loans or (B) _______% of the Maximum Collateral Amount or (ii)
if the Stepdown Requirement is not satisfied, the amount which is equal
to _______% of the Maximum Collateral Amount;
provided, however, that if on any Distribution Date, the Mortgage Portfolio
Performance Test is not satisfied, then the Specified Subordinated Amount will
be unlimited during the period that such Mortgage Portfolio Performance Test is
not satisfied.
STARTUP DAY: The day designated as such pursuant to Section
2.07(b) hereof.
STEP DOWN DATE: The Distribution Date occurring in _______.
STEP DOWN REQUIREMENT: The Stepdown Requirement is satisfied
for any date of determination thereof if as of such date of determination (x)
the Rolling Six Month Delinquency Rate is less than _______%, (y) the Cumulative
Loss Test is satisfied and (z) the Twelve Month Loss Amount is not greater than
or equal to _______% of the Pool Principal Balance as of the first day of the
twelfth preceding calendar month.
SUBORDINATED AMOUNT: As of any Distribution Date, the
difference, if any, between (a) the sum of (i) the aggregate Principal Balances
of the Mortgage Loans as of the close of business on the last day of the related
Due Period and (ii) the amount on deposit in the Pre-Funding Account as of the
close of business on the last day of the immediately preceding Due Period and
(b) the Class A Certificate Principal Balance as of such Distribution Date
(after taking into account the payment of the Principal Distribution Amount on
such Distribution Date except for any portion thereof related to an Insured
Payment); provided, however, that such amount shall not be less than zero.
SUBORDINATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the difference, if greater than zero, between (a) the
Specified Subordinated Amount applicable to such Distribution Date and (b) the
Subordinated Amount applicable to such Distribution Date prior to taking into
account the payment of any related Subordination Increase Amounts on such
Distribution Date.
SUBORDINATION DEFICIT: As of any Distribution Date, the
amount, if any, by which (a) the Class A Certificate Principal Balance, after
taking into account the payment of the Principal Distribution Amount (except for
any amount in respect of the Subordination Deficit) on such date exceeds (b) the
sum of (i) the aggregate Principal Balance of the Mortgage Loans determined as
of the end of the immediately preceding Due Period and (ii) the amount, if any,
on deposit in the Pre-Funding Account as of the close of business on the last
day of the immediately preceding Due Period.
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SUBORDINATION INCREASE AMOUNT: With respect to any
Distribution Date, the lesser of:
(a) the Subordination Deficiency Amount as of such
Distribution Date (after taking into account the payment of the Principal
Distribution Amount on such Distribution Date (except for any Subordination
Increase Amount)); and
(b) (i) with respect to the first Distribution Date, zero,
(ii) with respect to each Distribution Date from the second
Distribution Date to the earliest to occur of (x) the Distribution Date
on which the Subordinated Amount first equals or exceeds __% of the
Maximum Collateral Amount, (y) the Step Down Date or (z) the date on
which the Mortgage Portfolio Performance Test first has not been met,
__% of the amount of Net Monthly Excess Cashflow on such Distribution
Date, and
(iii) with respect to any other Distribution Date, __% of
the amount of Net Monthly Excess Cashflow on such Distribution Date.
SUBORDINATION LOSS TEST: The Subordination Loss Test for any
period set out below is satisfied if the Cumulative Loss Percentage for such
period does not exceed the percentage set out for such period below:
Period Cumulative Loss Percentage
-------------------------------------------- --------------------------
1st - 12th Distribution Date _______%
13th - 24th Distribution Date _______%
25th - 36th Distribution Date _______%
37th - 48th Distribution Date _______%
49th - 60th Distribution Date
and thereafter _______%
SUBORDINATION REDUCTION AMOUNT: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess Subordinated
Amount for such Distribution Date and (b) the Principal Remittance Amount for
the prior Due Period.
SUBSEQUENT CUT-OFF DATE: As to any Subsequent Mortgage Loans,
the date specified in the Addition Notice delivered in connection therewith,
which date shall be the close of business on the last day of the month
immediately preceding the month in which such Subsequent Mortgage Loans will be
conveyed to the Trust.
SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans hereafter
transferred and assigned to the Trust pursuant to Section 2.03.
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SUBSEQUENT TRANSFER: The transfer and assignment by the
Depositor to the Trust of the Subsequent Mortgage Loans pursuant to the terms
hereof.
SUBSEQUENT TRANSFER DATE: The Business Day on which a
Subsequent Transfer occurs.
SUBSERVICERS: _______.
SUBSERVICING AGREEMENT: The agreement between the Servicer and
the Subservicers relating to subservicing and/or administration of certain
Mortgage Loans as provided in Section 5.13, a copy of which shall be delivered,
along with any modifications thereto, to the Trustee and the Certificate
Insurer.
SUBSTITUTION ADJUSTMENT: As to any date on which a
substitution occurs pursuant to Sections 2.06 or 3.03, 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: 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 REMIC Trust.
TAX RETURN: 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: The display designated as Telerate Page
3750 on the Telerate Service (or such other page as may replace the Telerate
page on that service for the purpose of displaying London interbank offered
rates of major banks).
TRANSFER: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
TRANSFER AFFIDAVIT AND AGREEMENT: As defined in Section
4.02(k)(ii).
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TRANSFEREE: Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
TRANSFEROR: Any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
TRUST: _______, the trust created hereunder.
TRUSTEE: _______, a _______ banking corporation, or its
successor-in-interest, or any successor trustee appointed as herein provided.
TRUSTEE FEE: As to any Distribution Date, the fee payable to
the Trustee in respect of its services as Trustee that accrues at a monthly rate
equal to one-twelfth of __% on the Principal Balance of each Mortgage Loan as of
the immediately preceding Due Date.
TRUSTEE'S MORTGAGE FILE: The documents delivered to the
Trustee or its designated agent pursuant to Section 2.05.
TRUSTEE'S REMITTANCE REPORT: As defined in Section 6.07.
TRUST FUND: The segregated Pool of assets subject hereto,
constituting the trust created hereby and to be administered hereunder,
consisting of: (i) such Mortgage Loans as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; any other
security for such Mortgage Loan, including, without limitation, pledged
equipment, inventory and working capital and assignments of rights and interests
made by the related mortgagor; (v) the Certificate Insurance Policy; (vi) the
rights and remedies of the Trustee against any Person making any representation
or warranty to the Trustee hereunder, to the extent provided herein; and (vii)
each Account and such assets that are deposited therein from time to time and
any investments thereof, together with any and all income, proceeds and payments
with respect thereto.
TWELVE MONTH LOSS AMOUNT: With respect to any Distribution
Date, an amount equal to the aggregate of all Liquidated Loan Losses on the
Mortgage Loans which became Liquidated Mortgage Loans during the 12 preceding
Due Periods.
UNDERWRITER: Prudential Securities Incorporated.
UNDERWRITING GUIDELINES: The underwriting guidelines of the
Originators, a copy of which is attached as an exhibit to the Loan Sale
Agreement.
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UNITED STATES PERSON: A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States or a trust if a court within the United States can exercise
primary jurisdiction over its administration and at least one United States
fiduciary has the authority to control all substantial decisions of the trust.
WEIGHTED AVERAGE CLASS A PASS-THROUGH RATE: The weighted
average (weighted by the related Certificate Principal Balance) of the Class A-1
Pass-Through Rate, the Class A-2 Pass-Through Rate, the Class A-3 Pass-Through
Rate, the Class A-4 Pass-Through Rate, the Class A-5 Pass-Through Rate and the
Class A-6 Pass-Through Rate.
Section 1.02 Provisions of General Application. (a) All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
(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) Any 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 (other than with respect to
the Mortgage Loans and to the Class A-1 Certificates) provided for herein shall
be made on the basis of a 360-day year consisting of twelve 30-day months. All
calculations of interest with respect to the Class A-1 Certificates shall be on
an actual/360 basis. All calculations of interest with respect to any Mortgage
Loan provided for herein shall be made in accordance with the terms of the
related Note and Mortgage or, if such documents do not specify the basis upon
which interest accrues thereon, on the basis of a 360-day year consisting of
twelve 30-day months, to the extent permitted by applicable law.
(f) Any Mortgage Loan payment is deemed to be received on the
date such payment is actually received by the 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 Note and Mortgage to reduce the outstanding principal
balance of such Mortgage Loan on which interest accrues.
Section 1.03 Business Day Certificate. On the Closing Date
(with respect to the calendar year ____) and thereafter, within 15 days prior to
the end of each calendar year while this Agreement remains in effect (with
respect to the succeeding calendar years), the Servicer
39
shall provide to the Trustee and the Depositor a certificate of a Servicing
Officer specifying the days on which banking institutions in the State of
Pennsylvania are authorized or obligated by law, executive order or governmental
decree to be closed.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 Establishment of the Trust. 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
"_________" and does hereby appoint __________ as Trustee in accordance with the
provisions of this Agreement.
Section 2.02 Purchase and Sale of Initial Mortgage Loans. The
Depositor does hereby sell, transfer, assign, set over and convey to the Trustee
without recourse but subject to the terms and provisions of this Agreement, all
of the right, title and interest of the Depositor in and to the Initial Mortgage
Loans, including the outstanding principal of and interest due on such Initial
Mortgage Loans, and all other assets included or to be included in the Trust
Fund for the benefit of the Certificateholders and the Certificate Insurer. In
connection with such transfer and assignment, and pursuant to Section 2.07 of
the Loan Sale Agreement, the Depositor does hereby also irrevocably transfer,
assign, set over and otherwise convey to the Trustee all of its rights under the
Loan Sale Agreement, including, without limitation, its right to exercise the
remedies created by Sections 2.05 and 3.05 of the Loan Sale Agreement for
defective documentation and for breaches of representations and warranties,
agreements and covenants of the Originators contained in Sections 3.01, 3.02 and
3.03 of the Loan Sale Agreement.
Section 2.03 Purchase and Sale of Subsequent Mortgage Loans.
(a) Subject to the satisfaction of the conditions set forth in paragraph (b)
below, in consideration of the Trustee's delivery on the related Subsequent
Transfer Dates to or upon the order of the Depositor of all or a portion of the
balance of funds in the Pre-Funding Account, the Depositor shall on any
Subsequent Transfer Date sell, transfer, assign, set over and convey to the
Trustee without recourse but subject to terms and provisions of this Agreement,
all of the right, title and interest of the Depositor in and to the Subsequent
Mortgage Loans, including the outstanding principal of and interest due on such
Subsequent Mortgage Loans, and all other assets included or to be included in
the Trust Fund for the benefit of the Certificateholders and the Certificate
Insurer. In connection with such transfer and assignment, and pursuant to
Section 2.07 of the Loan Sale Agreement, the Depositor does hereby also
irrevocably transfer, assign, set over and otherwise convey to the Trustee all
of its rights under the Loan Sale Agreement, including, without limitation, its
right to exercise the remedies created by Sections 2.05 and 3.05 of the Loan
Sale Agreement for defective documentation and for breaches of representations
and warranties, agreements and covenants of the Depositor contained in Sections
3.01, 3.02 and 3.03 of the Loan Sale Agreement.
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The amount released from the Pre-Funding Account with respect
to a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%)
of the aggregate principal balances as of the related Subsequent Cut-Off Date of
the Subsequent Mortgage Loans so transferred.
(b) The Subsequent Mortgage Loans and the other property and
rights related thereto described in paragraph (a) above shall be transferred by
the Depositor to the Trust only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) the Depositor shall have provided the Trustee, the Rating
Agencies and the Certificate Insurer with a timely Addition Notice,
which shall include a Mortgage Loan Schedule, listing the Subsequent
Mortgage Loans and shall have provided any other information reasonably
requested by any of the foregoing with respect to the Subsequent
Mortgage Loans;
(ii) the Depositor shall have deposited in the Collection
Account all collections of (x) principal in respect of the Subsequent
Mortgage Loans received after the related Subsequent Cut-Off Date and
(y) interest due on the Subsequent Mortgage Loans after the related
Subsequent Cut-Off Date;
(iii) as of each Subsequent Transfer Date, the Depositor was
not insolvent nor will be made insolvent by such transfer nor is the
Depositor aware of any pending insolvency;
(iv) such addition will not result in a material adverse tax
consequence to the Trust or the Holders of the Certificates;
(v) the Pre-Funding Period shall not have terminated;
(vi) the Depositor shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b) and that the Subsequent
Mortgage Loans comply with the provisions of this Section 2.03 and each
complies with the terms of the Loan Sale Agreement, including each of
the representations and warranties made with respect thereto;
(vii) there shall have been delivered to the Certificate
Insurer, the Rating Agencies and the Trustee, Independent Opinions of
Counsel with respect to the transfer of the Subsequent Mortgage Loans
substantially in the form of the Opinions of Counsel delivered to the
Certificate Insurer and the Trustee on the Startup Date (bankruptcy,
corporate and tax opinions); and
(viii) the Originators and the Depositor shall have delivered
to the Trustee an executed copy of a subsequent transfer agreement,
substantially in the form of Exhibit L hereto.
(c) The obligation of the Trust to purchase the Subsequent
Mortgage Loans on a Subsequent Transfer Date is subject to the following
requirements: (i) such Subsequent
41
Mortgage Loan may not be 30 or more days contractually delinquent as of the
related Subsequent Cut-Off Date; (ii) the original term to maturity of such
Subsequent Mortgage Loan may not exceed ___ months; (iii) such Subsequent
Mortgage Loan must have a Mortgage Interest Rate of at least __%; (iv) the
purchase of the Subsequent Mortgage Loans is consented to by the Certificate
Insurer and the Rating Agencies; (v) the Principal Balance of any such
Subsequent Mortgage Loan may not exceed $_______; (vi) no more than __% of such
Subsequent Mortgage Loans may be second liens; (vii) no such Subsequent Mortgage
Loan shall have a CLTV of more than, (a) for consumer purpose loans, __%, and
(b) for business purpose loans, __%; (viii) no more than __% of such Subsequent
Mortgage Loans may be Balloon Loans; (ix) no more than __% of such Subsequent
Mortgage Loans may be secured by mixed-use properties, commercial properties, or
four or more unit multifamily properties; (x) no more than __% of such
Subsequent Mortgage Loans may be secured by commercial properties; and (xi)
following the purchase of such Subsequent Mortgage Loans by the Trust, the
Mortgage Loans (including the Subsequent Mortgage Loans) (a) will have a
weighted average Mortgage Interest Rate, (I) for consumer purpose loans, of at
least __% and (II) for business purpose loans, of at least ___%; and (b) will
have a weighted average CLTV of not more than (I) for consumer purpose loans,
__%, and (II) for business purpose loans, ___%.
(d) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Depositor shall satisfy the document delivery
requirements set forth in Section 2.05.
(e) On each Subsequent Transfer Date upon written instruction
from the Depositor, the Trustee shall withdraw from the Capitalized Interest
Account and pay to the Depositor on such Subsequent Transfer Date the Overfunded
Interest Amount for such Subsequent Transfer Date, as calculated by the Trustee
with the cooperation of the Depositor and subject to the approval of the
Certificate Insurer.
(f) For any Subsequent Mortgage Loan that has a first Due Date
that occurs later than the last day of the Due Period following the Due Period
in which the Subsequent Mortgage Loan was sold to the Trust, on each applicable
Servicer Distribution Date, the Servicer will deposit into the Certificate
Account 30 days' interest at the Mortgage Interest Rate, net of the Servicing
Fee, for each month after the month in which the Subsequent Transfer occurs
until, but not including, the month in which first Due Date occurs.
Section 2.04 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 is vested in the Trustee for the benefit of the Certificateholders
and the Certificate Insurer.
(b) Pursuant to Section 2.05 of the Loan Sale Agreement, the
Depositor has delivered or caused to be delivered the Trustee's Mortgage File
related to each Mortgage Loan to the Trustee.
The Trustee will be the custodian or 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 all present
and future Certificateholders and the Certificate
42
Insurer; provided, however, that the custodian so appointed shall in no event be
the Depositor or the Servicer or any Person known to a Responsible Officer of
the Trustee to be an Affiliate of the Depositor or the Servicer and shall be
approved by the Certificate Insurer.
The Custodian shall afford the Depositor, the Certificate
Insurer and the 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 2.05 Delivery of Mortgage Loan Documents. (a) In
connection with the transfer and assignment of the Mortgage Loans, the Depositor
does hereby with respect to the Initial Mortgage Loans, and will on or before
the Subsequent Transfer Date with respect to Subsequent Mortgage Loans, deliver
or cause to be delivered to the Trustee the following documents or instruments
with respect to each Mortgage Loan so transferred or assigned:
(i) the original Mortgage Note, endorsed without recourse in
blank by the related Originator, including all intervening endorsements
showing a complete chain of endorsement;
(ii) the related Mortgage with evidence of recording indicated
thereon or a copy thereof certified by the applicable recording office;
(iii) the recorded mortgage assignment, or copy thereof
certified by the applicable recording office, if any, showing a
complete chain of assignment from the originator of the related
Mortgage Loan to the related Originator (which assignment may, at such
Originator's option, be combined with the assignment referred to in
subpart (iv) hereof);
(iv) a mortgage assignment in recordable form (which, if
acceptable for recording in the relevant jurisdiction, may be included
in a blanket assignment or assignments) of each Mortgage from the
related Originator to the Trustee;
(v) originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a
Mortgage or Mortgage Note have been modified or such Mortgage or
Mortgage Note has been assumed; and
(vi) an original title insurance policy (or (A) a copy of the
title insurance policy, or (B) a binder thereof or copy of such binder
together with a certificate from the related Originator that the
original Mortgage has been delivered to the title insurance company
that issued such binder for recordation).
In instances where the original recorded Mortgage and a
completed assignment thereof in recordable form cannot be delivered by the
Depositor to the Trustee prior to or concurrently with the execution and
delivery of this Agreement (or, with respect to Subsequent Mortgage Loans, prior
to or on the Subsequent Transfer Date), due to a delay in connection with
recording, the Depositor may:
43
(x) In lieu of delivering such original recorded Mortgage,
deliver to the Trustee a copy thereof provided that the related Originator
certifies that the original Mortgage has been delivered to a title insurance
company for recordation after receipt of its policy of title insurance or binder
therefor; and
(y) In lieu of delivering the completed assignment in
recordable form, deliver to the Trustee the assignment in recordable form,
otherwise complete except for recording information.
