EXHIBIT 4.1
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CENDANT MORTGAGE CAPITAL LLC,
Depositor
[NAME OF MASTER SERVICER],
Master Servicer
[NAME OF TRUSTEE],
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of ________ 1, 20__
_________________________________
Mortgage Pass-Through Certificates, _____ Series ____-__
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...................................................3
Section 1.02 Accounting.....................................................47
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans...................................48
Section 2.02 Acceptance of Trust Fund by the Trustee........................51
Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller;
Assignment of Interest in Additional Collateral................52
Section 2.04 Representations, Warranties and Covenants of the
Master Servicer..........................................55
Section 2.05 Representations and Warranties of the Depositor................57
Section 2.06 Purpose and Powers of the Trust................................58
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master Servicer......................59
Section 3.02 Sub-Servicing Agreements Between the Master Servicer
and Sub-Servicers..............................................61
Section 3.03 Successor Sub-Servicers........................................62
Section 3.04 Liability of the Master Servicer...............................62
Section 3.05 No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders..................................62
Section 3.06 Assumption or Termination of Sub-Servicing Agreements
by Trustee.....................................................63
Section 3.07 Collection of Certain Mortgage Loan Payments...................63
Section 3.08 Sub-Servicing Accounts.........................................64
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.............................................64
Section 3.10 Collection Account and Distribution Account....................65
Section 3.11 Withdrawals From the Collection Account and Distribution
Account........................................................67
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account...........................................69
Section 3.13 Maintenance of the Primary Insurance Policies;
Collections Thereunder.........................................70
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage..........................................71
Section 3.15 Enforcement of Due-on-Sale Clauses; Assumption Agreements......73
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Section 3.16 Realization Upon Defaulted Mortgage Loans......................73
Section 3.17 Trustee to Cooperate; Release of Mortgage Files................76
Section 3.18 Servicing Compensation.........................................77
Section 3.19 Reports to the Trustee; Collection Account Statements..........78
Section 3.20 Statement as to Compliance.....................................78
Section 3.21 Independent Public Accountants' Servicing Report...............78
Section 3.22 Access to Certain Documentation................................79
Section 3.23 Title, Management and Disposition of REO Property..............79
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment
Interest Shortfalls............................................82
Section 3.25 Administration of Buydown Funds................................82
Section 3.26 Obligations of the Master Servicer in Respect of Loan
Rates and Monthly Payments ....................................83
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Distribution Account; Distributions............................84
Section 4.02 Statements to Certificateholders...............................87
Section 4.03 Remittance Reports; Advances by the Master Servicer............90
Section 4.04 Allocation of Realized Losses..................................91
Section 4.05 Information Reports to be Filed by the Master Servicer.........92
Section 4.06 Compliance With Withholding Requirements.......................92
Section 4.07 Distributions On the Uncertificated Remic I Regular Interests..92
Section 4.08 Surety Bond....................................................94
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...............................................95
Section 5.02 Registration of Transfer and Exchange of Certificates..........95
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............100
Section 5.04 Persons Deemed Owners.........................................101
Section 5.05 Appointment of Paying Agent...................................101
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor............102
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Master Servicer or the Depositor......................102
Section 6.03 Limitation On Liability of the Master Servicer and Others.....102
Section 6.04 Master Servicer Not to Resign.................................103
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Section 6.05 Delegation of Duties..........................................103
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Events of Termination.........................104
Section 7.02 Trustee to Act; Appointment of Successor......................106
Section 7.03 Waiver of Master Servicer Events of Termination...............107
Section 7.04 Notification to Certificateholders............................107
Section 7.05 Survivability of Master Servicer Liabilities..................107
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.............................................108
Section 8.02 Certain Matters Affecting the Trustee.........................110
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.........111
Section 8.04 Trustee May Own Certificates..................................112
Section 8.05 Master Servicer to Pay Trustee Expenses.......................112
Section 8.06 Eligibility Requirements for Trustee..........................113
Section 8.07 Resignation or Removal of Trustee.............................113
Section 8.08 Successor Trustee.............................................114
Section 8.09 Merger or Consolidation of Trustee............................114
Section 8.10 Appointment of Co-trustee or Separate Trustee.................114
Section 8.11 Limitation of Liability.......................................116
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates..................................................116
Section 8.13 Suits for Enforcement.........................................116
Section 8.14 Waiver of Bond Requirement....................................116
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.....117
Section 8.16 Right of Trustee in Capacity of Certificate Registrar
or Paying Agent...............................................117
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC Administration..........................................118
Section 9.02 Prohibited Transactions and Activities........................121
Section 9.03 Master Servicer and Trustee Indemnification...................121
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ARTICLE X
TERMINATION
Section 10.01 Termination...................................................122
Section 10.02 Additional Termination Requirements...........................123
ARTICLE XI
[RESERVED]
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.....................................................126
Section 12.02 Recordation of Agreement; Counterparts........................127
Section 12.03 Limitation on Rights of Certificateholders....................127
Section 12.04 Governing Law; Jurisdiction...................................128
Section 12.05 Notices.......................................................128
Section 12.06 Severability of Provisions....................................129
Section 12.07 Article and Section References................................129
Section 12.08 Notice to the Rating Agencies.................................129
Section 12.09 Further Assurances............................................130
Section 12.10 Benefits of Agreement.........................................130
Section 12.11 Acts of Certificateholders....................................130
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EXHIBITS:
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Exhibit A Form of Class A Certificates
Exhibit B Form of Class M Certificates
Exhibit C-1 Form of Class R Certificates
Exhibit C-2 Form of Class B Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Transferor Certificate
Exhibit F-2 Form of Transferee Representation Letter
Exhibit F-3 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit
Exhibit G Form of ERISA Representation Letter
Exhibit H Form of Lost Note Affidavit
Exhibit I-1 Form of Trustee's Initial Certification
Exhibit I-2 Form of Trustee's Final Certification
Exhibit J Mortgage Loan Purchase Agreement
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This Pooling and Servicing Agreement is dated as of ___________ 1, ____
(the "Agreement"), among CENDANT MORTGAGE CAPITAL LLC, as depositor (the
"Depositor"), [NAME OF MASTER SERVICER], as master servicer (the "Master
Servicer") and [NAME OF TRUSTEE], as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein). As provided herein, the Trustee will
make, in accordance with Section 9.01, an election to treat the entire
segregated pool of assets described in the definition of REMIC I (as defined
herein), and subject to this Agreement (including the Mortgage Loans), as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes
and such segregated pool of assets will be designated as "REMIC I." The
Uncertificated REMIC I Regular Interests will be the "regular interests" in
REMIC I and the Class R-I Certificates will be the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions (as defined herein)
under the federal income tax law. A segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests will be designated as "REMIC II," and
the Trustee will make, in accordance with Section 9.01, a separate REMIC
election with respect thereto. The Class I-A-1, Class I-A-2, Class I-A-IO, Class
II-A-1, Class II-A-IO, Class III-A-1, Class III-A-IO, Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates will be "regular
interests" in REMIC II, and the Class R-II Certificates will be the sole class
of "residual interests" therein for purposes of the REMIC Provisions (as defined
herein) under federal income tax law.
The following table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass- Through Rate, the initial Uncertificated Balance
and, solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Uncertificated
REMIC I Regular Interest. The Uncertificated REMIC I Regular Interests will not
be certificated.
Uncertificated REMIC I
Regular Interest Uncertificated REMIC I Initial Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date(1)
LTIA Variable (2) $[______________] _________ 25, ____
LTIB Variable (2) $[______________] _________ 25, ____
LTIIA Variable (2) $[______________] _________ 25, ____
LTIIB Variable (2) $[______________] _________ 25, ____
LTIIIA Variable (2) $[______________] _________ 25, ____
LTIIIB Variable (2) $[______________] _________ 25, ____
_____________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the latest
possible maturity date for the Mortgage Loans has been designated as the
"latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Balance or Original Notional
Amount, as the case may be, for ea+ch Class of Certificates comprising the
interests in the Trust Fund created hereunder:
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Original Class Certificate
Balance or Notional Initial Pass-Through Assumed Final Maturity
Class Amount Rate Dates
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I-A-1 $ ____% _______ 25, ____
I-A-2 $ ____% _______ 25, ____
I-A-IO (1) Variable(4) _______ 25, ____
II-A-1 $ ____% _______ 25, ____
II-A-IO (2) Variable(4) _______ 25, ____
III-A-1 $ Variable(4) _______ 25, ____
III-A-IO (3) Variable(4) _______ 25, ____
M-1 $ Variable(5) _______ 25, ____
M-2 $ Variable(5) _______ 25, ____
M-3 $ Variable(5) _______ 25, ____
B-1 $ Variable(5) _______ 25, ____
B-2 $ Variable(5) _______ 25, ____
B-3 $ Variable(5) _______ 25, ____
R-I N/A N/A _______ 25, ____
R-II N/A N/A _______ 25, ____
Total $
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(1) Original Notional Amount of $___________. No principal will be paid on
the Class I-A-IO Certificates.
(2) Original Notional Amount of $___________. No principal will be paid on
the Class II-A-IO Certificates.
(3) Original Notional Amount of $___________. No principal will be paid on
the Class III-A-IO Certificates.
(4) The Class I-A-IO, Class II-A-IO, Class III-A-1 and Class III-A-IO
Certificates will accrue interest at a variable rate. The rate for the
first Interest Accrual Period will be approximately _________%,
_________%, ________% and ___________%, respectively.
(5) The Class M Certificates and Class B Certificates will accrue interest
at a variable rate. The rate for the first Interest Accrual Period for
the Class M Certificates and Class B Certificates will be
approximately _____% per annum.
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest
will be calculated for all Certificates on the basis of a 360-day year
consisting of twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Any of the Collection Account and Distribution Account.
"Accrued Certificate Interest": An amount equal to the interest accrued
during the related Interest Accrual Period on the Class Certificate Balance or
Notional Amount, as applicable of each Class of Certificates at the
then-applicable Pass-Through Rate. Accrued Certificate Interest on any Class of
Certificates will be reduced by the amount of (i) Prepayment Interest Shortfalls
(to the extent not offset by the Master Servicer with a payment of Compensating
Interest as provided in Section 3.24), (ii) the interest portion (adjusted to
the Net Mortgage Rate) of Realized Losses (including Excess Losses) not
allocated solely to one or more specific Classes of Certificates pursuant to
Section 4.02, (iii) the interest portion of Advances previously made with
respect to a Mortgage Loan or REO Property which remained unreimbursed following
the Cash Liquidation or REO Disposition of such Mortgage Loan or REO Property
that were made with respect to delinquencies that were ultimately determined to
be Excess Losses and (iv) any other interest shortfalls not covered by the
subordination provided by the Class M Certificates and Class B Certificates,
including Relief Act Shortfalls, with all such reductions allocated among all of
the Certificates in proportion to their respective amounts of Accrued
Certificate Interest payable on such Distribution Date which would have resulted
absent such reductions.
"Additional Collateral": (i) With respect to any Mortgage 100(sm) Loan, the
Securities Account and the financial assets held therein subject to a security
interest pursuant to the related Mortgage 100(sm) Pledge Agreement, or (ii) with
respect to any Parent Power(R) Mortgage Loan, the related Parent Power(R)
Agreement and collateral pledged pursuant thereto.
"Additional Collateral Agreements": Each Mortgage 100(sm) Pledge Agreement,
Parent Power(R) Guaranty and Security Agreement for Securities Account, Parent
Power(R) Guaranty Agreement for Real Estate, Control Agreement, Equity Access(R)
Agreement and Equity Access(R) Mortgage, as applicable, for each Additional
Collateral Mortgage Loan.
"Additional Collateral Mortgage Loan": A Mortgage Loan that is supported by
Additional Collateral.
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"Additional Collateral Servicer": Either (i) MLCC or (ii) the Master
Servicer, if MLCC's obligations to administer the Additional Collateral under
the Loan Purchase and Sale Agreement have been terminated with respect to the
Additional Collateral Mortgage Loans.
"Advance": As to any Mortgage Loan or REO Property, any advance made by the
Master Servicer in respect of any Distribution Date pursuant to Section 4.03.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments and
supplements hereto.
"Applicable Credit Support Percentage": With respect to any Class of
Certificates, the sum of the related Class Subordination Percentages of such
Class and all Classes of Subordinate Certificates which have a lower relative
priority of payment than such Class.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the date
set forth as such in the Preliminary Statement.
"Available Funds": For any Distribution Date, the sum of the Group I
Available Funds, the Group II Available Funds and the Group III Available Funds.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Loss Coverage Amount": As of any date of determination prior to
the first anniversary of the Cut-off Date, an amount equal to the excess, if
any, of (A) $_______ over (B) the aggregate amount of Bankruptcy Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.02. As of any date of determination on or after the first
anniversary of the Cut-off Date, an amount equal to the excess, if any, of (1)
the lesser of (a) the Bankruptcy Loss Coverage Amount calculated as of the close
of business on the Business Day immediately preceding the most recent
anniversary of the Cut-off Date coinciding with or preceding such date of
determination (or, if such date of determination is an anniversary of the
Cut-off Date, the Business Day immediately preceding such date of determination)
(for purposes of this definition, the "Relevant Anniversary") and (b) the
greater of
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(A) the greater of (i) 0.0006 times the aggregate principal balance of
all the Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary
having a Loan-to-Value Ratio at origination which exceeds 75% and (ii)
$100,000; and (B) the greater of (i) the product of (x) an amount equal to
the largest difference in the related Monthly Payment for any Non-Primary
Residence Loan remaining in the Mortgage Pool which had an original
Loan-to-Value Ratio greater than 80% that would result if the Net Mortgage
Rate thereof was equal to the greater of (I) 5% or (II) the weighted
average (based on the principal balance of the Mortgage Loans as of the
Relevant Anniversary) of the Net Mortgage Rates of all Mortgage Loans as of
the Relevant Anniversary less 1.25% per annum, (y) a number equal to the
weighted average remaining term to maturity, in months, of all Mortgage
Loans with a Loan-to-Value Ratio of greater than 80% remaining in the
Mortgage Pool as of the Relevant Anniversary, and (z) one plus the quotient
of the number of all Non-Primary Residence Loans with a Loan-to-Value Ratio
of greater than 80% remaining in the Mortgage Pool divided by the total
number of outstanding Mortgage Loans in the Mortgage Pool as of the
Relevant Anniversary, and (ii) $______,
over (2) the aggregate amount of Bankruptcy Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.02 since the
Relevant Anniversary.
The Bankruptcy Loss Coverage Amount may be further reduced by the Master
Servicer (including accelerating the manner in which such coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency and (ii) provide a
copy of such written confirmation to the Trustee.
"Bankruptcy Losses": Losses that are incurred as a result of Debt Service
Reductions and Deficient Valuations.
"Book-Entry Certificates": Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the
Certificates (other than the Class R Certificates and the Private Certificates)
shall be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of Delaware, the State of New York, the State
of New Jersey, the State of Minnesota or the State of Maryland or in the city in
which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
"Buydown Account": The custodial account or accounts created and maintained
pursuant to Section 3.25.
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"Buydown Agreement": An agreement between the applicable originator and a
Mortgagor, or an agreement among such originator, a Mortgagor and an employer of
a relocated Mortgagor which, in each case, provides for the application of
Buydown Funds.
"Buydown Funds": In respect of any Buydown Mortgage Loan, any amount
contributed by the related originator or the employer of a relocated borrower in
order to enable the Mortgagor to reduce the payments required to be made from
the Mortgagor's funds during the Buydown Period. The Buydown Funds are not part
of the Trust Fund prior to deposit into the Collection Account or the
Distribution Account.
"Buydown Mortgage Loan": Any Mortgage Loan in respect of which, pursuant to
a Buydown Agreement, (i) the Mortgagor pays less than the full monthly payment
specified in the Mortgage Note during the Buydown Period and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is paid from the related Buydown Funds.
"Buydown Period": The period during which Buydown Funds are required to be
applied to the related Buydown Mortgage Loans as provided in Section 3.25.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of which
were more than $1,000 in excess of the principal balance of any existing first
mortgage or subordinate mortgage on the related Mortgaged Property and related
closing costs.
"Cash Liquidation": As to any defaulted Mortgage Loan other than REO
Property which has been acquired by the Master Servicer on behalf of the Trustee
for the benefit of the Certificateholders, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Master Servicer reasonably or in
good faith expects to be finally recoverable with respect to such Mortgage Loan.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or non-U.S. Person shall not be a Holder of a Class R Certificate for any
purpose hereof.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Register" and "Certificate Registrar": The register maintained
and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of payment
and bear the same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced thereby.
"Class A Certificate": Any of the Class I-A-1, Class I-A-2, Class I-A-IO,
Class II-A-I, Class II-A-IO, Class III-A-1 and Class III-A-IO Certificates as
designated on the face thereof substantially
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in the form annexed hereto as Exhibit A, executed by the Trustee and
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein.
"Class A-IO Certificate": Any of the Class I-A-IO, Class II-A-IO or Class
III-A-IO Certificates.
"Class I-A Certificate": Any of the Class I-A-1, Class I-A-2 or Class
I-A-IO Certificates.
"Class II-A Certificate": Any of the Class II-A-1 or Class II-A-IO
Certificates.
"Class III-A Certificate": Any of the Class III-A-1 or Class I-A-IO
Certificates.
"Class A Certificateholder": Any Holder of a Class A Certificate.
"Class I-A-IO Notional Amount": As of any Distribution Date, with respect
to the Class I-A-IO Certificates, the Uncertificated Principal Balance which
shall equal the aggregate Stated Principal Balance of the Group I Mortgage
Loans, which for federal income tax purposes shall equal the aggregate
Uncertificated Principal Balances of Uncertificated REMIC I Regular Interests
LTIA and LTIB.
"Class II-A-IO Notional Amount": As of any Distribution Date, with respect
to the Class II-A-IO Certificates, the Uncertificated Principal Balance which
shall equal the aggregate Stated Principal Balance of the Group II Mortgage
Loans, which for federal income tax purposes shall equal the aggregate
Uncertificated Principal Balances of Uncertificated REMIC I Regular Interests
LTIIA and LTIIB.
"Class III-A-IO Notional Amount": As of any Distribution Date, with respect
to the Class III-A-IO Certificates, the Uncertificated Principal Balance which
shall equal the aggregate Stated Principal Balance of the Group III Mortgage
Loans, which for federal income tax purposes shall equal the aggregate
Uncertificated Principal Balances of Uncertificated REMIC I Regular Interests
LTIIIA and LTIIIB.
"Class B Certificate": Any one of the Class B-1, Class B-2 or Class B-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit C-2, executed by the Trustee and authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein and
therein.
"Class B Certificateholder": Any Holder of a Class B Certificate.
"Class B Percentage": The Class B-1 Percentage, Class B-2 Percentage or
Class B-3 Percentage.
"Class B-1 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class B-1 Certificates immediately
prior to such Distribution Date and the denominator of
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which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) immediately prior to such Distribution Date.
"Class B-2 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class B-2 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
"Class B-3 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class B-3 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
"Class Certificate Balance": With respect to any Certificate (other than a
Class A-IO or Class R Certificate) as of any date of determination, the Class
Certificate Balance of such Certificate on the Distribution Date immediately
prior to such date of determination, reduced by the aggregate of (a) all
distributions of principal made thereon on such immediately prior Distribution
Date and (b) without duplication of amounts described in clause (a) above,
reductions in the Class Certificate Balance thereof in connection with
allocations thereto of Realized Losses on the Mortgage Loans and Extraordinary
Trust Fund Expenses on such immediately prior Distribution Date (or, in the case
of any date of determination up to and including the initial Distribution Date,
the initial Class Certificate Balance of such Certificate, as stated on the face
thereof); provided, however, that the Class Certificate Balance of each
Subordinate Certificate of the Class of Subordinate Certificates outstanding
with the highest numerical designation at any given time shall be calculated to
equal the Percentage Interest evidenced by such Certificate multiplied by the
excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Class Certificate Balances of all
other Classes of Certificates then outstanding. The Class A-IO Certificates
shall not have Class Certificate Balances and shall not be entitled to any
distributions of principal. The Class R Certificates shall not have Class
Certificate Balances.
"Class M Certificate": Any one of the Class M-1, Class M-2 or Class M-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit B, executed by the Trustee and authenticated and delivered by
the Trustee, representing the right to distributions as set forth herein and
therein.
"Class M Certificateholder": Any Holder of a Class M Certificate.
"Class M Percentage": The Class M-1 Percentage, Class M-2 Percentage or
Class M-3 Percentage.
"Class M-1 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class M-1 Certificates immediately
prior to such date and the denominator of which is the
8
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
"Class M-2 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class M-2 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
"Class M-3 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class M-3 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
"Class R Certificates": Any one of the Class R-I Certificates and Class
R-II Certificates executed by the Trustee, and authenticated and delivered by
the Certificate Registrar, substantially in the form annexed hereto as Exhibit
C-1 and evidencing the ownership of an interest designated as the Residual
Interest.
"Class Subordination Percentage": With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Class Certificate Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Class Certificate Balances of all
Classes of Certificates immediately prior to such Distribution Date.
"Closing Date": __________, ____.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by the
Master Servicer pursuant to Section 3.10, which shall be entitled "[Name of
Master Servicer], as Master Servicer for [Name of Trustee], as Trustee, in trust
for registered Holders of Mortgage Pass-Through Certificates, ____ Series
____-__", and which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a taking
of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Control Agreement": With respect to each Mortgage 100(sm) Loan, the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Pledged Collateral Account Control Agreement between the guarantor
or mortgagor, as applicable, the Additional Collateral Servicer and ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, pursuant to which the guarantor or
mortgagor, as applicable, has granted a security interest in a Securities
Account.
9
"Cooperative": A corporation that has been formed for the purpose of
cooperative apartment ownership.
"Cooperative Assets": Shares issued by Cooperatives, the related
Cooperative Lease and any other collateral securing the Cooperative Loans.
"Cooperative Building": The building and other property owned by a
Cooperative.
"Cooperative Lease": With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.
"Cooperative Loan": The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.
"Cooperative Unit": A specific dwelling unit in a Cooperative Building as
to which exclusive occupancy rights have been granted pursuant to a Lease.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located, for Certificate transfer
purposes, at _______________________________________________________, Attention:
Cendant Mortgage Capital LLC, ____ Series ____-__, or at such other address as
the Trustee may designate from time to time by notice to the Certificateholders,
the Depositor and the Master Servicer.
"Corresponding Class": With respect to Uncertificated REMIC I Regular
Interest LTIA, the Class I-A-1 Certificates and the Class I-A-2 Certificates;
with respect to Uncertificated REMIC I Regular Interest LTIIA, the Class II-A-1
Certificates; with respect to Uncertificated REMIC I Regular Interest LTIIIA,
the Class III-A-1 Certificates; and with respect to Uncertificated REMIC I
Regular Interests LTIB, LTIIB and LTIIIB, the Class M Certificates and the Class
B Certificates.
"Credit Support Depletion Date": The Distribution Date on which the Class
Certificate Balances of the Mezzanine Certificates and Subordinate Certificates
are reduced to zero.
"Curtailment": Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
"Cut-off Date": _______ 1, ____.
"Cut-off Date Aggregate Principal Balance": The aggregate of the Cut-off
Date Principal Balances of the Mortgage Loans. With respect to all Eligible
Substitute Mortgage Loans, their respective dates of substitution.
10
"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date (or as of the applicable
date of substitution with respect to a Eligible Substitute Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Eligible Substitute Mortgage Loans.
"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 then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Depositor": Cendant Mortgage Capital LLC, a Delaware limited liability
company, or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust Company,
whose nominee is Cede & Co., or any other organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry Certificates, the
agreement among the Depositor, the Trustee and the initial Depository, to be
dated on or about the Closing Date.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 15th day
of the calendar month in which such Distribution Date occurs or, if such 15th
day is not a Business Day, the Business Day immediately preceding such 15th day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust Fund other than
through an Independent Contractor; PROVIDED, HOWEVER, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses
11
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to such REO
Property.
"Disqualified Organization": Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the ▇▇▇▇▇▇▇ Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, that the
holding of an ownership interest in a Residual Certificate by such Person may
cause the Trust or any Person having an ownership interest in the Residual
Certificate (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 Residual 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.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, [Name of Trustee], as Trustee, in trust for the
registered Holders of the Cendant Mortgage Capital LLC, Mortgage Pass- Through
Certificates, ____ Series ___-__" and which must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such 25th
day is not a Business Day, the Business Day immediately following such 25th day,
commencing in ____________.
"Due Date": With respect to each Mortgage Loan and any Distribution Date,
the first day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any days
of grace.
"Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month preceding the month in which such Distribution
Date (or with respect to the first Due Period, the day following the Cut-off
Date) occurs and ending on the first day of the month in which such Distribution
Date occurs.
"Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated F-1 by Fitch, P-1 by ▇▇▇▇▇'▇ and A-1 by S&P (or comparable ratings if
Fitch, ▇▇▇▇▇'▇ and S&P are not the Rating Agencies) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC (to the limits established by such
12
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for a
Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of, and not more than 5% less
than, the outstanding principal balance of the Defective Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) have a
Loan Rate, not less than the Loan Rate of the Defective Mortgage Loan and not
more than 1% in excess of the Loan Rate of such Defective Mortgage Loan, (iii)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Defective Mortgage Loan, (iv) be current as of the date
of substitution, (v) have a Loan-to-Value Ratio as of the date of substitution
equal to or lower than the Loan-to-Value Ratio of the Defective Mortgage Loan as
of such date, (vi) have a risk grading determined by the Seller at least equal
to the risk grading assigned on the Defective Mortgage Loan, (vii) have been
reunderwritten by the Seller in accordance with the same underwriting criteria
and guidelines as the Defective Mortgage Loan and (viii) conform to each
representation and warranty set forth in Section 2.04 hereof applicable to the
Defective Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Defective Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Loan Rates described in clause (ii) hereof shall be determined on
the basis of weighted average Loan Rates, the risk gradings described in clause
(vi) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (iii) hereof shall be determined on the basis of weighted
average remaining term to maturity, the Loan-to-Value Ratios described in clause
(v) hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (viii) hereof must be satisfied as to each Eligible
Substitute Mortgage Loan or in the aggregate, as the case may be. Any Mortgage
Loan substituted for a Mortgage Loan which has an arrearage due to the
application of any related forbearance plan with respect to such Mortgage Loan,
will be treated as having such an arrearage due to the application of any
related forbearance plan with respect to such Mortgage Loan.
"Equity Access(R) Agreement": The revolving line of credit agreement
entered into between the Master Servicer and the guarantor under any Parent
Power(R) Guaranty Agreement for Real Estate pursuant to which a line of credit
may be drawn upon by the Additional Collateral Servicer to fund the payment by
such guarantor of a loss specified in such Parent Power(R) Guaranty Agreement
for Real Estate.
13
"Equity Access(R) Mortgage": The mortgage, deed of trust or other security
instrument (including all amendments and supplements thereto) made by the
guarantor under any Parent Power(R) Guaranty Agreement for Real Estate to secure
its obligations thereunder and under the related Equity Access(R) Agreement.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA-Restricted Certificates": Any of the Class B-1, Class B-2, Class
B-3, Class R-I and Class R-II Certificates.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Excess Losses": (i) Special Hazard Losses in excess of the Special Hazard
Loss Coverage Amount, (ii) Bankruptcy Losses in excess of the Bankruptcy Loss
Coverage Amount, (iii) Fraud Losses in excess of the Fraud Loss Coverage Amount
and (iv) Extraordinary Losses.
"Extraordinary Loss": Any Realized Loss or portion thereof caused by or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled and
whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by
the definition of the term "Special Hazard Loss";
(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending or
expected attack by any government or sovereign power, DE JURE or DE FACTO,
or by any authority maintaining or using military, naval or air forces, or
by military, naval or air forces, or by an agent of any such government,
power, authority or forces;
(iii) any weapon of war employing atomic fission or radioactive forces
whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority, or risks of contraband or illegal transactions or trade.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to Section 6.03, any amounts reimbursable to
the Trustee from the Trust Fund pursuant to this Agreement, including but not
limited to Section 8.05, and any other costs, expenses, liabilities and losses
borne by the Trust Fund (exclusive of any cost, expense, liability or loss that
is specific to a particular Mortgage Loan or REO Property and is taken into
account in calculating
14
a Realized Loss in respect thereof) for which the Trust Fund has not and, in the
reasonable good faith judgment of the Trustee, shall not, obtain reimbursement
or indemnification from any other Person.
"▇▇▇▇▇▇ Mae": Federal National Mortgage Association or any successor
thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section 3.14.
"Final Recovery Determination": With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by the
Seller or the Master Servicer pursuant to or as contemplated by Section 2.03 or
10.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination
made thereby.
"Fitch": Fitch, Inc. or its successor in interest.
"Foreclosure Price": The amount reasonably expected to be received from the
sale of the related Mortgaged Property net of any expenses associated with
foreclosure proceedings.
"Fraud Loss Coverage Amount": As of any date of determination after the
Cut-off Date, an amount equal to 1.00% of the aggregate outstanding principal
balance of all of the Mortgage Loans as of the most recent anniversary of the
Cut-off Date minus the Fraud Losses allocated solely to one or more specific
Classes of Certificates in accordance with Section 4.02 since the most recent
anniversary of the Cut-off Date up to such date of determination. On and after
the fifth anniversary of the Cut-off Date, the Fraud Loss Amount shall be zero.
The Fraud Loss Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Fraud Losses": Losses sustained on a Liquidated Mortgage Loan by reason of
a default arising from fraud, dishonesty or misrepresentation.
"▇▇▇▇▇▇▇ Mac": Federal Home Loan Mortgage Corporation or any successor
thereto.
"Gross Margin": As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related index on each Interest Rate Adjustment Date
to determine (subject to rounding, the minimum
15
and maximum Mortgage Interest Rate and the related periodic rate cap) the
related mortgage interest rate until the next Interest Rate Adjustment Date.
"Group I Available Funds": With respect to any Distribution Date and the
Group I Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the
aggregate of the related Monthly Payments received on or prior to the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments and other unscheduled recoveries of principal and interest in
respect of the Group I Mortgage Loans during the related Prepayment Period, (c)
the aggregate of any amounts received in respect of a related REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any related
Advances made by the Master Servicer for such Distribution Date, over (ii) the
sum of (a) related amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case may
be, in error and (d) any Extraordinary Trust Fund Expenses. The Group I
Available Funds shall also be increased by any Required Surety Payment.
"Group II Available Funds": With respect to any Distribution Date and the
Group II Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the
aggregate of the related Monthly Payments received on or prior to the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments and other unscheduled recoveries of principal and interest in
respect of the Group II Mortgage Loans during the related Prepayment Period, (c)
the aggregate of any amounts received in respect of a related REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any related
Advances made by the Master Servicer for such Distribution Date, over (ii) the
sum of (a) related amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case may
be, in error and (d) any Extraordinary Trust Fund Expenses. The Group II
Available Funds shall also be increased by any Required Surety Payment.
"Group III Available Funds": With respect to any Distribution Date and the
Group III Mortgage Loans, an amount equal to the excess of (i) the sum of (a)
the aggregate of the related Monthly Payments received on or prior to the
related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Principal Prepayments and other unscheduled recoveries of principal and interest
in respect of the Group III Mortgage Loans during the related Prepayment Period,
(c) the aggregate of any amounts received in respect of a related REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any related
Advances made by the Master Servicer for such Distribution Date, over (ii) the
sum of (a) related amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case may
be, in
16
error and (d) any Extraordinary Trust Fund Expenses. The Group III Available
Funds shall also be increased by any Required Surety Payment.
"Group I Rate Change Date": The earlier to occur of (i) the first possible
Distribution Date after the first possible Optional Termination Date and (ii)
the Distribution Date in ____________.
"Group II Rate Change Date": The earlier to occur of (i) the first possible
Distribution Date after the first possible Optional Termination Date and (ii)
the Distribution Date in ____________.
"Group III Rate Change Date": The earlier to occur of (i) the first
possible Distribution Date after the first possible Optional Termination Date
and (ii) the Distribution Date in ____________.
"Group I Senior Accelerated Distribution Percentage": With respect to any
Distribution Date, the percentage indicated below:
Group I Senior Accelerated
Distribution Date Distribution Percentage
----------------- -----------------------
___________ through 100%
____________
___________ through Group I Senior Percentage, plus 70% of
__________ the Group I Subordinate Percentage
___________ through Group I Senior Percentage, plus 60% of
________ the Group I Subordinate Percentage
___________ through Group I Senior Percentage, plus 40% of
________ the Group I Subordinate Percentage
___________ through Group I Senior Percentage, plus 20% of
_________ the Group I Subordinate Percentage
__________ and Group I Senior Percentage,
thereafter
provided, however, (i) that any scheduled reduction to the Group I Senior
Accelerated Distribution Percentage described above shall not occur as of any
Distribution Date unless either (a)(1)(x) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months as a percentage of the aggregate
outstanding Class Certificate Balance of the Class M Certificates and the Class
B Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if occurring during the sixth, seventh, eighth, ninth
or tenth year (or any year thereafter) after the
17
Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum
of the Initial Class Certificate Balances of the Class M Certificates and Class
B Certificates or (b) (1) the aggregate outstanding principal balance of the
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or
prior to such Distribution Date are less than 10% of the sum of the Initial
Class Certificate Balances of the Class M Certificates and Class B Certificates
and (ii) that for any Distribution Date on which the Group I Senior Percentage
is greater than the Original Group I Senior Percentage, the Group I Senior
Accelerated Distribution Percentage for such Distribution Date shall be 100%.
Notwithstanding the foregoing, upon the reduction of the aggregate Class
Certificate Balance of the Class I-A Certificates to zero, the Group I Senior
Accelerated Distribution Percentage will equal 0%.
"Group II Senior Accelerated Distribution Percentage": With respect to any
Distribution Date, the percentage indicated below:
Group II Senior Accelerated
Distribution Date Distribution Percentage
----------------- -----------------------
________ through 100%
_________
__________ through Group II Senior Percentage, plus 70% of
_______ the Group II Subordinate Percentage
__________ through Group II Senior Percentage, plus 60% of
__________ the Group II Subordinate Percentage
__________ through Group II Senior Percentage, plus 40% of
_______ the Group II Subordinate Percentage
__________ through Group II Senior Percentage, plus 20% of
_________ the Group II Subordinate Percentage
____________ and Group II Senior Percentage,
thereafter
provided, however, (i) that any scheduled reduction to the Group II Senior
Accelerated Distribution Percentage described above shall not occur as of any
Distribution Date unless either (a)(1)(x) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months as a percentage of the aggregate
outstanding Class Certificate Balance of the Class M Certificates and the Class
B Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if
18
occurring during the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%,
respectively, of the sum of the Initial Class Certificate Balances of the Class
M Certificates and Class B Certificates or (b) (1) the aggregate outstanding
principal balance of the Mortgage Loans delinquent 60 days or more (including
foreclosure and REO Property) averaged over the last six months, as a percentage
of the aggregate outstanding principal balance of all Mortgage Loans averaged
over the last six months, does not exceed 4% and (2) Realized Losses on the
Mortgage Loans on or prior to such Distribution Date are less than 10% of the
sum of the Initial Class Certificate Balances of the Class M Certificates and
Class B Certificates and (ii) that for any Distribution Date on which the Group
II Senior Percentage is greater than the Original Group II Senior Percentage,
the Group II Senior Accelerated Distribution Percentage for such Distribution
Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the
aggregate Class Certificate Balance of the Class II-A-1 Certificates to zero,
the Group II Senior Accelerated Distribution Percentage will equal 0%.
"Group III Senior Accelerated Distribution Percentage": With respect to any
Distribution Date, the percentage indicated below:
Group III Senior Accelerated
Distribution Date Distribution Percentage
----------------- -----------------------
_______ through 100%
___________
_________ through Group III Senior Percentage, plus 70% of
__________ the Group III Subordinate Percentage
___________ through Group III Senior Percentage, plus 60% of
_________ the Group III Subordinate Percentage
_________ through Group III Senior Percentage, plus 40% of
__________ the Group III Subordinate Percentage
_________ through Group III Senior Percentage, plus 20% of
_______ the Group III Subordinate Percentage
_________ and Group III Senior Percentage,
thereafter
provided, however, (i) that any scheduled reduction to the Group III Senior
Accelerated Distribution Percentage described above shall not occur as of any
Distribution Date unless either (a)(1)(x) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months as a percentage of the aggregate
outstanding Class Certificate Balance of the Class M Certificates and the Class
B Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not
19
exceed 2% and (2) Realized Losses on the Mortgage Loans to date for such
Distribution Date if occurring during the sixth, seventh, eighth, ninth or tenth
year (or any year thereafter) after the Closing Date are less than 30%, 35%,
40%, 45% or 50%, respectively, of the sum of the Initial Class Certificate
Balances of the Class M Certificates and Class B Certificates or (b) (1) the
aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days
or more (including foreclosure and REO Property) averaged over the last six
months, as a percentage of the aggregate outstanding principal balance of all
Mortgage Loans averaged over the last six months, does not exceed 4% and (2)
Realized Losses on the Mortgage Loans on or prior to such Distribution Date are
less than 10% of the sum of the Initial Class Certificate Balances of the Class
M Certificates and Class B Certificates and (ii) that for any Distribution Date
on which the Group III Senior Percentage is greater than the Original Group III
Senior Percentage, the Group III Senior Accelerated Distribution Percentage for
such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the
reduction of the aggregate Class Certificate Balance of the Class III-A-1
Certificates to zero, the Group III Senior Accelerated Distribution Percentage
will equal 0%.
"Group I Senior Percentage": As of any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class I-A Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Group I Mortgage Loans or related REO
Properties immediately prior to such Distribution Date.
"Group II Senior Percentage": As of any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class II-A-1 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Group II Mortgage Loans or related REO
Properties immediately prior to such Distribution Date.
"Group III Senior Percentage": As of any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class III-A-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Group III Mortgage Loans or
related REO Properties immediately prior to such Distribution Date.
"Group I Senior Principal Distribution Amount": As to any Distribution
Date, the lesser of (a) the balance of the Group I Available Distribution Amount
remaining after the distribution of all amounts required to be distributed
pursuant to Section 4.01(c)(A) and (b) the sum of the following:
(A) the Group I Senior Percentage for such Distribution Date times the
sum of the following:
(1) the principal portion of each Monthly Payment due during the
related Due Period on each Outstanding Mortgage Loan in Loan Group I,
whether or not received on or prior to the related Determination Date,
minus the principal portion of any Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy Loss
Coverage Amount;
20
(2) the Stated Principal Balance of any Group I Mortgage Loan
repurchased during the related Prepayment Period pursuant to Section
2.02, 2.03, 3.15 or 3.16; and
(3) the principal portion of all other unscheduled collections
(other than Principal Prepayments in Full and Curtailments and amounts
received in connection with a Cash Liquidation or REO Disposition of a
Group I Mortgage Loan, including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during the
related Prepayment Period to the extent applied by the Master Servicer
as recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16;
(B) with respect to each Group I Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related Prepayment
Period and did not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal
to the lesser of (a) the Group I Senior Percentage for such Distribution
Date times the Stated Principal Balance of such Group I Mortgage Loan and
(b) the Group I Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections (including
without limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to Section 3.16;
(C) the Group I Senior Accelerated Distribution Percentage for such
Distribution Date times the aggregate of all Principal Prepayments in Full
and Curtailments received in the related Prepayment Period with respect to
the Group I Mortgage Loans;
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which remain
unpaid after application of amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class M Certificates or Class B
Certificates;
"Group II Senior Principal Distribution Amount": As to any Distribution
Date, the lesser of (a) the balance of the Group II Available Distribution
Amount remaining after the distribution of all amounts required to be
distributed pursuant to Section 4.01(c)(B) and (b) the sum of the following:
(A) the Group II Senior Percentage for such Distribution Date times
the sum of the following:
(1) the principal portion of each Monthly Payment due during the
related Due Period on each Outstanding Mortgage Loan in Loan Group II,
whether or not received on or prior to the related Determination Date,
minus the principal portion of any Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy Loss
Coverage Amount;
21
(2) the Stated Principal Balance of any Group II Mortgage Loan
repurchased during the related Prepayment Period pursuant to Section
2.02, 2.03, 3.15 or 3.16; and
(3) the principal portion of all other unscheduled collections
(other than Principal Prepayments in Full and Curtailments and amounts
received in connection with a Cash Liquidation or REO Disposition of a
Group II Mortgage Loan, including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during the
related Prepayment Period to the extent applied by the Master Servicer
as recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16;
(B) with respect to each Group II Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related Prepayment
Period and did not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal
to the lesser of (a) the Group II Senior Percentage for such Distribution
Date times the Stated Principal Balance of such Group II Mortgage Loan and
(b) the Group II Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections (including
without limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to Section 3.16;
(C) the Group II Senior Accelerated Distribution Percentage for such
Distribution Date times the aggregate of all Principal Prepayments in Full
and Curtailments received in the related Prepayment Period with respect to
the Group II Mortgage Loans;
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which remain
unpaid after application of amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class M Certificates or Class B
Certificates;
"Group III Senior Principal Distribution Amount": As to any Distribution
Date, the lesser of (a) the balance of the Group III Available Distribution
Amount remaining after the distribution of all amounts required to be
distributed pursuant to Section 4.01(c)(C) and (b) the sum of the following:
(A) the Group III Senior Percentage for such Distribution Date times
the sum of the following:
(1) the principal portion of each Monthly Payment due during the
related Due Period on each Outstanding Mortgage Loan in Loan Group
III, whether or not received on or prior to the related Determination
Date, minus the principal portion of any Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy Loss
Coverage Amount;
22
(2) the Stated Principal Balance of any Group III Mortgage Loan
repurchased during the related Prepayment Period pursuant to Section
2.02, 2.03, 3.15 or 3.16; and
(3) the principal portion of all other unscheduled collections
(other than Principal Prepayments in Full and Curtailments and amounts
received in connection with a Cash Liquidation or REO Disposition of a
Group III Mortgage Loan, including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during the
related Prepayment Period to the extent applied by the Master Servicer
as recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16;
(B) with respect to each Group III Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related Prepayment
Period and did not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal
to the lesser of (a) the Group III Senior Percentage for such Distribution
Date times the Stated Principal Balance of such Group III Mortgage Loan and
(b) the Group III Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections (including
without limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to Section 3.16;
(C) the Group III Senior Accelerated Distribution Percentage for such
Distribution Date times the aggregate of all Principal Prepayments in Full
and Curtailments received in the related Prepayment Period with respect to
the Group III Mortgage Loans;
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which remain
unpaid after application of amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class M Certificates or Class B
Certificates;
"Highest Priority": As of any date of determination, the Class of
Subordinate Certificates then outstanding with the earliest priority for
payments pursuant to Section 4.01(c), in the following order: Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.
"HUD": The United States Department of Housing and Urban Development, or
any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; PROVIDED, HOWEVER, that a Person shall not
23
fail to be Independent of the Depositor or the Master Servicer or any Affiliate
thereof merely because such Person is the beneficial owner of 1% or less of any
class of securities issued by the Depositor or the Master Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were
a real estate investment trust (except that the ownership tests set forth in
that section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Master Servicer) if the Trustee has received an
Opinion of Counsel, which Opinion of Counsel shall be an expense of the Trust
Fund, to the effect that the taking of any action in respect of any REO Property
by such Person, subject to any conditions therein specified, that is otherwise
herein contemplated to be taken by an Independent Contractor will not cause such
REO Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as rents from real
property.
"Initial Class Certificate Balance": With respect to any Regular
Certificate other than the Class A-IO Certificates, the amount designated
"Initial Class Certificate Balance" on the face thereof.
"Initial Subordinate Class Percentage": With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Class Certificate Balance of such Class of Subordinate Certificates divided by
the aggregate Stated Principal Balance of all the Mortgage Loans as of the
Cut-off Date as follows:
Class M-1: ____% Class B-1: ____%
Class M-2: ____% Class B-2: ____%
Class M-3: ____% Class B-3: ____%
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan, to the extent such proceeds are not
to be applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and all
Certificates, the calendar month immediately preceding the month in which such
Distribution Date occurs.
"Interest Rate Adjustment Date": With respect to each Mortgage Loan, the
date on which the related mortgage interest rate is adjusted.
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"Late Collections": With respect to any Mortgage Loan, all amounts received
subsequent to the Determination Date immediately following any related Due
Period, whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal and/or interest due (without regard to any acceleration of payments
under the related Mortgage and Mortgage Note) but delinquent on a contractual
basis for such Due Period and not previously recovered.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan
in respect of which the Master Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Due Period,
that all Liquidation Proceeds and Insurance Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in respect
of the rental of any REO Property prior to REO Disposition) received by the
Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise, or (iii) the repurchase, substitution or sale of
a Mortgage Loan or an REO Property pursuant to or as contemplated by Section
2.03, Section 3.16 or Section 10.01.
"Loan Balance": As of any date, the aggregate Stated Principal Balance of
all of the Mortgage Loans as of such date.
"Loan Purchase and Sale Agreement": The Loan Purchase and Sale Agreement,
dated as of _________________, between MLCC and the Master Servicer, pursuant to
which MLCC shall be responsible for servicing and administering the Additional
Collateral.
"Loan-to-Value Ratio": As of any date and Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the Stated Principal
Balance of the Mortgage Loan, and the denominator of which is the Value of the
related Mortgaged Property.
"Loan Rate": With respect to each Mortgage Loan, the annual rate at which
interest accrues on such Mortgage Loan from time to time in accordance with the
provisions of the related Mortgage Note, which rate shall remain constant at the
rate set forth in the Mortgage Loan Schedule as the Loan Rate in effect
immediately following the Cut-off Date. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
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"Lost Note Affidavit": With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Depositor as applicable certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a
copy of the related Mortgage Note and indemnifying the Trust against any loss,
cost or liability resulting from the failure to deliver the original Mortgage
Note) in the form of Exhibit H hereto.
"Lower Priority": As of any date of determination and with respect to any
Class of Subordinate Certificates, any other Class of Subordinate Certificates
then outstanding with a later priority for payments pursuant to Section 4.01(c).
"Lowest Priority": As of any date of determination, the Class of
Subordinate Certificates then outstanding with the latest priority for payments
pursuant to Section 4.01(c), in the following order: Class B-3, Class B-2, Class
B-1, Class M-3, Class M-2 and Class M-1 Certificates.
"Majority Certificateholders": The Holders of Certificates evidencing at
least 51% of the Voting Rights.
"Master Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Master Servicer or which is 50% or more owned by
the Master Servicer and (ii) which is qualified to service residential mortgage
loans.
"Master Servicer Event of Termination": One or more of the events described
in Section 7.01.
"Master Servicer Remittance Date": With respect to any Distribution Date,
the fourth Business Day prior to such Distribution Date.
"MLCC": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation and its successors in interest.
"MLCC Servicing Agreement": The Master Servicing Agreement, dated as of
_______________, between the Seller and MLCC.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
Master Servicer pursuant to Section 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
26
"Mortgage 100(sm) Loan": A Mortgage Loan secured by Additional Collateral
in the form of a security interest in the Securities Account and the financial
assets held therein and having a value, as of the date of origination of such
Mortgage Loan, of at least equal to the related Original Additional Collateral
Requirement.
"Mortgage 100(sm) Pledge Agreement": With respect to each Mortgage 100(sm)
Loan, the Pledge Agreement for Securities Account between the related mortgagor
and the Additional Collateral Servicer pursuant to which such mortgagor granted
a security interest in the related securities and other financial assets held
therein.
"Mortgage File": The mortgage documents listed in Section 2.01(A) and (B)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan (including the Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section
2.03(d) as from time to time held as a part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The mortgage loan purchase agreement,
dated _____ 1, ____, between the Seller and the Depositor, regarding the
transfer of the Mortgage Loans.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
identifying the Mortgage Loans transferred from the Seller, and attached hereto
as Exhibit D. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:
(i) the Seller's Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including the state
and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the original date of the mortgage;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Loan Rate;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(xi) the stated maturity date;
27
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment as of the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvii) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
(xviii) a code indicating the documentation style (i.e., full,
alternative or reduced);
(xix) a code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy;
(xx) the Value of the Mortgaged Property;
(xxi) the sale price of the Mortgaged Property, if applicable;
(xxii) the actual unpaid principal balance of the Mortgage Loan as of
the Cut-off Date;
(xxiii) the Servicing Fee;
(xxiv) whether the Mortgage Loan is a Buydown Mortgage Loan;
(xxv) the related index; . (xxvi) the next Interest Rate Adjustment
Date;
(xxvii) the Gross Margin;
(xxviii) the minimum and maximum Mortgage Interest Rate under the
terms of the Mortgage Note; and
(xxix) the related periodic rate cap.
The Mortgage Loan Schedule shall set forth the following information with
respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Loan Rate of the
28
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Master Servicer
in accordance with the provisions of this Agreement. With respect to any
Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D from
time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property (including REO Property) the
related Liquidation Proceeds net of Advances, Servicing Advances, Servicing Fees
and any other accrued and unpaid Servicing Fees received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property.
"Net Mortgage Rate": With respect to any Mortgage Loan, the Loan Rate minus
the Servicing Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the Trust,
including any lease renewed or extended on behalf of the Trust if the Trust has
the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": The Class I-A-IO Notional Amount, the Class II-A-IO
Notional Amount or the Class II-A-IO Notional Amount.