The Trustee shall promptly upon receipt thereof, with respect
to each Mortgage Note described in (i) above and each assignment described in
(iv) above, endorse such Mortgage Note and assignment as follows: "_______, as
Trustee under the Pooling and Servicing Agreement dated as of _______, _______."
As promptly as practicable, but in any event within thirty
(30) days from the Closing Date or the Subsequent Transfer Date, as applicable,
the related Originator shall cause to be recorded, at the related Originator's
expense, in the appropriate public office for real property records, the
assignments of the Mortgages to the Trustee.
All original documents relating to the Mortgage Loans which
are not delivered to the Trustee, as permitted by Section 2.05(a) of the Loan
Sale Agreement and this Section 2.05(a), are and shall be held by the related
Originator, the Depositor or the Servicer in trust for the benefit of the
Trustee on behalf of the Certificateholders.
(b) Within 30 days following delivery of the Mortgage Files to
the Trustee, the Trustee will review each Mortgage File to ascertain that all
required documents set forth in Section 2.01(a) have been executed and received,
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, and in so doing the Trustee may rely on the purported due
execution and genuineness of any signature thereon. If within such 30-day period
(or, with respect to any Qualified Replacement Mortgage, within 30 days after
the assignment thereof) the Trustee finds any document constituting a part of a
Mortgage File not to have been executed or received or to be unrelated to the
Mortgage Loans identified in the Mortgage Loan Schedule, the Trustee shall (i)
promptly notify the Class A Certificateholders in writing with the details
thereof, and (ii) promptly notify the Servicer, which shall have a period of 60
days after such notice within which to correct or cure any such defect. Each
original recorded assignment of a Mortgage shall be delivered to the Trustee
within 10 days following the date on which it is returned to the Servicer by the
office with which such assignment was filed for recording and within 10 days
following receipt by the Trustee of the recorded assignment or the assignment in
recordable form, as the case may be, the Trustee shall review such assignment to
confirm the information specified above with respect to the documents
constituting the Mortgage File. Upon receipt by the Trustee of the recorded
assignment or the assignment in recordable form, as the case may be, such
recorded assignment or assignment in recordable form shall become part of the
Mortgage File. The Trustee shall notify the Servicer of any defect in such
assignment based on such review. The Servicer shall have a period of 60 days
following such notice to correct or cure such defect. In the event that the
Servicer fails to record an assignment of a Mortgage as
44
herein provided the Trustee shall, at the Servicer's expense, use reasonable
efforts to prepare and, if required hereunder, file such assignments for
recordation in the appropriate real property or other records and the Servicer
hereby appoints the Trustee as its attorney-in-fact with full power and
authority acting in its stead for the purpose of such preparation, execution and
filing.
(c) It is intended that the conveyance of the Mortgage Loans
and other property by the Depositor to the Trustee as provided in this Section
2.05 and Sections 2.02 and 2.03 be, and be construed as, a sale of the Mortgage
Loans and such other property by the Depositor to the Trustee for the benefit of
the Certificateholders. It is, further, not intended that such conveyance be
deemed a pledge of the Mortgage Loans or such other property by the Depositor to
the Trustee to secure a debt or other obligation of the Depositor. However, in
the event that the Mortgage Loans or any of such other property are held to be
property of the Depositor, or if for any reason this Agreement is held or deemed
to create a security interest in the Mortgage Loans or any of such other
property, then it is intended that: (i) this Agreement shall also be deemed to
be a security agreement within the meaning of the Uniform Commercial Code; (ii)
the conveyance provided for in this Section shall be deemed to be a grant by the
Depositor to the Trustee of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans and such other property and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including,
without limitation, all amounts from time to time held or invested in the
Certificate Account, whether in the form of cash, instruments, securities or
other property; (iii) the possession by the Trustee or its agent of the Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to the
Uniform Commercial Code; and (iv) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. The Depositor and the Trustee shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans
or any of such other property, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement.
(d) Without diminution of the requirements of Sections 2.04(c)
and this Section 2.05, all original documents relating to the Mortgage Loans
that are not delivered to the Trustee are and shall be held by the 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 2.05 to be a part of a Mortgage File, such
document shall be delivered promptly to the Trustee pursuant to the Loan Sale
Agreement. In acting as custodian of any such original document, the 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 Servicer's receipt
thereof, the Servicer on behalf of the Trust shall ▇▇▇▇ conspicuously each
original document not delivered to the Trustee, and the Depositor's master data
processing records evidencing each
45
Mortgage Loan with a legend, acceptable to the Trustee, evidencing that the
Trust has purchased the Mortgage Loans and all right and title thereto and
interest therein pursuant to the Loan Sale Agreement and this Agreement.
Section 2.06 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 and the Servicer on or prior
to the Closing Date an acknowledgment of receipt of the Certificate Insurance
Policy and, on or prior to the Closing Date or any Subsequent Transfer Date,
with respect to each Mortgage Loan transferred on such date, 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. 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 30 days after the
Closing Date (with respect to the Initial Mortgage Loans) or any Subsequent
Transfer Date (with respect to the Subsequent Mortgage Loans), as applicable,
and to deliver to the 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 the related 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), (i) all documents required
to be delivered to it pursuant to Section 2.05 are in its possession, (ii) each
such document has been reviewed by it 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, and (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the Mortgage Loan Schedule as to the information set forth in (i), (ii), (v) and
(vi) of the definition of "Mortgage Loan Schedule" set forth herein accurately
reflects the information set forth in the Trustee's Mortgage File delivered on
such date. The Trustee shall be under no duty or obligation to 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.
Within 90 days of the Closing Date, with respect to the
Initial Mortgage Loans, and within 90 days of any Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans transferred on such date, the Trustee
shall deliver (or cause to be delivered) to the Servicer, the Depositor, the
Rating Agencies 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 related 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), (i) all documents required to be delivered to it
pursuant to Section 2.05 are in its possession, (ii) each such document has been
reviewed by it 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, and (iii) based on its examination and only
as to the foregoing documents, the information set forth in (i), (ii), (v) and
(vi) of the definition of "Mortgage Loan Schedule" set forth herein
46
accurately reflects the information set forth in the Trustee's Mortgage File
delivered on such date.
(b) If 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 2.05 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 Servicer, the Depositor,
the Certificate Insurer and the Trustee. In performing any such review, the
Trustee may conclusively rely on the Depositor 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 2.05 have been executed and received and
relate to the Mortgage Files identified in the related Mortgage Loan Schedule.
Pursuant to the Loan Sale Agreement, the Depositor and the Originators have
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 60 days after the Trustee's notice to it respecting
such defect the Depositor 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, the
Depositor and the Originators will be obligated, pursuant to the Loan Sale
Agreement, to either (i) substitute in lieu of such Mortgage Loan a Qualified
Substitute Mortgage Loan in the manner and subject to the conditions set forth
in Section 3.03 or (ii) purchase such Mortgage Loan at a purchase price equal to
the Principal Balance of such Mortgage Loan as of the date of purchase, plus all
accrued and unpaid interest on such Principal Balance computed at the Mortgage
Interest Rate, net of the Servicing Fee if the Depositor or an Originator, as
applicable, is the Servicer, plus the amount of any unreimbursed Servicing
Advances made by the Servicer with respect to such Mortgage Loan, which purchase
price shall be deposited in the Collection Account on the next succeeding
Servicer Distribution Date, after deducting therefrom any amounts received in
respect of such repurchased Mortgage Loan or Loans and being held in the
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"). For purposes of calculating the Available Funds, any Loan
Repurchase Price or Substitution Adjustment that is paid shall be deemed
deposited in the Certificate Account in the Due Period preceding such Servicer
Distribution Date.
(c) 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 in the Collection Account (which
certification shall be in the form of Exhibit H hereto), the Trustee shall
release to the Servicer for release to the Depositor the related Trustee's
Mortgage File and shall execute, without recourse, and deliver such instruments
of transfer furnished by the Depositor as may be necessary to transfer such
Mortgage Loan to the Depositor. The Trustee shall notify the Certificate Insurer
if the Depositor fails to repurchase or substitute for a Mortgage Loan in
accordance with the foregoing.
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Section 2.07 Designations under REMIC Provisions; Designation
of Startup Day. (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 REMIC Trust for the purposes of the REMIC
Provisions.
(b) The Closing Date will be the "startup day" of the REMIC
Trust within the meaning of Section 860G(a)(9) of the Code.
Section 2.08 Execution of Certificates. The Trustee
acknowledges the assignment to it of the Mortgage Loans and the delivery of the
Trustee's Mortgage Files relating thereto to it 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 in Authorized Denominations evidencing the entire
ownership of the Trust Fund.
Section 2.09 Application of Principal and Interest. In the
event that Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than
the 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 and then to
principal.
Section 2.10 Grant of Security Interest. (a) Except with
respect to the REMIC Provisions, 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 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. The conveyance by the Depositor of the
Trust Fund to the Trustee on behalf of the Trust shall not constitute and is not
intended to result in an assumption by the Trustee or any Certificateholder of
any obligation of the Depositor or any other Person in connection with the Trust
Fund.
(b) The Depositor and the Servicer shall take no action
inconsistent with the Trust's ownership of the Trust Fund and each 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
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.
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Section 2.11 Further Action Evidencing Assignments. (a) The
Servicer agrees that, from time to time, at its expense, it shall cause the
Depositor, promptly to execute and deliver all further instruments and
documents, and take all further action, that may be necessary or appropriate, or
that the 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 Servicer and the Depositor will,
upon the request of the Servicer or 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) The Depositor hereby grants to the Servicer and the
Trustee powers of attorney to execute all documents on its behalf under this
Agreement and the Loan Sale Agreement as may be necessary or desirable to
effectuate the foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of the Servicer. The 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 that:
(a) Each of the Depositor, the Servicer and the Subservicers
is a corporation duly organized, validly existing and in good standing under the
laws of their respective states of incorporation and has the corporate power to
own its assets and to transact the business in which it is currently engaged.
Each of the Depositor, the Servicer and the Subservicers is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the character of the business transacted by it or properties owned or
leased by it or the performance of its obligations hereunder requires such
qualification and in which the failure so to qualify could reasonably be
expected to have a material adverse effect on the business, properties, assets,
or condition (financial or other) of the Depositor, the Servicer or the
Subservicers or the performance of their respective obligations hereunder;
(b) The Depositor and the Servicer each has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Depsitor and the Servicer,
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of equitable
remedies;
(c) Neither the Depositor nor the Servicer is required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency which consent already has not been obtained
49
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except such as have been obtained prior to the
Closing Date;
(d) The execution, delivery and performance of this Agreement
by the Depositor and the Servicer will not violate any provision of any existing
law or regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of the Depositor or the Servicer, respectively, or
constitute a breach of any mortgage, indenture, contract or other Agreement to
which the Depositor or the Servicer, respectively, is a party or by which it may
be bound;
(e) There is no action, suit, proceeding or investigation
pending or threatened against the Servicer, the Depositor or the Subservicers
which, either in any one instance or in the aggregate, is, in the Servicer's and
the Depositor's judgment, likely to result in any material adverse change in the
business, operations, financial condition, properties, or assets of the
Servicer, the Depositor or the Subservicers, or in any material impairment of
the right or ability of any of them to carry on its business substantially as
now conducted, or in any material liability on the part of any of them, or which
would draw into question the validity of this Agreement, the Certificates, or
the Mortgage Loans or of any action taken or to be taken in connection with the
obligations of the Depositor or the Servicer contemplated herein or therein, or
which would be likely to impair materially the ability of the Depositor or the
Servicer to perform its obligations hereunder;
(f) Neither this Agreement nor any statement, report, or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby, including, without
limitation, the sale or placement of the Certificates, contains any untrue
statement of fact provided by or on behalf of the Depositor or the Servicer or
omits to state a fact necessary to make the statements provided by or on behalf
of the Depositor or the Servicer contained herein or therein not misleading:
(g) Neither the Depositor nor the Servicer believes, nor does
either have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(h) The transfer, assignment, and conveyance of the Mortgage
Loans by the Depositor pursuant to this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(i) The Depositor is solvent and will not as a result of this
Agreement and the undertakings of the Depositor hereunder be rendered insolvent;
and
(j) None of the Depositor, the Servicer or the Subservicers is
an "investment company" or a company "controlled by an investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.01 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.
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Section 3.02 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 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 made 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,
(i) 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 (A) the charter or bylaws of the Depositor, or (B) 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; (ii)
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 (iii)
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
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(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 may materially and adversely affect its
performance hereunder.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.02 shall survive delivery
of the respective Mortgage Files to the Trustee or to a custodian, as the case
may be, and shall inure to the benefit of the Trustee.
Section 3.03 Purchase and Substitution. (a) It is understood
and agreed that the representations and warranties set forth in Sections 3.01,
3.02 and 3.03 of the Loan Sale Agreement shall survive delivery of the
Certificates to the Certificateholders. Pursuant to the Loan Sale Agreement,
with respect to any representation or warranty contained in Sections 3.01, 3.02
or 3.03 of the Loan Sale Agreement that is made to the best of the Depositor's
knowledge, if it is discovered by the 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 Depositor'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 Depositor, the 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 the Certificate Insurer, 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 Depositor's best knowledge), the
party discovering such breach shall give prompt written notice to the others.
Subject to the last paragraph of this Section 3.03, 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 Loan Sale Agreement, the Servicer
shall, or shall cause the Depositor or an Originator to (a) promptly cure such
breach in all material respects, or (b) purchase such Mortgage Loan on the next
succeeding Servicer Distribution Date, in the manner and at the price specified
in Section 2.06(b), or (c) remove such Mortgage Loan from the Trust Fund (in
which case it 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 Day or at
such later date, if the Trustee and the Certificate Insurer receive an Opinion
of Counsel to the effect set forth below in this Section. In addition, pursuant
to the Loan Sale Agreement, the Depositor and the related Originator shall be
obligated to indemnify the Trustee, the Certificateholders and the Certificate
Insurer for any third party claims arising out of a breach by the Depositor of
representations or warranties regarding the Mortgage Loans. Pursuant to the Loan
Sale Agreement any such substitution shall be accompanied by payment by the
Depositor of the Substitution Adjustment, if any, to be deposited in the
Collection Account.
(b) As to any Deleted Mortgage Loan for which the Depositor
substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall
cause the Depositor or an Originator, as applicable, to effect such substitution
by delivering to the Trustee a certification in
52
the form attached hereto as Exhibit H, executed by a Servicing Officer and the
documents described in Sections 2.05(a)(i)-(vi) for such Qualified Substitute
Mortgage Loan or Loans.
(c) The 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 Depositor. The Trust Fund will own all
payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Depositor shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
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 obligations of the
Depositor and the related Originator set forth in Sections 2.05 and 3.05 of the
Loan Sale Agreement to, and the Servicer's obligation to cause the Depositor and
the Originator to, cure, purchase or substitute for a defective Mortgage Loan,
or to indemnify as described in clause (a) above, constitute the sole remedies
of the Trustee, the Certificate Insurer and the Certificateholders respecting a
breach of the representations and warranties of the Depositor set forth in
Sections 3.01 and 3.02 of the Loan Sale Agreement. The Trustee shall give prompt
written notice to the Certificate Insurer and the Rating Agencies of any
repurchase or substitution made pursuant to this Section 3.03 or Section
2.06(b).
(e) Upon discovery by the Servicer, the Trustee, the
Certificate Insurer or any Certificateholder that any Mortgage Loan does not
constitute a Qualified Mortgage, the party discovering such fact shall promptly
(and in any event within 5 days of the discovery) give written notice thereof to
the other parties. In connection therewith, pursuant to the Loan Sale Agreement,
the Depositor 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 Depositor's receipt of notice, in the same manner as it would a Mortgage
Loan for a breach of representation or warranty contained in Sections 3.01, 3.02
or 3.03 of the Loan Sale Agreement. The Trustee shall reconvey to the Depositor
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 Sections 3.01, 3.02 or 3.03 of the
Loan Sale Agreement.
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates. The Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6 and Class R Certificates shall be
substantially in the forms annexed hereto as Exhibits A and B, as applicable.
All Certificates shall be executed by manual or facsimile
53
signature on behalf of the Trustee by an authorized officer and authenticated by
the manual or facsimile signature of an authorized officer. Certificates bearing
the signatures of individuals who were at the time of the execution of the
Certificates 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 4.02 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 Certificates and transfers of
Certificates as herein provided. The Certificate Insurer 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 thereof or his attorney duly authorized in writing.
(d) No service charge shall be made to a 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 transfer or
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 Certificates shall, except as otherwise provided in
the next paragraph, be initially issued in the form of a single fully registered
Certificate for each Class with a denomination equal to the Original Certificate
Principal Balance for such Class. 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 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 Servicer, the Trustee and the Certificate
Insurer shall have no responsibility or obligation with respect to (i) the
accuracy of the records of
54
the Depository, Cede & Co., or any Direct or Indirect Participant with respect
to any Ownership Interest, (ii) 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 (iii) 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 (i) the Depository or the 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 Servicer or the Depository is unable
to locate a qualified successor or (ii) the Trustee 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 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 Servicer, or such
depository's agent or designee but, if the 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
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, as amended
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 Servicer, the Depositor or the
Trustee is obligated under this Agreement to register 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 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
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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 different from or additional to those available to 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 (i) 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),
(ii) 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 (iii) 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) Subject to the restrictions set forth in this Agreement,
upon surrender for registration of transfer of any Certificate at the office or
agency of the Trustee located in New York, New York, the Trustee shall execute,
authenticate and deliver in the name of the designated transferee or
transferees, a new Certificate of the same Class and Percentage Interest 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 Percentage 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 cancelled and destroyed by the
Trustee in accordance with the Trustee's standard procedures.