"Officers' Certificate": A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a vice president (however
denominated), and by the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries of the Master Servicer or the Depositor, as
applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any
29
opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or
(b) compliance with the REMIC Provisions must be an opinion of Independent
counsel.
"Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate the Trust Fund pursuant to Section 10.01.
"Original Additional Collateral Requirement": With respect to any
Additional Collateral Mortgage Loan, an amount equal to the Additional
Collateral required at the time of the origination of such Additional Collateral
Mortgage Loan. Even though for other purposes the Original Additional Collateral
Requirement may actually exceed thirty percent (30%) of the original principal
balance of an Additional Collateral Mortgage Loan, solely for purposes of the
Required Surety Payment, the Original Additional Collateral Requirement for an
Additional Collateral Mortgage Loan will be deemed not to exceed thirty percent
(30%) of its original principal balance.
"Original Applicable Credit Support Percentage": With respect to (i) the
Class M-1 Certificates, ____%, (ii) the Class M-2 Certificates, ____%, (iii) the
Class M-3 Certificates, ____%, (iv) the Class B-1 Certificates, ____%, (v) the
Class B-2 Certificates, ____%, and (vi) the Class B-3 Certificates, ____%.
"Original Notional Amount": With respect to the Class I-A-IO, Class II-A-IO
and Class III-A-IO Certificates, $____________, $____________ and $___________,
respectively.
"Original Class Certificate Balance": With respect to each Class of the
Certificates (other than the Class A-IO Certificates), the Class Certificate
Balance thereof on the Closing Date, as set forth opposite such Class above in
the Preliminary Statement.
"Original Subordinated Principal Balance": The aggregate of the Class
Certificate Balances of the Subordinate Certificates as of the Cut-off Date.
"Other Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, other than the Primary
Insurance Policy, if any, to the extent such proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account.
"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.
"Parent Power(R)Agreement": With respect to each Parent Power(R)Mortgage
Loan, a Parent Power(R)Guaranty and Security Agreement for Securities Account or
a Parent Power(R)Guaranty Agreement for Real Estate.
"Parent Power(R) Guaranty Agreement for Real Estate": With respect to a
Parent Power(R) Mortgage Loan, an agreement between the Additional Collateral
Servicer and a guarantor on behalf of the mortgagor under such Parent Power(R)
Mortgage Loan pursuant to which such guarantor
30
guarantees the payment of certain losses under such Parent Power(R) Mortgage
Loan, authorizes the Additional Collateral Servicer to draw on the related
Equity Access Agreement to fund such guaranty and has secured such Equity Access
Agreement with an Equity Access Mortgage secured by a lien on residential real
estate of the guarantor. The required amount of the collateral supporting such
guaranty is at least equal to the Original Additional Collateral Requirement for
such Parent Power(R) Mortgage Loan. For purposes of this definition, the Parent
Power(R) Guaranty Agreement for Real Estate shall not include the rights of the
mortgagee under the Equity Access(R) Agreement referred to therein and under the
Equity Access(R) Mortgage, which rights have been retained by the Additional
Collateral Servicer.
"Parent Power(R) Guaranty and Security Agreement for Securities Account":
With respect to a Parent Power(R) Mortgage Loan, an agreement between the
Additional Collateral Servicer and a guarantor on behalf of the mortgagor under
such Parent Power(R) Mortgage Loan pursuant to which such guarantor guarantees
the payment of certain losses under such Parent Power(R) Mortgage Loan and has
granted a security interest to the Additional Collateral Servicer in certain
marketable securities to collateralize such guaranty. The required amount of
such collateral is at least equal to the Original Additional Collateral
Requirement for such Parent Power(R) Mortgage Loan.
"Parent Power(R) Mortgage Loan": A Mortgage Loan having at the time of
origination a Loan-to-Value Ratio generally in excess of the Master Servicer's
maximum acceptable Loan-to-Value Ratio for such Mortgage Loan as set forth in
the Underwriting Guide, which Mortgage Loan is supported by a Parent Power(R)
Agreement.
"Pass-Through Rate": With respect to the Certificates and any Distribution
Date, the following:
(i) For the Class I-A-1 Certificates and Class I-A-2 Certificates on each
Distribution Date prior to the Group I Rate Change Date will be a per
annum rate equal to ____% per annum, which is equal to the interest
rate payable to the REMIC regular interests represented by the Class
I-A-1 Certificates and Class I-A-2 Certificates of ____% per annum.
Beginning with the Interest Accrual Period related to the Group I Rate
Change Date, the Pass-Through Rate on the Class I-A-1 Certificates and
Class I-A-2 Certificates will be equal to the weighted average of the
Net Mortgage Rates on the Group I Mortgage Loans.
(ii) For the Class I-A-IO Certificates on each Distribution Date prior to
the Group I Rate Change Date will be a per annum rate equal to the
excess, if any, of (A) the weighted average of the Net Mortgage Rates
on the Group I Mortgage Loans, over (B) ____% per annum. For federal
income tax purposes, the Pass-Through Rate for the Class I- A-IO
Certificates on each Distribution Date prior to the Group I Rate
Change Date will be: with respect to the component of the Class I-A-IO
Notional Amount equal to Uncertificated REMIC I Regular Interest LTIA,
a per annum rate equal to the excess, if any, of (A) the weighted
average of the Net Mortgage Rates on the Group I Mortgage Loans, over
(B) ____% per annum, and with respect to the component of the Class
I-A-IO Notional Amount equal to Uncertificated REMIC I Regular
Interest LTIB, a per annum rate equal to the excess, if any, of (A)
the weighted
31
average of the Net Mortgage Rates on the Group I Mortgage Loans over
(B) ____% per annum. Beginning with the Interest Accrual Period Group
I Rate Change Date, the Pass-Through Rate on the Class I-A-IO
Certificates will equal zero.
(iii) For the Class II-A-1 Certificates on each Distribution Date prior to
the Group II Rate Change Date will be a per annum rate equal to ____%
per annum. Beginning with the Interest Accrual Period related to the
Group II Rate Change Date, the Pass- Through Rate on the Class II-A-1
Certificates will be equal to the weighted average of the Net Mortgage
Rates on the Group II Mortgage Loans.
(iv) For the Class II-A-IO Certificates on each Distribution Date prior to
the Group II Rate Change Date will be a per annum rate equal to (A)
the weighted average of the Net Mortgage Rates on the Group II
Mortgage Loans, over (B) ____% per annum. Beginning on Group II Rate
Change Date, the Pass-Through Rate on the Class II-A- IO Certificates
will equal zero.
(v) For the Class III-A-1 Certificates on each Distribution Date prior to
the Group III Rate Change Date will be a per annum rate equal to the
lesser of (A) ____% per annum and (B) the weighted average of the Net
Mortgage Rates on the Group III Mortgage Loans. Beginning with the
Interest Accrual Period related to Group III Rate Change Date, the
Pass-Through Rate on the Class III-A-1 Certificates will be equal to
the weighted average of the Net Mortgage Rates on the Group III
Mortgage Loans.
(vi) For the Class III-A-IO Certificates on each Distribution Date prior to
the Group III Rate Change Date will be a per annum rate equal to the
excess, if any of (A) the weighted average of the Net Mortgage Rates
on the Group III Mortgage Loans over (B) the Pass-Through Rate on the
Class III-A-1 Certificates. Beginning on Group III Rate Change Date,
the Pass-Through Rate on the Class III-A-IO Certificates will equal
zero.
(vii) For each Class of Class M Certificates and Class B Certificates on
each Distribution Date will equal the weighted average of:
(A) the excess of (A) the Uncertificated REMIC I Pass-Through Rate
for Uncertificated REMIC I Regular Interests LTIB over (B) prior
to the Group I Rate Change Date, the excess, if any, of (i) the
Uncertificated REMIC I Pass-Through Rate for Uncertificated REMIC
I Regular Interest LTIB over (ii) ____%, and on or after the
Group I Rate Change Date, zero, weighted on the basis of the
Uncertificated Principal Balance of Uncertificated REMIC I
Regular Interest LTIB;
(B) the excess of (A) the Uncertificated REMIC I Pass-Through Rate
for Uncertificated REMIC I Regular Interests LTIIB over (B) prior
to the Group II Rate Change Date, the excess, if any, of (i) the
Uncertificated REMIC I Pass-Through Rate for Uncertificated REMIC
I Regular Interest LTIIB over
32
(ii) ____%, and on or after the Group II Rate Change Date, zero,
weighted on the basis of the Uncertificated Principal Balance of
Uncertificated REMIC I Regular Interest LTIIB; and
(C) the excess of (A) the Uncertificated REMIC I Pass-Through Rate
for Uncertificated REMIC I Regular Interests LTIIIB over (B)
prior to the Group III Rate Change Date, the excess, if any, of
(i) the Uncertificated REMIC I Pass-Through Rate for
Uncertificated REMIC I Regular Interest LTIIIB over (ii) the
lesser of (x) ____% and (y) the Uncertificated REMIC I
Pass-Through Rate for Uncertificated REMIC I Regular Interests
LTIIIB, and on or after the Group III Rate Change Date, zero,
weighted on the basis of the Uncertificated Principal Balance of
Uncertificated REMIC I Regular Interest LTIIIB.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a Class
R Certificate), a fraction, expressed as a percentage, the numerator of which is
the Initial Class Certificate Balance or Initial Notional Amount, as the case
may be, represented by such Certificate and the denominator of which is the
Original Class Certificate Balance or Original Notional Amount, as the case may
be, of the related Class. With respect to any Class of Class R Certificates, the
portion of such Class evidenced thereby, expressed as a percentage, as stated on
the face of such Certificate; PROVIDED, HOWEVER, that the sum of all such
percentages for each such Class totals 100%.
"Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued or managed by the Depositor, the Master Servicer, the Trustee or
any of their respective Affiliates or for which an Affiliate of the Trustee
serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agent acting in
their respective commercial capacities) incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company or its ultimate
parent has a short-term uninsured debt rating in one of the two highest
available rating categories of S&P and ▇▇▇▇▇'▇ and the highest available
rating category of Fitch and provided that each such investment has an
original maturity of no more than 365 days and (B) any other demand or time
deposit or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into with
a depository institution or trust
33
company (acting as principal) rated A or higher by S&P and rated A2 or
higher by Fitch, provided, however, that collateral transferred pursuant to
such repurchase obligation must be of the type described in clause (i)
above and must (A) be valued daily at current market prices plus accrued
interest or (B) pursuant to such valuation, be equal, at all times, to 105%
of the cash transferred by the Trustee in exchange for such collateral and
(C), be delivered to the Trustee or, if the Trustee is supplying the
collateral, an agent for the Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of
America or any State thereof and that are rated by each Rating Agency in
its highest long-term unsecured rating categories at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition thereof)
that is rated by each Rating Agency in its highest short-term unsecured
debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 including funds managed or advised by the Trustee or an
affiliate thereof having a rating by S&P of AAA-G, AAA-m, or AA-m, and if
rated by ▇▇▇▇▇'▇, rated Aaa, Aa1 or Aa2; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies in writing as a
permitted investment of funds backing securities having ratings equivalent
to its highest initial rating of the Class A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Person other than a Disqualified Organization,
an "electing large partnership" as defined in Section 775(a) of the Code or a
non-U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Prepayment Interest Shortfall": As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan
34
over the amount of interest (adjusted to the Net Mortgage Rate) paid by the
Mortgagor for such Prepayment Period to the date of such Principal Prepayment in
Full or (b) a Curtailment during the prior calendar month, an amount equal to
one month's interest at the Net Mortgage Rate on the amount of such Curtailment.
The obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
"Prepayment Distribution Trigger": With respect to any Distribution Date
and any Class of Subordinate Certificates (other than the Class M-1
Certificates), a test that shall be satisfied if the fraction (expressed as a
percentage) equal to the sum of the Class Certificate Balances of such Class and
each Class of Subordinate Certificates with a Lower Priority than such Class
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to the sum
of the related Initial Subordinate Class Percentages of such Classes of
Subordinate Certificates.
"Primary Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in effect with respect to any Mortgage
Loan, or any replacement policy therefor obtained by the Master Servicer
pursuant to Section 3.13.
"Principal Prepayment": Any payment of principal made by the Mortgagor on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"Principal Prepayment in Full": Any Principal Prepayment made by a
Mortgagor of the entire unpaid principal balance of the Mortgage Loan.
"Private Certificates": Any of the Class B-1, Class B-2, Class B-3, Class
R-I and Class R-II Certificates.
"Property Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, to the extent such proceeds
are received by the Master Servicer and are not to be applied to the restoration
of the related Mortgaged Property or released to the Mortgagor in accordance
with the Master Servicer's servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated
Principal Balance at the applicable Loan Rate in effect from time to time from
the Due Date as to which interest was last covered by a payment by the Mortgagor
or an advance by the Master Servicer, which payment or
35
advance had as of the date of purchase been distributed pursuant to Section
4.01, through the end of the calendar month in which the purchase is to be
effected, and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Loan Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Master Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed as or to cover
REO Imputed Interest pursuant to Section 4.07, (iii) any unreimbursed Servicing
Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Section
3.23, and (v) in the case of a Mortgage Loan required to be purchased pursuant
to Section 2.03, expenses reasonably incurred or to be incurred by the Master
Servicer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation.
"Qualified Insurer": Any insurance company acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the proceeds of which
are not more than $1000 in excess of the existing first mortgage loan and any
subordinate mortgage loan on the related Mortgaged Property and related closing
costs, and were used exclusively (except for up to $1000) to satisfy the then
existing first mortgage loan and any subordinate mortgage loan of the Mortgagor
on the related Mortgaged Property and to pay related closing costs.
"Rate Change Date": The Group I Rate Change Date, the Group II Rate Change
Date or the Group III Rate Change Date.
"Rating Agency or Rating Agencies": S&P, Fitch or their successors. If such
agencies or their successors are no longer in existence, "Rating Agencies" shall
be such nationally recognized statistical rating agencies, or other comparable
Persons, designated by the Depositor, notice of which designation shall be given
to the Trustee and Master Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan.
"Record Date": With respect to all of the Certificates, the last Business
Day of the month immediately preceding the month in which the related
Distribution Date occurs.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were used
to satisfy an existing mortgage loan on the Mortgaged Property.
"Regular Certificate": Any of the Class A, Class M and Class B
Certificates.
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"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"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 Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Stated Principal Balance of such Mortgage Loan at the
Loan Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC I": The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) each Mortgage Loan (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late
payment charges received on the Mortgage Loans), together with all documents
included in the related Mortgage File, subject to Section 2.01; (ii) such funds
or assets as from time to time are deposited in the Collection Account or the
Distribution Account and belonging to the Trust Fund; (iii) any REO Property;
(iv) the Primary Hazard Insurance Policies, if any, the Primary Insurance
Policies, if any, and all other Insurance Policies with respect to the Mortgage
Loans; and (v) the Depositor's interest in respect of the representations and
warranties made by the Seller in the Mortgage Loan Purchase Agreement as
assigned to the Trustee pursuant to Section 2.04 hereof. REMIC I shall not
include the Buydown Account.
"REMIC II": The segregated pool of assets consisting of the Uncertificated
REMIC I Regular Interest conveyed in trust to the Trustee for the benefit of the
holders of the Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-IO, Class
III-A-1, Class III-A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2,
Class B-3 and Class R-II Certificates pursuant to Section 2.06, with respect to
which a separate REMIC election is to be made.
"REMIC II Certificates": Any of the Class I-A-1, Class I-A-2, Class II-A-1,
Class II-A-IO, Class III-A-1, Class III-A-IO, Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3 and Class R-II Certificates.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Report": A report prepared by the Master Servicer and delivered
to the Trustee pursuant to Section 4.03.
37
"Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Master Servicer in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer, in the form
of Exhibit E attached hereto.
"Required Surety Payment": With respect to any Additional Collateral
Mortgage Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion of the Realized Loss with respect to such Mortgage Loan and
(ii) the excess, if any, of (a) the amount of Additional Collateral required at
origination with respect to such Mortgage Loan (but no more than 30% of the
original Principal Balance of such Mortgage Loan) over (b) the net proceeds
realized by the Additional Collateral Servicer from the related Additional
Collateral.
"Residential Dwelling": Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, or (iv) a detached
one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (as defined in ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
Section 5402(6)).
38
"Residual Certificate": Any of the Class R Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any officer,
including any Vice President, Assistant Vice President, 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 in each case having direct responsibility for the
administration of this Agreement.
"Restricted Classes": With respect to any Class of Certificates, any
Classes of Certificates with a lower priority of payment relative to such Class.
"S&P": Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.,
and its successors.
"Securities Account": With respect to any Additional Collateral Mortgage
Loans, the account, together with the financial assets held therein, that is the
subject of the related Mortgage 100(sm) Pledge Agreement.
"Security Agreement": With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Assets.
"Seller": [Name of Seller], a [_____________] corporation, or any successor
in interest.
"Senior Accelerated Distribution Percentage": The Group I, Group II or
Group III Senior Accelerated Distribution Percentage, as applicable.
"Senior Certificates": The Class I-A-1, Class I-A-2, Class I-A-IO, Class
II-A-1, Class II-A-IO, Class III-A-1 and Class III-A-IO Certificates.
"Senior Percentage": The Group I Senior Percentage, Group II Senior
Percentage or Group III Senior Percentage, as applicable.
"Senior Principal Distribution Amount": The Group I Senior Principal
Distribution Amount, the Group II Senior Principal Distribution Amount or the
Group III Senior Principal Distribution Amount, as applicable.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicer Event of Termination": One or more of the events described in
Section 7.01.
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"Servicing Advances": The reasonable "out-of-pocket" costs and expenses
incurred by the Master Servicer in connection with a default, delinquency or
other unanticipated event by the Master Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, in respect of a
particular Mortgage Loan, (iii) the management (including reasonable fees in
connection therewith) and liquidation of any REO Property, and (iv) the
performance of its obligations under Section 3.01, Section 3.09, Section 3.13,
Section 3.14, Section 3.16 and Section 3.23. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Master Servicer to the Trustee and the Depositor on the Closing Date, as such
list may from time to time be amended.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month.
"Servicing Fee Rate": With respect to any Mortgage Loan, a rate between
_____% per annum and _____% per annum as described on the Mortgage Loan
Schedule.
"Special Hazard Loss Coverage Amount": As of any Distribution Date, an
amount equal to $_________ minus the sum of (i) the aggregate amount of Special
Hazard Losses allocated solely to one or more specific Classes of Certificates
in accordance with Section 4.02 and (ii) the Adjustment Amount (as defined
below) as most recently calculated. For each anniversary of the Cut- off Date,
the Adjustment Amount shall be equal to the amount, if any, by which the amount
calculated in accordance with the preceding sentence (without giving effect to
the deduction of the Adjustment Amount for such anniversary) exceeds the greater
of (A) the greatest of (i) twice the outstanding principal balance of the
Mortgage Loan in the Trust Fund which has the largest outstanding principal
balance on the Distribution Date immediately preceding such anniversary, (ii)
the product of 1.00% multiplied by the outstanding principal balance of all
Mortgage Loans on the Distribution Date immediately preceding such anniversary
and (iii) the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Mortgage Loans in any single five-digit
California zip code area with the largest amount of Mortgage Loans by aggregate
principal balance as of such anniversary and (B) the greater of (i) the product
of 0.50% multiplied by the outstanding principal balance of all Mortgage Loans
on the Distribution Date immediately preceding such anniversary multiplied by a
fraction, the numerator of which is equal to the aggregate outstanding principal
balance (as of the immediately preceding Distribution Date) of all of the
Mortgage Loans secured by Mortgaged Properties located in the State of
California divided by the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans, expressed
as a percentage, and the denominator of which is equal to _____%
40
(which percentage is equal to the percentage of Mortgage Loans initially secured
by Mortgaged Properties located in the State of California) and (ii) the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the largest Mortgage Loan secured by a Mortgaged Property
located in the State of California.
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Special Hazard Losses": Realized Losses in respect of Special Hazard
Mortgage Loans.
"Special Hazard Mortgage Loan": A Liquidated Mortgage Loan as to which the
ability to recover the full amount due thereunder was substantially impaired by
a hazard not insured against under a standard hazard insurance policy.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
"Stayed Funds": If the Master Servicer is the subject of a proceeding under
the federal Bankruptcy Code and the making of a remittance by the Master
Servicer pursuant to this Agreement is prohibited by Section 362 of the federal
Bankruptcy Code, funds which are in the custody of the Master Servicer, a
trustee in bankruptcy or a federal bankruptcy court and should have been the
subject of such remittance absent such prohibition.
"Subordinate Certificates": The Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates.
"Subordinate Percentage": For any Distribution Date, the difference between
100% and the Senior Percentage for such date.
"Subordinate Prepayment Percentage": With respect to any Distribution Date
and each Class of Subordinate Certificates, under the applicable circumstances
set forth below, the respective percentages set forth below:
(i) For any Distribution Date prior to the Distribution Date in
___________), 0%.
41
(ii) For any Distribution Date for which clause (i) does not apply,
and on which any Class of Subordinate Certificates are outstanding:
(a) in the case of the Class of Subordinate Certificates then
outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment Distribution
Trigger has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Class Certificate Balance of such Class
immediately prior to such date and the denominator of which is the sum
of the Class Certificate Balances immediately prior to such date of
(1) the Class of Subordinate Certificates then outstanding with the
Highest Priority and (2) all other Classes of Subordinate Certificates
for which the respective Prepayment Distribution Triggers have been
satisfied; and
(b) in the case of each other Class of Subordinate Certificates
for which the Prepayment Distribution Triggers have not been
satisfied, 0%; and
(iii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.01(c) of this Agreement (determined without regard to the proviso to the
definition of "Subordinate Principal Distribution Amount") would result in
a distribution in respect of principal of any Class or Classes of
Subordinate Certificates in an amount greater than the remaining Class
Certificate Balance thereof (any such class, a "Maturing Class"), then: (a)
the Subordinate Prepayment Percentage of each Maturing Class shall be
reduced to a level that, when applied as described above, would exactly
reduce the Class Certificate Balance of such Class to zero; (b) the
Subordinate Prepayment Percentage of each other Class of Subordinate
Certificates (any such Class, a "Non-Maturing Class") shall be recalculated
in accordance with the provisions in paragraph (ii) above, as if the Class
Certificate Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the "Recalculated Percentage"); (c) the total
amount of the reductions in the Subordinate Prepayment Percentages of the
Maturing Class or Classes pursuant to clause (a) of this sentence,
expressed as an aggregate percentage, shall be allocated among the
Non-Maturing Classes in proportion to their respective Recalculated
Percentages (the portion of such aggregate reduction so allocated to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes of
such Distribution Date, the Subordinate Prepayment Percentage of each
Non-Maturing Class shall be equal to the sum of (1) the Subordinate
Prepayment Percentage thereof, calculated in accordance with the provisions
in paragraph (ii) above as if the Class Certificate Balance of each
Maturing Class had not been reduced to zero, plus (2) the related
Adjustment Percentage.
"Subordinate Principal Distribution Amount": With respect to any
Distribution Date and each Class of Class M Certificates and Class B
Certificates, the sum of the following:
(i) the product of (x) the related Class M Percentage or Class B
Percentage for such Class and (y) the aggregate of the following amounts:
(1) the principal portion of each Monthly Payment due during the
related Due Period on each Outstanding Mortgage Loan, whether or not
received on or prior
42
to the related Determination Date, minus the principal portion of any
Debt Service Reduction which together with other Bankruptcy Losses
exceeds the Bankruptcy Loss Coverage Amount;
(2) the Stated Principal Balance of any Mortgage Loan repurchased
during the related Prepayment Period pursuant to Section 2.02, 2.03,
3.15 or 3.16; and
(3) the principal portion of all other unscheduled collections
(other than Principal Prepayments in Full and Curtailments and amounts
received in connection with a Cash Liquidation or REO Disposition of a
Mortgage Loan, including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) received during the related
Prepayment Period to the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16;
(ii) such Class's pro rata share, based on the Certificate Principal
Balance of each Class of Class M Certificates and Class B Certificates then
outstanding, of, with respect to each Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related Prepayment
Period and did not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal
to the related unscheduled collections (including without limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent
applied by the Master Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.16, to the extent such collections are
not otherwise distributed to the Senior Certificates;
(iii) the product of (x) the related Subordinate Prepayment Percentage
for such Distribution Date and (y) the aggregate of all Principal
Prepayments in Full and Curtailments on the Mortgage Loans received in the
related Prepayment Period, to the extent not payable to the Senior
Certificates; and
(iv) any amounts described in clauses (i), (ii) and (iii) as
determined for any previous Distribution Date, that remain undistributed to
the extent that such amounts are not attributable to Realized Losses which
have been allocated to a Class of Subordinate Certificates;
PROVIDED, HOWEVER, that such amount shall in no event exceed the outstanding
Certificate Principal Balance of such Class of Certificates immediately prior to
such date.
"Sub-Servicer": Any Person with which the Master Servicer has entered into
a Sub- Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.