(j) No transfer of a Class A Certificate shall be made to the
Depositor or, to the actual knowledge of a Responsible Officer of the Trustee,
to any of the Depositor's Affiliates, successors or assigns.
(k) 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 Servicer or
56
its designee as its attorney-in-fact to negotiate the terms of any mandatory
sale under clause (8) 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 of, 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, in form and substance satisfactory to the
Trustee, 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 as 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 4.02(k) 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 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 and all of such other documents as shall have been reasonably
required by the Trustee as a condition to such registration. In
addition, no Transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the Transferee
of such Certificate
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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).
(vii) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section 4.02 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 4.02, 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 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 4.02.
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 4.02 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
4.02, then the 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
Servicer or its designee on such reasonable terms as the Servicer or
its designee may choose. Such purchaser may be the Servicer itself or
any Affiliate of the Servicer. The proceeds of such sale, net of
commissions, expenses and taxes due, if any, will be remitted by the
Servicer to the last preceding purported transferee of such Class R
Certificate, except that in the event that the Servicer determines that
the Holder or any prior Holder of such Class R Certificate may be
liable for any amount due under this Section 4.02 or any other
provision of this Agreement, the Servicer may withhold a corresponding
amount from such remittance as security for such claim. The terms and
conditions of any sale under this clause (8) shall be determined in the
sole discretion of the 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.
(l) The provisions of Section 4.02(k) may be modified, added
to or eliminated, 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 REMIC Trust to cease to qualify as a REMIC and will not cause (x) the REMIC
Trust 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
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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
Person that is not a Permitted Transferee.
(m) The Trustee and the Servicer shall require the prospective
transferee of any Class R Certificate to certify (in the form of Exhibit K
hereto) that it is not a pension or benefit plan or individual retirement
arrangement that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or to Section 4975 of the Code or an entity whose
underlying assets are deemed to be assets of such a plan or arrangement by
reason of such plan's or arrangement's investment in the entity, as determined
under U.S. Department of Labor Regulations 29 C.F.R. ss. 2510.3-101 or
otherwise.
Section 4.03 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Servicer, 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 Servicer 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 Percentage Interest, but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section 4.03, the 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 4.03 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 4.04 Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer and subject to the provisions of
Section 4.02 and Article X, the Servicer, the Depositor, 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 6.05 and for all other purposes whatsoever, and the
Servicer, the Depositor, the Certificate Insurer and the Trustee shall not be
affected by notice to the contrary.
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 REMIC Matters; The Servicer. (a) The parties
intend that the Trust Fund formed hereunder shall, except for the Capitalized
Interest Account and the Pre-Funding Account, constitute, and that the affairs
of the Trust Fund shall be conducted and this Agreement shall be construed so as
to qualify the Trust Fund as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall, to the extent
permitted by applicable law, act as agent (and the Trustee is hereby appointed
to act as agent) on behalf of the
59
Trust Fund and that in such capacity it shall: (a) prepare and file, or cause to
be prepared and filed, all required federal, state and local tax returns for the
REMIC using a calendar year as the taxable year for the Trust Fund when and as
required by the REMIC Provisions and other applicable federal, state and local
income tax laws; (b) maintain or cause the maintenance of the books of the Trust
Fund on the accrual method of accounting; (c) make an election, on behalf of the
Trust Fund, to be treated as a REMIC on the federal tax return of the Trust Fund
for its first taxable year, in accordance with the REMIC Provisions; provided,
however, that such election shall not be made with respect to the Capitalized
Interest Account and the Pre-Funding Account and shall specifically exclude the
Capitalized Interest Account and the Pre-Funding Account from the assets for
which a REMIC election is made; (d) prepare and forward, or cause to be prepared
and forwarded, to the Certificateholders all information reports as and when
required to be provided to them in accordance with the REMIC Provisions; (e)
conduct the affairs of the Trust Fund at all times that any Certificates are
outstanding so as to maintain the status thereof as a REMIC under the REMIC
Provisions; and (f) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of the
Trust Fund.
The Capitalized Interest Account is an "outside reserve fund"
within the meaning of Treasury Regulations Section 1.860G-2(h) and is not an
asset of the REMIC. The Depositor is the owner of the Capitalized Interest
Account for purposes of Treasury Regulations Section 1.860G-2(h). For all
federal income tax purposes, amounts transferred by the REMIC to the Capitalized
Interest Account, if any, will be treated as amounts distributed by the REMIC to
the Depositor.
In the event that any income tax (including any tax with
regard to "prohibited transactions" of the Trust Fund as defined in Section 860F
of the Code) is imposed on the Trust Fund, such tax shall be charged against
amounts otherwise distributable to the Holders of the Class R Certificates on a
pro rata basis to the extent hereinafter provided. In the event that any such
tax shall be due and owing at a time when amounts otherwise distributable to the
Holders of the Class R Certificates are not available, the Trustee shall pay
such tax from its own funds. In such event, the Trustee is hereby authorized to
retain from amounts otherwise distributable to the Holders of the Class R
Certificates on any Distribution Date sufficient funds to reimburse the Trustee
for the payment of such tax (to the extent that the Trustee has not been
previously reimbursed or indemnified therefor) (but such obligation shall not
prevent the Trustee or any other appropriate Person from contesting any such tax
in appropriate proceedings and shall prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings).
(b) The Servicer shall service and administer the Mortgage
Loans in accordance with the Accepted Servicing Practices and shall have full
power and authority to do any and all things not inconsistent therewith in
connection with such servicing and administration which it may deem necessary or
desirable subject to the limitations set forth in this Agreement. The Trustee
shall furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered
by the Trustee, to execute and deliver, on behalf of itself, the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or
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cancellation, or of partial or full release or discharge and all other
comparable instruments, and to effect such modifications, waivers, indulgences
and other like matters as are in its judgment necessary or desirable, with
respect to the Mortgage Loans and the Mortgaged Properties and the servicing and
administration thereof. The Servicer shall notify the Trustee of any such
waiver, release, discharge, modification, indulgence or other such matter by
delivering to the Trustee an Officer's Certificate certifying that such
agreement is in compliance with this Section 5.01(b) together with the original
copy of any written agreement or other document executed in connection
therewith, all of which written agreements or documents shall, for all purposes,
be considered a part of the related Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Notwithstanding
anything in this Agreement to the contrary, the Servicer shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance, change the lien
priority, or change the final maturity date on or of such Mortgage Loan unless
(i) the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Servicer, imminent and (ii) the Certificate
Insurer consents to such modifications in writing; provided, however, that the
Servicer shall be permitted to extend the final maturity date on a Mortgage Loan
by 180 days or less without the consent of the Certificate Insurer.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Agreement) to the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
Section 5.02 Collection of Certain Mortgage Loan Payments;
Collection Account. (a) The Servicer shall make its reasonable efforts to
collect all payments called for under the terms and provisions of the Mortgage
Loans, and shall, to the extent such procedures shall be consistent with this
Agreement, follow the Accepted Servicing Practices. Consistent with the
foregoing, the Servicer may in its discretion waive any assumption fees or other
fees which may be collected in the ordinary course of servicing such Mortgage
Loans.
(b) The Servicer shall establish and maintain in the name of
the Trustee the Collection Account, in trust for the benefit of the
Certificateholders and the Certificate Insurer. The Collection Account shall be
established and maintained as an Eligible Account.
(c) The Servicer shall deposit in the Collection Account any
amounts representing Monthly Payments on the Mortgage Loans due or to be applied
as of a date after the Cut-Off Date, and thereafter, on a daily basis (except as
otherwise permitted herein), the following payments and collections received or
made by it (other than in respect of principal collected and interest due on the
Mortgage Loans on or before the Cut-Off Date):
(i) Payments of interest on the Mortgage Loans;
(ii) Payments of principal of the Mortgage Loans;
(iii) The Loan Repurchase Price of Mortgage Loans repurchased
pursuant to Sections 2.06 or 5.05;
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(iv) The Substitution Adjustment received in connection with
Mortgage Loans for which Qualified Replacement Mortgages are received
pursuant to Sections 2.06 and 3.03;
(v) All Liquidation Proceeds; and
(vi) All Insurance Proceeds (including, for this purpose, any
amounts required to be deposited by the Servicer pursuant to the last
sentence of Section 5.04).
It is understood that the Servicer need not deposit amounts
representing fees, prepayment premiums, late payment charges or extension or
other administrative charges payable by Mortgagors, or amounts received by the
Servicer for the account of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items.
(d) The Trustee shall invest any funds in the Collection
Account in Permitted Investments as directed by the Servicer, which shall mature
not later than the Business Day next preceding the Distribution Date next
following the date of such investment (except that any investment held by the
Trustee may mature on such Distribution Date) and shall not be sold or disposed
of prior to its maturity. All net income and gain realized from any such
investment shall be for the benefit of the Servicer and shall be subject to its
withdrawal or order on a Distribution Date. The Servicer shall deposit from its
own funds the amount of any loss, to the extent not offset by investment income
or earnings, in the Collection Account upon the realization of such loss.
Section 5.03 Permitted Withdrawals from the Collection
Account. The Trustee shall make withdrawals from the Collection Account, on any
Distribution Date, for the following purposes:
(a) to reimburse the Servicer for Liquidation Expenses
theretofore incurred in respect of any Mortgage Loan in an amount not to exceed
the amount of the sum of the related Insurance Proceeds and Liquidation Proceeds
deposited in the Collection Account pursuant to Section 5.02(c)(v)-(vi);
(b) to reimburse the Servicer for amounts expended by it
pursuant to Section 5.04 in good faith in connection with the restoration of
damaged property, in an amount not to exceed the amount of the related Insurance
Proceeds and Liquidation Proceeds (net of withdrawals pursuant to clause (i)
above) and amounts representing proceeds of other insurance policies covering
the property subject to the related Mortgage deposited in the Collection Account
pursuant to Section 5.02(c)(v)-(vi);
(c) to pay to the Depositor amounts received in respect of any
Defective Mortgage Loan purchased or substituted for by the Depositor to the
extent that the distribution of any such amounts on the Distribution Date upon
which the proceeds of such purchase are distributed would make the total amount
distributed in respect of any such Mortgage Loan on such Distribution Date
greater than the Loan Repurchase Price or the Substitution Adjustment therefor;
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(d) to reimburse the Servicer for unreimbursed Servicing
Advances, without interest, with respect to the Mortgage Loans for which it has
made a Servicing Advance, from subsequent collections with respect to interest
on such Mortgage Loans and from Liquidation Proceeds, Insurance Proceeds and/or
the Loan Repurchase Price or Substitution Adjustment of or relating to such
Mortgage Loans;
(e) to reimburse the Servicer 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;
(f) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(g) to withdraw any funds deposited in the Collection Account
that were not required to be deposited therein; and
(h) to pay the Servicer Servicing Compensation pursuant to
Section 5.08 hereof to the extent not retained or paid.
The 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 5.04 Hazard Insurance Policies; Property Protection
Expenses. (a) The Servicer shall cause to be maintained for each Mortgage Loan a
hazard insurance policy with extended coverage which contains a standard
mortgagee's clause with an appropriate endorsement in an amount equal to the
lesser of (a) the maximum insurable value of the related Mortgaged Property or
(b) the sum of the Principal Balance of such Mortgage Loan plus the outstanding
balance of any mortgage loan senior to such Mortgage Loan, but in no event shall
such amount be less than is necessary to prevent the Mortgagor from becoming a
coinsurer thereunder. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value from time to time of the improvements which are a part of such
property or (ii) the combined Principal Balance of such Mortgage Loan and the
principal balance of any mortgage loan senior to such Mortgage Loan at the time
of such foreclosure plus accrued interest and the good-faith estimate of the
Servicer of related Liquidation Expenses to be incurred in connection therewith.
Amounts collected by the Servicer under any such policies shall be deposited in
the Collection Account to the extent that they constitute Liquidation Proceeds
or Insurance Proceeds. Each hazard insurance policy shall contain a standard
mortgage clause naming the Originator, its successors and assigns, as mortgagee.
The Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or flood or other additional insurance and shall be under no
obligation itself to maintain any such additional insurance on property acquired
in respect of a Mortgage Loan,
63
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance.
(b) If the Servicer shall obtain and maintain a blanket policy
issued by an insurer acceptable to the Rating Agencies and the Certificate
Insurer insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
5.04(a), it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with Section 5.04(a), and there shall have been a loss which would
have been covered by such policy, deposit in the Collection Account the amount
not otherwise payable under the blanket policy because of such deductible
clause.
(c) If the Mortgaged Property or REO Property is located at
the time of origination of the Mortgage Loan in a federally designated special
flood hazard area (and if the flood insurance policy referenced herein has been
made available), the Servicer will cause to be maintained flood insurance in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the Principal Balance of the related Mortgage Loan and the balance of the
related first lien, if any, (ii) the maximum insurable value of the related
Mortgaged Property, and (iii) the maximum amount of such insurance available for
the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).
Section 5.05 Assumption and Modification Agreements. In any
case in which a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall exercise its right to accelerate the maturity of
the related Mortgage Loan and require that the Principal Balance thereof be paid
in full on or prior to such conveyance by the Mortgagor under any "due-on-sale"
clause applicable thereto. If such "due-on-sale" clause, by its terms, is not
operable or the Servicer is prevented, as provided in the last paragraph of this
Section 5.05, from enforcing any such clause, the Servicer is authorized,
subject to the consent of the Certificate Insurer, to take or enter into an
assumption and modification agreement from or with the Person to whom such
property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and the Mortgagor remains liable thereon
or, if the Servicer in its reasonable judgment finds it appropriate, is released
from liability thereon. The Servicer shall notify the Trustee that any
assumption and modification agreement has been completed by delivering to the
Trustee and the Certificate Insurer an Officer's Certificate certifying that
such agreement is in compliance with this Section 5.05 together with the
original copy of such assumption and modification agreement. Any such assumption
and modification agreement shall, for all purposes, be considered a part of the
related Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. In connection with any such agreement, the then
current Mortgage Interest Rate thereon shall not be increased or decreased. Any
fee collected by the Servicer for entering into any such agreement will be
retained by the Servicer as additional servicing compensation. At its sole
election, the Servicer may purchase from the Trust Fund any Mortgage Loan that
has been assumed in accordance with this Section 5.05 within one month after the
date of such assumption at a price equal to the greater of (i) the fair market
value of such Mortgage Loan (as determined by the Servicer in its
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good faith judgment) and (ii) the Loan Repurchase Price. Such amount, if any,
shall be deposited into the Collection Account in the Due Period in which such
repurchase is made.
Notwithstanding the foregoing paragraph of this Section 5.05
or any other provision of this Agreement, the Servicer shall not be deemed to be
in default, breach or any other violation of its obligations hereunder by reason
of any assumption of a Mortgage Loan, or transfer of any Mortgaged Property
without the assumption thereof, by operation of law or any assumption or
transfer which the Servicer reasonably believes it may be restricted by law from
preventing for any reason whatsoever.
Section 5.06 Realization Upon Defaulted Mortgage Loans. (a)
The Servicer shall foreclose upon or otherwise comparably convert to ownership
Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 5.02(a). Prior to
conducting any sale in a foreclosure proceeding or accepting a deed-in-lieu of
foreclosure with respect to any Mortgaged Property, the Servicer shall cause an
environmental review to be performed, in accordance with Accepted Servicing
Practices on the Mortgaged Property by a company such as Equifax, Inc. or
Toxicheck. If such review reveals that the Mortgaged Property has on it, under
it or is near hazardous or toxic material or waste or reveals any other
environmental problem, the Servicer shall not foreclose or accept a deed-in-lieu
of foreclosure. In connection with such foreclosure or other conversion, the
Servicer shall follow such practices (including, in the case of any default on a
related senior mortgage loan, the advancing of funds to correct such default)
and procedures which are consistent with the Accepted Servicing Practices as it
shall deem necessary or advisable and as shall be normal and usual in its
general first and second mortgage loan servicing activities. The foregoing is
subject to the proviso that the Servicer shall not be required to expend its own
funds in connection with any foreclosure or towards the correction of any
default on a related senior mortgage loan or restoration of any property unless,
in the reasonable judgment of the Servicer, such expenses will be recoverable
from Liquidation Proceeds.
(b) In the event that title to any Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trustee, or to its nominee on behalf
of Certificateholders. In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, such Mortgaged Property shall be disposed of by or
on behalf of the Trust Fund within two years after its acquisition by the Trust
Fund unless the Servicer shall have furnished the Trustee with an Opinion of
Counsel to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to two years after its acquisition will not result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as defined in
Section 860F of the Code or cause the Trust Fund to fail to qualify as a REMIC
at any time that any Certificates are outstanding.
(c) Any Insurance Proceeds or Liquidation Proceeds received
with respect to a Mortgage Loan or REO Property (other than received in
connection with a purchase by the Class R Certificateholders of all the Mortgage
Loans and REO Properties in the Trust Estate pursuant to Section 8.01(b)) will
be applied in the following order of priority, in each case to the extent of
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available funds: first, to pay the Servicer any accrued and unpaid Servicing
Fees relating to such Mortgage Loan; second, to reimburse the Servicer or any
Subservicer for any related unreimbursed Servicing Advances, and any related
unreimbursed Periodic Advances theretofore funded by the Servicer or any
Subservicer from its own funds, in each case, with respect to the related
Mortgage Loan; third, to accrued and unpaid interest on the Mortgage Loan, at
the Mortgage Loan Rate (or at such lesser rate as may be in effect for such
Mortgage Loan pursuant to application of the Civil Relief Act) on the Principal
Balance of such Mortgage Loan, to the date such Mortgage Loan is determined to
be a Liquidated Mortgage Loan if it is a Liquidated Mortgage Loan, or to the Due
Date in the Due Period prior to the Distribution Date on which such amounts are
to be distributed if such determination has not yet been made, minus any unpaid
Servicing Fees with respect to such Mortgage Loan; fourth, to the extent of the
Principal Balance of the Mortgage Loan outstanding immediately prior to the
receipt of such proceeds, as a recovery of principal of the related Mortgage
Loan; and fifth, to any prepayment or late payment charges or penalty interest
payable in connection with the receipt of such proceeds and to all other fees
and charges due and payable with respect to such Mortgage Loan. The amount of
any gross Insurance Proceeds and Liquidation Proceeds received with respect to
any Mortgage Loan or REO Property minus the amount of any unreimbursed Servicing
Advances, unreimbursed Periodic Advances or unpaid Servicing Fees, in each case,
with respect to the related Mortgage Loan, are the "Net Recovery Proceeds" with
respect to such Mortgage Loan or REO Property.
Section 5.07 Trustee to Cooperate. Upon the payment in full of
the Principal Balance of any Mortgage Loan, the Servicer will notify the Trustee
by a certification (which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 5.02 have been so
deposited) of a Servicing Officer. Upon any such payment in full, the Servicer
is authorized to execute, pursuant to the authorization contained in Section
5.01, an instrument of satisfaction regarding the related Mortgage, which
instrument of satisfaction shall be recorded by the Servicer if required by
applicable law and be delivered to the Person entitled thereto, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction shall be reimbursed from the Collection Account. From
time to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, the Trustee shall, upon request of the Servicer and delivery to the
Trustee of a trust receipt signed by a Servicing Officer, release the related
Mortgage File to the Servicer and shall execute such documents as shall be
necessary for the prosecution of any such proceedings. Such trust receipt shall
obligate the Servicer to return the Mortgage File to the Trustee when the need
therefor by the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released by
the Trustee to the Servicer.
Section 5.08 Servicing Compensation; Payment of Certain
Expenses by Servicer. On each Distribution Date, the Servicer shall be entitled
to receive and the Trustee shall pay, out of collections on the Mortgage Loans
for the Due Period, as servicing compensation for such Due Period, an amount
(the "Monthly Servicing Fee") equal to the product of one-twelfth of the
Servicing Fee Rate and the Pool Balance as of the beginning of such Due Period.
Additional servicing compensation in the form of assumption fees, late
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payment charges or extension and other administrative charges shall be retained
by the Servicer. The Servicer shall be required to pay all expenses incurred by
it in connection with its activities hereunder (including payment of all fees
and expenses of the Subservicer and payment of the Trustee Fee to the extent
that monies in the Collection Account are insufficient therefor, as provided in
Section 9.05 hereof, and all other fees and expenses not expressly stated
hereunder to be payable by or from another source) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
Section 5.09 Annual Statement as to Compliance. The Servicer
will deliver to the Trustee, the Rating Agencies, the Certificate Insurer and
each Certificateholder, on or before April 30 of each year, beginning _______,
an Officer's Certificate of the Servicer stating that (a) a review of the
activities of the Servicer during the preceding calendar year and of its
performance under this Agreement has been made under such Officer's supervision
and (b) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its material 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.
Section 5.10 Annual Independent Public Accountants' Servicing
Report. On or before April 30 of each year, beginning _______, the Servicer at
its expense shall cause a firm of independent public accountants that is a
member of the American Institute of Certified Public Accountants (who may also
render other services to the Servicer) to furnish a report to the Trustee, the
Rating Agencies and each Certificateholder to the effect that such firm has
examined certain documents and records relating to the servicing of mortgage
loans under Pooling and servicing agreements (including this Agreement)
substantially similar to this Agreement, and that such examination, which has
been conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers (to the extent that the procedures in such audit
guide are applicable to the servicing obligations set forth in such agreements),
has disclosed no items of noncompliance with the provisions of this Agreement
which, in the opinion of such firm, are material, except for such items of
noncompliance as shall be set forth in such report.
Section 5.11 Access to Certain Documentation. Each of the
Servicer and the Depositor shall permit the designated agents or representatives
of each Certificateholder, the Certificate Insurer and the Trustee (i) to
examine and make copies of and abstracts from all books, records and documents
(including computer tapes and disks) in the possession or under the control of
the Servicer or the Depositor relating to the Mortgage Loans and (ii) to visit
the offices and properties of the Servicer and of the Depositor for the purpose
of examining such materials and to discuss matters relating to the Mortgage
Loans and the Servicer's and the Depositor's performance under this Agreement
with any of the officers or employees of the Servicer and the Depositor having
knowledge thereof and with the independent public accountants of the Servicer
(and by this provision the Servicer and the Depositor each authorize their
respective accountants to discuss their respective finances and affairs), all at
such reasonable times, as often as may be reasonably requested and without
charge to such Certificateholder, the Certificate Insurer or the Trustee.
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Section 5.12 Maintenance of Fidelity Bond. The Servicer shall
during the term of its service as servicer maintain in force a fidelity bond and
errors and omissions insurance in respect of its officers, employees or agents.
Such bond and insurance shall comply with the requirements from time to time of
the FNMA for Persons performing servicing for mortgage loans purchased by such
association.
Section 5.13 The Subservicers. The parties acknowledge that
the Servicer intends to appoint the Subservicers as the Servicer's agent for the
purpose of servicing on the Servicer's behalf such of the Mortgage Loans as were
originated in the State of New Jersey. The Servicer agrees to cause the
Subservicers to service such Mortgage Loans in a manner consistent with the
Accepted Servicing Practices set forth in this Agreement, and agrees that
receipt by the Subservicers of any and all amounts which by the terms hereof are
required to be deposited in the Collection Account shall constitute receipt
thereof by the Servicer for all purposes hereof as of the date so received by
the Subservicers. Notwithstanding such designation of the Subservicers, the
Servicer agrees that it is, and it shall remain, fully obligated under the terms
hereof as Servicer with respect to all such Mortgage Loans, and nothing herein
shall relieve or release the Servicer from its obligations to the other parties
hereto to service such Mortgage Loans in the manner provided in this Agreement.
Section 5.14 Reports to the Trustee; Collection Account
Statements. Not later than 15 days after each Distribution Date, the 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 Distribution Date, stating that all
distributions required by this Agreement to be made by the Servicer on behalf of
the Trustee have been made (or if any required distribution has not been made by
the 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
5.02 and each category of withdrawal specified in Section 5.03 and the aggregate
of deposits into the Collection Account as specified in Section 6.01(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 Distribution Date occurs. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request.
Section 5.15 Optional Purchase of Defaulted Mortgage Loans.
(a) The Depositor or any Affiliate of the Depositor, in its sole discretion,
shall have the right to elect (by written notice sent to the Servicer, the
Trustee and the Certificate Insurer), but shall not be obligated, to purchase
for its own account from the Trust Fund any Mortgage Loan which is 90 days or
more Delinquent in the manner and at the price specified in Section 2.06(b)
except that the amount described in clause (ii) of Section 2.06(b) shall in no
case be net of the Servicing Fee. The purchase price for any Mortgage Loan
purchased hereunder shall be deposited in the Collection Account and the
Trustee, upon receipt of such deposit, shall release or cause to be released to
the purchaser of such Mortgage Loan the related Trustee's Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared by
the purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such
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Mortgage Loan shall succeed to all the Trustee's right, title and interest in
and to such Mortgage Loan and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The purchaser
of such Mortgage Loan shall thereupon own such Mortgage Loan, and all security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
(b) After the Depositor or an Affiliate of the Depositor has
repurchased defaulted Mortgage Loans in a principal amount equal to 1% of the
Maximum Collateral Amount, then notwithstanding the foregoing, unless the
Certificate Insurer consents, any such Depositor or Affiliate of the Depositor
may only exercise its option pursuant to this Section 5.15 with respect to the
Mortgage Loan or Mortgage Loans that have been Delinquent for the longest period
at the time of such repurchase. Any request by such the Depositor or Affiliate
to the Certificate Insurer for consent to repurchase Mortgage Loans that are not
the most Delinquent shall be accompanied by a description of the Mortgage Loans
that have been Delinquent longer than the Mortgage Loan or Mortgage Loans the
Depositor or such Affiliate proposes to repurchase. If the Certificate Insurer
fails to respond to such request within 10 Business Days after receipt thereof,
the Depositor or such Affiliate may repurchase the Mortgage Loan or Mortgage
Loans proposed to be repurchased without the consent of, or any further action
by, the Certificate Insurer. Notice to the Certificate Insurer shall be
delivered in accordance with the terms of the Insurance and Indemnity Agreement.
Section 5.16 Reports to be Provided by the Servicer. (a) In
connection with the transfer of the Certificates, the Trustee on behalf of any
Certificateholder may request that the Servicer make available to any
prospective Certificateholder annual audited financial statements of the
Servicer for one or more of the most recently completed five fiscal years for
which such statements are available, which request shall not be unreasonably
denied or unreasonably delayed. Such annual audited financial statements also
shall be made available to the Certificate Insurer upon request.
(b) The Servicer also agrees to make available on a reasonable
basis to the Certificate Insurer or any prospective Certificateholder a
knowledgeable financial or accounting officer for the purpose of answering
reasonable questions respecting recent developments affecting the Servicer or
the financial statements of the Servicer and to permit the Certificate Insurer
or any prospective Certificateholder to inspect the Servicer's servicing
facilities during normal business hours for the purpose of satisfying the
Certificate Insurer or such prospective Certificateholder that the Servicer has
the ability to service the Mortgage Loans in accordance with this Agreement.
Section 5.17 Adjustment of Servicing Compensation in Respect
of Prepaid Mortgage Loans. The Monthly Servicing Fee that the Servicer shall be
entitled to receive with respect to all of the Mortgage Loans and each
Distribution Date shall be offset on such Distribution 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 month preceding
the month of such Distribution Date. The amount of any offset against the
Monthly Servicing Fee with respect to any Distribution Date under this Section
5.17 shall be limited to the Monthly Servicing Fee otherwise payable to the
Servicer (without adjustment on account of Prepayment
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Interest Shortfalls) with respect to such Distribution Date, and the rights of
the Certificateholders to the offset of the aggregate Prepayment Interest
Shortfalls shall not be cumulative.
Section 5.18 Periodic Advances; Special Advance. (a) If, on
any Servicer Distribution Date, the Servicer determines that any Monthly
Payments due on the Due Date immediately preceding such Servicer Distribution
Date have not been received as of the close of business on the Business Day
preceding such Servicer Distribution Date, the Servicer shall determine the
amount of any Periodic Advance required to be made with respect to the related
Distribution Date. The Servicer shall, one Business Day after such Servicer
Distribution Date, deliver a magnetic tape or diskette to the Trustee indicating
the payment status of each Mortgage Loan as of such Servicer Distribution Date.
The Servicer shall include in the amount to be deposited in the Collection
Account on such Servicer Distribution Date an amount equal to the Periodic
Advance, if any, 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 Distribution Dates in subsequent months. Any funds being held
for future distribution to Certificateholders and so used shall be replaced by
the Servicer from its own funds by deposit in the Collection Account on or
before the Business Day preceding any such future Servicer Distribution Date to
the extent that funds in the Collection Account on such Servicer Distribution
Date shall be less than payments to Certificateholders required to be made on
such date.
The 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 determination being
conclusive for purposes of withdrawals from the Collection Account pursuant to
Section 5.03.
(b) In addition to the Periodic Advances the Servicer shall
make a special advance (the "Special Advance") on the Servicer Distribution Date
occurring in _______, of $_______, with respect to interest on Mortgage Loans
not having their first payment due until after _______. The Special Advance
shall be made without regard to recoverability, and shall not be reimbursable.
In no event shall the Trustee, as successor Servicer, be liable for the payment
of the Special Advance.
Section 5.19 Indemnification; Third Party Claims. (a) The
Servicer agrees to indemnify and to hold each of the Depositor, the Trustee, the
Certificate Insurer and each Certificateholder 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 Depositor, the
Trustee, the Certificate Insurer and any Certificateholder may sustain in any
way related to the failure of the Servicer to perform its duties and service the
Mortgage Loans in compliance with the terms of this Agreement. Each indemnified
party and the Servicer shall immediately notify the other indemnified parties if
a claim is made by a third party with respect to this Agreement, and the
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Depositor, the Servicer, the Trustee, the Certificate Insurer and/or a
Certificateholder in respect of such claim. The Trustee shall reimburse the
Servicer in accordance with Section 5.08 hereof for all amounts advanced by it
pursuant to the preceding sentence except when the claim relates directly to the
failure of the
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Servicer to service and administer the Mortgages in compliance with the terms of
this Agreement; provided, that the Servicer's indemnity hereunder shall not be
in any manner conditioned on the availability of funds for such reimbursement.
(b) The Trustee may, if necessary, reimburse the Servicer from
amounts otherwise distributable on the Class R Certificates for all amounts
advanced by it pursuant to Section 4.04(a)(ii) of the Loan Sale Agreement,
except when the claim relates directly to the failure of the Servicer, if it is,
or is an Affiliate of, the Depositor, to perform its obligations to service and
administer the Mortgages in compliance with the terms of the Loan Sale
Agreement, or the failure of the Depositor to perform its duties in compliance
with the terms of this Agreement.
(c) The Trustee shall reimburse the Depositor from amounts
otherwise distributable on the Class R Certificates for all amounts advanced by
the Depositor pursuant to the second sentence of Section 4.04(a)(ii) of the Loan
Sale Agreement except when the relevant claim relates directly to the failure of
the Depositor to perform its duties in compliance with the terms of the Loan
Sale Agreement.
Section 5.20 Maintenance of Corporate Existence and Licenses;
Merger or Consolidation of the Servicer. (a) The 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 3.01 to be true and correct at all
times under this Agreement.
(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be an established mortgage loan servicing
institution 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 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 Servicer
shall send notice of any such merger or consolidation to the Trustee and the
Certificate Insurer.
Section 5.21 Assignment of Agreement by Servicer; Servicer Not
to Resign. The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Depositor, the Certificate Insurer and the Trustee or upon the
determination that the Servicer's duties hereunder are no longer permissible
under applicable law and that such incapacity cannot be cured by the Servicer
without incurring, in the reasonable judgment of the Certificate Insurer,
unreasonable expense. Any such determination that the Servicer's duties
hereunder are no longer permissible under applicable law permitting the
resignation of the Servicer shall be evidenced by a written Opinion of Counsel
(who may be counsel for the Servicer) to such effect delivered to the Trustee,
the Depositor and the Certificate Insurer. No such resignation shall become
effective until the Trustee or a successor appointed in accordance with the
terms of this Agreement has assumed
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the Servicer's responsibilities and obligations hereunder in accordance with
Section 7.02. The Servicer shall provide the Trustee, the Rating Agencies and
the Certificate Insurer with 30 days prior written notice of its intention to
resign pursuant to this Section 5.21.
Section 5.22 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 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 and/or the Certificates required to be filed, 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, as amended. 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 Trustee in connection with the
foregoing shall be reimbursed pursuant to Section 9.05 and shall not be paid by
the Trust.
The Servicer and the Depositor each agree to promptly furnish
to the Trustee, from time to time upon request, such further information,
reports and financial statements as the Trustee deems appropriate to prepare and
file all necessary reports with the Securities and Exchange Commission.
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.1 Establishment of Accounts; Withdrawals from
Accounts; 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 _______, Mortgage Pass-Through
Certificates, Series _____", the Pre-Funding Account which shall be titled
"Pre-Funding Account, _______, as trustee for the registered holders of _______,
Mortgage Pass-Through Certificates, Series _______", the Capitalized Interest
Account which shall be titled "Capitalized Interest Account, _______, as trustee
for the registered holders of _______, Mortgage Pass-Through Certificates,
Series _______", each of which such Account shall be an Eligible Account. Upon
receipt of the proceeds of the sale of the Certificates, on the Closing Date,
the Trustee shall, upon the Depositor's direction, from the proceeds of the sale
of the Certificates, deposit, on behalf of the Certificateholders (i) in the
Pre-Funding Account, the Original Pre-Funded Amount, and (ii) in the Capitalized
Interest Account, an amount equal to $_______.
(b) The Servicer may direct the Trustee in writing to invest
the funds in the Certificate Account only in Permitted Investments. No Permitted
Investment shall be sold or disposed of at a gain prior to maturity unless the
Servicer has delivered to the Trustee an Opinion of Counsel (at the 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
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860F(a)(1), otherwise subject the Trust Fund to tax or cause the Trust Fund to
fail to qualify as a REMIC and the Certificate Insurer consents to such
disposition. 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 Servicer as additional servicing
compensation. The amount of any losses incurred in respect of any such
investments shall be deposited in the Certificate Account by the Servicer out of
its own funds immediately as realized.
(c) On each Servicer Distribution Date, the Servicer shall
cause to be deposited in the Certificate Account, from funds on deposit in the
Collection Account, (a) an amount equal to the Servicer Remittance Amount and
(b) Net Foreclosure Profits, if any with respect to the related Distribution
Date, minus any portion thereof payable to the Servicer pursuant to Section
5.03. On each Servicer Distribution Date, the Servicer shall also deposit into
the Certificate Account any Periodic Advances with respect to the related
Distribution Date calculated in accordance with Section 5.18 and any amounts
required to be deposited in connection with a Subsequent Mortgage Loan pursuant
to Section 2.03(f); on the Servicer Distribution Dates occurring on _________,
the Servicer also will deposit the Special Advance;
(d) On the _______ and _______ Distribution Dates, the Trustee
shall transfer from the Capitalized Interest Account to the Certificate Account
the Capitalized Interest Requirement, if any, for such Distribution Date.
(e) On the Distribution Date following either the final
Subsequent Transfer Date or _______ whichever date is earlier, any amounts
remaining in the Capitalized Interest Account, after taking into account the
transfers on such Distribution Date described in clause (d) above, shall be paid
to the Depositor, and the Capitalized Interest Account.
(f) On any Subsequent Transfer Date, the Depositor shall
instruct in writing the Trustee to withdraw from the Pre-Funding Account an
amount equal to 100% of the aggregate Principal Balances as of the related
Subsequent Cut-Off Date of the Subsequent Mortgage Loans sold to the Trust on
such Subsequent Transfer Date and pay such amount to or upon the order of the
Depositor upon satisfaction of the conditions set forth in Section 2.03(b) and
(c) hereof with respect to such transfer. The Trustee may conclusively rely on
such written instructions from the Depositor.