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"Sub-Servicing Agreement": The written contract between the Master Servicer
and a Sub-Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02.
"Substitution Adjustment Amount": As defined in Section 2.03(d) hereof.
"Surety Bond": The limited purpose Surety Bond (Policy No. AB0039BE), dated
February 28, 1996 in respect to Mortgage Loans originated by MLCC, issued by
Ambac Assurance Corporation (f/k/a Ambac Indemnity Corporation) for the benefit
of certain beneficiaries, including the Trustee for the benefit of the
Certificateholders, but only to the extent that such Surety Bond covers any
Additional Collateral Mortgage Loans.
"Tax Matters Person": The tax matters person appointed pursuant to Section
9.01(c) hereof.
"Tax Returns": 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
the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be
filed on behalf of the Trust in its capacity 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 provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Transition Cost": Any documented fees, expenses and allocated costs
reasonably incurred by a successor master servicer or the Trustee in connection
with a transfer of servicing from the Master Servicer to a successor master
servicer, including without limitation, any costs or expenses associated with
the complete transfer of all master servicing data and the completion,
correction or manipulation of such master servicing data as may be required by
the Trustee to correct any errors or insufficiencies in the master servicing
data or otherwise to enable the Trustee to master service the Mortgage Loans
properly and effectively.
"Trust Fund": REMIC I and REMIC II.
"Uncertificated Principal Balance": With respect to each Uncertificated
REMIC I Regular Interest on any date of determination, the amount set forth in
the Preliminary Statement hereto minus the sum of (x) the aggregate of all
amounts previously deemed distributed with respect to such interest and applied
to reduce the Uncertificated Principal Balance thereof pursuant to Section
4.07(a)(ii) and (y) the aggregate of all reductions in Class Certificate Balance
deemed to have occurred in connection with Realized Losses that were previously
deemed allocated to the Uncertificated Principal Balance of such Uncertificated
REMIC I Regular Interest pursuant to Section 4.07(d).
"Uncertificated REMIC I Accrued Interest": With respect to each
Distribution Date, (i) as to Uncertificated REMIC I Regular Interest LTIA, an
amount equal to the aggregate amount of
44
Accrued Certificate Interest that would result under the terms of the definition
thereof on the Class I-A-1 and Class I-A-2 Certificates if the Pass-Through Rate
on such Classes were equal to the Uncertificated REMIC I Pass-Through Rate and
the Uncertificated Principal Balance were the Class Certificate Balance, (ii) as
to Uncertificated REMIC I Regular Interest LTIB, an amount equal to the
aggregate amount of Accrued Certificate Interest that would result under the
terms of the definition thereof on the portion of the Class M Certificates and
Class B related to Group I if the Pass-Through Rate on such Classes were equal
to the Uncertificated REMIC I Pass-Through Rate and the Uncertificated Principal
Balance were the Class Certificate Balance, (iii) as to Uncertificated REMIC I
Regular Interest LTIIA, an amount equal to the amount of Accrued Certificate
Interest that would result under the terms of the definition thereof on the
Class II-A-1 Certificates if the Pass-Through Rate on such Class were equal to
the Uncertificated REMIC I Pass-Through Rate and the Uncertificated Principal
Balance were the Class Certificate Balance, (iv) as to Uncertificated REMIC I
Regular Interest LTIIB, an amount equal to the aggregate amount of Accrued
Certificate Interest that would result under the terms of the definition thereof
on the portion of the Class M Certificates and Class B related to Group II if
the Pass-Through Rate on such Classes were equal to the Uncertificated REMIC I
Pass-Through Rate and the Uncertificated Principal Balance were the Class
Certificate Balance, (v) as to Uncertificated REMIC I Regular Interest LTIIIA,
an amount equal to the aggregate amount of Accrued Certificate Interest that
would result under the terms of the definition thereof on the Class III-A-1
Certificates if the Pass-Through Rate on such Class were equal to the
Uncertificated REMIC I Pass-Through Rate and the Uncertificated Principal
Balance were the Class Certificate Balance, (vi) as to Uncertificated REMIC I
Regular Interest LTIIIB, an amount equal to the aggregate amount of Accrued
Certificate Interest that would result under the terms of the definition thereof
on the portion of the Class M Certificates and Class B related to Group III if
the Pass-Through Rate on such Classes were equal to the Uncertificated REMIC I
Pass- Through Rate and the Uncertificated Principal Balance were the Class
Certificate Balance; provided, that any reduction in the amount of Accrued
Certificate Interest resulting from the allocation of Prepayment Interest
Shortfalls, Realized Losses or other amounts to the Certificates shall be
allocated to the Uncertificated REMIC I Regular Interests for which such
Certificates are the Corresponding Classes.
"Uncertificated REMIC I Pass-Through Rate": With respect to Uncertificated
REMIC I Regular Interests LTIA and LTIB, the weighted average of the Net
Mortgage Rates on the Group I Mortgage Loans, weighted on the Stated Principal
Balances thereof. With respect to Uncertificated REMIC I Regular Interests LTIIA
and LTIIB, the weighted average of the Net Mortgage Rates on the Group II
Mortgage Loans, weighted on the Stated Principal Balances thereof. With respect
to Uncertificated REMIC I Regular Interests LTIIIA and LTIIIB, the weighted
average of the Net Mortgage Rates on the Group III Mortgage Loans, weighted on
the Stated Principal Balances thereof.
"Uncertificated REMIC I Regular Interests": Each uncertificated partial
undivided beneficial ownership interest in REMIC I as designated in the
Preliminary Statement having a principal balance equal to its Uncertificated
Principal Balance, and which bears interest at a rate equal to its
Uncertificated REMIC I Pass-Through Rate.
"Uncertificated REMIC I Regular Interest Distribution Amount": With respect
to any Distribution Date and each Uncertificated REMIC I Regular Interest, the
sum of the amounts deemed
45
to be distributed on such Uncertificated REMIC I Regular Interest for such
Distribution Date pursuant to Section 4.07(a).
"Undercollateralized Amount": On any Distribution Date, the excess of (x)
the aggregate Class Certificate Balance of any Class or Classes of Senior
Certificates related to a Mortgage Loan Group immediately prior to such
Distribution Date over (y) the aggregate Scheduled Principal Balance of the
Mortgage Loans in its related Mortgage Loan Group as of the beginning of the
related Due Period.
"Undercollateralized Senior Certificates": As defined in Section
4.01(c)(F).
"Underwriting Guide": The underwriting guide of the Master Servicer, as
revised from time to time.
"Uninsured Cause" Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
"United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates, no
partnership or other entity treated as a partnership for United States federal
income tax purposes shall be treated as a United States Person unless all
persons that own an interest in such partnership either directly or through any
entity that is not a corporation for United States federal income tax purposes
are United States Persons, or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such United States Persons have the authority to
control all substantial decisions of the trust. To the extent prescribed in
regulations by the Secretary of the Treasury, which have not yet been issued, a
trust which was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under subpart E of part I of subchapter J of chapter 1 of
the Code), and which was treated as a United States person on August 20, 1996
may elect to continue to be treated as a United States person notwithstanding
the previous sentence.
"Value": With respect to any Mortgaged Property, the value thereof as
determined by an independent appraisal made at the time of the origination of
the related Mortgage Loan; except that, with respect to any Mortgage Loan that
is a purchase money mortgage loan, the lesser of (i) the value thereof as
determined by an independent appraisal made at the time of the origination of
such Mortgage Loan, if any, and (ii) the sales price of the related Mortgaged
Property.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of such Certificates outstanding shall be the fraction, expressed
as a percentage, the numerator of which is the aggregate Class Certificate
Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Class Certificate Balance of all the
Certificates then outstanding (except with respect to the Class A-IO and Class R
Certificates). 96% of all Voting Rights will be allocated among all
46
holders of the Certificates (other than the Class A-IO and Class R Certificates)
in proportion to their then outstanding Class Certificate Balances, 1.00% of all
Voting Rights will be allocated among the holders of the Class I-A-IO
Certificates, 1.00% of all Voting Rights will be allocated among the holders of
the Class II-A-IO Certificates, 1.00% of all Voting Rights will be allocated
among the holders of the Class III-A-IO Certificates and 0.50% and 0.50% of all
Voting Rights will be allocated among the holders of the Class R-I and Class
R-II Certificates, respectively, in proportion to the Percentage Interests
evidenced by their respective Certificates; PROVIDED, HOWEVER, that any
Certificate registered in the name of the Master Servicer, the Depositor or the
Trustee or any of their respective affiliates shall not be included in the
calculation of Voting Rights.
"Written Order to Authenticate": A written order by which the Depositor
directs the Trustee to issue the Certificates.
Section 1.02 ACCOUNTING.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee without
recourse for the benefit of the Certificateholders all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (except Section 9 thereof), the interest in the Surety Bond
transferred to the Trustee pursuant to Section 2.03(e) and all other assets
included or to be included in the Trust Fund. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on or
with respect to the Mortgage Loans (but excluding any payments of principal and
interest due on or prior to the Cut-off Date, and including the proceeds from
the liquidation of Additional Collateral for any Additional Collateral Mortgage
Loans). The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement.
In connection with such transfer and assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee, the following documents or
instruments (A) with respect to each Mortgage Loan, other than a Cooperative
Loan:
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of [Name of Trustee], as Trustee for the registered holders of
the Cendant Mortgage Capital LLC, Mortgage Pass-Through Certificates, ____
Series ____-__, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to
the Person so endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording thereon which
have been recorded, with evidence of recording thereon or a copy of the
Mortgage certified by the public recording office in which such Mortgage
has been recorded;
(iii) an original Assignment of the Mortgage executed in the following
form: "[Name of Trustee], as Trustee for the registered holders of the
Cendant Mortgage Capital LLC, Mortgage Pass-Through Certificates ____
Series ____-__.
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to
the Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
48
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) [reserved];
(viii) the original mortgagee title insurance policy;
(ix) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage;
(x) the original power of attorney, if applicable;
(xi) if such Mortgage Loan is a Buydown Mortgage Loan (as shown in the
Mortgage Loan Schedule), the original Buydown Agreement;
(xii) in the case of an Additional Collateral Mortgage Loan, a copy of
the related Mortgage 100(sm) Pledge Agreement or Parent Power(R) Agreement,
as the case may be.
(B) with respect to each Mortgage Loan that is a Cooperative Loan:
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of [Name of Trustee], as Trustee for the registered holders of
the Cendant Mortgage Capital LLC, Mortgage Pass-Through Certificates, ____
Series ____-__, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to
the Person so endorsing to the Trustee;
(ii) [reserved];
(iii) the original duly executed assignment of Security Agreement to
the Trustee;
(iv) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
(v) the acknowledgment copy of the original executed Form UCC-3 with
respect to the security agreement, indicating the Trustee as the assignee
of the secured party;
(vi) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(vii) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(viii) a copy of the recognition agreement;
49
(ix) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon;
(x) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan; and
(xi) the certificate of primary mortgage insurance, if applicable;
PROVIDED, HOWEVER, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (v) the Depositor
may deliver a Mortgage Note pursuant to (A)(i) and (B)(i) endorsed in blank,
provided that the endorsement is completed within 45 days of the Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Mortgage required to be
included thereon, be delivered to recording offices for recording and have not
been returned to the Depositor in time to permit their delivery as specified
above, the Depositor may deliver a true copy thereof with a certification by the
Depositor or the Master Servicer, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording"; and (y) in lieu of the Mortgage, assignment to
the Trustee or intervening assignments thereof, if the applicable jurisdiction
retains the originals of such documents (as evidenced by a certification from
the Depositor or the Master Servicer, to such effect) the Depositor may deliver
photocopies of such documents containing an original certification by the
judicial or other governmental authority of the jurisdiction where such
documents were recorded; and PROVIDED, FURTHER, HOWEVER, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Depositor, in lieu of delivering the above documents,
may deliver to the Trustee a certification to such effect and shall deposit all
amounts paid in respect of such Mortgage Loans in the Distribution Account on
the Closing Date. The Depositor shall deliver such original documents (including
any original documents as to which certified copies had previously been
delivered) to the Trustee promptly after they are received. The Depositor shall
cause, at its expense, the assignment of the Mortgage to the Trustee to be
recorded not later than 180 days after the Closing Date, unless such recordation
is not required by the Rating Agencies or an Opinion of Counsel has been
provided as set forth below in this Section 2.01. With respect to the
Cooperative Loans, the Depositor will, promptly after the Closing Date, cause
the related financing statements (if not yet filed) and an assignment thereof
from the Depositor to the Trustee to be filed in the appropriate offices. The
Depositor need not cause to be recorded any assignment in any jurisdiction under
the laws of which, as evidenced by an Opinion of Counsel delivered by the
Depositor to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of
Counsel, each assignment shall be submitted for recording by the Depositor in
the manner described above, at no expense to the Trust Fund or the Trustee, upon
the earliest to occur of : (i) reasonable direction by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
25% of the Trust Fund, (ii) the occurrence of a Master Servicer Event of
Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Depositor, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof and (v) with respect to any one assignment, the
50
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage. Notwithstanding the foregoing, if the Depositor
fails to pay the cost of recording the assignments, such expense will be paid by
the Trustee and the Trustee shall be reimbursed for such expenses by the Trust
Fund in accordance with Section 8.05.
If any original Mortgage Note referred to in Section 2.01(A)(i) or
2.01(B)(i) above cannot be located, the obligations of the Depositor to deliver
such documents shall be deemed to be satisfied upon delivery to the Trustee of a
photocopy of such Mortgage Note, if available, with a Lost Note Affidavit. If
any of the original Mortgage Notes for which a Lost Note Affidavit was delivered
to the Trustee is subsequently located, such original Mortgage Note shall be
delivered to the Trustee within three Business Days.
Section 2.02 ACCEPTANCE OF TRUST FUND BY THE TRUSTEE.
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trustee
acknowledges receipt of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(A)(iii) and (xii)) above and declares
that it holds and will hold such documents and the other documents delivered to
it constituting the Mortgage File, and that it holds or will hold all such
assets and such other assets included in the definition of the "Trust Fund" and
the rights of the Seller with respect to any Additional Collateral and the
Surety Bond assigned to the Trustee pursuant to Section 2.03(e) in trust for the
exclusive use and benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to review
each Mortgage File on or before the Closing Date and to certify on the Closing
Date in substantially the form attached hereto as Exhibit I-1 that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(A)(iii) and (xii)) required to be delivered to it
pursuant to this Agreement are in its possession, provided that with respect to
the documents described in Section 2.01(A)(v), (vi), (ix), (x) and (xi) and
2.01(B)(ix), (x) and (xi) to the extent the Trustee has actual knowledge that
such documents exist, (ii) such documents have been reviewed by it and are not
torn, mutilated, defaced or otherwise altered (except if initialed by the
obligor) and relate to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i) through (iii) (except the ZIP Code), (ix)
and (xv) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. Notwithstanding anything to the
contrary in this Agreement, it is herein acknowledged that, in conducting such
review, the Trustee is under no duty or obligation to inspect, review or examine
any such documents, instruments, certificates or other papers to determine
whether they are genuine, enforceable, or appropriate for the represented
purpose or whether they have actually been recorded or that they are other than
what they purport to be on their face, or to determine whether any Person
executing any documents is authorized to do so or whether any signature is
genuine.
The Trustee agrees, for the benefit of the Certificateholders, to review
each Mortgage File within 60 days following the Closing Date and to certify in
substantially the form attached hereto
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as Exhibit I-2 that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(A)(v))
required to be delivered to it pursuant to this Agreement are in its possession,
provided that with respect to the documents described in Section 2.01(A)(v),
(vi), (ix), (x) and (xi) and 2.01(B)(ix), (x) and (xi) to the extent the Trustee
has actual knowledge that such documents exist, (ii) such documents have been
reviewed by it and are not torn, mutilated, defaced or otherwise altered (except
if initialed by the obligor) and appear regular on their face and relate to such
Mortgage Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii)(except the ZIP code), (ix) and (xv) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee is under no duty or obligation (i) to inspect, review or examine any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose or
whether they have actually been recorded or that they are other than what they
purport to be on their face, or to determine whether any Person executing any
documents is authorized to do so or whether any signature is genuine.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver to the Depositor and the Master Servicer a final certification in the
form annexed hereto as Exhibit I-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon, provided that with respect
to the documents described in Section 2.01(A)(v), (vi), (ix), (x) and (xi) and
2.01(B)(ix), (x) and (xi) to the extent the Trustee has actual knowledge that
such documents exist.
If in the process of reviewing the Mortgage Files and making or preparing,
as the case may be, the certifications referred to above, the Trustee finds any
document or documents constituting a part of a Mortgage File to be missing or
defective in any material respect, at the conclusion of its review the Trustee
shall so notify the Depositor and the Master Servicer. In addition, upon the
discovery by the Depositor, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made by the Seller in the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Master Servicer for servicing purposes.
Section 2.03 REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE SELLER;
ASSIGNMENT OF INTEREST IN ADDITIONAL COLLATERAL.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of the
breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of
52
the Certificateholders, by the Trustee, the Master Servicer or the Depositor
shall promptly notify the Seller and the Trustee, the Master Servicer and the
Depositor of such defect, missing document or breach and request that the Seller
deliver such missing document or cure such defect or breach within 90 days from
the date the Seller was notified of such missing document, defect or breach, and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Master Servicer (or, in
accordance with Section 3.02(b), the Trustee) shall enforce the obligations of
the Seller under the Mortgage Loan Purchase Agreement to repurchase such
Mortgage Loan from the Trust Fund at the Purchase Price within 90 days after the
date on which the Seller was notified (subject to Section 2.03(d)) of such
missing document, defect or breach, if and to the extent that the Seller is
obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase
Price for the repurchased Mortgage Loan shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release to the Seller the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as the Seller shall furnish to it and as shall be
necessary to vest in the Seller any Mortgage Loan released pursuant hereto, and
the Trustee shall have no further responsibility with regard to such Mortgage
File. In lieu of repurchasing any such Mortgage Loan as provided above, if so
provided in the related Mortgage Loan Purchase Agreement, the Seller may cause
such Mortgage Loan to be removed from the Trust Fund (in which case it shall
become a Defective Mortgage Loan) and substitute one or more Eligible Substitute
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.03(d). It is understood and agreed that the obligation of the Seller to cure
or to repurchase (or to substitute for) any Mortgage Loan as to which a document
is missing, a material defect in a constituent document exists or as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Depositor, the
Master Servicer or the Trustee on behalf of the Certificateholders.
(b) Within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04 which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for Defective
Mortgage Loans made pursuant to Section 2.03(a), in the case of the Seller, must
be effected prior to the date which is two years after the Closing Date.
As to any Defective Mortgage Loan for which the Seller substitutes a
Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected
by the Seller delivering to the Trustee, for such Eligible Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee,
and such other documents and agreements, with all necessary endorsements
thereon, as are required by Section 2.01, together with an Officers' Certificate
providing that each such Eligible Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt of the original Mortgage Note for such Eligible
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents in the manner specified in Section 2.02 and deliver to the
Depositor and the Master Servicer, with
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respect to such Eligible Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit I-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Depositor and the Master Servicer a certification
substantially in the form of Exhibit I-2 hereto with respect to such Eligible
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the
month of substitution are not part of the Trust Fund and will be retained by the
Seller. For the month of substitution, distributions to Certificateholders will
reflect the Monthly Payment due on such Defective Mortgage Loan on or before the
Due Date in the month of substitution, and the Seller shall thereafter be
entitled to retain all amounts subsequently received in respect of such
Defective Mortgage Loan. The Depositor shall give or cause to be given written
notice to the Certificateholders that such substitution has taken place, shall
amend the Mortgage Loan Schedule to reflect the removal of such Defective
Mortgage Loan from the terms of this Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such
Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage
Pool and shall be subject in all respects to the terms of this Agreement and, in
the case of a substitution effected by the Seller, the Mortgage Loan Purchase
Agreement, including, in the case of a substitution effected by the Seller, all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement in each case as of the date of substitution.
For any month in which the Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Master
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate of, as to each such Eligible Substitute Mortgage Loan, the
Stated Principal Balance thereof as of the date of substitution, together with
one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Adjustment Amount, if any, and the
Trustee, upon receipt of the related Eligible Substitute Mortgage Loan or Loans
and certification by the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall deliver to it and as shall be necessary to vest therein any
Defective Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to the
Trustee an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code, or (b) any REMIC to fail to qualify as a REMIC
at any time that any Certificate is outstanding.
(d) Upon discovery by the Depositor, the Seller, the Master Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other parties.
In connection therewith, the Seller shall repurchase or, subject to the
limitations set forth in Section 2.03(c), substitute one or more Eligible
Substitute Mortgage
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Loans for the affected Mortgage Loan within 60 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. Such
repurchase or substitution shall be made by the Seller, as the case may be, if
the affected Mortgage Loan's status as a non-qualified mortgage is or results
from a breach of any representation, warranty or covenant made by the Seller
under the Mortgage Loan Purchase Agreement. Any such repurchase or substitution
shall be made in the same manner as set forth in Sections 2.03(a), if made by
the Seller. The Trustee shall reconvey to the Seller 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.
(e) The Depositor hereby assigns to the Trustee its security interest in
and to any Additional Collateral, its right to receive amounts due or to become
due in respect of any Additional Collateral, all of its rights in each
Additional Collateral Agreement, and its rights as beneficiary under the Surety
Bond in respect of any Additional Collateral Mortgage Loans. With respect to any
Additional Collateral Mortgage Loan, the Additional Collateral Servicer shall
cause to be filed in the appropriate recording office a Form UCC-3 giving notice
of the assignment of the related security interest to the Trust Fund and shall
thereafter cause the timely filing of all necessary continuation statements with
regard to such financing statements.
Section 2.04 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders, and
to the Depositor, that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of [___________]
and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Master Servicer in
any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to
the extent necessary to ensure its ability to enforce each Mortgage Loan
and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(ii) The Master Servicer has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Agreement
and has duly authorized by all necessary corporate action on the part of
the Master Servicer the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution
and delivery thereof by the Depositor and the Trustee, constitutes a legal,
valid and binding obligation of the Master Servicer, enforceable against
the Master Servicer in accordance with its terms, except to the extent that
(a) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
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(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer
hereunder, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Master Servicer and will not
(A) result in a breach of any term or provision of the charter or by-laws
of the Master Servicer or (B) conflict with, result in a breach, violation
or acceleration of, or result in a default under, the terms of any other
material agreement or instrument to which the Master Servicer is a party or
by which it may be bound, or any statute, order or regulation applicable to
the Master Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Master Servicer; and the
Master Servicer is not a party to, bound by, or in breach or violation of
any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects or, to the Master Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Master Servicer to service the
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof; and
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee. Subject to Section 7.01, the obligation of the Master Servicer
set forth in Section 2.03(c) to cure breaches shall constitute the sole remedies
against the Master Servicer available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.04.
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Section 2.05 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had
good and marketable title to each Mortgage Loan (insofar as such title was
conveyed to it by the Seller, as set forth in the Mortgage Loan Purchase
Agreement) subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance or other
interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly formed and is validly existing as a
limited liability company in good standing under the laws of Delaware, with
full corporate power and authority to own its assets and conduct its
business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of formation
or limited liability company agreement or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material adverse
changes in the financial condition, earnings, affairs or business of the
Depositor or which might materially and adversely affect the properties or
assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by the
Depositor, and the consummation of the transactions contemplated thereby,
do not and will not result in a material breach or violation of any of the
terms or provisions of, or, to the knowledge of the Depositor, constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Depositor is a party or by which
the Depositor is bound or to which any of the property or assets of the
Depositor is subject, nor will such actions result in any violation of the
provisions of the certificate of formation or limited liability company
agreement of the Depositor or, to the best of the Depositor's
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knowledge without independent investigation, any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets (except
for such conflicts, breaches, violations and defaults as would not have a
material adverse effect on the ability of the Depositor to perform its
obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement, as
the case may be; (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.06 PURPOSE AND POWERS OF THE TRUST.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(i) to issue the Certificates to or at the direction of the Depositor
in exchange for the Mortgage Loans;
(ii) to perform the activities of the trust that are expressly set
forth in this Agreement;
(iii) to engage in those activities that are reasonably necessary,
suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith; and
(iv) subject to compliance with this Agreement, to engage in such
other activities as may be required in connection with conservation of the
Trust Fund and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing activities.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer
or any Affiliate of the Master Servicer or any Sub-Servicer may have
with the related Mortgagor;
(ii) the ownership of any Certificate by the Master Servicer or
any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under each
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Primary Insurance Policy and any standard hazard insurance policy. Subject to
Section 3.17, the Trustee shall execute, at the written request of the Master
Servicer, and furnish to the Master Servicer and any Sub-Servicer such documents
as are necessary or appropriate to enable the Master Servicer or any
Sub-Servicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Master Servicer a power of attorney to
carry out such duties. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.06) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Loan Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause either the Trust Fund to fail to qualify as a REMIC under the Code
or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.