(g) If the Pre-Funding Amount (exclusive of Pre-Funding
Earnings) has been reduced to $100,000 or less by ___________, then, on the
_________ Distribution Date after giving effect to any reductions in the
Pre-Funding Amount on such date, the Trustee shall withdraw from the Pre-Funding
Account on such date and deposit in the Certificate Account the amount on
deposit in the Pre-Funding Account other than any Pre-Funding Earnings; if the
Pre-Funding Amount has not been reduced to zero by _______, and the remaining
Pre-Funding Amount (exclusive of Pre-Funding Earnings) is (i) less than or equal
to 1% of the Pool Principal Balance on such date, the Trustee shall withdraw
from the Pre-Funding Account the amount on deposit therein, other than the
Pre-Funding Earnings, and deposit such amount into the Collection Account or
(ii) greater than 1% of the Pool Principal Balance on such date, the Trustee
shall withdraw from the Pre-Funding Account the amount on deposit therein, other
than the Pre-Funding Earnings, and distribute such amount to the Holders of the
Class A Certificates, pro rata, as a separate payment of principal, on the
_______ Distribution Date.
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(h) On the _______ and the _______, Distribution Dates the
Trustee shall transfer from the Pre-Funding Account to the Certificate Account
the Pre-Funding Earnings, if any, applicable to each such date.
Section 6.02 Permitted Withdrawals From the Certificate
Account. The Trustee shall withdraw or cause to be withdrawn funds from the
Certificate Account for the following purposes:
(a) to effect the distributions described in Section 6.05;
(b) to pay to the Depositor with respect to each Mortgage Loan
or property acquired in respect thereof that has been repurchased or replaced
pursuant to Section 2.04 or 2.05 or to pay to the Servicer with respect to each
Mortgage Loan or property acquired in respect thereof that has been purchased
all amounts received thereon and not required to be distributed as of the date
on which the related repurchase or purchase price or Principal Balance was
determined;
(c) to pay the Servicer 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 6.03 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 (a) all payments due 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 Servicer or by any Sub-Servicer
and (b) Insured Payments. 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 6.04 The Certificate Insurance Policy. (a) Within two
(2) days of each Servicer Distribution Date, the Trustee shall determine with
respect to the immediately following Distribution Date, the amount to be on
deposit in the Certificate Account on such Distribution Date as a result of the
(i) Servicer's remittance of the Servicer Remittance Amount on the related
Servicer Distribution Date, and (ii) any transfers to the Certificate Account
made from the Capitalized Interest Account and/or the Pre-Funding Account
relating to such Distribution Date pursuant to Section 6.01 hereof, excluding
the amount of any Insured Payment and prior to the application of the amounts
described in clauses (a)(i) through (a)(iii) of Section 6.05 for the
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related Distribution Date. The amounts described above in the preceding sentence
with respect to the Distribution Date are the "Available Funds".
(b) If on any Distribution Date there is an Available Funds
Shortfall, the Trustee shall complete a Notice in the form of Exhibit A to the
Certificate Insurance Policy and submit such notice to the Certificate Insurer
no later than 12:00 noon New York City time on the second Business Day preceding
such Distribution Date as a claim for an Insured Payment in an amount equal to
such Available Funds Shortfall.
(c) The Trustee shall establish a separate Eligible Account
for the benefit of Holders of the Certificates and the Certificate Insurer
referred to herein as the "Certificate Insurance Payment Account" over which the
Trustee shall have exclusive control and sole right of withdrawal. The Trustee
shall deposit upon receipt any amount paid under the Certificate Insurance
Policy in the Certificate Insurance Payment Account and distribute such amount
only for purposes of payment to the Certificateholders of the Insured
Distribution Amount for which a claim was made and such amount may not be
applied to satisfy any costs, expenses or liabilities of the Servicer, the
Trustee or the Trust Fund. Amounts paid under the Certificate Insurance Policy,
to the extent needed to pay the Insured Distribution Amount shall be transferred
to the Certificate Account on the related Distribution Date and disbursed by the
Trustee to the Certificateholders in accordance with Section 6.05. It shall not
be necessary for such payments to be made by checks or wire transfers separate
from the checks or wire transfers used to pay the Insured Distribution Amount
with other funds available to make such payment. However, the amount of any
payment of principal or of interest on the Certificates to be paid from funds
transferred from the Certificate Insurance Payment Account shall be noted as
provided in paragraph (d) below in the Certificate Register and in the statement
to be furnished to Holders of the Certificates pursuant to Section 6.07. Funds
held in the Certificate Insurance Payment Account shall not be invested. Any
funds remaining in the Certificate Insurance Payment Account on the first
Business Day following a Distribution Date shall be returned to the Certificate
Insurer pursuant to the written instructions of the Certificate Insurer by the
end of such Business Day.
(d) 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.
(e) In the event that the Trustee has received a certified
copy of an order of the appropriate court that any 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 Insured Payment, and shall, at the time it
provides notice to the Certificate Insurer, notify, by mail to the
Certificateholders of the affected Certificates that, in the event any
Certificateholder's Insured Payment 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
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evidencing the payments which have been made by the Trustee and subsequently
recovered from the Certificateholders, and dates on which such payments were
made.
(f) 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
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, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedas 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 Servicer and the Trustee hereby
delegate and assign to the Certificate Insurer, to the fullest extent permitted
by law, the rights of the 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.
(g) The Trustee shall, upon retirement of the Certificates,
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, surrender the Certificate Insurance Policy to the Certificate
Insurer for cancellation.
Section 6.05 Distributions. (a) No later than 12:00 noon
Pennsylvania time on the fourth Business Day preceding each Distribution Date,
the Servicer shall deliver to the Trustee a report in computer-readable form
containing such information as to each Mortgage Loan as of such Distribution
Date and such other information as the Trustee shall reasonably require. With
respect to the Certificate Account, on each Distribution Date, the Trustee shall
make the following allocations, disbursements and transfers in the following
order of priority, and each such allocation, transfer and disbursement shall be
treated as having occurred only after all preceding allocations, transfers and
disbursements have occurred:
(i) to the Trustee, an amount equal to the
Trustee's Fees then due to it;
(ii) from amounts then on deposit in the
Certificate Account (excluding any Insured Payments) to the
Certificate Insurer the lesser of (x) the excess of (i) the
amount then on deposit in the Certificate Account over (ii)
the Insured Distribution Amount for such Distribution Date and
(y) the sum of (i) the amount of all Reimbursement Amounts
which have not been previously repaid as of such Distribution
Date and any other amounts then due to the Certificate Insurer
pursuant to the Insurance and Indemnity Agreement and (ii) the
Premium Amount;
(iii) from amounts then on deposit in the
Certificate Account, pro rata, (A) to the Owners of the Class
A-1 Certificates, the Class A-1 Distribution Amount for
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such Distribution Date; (B) to the Owners of the Class A-2
Certificates, the Class A-2 Distribution Amount for such
Distribution Date; (C) to the Owners of the Class A-3
Certificates, the Class A-3 Distribution Amount for such
Distribution Date; (D) to the Owners of the Class A-4
Certificates, the Class A-4 Distribution Amount for such
Distribution Date; (E) to the Owners of the Class A-5
Certificates, the Class A-5 Distribution Amount for such
Distribution Date; and (F) to the Owners of the Class A-6
Certificates, the Class A-6 Distribution Amount for such
Distribution Date;
(iv) following the making by the Trustee of
all allocations, transfers and disbursements described above,
from amounts then on deposit in the Certificate Account, the
Trustee shall distribute to the Holders of the Class R
Certificates, the amount remaining in the Certificate Account
on such Distribution Date, if any; provided, however, that if,
on any Distribution Date, (x) the Certificate Insurer is then
in default under the Certificate Insurance Policy relating to
the Mortgage Loans and (y) a Subordination Deficit exists,
then any distribution of the Principal Distribution Amount on
such Distribution Date shall be made pro rata to the Owners of
each of the Class A Certificates.
Notwithstanding the foregoing, the aggregate amounts
distributed on all Distribution Dates to the Holders of each Class of Class A
Certificates on account of principal shall not exceed the Original Certificate
Principal Balance for the related Class A Certificates.
Section 6.06 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 other than the
Certificate Insurance Payment Account held by the Trustee shall be invested and
reinvested by the Trustee, as directed in writing by the Servicer, in one or
more Permitted Investments bearing interest or sold at a discount. If an Event
of Default shall have occurred and be continuing or if the Servicer does not
provide investment directions, the Trustee shall invest all Accounts in
Permitted Investments described in paragraph (iv) of the definition of Permitted
Investments. No such investment in any Account shall mature later than the
Business Day immediately preceding the next Distribution Date (except that if
such Permitted Investment is an obligation of the Trustee, then such Permitted
Investment shall mature not later than such Distribution Date).
(b) Subject to Section 6.01(b), 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 not be, and the Servicer shall be, liable for
any investment loss or other charge resulting therefrom unless the Trustee's
failure to perform in accordance with this Section 6.06 is the cause of such
loss or charge.
(c) Subject to Section 9.01 hereof, the Trustee shall not in
any way be held liable by reason of any insufficiency in any Account held by the
Trustee resulting from any investment loss on any Permitted Investment included
therein (except to the extent that the Trustee is the obligor and has defaulted
thereon or as provided in subsection (b) of this Section 6.06).
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(d) 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 Account (excluding the Certificate Insurance
Payment Account) shall be for the benefit of the Servicer as servicing
compensation (in addition to the Servicing Fee). The 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 6.07 Reports by the Trustee. (a) On each Distribution
Date the Trustee shall provide to each Holder, to the Servicer, to the
Certificate Insurer, to the Underwriter, to the Depositor and to the Rating
Agencies a written report (the "Trustee Remittance Report"), setting forth
information including, without limitation, the following information:
(i) the amount of the distribution with
respect to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4,
Class A-5, Class A-6 and Class R Certificates;
(ii) the amount of such distributions
allocable to principal, separately identifying the aggregate
amount of any Prepayments or other unscheduled recoveries of
principal included therein and separately identifying any
Subordination Increase Amounts;
(iii) the amount of such distributions
allocable to interest and the calculation thereof;
(iv) the Certificate Principal Balance of
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and
Class A-6 Certificates as of such Distribution Date, together
with the principal amount of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5 and Class A-6 Certificates (based on
a Certificate in an original principal amount of $1,000) then
outstanding, in each case after giving effect to any payment
of principal on such Distribution Date;
(v) the amount of any Insured Payment
included in the amounts distributed to the Class A
Certificateholders on such Distribution Date;
(vi) the total of any Substitution
Adjustments and any Loan Repurchase Price amounts included in
such distribution;
(vii) the amounts, if any, of any Liquidated
Loan Losses for consumer purpose loans and for business
purpose loans for the related Due Period and cumulative
Liquidated Loan Losses since the Startup Date for consumer
purpose loans and for business purpose loans; and
(viii) LIBOR for such Payment Date.
Items (i), (ii) and (iii) above shall, with respect to each
Class of Class A Certificates, be presented on the basis of a Certificate having
a $1,000 denomination. In addition, by January 31 of each calendar year
following any year during which the Certificates
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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 each Class of Class A
Certificateholders and the Class R Certificateholders as a Class on each
Distribution Date will be made on a pro rata basis among the Certificateholders
of each Class on the next preceding Record Date based on the Percentage Interest
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 Distribution Date the Trustee will
distribute to each Holder, to the Certificate Insurer, to the Underwriter, to
the Servicer, to the Depositor and to the Rating Agencies, together with the
information described in subsection (a) preceding, the following information
with respect to all Mortgage Loans and as to consumer purpose and business
purpose 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 Servicer and furnished to the
Trustee for such purpose on or prior to the related Servicer Distribution 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) 31-60 days Delinquent, (B) 61-90 days
Delinquent and (C) 91 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 also included in any of the statistics
described in the foregoing clause (i);
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(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 Properties 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);
(v) the weighted average Mortgage Interest
Rate as of the Due Date occurring in the Due Period related to
such Distribution Date;
(vi) the weighted average remaining term to
stated maturity of all Mortgage Loans;
(vii) the book value of any REO Property;
(viii) the Pool Cumulative Loan Losses and
the aggregate Pool Cumulative Loan Losses since the Closing
Date; and
(ix) the total number of Mortgage Loans and
the Pool Principal Balance.
Section 6.08 Additional Reports by Trustee. (a) The Trustee
shall report to the Depositor, the Servicer and the Certificate Insurer with
respect to the amount then held in each 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 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
any Loan Sale Agreement or in Section 3.01 or 3.02 hereof. The Trustee shall
also provide the Certificate Insurer such other information as may be reasonably
requested by it.
Section 6.09 Compensating Interest. Not later than the close
of business on the third Business Day prior to the Distribution Date, the
Servicer shall remit to the Trustee (without right or reimbursement therefor)
for deposit into the Certificate Account an amount equal to the lesser of (a)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from Principal Prepayments during the related Due Period and (b)
its aggregate Monthly Servicing Fees received in the related Due Period and
shall not have the right to reimbursement therefor (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
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Fund. The Depositor, the 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 Servicer, the
Trustee or the Certificate Registrar (a) 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 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 (b) the Certificate Insurer shall be
paid such amounts from the sources and in the manner provided herein for the
payment of such amounts and as provided in the Insurance and Indemnity
Agreement. The Trustee and the 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.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. (a) In case one or more of the
following Events of Default by the Servicer shall occur and be continuing, that
is to say:
(i) any failure by the Servicer to remit to
the Trustee any payment required to be made by the Servicer
under the terms of this Agreement which continues unremedied
for one (1) Business Day after the date upon which written
notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer and the Certificate
Insurer by the Trustee or to the Servicer and the Trustee by
the Certificate Insurer or Certificateholders of Class A
Certificates evidencing Percentage Interests of at least 25%;
(ii) the failure by the Servicer to make any
required Servicing Advance which failure continues unremedied
for a period of 30 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee or to the Servicer
and the Trustee by any Certificateholder or the Certificate
Insurer;
(iii) any failure on the part of the
Servicer duly to observe or perform in any material respect
any other of the covenants or agreements on the part of the
Servicer contained in this Agreement, or the failure of any
representation and warranty made pursuant to Section 3.01 to
be true and correct which continues unremedied for a period of
30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Servicer, as the case may be, by the Depositor or
the Trustee or to the Servicer and the Trustee by any
Certificateholder or the Certificate Insurer;
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(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 Servicer and
such decree or order shall have remained in force,
undischarged or unstayed for a period of 30 days;
(v) the 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
Servicer or of or relating to all or substantially all of the
Servicer's property;
(vi) the 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 Certificate Insurer shall notify
the Trustee of any event of default under the Insurance and
Indemnity Agreement;
(viii) if on any Distribution Date the
Rolling Six Month Delinquency Rate exceeds __%;
(ix) if on any Distribution Date, commencing
in _______, the Twelve Month Loss Amount exceeds ___% of the
Pool Principal Balance as of the close of business on the
first day of the twelfth preceding calendar month;
(x) if (a) on any Distribution Date
occurring before _______, the aggregate Pool Cumulative Loan
Losses since the Cut-Off Date exceed ___% of the Original Pool
Principal Balance, (b) on any Distribution Date on or after
_______ and before _______, the aggregate Pool Cumulative Loan
Losses since the Cut-Off Date exceed ___% of the Original Pool
Principal Balance, (c) on any Distribution Date on or after
_______ and before _______, the aggregate Pool Cumulative Loan
Losses since the Cut-Off Date exceed ___% of the Original Pool
Principal Balance, (d) on any Distribution Date on or after
_______ and before _______, the aggregate Pool Cumulative Loan
Losses since the Cut-Off Date exceed ___% of the Original Pool
Principal Balance, or (e) on any Distribution Date on or after
_______, the aggregate Pool Cumulative Loan Losses since the
Cut-Off Date exceed ___% of the Original Pool Principal
Balance.
(b) then, and in each and every such case, so long as an Event
of Default shall not have been remedied: (x) with respect solely to clause (i)
above, if such payment is in respect of Periodic Advances or Compensating
Interest owing by the Servicer and such payment is not made by 12:00 Noon New
York time on the second Business Day prior to the applicable Distribution Date,
the Trustee, upon receipt of written notice or discovery by a Responsible
Officer of such failure, shall give immediate telephonic notice of such failure
to a Servicing Officer of the Servicer and to the Certificate Insurer and the
Trustee shall, with the consent of the
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Certificate Insurer, terminate all of the rights and obligations of the Servicer
under this Agreement and the Trustee, or a successor servicer appointed in
accordance with Section 7.02, shall immediately make such Periodic Advance or
payment of Compensating Interest and assume, pursuant to Section 7.02 hereof,
the duties of a successor Servicer; (y) with respect to that portion of clause
(i) above not referred to in the preceding clause (x) and clauses (ii), (iii),
(iv), (v), (vi) and (vii) above, the Trustee shall, but only at the direction of
the Certificate Insurer or the Majority Certificateholders, by notice in writing
to the Servicer and a Responsible Officer of the Trustee and subject to the
prior written consent of the Certificate Insurer, in the case of any removal at
the direction of the Majority Certificateholders, and in addition to whatever
rights such Certificateholders may have at law or equity to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, as servicer; and (z) with respect to clause
(viii)-(x) above, the Trustee shall, but only at the direction of the
Certificate Insurer, after notice in writing to the Servicer and a Responsible
Officer of the Trustee, terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
as Servicer. Upon receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall, subject to Section 7.02, 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 Servicer, as attorney-in-fact or otherwise, at the expense of the
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
Servicer agrees to cooperate (and pay any related costs and expenses) with the
Trustee in effecting the termination of the 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 Servicer to the Collection Account or thereafter received with
respect to the Mortgage Loans. The Trustee shall promptly notify the Certificate
Insurer and the Rating Agencies of the occurrence of an Event of Default.
Section 7.02 Trustee to Act; Appointment of Successor. (a) On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.01 or fails to receive a Servicer Extension Notice pursuant to Section
8.04, or the Trustee receives the resignation of the Servicer evidenced by an
Opinion of Counsel pursuant to Section 5.21, or the Servicer is removed as
Servicer pursuant to Article VII, in which event the Trustee shall promptly
notify the Rating Agencies, except as otherwise provided in Section 7.01, the
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof
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
servicer prior to it and including, without limitation, the obligations of the
Servicer set forth in Sections 2.06 and 3.03. The Trustee, as successor
servicer, shall be obligated to pay Compensating Interest pursuant to Section
6.09 in any event and to make advances pursuant to Section 5.18 unless, and only
to the extent the Trustee determines reasonably and in good faith that such
advances would not be recoverable
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pursuant to Section 5.04, such determination to be evidenced by a certification
of a Responsible Officer of the Trustee 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
such direction of the Majority Certificateholders and Certificate Insurer or the
Certificate Insurer, or if no such direction is provided to the Trustee,
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 Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder.
(c) In the event the Trustee is the successor servicer, it
shall be entitled to the same Servicing Compensation (including the Servicing
Fee as adjusted pursuant to the definition thereof) and other funds pursuant to
Section 5.08 hereof as the Servicer if the Servicer had continued to act as
servicer hereunder. In the event the Trustee is unable or unwilling to act as
successor servicer, the Trustee shall solicit, by public announcement, bids from
housing and home finance institutions, banks and mortgage servicing institutions
meeting the qualifications set forth above. Such public announcement shall
specify that the successor servicer shall be entitled to the full amount of the
aggregate Servicing Fees hereunder as servicing compensation, together with the
other Servicing Compensation. Within thirty days after any such public
announcement, the Trustee shall negotiate and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest qualifying bid. The Trustee shall deduct
from any sum received by the Trustee from the successor to the Servicer in
respect of such sale, transfer and assignment all costs and expenses of any
public announcement and of any sale, transfer and assignment of the servicing
rights and responsibilities hereunder and the amount of any unreimbursed
Servicing Advances and Periodic Advances owed to the Trustee. After such
deductions, the remainder of such sum shall be paid by the Trustee to the
Servicer at the time of such sale, transfer and assignment to the Servicer's
successor.
(d) The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Servicer agrees to cooperate with the Trustee and any successor
servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee or
such successor servicer, as applicable, at the Servicer's cost and expense, all
documents and records reasonably requested by it to enable it to assume the
Servicer's functions hereunder and shall promptly also transfer to the Trustee
or such successor servicer, as applicable, all amounts that then have been or
should have been deposited in the Collection Account by the Servicer or that are
thereafter received with respect to the Mortgage Loans. Any collections received
by the 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 servicer. Neither the Trustee nor any other successor
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 (i) the
failure of the Servicer to deliver, or any delay in delivering, cash, documents
or records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer hereunder.
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Notwithstanding anything to the contrary herein, no appointment of a successor
to the Servicer under this Agreement 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 servicer
until a successor servicer reasonably acceptable to the Certificate Insurer has
been appointed. The Certificate Insurer shall have the right to remove the
Trustee as successor Servicer under this Section 7.02 without cause, and the
Trustee shall appoint such other successor Servicer as directed by the
Certificate Insurer.
(e) Pending appointment of a successor to the Servicer
hereunder, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer pursuant to
Section 5.08, together with other Servicing Compensation. The Servicer, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
Section 7.03 Waiver of Defaults. 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
Servicer as 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 the Rating Agencies and the Certificate Insurer.
Section 7.04 Rights of the Certificate Insurer to Exercise
Rights of Class A Certificateholders. By accepting its Certificate, each Class A
Certificateholder agrees that unless a Certificate Insurer Default exists, the
Certificate Insurer shall be deemed to be the Certificateholders for all
purposes (other than with respect to the receipt of payment on the Certificates)
and shall have the right to exercise all rights of the Class A
Certificateholders under this Agreement and under the Class A Certificates
without any further consent of the Class A Certificateholders, including,
without limitation:
(a) the right to require the Depositor to repurchase Mortgage
Loans pursuant to Section 2.06 or 3.03 hereof to the extent set forth in such
Sections;
(b) the right to give notices of breach or to terminate the
rights and obligations of the Servicer as servicer pursuant to Section 7.01
hereof and to consent to or direct waivers of Servicer defaults pursuant to
Section 7.03 hereof;
(c) the right to direct the actions of the Trustee during the
continuance of a Servicer default pursuant to Sections 7.01 and 7.02 hereof;
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(d) the right to institute proceedings against the Servicer
pursuant to Section 7.01 hereof;
(e) the right to direct the Trustee to investigate certain
matters pursuant to Section 9.02(a)(v) hereof;
(f) the right to remove the Trustee pursuant to Section 9.07
hereof;
(g) the right to direct foreclosures upon the failure of the
Servicer to do so in accordance with the provisions of Section 5.06 of this
Agreement; and
(h) any rights or remedies expressly given the Majority
Certificateholders.
In addition, each Certificateholder agrees that, subject to
Section 10.02, unless a Certificate Insurer Default exists, the rights
specifically enumerated above may only be exercised by the Certificateholders
with the prior written consent of the Certificate Insurer.
Section 7.05 Trustee To Act Solely with Consent of the
Certificate Insurer. Unless a Certificate Insurer Default exists, the Trustee
shall not, without the Certificate Insurer's consent or unless directed by the
Certificate Insurer:
(a) terminate the rights and obligations of the Servicer as
Servicer pursuant to Section 7.01 hereof;
(b) agree to any amendment pursuant to Section 10.03 hereof;
or
(c) undertake any litigation.
The Certificate Insurer may, in writing and in its sole
discretion renounce all or any of its rights under Sections 7.04, 7.05 or 7.06
or any requirement for the Certificate Insurer's consent for any period of time.
Section 7.06 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 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
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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.
Section 7.07 Certificate Insurer Default. Notwithstanding
anything elsewhere in this Agreement or in the Certificates to the contrary, if
a Certificate Insurer Default exists, or if and to the extent the Certificate
Insurer has delivered its written renunciation of all of its rights under this
Agreement, the provisions of this Article VII and all other provisions of this
Agreement which (a) permit the Certificate Insurer to exercise rights of the
Certificateholders, (b) restrict the ability of the Certificateholders, the
Servicer or the Trustee to act without the consent or approval of the
Certificate Insurer, (c) provide that a particular act or thing must be
acceptable to the Certificate Insurer, (d) permit the Certificate Insurer to
direct (or otherwise to require) the actions of the Trustee, the Servicer or the
Certificateholders, (e) provide that any action or omission taken with the
consent, approval or authorization of the Certificate Insurer shall be
authorized hereunder or shall not subject the party taking or omitting to take
such action to any liability hereunder or (f) which have a similar effect, shall
be of no further force and effect and the Trustee shall administer the Trust
Fund and perform its obligations hereunder solely for the benefit of the Holders
of the Certificates. Nothing in the foregoing sentence, nor any action taken
pursuant thereto or in compliance therewith, shall be deemed to have released
the Certificate Insurer from any obligation or liability it may have to any
party or to the Certificateholders hereunder, under any other agreement,
instrument or document (including, without limitation, the Certificate Insurance
Policy) or under applicable law.
ARTICLE VIII
TERMINATION
Section 8.01 Termination. (a) Subject to Section 8.02, this
Agreement shall terminate upon notice to the Trustee of either: (i) 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
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 (ii)
mutual consent of the 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 surviving lineal descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, late
Ambassador of the United States to the Court of St. ▇▇▇▇▇, alive as of the date
hereof.
(b) In addition, subject to Section 8.02, the Servicer may, at
its option and at its sole cost and expense, terminate this Agreement on the
First Distribution Date after any Distribution Date on which the Pool Principal
Balance is less than 10% of the Maximum Collateral Amount (the "Clean-Up Call
Date") by purchasing, on such succeeding Distribution Date, all of the
outstanding Mortgage Loans and REO Properties at a price equal to the sum of (i)
100% of the aggregate Principal Balance of each outstanding Mortgage Loan and
each REO Property and (ii) the greater of (1) the aggregate amount of accrued
and unpaid interest on the Mortgage Loans through the related Due Period and (2)
30 days' accrued interest thereon computed at a rate equal to the related
Mortgage Interest Rate, in each case net of the Servicing
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Fee, and (iii) any unreimbursed amounts due to the Certificate Insurer under
this Agreement and any I&I Payments (the "Termination Price"). Any such purchase
shall be accomplished by deposit into the Certificate Account of the Termination
Price. No such termination is permitted without the prior written consent of the
Certificate Insurer if it would result in a draw on the Certificate Insurance
Policy.
(c) If on any Distribution Date, the 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 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 Distribution
Date upon which the Trust Fund 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 Servicer by letter
to Certificateholders mailed during the month of such final distribution before
the Servicer Distribution Date in such month, specifying (i) the Distribution
Date upon which final payment of the Certificates will be made upon presentation
and surrender of Certificates at the office of the Trustee therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee therein specified. The Servicer shall give such notice to the
Trustee therein specified. The 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 Servicer
with the Trustee of a sum sufficient to purchase all of the Mortgage Loans and
REO Properties as set forth above or when the Class A 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 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 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
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 and not to the
Certificate Insurer. Such funds shall remain uninvested.
Section 8.02 Additional Termination Requirements. (a) In the
event that the Servicer exercises its purchase option as provided in Section
8.01, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee has been furnished with an Opinion
of Counsel to the effect that the failure of the REMIC Trust to comply with the
requirements of this Section 8.02 will not (i) result in the imposition of taxes
on
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"prohibited transactions" of the REMIC Trust as defined in Section 860F of
the Code or (ii) cause the REMIC Trust 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
Distribution Date the Servicer shall adopt and the Trustee
shall sign, a plan of complete liquidation of the REMIC Trust
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 and at or prior to the
final Distribution Date, the Trustee shall sell all of the
assets of the Trust Fund to the 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 Class A Principal Balance, plus
one month's interest thereon at the Class A Pass-Through Rate,
(B) to the Certificate Insurer any amounts due the Certificate
Insurer under this Agreement and unpaid, including
unreimbursed Insured Payments and I&I Payments and (C) to the
Class R Certificateholders, all cash on hand after such
payment to the Class A Certificateholders (other than cash
retained to meet claims) and the Trust Fund shall terminate at
such time.
(b) By their acceptance of the Certificates, the Holders
thereof hereby agree to appoint the Servicer as their attorney in fact to: (i)
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 (ii) 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 8.03 Accounting Upon Termination of Servicer. Upon
termination of the Servicer, the 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
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to its successor and to more fully and definitively vest in such successor all
rights, powers, duties, responsibilities, obligations and liabilities of the
"Servicer" under this Agreement.
Section 8.04 Retention and Termination of the Servicer. The
Servicer hereby covenants and agrees to act as servicer under this Agreement for
an initial term commencing on the Closing Date and expiring on _______ (the
"Initial Term"). Thereafter, the Initial Term shall be extendible in the sole
discretion of the Certificate Insurer by written notice (each, a "Servicer
Extension Notice") of the Certificate Insurer (or the Trustee if revocable
written standing instructions of the Certificate Insurer have been previously
delivered to the Trustee), for any specified number of three month terms to the
Servicer. Each such Servicer Extension Notice (if any) shall be delivered by the
Certificate Insurer (or the Trustee, as applicable,) to the other parties to
this Agreement. The Servicer hereby agrees that, as of the date hereof and upon
its receipt of any Servicer Extension Notice the Servicer shall be bound for the
duration of the Initial Term and the term covered by any such Servicer Extension
Notice to act as the Servicer, subject to and in accordance with the other
provisions of this Agreement. The Servicer agrees that if, as of the fifteenth
day prior to the last day of any such servicing term, the Servicer shall not
have received a Servicer Extension Notice from the Certificate Insurer (or
Trustee, as applicable), the Servicer shall, within five days thereafter, give
written notice of such non-receipt to the Certificate Insurer and the Trustee.
The failure of the Certificate Insurer or the Trustee, as applicable, to deliver
a Servicer Extension Notice by the end of any such three-month term shall result
in the automatic termination of the Servicer.
ARTICLE IX
THE TRUSTEE
Section 9.01 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 powers 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 Servicer or the Depositor
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
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.
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(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, the Class A Certificateholders
holding Class A Certificates evidencing Percentage Interests
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 knowledge of any
default or Event of Default (except an Event of Default with
respect to the nonpayment of any amount described in Section
7.01(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 Servicer under
this Agreement except during such time, if any, as the Trustee
shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance
with the terms of this Agreement; and
(vi) subject to the other provisions of this
Agreement (and except in its capacity as successor Servicer)
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
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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 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 REMIC Trust formed hereunder shall
constitute, and that the affairs of the REMIC Trust 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 Depositor, as Class R
Certificateholder, covenants and agrees that it shall act as agent (and the
Depositor, as Class R Certificateholder, is hereby appointed to act as agent)
and as Class R Certificateholder Tax Matters Person on behalf of the REMIC
Trust, 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 REMIC Trust,
using a calendar year as the taxable year for the REMIC Trust;
(ii) make, or cause to be made, an election,
on behalf of the REMIC Trust, to be treated as a REMIC on the
federal tax return of the REMIC Trust 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
REMIC Trust are within its control, conduct such affairs of
the REMIC Trust at all times that any Certificates are
outstanding so as to maintain the status of the REMIC Trust 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 REMIC Trust;
(vi) pay the amount of any and all federal,
state, and local taxes, including, without limitation, any
minimum tax imposed by Section 23151(a) and 23153(a) of the
Pennsylvania Revenue and Taxation Code upon the Trustee or the
Certificateholders in
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connection with the Trust, the Trust Fund or the Mortgage
Loans, 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 4.02, 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 9.01(c) and 9.05 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 5.12 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 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 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 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 any time 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, 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
93
Internal Revenue Service or state tax authorities), other than
the expense of obtaining any Opinion of Counsel required
pursuant to Sections 3.03, 5.10 and 8.02 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:
(A) 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;
(B) 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;
(C) the Prepayment Assumption and any
interest rate assumptions used in determining the
projected principal and interest cash flows described
above;
(D) 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;
(E) 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 REMIC
with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(F) the amount and timing of any
non-interest expenses of the REMIC; and
(G) any taxes (including penalties and
interest) imposed on the 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 of
Mortgaged Property to the Internal Revenue Service and/or the borrowers, as
applicable.
(e) 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
94
property" of the REMIC as defined in Section 860G(c) of the Code, on any
contribution to the REMIC after the Startup Day pursuant to Section 860G(d) of
the Code, or any other tax (other than any minimum tax imposed by Sections
23151(a) or 23153(a) of the Pennsylvania Revenue and Taxation Code) 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 Servicer, if such tax arises out of or results from a breach by the
Servicer of any of its obligations under this Agreement, or otherwise (iii) the
holders of the Class R Certificates in proportion to their Percentage Interests.
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 Distribution Date sufficient
funds to reimburse the Trustee for the payment of such tax (to the extent that
the Trustee has not been previously reimbursed or indemnified therefor).
Section 9.02 Certain Matters Affecting the Trustee. (a) Except
as otherwise provided in Section 9.01:
(i) the Trustee may rely and shall be
protected in acting or refraining from acting upon any
resolution, Officer's Certificate, 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,
order 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 by the Trustee
or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use
the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the
conduct of such person's own affairs;
(iv) the Trustee shall not be personally
liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Agreement;
(v) prior to the occurrence of an Event of
Default 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,
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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 Class A Certificates evidencing
Percentage Interests aggregating not less than 25%; 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 Servicer or, if paid by the Trustee, shall be repaid by
the Servicer upon demand from the 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 Day, 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 Servicer) to the
effect that the inclusion of such assets in the Trust Fund will not cause the
REMIC Trust to fail to qualify as a REMIC at any time that any Certificates are
outstanding or subject the REMIC Trust 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 Servicer for any taxes and
costs, including any attorney's fees, imposed or incurred by the Trust Fund or
the Servicer as a result of the breach of the Trustee's covenants set forth
within this subsection (b).
Section 9.03 Trustee 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
Depositor or the 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 Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the 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 9.04 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.
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Section 9.05 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's Fee in accordance with the
provision of Section 6.04(a). Additionally, the Trustee hereby covenants, for
the benefit of the Depositor, that the Trustee has arranged separately with the
Servicer for the payment to the Trustee of all of the Trustee's expenses in
connection with this Agreement, including, without limitation, all of the
Trustee's fees and expenses in connection with any actions taken by the Trustee
pursuant to Section 9.12 hereof. For the avoidance of doubt, the parties hereto
acknowledge that it is the intent of the parties that the Depositor and the
Certificate Insurer shall not pay any of the Trustee's fees and expenses in
connection with this transaction. The Trustee shall not be entitled to
compensation for any expense, disbursement or advance as may arise from its
negligence or bad faith, and 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 Servicer and held
harmless against any loss, liability, claim, damage or expense arising out of,
or imposed upon the Trust or the Trustee through the Servicer's acts or
omissions in violation of this Agreement, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence of
the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder. The
obligations of the Servicer under this Section 9.05 arising prior to any
resignation or termination of the Servicer hereunder shall survive termination
of the Servicer and payment of the Certificates, and shall extend to any
co-trustee appointed pursuant to this Article IX.
Section 9.06 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a banking entity (a) 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 BBB- by S&P and Baa3 by Moody's (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 as evidenced in writing. If such banking entity 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
determining an entity's combined capital and surplus for clause (c) of this
Section, the amount set forth in its most recent report of condition so
published shall be deemed to be its combined capital and surplus. 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 9.07.
Section 9.07 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 Servicer, the Certificate Insurer and
all Certificateholders. Upon receiving such notice of resignation, the Servicer
at the direction of the Certificate Insurer 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
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the Depositor, the Certificateholders, the Certificate Insurer and the Depositor
by the Servicer. Unless a successor trustee shall have been so appointed and
shall 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 9.06 and shall fail to resign after
written request therefor by the 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 Servicer (with the consent of the Certificate Insurer) or
the Certificate Insurer may remove the Trustee and the Servicer shall, within 30
days after such removal, appoint, at the direction of the Certificate Insurer, 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 and the
Certificate Insurer by the 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 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 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
not become effective until acceptance of appointment by the successor trustee as
provided in Section 9.08.