Notwithstanding any other provision of this Agreement, the Loan
Purchase and Sale Agreement or the MLCC Servicing Agreement to the contrary,
except as provided below, the Master Servicer shall have no duty or obligation
to service and administer the Additional Collateral and the Master Servicer
shall not be deemed to be the Additional Collateral Servicer, unless and until
MLCC's obligations to administer the Additional Collateral under the Loan
Purchase and Sale Agreement have been terminated with respect to the Additional
Collateral Loans, in which case, the Master Servicer shall be bound to service
and administer the Additional Collateral and the Surety Bond in accordance with
the provisions of this Agreement and the related Additional Collateral
Agreements from the date of such termination. The Master Servicer shall enforce
the obligations of MLCC to service and administer the Additional Collateral as
provided in the Loan Purchase and Sale Agreement, and shall take appropriate
action thereunder if MLCC fails to substantially comply with its obligations to
administer the Additional Collateral. In the event the Master Servicer receives
an indemnification payment from MLCC under Section 11 of the Loan Purchase and
Sale Agreement that is attributable to losses resulting from MLCC's failure to
administer the Additional Collateral in accordance with the terms of the Loan
Purchase and Sale Agreement in connection with
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Additional Collateral Mortgage Loans, the Master Servicer shall deposit such
amount in the Collection Account.
The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Agreement.
Section 3.02 SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND
SUB-SERVICERS.
(a) The Master Servicer may enter into Sub-Servicing Agreements
(provided that such agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the rating on any Class of Certificates) with
Sub-Servicers, for the servicing and administration of the Mortgage Loans.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts of which
are insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement and of the Seller
under the Mortgage Loan Purchase Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Sub- Servicing Agreement, or to purchase a Mortgage Loan on account of missing
or defective documentation or on account of a breach of a representation,
warranty or covenant, as described in
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Section 2.03(a). Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, and
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans, or (ii) from a specific recovery
of costs, expenses or attorneys' fees against the party against whom such
enforcement is directed. Enforcement of the obligations under the Mortgage Loan
Purchase Agreement against the Seller shall be effected by the Master Servicer,
in accordance with the foregoing provisions of this paragraph.
Section 3.03 SUCCESSOR SUB-SERVICERS.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Termination).
Section 3.04 LIABILITY OF THE MASTER SERVICER.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub- Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND TRUSTEE
OR CERTIFICATEHOLDERS.
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Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY
TRUSTEE.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Termination), the Trustee or its designee or the successor master
servicer as appointed pursuant to Section 7.02 herein, shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor master servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Primary Insurance Policy and any other
applicable insurance policies, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Consistent with the foregoing, the Master Servicer may in
its discretion (i) waive any late payment charge or, if applicable, penalty
interest, only upon determining that the coverage of such Mortgage Loan by the
related Primary Insurance Policy, if any, will not be affected, or (ii) extend
the due dates for Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided that any extension pursuant to clause (ii) above
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.06
and
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in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also,
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Loan Rate, forgive the payment of principal or interest or
extend the final maturity date of such Mortgage Loan), accept payment from the
related Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan (such payment, a "Short Pay-off") or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor.
Section 3.08 SUB-SERVICING ACCOUNTS.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Sub-Servicer's receipt thereof, all proceeds of Mortgage Loans received by
the Sub- Servicer less its servicing compensation to the extent permitted by the
Sub-Servicing Agreement, and shall thereafter deposit such amounts in the
Sub-Servicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Sub-Servicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Master Servicer for deposit in the Collection Account not later than two
Business Days after the deposit of such amounts in the Sub-Servicing Account.
For purposes of this Agreement, the Master Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS.
The Master Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of ground rents, taxes,
assessments, fire and hazard insurance premiums, Primary Insurance Policy
premiums, water charges, sewer rents and comparable items for the account of the
Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
two Business Days after the deposit of such funds in the clearing account, for
the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
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Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) clear and terminate the
Servicing Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments.
Section 3.10 COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT.
(a) On behalf of the Trust Fund, the Master Servicer shall establish
and maintain one or more accounts (such account or accounts, the "Collection
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and
amounts paid by the Master Servicer in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 9.01);
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(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Eligible Substitute Mortgage Loans
pursuant to Section 2.03;
(viii) any amounts required to be transferred from any Buydown
Account pursuant to Section 3.25; and
(ix) any amounts realized by MLCC and received by the Trustee or
the Master Servicer in respect of any Additional Collateral.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Eligible Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges or
assumption fees need not be deposited by the Master Servicer in the Collection
Account. In the event the Master Servicer shall deposit in the Collection
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 5:00 p.m.
New York time on the Master Servicer Remittance Date, that portion of the
Available Funds for the related Distribution Date then on deposit in the
Collection Account.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Permitted Investments in accordance with the provisions set forth
in Section 3.12. The Master Servicer shall give notice to the Trustee and the
Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Master Servicer and the Depositor of the location of the Distribution
Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Master Servicer to the Trustee for deposit in an account (which may be
the Distribution Account and
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must satisfy the standards for the Distribution Account as set forth in the
definition thereof) and for all purposes of this Agreement shall be deemed to be
a part of the Collection Account; provided, however, that the Trustee shall have
the sole authority to withdraw any funds held pursuant to this subsection (d).
In the event the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account any amount not required to be deposited therein, it may at
any time request that the Trustee withdraw such amount from the Distribution
Account and remit to it any such amount, any provision herein to the contrary
notwithstanding. In addition, the Master Servicer shall deliver to the Trustee
from time to time for deposit, and upon written notification from the Master
Servicer, the Trustee shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.06;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in connection
with a purchase of Mortgage Loans and REO Properties pursuant to
Section 9.01;
(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the Master
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall deposit such funds in the Distribution Account.
(f) The Master Servicer shall deposit in the Collection Account any
amounts required to be deposited pursuant to Section 3.12(b) in connection with
losses realized on Permitted Investments with respect to funds held in the
Collection Account.
Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION
ACCOUNT.
(a) The Master Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described in
Section 4.06:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer
for Advances, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of
Monthly Payments on Mortgage Loans with respect to which such Advances
were made in accordance with the provisions of Section 4.06;
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(iii) subject to Section 3.16(d), to pay the Master Servicer or
any Sub- Servicer any unpaid Servicing Fees and reimburse any
unreimbursed Servicing Advances with respect to each Mortgage Loan,
but only to the extent of any Liquidation Proceeds, Insurance Proceeds
or other amounts as may be collected by the Master Servicer with
respect to such Mortgage Loan;
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing Fee) on the Master Servicer Remittance Date
any interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Master Servicer, the Depositor or the Seller,
as the case may be, with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 2.03 or
Section 3.16(c) all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance previously
made which the Master Servicer has determined to be a Nonrecoverable
Advance in accordance with the provisions of Section 4.06;
(vii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the
Depositor, as the case may be, pursuant to Section 6.03;
(viii) to reimburse the Master Servicer or the Trustee, as the
case may be, for expenses reasonably incurred in respect of the breach
or defect giving rise to the purchase obligation under Section 2.03 or
Section 2.04 of this Agreement that were included in the Purchase
Price of the Mortgage Loan, including any expenses arising out of the
enforcement of the purchase obligation;
(ix) to pay, or to reimburse the Master Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.16(b);
(x) to clear and terminate the Collection Account pursuant to
Section 10.01; and
(xi) to reimburse the Master Servicer for amounts deposited in
error.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above.
The Master Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vii) above.
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(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions to Certificateholders in accordance
with Section 4.01;
(ii) to pay to itself amounts to which it is entitled pursuant to
Section 8.05;
(iii) to pay itself any interest income earned on funds deposited
in the Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself pursuant to Section 7.02 and 7.01(b);
(v) to pay any amounts in respect of taxes pursuant to
10.01(g)(iii); and
(vi) to clear and terminate the Distribution Account pursuant to
Section 10.01.
Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND THE
DISTRIBUTION ACCOUNT.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount
equal to the lesser of (1) all amounts then payable thereunder
and (2) the amount required to be withdrawn on such date; and
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(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such
Permitted Investment would not constitute a Permitted Investment
in respect of funds thereafter on deposit in the Investment
Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
Section 3.13 MAINTENANCE OF THE PRIMARY INSURANCE POLICIES;
COLLECTIONS THEREUNDER.
The Master Servicer will maintain or cause the related Sub-Servicer,
if any, to maintain in full force and effect, if required under the Mortgage
Loan Purchase Agreement and to the extent available, a Primary Insurance Policy
conforming in all respects to the description set forth in Section 2(vii) of the
Mortgage Loan Purchase Agreement with respect to each Mortgage Loan so insured
as of the Closing Date (or, in the case of a Eligible Substitute Mortgage Loan,
on the date of substitution). Such coverage will be maintained with respect to
each such Mortgage Loan for so long as it is outstanding, subject to any
applicable laws or until the related Loan-to-Value Ratio is reduced to less than
or equal to 80% based on Mortgagor payments. The Master Servicer shall cause the
premium for each Primary Insurance Policy to be paid on a timely basis and shall
pay such premium out of its own funds if it is not otherwise paid. The Master
Servicer or the related Sub- Servicer, if any, will not cancel or refuse to
renew any such Primary Insurance Policy in effect on the Closing Date (or, in
the case of a Eligible Substitute Mortgage Loan, on the date of substitution)
that is required to be kept in force under this Agreement unless a replacement
Primary Insurance Policy for such canceled or non-renewed policy is obtained
from and maintained with an insurer.
The Master Servicer shall not take, or permit any Sub-Servicer to
take, any action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Sub-Servicer, would have been covered
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thereunder. The Master Servicer will comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under each Primary
Insurance Policy. In connection with any assumption and modification agreement
or substitution of liability agreement entered into or to be entered into
pursuant to Section 3.15, the Master Servicer shall promptly notify the insurer
under the related Primary Insurance Policy, if any, of such assumption in
accordance with the terms of such policies and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage under
the Primary Insurance Policy. If any such Primary Insurance Policy is terminated
as a result of such assumption, the Master Servicer or the related Sub- Servicer
shall obtain a replacement Primary Insurance Policy as provided above.
In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of
itself, the Trustee and the Certificateholders, claims to the insurer under any
Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Any amounts collected by the Master Servicer under any Primary
Insurance Policy shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11; and any amounts collected by the Master
Servicer under any Primary Insurance Policy in respect of any REO Property shall
be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.23. In those cases in which a Mortgage Loan is serviced by a
Sub-Servicer, the Sub-Servicer, on behalf of itself, the Trustee, and the
Certificateholders, will present claims to the insurer under any Primary
Insurance Policy and all collections thereunder shall be deposited initially in
the Sub- Servicing Account.
Section 3.14 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND
FIDELITY COVERAGE.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the current principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Loan Rate and
related Servicing Advances. The Master Servicer will comply in the performance
of this Agreement with all reasonable rules and requirements of each insurer
under any such hazard policies. Any amounts to be collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the
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REO Account, subject to withdrawal pursuant to Section 3.23, if received in
respect of an REO Property. Any cost incurred by the Master Servicer in
maintaining any such insurance shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid principal balance of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
so permit. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property or REO Property is
at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, the Master Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) 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).
In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a "General Policy Rating" of A:X or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Master Servicer has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
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Section 3.15 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS.
The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not exercise any such rights if prohibited by law
from doing so or if the exercise of such rights would impair or threaten to
impair any recovery under the related Primary Insurance Policy, if any. If the
Master Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Master Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Master Servicer
is also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of the Master Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. In
connection with any assumption or substitution, the Master Servicer shall apply
such underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable Primary Insurance
Policy or hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by the Master Servicer in respect of
an assumption or substitution of liability agreement will be retained by the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the related Loan Rate and the amount of the Monthly Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
The Master Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
executed original of such substitution or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
Section 3.16 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
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(a) The Master Servicer shall, consistent with the servicing standard
set forth in Section 3.01, foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07. The Master Servicer
shall be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Master Servicer as contemplated in Section 3.11 and
Section 3.23. The foregoing is subject to the provision that, in any case in
which Mortgaged Property shall have suffered damage from an Uninsured Cause, the
Master Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Master Servicer has received actual notice of, or has actual knowledge
of, the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Master Servicer shall not, on behalf of the Trustee, either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Master Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.23 shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being
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prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from the Trust Fund
any Mortgage Loan that is 90 days or more delinquent, which the Master Servicer
determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan purchased hereunder shall be deposited in the
Collection Account, and the Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release or cause to be released to
the Master Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Master Servicer shall furnish and as shall be necessary to vest in the Master
Servicer title to any Mortgage Loan released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: FIRST, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); SECOND, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and THIRD, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: FIRST, to
unpaid Servicing Fees; and SECOND, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
(e) In addition to the foregoing, the Additional Collateral Servicer
shall use its best reasonable efforts to realize upon any Additional Collateral
for such of the Additional Collateral 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 3.11; provided that the
Additional Collateral Servicer shall not, on behalf of the Trustee, obtain title
to any such Additional Collateral as a result of or in lieu of the disposition
thereof or otherwise; and provided further that
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(i) the Additional Collateral Servicer shall not proceed with respect to such
Additional Collateral in any manner that would impair the ability to recover
against the related Mortgaged Property, and (ii) the Master Servicer shall
proceed with any acquisition of REO Property in a manner that preserves the
ability to apply the proceeds of such Additional Collateral against amounts owed
under the defaulted Mortgage Loan. Any proceeds realized from such Additional
Collateral (other than amounts to be released to the Mortgagor or the related
guarantor in accordance with procedures that the Master Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note and to the terms and conditions of any
security agreement, guarantee agreement, mortgage or other agreement governing
the disposition of the proceeds of such Additional Collateral) shall be
deposited in the Distribution Account, subject to withdrawal pursuant to Section
3.11; provided, that such proceeds shall not be so deposited if the Required
Surety Payment in respect of such Additional Collateral Mortgage Loan has been
deposited in the Collection Account (except to the extent of any such proceeds
taken into account in calculating the amount of the Required Surety Payment).
Any other payment received by the Seller in respect of such Additional
Collateral shall be deposited in the Distribution Account subject to withdrawal
pursuant to Section 3.11.
Section 3.17 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full shall be escrowed in
a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering a certification in duplicate (one of which will
be returned to the Master Servicer with the Mortgage File) in the form of
Exhibit E which shall be signed by a Servicing Officer or in a mutually
agreeable electronic format which will in lieu of a signature be deemed to
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trustee shall promptly
release the related Mortgage File to the Master Servicer. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy or any other insurance policy relating to the
Mortgage Loans, the Trustee shall, upon request of the Master Servicer and
delivery to the Trustee in duplicate (one of which will be returned to the
Master Servicer with the Mortgage File) of a Request for Release in the form of
Exhibit E, which shall be signed by a Servicing Officer or in a mutually
agreeable electronic format which will in lieu of a signature be deemed to
originate from a Servicing Officer release the related Mortgage File to the
Master Servicer, and the Trustee shall, at the direction of the Master Servicer,
and in the form provided by the Master Servicer execute such documents as shall
be necessary to the prosecution of any such proceedings. Such Request for
Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection
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Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, the Master Servicer shall no longer be obligated to return the
documents released by the Trustee pursuant to the related Request for Release
and a copy of the Request for Release shall be released by the Trustee to the
Master Servicer.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer any court pleadings, requests
for trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.18 SERVICING COMPENSATION.
As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest and Buydown Funds in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption fees, late
payment charges and other similar fees and charges shall be retained by the
Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums due under the Primary Insurance
Policies, if any, premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of
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each Sub-Servicer, and to the extent provided herein in Section 8.05, the fees
and expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.
Section 3.19 REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee and the Depositor a statement prepared by
the Master Servicer setting forth the status of the Collection Account as of the
close of business on such Distribution Date and showing, for the period covered
by such statement, the aggregate amount of deposits into and withdrawals from
the Collection Account of each category of deposit specified in Section 3.10(a)
and each category of withdrawal specified in Section 3.11. Such statement may be
in the form of the then current ▇▇▇▇▇▇ ▇▇▇ Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Master Servicer to the Trustee.
Section 3.20 STATEMENT AS TO COMPLIANCE.
The Master Servicer will deliver to the Trustee, the Depositor and
each Rating Agency on or before March 15 of each calendar year commencing in
____, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
Section 3.21 INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Not later than March 15 of each calendar year commencing in ____, the
Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report
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such firm may rely, as to matters relating to the direct servicing of
residential mortgage loans by Sub- Servicers, upon comparable reports of firms
of independent certified public accountants rendered on the basis of
examinations conducted in accordance with the same standards (rendered within
one year of such report) with respect to those Sub-Servicers. Immediately upon
receipt of such report, the Master Servicer shall furnish a copy of such report
to the Trustee and each Rating Agency.
Section 3.22 ACCESS TO CERTAIN DOCUMENTATION.
The Master Servicer shall provide to the Office of Thrift Supervision,
the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by it at the expense of the Person requesting
such access.
Section 3.23 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
(a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property within three years after the end of the calendar
year in which the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trustee and the Depositor
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by the Trust Fund of such REO Property subsequent to the
three-year grace period after its acquisition will not result in the imposition
on the Trust Fund of taxes on "prohibited transactions" thereof, as defined in
Section 860F of the Code, or cause the Trust Fund to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the Trust Fund of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer
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shall be entitled to retain or withdraw any interest income paid on funds
deposited in the REO Account.
(c) The Master Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Master Servicer manages and operates similar property owned
by the Master Servicer or any of its Affiliates, all on such terms and for such
period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:
(i) authorize the Trust Fund to enter into, renew or extend any
New Lease with respect to any REO Property, if the New Lease by its
terms will give rise to any income that does not constitute Rents from
Real Property;
(ii) authorize any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize any construction on any REO Property, other than
the completion of a building or other improvement thereon, and then
only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of Section 856(e)(4)(B)
of the Code; or
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(iv) authorize any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust
Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Master Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of
its duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of any
such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such
REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.
(d) In addition to the withdrawals permitted under Section 3.23(c),
the Master Servicer may from time to time make withdrawals from the REO Account
for any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing
Fees in respect of the related Mortgage Loan; and (ii) to reimburse itself or
any Sub-Servicer for unreimbursed Servicing Advances and Advances made in
respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the
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related Distribution Date in accordance with Section 4.01, the income from the
related REO Property received during the prior calendar month, net of any
withdrawals made pursuant to Section 3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), and
further subject to obtaining the approval of the insurer under any related
Primary Insurance Policy (if and to the extent that such approvals are necessary
to make claims under such policies in respect of the affected REO Property),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution Date
in accordance with Section 4.01. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).
(g) The Master Servicer shall file information returns with respect to
the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 3.24 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF
PREPAYMENT INTEREST SHORTFALLS.
The Master Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 5:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from Principal Prepayments in Full or Curtailments during the
related Prepayment Period and (ii) the portion of its aggregate Servicing Fee
which accrued at a Servicing Fee Rate for the most recently ended calendar month
("Compensating Interest").
Section 3.25 ADMINISTRATION OF BUYDOWN FUNDS.
The Buydown Account established and maintained by the Master Servicer
with respect to each Buydown Mortgage Loan shall be a non-interest bearing
Eligible Account. Upon receipt from the Mortgagor of the amount due on a Due
Date for each Buydown Mortgage Loan, the Master Servicer will withdraw from the
related Buydown Account the predetermined amount that, when added to the amount
due on such date from the Mortgagor, equals the Monthly Payment and will deposit
that amount together with the related payment made by the Mortgagor in the
Collection Account. The Buydown Account shall not be an asset of any REMIC and
for federal income tax purposes shall be owned by the Master Servicer.
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If any Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan
in its entirety during the Buydown Period, the Master Servicer will withdraw
from the related Buydown Account and remit to such Mortgagor in accordance with
the related Buydown Agreement any Buydown Funds remaining in the Buydown
Account. If a Principal Prepayment by a Mortgagor during the Buydown Period,
together with any Buydown Funds in the related Buydown Account, will result in a
Principal Prepayment in Full, the Master Servicer will withdraw from the related
Buydown Account for deposit in the Collection Account the Buydown Funds, which
together with such Principal Prepayment, will result in a Principal Prepayment
in Full. If a Mortgagor defaults during the Buydown Period with respect to a
Buydown Mortgage Loan and the Mortgaged Property is sold at foreclosure or title
thereto is acquired on behalf of the Certificateholders, the Master Servicer
will withdraw from the Buydown Account the Buydown Funds (which shall thereupon
constitute "Liquidation Proceeds" for purposes of this Agreement) for deposit in
the Collection Account.
Section 3.26 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF LOAN
RATES AND MONTHLY PAYMENTS.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to a calculation of
the principal balance of a Mortgage Loan that was made by the Master Servicer in
a manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Master Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Trustee for deposit in the Distribution Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor master
servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 DISTRIBUTION ACCOUNT; DISTRIBUTIONS.
(a) The Master Servicer shall remit to the Trustee for deposit into
the Distribution Account on or before 5:00 P.M. New York time on each Master
Servicer Remittance Date by wire transfer of immediately available funds an
amount equal to the sum of (i) any Advance for the immediately succeeding
Distribution Date, (ii) any amount required to be deposited in the Distribution
Account pursuant to Sections 3.10, 3.11, 3.14 or 3.24 and (iii) all other
amounts constituting the Available Funds for the immediately succeeding
Distribution Date.
(b) [reserved]
(c) On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 10.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least five
(5) Business Days prior to the related Record Date, or otherwise by check mailed
to such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the following amounts, in the following order of
priority:
(A) On each Distribution Date, the Group I Available Funds will be
distributed in the following order of priority among the Class I-A Certificates
except as otherwise noted:
FIRST, to the Class I-A Certificates, the Accrued Certificate Interest
on each such Class for such Distribution Date. As described below, Accrued
Certificate Interest on each such Class of Class I-A Certificates is
subject to reduction in the event of certain interest shortfalls allocable
thereto. Any interest shortfalls shall be allocated among the Class I-A
Certificates as described below;
SECOND, to the Class I-A Certificates, any Accrued Certificate
Interest thereon remaining undistributed from previous Distribution Dates,
to the extent of remaining Group I Available Funds, any shortfall in
available amounts being allocated among such Classes in proportion to the
amount of such Accrued Certificate Interest remaining undistributed for
each such Class for such Distribution Date; and
THIRD, sequentially, in the following order, to the Class I-A-1
Certificates and Class I-A-2 Certificates, in reduction of the Class
Certificate Balances thereof, the Group I Senior Principal Distribution
Amount for such Distribution Date to the
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extent of remaining Group I Available Funds, until the Class Certificate
Balances of such Classes have been reduced to zero;
(B) On each Distribution Date, the Group II Available Funds will be
distributed in the following order of priority among the Class II-A Certificates
except as otherwise noted:
FIRST, to the Class II-A Certificates, the Accrued Certificate
Interest on each such Class for such Distribution Date. As described
below, Accrued Certificate Interest on each such Class of Class II-A
Certificates is subject to reduction in the event of certain interest
shortfalls allocable thereto. Any interest shortfalls shall be
allocated among the Class II-A Certificates as described below;
SECOND, to the Class II-A Certificates, any Accrued
Certificate Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group II Available
Funds, any shortfall in available amounts being allocated among such
Classes in proportion to the amount of such Accrued Certificate
Interest remaining undistributed for each such Class for such
Distribution Date; and
THIRD, to the Class II-A-1 Certificates, in reduction of the
Class Certificate Balance thereof, the Group II Senior Principal
Distribution Amount for such Distribution Date to the extent of
remaining Group II Available Funds, until the Class Certificate Balance
of such Class has been reduced to zero;
(C) On each Distribution Date, the Group III Available Funds will be
distributed in the following order of priority among the Class III-A
Certificates except as otherwise noted:
FIRST, to the Class III-A Certificates, the Accrued Certificate
Interest on each such Class for such Distribution Date. As described below,
Accrued Certificate Interest on each such Class of Class III-A Certificates
is subject to reduction in the event of certain interest shortfalls
allocable thereto. Any interest shortfalls shall be allocated among the
Class III-A Certificates as described below;
SECOND, to the Class III-A Certificates, any Accrued Certificate
Interest thereon remaining undistributed from previous Distribution Dates,
to the extent of remaining Group III Available Funds, any shortfall in
available amounts being allocated among such Classes in proportion to the
amount of such Accrued Certificate Interest remaining undistributed for
each such Class for such Distribution Date; and
THIRD, to the Class III-A-1 Certificates, in reduction of the Class
Certificate Balance thereof, the Group III Senior Principal Distribution
Amount for such Distribution Date to the extent of remaining Group III
Available Funds, until the Class Certificate Balance of such Class has been
reduced to zero;
(D) On each Distribution Date on or prior to the Credit Support
Depletion Date, an amount equal to the sum of the remaining Group I, Group II
and Group III Available Funds after the
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distributions in (A), (B) and (C) above and after any distributions required to
be made pursuant to clauses (E) and (F) below, will be distributed sequentially,
in the following order, to the Class M-1, Class M-2, Class M-3, Class B-1, Class
B-2 and Class B-3 Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (c) such Class's Subordinate
Principal Distribution Amount for such Distribution Date, in each case to the
extent of the remaining Available Funds:
(E) On each Distribution Date prior the Credit Support Depletion Date, but
after the reduction of the aggregate Class Certificate Balance of the Class I-A,
Class II-A-1 or Class III-A-1 Certificates to zero, the remaining Class or
Classes of Senior Certificates will be entitled to receive in reduction of their
Class Certificate Balances, pro rata based upon their Class Certificate Balances
immediately prior to such Distribution Date, in addition to any principal
prepayments related to such remaining Senior Certificates' respective Mortgage
Loan Group allocated to such Senior Certificates, 100% of the Principal
Prepayments on any Mortgage Loan in the Mortgage Loan Group relating to the
fully repaid Class or Classes of Senior Certificates; PROVIDED, HOWEVER, that if
the weighted average Subordinate Percentage equals or exceeds ____% on such
Distribution Date, then the additional allocation of principal prepayments to
the Senior Certificates in accordance with this clause (E) will not be made.