Section 9.08 Successor Trustee. Any successor trustee
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor, the Certificate Insurer, the Servicer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with 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 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 9.06.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register and to the Rating Agencies. If the Servicer fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Servicer.
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Section 9.09 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated or any 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 9.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.10 Appointment of Co-Trustee or Separate Trustee.
(a) 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
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 and the consent of the Certificate Insurer, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 9.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 9.08 hereof.
(b) 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 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.
(c) 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.
99
(d) 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. The 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 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 five
(5) Business Days after its receipt thereof, the Servicer shall (a) sign on
behalf of the Trust Fund any Tax Return that the Servicer is required to sign
pursuant to applicable federal, state or local tax laws, and (b) cause such Tax
Return to be 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.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Limitation on Liability of the Depositor and the
Servicer. None of the Depositor or the Servicer nor any of the directors,
officers, employees or agents of the Depositor or the 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 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 gross negligence in the performance of duties
or by reason of reckless disregard of obligations or duties hereunder. The
Depositor or the Servicer and any director, officer, employee or agent of the
Depositor or the 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 10.02 Acts of Certificateholders. (a) Except as
otherwise specifically provided herein, whenever Certificateholder action,
consent or approval is required under this
100
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 heirs 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.
Section 10.03 Amendment. (a) This Agreement may be amended
from time to time by the Servicer, the Depositor and the Trustee by written
agreement, upon the prior written consent 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, adversely affect in any material respect the interests of any
Certificateholder; 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. The Trustee shall
give prompt written notice to the Rating Agencies of any amendment made pursuant
to this Section 10.03 or pursuant to Section 6.09 of the Loan Sale Agreement.
(b) This Agreement may be amended from time to time by the
Servicer, the Depositor and the Trustee with the consent of the Certificate
Insurer, the Majority Certificateholders and the Holders of the majority of the
Percentage Interest in 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
receives an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not adversely affect the status of the REMIC Trust
as a REMIC or cause a tax to be imposed on the 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.
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(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 10.04 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 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 10.05 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 Servicer, _______, Attention: _______, (ii)
in the case of the Depositor, _______, Attention: _______, (iii) in the case of
the Trustee, _______ Attention: _______, (iv) in the case of the
Certificateholders, as set forth in the Certificate Register, (v) in the case of
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Home Equity Monitoring Group, (vi) in the case of Standard & Poor's
Rating Services, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Residential
Mortgage Surveillance Group, (viii) in the case of the Certificate Insurer,
________________________ Attention: Surveillance Department (in each case in
which notice or other communication to the Certificate Insurer refers to an
Event of Default, a claim on the Certificate Insurance Policy or with respect to
which failure on the part of the Certificate Insurer to respond shall be deemed
to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of each of the General
Counsel and the Head -Financial Guaranty Group and shall be marked to indicate
"URGENT MATERIAL ENCLOSED") and (viii) in the case of the Underwriter,
Prudential Securities Secured Financing Corporation or Prudential Securities
Incorporated, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇.
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 10.07 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.
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Section 10.08 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 Servicer shall be rendered as an
independent contractor and not as agent for the Certificateholders.
Section 10.09 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 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
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 Depositor to act, as their agent,
as the Tax Matters Person for the REMIC Trust 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.
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Section 10.16 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 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 10.06 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 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 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 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.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Servicer, the Trustee and the
Depositor have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
_________________________________________
___, as Depositor
By:
Name:
Title:
______________________________, as Servicer
By:_________________________________________
Name:
Title:
________________________________, as Trustee
By:_________________________________________
Name:
Title:
[Signature Page to Pooling and Servicing Agreement]
EXHIBIT A
FORM OF CLASS A-[ ] CERTIFICATE
Series ______ Pass-Through Rate: _____%
No. A-[ ]-__
Original Certificate Principal Maximum Collateral Amount:
Balance: $______ $________
CUSIP: ______ Percentage Interest of this Certificate: 100%
Cut-Off Date: Date of Pooling and Servicing Agreement: As of
Close of business ______ ________
Closing Date: ______
First Distribution Date: ______ Latest Maturity Date: ________
Servicer: ________ Trustee: ________
-----------------------------------
Unless this Certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation ("DTC"),
to the Depositor 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.
This certifies that CEDE & CO. is the registered owner of a
Class A-[ ] Certificate percentage interest (the "Percentage Interest") in
certain first and second lien mortgage loans (the "Mortgage Loans") serviced by
________ (hereinafter called the "Servicer"), in its capacity as servicer under
that certain Pooling and Servicing Agreement (the "Agreement") dated as of
________ among ________, as servicer, ________, as depositor (the "Depositor")
and ________, as trustee (the "Trustee"). The Mortgage Loans were originated or
acquired by_________ and ________ (together, the "Originators") and sold to the
Depositor pursuant to that certain Loan Sale Agreement, dated as of ________,
among the Depositor and the Originators. The Mortgage Loans will be serviced by
the Servicer pursuant to the terms and conditions of the Agreement, certain of
the pertinent provisions of which are set forth herein. 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.
A-1-1
On each Distribution Date, commencing on ________, the Trustee
shall distribute to the Person in whose name this Certificate is registered on
the last day of the month next preceding the month of such distribution (the
"Record Date"), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of the Class A-[ ] Certificates on such Distribution Date pursuant to
Section 6.05 of the Agreement.
Distributions on this Certificate will be made by the Trustee
by wire transfer of immediately available funds to the account of the Person
entitled thereto as shall appear on the Certificate Register without the
presentation or surrender of this Certificate (except for the final distribution
as described below) or the making of any notation thereon, at a bank or other
entity having appropriate facilities therefor, if such Person 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 so
notified the Trustee at least five business days prior to the related Record
Date, or by check mailed to the address of such Person appearing in the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained for that purpose by the Trustee in New York, New
York.
This Certificate is one of a duly authorized issue of
Certificates designated as ________, Mortgage Pass-Through Certificates, Series
________, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 and
Class R (herein called the "Certificates") and representing undivided ownership
of (i) such Mortgage Loans as from time to time are subject to the Agreement,
together with the Mortgage Files relating thereto and all collections thereon
and proceeds thereof (other than payments of interest that accrued on each
Mortgage Loan up to the Cut-Off Date), (ii) such assets as from time to time are
identified as REO Property and collections thereon and proceeds thereof, assets
that are deposited in the Accounts, including amounts on deposit in such
Accounts and invested in Permitted Investments, (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to the Agreement and any Insurance Proceeds, (iv) the
Certificate Insurance Policy, (v) Liquidation Proceeds and (vi) Released
Mortgaged Property Proceeds.
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Originators, the Certificate
Insurer or the Trustee and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Government National Mortgage Association, the Federal
Housing Administration or the Veterans Administration or any other governmental
agency. The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans and, with respect to the Class A
Certificates, Insured Payments under the Certificate Insurance Policy, all as
more specifically set forth herein and in the Agreement. In the event Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Servicer from related recoveries on such Mortgage Loan.
A-1-2
________ (the "Certificate Insurer") has issued a surety bond
with respect to the Class A Certificates, which guarantees certain payments on
the Class A Certificates, as described in the Agreement.
Subject to certain restrictions, the Agreement permits the
amendment thereof by the Depositor, the Servicer and the Trustee. Subject to the
rights of the Certificate Insurer, the Agreement permits the Majority
Certificateholders to waive, on behalf of all Certificateholders, any default by
the Servicer in the performance of its obligations under the Agreement and its
consequences, except in a default in making any required distribution on a
Certificate. Any such consent or waiver by the Majority Certificateholders shall
be conclusive and binding on the holder of this Certificate and upon all future
holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in New York,
New York, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to, the Trustee, duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same aggregate undivided
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only in fully-registered form.
As provided in the Agreement and subject to certain limitations therein set
forth, a Certificate is exchangeable for a new Certificate evidencing the same
undivided ownership 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 Servicer, the Depositor, the Originators and the Trustee
and any agent of any of the foregoing, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
foregoing shall be affected by notice to the contrary.
The obligations created by the Agreement shall terminate upon
notice to the Trustee of: (i) the later of (a) the distribution to
Certificateholders of the final payment or collection with respect to the last
Mortgage Loan (or Periodic Advances of same by the Servicer), or the disposition
of all funds with respect to the last Mortgage Loan and the remittance of all
funds due under the Agreement and the payment of all amounts due and payable to
the Certificate Insurer and the Trustee or (b) mutual consent of the Servicer,
the Certificate Insurer and all Certificateholders, or (ii) the purchase by the
Servicer of all outstanding Mortgage Loans and REO Properties at a price
determined as provided in the Agreement (the exercise of the right of the
Servicer to purchase all
A-1-3
the Mortgage Loans and property in respect of Mortgage Loans will result in
early retirement of the Certificates), the right of the Servicer to purchase
being subject to the Pool Principal Balance of the Mortgage Loans and REO
Properties at the time of purchase being less than ten percent (10%) of the
Maximum Collateral Amount. Unless this Certificate has been authenticated by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
Unless this Certificate has been countersigned by the Trustee,
by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed by its authorized officer.
_______________________________, not in its
individual capacity, but solely as Trustee
By:____________________________
CERTIFICATE OF AUTHENTICATION
This is a Class A-[ ] Certificate referred to in the
within-mentioned Agreement, which Certificate is issued to Cede & Co. in the
initial denomination of $________.
_______________________________, not in its
individual capacity, but solely as Trustee
By:____________________________
Dated: ________
A-1-5
EXHIBIT B
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAW OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE AGREEMENT REFERRED TO HEREIN.
SOLELY 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").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN OPINION OF COUNSEL TO THE
TRUSTEE AND (2) AN AFFIDAVIT TO THE TRUSTEE THAT SUCH TRANSFEREE IS A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT) OR AN AGENT OF A
PERMITTED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER OF THIS CLASS R CERTIFICATE TO A PERSON OTHER THAN A
PERMITTED TRANSFEREE OR AN AGENT OF A PERMITTED TRANSFEREE SUCH REGISTRATION
SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
NO TRANSFER OF THIS 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, NOR TO AN ENTITY WHOSE UNDERLYING ASSETS ARE
DEEMED TO BE ASSETS OF SUCH A PLAN, ACCOUNT OR ARRANGEMENT BY REASON OF SUCH
PLAN'S, ACCOUNT'S OR ARRANGEMENT'S INVESTMENT IN THE ENTITY, AS DETERMINED UNDER
U.S. DEPARTMENT OF LABOR REGULATIONS 29 C.F.R. ss. 2510.3-101 OR OTHERWISE.
B-1
Series ________ Percentage Interest of this Certificate:
No. R-1 100%
Cut-Off Date: Date of Pooling and Servicing
Close of business ________ Agreement: As of _______
Closing Date: ________ Latest Maturity Date: ________
First Distribution Date: ________ Trustee: ________
Servicer: ________
________________________________
This certifies that ________ is the registered owner of a
Class R percentage interest (the "Percentage Interest") in certain first or
second lien mortgage loans (the "Mortgage Loans") serviced by ________
(hereinafter called the "Servicer"), in its capacity as servicer under that
certain Pooling and Servicing Agreement (the "Agreement") dated as of ________
among ________, as servicer, ________, as depositor (the "Depositor") and
________, as trustee (the "Trustee"). The Mortgage Loans were originated or
acquired by ________ and ________ (the "Originators") and sold to the Depositor
pursuant to that certain Loan Sale Agreement, dated as of ________, among the
Depositor and the Originators. The Mortgage Loans will be serviced by the
Servicer pursuant to the terms and conditions of the Agreement, certain of the
pertinent provisions of which are set forth herein. 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.
On each Distribution Date, commencing on ________, the Trustee
shall distribute to the Person in whose name this Certificate is registered on
the last day of the month next preceding the month of such distribution (the
"Record Date"), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of the Class R Certificates on such Distribution Date pursuant to
Section 6.05 of the Agreement.
Distributions on this Certificate will be made by the Trustee
by wire transfer of immediately available funds to the account of the Person
entitled thereto as shall appear on the Certificate Register without the
presentation or surrender of this Certificate (except for the final distribution
as described below) or the making of any notation thereon, at a bank or other
entity having appropriate facilities therefor, if such Person shall own of
record Certificates of the same Class which have at least a 10% Percentage
Interest appearing in the Certificate Register and shall have so notified the
Trustee at least five business days prior to the related Record Date, or by
check mailed to the address of such Person appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of
B-2
this Certificate at the office or agency maintained for that purpose by the
Trustee in New York, New York.
This Certificate is one of a duly authorized issue of
Certificates designated as ________, Mortgage Pass-Through Certificates,
________, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 and
Class R (herein called the "Certificates") and representing undivided ownership
of (i) such Mortgage Loans as from time to time are subject to the Agreement,
together with the Mortgage Files relating thereto and all collections thereon
and proceeds thereof (other than payments of interest that accrued on each
Mortgage Loan up to the Cut-Off Date), (ii) such assets as from time to time are
identified as REO Property and collections thereon and proceeds thereof, assets
that are deposited in the Accounts, including amounts on deposit in such
Accounts and invested in Permitted Investments, (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to the Agreement and any Insurance Proceeds, (iv) the
Certificate Insurance Policy, (v) Liquidation Proceeds and (vi) Released
Mortgaged Property Proceeds.
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Originators, ___________________
(the "Certificate Insurer") or the Trustee and are not insured or guaranteed by
the Federal Deposit Insurance Corporation, the Government National Mortgage
Association, the Federal Housing Administration or the Veterans Administration
or any other governmental agency. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans and,
with respect to the Class A Certificates, Insured Payments under the Certificate
Insurance Policy, all as more specifically set forth herein and in the
Agreement. In the event Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Servicer from related recoveries on
such Mortgage Loan.
Subject to certain restrictions, the Agreement permits the
amendment thereof by the Depositor, the Servicer and the Trustee. Subject to the
rights of the Certificate Insurer, the Agreement permits the Majority
Certificateholders to waive, on behalf of all Certificateholders, any default by
the Servicer in the performance of its obligations under the Agreement and its
consequences, except in a default in making any required distribution on a
Certificate. Any such consent or waiver by the Majority Certificateholders shall
be conclusive and binding on the holder of this Certificate and upon all future
holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.
As provided in the Agreement and subject to certain
limitations therein set forth, including, without limitation, with respect to
the Class R Certificates, execution and delivery as appropriate of the Transfer
Affidavit and Agreement (attached as an exhibit to the Agreement) and the
Transfer Certificate (attached as an exhibit to the Agreement) described in
Section 4.02(i) of the Agreement, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Trustee in
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇-▇
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to, the Trustee, duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same aggregate undivided
Percentage Interest will be issued to the designated transferee or transferees.
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"), nor to
an entity whose underlying assets are deemed to be assets of such a plan,
account or arrangement by reason of such plan's, account's or arrangement's
investment in the entity, as determined under U.S. Department of Labor
Regulations 29 C.F.R. ss. 2510.3-101 or otherwise.
The Certificates are issuable only in fully-registered form.
As provided in the Agreement and subject to certain limitations therein set
forth, a Certificate is exchangeable for a new Certificate evidencing the same
undivided ownership 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 Servicer, the Depositor, the Originators and the Trustee
and any agent of any of the foregoing, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
foregoing shall be affected by notice to the contrary.
The obligations created by the Agreement shall terminate upon
notice to the Trustee of: (i) the later of (a) the distribution to
Certificateholders of the final payment or collection with respect to the last
Mortgage Loan (or Periodic Advances of same by the Servicer), or the disposition
of all funds with respect to the last Mortgage Loan and the remittance of all
funds due under the Agreement and the payment of all amounts due and payable to
the Certificate Insurer and the Trustee or (b) mutual consent of the Servicer,
the Certificate Insurer and all Certificateholders, or (ii) the purchase by the
Servicer of all outstanding Mortgage Loans and REO Properties at a price
determined as provided in the Agreement (the exercise of the right of the
Servicer to purchase all the Mortgage Loans and property in respect of Mortgage
Loans will result in early retirement of the Certificates), the right of the
Servicer to purchase being subject to the Pool Principal Balance of the Mortgage
Loans and REO Properties at the time of purchase being less than ten percent
(10%) of the Maximum Collateral Amount. By its acceptance of this Certificate,
the Certificateholder hereby appoints the Servicer as its attorney-in-fact to
negotiate the sale and effect the transfer of a Class R Certificate in
accordance with Section 4.02(i) of the Agreement and to adopt a plan of
liquidation of the Trust Fund in accordance with Section 8.02 of the Agreement.
B-4
Unless this Certificate has been countersigned by the Trustee,
by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed by its authorized officer.
________________________________, not in its
individual capacity, but solely as Trustee
By: ________________________________
CERTIFICATE OF AUTHENTICATION
This is a Class R Certificate referred to in the
within-mentioned Agreement.
___________________________,
not in its individual capacity, but
solely as Trustee
By: ________________________________
Dated: ________
B-5
EXHIBIT C
CONTENTS OF THE MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items (copies to the extent the originals have
been delivered to the Trustee pursuant to Section 2.03 of the Agreement), all of
which shall be available for inspection by the Certificateholders, to the extent
required by applicable laws:
1. The original Mortgage Note, with all prior and intervening
endorsements showing a complete chain of endorsements from the
originator of the Mortgage Loan to the Person so endorsing the
Mortgage Loan to the Trustee, endorsed by such Person "Pay to
the order of ________________ without recourse" and signed, by
facsimile or manual signature, in the name of the Depositor by
a Responsible Officer.
2. Either: (i) the original Mortgage, and related power of
attorney, if any, with evidence of recording thereon, or (ii)
a copy of the Mortgage and related power of attorney, if any,
certified as a true copy of the original Mortgage or power of
attorney by a Responsible Officer of the Depositor on the face
of such copy substantially as follows: "certified true and
correct copy of original which has been transmitted for
recordation."
3. Either: (i) The original Assignment of Mortgage in recordable
form in blank or (ii) a copy of the Assignment certified as a
true copy of the original Assignment by a Responsible Officer
of the Depositor on the face of such copy substantially as
follows: "certified true and correct copy of original which
has been transmitted for recordation." Any such Assignments of
Mortgage may be made by blanket assignments for Mortgage Loans
secured by the Mortgaged Properties located in the same
county, if permitted by applicable law.
4. The original lender's policy of title insurance or a true copy
thereof, or if such original lender's title insurance policy
has been lost, a copy thereof certified by the appropriate
title insurer to be true and complete, or if such lender's
title insurance policy has not been issued as of the Closing
Date, a marked up commitment (binder) to issue such policy.
5. All original intervening assignments, if any, showing a
complete chain of assignments from the originator to the
related Originator, including any recorded warehousing
assignments, with evidence of recording thereon, certified by
a Responsible Officer of the related Originator by facsimile
or manual signature as a true copy of the original of such
intervening assignments.
6. Originals of all assumption, written assurance, substitution
and modification agreements, if any.
C-1
EXHIBIT D
CERTIFICATE RE: PREPAID LOANS
I, ______________, ____________ of ________, as Depositor,
hereby certify that between the "Cut-Off Date" (as defined in the Pooling and
Servicing Agreement dated as of ________ among ________, ________ and ________,
as trustee) and the "Startup Day" the following schedule of "Mortgage Loans"
(each as defined in the Pooling and Servicing Agreement) have been prepaid in
full.
Dated: ________
By:______________________________________
Name:
Title:
D-1
EXHIBIT E
TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
________
[Depositor]
[Servicer]
[Certificate Insurer]
Re: Pooling and Servicing Agreement, dated as of ________ (the
"Pooling and Servicing Agreement"), among ________, as
Depositor, ________, as Servicer, and ________, as Trustee,
________, Mortgage Pass-Through Certificates, Series
________, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6 and Class R
____________________________________________________________
Ladies and Gentlemen:
In accordance with Section 2.06 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby acknowledges
receipt by it in good faith without notice of adverse claims, subject to the
provisions of Sections 2.05 and 2.06 of the Pooling and Servicing Agreement (as
such provisions relate to the Initial Mortgage Loans), of (x) the documents
relating to the Initial Mortgage Loans referred to in Section 2.05(a) of the
Pooling and Servicing Agreement, except with respect to the list of exceptions
attached hereto, and based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule accurately reflects
information set forth in the Mortgage File as well as the assignment to it of
all other assets included in clauses (i) and (iii) of the definition of "Trust
Fund", (y) the Certificate Account, the Pre-Funding Account and the Capitalized
Interest Account and (z) the Certificate Insurance Policy and declares that it
holds and will hold the Certificate Insurance Policy and such documents and the
other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold all such assets and such other assets included in the
definition of "Trust Fund" that are delivered to it, in trust for the exclusive
use and benefit of all present and future Certificateholders.
The Trustee has made no independent examination of any such
documents beyond the review specifically required in the above-referenced
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any such
documents or any of the Mortgage Loans identified on the Mortgage Loan Schedule,
or (ii) the collectability, insurability, effectiveness or suitability of any
such Mortgage Loan.
E-1
The Schedule of Mortgage Loans is attached to this Receipt.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
__________________________________,
as Trustee
By:________________________________
Name:
Title:
E-2
EXHIBIT F
INITIAL CERTIFICATION OF TRUSTEE
[Depositor]
[Servicer]
[Certificate Insurer]
Re: Pooling and Servicing Agreement, dated as of ________ (the
"Pooling and Servicing Agreement") among ________, as
Depositor, ________, as Servicer, and ________, as Trustee,
________, Mortgage Pass-Through _______, Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class A-3, Class A-4, Class A-5, Class A-6 and Class R
______________________________________________________________
Ladies and Gentlemen:
In accordance with the provisions of Section 2.06 of the
above-referenced Pooling and Servicing Agreement, the undersigned, as Trustee,
hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan listed
on the attachment hereto), it has reviewed the documents delivered to it
pursuant to Section 2.03 of the Pooling and Servicing Agreement and has
determined that (i) all documents required to be delivered to it pursuant to the
above-referenced Pooling and Servicing Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
have not been mutilated, damaged, torn or otherwise physically altered and
relate to such Mortgage Loan, (iii) based on its examination and only as to the
foregoing documents, the information set forth in the Mortgage Loan Schedule
respecting such Mortgage Loan accurately reflects the information set forth in
the Trustee's Mortgage File and (iv) each Mortgage Note has been endorsed as
provided in Section 2.03 of the Pooling and Servicing Agreement. The Trustee has
made no independent examination of such documents beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, enforceability or
genuineness of any such documents contained in each or any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
__________________________, as Trustee
By:_____________________________________
Name:
Title:
F-1
EXHIBIT G
FINAL CERTIFICATION OF TRUSTEE
[Depositor]
[Servicer]
[Certificate Insurer]
Re: Pooling and Servicing Agreement, dated as of ________ (the
"Pooling and Servicing Agreement") among ________, as
Depositor, ________, as Servicer, and ________, as Trustee,
________, Mortgage Pass-Through Certificates, Series ________,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6and Class R
_______________________________________________________________
Ladies and Gentlemen:
In accordance with Section 2.06 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that,
except as noted on the attachment hereto, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the documents delivered to it pursuant to
Section 2.03 of the Pooling and Servicing Agreement and has determined that (i)
all documents required to be delivered to it pursuant to the above-referenced
Pooling and Servicing Agreement are in its possession, (ii) such documents have
been reviewed by it and appear regular on their face and have not been
mutilated, damaged, torn or otherwise physically altered and relate to such
Mortgage Loan, and (iii) based on its examination, and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule respecting
such Mortgage Loan accurately reflects the information set forth in the
Trustee's Mortgage File. The Trustee has made no independent examination of such
documents beyond the review specifically required in the above-referenced
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
___________________________________,
as Trustee
By:_________________________________
Name:
Title:
G-1
EXHIBIT H
REQUEST FOR RELEASE OF DOCUMENTS
________________, ______
To: [Trustee]
Re: _______, Mortgage Pass-Through Certificates, Series _______,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6 and Class R
______________________________________________________________
In connection with the administration of the pool of Mortgage
Loans held by you as Trustee for the Certificateholders, we request the release,
and acknowledge receipt, of the (Trustee's Mortgage File/[specify document]) for
the Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
____ 1. Mortgage Loan Paid in Full
(Servicer hereby certifies that all amounts received
in connection therewith have been credited to the
Collection Account.)
____ 2. Mortgage Loan Liquidated
(Servicer hereby certifies that all proceeds of
foreclosure, insurance or other liquidation have been
finally received and credited to the Collection
Account.)
____ 3. Mortgage Loan in Foreclosure
____ 4. Mortgage Loan Repurchased Pursuant to Section 5.18 of the
Pooling and Servicing Agreement.
____ 5. Mortgage Loan Repurchased or Substituted pursuant to Article
II or III of the Pooling and Servicing Agreement (Servicer
hereby certifies that the repurchase price or Substitution
Adjustment has been credited to the Certificate Account
and that the substituted mortgage loan is a Qualified Substitute
Mortgage Loan.)
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____ 6. Other (explain)_______________________________________________
If box 1 or 2 above is checked, and if all or part of the
Trustee's Mortgage File was previously released to us, please release to us our
previous receipt on file with you, as well as any additional documents in your
possession relating to the above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all
of the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
By: __________________________________
Name:
Title:
Documents returned to Trustee:
__________________________, as
Trustee
By:_____________________________
Date:___________________________
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EXHIBIT I
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of ________, Mortgage Pass-Through Certificates, Series
________, Class R (the "Owner")), a [savings institution] [corporation] duly
organized and existing under the laws of [the State of ______] [the United
States], on behalf of which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986 (the "Code"), (ii) will endeavor to remain
other than a disqualified organization for so long as it retains its ownership
interest in the Class R Certificates, and (iii) is acquiring the Class R
Certificates for its own account or for the account of another Owner from which
it has received an affidavit and agreement in substantially the same form as
this affidavit and agreement. A "Permitted Transferee" is any person other than
a "disqualified organization" or a possession of the United States. (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity) or any foreign government, international organization or any agency or
instrumentality of such foreign government or organization, any rural electric
or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that generally is exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be
imposed on transfers of Class R Certificates to disqualified organizations under
the Code, that applies to all transfers of Class R Certificates after ________;
(ii) that such tax would be on the transferor, or, if such transfer is through
an agent (which person includes a broker, nominee or middleman) for a
disqualified organization, on the agent; (iii) that the person otherwise liable
for the tax shall be relieved of liability for the tax if the transferee
furnishes to such person an affidavit that the transferee is not a disqualified
organization and, at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that the Class R Certificates
may be "noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code
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and that the transferor of a noneconomic residual interest will remain liable
for any taxes due with respect to the income on such residual interest, unless
no significant purpose of the transfer was to impede the assessment or
collection of tax.
4. That the Owner is aware of the tax imposed on a
"pass-through entity" holding Class R Certificates if at any time during the
taxable year of the pass-through entity a disqualified organization is the
record holder of an interest in such entity. (For this purpose, a "pass through
entity" includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not register
the transfer of any Class R Certificates unless the transferee, or the
transferee's agent, delivers to it an affidavit and agreement, among other
things, in substantially the same form as this affidavit and agreement. The
Owner expressly agrees that it will not consummate any such transfer if it knows
or believes that any of the representations contained in such affidavit and
agreement are false.
6. That the Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of Section 4.02(i) of
the Pooling and Servicing Agreement under which the Class R Certificates were
issued (in particular, clauses (g) and (h) of Section 4.02(i) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such
Certificates in violation of Section 4.02(i)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
8. That the Owner's Taxpayer Identification Number is
____________.
9. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.
10. That no purpose of the Owner relating to the transfer of
any of the Class R Certificates by the Owner is or will be to impede the
assessment or collection of any tax.
11. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so long as any
of the Certificates remain outstanding.
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12. That the Owner has no present knowledge or expectation
that it will become insolvent or subject to a bankruptcy proceeding for so long
as any of the Class R Certificates remain outstanding.
13. That the Owner is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
14. That the Owner will, in connection with any transfer that
it makes of the Class R Certificates, deliver to the Trustee an affidavit in
form and substance satisfactory to the Trustee, representing and warranting that
it is not transferring the Class R Certificates to impede the assessment or
collection of any tax and that it has no actual knowledge that the proposed
transferee: (i) has insufficient assets to pay any taxes owned by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class R Certificates
remains outstanding and; (iii) is not a Permitted Transferee.
15. That the Owner agrees to require a Transfer Affidavit and
Agreement from any person to whom the Owner attempts to transfer a percentage
interest in the Class R Certificates, and in connection with any transfer by a
person for whom the Owner is acting as nominee, trustee or agent, and the Owner
will not transfer its percentage interest or cause any percentage interest to be
transferred to any person that the Owner knows is not a Permitted Transferee. In
connection with any such transfer by the Owner, the Owner agrees to deliver to
the Trustee a transfer certificate in the form attached to the Pooling and
Servicing Agreement as Exhibit J to the effect that the Owner has no actual
knowledge that the person to which the transfer is to be made is not a Permitted
Transferee.
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IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this _ day of .
[NAME OF OWNER]
By: ____________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
______________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of
Officer], known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that he executed the same as his free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of
________________ ____.
NOTARY PUBLIC________________________
COUNTY OF____________________________
STATE OF_____________________________
My Commission expires the____
day of ____________, ____.
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EXHIBIT J
TRANSFEROR'S CERTIFICATE
________________, 19__
[Trustee]
Attention: Corporate Trust Administration
Re: ________, Mortgage Pass-Through Certificates, Series ________,
Class R Certificates
______________________________________________________________
Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _____________________ (the "Seller") to ______________________ (the
"Purchaser") of a ___% Percentage Interest of ________, Mortgage Pass-Through
Certificates, Series ________, Class R (the "Certificates"), pursuant to Section
4.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of ________ among ________, as servicer (the "Company"),
________, as depositor, and ________, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to
the Trustee and the Company a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit I. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller has no actual knowledge that the proposed
Transferee is not both a United States Person and a Permitted Transferee.
Very truly yours,
___________________________
(Seller)
By:________________________
Name:
Title:
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EXHIBIT K
ERISA INVESTMENT REPRESENTATION LETTER
[Depositor]
[Servicer]
[Trustee]
Re: ________, Mortgage Pass-ThroughCertificates,
Series ________, Class R Certificates
_____________________________________________________________
The undersigned (the "Purchaser") proposes to purchase certain
Class R Certificates (the "Certificates"). In doing so, the Purchaser hereby
acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and
not otherwise defined shall have the meaning given it in the Pooling and
Servicing Agreement, dated as of ________ (the "Agreement"), among ________, as
Depositor (the "Depositor"), ________, as Servicer (the "Servicer") and
________, as Trustee (the "Trustee") relating to the Certificates.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
the Depositor and the Trustee that the Purchaser is not a pension or benefit
plan or individual retirement arrangement that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or to Section 4975
of the Code or an entity whose underlying assets are deemed to be assets of such
a plan or arrangement by reason of such plan's or arrangement's investment in
the entity, as determined under U.S. Department of Labor Regulations 29 C.F.R.
ss. 2510.3-101 or otherwise.
IN WITNESS WHEREOF, the undersigned has caused this ERISA
Investment Representation Letter to be validly executed by its duly authorized
representative as of the date first above written.
[NAME OF PURCHASER]
By:________________________
Name:
Title:
K-1
EXHIBIT L
FORM OF SUBSEQUENT TRANSFER AGREEMENT
________
________ and ________, as originators (the "Originators"),
________, as depositor (the "Depositor"), and ________, as purchaser (the
"Purchaser"), pursuant to the Pooling and Servicing Agreement, dated as of
________ (the "Pooling and Servicing Agreement"), among the Depositor, ________,
as servicer (in such capacity, the "Servicer") and ________, as trustee (the
"Trustee"), hereby confirm, as of this ____ day of _______, ________, their
understanding with respect to the sale by the Originators to the Depositor, and
the sale by the Depositor to the Purchaser of those Mortgage Loans listed on the
attached Schedule of Mortgage Loans (the "Subsequent Mortgage Loans").
Conveyance of Subsequent Mortgage Loans. The Originators do
hereby irrevocably sell, transfer, assign, set over and otherwise convey to the
Depositor, without recourse (except as otherwise explicitly provided for herein)
all of its right, title and interest in and to the Subsequent Mortgage Loans,
exclusive of the obligations of the Originators with respect to the Subsequent
Mortgage Loans but including specifically, without limitation, the Mortgages,
the Files and all other documents, materials and properties appurtenant thereto
and the Notes, including all interest and principal collected by the Originators
on or with respect to the Subsequent Mortgage Loans on or after the related
Subsequent Cut-Off Date, together with all of its right, title and interest in
and to the proceeds received on or after such Subsequent Cut-Off Date of any
related insurance policies on behalf of the Depositor. The Originators shall
deliver the original Note, Mortgage or mortgage assignment with evidence of
recording thereon (except as otherwise provided by the Pooling and Servicing
Agreement) and other required documentation in accordance with the delivery
requirements of the Depositor set forth in Section 2.05 of the Loan Sale
Agreement, dated as of ________ (the "Loan Sale Agreement"), among the
Originators and the Depositor.
The Depositor does hereby irrevocably sell, transfer, assign,
set over and otherwise convey to the Purchaser, without recourse (except as
otherwise explicitly provided for herein) all of its right, title and interest
in and to the Subsequent Mortgage Loans, exclusive of the obligations of the
Depositor or any other Person with respect to the Subsequent Mortgage Loans but
including specifically, without limitation, the Mortgages, the Files and all
other documents, materials and properties appurtenant thereto and the Notes,
including all interest and principal collected by the Depositor on or with
respect to the Subsequent Mortgage Loans on or after the related Subsequent
Cut-Off Date, together with all of its right, title and interest in and to the
proceeds received on or after such Subsequent Cut-Off Date of any related
insurance policies on behalf of the Purchaser. The Depositor shall deliver the
original Mortgage or mortgage assignment with evidence of recording thereon
(except as otherwise provided by the
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Pooling and Servicing Agreement) and other required documentation in accordance
with the terms set forth in Section 2.05 of the Pooling and Servicing Agreement.
The expenses and costs relating to the delivery of the
Subsequent Mortgage Loans specified in this Subsequent Transfer Agreement and
the Pooling and Servicing Agreement shall be borne by the Depositor.
The Originators and the Depositor hereby affirm the
representations and warranties set forth in the Loan Sale Agreement,
respectively, that relate to the Subsequent Mortgage Loans on the date hereof.
The Originators and the Depositor each hereby deliver notice and confirm that
each of the conditions set forth in Section 2.03(b) of the Pooling and Servicing
Agreement are satisfied as of the date hereof.
The Depositor hereby affirms any of its representations and
warranties set forth in the Loan Sale Agreement that relate to the Subsequent
Mortgage Loans as of the date hereof. The Depositor hereby delivers notice and
confirms that each of the conditions set forth in Section 2.03(b) to the Pooling
and Servicing Agreement are satisfied as of the date hereof.
Additional terms of the sale are attached hereto as Attachment A.
To the extent permitted by applicable law, this Subsequent
Transfer 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 counties or other comparable jurisdictions in which any or all of
the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Certificateholders' expense on the direction of
the Majority Certificateholders, 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.
Capitalized terms used herein but not defined herein shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to the principles of conflicts of laws.
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.
All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified, confirmed and incorporated herein; provided, that
in the event of any
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conflict the provisions of this Subsequent Transfer Agreement shall control
over the conflicting provisions of the Pooling and Servicing Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have hereby executed
this Agreement as of the date first above written.
__________________________
as Originator
By:_______________________
Name:
Title:
__________________________
, as Originator
By:_______________________
Name:
Title:
_________________________,
as Depositor
By:_______________________
Name:
Title:
_________________________,
as Trustee
By:_______________________
Name:
Title:
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