(F) If on any Distribution Date on which an Undercollateralized Amount
exists with respect any Class or Classes of Senior Certificates (any such Class
or Classes of Senior Certificates, "Undercollateralized Senior Certificates")
and any Subordinate Certificates are still outstanding in each case after giving
effect to distributions to be made on such Distribution Date, (i) 100% of
amounts otherwise allocable to the Subordinate Certificates in respect of
principal will be distributed to such Undercollateralized Senior Certificates in
reduction of the Class Certificate Balances thereof, until the aggregate Class
Certificate Balance of such Class or Classes of Undercollateralized Senior
Certificates is equal to the aggregate Scheduled Principal Balance of the
Mortgage Loans in its related Mortgage Loan Group, and (ii) the Accrued
Certificate Interest otherwise allocable to the Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and distributed to such Class
or Classes of Undercollateralized Senior Certificates pursuant to clause FIRST
of clauses (A), (B) or (C) above, as applicable, in an amount equal to the
Accrued Certificate Interest at the Pass-Through Rate for such Class or Classes
of Undercollateralized Senior Certificates for such Distribution Date on a
balance equal to the related Undercollateralized Amount. Any such reduction in
the Accrued Certificate Interest on the Subordinate Certificates will be
allocated to the Class B-3, Class B-2, Class B-1, Class M-3, Class M-2 and Class
M-1 Certificates, in that order.
On each Distribution Date, any Available Funds remaining after payment of
interest and principal to the Classes of Certificates entitled thereto, as
described above, will be distributed to the Class R-II Certificates; provided
that if on any Distribution Date on or after the Credit Support Depletion Date
there are any Group I, Group II or Group III Available Funds remaining after
payment of interest and principal to a Class or Classes of Senior Certificates
entitled thereto, such amounts will be distributed to the other Classes of
Senior Certificates, PRO RATA, based upon their Class Certificate Balances,
until all amounts due to all Classes of Senior Certificates have been paid in
full, before any amounts are distributed to the Class R-II Certificates. It is
not anticipated that there will be any significant amounts remaining for such
distribution.
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(d) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(e) Except as otherwise provided in Section 10.01, if the Master
Servicer anticipates that a final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non- tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 4.01(e) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within six months after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee shall
take reasonable steps as directed by the Depositor, or appoint an agent to take
reasonable steps, to contact the remaining non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the Trust Fund. If within nine months
after the second notice any such Certificates shall not have been surrendered
for cancellation, the Class R-II Certificateholders shall be entitled to all
unclaimed funds and other assets which remain subject hereto. No interest shall
accrue or be payable to any Certificateholder on any amount held in trust as a
result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 4.01(e).
Section 4.02 STATEMENTS TO CERTIFICATEHOLDERS.
On each Distribution Date the Trustee shall make available to each
Holder of a Certificate and to the Depositor, the Master Servicer and the Rating
Agencies, a statement based on information contained in the Remittance Report:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates, separately identified, allocable
to principal;
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(ii) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to interest, separately
identified;
(iii) the aggregate amount of servicing compensation received by the
Master Servicer during the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
(iv) the aggregate amount of Advances for the related Due Period;
(v) the aggregate Stated Principal Balance of the Group I, Group II
and Group III Mortgage Loans at the close of business at the end of the
related Due Period;
(vi) the number, weighted average remaining term to maturity and
weighted average Loan Rate of the Group I, Group II and Group III Mortgage
Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of Group I,
Group II and Group III Mortgage Loans (a) one month, two months or three
months delinquent on a contractual basis, (b) as to which foreclosure
proceedings have been commenced and (c) in bankruptcy as of the close of
business on the last day of the calendar month preceding such Distribution
Date;
(viii) with respect to any Group I, Group II and Group III Mortgage
Loan that became an REO Property during the preceding calendar month, the
unpaid principal balance and the Stated Principal Balance of such Group I,
Group II and Group III Mortgage Loan as of the date it became an REO
Property;
(ix) the book value of any REO Property as of the close of business on
the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal balance
of all REO Properties as of the close of business of the last day of the
preceding due period;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during the
related Due Period and the cumulative amount of Realized Losses;
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Collection Account for such Distribution Date;
(xiii) the Class Certificate Balance or Notional Amount, as the case
may be, of each Class of Certificates, after giving effect to the
distributions made on such Distribution Date;
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(xiv) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest
Accrual Period and the respective portions thereof, if any, remaining
unpaid following the distributions made in respect of such Certificates on
such Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date as determined separately for each Loan Group, to the
extent not covered by payments of Compensating Interest by the Master
Servicer pursuant to Section 3.24;
(xvi) the Group I, Group II and Group III Available Funds;
(xvii) the Pass-Through Rate for each Class of Certificates for such
Distribution Date; and
(xviii) the aggregate Stated Principal Balance of Group I, Group II
and Group III Mortgage Loans purchased by the Master Servicer during the
related Due Period and indicating the Section of this Agreement requiring
or allowing the purchase of each such Group I, Group II and Group III
Mortgage Loan.
The Trustee will make the monthly statements (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, and other parties to the Pooling and
Servicing Agreement via the Trustee's internet website and its fax-on-demand
service. The Trustee's internet website shall initially be located at
"www.________________". Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (___) ___-____. Parties that are
unable to use the above distribution options are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Trustee shall have the right to change the way monthly
statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Trustee shall provide timely
and adequate notification to all above parties regarding any such changes.
In addition, the Trustee will make available, as a convenience for
interested parties (and not in furtherance of the distribution of any related
prospectus or prospectus supplement under the securities laws), this Agreement,
the related prospectus and prospectus supplement via the Trustee's internet
website. The Trustee will make no representations or warranties as to the
accuracy of completeness of such documents and will assume no responsibility
therefor.
In connection with providing access to the Trustee's website, the
Trustee may require registration and the acceptance of a disclaimer. The Trustee
shall not be liable for the dissemination of information in accordance with this
Agreement which is not due to an error on the part of the Trustee with respect
to such information.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts shall also be expressed as a dollar amount per Single
Certificate.
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The Trustee shall provide to each Certificateholder any written
reports or other information required by the Code and regulations thereunder as
from time to time are in force. In addition, upon written request, within a
reasonable period of time after the end of each calendar year, the Trustee shall
prepare and forward, to each Person who at any time during the calendar year was
a Certificateholder, a statement containing the information set forth in
subclauses (i) - (iii) above, aggregated for such calendar year or applicable
portion thereof during which such person was a Certificateholder.
Section 4.03 REMITTANCE REPORTS; ADVANCES BY THE MASTER SERVICER.
(a) On the second Business Day following each Determination Date but in no
event less than five Business Days prior to the related Distribution Date, the
Master Servicer shall deliver to the Trustee by telecopy (or by such other means
as the Master Servicer and the Trustee may agree from time to time) a Remittance
Report, and other data mutually agreed upon, with respect to the related
Distribution Date. On the same date, the Master Servicer shall forward to the
Trustee by overnight mail a computer readable magnetic tape or diskette or in
such other medium as may be agreed between the Master Servicer and the Trustee
containing the information set forth in such Remittance Report with respect to
the related Distribution Date. Not later than the close of business New York
time on the Master Servicer Remittance Date, the Master Servicer shall deliver
or cause to be delivered to the Trustee in addition to the information provided
on the Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and 4.06 and to prepare the statements to Certificateholders contemplated
by Section 4.02. The Trustee shall not be responsible to recompute, recalculate
or verify any information provided to it by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal the sum of (i) the aggregate amount of Monthly
Payments (net of the related Servicing Fee), due during the related Due Period
in respect of the Mortgage Loans, which Monthly Payments were delinquent on a
contractual basis as of the close of business on the related Determination Date
and (ii) with respect to each REO Property, which REO Property was acquired
during or prior to the related Due Period and as to which REO Property an REO
Disposition did not occur during the related Due Period, an amount equal to the
excess, if any, of the REO Imputed Interest on such REO Property for the most
recently ended calendar month, over the net income from such REO Property
transferred to the Distribution Account pursuant to Section 4.01 for
distribution on such Distribution Date.
Before the close of business New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect
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to the Mortgage Loans and REO Properties. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the
Collection Account on or before any future Master Servicer Remittance Date to
the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Master Servicer
Remittance Date) shall be less than the total amount that would be distributed
to the Classes of Certificateholders pursuant to Section 4.01 on such
Distribution Date if such amounts held for future distributions had not been so
used to make Advances. The Trustee will provide notice to the Master Servicer by
telecopy on any Master Servicer Remittance Date or within one Business Day in
the event that the amount remitted by the Master Servicer to the Trustee on such
date is less than the Advances required to be made by the Master Servicer for
the related Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon; provided, however, that such obligation will cease if title to the
Mortgaged Property is acquired by the Trust Fund in foreclosure or by deed in
lieu of foreclosure.
(d) Notwithstanding anything herein to the contrary, no Advance shall be
required to be made hereunder by the Master Servicer if such Advance would, if
made, constitute a Nonrecoverable Advance. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Depositor and the
Trustee.
Section 4.04 ALLOCATION OF REALIZED LOSSES.
Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition that
occurred during the related Prepayment Period. The amount of each Realized Loss
shall be evidenced by an Officers' Certificate. All Realized Losses, other than
Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or
Excess Fraud Losses, shall be allocated as follows: first, to the Class B-3
Certificates until the Class Certificate Balance thereof has been reduced to
zero; second, to the Class B-2 Certificates until the Class Certificate Balance
thereof has been reduced to zero; third, to the Class B-1 Certificates until the
Class Certificate Balance thereof has been reduced to zero; fourth, to the Class
M-3 Certificates until the Class Certificate Balance thereof has been reduced to
zero; fifth, to the Class M-2 Certificates until the Class Certificate Balance
thereof has been reduced to zero; sixth, to the Class M-1 Certificates until the
Class Certificate Balance thereof has been reduced to zero; seventh, to the
Class I-A, Class II-A and Class III-A Certificates if such Realized Loss was on
a Group I, Group II or Group III Mortgage Loan, respectively; and eighth, among
all the remaining Classes of Senior Certificates on a pro rata basis, as
described below. Any Excess Losses will be allocated among the Certificates
(other than the Class R Certificates), on a pro rata basis, as described below.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Class Certificate
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Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Accrued Certificate Interest thereon payable on such Distribution Date (without
regard to any Compensating Interest for such Distribution Date) in the case of
an interest portion of a Realized Loss. Any allocation of the principal portion
of Realized Losses (other than Debt Service Reductions) to the Class B
Certificates or, after the Class Certificate Balances of the Class B
Certificates have been reduced to zero, to the Class of Class M Certificates
then outstanding with the highest numerical designation shall be made by
operation of the definition of "Class Certificate Balance" and by operation of
the provisions of Section 4.01. Allocations of the interest portions of Realized
Losses shall be made by operation of the definition of "Accrued Certificate
Interest" and by operation of the provisions of Section 4.01. Allocations of the
principal portion of Debt Service Reductions shall be made by operation of the
provisions of Section 4.01. All Realized Losses and all other losses allocated
to a Class of Certificates hereunder will be allocated among the Certificates of
such Class in proportion to the Percentage Interests evidenced thereby.
Section 4.05 INFORMATION REPORTS TO BE FILED BY THE MASTER SERVICER.
The Master Servicer or the Sub-Servicers shall file information
reports with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section 4.06 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.03 hereof, indicate such amount
withheld.
Section 4.07 DISTRIBUTIONS ON THE UNCERTIFICATED REMIC I REGULAR INTERESTS.
(a) On each Distribution Date the Trustee shall be deemed to distribute to
itself, as the holder of the Uncertificated REMIC I Regular Interests, the
following amounts in the following order of priority to the extent of the
Available Funds:
(i) From Group I Available Funds, Uncertificated REMIC I Accrued
Interest on the Uncertificated REMIC I Regular Interests LTIA and LTIB for
such Distribution Date, plus any Uncertificated REMIC I Accrued Interest
thereon remaining unpaid from any previous Distribution Date from Group II
Available Funds, Uncertificated REMIC I Accrued
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Interest on the Uncertificated REMIC I Regular Interests LTIIA and LTIIB
for such Distribution Date, plus any Uncertificated REMIC I Accrued
Interest thereon remaining unpaid from any previous Distribution Date and
from Group III Available Funds, Uncertificated REMIC I Accrued Interest on
the Uncertificated REMIC I Regular Interests LTIIIA and LTIIIB for such
Distribution Date, plus any Uncertificated REMIC I Accrued Interest thereon
remaining unpaid from any previous Distribution Date; and
(ii) In accordance with the priority set forth in Section 4.07(b), an
amount equal to the sum of the amounts in respect of principal
distributable on the Senior, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates under Section 4.01(c), as allocated
thereto.
(b) The amount described in Section 4.07(a)(ii) shall be deemed
distributed:
(i) from Group I Available Funds to (A) Uncertificated REMIC I Regular
Interest LTIA with the amount to be distributed allocated to such interest
in accordance with the priority assigned to the Class I-A-1 Certificates
and Class I-A-2 Certificates and (B) Uncertificated REMIC I Regular
Interest LTIB any remaining amounts from Group I Available Funds;
(ii) from Group II Available Funds to (A) Uncertificated REMIC I
Regular Interest LTIIA with the amount to be distributed allocated to such
interest in accordance with the priority assigned to the Class II-A-1
Certificates and (B) Uncertificated REMIC I Regular Interest LTIIB any
remaining amounts from Group II Available Funds; and
(iii) from Group III Available Funds to (A) Uncertificated REMIC I
Regular Interest LTIIIA with the amount to be distributed allocated to such
interest in accordance with the priority assigned to the Class III-A-1
Certificates and (B) Uncertificated REMIC I Regular Interest LTIIIB any
remaining amounts from Group III Available Funds,
until the Uncertificated Principal Balance of each such interest is reduced to
zero.
(c) The amounts described in Section 4.07(a)(ii) shall be deemed
distributed by REMIC I to REMIC II in accordance with the priority assigned to
the REMIC II Certificates (other than the Class R-II Certificates) under Section
4.01(c).
(d) In determining from time to time the Uncertificated REMIC I Regular
Interest Distribution Amount, Realized Losses allocated to the Certificates
under Section 4.04 shall be allocated to the Uncertificated REMIC I Regular
Interests in the same amount and priorities as allocated to the Corresponding
Classes.
(e) On each Distribution Date the Trustee shall be deemed to distribute
from REMIC II, in the priority set forth in Sections 4.01(c), to the Senior,
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class R-II
Certificates the amounts distributable thereon, from the amounts deemed to have
been received by REMIC II from REMIC I under this Section 4.07.
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(f) Notwithstanding the deemed distributions on the Uncertificated REMIC I
Regular Interest described in this Section 4.07, distributions of funds from the
Distribution Account shall be made only in accordance with Section 4.01.
Section 4.08 SURETY BOND.
If a Required Surety Payment is payable pursuant to the Surety Bond with
respect to any Additional Collateral Mortgage Loans, as determined by the
Additional Collateral Servicer, the Additional Collateral Servicer shall so
notify the Trustee as soon as reasonably practicable and the Trustee shall
promptly complete the notice in the form of Attachment 1 to the Surety Bond and
shall promptly submit such notice to the surety as a claim for a Required Surety
Payment. MLCC shall upon request assist the Trustee in completing such notice
and shall provide any information requested by the Trustee in connection
therewith.
Upon receipt of a Required Surety Payment from the surety on behalf of the
Certificateholders, the Trustee shall deposit such Required Surety Payment in
the Distribution Account and shall distribute such Required Surety Payment, or
the proceeds thereof, in accordance with the provisions of Section 4.01.
The Trustee shall (i) receive as attorney-in-fact of each Holder of a
Certificate any Required Surety Payment from the surety and (ii) disburse the
same to the Holders of such Certificates as set forth in Section 4.01.
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ARTICLE V
THE CERTIFICATES
Section 5.01 THE CERTIFICATES.
Each of the Class A, Class M, Class B and Class R Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
receipt of a Written Order to Authenticate from the Depositor concurrently with
the sale and assignment to the Trustee of the Trust Fund. Each Class of the
Certificates (other than the Class R-I, Class R-II, Class B-1, Class B-2 and
Class B-3 Certificates) shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of
$100,000 and integral dollar multiples of $1 in excess thereof. The Class B-1,
Class B-2 and Class B-3 Certificates will be issued in registered, certificated
form in minimum denominations of $250,000 and integral multiples of $1,000 in
excess thereof, except for one Class of each of the Class B-1, Class B-2 and
Class B-3 Certificates evidencing the sum of an authorized denomination thereof
and the remainder of the aggregate initial Class Certificate Balance of such
class of Certificates. The Residual Certificates will be issued in registered,
certificated form in minimum denominations of a 25% Percentage Interest.
Provided however, that one Certificate of each such Class of Certificates may be
in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Class Certificate Balance
or Class Certificate Notional Amount of such Class on the Closing Date.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Certificates, other
then the Private Certificates, the Class A-IO, Class R-I and Class R-II
Certificates, shall be Book-Entry Certificates.
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall cause to be kept at the Corporate Trust
Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
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Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged for
other Certificates in authorized denominations and the same aggregate Percentage
Interests, upon surrender of the Certificates to be exchanged at any such office
or agency. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute on behalf of the Trust and authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Trustee or the Certificate Registrar)
be duly endorsed by, or be accompanied by a written instrument of transfer
satisfactory to the Trustee and the Certificate Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.
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(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Master Servicer Event
of Termination, the Certificate Owners of each Class of Book-Entry Certificates
representing Percentage Interests of such Classes aggregating not less than 51%
advises the Trustee and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate Owners.
Upon surrender to the Certificate Registrar of the Book-Entry Certificates by
the Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, at the Depositor's expense, in the case of (ii)
above, or the Seller's expense, in the case of (i) and (iii) above, execute on
behalf of the Trust and authenticate the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Certificate Registrar, the Master Servicer, any Paying Agent and the
Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(d) Except with respect to the initial transfer of the Private Certificates
by the Depositor, no transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, (i) unless such
transfer is made in reliance upon Rule 144A (as evidenced by the investment
letter delivered to the Trustee, in substantially the form attached hereto as
Exhibit F-2) under the 1933 Act, the Trustee and the Depositor shall require a
written Opinion of Counsel (which may be in-house counsel) acceptable to and in
form and substance reasonably satisfactory to the Trustee and the Depositor that
such transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or
the Depositor or (ii) the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached hereto as Exhibit
F-1) and the transferee to execute an investment letter (in substantially the
form attached hereto as Exhibit F-2) acceptable to and in form and substance
reasonably satisfactory to the Depositor and the Trustee certifying to the
Depositor and the Trustee the facts surrounding such transfer, which investment
letter shall not be an expense of the Trustee or the Depositor. The Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received (i) a representation from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the Trustee
and the Depositor, (such requirement is satisfied only by the Trustee's receipt
of a representation letter from the transferee substantially in the form of
Exhibit G hereto, as appropriate), to the effect that either (i) such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA
or a plan subject to Section 4975 of the Code, nor a
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person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, (ii) a representation or
certification to the Trustee (upon which the Trustee is authorized to rely) to
the effect that the proposed transfer and/or holding of such a Certificate and
the servicing, management and operation of the Trust: (I) will not result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
which is not covered under an individual or class prohibited transaction
exemption including but not limited to Department of Labor Prohibited
Transaction Exemption ("PTE") 84-14 (Class Exemption for Plan Asset Transactions
Determined by Independent Qualified Professional Asset Managers); PTE 91-38
(Class Exemption for Certain Transactions Involving Bank Collective Investment
Funds); PTE 90-1 (Class Exemption for Certain Transactions Involving Insurance
Company Pooled Separate Accounts), PTE 95-60 (Class Exemption for Certain
Transactions Involving Insurance Company General Accounts), and PTCE 96-23
(Class Exemption for Plan Asset Transactions Determined by In-House Asset
Managers) and (II) will not subject the Depositor, the Master Servicer or the
Trustee to any obligation in addition to those undertaken in the Agreement or
(iii) in the case of any such ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan subject to ERISA or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee which
Opinion of Counsel shall not be an expense of either the Trustee or the Trust,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust being
deemed to be "plan assets" and subject to the prohibited transaction provisions
of ERISA and the Code and will not subject the Trustee, the Master Servicer or
the Depositor to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. For purposes of clauses (i) and (ii) of the
preceding sentence, such representations shall be deemed to have been made to
the Trustee by the transferee's acceptance of an ERISA-Restricted Certificate
(or the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates) unless the Trustee shall have received
from the transferee an alternative representation acceptable in form and
substance to the Depositor. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect.
If any Book-Entry Certificate (or any interest therein) is acquired or held
in violation of the provisions of Section 5.02(d) above, then the last preceding
Transferee that either (i) is not a Plan Investor or (ii) is not in compliance
with (b) of the immediately preceding paragraph shall be restored, to the extent
permitted by law, to all rights and obligations as Certificate Owner thereof
retroactive to the date of such Transfer of such Certificate. The Trustee shall
be under no liability to any Person for making any payments due on such
Certificate to such preceding Transferee.
Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in this Section 5.02(d) shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer and the Trust Fund from and against
any and all liabilities, claims, costs or expenses incurred by such parties as a
result of such acquisition or holding.
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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 Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) 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 shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Person shall acquire an Ownership Interest in a Class R
Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall as a condition to
registration of the transfer, require delivery to it, in form and substance
satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit F-3 hereto from the
proposed transferee to the effect that such transferee is a Permitted
Transferee and 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 who is not a Permitted
Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Class R Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest in
a Class R Certificate in violation of the provisions of this Section shall
be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the
provisions of this Section, become a Holder of a Class R Certificate, then
the prior Holder of such Class R Certificate that is a Permitted Transferee
shall, upon discovery that the registration of transfer of such Class R
Certificate was not in fact permitted by this Section, be restored to all
rights as Holder thereof retroactive to the date of registration of
transfer of such Class R Certificate. 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 or for making any
distributions due on such Class R 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 Trustee received the documents specified in
clause (iii). The Trustee shall be entitled to recover from any Holder of a
Class R Certificate that was in fact not a Permitted Transferee at the time
such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class
R Certificate that is a Permitted Transferee.
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(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right but not
the obligation, without notice to the Holder of such Class R Certificate or
any other Person having an Ownership Interest therein, to notify the
Depositor to arrange for the sale of such Class R Certificate. The proceeds
of such sale, net of commissions (which may include commissions payable to
the Depositor or its affiliates in connection with such sale), expenses and
taxes due, if any, will be remitted by the Trustee to the previous Holder
of such Class R Certificate that is a Permitted Transferee, except that in
the event that the Trustee determines that the Holder of such Class R
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (v) shall be determined
in the sole discretion of the Trustee 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.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of reasonable
compensation will provide to the Internal Revenue Service, and to the
persons specified in Sections 860E(e)(3) and (6) of the Code, information
needed to compute the tax imposed under Section 860E(e)(5) of the Code on
transfers of residual interests to disqualified organizations.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause any REMIC hereunder to fail to qualify
as a REMIC.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange shall
be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for
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or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 PERSONS DEEMED OWNERS.
The Master Servicer, the Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Master Servicer, the Depositor, the
Certificate Registrar, any Paying Agent or the Trustee may treat the Person,
including a Depository, in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and none of the Master
Servicer, the Trust, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
To the extent the Trustee, Certificate Registrar or any Paying Agent is
required pursuant to this Agreement to determine the identity of the beneficial
owner of a Book-Entry Certificate, any costs assessed by the Depository in
making such determination shall be an expense of the party making such request,
but in no event shall such cost be an expense of the Trust Fund.
Section 5.05 APPOINTMENT OF PAYING AGENT.
(a) The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and shall report the amounts
of such distributions to the Trustee. The duties of the Paying Agent may include
the obligation (i) to withdraw funds from the Distribution Account pursuant to
Sections 3.10 and 3.11 and for the purpose of making the distributions referred
to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the Rating Agencies.
(b) The Trustee shall cause the Paying Agent (if other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent shall hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree that it shall comply with all requirements of
the Code regarding the withholding of payments in respect of Federal income
taxes due from Certificate Owners and otherwise comply with the provisions of
this Agreement applicable to it.
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ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Master
Servicer, as the case may be, herein. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor.
Section 6.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, THE MASTER SERVICER OR THE DEPOSITOR.
Any entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; PROVIDED, HOWEVER, that the successor master servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor master servicer.
Section 6.03 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; PROVIDED, FURTHER, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or employee or
agent of the Master Servicer may rely in good faith on any document of any kind
PRIMA FACIE properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Master Servicer may
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undertake any such action which it may deem necessary or desirable in respect of
this Agreement, and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust and the Master Servicer
shall be entitled to be reimbursed therefor only pursuant to Section 3.11. The
Master Servicer's right to indemnity or reimbursement pursuant to this Section
shall survive any resignation or termination of the Master Servicer pursuant to
Section 6.04 or 7.01 with respect to any losses, expenses, costs or liabilities
arising prior to such resignation or termination (or arising from events that
occurred prior to such resignation or termination). This paragraph shall apply
to the Master Servicer solely in its capacity as Master Servicer hereunder and
in no other capacities.
Section 6.04 MASTER SERVICER NOT TO RESIGN.
Subject to the provisions of Section 7.01 and Section 6.02, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii)
upon satisfaction of the following conditions: (a) the Master Servicer has
proposed a successor master servicer to the Trustee in writing and such proposed
successor master servicer is reasonably acceptable to the Trustee; and (b) each
Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor master servicer stating that the proposed
appointment of such successor master servicer as Master Servicer hereunder will
not result in the reduction or withdrawal of the then current rating of the
Regular Certificates or the ratings that are in effect; PROVIDED, HOWEVER, that
no such resignation by the Master Servicer shall become effective until such
successor master servicer or, in the case of (i) above, the Trustee shall have
assumed the Master Servicer's responsibilities and obligations hereunder or the
Trustee shall have designated a successor master servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Master Servicer.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
Section 6.05 DELEGATION OF DUTIES.
In the ordinary course of business, the Master Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Master Servicer of its liabilities and responsibilities with respect to such
duties and shall not constitute a resignation within the meaning of Section
6.04. The Master Servicer shall provide the Trustee and the Rating Agencies with
60 days prior written notice prior to the delegation of any of its duties to any
Person other than any of the Master Servicer's Affiliates or their respective
successors and assigns.
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ARTICLE VII
DEFAULT
Section 7.01 MASTER SERVICER EVENTS OF TERMINATION.
(a) If any one of the following events ("Master Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any Advance (other
than a Nonrecoverable Advance); or (B) any other failure by the Master
Servicer to deposit in the Collection Account or Distribution Account any
deposit required to be made under the terms of this Agreement which
continues unremedied for a period of one Business Day after the date upon
which such Advance or deposit was required to be remitted to the Trustee,
provided, that, if the Master Servicer cures such failure within such one
Business Day period, the amounts remitted shall include interest calculated
at the applicable federal funds rate; or
(ii) The failure by the Master Servicer to make any required Advance
which failure continues unremedied for a period of 30 days, or the failure
by the Master Servicer duly to observe or perform, in any material respect,
any other covenants, obligations or agreements of the Master Servicer as
set forth in this Agreement, which failure continues unremedied for a
period of 30 days, after the date (A) on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee or by any Holder of a Regular Certificate
evidencing at least 25% of the Voting Rights or (B) actual knowledge of
such failure by a Servicing Officer of the Master Servicer; or
(iii) The entry against the Master Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 days; or
(iv) The Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property; or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained in
force undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable
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insolvency or reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations;
(b) then, and in each and every such case, so long as a Master Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following the
Master Servicer Remittance Date, the Trustee shall terminate all of the rights
and obligations of the Master Servicer under this Agreement and the Trustee, or
a successor master servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to the terms of Section 7.02,
the duties of a successor master servicer and (y) in the case of (i)(B), (ii),
(iii) and (iv) above, the Trustee shall, at the direction of the Holders of each
Class of Regular Certificates evidencing Percentage Interests aggregating not
less than 51%, by notice then given in writing to the Master Servicer (and to
the Trustee if given by Holders of Certificates), terminate all of the rights
and obligations of the Master Servicer as servicer under this Agreement, to the
extent permitted by law, and in and to the Mortgage Loans and the proceeds
thereof. Any such notice to the Master Servicer shall also be given to each
Rating Agency and the Depositor. On or after the receipt by the Master Servicer
(and by the Trustee if such notice is given by the Holders) of such written
notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Certificates or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee or duly appointed successor master
servicer pursuant to and under this Section; and, without limitation, the
Trustee or duly appointed successor master servicer is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and Related Documents or otherwise. The Master
Servicer agrees to cooperate with the Trustee (or the applicable successor
master servicer) in effecting the termination of the responsibilities and rights
of the Master Servicer hereunder, including, without limitation, the delivery to
the Trustee of all documents and records requested by it to enable it to assume
the Master Servicer's functions under this Agreement within ten Business Days
subsequent to such notice, the transfer within one Business Day subsequent to
such notice to the Trustee (or the applicable successor master servicer) for the
administration by it of all cash amounts that shall at the time be held by the
Master Servicer and to be deposited by it in the Collection Account, the
Distribution Account, any REO Account or any Servicing Account or that have been
deposited by the Master Servicer in such accounts or thereafter received by the
Master Servicer with respect to the Mortgage Loans or any REO Property received
by the Master Servicer. All Transition Costs incurred in connection with
transferring the Mortgage Files to the successor master servicer and amending
this Agreement to reflect such succession as Master Servicer pursuant to this
Section shall be paid by the predecessor Master Servicer (or if the predecessor
Master Servicer is the Trustee, the initial Master Servicer) or by the Trust
pursuant to Section 3.11(b)(iv) herein if the Master Servicer does not fulfill
its obligations hereunder within 45 days of presentation of reasonable
documentation of such costs and expenses. For purposes of this Section 7.01, the
Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Termination unless a Responsible Officer of the Trustee assigned to and working
in the Trustee's Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such a Master Servicer Event of
Termination is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.
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Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) Within 90 days of the time the Master Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor master servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Master 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
Master Servicer by the terms and provisions hereof arising on and after its
succession; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.06; and provided further, it is understood and acknowledged that by
the parties hereto that there will be a period of transition (not to exceed 90
days) before the transfer of servicing obligations is fully effected and that
the Trustee (i) shall be under no obligation to purchase any Mortgage Loan, and
(ii) shall have no obligation whatsoever with respect to any liability (other
than advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time of termination. As compensation therefor, the
Trustee (or such other successor master servicer) shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if the
Trustee is unwilling to act as successor master servicer or (ii) if the Trustee
is legally unable so to act, or if the Holders of Certificates entitled to at
least 51% of the Voting Rights so request in writing to the Trustee, the Trustee
shall appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $50,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
PROVIDED, that the appointment of any such successor master servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to
the Certificates or the ratings that are in effect by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Master Servicer hereunder, unless the Trustee
is prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation as
the Trustee and such successor shall agree, not to exceed the Servicing Fee).
The appointment of a successor master servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement prior
to its termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.13 or to indemnify the Trustee pursuant to Section
8.05, nor shall any successor master servicer be liable for any acts or
omissions of the predecessor Master Servicer or for any breach by such Master
Servicer of any of its representations or warranties contained herein or in any
related document or agreement. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) Any successor, including the Trustee, to the Master Servicer as
servicer shall during the term of its service as master servicer continue to
master service and administer the Mortgage
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Loans for the benefit of Certificateholders, and maintain in force a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Master Servicer hereunder and a Fidelity Bond in respect of its
officers, employees and agents to the same extent as the Master Servicer is so
required pursuant to Section 3.14.
Section 7.03 WAIVER OF MASTER SERVICER EVENTS OF TERMINATION.
The Majority Certificateholders may, on behalf of all Certificateholders,
waive any events permitting removal of the Master Servicer as servicer pursuant
to this Article VII, PROVIDED, HOWEVER, that the Majority Certificateholders may
not waive such events or a Master Servicer Event of Termination 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 Master Servicer Event of Termination 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.
Section 7.04 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination or appointment of a successor the Master Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Master Servicer Event of Termination the Trustee shall be deemed to have actual
knowledge of such Master Servicer Event of Termination five Business Days after
a Responsible Officer of the Trustee becomes aware of the occurrence of such an
event and the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Master Servicer Event of Termination
shall have been waived or cured. Such notice shall be given to the Rating
Agencies promptly after any such occurrence.
Section 7.05 SURVIVABILITY OF MASTER SERVICER LIABILITIES.
Notwithstanding anything herein to the contrary, upon termination of the
Master Servicer hereunder, any liabilities of the Master Servicer which accrued
prior to such termination shall survive such termination.
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ARTICLE VIII
THE TRUSTEE
Section 8.01 DUTIES OF TRUSTEE.
The Trustee, prior to the occurrence of a Master Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Master Servicer Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Master Servicer Event of
Termination has occurred (which has not been cured) of which a Responsible
Officer has actual knowledge, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, the Additional Collateral Servicer or the
Depositor hereunder. If any such instrument is found not to conform in any
material respect to the requirements of this Agreement, the Trustee shall notify
the Certificateholders of such instrument in the event that the Trustee, after
so requesting, does not receive a satisfactorily corrected instrument.
The Trustee shall prepare and file or cause to be filed on behalf of the
Trust Fund any tax return that is required with respect to both REMIC I and
REMIC II pursuant to applicable federal, state or local tax laws.
The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of both REMIC I and REMIC II
under the REMIC Provisions and to prevent the imposition of any federal, state
or local income, prohibited transaction, contribution or other tax on either
REMIC I or REMIC II to the extent that maintaining such status and avoiding such
taxes are within the control of the Trustee and are within the commercially
reasonable scope of specific responsibilities under this Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct; PROVIDED, HOWEVER, that:
(i) prior to the occurrence of a Master Servicer Event of Termination,
and after the curing of all such Master Servicer Events of Termination
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
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obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee, unless
it shall be proved by a court of competent jurisdiction that the Trustee
was negligent in ascertaining or investigating the facts related thereto;
(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 Majority Certificateholders relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising or omitting to exercise any trust
or power conferred upon the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure by
the Master Servicer to comply with the obligations of the Master Servicer
referred to in clauses (i) and (ii) of Section 7.01 or any Master Servicer
Event of Termination unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Master Servicer or
the Majority Certificateholders. In the absence of such receipt of such
notice, the Trustee may conclusively assume that there is no Master
Servicer Event of Termination.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer or Additional Collateral Servicer
under this Agreement, except during such time, if any, as the Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of this Agreement.
The Trustee shall not complete foreclosure proceedings, or accept a deed in
lieu of foreclosure, with respect to any Mortgage Loan, unless the Trustee has
been supplied with an Opinion of Counsel to the effect that if the related
Mortgaged Property is acquired by the Trust, such Mortgaged Property from such
Mortgage will qualify as "foreclosure property" within the meaning of Section
860G(a) (8) of the Code. In the event that the Trustee acquires possession of
any Mortgaged Property in spite of the foregoing, the Trustee shall dispose of
the acquired Mortgaged Property as expeditiously as possible.
The Trustee shall have no duty (A) to see any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or
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depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Distribution Account to confirm or verify
the contents of any reports or certificates of the Master Servicer or the
Additional Collateral 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.
Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon, and shall be
fully protected in acting or refraining from acting upon, any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably 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 advice or Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of the Certificateholders pursuant to the provisions of
this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; 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 any
such act;
(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 a Master Servicer Event of Termination
and after the curing of all Master Servicer Events of Termination which may
have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholder; 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
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indemnity against such cost, expense or liability as a condition to such
proceeding. The reasonable expense of every such examination shall be paid
by the Master Servicer or, if paid by the Trustee, shall be reimbursed by
the Master Servicer upon demand. Nothing in this clause (v) shall derogate
from the obligation of the Master Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no liability and
makes no representation as to any acts or omissions hereunder of the Master
Servicer until such time as the Trustee may be required to act as Master
Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed by the Trustee with due care; and
(viii) 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.
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Master Servicer, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for the
use or application by the Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer. The Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02); the validity of the assignment of
any Mortgage Loan to the Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 7.02); the compliance by the Depositor or the
Master Servicer with any warranty or representation made under this Agreement or
in any related document or the accuracy of any such warranty or representation
prior to the Trustee's receipt of notice or other discovery of any
non-compliance therewith or any breach thereof; any investment of monies by or
at the direction of the Master Servicer or any loss resulting therefrom, it
being understood that the Trustee shall remain responsible for any Trust
property that it may hold in its individual capacity; the acts or omissions of
any of the Master Servicer (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02), any Sub-
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Servicer or any Mortgagor; any action of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02), or any Sub-Servicer taken in the name of the Trustee; the failure of the
Master Servicer or any Sub-Servicer to act or perform any duties required of it
as agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); PROVIDED, HOWEVER, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
master servicer).
Section 8.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it were not
Trustee and may transact any banking and trust business with the Master
Servicer, the Depositor or their Affiliates.
Section 8.05 MASTER SERVICER TO PAY TRUSTEE EXPENSES.
The Master Servicer will pay or reimburse the Trustee (or, if the Master
Servicer does not fulfill its obligations hereunder, the Trust Fund will
reimburse pursuant to Section 3.11(b)(ii) herein) within 30 days upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith or which
is the responsibility of the Trustee hereunder. In addition, the Master Servicer
covenants and agrees to indemnify the Trustee (or, if the Master Servicer does
not fulfill its obligations hereunder within 30 days upon the Trustee's request,
the Trust Fund will indemnify pursuant to Section 3.11(b)(ii) herein) and its
officers, directors, employees and agents from, and hold it harmless against,
any and all losses, liabilities, damages, claims or expenses incurred in
connection with any legal action relating to this Agreement or the Certificates,
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. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified, by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee,
including the compensation and the expenses and disbursements of its agents and
its counsel, in the ordinary course of the Trustee's performance in accordance
with the provisions of this Agreement) incurred by the Trustee or such party
arising out of or in connection with the acceptance or administration of its
duties under this Agreement, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance by
the Trustee of its duties under this Agreement or by reason of the reckless
disregard
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of the Trustee's obligations and duties under this Agreement. This section shall
survive termination of this Agreement or the resignation or removal of any
Trustee hereunder.
Section 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall be a corporation or a national banking
association, and duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of Baa3 by Fitch and a
short-term rating of at least A-1 by S&P, and subject to supervision or
examination by federal or state authority. If such 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 this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
Section 8.07 RESIGNATION OR REMOVAL OF TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Master Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor may remove
the Trustee. If the Depositor or the Master Servicer removes the Trustee under
the authority of the immediately preceding sentence, the Depositor shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee.
The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Master Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor Trustee in accordance with this Section.
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Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08.
Section 8.08 SUCCESSOR TRUSTEE.
Any successor Trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the Rating Agencies, the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective, and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee. The Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in this Section
8.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 8.08, the successor Trustee shall mail notice of the appointment of a
successor Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency.
Section 8.09 MERGER OR CONSOLIDATION OF TRUSTEE.
Any entity into which the Trustee may be merged or converted or with which
it may be consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such entity shall be eligible under the provisions of Section 8.06 and
8.08, 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 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Mortgaged Property may at the time be located, the
Depositor 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, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. Any such co-trustee or separate trustee
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shall be subject to the written approval of the Master Servicer. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case a Master Servicer Event of
Termination shall have occurred and be continuing, the Trustee alone shall have
the power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor Trustee under
Section 8.06, and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.08. The Master
Servicer shall be responsible for the fees of any co-trustee or separate trustee
appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee
except that following the occurrence of a Master Servicer Event of
Termination, the Trustee acting alone may accept the resignation or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Rating Agencies and the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties,
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rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
Trustee.
Section 8.11 LIMITATION OF LIABILITY.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.
Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Master Servicer and each
Certificateholder upon reasonable notice during normal business hours, access to
all records maintained by the Trustee in respect of its duties hereunder and
access to officers of the Trustee responsible for performing such duties. The
Trustee shall cooperate fully with the Master Servicer, the Depositor and such
Certificateholder and shall make available to the Master Servicer, the Depositor
and such Certificateholder for review and copying at the expense of the party
requesting such copies, such books, documents or records as may be requested
with respect to the Trustee's duties hereunder. The Depositor, the Master
Servicer and the Certificateholders shall not have any responsibility or
liability for any action or failure to act by the Trustee and are not obligated
to supervise the performance of the Trustee under this Agreement or otherwise.
Section 8.13 SUITS FOR ENFORCEMENT.
In case a Master Servicer Event of Termination or other default by the
Master Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
Section 8.14 WAIVER OF BOND REQUIREMENT.
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The Trustee shall be relieved of, and each Certificateholder hereby waives,
any requirement of any jurisdiction in which the Trust, or any part thereof, may
be located that the Trustee post a bond or other surety with any court, agency
or body whatsoever.
Section 8.15 WAIVER OF INVENTORY, ACCOUNTING AND APPRAISAL REQUIREMENT.
The Trustee shall be relieved of, and each Certificateholder hereby waives,
any requirement of any jurisdiction in which the Trust, or any part thereof, may
be located that the Trustee file any inventory, accounting or appraisal of the
Trust with any court, agency or body at any time or in any manner whatsoever.
Section 8.16 RIGHT OF TRUSTEE IN CAPACITY OF CERTIFICATE REGISTRAR OR
PAYING AGENT.
In the event that the Trustee is also acting in the capacity of Paying
Agent or Certificate Registrar hereunder, the rights, protections, indemnities
and immunities afforded to the Trustee pursuant to this Article VIII shall also
be afforded to the Trustee in its capacity as Paying Agent or Certificate
Registrar.
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ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC ADMINISTRATION.
(a) The Trustee shall make elections to treat each of REMIC I and REMIC II
as a REMIC under the Code and, if necessary, under applicable state law. Each
such election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC I election in respect of the Trust Fund, the
Uncertificated REMIC I Regular Interest shall be designated as the "regular
interest" and the Class R-I Certificates shall be designated as the sole class
of "residual interest" in REMIC I. For purposes of the REMIC II election in
respect of the Trust Fund, the Class A Certificates, Class M Certificates and
Class B Certificates shall be designated as the "regular interests" and the
Class R-II Certificates shall be designated as the sole class of "residual
interests" in REMIC II. The Master Servicer and the Trustee shall not permit the
creation of any "interests" (within the meaning of Section 860G of the Code) in
REMIC I or REMIC II other than the Uncertificated REMIC I Regular Interest and
the Class R-I Certificates and the REMIC II Certificates, respectively. Within
30 days after the Closing Date, the Trustee shall prepare and file with the
Internal Revenue Service Form 8811, "Information Return for Real Estate Mortgage
Investment Conduits (REMIC) and Issuers of Collateralized Debt Obligations" for
each of REMIC I and REMIC II.
The Trustee will apply for an Employee Identification Number from the IRS
via form SS-4 or any other acceptable method for all tax entities.
(b) The Closing Date is hereby designated as the "Startup Day" of the Trust
Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of REMIC I or
REMIC II other than the expense of obtaining any tax related Opinion of Counsel
except as specified herein and except that the Trustee shall be entitled to be
reimbursed from the Collection Account for any professional fees and expenses
related to any non-routine audits or any administrative or judicial proceedings
that do not result from any breach of its tax duties under this Section 9.01.
The Trustee, as agent for REMIC I and REMIC II's Tax Matters Person, shall (i)
act on behalf of REMIC I and REMIC II in relation to any tax matter or
controversy involving the Trust Fund and (ii) represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. By their acceptance thereof,
the holder of the largest Percentage Interest of the Residual Certificates of
the related REMIC shall be designated as the Tax Matters Person (as defined in
the REMIC Provisions) hereby agrees to irrevocably appoint the Trustee or an
Affiliate as its agent to perform all of the duties of the Tax Matters Person
for REMIC I and REMIC II.
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(d) The Trustee shall prepare, sign and file all of the Tax Returns in
respect of the REMICs created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of REMIC I and REMIC II
as is in its possession and reasonably required by the Trustee to enable it to
perform its obligations under this Article IX.
(e) The Trustee shall perform on behalf of REMIC I and REMIC II all
reporting and other tax compliance duties that are the responsibility of the
REMIC under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate, at such Transferor's expense, such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not a Permitted Transferee, (ii) to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of REMIC I and REMIC II. The Master Servicer shall
provide on a timely basis to the Trustee such information with respect to the
assets of REMIC I and REMIC II, including, without limitation, the Mortgage
Loans, as is in its possession and reasonably required by the Trustee to enable
it to perform its obligations under this subsection. In addition, the Depositor
shall provide or cause to be provided to the Trustee, within ten (10) days after
the Closing Date, all information or data that the Trustee reasonably determines
to be relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) To the extent that the affairs of the Trust Fund are within its control
and the scope of its specific responsibilities under this Agreement, the Trustee
shall take such action and shall cause either REMIC created hereunder to take
such action as shall be necessary to create or maintain the status thereof as a
REMIC under the REMIC Provisions (and the Master Servicer shall assist it, to
the extent reasonably requested by it). The Trustee shall not knowingly take any
action, cause REMIC I and REMIC II to take any action or fail to take (or fail
to cause to be taken) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i) endanger the status of REMIC I and
REMIC II as a REMIC or (ii) result in the imposition of a tax upon REMIC I and
REMIC II (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee has received an Opinion of Counsel, addressed
to the Trustee (at the expense of the party seeking to take such action but in
no event at the expense of the Trustee) to the effect that the contemplated
action will not, with respect to the REMICs created hereunder, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Trustee has advised it in writing that it has received an Opinion of
Counsel to the effect that an Adverse REMIC Event could occur with respect to
such action. In addition, prior to taking any action with respect to REMIC I and
REMIC II or the assets of REMIC I and REMIC II, or causing REMIC I and REMIC II
to take any action, which is not contemplated under the terms of this Agreement,
the Master Servicer will consult with counsel with
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respect to whether such action could cause an Adverse REMIC Event to occur with
respect to either REMIC I or REMIC II, and the Master Servicer shall not take
any such action or cause either REMIC I or REMIC II to take any such action as
to which counsel has advised it in writing that an Adverse REMIC Event could
occur. The Trustee may consult with counsel to make such written advice, and the
cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee.
(g) In the event that any tax is imposed on "prohibited transactions" of
the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the REMIC as defined in Section
860G(c) of the Code, on any contributions to REMIC I or REMIC II after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 9.03 hereof, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article IX, (ii) to the Master Servicer pursuant to
Section 9.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article IX,
or otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Distribution Account and shall be paid by
withdrawal therefrom to the extent not required to be paid by the Master
Servicer or the Trustee pursuant to another provision of this Agreement.
(h) On or before April 15 of each calendar year, commencing April 15, ____,
the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating (without regard to
any action taken by any party other than the Trustee) the Trustee's compliance
with this Article IX.
(i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to REMIC I and REMIC II on a calendar year and on an
accrual basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to REMIC I and REMIC II other than in connection with
any Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel (which shall be at the
expense of the party requesting to make such contribution and not at the expense
of the Trustee) to the effect that the inclusion of such assets in the REMIC
will not cause either REMIC I or REMIC II to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject either REMIC to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which either REMIC I and REMIC II will receive a fee or other
compensation for services nor knowingly permit the REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
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Section 9.02 PROHIBITED TRANSACTIONS AND ACTIVITIES.
None of the Depositor, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
REMIC I and REMIC II pursuant to Article X of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for either REMIC I or REMIC II (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Custodial Account or the Distribution Account for gain, nor accept any
contributions to REMIC I or REMIC II after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03),
unless it has received an Opinion of Counsel, addressed to the Trustee (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution will not (a)
affect adversely the status of either REMIC I or REMIC II as a REMIC or (b)
cause either REMIC I or REMIC II to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Section 9.03 MASTER SERVICER AND TRUSTEE INDEMNIFICATION.
(a) The Trustee agrees to indemnify REMIC I and REMIC II, the
Depositor, and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by REMIC I and
REMIC II, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in this Article IX, subject, however, to the
provision of Sections 8.01 and 8.02 of this Agreement.
(b) The Master Servicer agrees to indemnify REMIC I and REMIC II, the
Depositor and the Trustee for any taxes and costs including, without limitation,
any reasonable attorneys' fees imposed on or incurred by either REMIC I or REMIC
II, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article IX.
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ARTICLE X
TERMINATION
Section 10.01 TERMINATION.
(a) The respective obligations and responsibilities of the Master Servicer,
the Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Master Servicer to send certain
notices as hereinafter set forth) shall terminate upon notice to the Trustee
upon the earliest of (i) the Distribution Date on which the Class Certificate
Balance of each Class of Class A Certificates has been reduced to zero, (ii) the
final payment or other liquidation of the last Mortgage Loan in the Trust, and
(iii) the optional purchase by the Master Servicer of the Mortgage Loans as
described below. Notwithstanding the foregoing, in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of
the United States to the Court of St. James's, living on the date hereof.
The Master Servicer may, at its option, terminate this Agreement on any
date on which the Loan Balance is less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date or by purchasing,
on the next succeeding Distribution Date, all of the outstanding Mortgage Loans
and REO Properties at a price equal to the sum of the outstanding Stated
Principal Balance of the Mortgage Loans and accrued and unpaid interest thereon
at the weighted average of the Loan Rates through the end of the Due Period
preceding the final Distribution Date plus unreimbursed Servicing Advances,
Advances and any unpaid Servicing Fees allocable to such Mortgage Loans and REO
Properties (the "Termination Price").
In connection with any such purchase pursuant to the preceding paragraph,
the Master Servicer shall deposit in the Distribution Account all amounts then
on deposit in the Collection Account (less amounts permitted to be withdrawn by
the Master Servicer pursuant to Section 3.10), which deposit shall be deemed to
have occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the Distribution
Account on the Determination Date before such Distribution Date of the
Termination Price and the delivery of an opinion of counsel that such
termination is a "qualified liquidation" under Section 860F of the Code.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Master Servicer,
by letter to the Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution specifying (1) the Distribution Date upon which final distribution
of the Certificates will be made upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein designated, (2) the
amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not
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applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Holders of the Certificates on the Distribution
Date for such final distribution, in proportion to the Percentage Interests of
their respective Class and to the extent that funds are available for such
purpose, an amount equal to the amount required to be distributed to such
Holders in accordance with the provisions of Section 4.01 for such Distribution
Date.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate servicing account for
the benefit of such Certificateholders, and the Master Servicer (if the Master
Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee
(in any other case) 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 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 to the Class R Certificateholders for
payment.
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event that the Master Servicer exercises its purchase option as
provided in Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the Trust
to comply with the requirements of this Section will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust as defined in
Section 860F of the Code or (ii) cause the Trust Fund constituting part of the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) Within 90 days prior to the final Distribution Date, the Trustee
shall adopt and sign a plan of complete liquidation of the Trust Fund
meeting the requirements of a "qualified liquidation" under Section 860F of
the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Master Servicer for cash
pursuant to the terms of the plan of complete liquidation; 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 Holders of each of the Class A (other
than the Class A-IO Certificates), Class B and Class M Certificates, an
amount equal to the sum of the related Class Certificate Balance and one
month's interest thereon at the applicable Pass-Through Rate (B) to the
Holders of the Class A-IO Certificates
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one month's interest on the Notional Amount thereof at the applicable
Pass-Through Rate, and (C) to the Class R Certificateholders, all cash on
hand after such payment to the Class A, Class M and Class B
Certificateholders (other than cash retained to meet claims) and the Trust
shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby agree
to appoint the Trustee 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 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.
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ARTICLE XI
[RESERVED]
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 AMENDMENT.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) 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 any such action listed
in clause (i) through (iii) above shall not adversely affect in any respect the
interests of any Certificateholder, as evidenced by (i) notice in writing to the
Depositor, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
or (ii) an Opinion of Counsel delivered to the Master Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; PROVIDED,
HOWEVER, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates which are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66% Percentage Interest in such Class, or (z) reduce
the percentage of Voting Rights required by clause (y) above without the consent
of the Holders of all Certificates of such Class then outstanding. Upon approval
of an amendment, a copy of such amendment shall be sent to the Rating Agencies.
Prior to the execution of any amendment to this Agreement, the Trustee shall be
entitled to receive and rely upon an Opinion of Counsel (at the expense of the
Person seeking such amendment) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a tax on the Trust Fund pursuant to the REMIC
Provisions or cause the Trust Fund constituting part of the Trust to fail to
qualify as a REMIC at any time that any Certificates are outstanding and that
the amendment is being made in accordance with the terms hereof.
126
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Master
Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment; instead
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any amendment
pursuant to this 11.01 Section that affects its rights, duties and immunities
under this Agreement or otherwise.
Section 12.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall together constitute but one and the
same instrument.
Section 12.03 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not (i) operate to
terminate this Agreement or the Trust, (ii) 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, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust, 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.
127
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.04 GOVERNING LAW; JURISDICTION.
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. With respect to any claim
arising out of this Agreement, each party irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in The City of New York, and
each party irrevocably waives any objection which it may have at any time to the
laying of venue of any suit, action or proceeding arising out of or relating
hereto brought in any such courts, irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 12.05 NOTICES.
All directions, demands and notices hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service, to (a) in the case
of the Seller: [Name of Seller], _________________________________, or such
other address or telecopy number as may be furnished to the Master Servicer and
the Trustee in writing by the Seller; (b) in the case of the Trustee: [Name of
Trustee], ____________________________________, Attention: Cendant Mortgage
Capital LLC, Mortgage Pass-Through Certificates, ____ Series ____-__, or such
other address as may hereafter be furnished to the Depositor, the Seller and the
Master Servicer in writing by the Trustee; (c) in the case of the Depositor:
Cendant Mortgage Capital LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Attention: General Counsel, or such other address or telecopy number as
may be furnished to the Seller, the Master Servicer and the Trustee in writing
by the
128
Depositor; (d) in the case of the Master Servicer: [Name of Master Servicer],
__________________________________, or such other address as may be furnished to
the Seller, the Depositor and the Trustee in writing by the Master Servicer; and
(e) in the case of the Rating Agencies: with respect to Fitch, Fitch, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and with respect to
S&P, Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇. Any notice required or permitted
to be mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Master Servicer Default shall be given by telecopy and by
certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 12.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 ARTICLE AND SECTION REFERENCES.
All article and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section 12.08 NOTICE TO THE RATING AGENCIES.
(a) Each of the Trustee and the Master Servicer shall be obligated to use
its best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of the
Trustee or Master Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of Termination that
has not been cured or waived;
(iii) the resignation or termination of the Master Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor master servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
129
(b) In addition, (i) the Trustee shall promptly furnish to each Rating
Agency copies of each Statement to Certificateholders described in Section 4.06
hereof; and
(i) the Master Servicer shall promptly furnish to each Rating Agency
copies of the following:
(A) each annual statement as to compliance described in Section
3.19 hereof;
(B) each annual independent public accountants' servicing report
described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Master Servicer has not made an
Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Standard &
Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance Group; Fitch, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and ▇▇▇▇▇'▇ Investors
Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 12.09 FURTHER ASSURANCES.
Notwithstanding any other provision of this Agreement, neither the Regular
Certificateholders nor the Trustee shall have any obligation to consent to any
amendment or modification of this Agreement unless they have been provided
reasonable security or indemnity against their out-of-pocket expenses (including
reasonable attorneys' fees) to be incurred in connection therewith.
Section 12.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 12.11 ACTS OF CERTIFICATEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Master
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution
130
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 12.11.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Whenever such execution is
by a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by any Certificateholder shall bind every future Holder of such
Certificate and the Holder of every Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Trust in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
131
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
CENDANT MORTGAGE CAPITAL LLC, as
Depositor
By: _________________________________
Name:
Title:
[NAME OF MASTER SERVICER], as Master
Servicer
By: _________________________________
Name:
Title:
[NAME OF TRUSTEE], as Trustee
By: _________________________________
Name:
Title:
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
On the ___th day of ______, _____ before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
_______________ of Cendant Mortgage Capital LLC, a Delaware limited liability
company that executed the within instrument, and also known to me to be the
person who executed it on behalf of said limited liability company, and
acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
__________________________
STATE OF _______ )
) ss.:
COUNTY OF ________ )
On the __th day of ______, _____ before me, a notary public in and for said
State, personally appeared _______________ known to me to be a ______________ of
________________, a corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
__________________________
STATE OF _______ )
) ss.:
COUNTY OF ________ )
On the __th day of ______, _____ before me, a notary public in and for said
State, personally appeared _______________ known to me to be a ______________ of
________________, a corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
__________________________
EXHIBIT A
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
[NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE
WITH SECTION 5.02(D) OF THE AGREEMENT, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE.]
A-2
____ Series ____-__, Class [A-__] Aggregate [Certificate Principal
Balance] [Notional Amount] of
Class A-__ Certificates as of the
Pass-Through Rate: [_____% per annum] Issue Date: $______________
[Variable]
[Denomination] [Notional Amount]:
Date of Agreement and Cut-off Date: $______________
________ 1, ____
Master Servicer:
[Name of Master Servicer]
First Distribution Date: ______ 25, ____
Trustee: [Name of Trustee]
No. 1 Issue Date: _________________
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family,
adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by
CENDANT MORTGAGE CAPITAL LLC
____ SERIES ____-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that __________ is the registered owner of a Percentage
Interest (obtained by dividing the [denomination] [Notional Amount] of this
Certificate by the aggregate
A-3
[Certificate Principal Balance] [Notional Amount] of the Class A-__ Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-__ Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Cendant Mortgage Capital LLC (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-__ Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-__ Certificates, the
aggregate initial [Certificate Principal Balance] [Notional Amount] of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial [Certificate Principal Balance] [Notional Amount] of the Class A-__
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon the presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
[Certificate Principal Balance] [Notional Amount] of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
A-4
Holders of the Certificates, such purposes including reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, 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 appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all
A-5
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero, (ii) the final payment (or any advance with respect thereto) on
or other liquidation of the last Mortgage Loan remaining in The Trust Fund and
(iii) the optional purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from The Trust Fund of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans remaining
therein. The Agreement permits, but does not require, the party designated in
the Agreement to purchase from The Trust Fund all the Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining therein at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Loan Balance of the Mortgage Loans at the time of purchase
being less than 10% of the aggregate principal balance of the Mortgage Loans as
of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ______________
[NAME OF TRUSTEE]
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-__ Certificates referred to in the
within-mentioned Agreement.
[NAME OF CERTIFICATE REGISTRAR]
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-7
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as _________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: ____________________________________
______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
A-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of __________________________________, account number _________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by __________________________________________,
the assignee named above, or __________________________________, as its agent.
A-9
EXHIBIT B
FORM OF CLASS M CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND
THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
____ Series ____-__ Class M Aggregate Certificate Principal
Balance of Class M Certificates
Pass-Through Rate: ____% per annum as of the Issue Date:
$____________
Date of Agreement and Cut-off Date:
______ 1, ____ Denomination: $____________
First Distribution Date: ______ 25, ____ Master Servicer:
[Name of Master Servicer]
No. 1
Trustee: [Name of Trustee]
Issue Date: _______________
CUSIP: ____________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
B-1
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family,
adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by
CENDANT MORTGAGE CAPITAL LLC
____ SERIES ____-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class M Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Cendant
Mortgage Capital LLC (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial Certificate Principal Balance of the Class M
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon the presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, 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 appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As
B-3
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from The
Trust Fund all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining therein at a price determined as provided in the
Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _______________
[NAME OF TRUSTEE],
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
[NAME OF CERTIFICATE REGISTRAR],
as Certificate Registrar
By:_____________________________
Authorized Signatory
B-5
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as _________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
B-6
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ________________________________________________________, for
the account of ___________________________, account number ___________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by __________________________________________,
the assignee named above, or __________________________________, as its agent.
B-7
EXHIBIT C-1
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
5.02 OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE
WITH SECTION 5.02(D) OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT
OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
(II)
C-1-1
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS
RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION
OR AN AGENT OF A DISQUALIFIED ORGANIZATION, 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. EACH HOLDER OF
THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(D) OF THE AGREEMENT REFERRED TO
HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
CERTIFICATE.
____ Series ____-__, Class R-___ Percentage Interest: 100%
Pass-Through Rate: _____% per annum Master Servicer:
[Name of Master Servicer]
Date of Agreement and Cut-off Date:
__________ 1, ____ Trustee: [Name of Trustee]
First Distribution Date: ______ 25, ____ Issue Date: ____________
CUSIP: ______________
▇▇. ▇
▇-▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇ CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family,
adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by
CENDANT MORTGAGE CAPITAL LLC
____ SERIES ____-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in The Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Cendant
Mortgage Capital LLC (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
This Certificate does not have a principal balance or pass-through rate and
will be entitled to distributions only to the extent set forth in the Agreement.
In addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the Corporate Trust Office or the office or agency maintained by the Trustee in
California.
C-1-3
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, 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 appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using
C-1-4
Plan Assets to acquire this Certificate shall be made except in accordance with
Section 5.02(d) of the Agreement.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, 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, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be deemed
to have consented to the provisions of Section 5.02 of the Agreement and to any
amendment of the Agreement deemed necessary by counsel of the Depositor to
ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price
C-1-5
determined as provided in the Agreement from The Trust Fund of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans remaining
therein. The Agreement permits, but does not require, the party designated in
the Agreement to purchase from The Trust Fund all the Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining therein at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Loan Balance of the Mortgage Loans at the time of purchase
being less than 10% of the aggregate principal balance of the Mortgage Loans as
of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-1-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _____________
[NAME OF TRUSTEE],
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
[NAME OF CERTIFICATE REGISTRAR],
as Certificate Registrar
By:________________________________
Authorized Signatory
C-1-7
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
----------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as _________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: ____________________________________
______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
C-1-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _____________________________________, the
assignee named above, or ________________________________________, as its agent.
C-1-9
EXHIBIT C-2
FORM OF CLASS B CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES, [THE CLASS M CERTIFICATES] [THE
CLASS B-1 CERTIFICATES] [ AND THE CLASS B-2 CERTIFICATES] TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE
WITH SECTION 5.02(D) OF THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT.
C-2-1
____ Series ____-__, Class B-__ Aggregate Certificate Principal
Balance of Class B-__
Certificates as of the Issue
Pass-Through Rate: _____% per annum Date: $__________
Date of Agreement and Cut-off Date: Denomination: $__________
_______ 1, ____
Master Servicer:
[Name of Master Servicer]
First Distribution Date: ______ 25, ____
Trustee: [Name of Trustee]
No. 1
Issue Date: ____________
CUSIP: ____________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family,
adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by
CENDANT MORTGAGE CAPITAL LLC
____ SERIES ____-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE
C-2-2
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-__ Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-__ Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Cendant Mortgage Capital LLC (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-__ Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-__ Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B-__ Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
C-2-3
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, 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 appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Trustee, in
substantially the form attached to the Agreement as Exhibit F-2) under the 1933
Act, the Trustee and the Depositor shall require a written Opinion of Counsel
(which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Trustee
C-2-4
and the Depositor that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the 1933 Act or
is being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an
expense of the Trustee or the Depositor or (ii) the Trustee shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Agreement as Exhibit F-1) and the transferee to execute an
investment letter (in substantially the form attached to the Agreement as
Exhibit F-2) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Trustee certifying to the Depositor and the Trustee the
facts surrounding such transfer, which investment letter shall not be an expense
of the Trustee or the Depositor. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from The
Trust Fund all
C-2-5
the Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Loan Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _______________
[NAME OF TRUSTEE],
as Trustee
By:______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
[NAME OF CERTIFICATE REGISTRAR],
as Certificate Registrar
By:______________________________
Authorized Signatory
C-2-7
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as _________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
ransfer(s) unto ________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: ____________________________________
_______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
C-2-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of _____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by __________________________________________,
the assignee named above, or ___________________________________, as its agent.
C-2-9
EXHIBIT D
MORTGAGE LOAN SCHEDULE
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: [Trustee]
Attn: Inventory Control
Re: Pooling and Servicing Agreement dated as of ______ 1, ____, among
Cendant Mortgage Capital LLC, as Depositor, [Name of Master Servicer],
as Master Servicer and [Name of Trustee], as Trustee
In connection with the administration of the Mortgage Loans held by you as
Trustee for the Owner pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Trustee's Mortgage File for the Mortgage Loan described below, for the reason
indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (check one):
______ 1. Mortgage Paid in Full
______ 2. Foreclosure
______ 3. Substitution
______ 4. Other Liquidation (Repurchases, etc.)
______ 5. Nonliquidation Reason: ________________________
Address to which Trustee should
Deliver the Trustee's Mortgage File: ________________________
________________________
________________________
By:________________________
(authorized signer)
Issuer:_________________________
Address:________________________
________________________
Date: ________________________
E-1
EXHIBIT F-1
FORM OF TRANSFEROR CERTIFICATE
[Date]
[Trustee]
________________________
________________________
[Certificate Registrar]
________________________
________________________
Re: Cendant Mortgage Capital LLC,
Mortgage Pass-Through Certificates, ____ Series ____-__,
Class ___, Representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
F-1-1
______ 1, ____, among Cendant Mortgage Capital LLC as Depositor, [Name of Master
Servicer] as Master Servicer and [Name of Trustee] as Trustee (the "Pooling and
Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.
Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:________________________
Name:______________________
Title:________________________
F-1-2
EXHIBIT F-2
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
[Trustee]
________________________
________________________
[Certificate Registrar]
________________________
________________________
Re: Cendant Mortgage Capital LLC
Mortgage Pass-Through Certificates, ____ Series ____-__,
Class ___, Representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
the sale to it is being made in reliance on Rule 144A. The Transferee is
acquiring the Certificates for its own account or for the account of a
qualified institutional buyer, and understands that such Certificate may be
resold, pledged or transferred only (i) to a person reasonably believed to
be a qualified institutional buyer that purchases for its own account or
for the account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933 Act.
F-2-1
2. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism
associated with the Certificates, that it has requested.
F-2-2
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of ______ 1, ____, among Cendant Mortgage Capital LLC as Depositor,
[Name of Master Servicer] as Master Servicer and [Name of Trustee] as Trustee,
pursuant to which the Certificates were issued.
[TRANSFEREE]
By:________________________
Name:______________________
Title:________________________
F-2-3
ANNEX 1 TO EXHIBIT F-2
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and [Name of Trustee], as Trustee and Certificate Registrar,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________/1 in securities
(except for the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar
------------------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
F-2-4
institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS ATTACHED
HERETO.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, territory or the District of
Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.
F-2-5
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.
Dated:
______________________________
Print Name of Transferee
By:________________________
Name:______________________
Title:________________________
F-2-6
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
----------------------------------------------------------
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and [Name of Trustee], as Trustee and Certificate Registrar,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies which owned
in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
F-2-7
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
____________________________________
Print Name of Transferee or Advisor
By:__________________________
Name:________________________
Title:_______________________________
IF AN ADVISER:
_____________________________________
Print Name of Transferee
F-2-8
The undersigned hereby certifies on behalf of the purchaser named
below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as defined in
Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.
3. As of the date specified below (which is not earlier than the last
day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser _____________________________________________________________
By: (Signature)____________________________________________________________
Name of Signatory ______________________________________________________________
Title __________________________________________________________________________
Date of this certificate _______________________________________________________
Date of information provided in paragraph 3 ____________________________________
F-2-9
EXHIBIT F-3
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
________________________ , being duly sworn, deposes, represents and
warrants as follows:
(i) I am a ______________________ of ____________________________ (the
"Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Cendant Mortgage Capital LLC, Mortgage
Pass-Through Certificates, ____ Series ____-__, Class R-I and Class R-II
(collectively, the "Class R Certificates"), on behalf of whom I make this
affidavit and agreement. Capitalized terms used but not defined herein have
the respective meanings assigned thereto in the Pooling and Servicing
Agreement pursuant to which the Class R Certificates were issued.
(ii) The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 200___ and (ii) is acquiring the Class R Certificates
for its own account or for the account of another Owner from which it has
received an affidavit in substantially the same form as this affidavit. 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 is generally
exempt from federal income tax unless such organization is subject to the
tax on unrelated business taxable income.
(iii) The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under
the Internal Revenue Code of 1986 that applies to all transfers of the
Class R Certificates after March 31, 1988; (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 non-Permitted Transferee, 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
F-3-1
transferee is a Permitted Transferee and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv)
that each of the Class R Certificates may be a "noneconomic residual
interest" within the meaning of proposed Treasury regulations promulgated
under the Code and that the transferor of a "noneconomic residual interest"
will remain liable for any taxes due with respect to the income on such
residual interest, unless no significant purpose of the transfer is to
impede the assessment or collection of tax.
(iv) The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of
the pass-through entity, a non-Permitted Transferee 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.)
(v) The Owner is aware that the Trustee will not register the transfer
of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. 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.
(vi) 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 a Permitted Transferee.
(vii) The Owner's taxpayer identification number is _________________.
(viii) The Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were
issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d)
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 Certificate in violation of Section 5.02(d)); and that the
Owner expressly agrees to be bound by and to comply with such restrictions
and provisions.
(ix) The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.
(x) The Owner anticipates that it will, so long as it holds the Class
R Certificates, have sufficient assets to pay any taxes owed by the holder
of such Class R
F-3-2
Certificates, and hereby represents to and for the benefit of the person
from whom it acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as they become
due, fully understanding that it may incur tax liabilities in excess of any
cash flows generated by the Class R Certificates.
(xi) The Owner has no present knowledge that it may become insolvent
or subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.
(xii) 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.
(xiii) The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a
bankruptcy proceeding, for so long as the Class R Certificates remain
outstanding.
(xiv) The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under
which the Class R Certificate were issued and will not consummate any such
transfer if it knows, or knows facts that should lead it to believe, that
any such representations are false.
(xv) The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants 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 owed 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".
(xvi) 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 may be
included 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.
F-3-3
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 [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200___.
[OWNER]
By:___________________________
Name:_________________________
Title: [Vice] President
ATTEST:
By:__________________________
Name:________________________
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of __________, 200___.
________________________________
Notary Public
County of ______________________
State of _______________________
My Commission expires:
F-3-4
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss. :
COUNTY OF NEW YORK )
________________________, being duly sworn, deposes, represents and
warrants as follows:
1. I am a ____________________ of _____________________________ (the "Owner"),
a corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R (the "Residual
Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit F-2. The Owner does not know or believe that
any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement
F-3-5
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 [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200___.
[OWNER]
By: ___________________________
Name:__________________________
Title: [Vice] President
ATTEST:
By:__________________________
Name:________________________
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of __________, 200___.
__________________________________
Notary Public
County of ________________________
State of _________________________
My Commission expires:
F-3-6
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 200__
Cendant Mortgage Capital LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
[Trustee]
[Master Servicer]
Re: Cendant Mortgage Capital LLC
Mortgage Pass-Through Certificates, ____ Series ____-__, Class
[B-1][B-2][B-3]
---------------
Ladies and Gentlemen:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Cendant Mortgage Capital LLC, Mortgage
Pass-Through Certificates, ____ Series ____-__, Class ___ (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of ________ 1, ____ among Cendant Mortgage Capital LLC as
depositor (the "Depositor"), [Name of Master Servicer] as master servicer (the
"Master Servicer") and [Name of Trustee] as trustee (the "Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Pooling and Servicing Agreement. The Transferee hereby certifies,
represents and warrants to, and covenants with the Depositor, the Trustee and
the Master Servicer that the following statements in either (1) or (2) are
accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or other retirement arrangement, including individual retirement
accounts and annuities, ▇▇▇▇▇ plans and bank collective investment funds
and insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that is subject to Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986 (the "Code")
(any of the foregoing, a "Plan"), (ii) are not being acquired with "plan
assets" of a Plan within the meaning of the Department of Labor ("DOL")
regulation, 29 C.F.R. ss. 2510.3-101, and
G-1
(iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable law,
will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Trustee or
the Master Servicer to any obligation in addition to those undertaken in
the Pooling and Servicing Agreement and one of the following conditions are
met:
(i) the transferee is an insurance company and (A) the source of
funds used to purchase such Certificate is an "insurance company
general account" (as such term is defined in PTCE 95-60), (B) the
conditions set forth in Sections I and II PTCE 95-60 have been
satisfied and (C) there is no Plan with respect to which the amount of
such general account's reserves and liabilities for contracts held by
or on behalf of such Plan and all other Plans maintained by the same
employer (or any "affiliate" thereof, as defined in PTCE 95-60) or by
the same employee organization, exceeds 10% of the total of all
reserves and liabilities of such general account (as determined under
PTCE 95-60) as of the date of the acquisition of such Certificates;
(ii) the transferee is an insurance company and (A) the source of
funds used to purchase such Certificates is an insurance company
general account, (B) the requirements of Section 401(c) of ERISA and
the regulations to be promulgated thereunder ("401(c) Regulations")
have been satisfied and will continue to be satisfied and (C) the
insurance company represents that it understands that the operation of
the general account after December 31, 1998 may affect its ability to
continue to hold such Certificates after the date which is 18 months
after the 401(c) Regulations become final and that unless a Class
Exemption or an exception under Section 401(c) of ERISA is then
available for the continued holding of such Certificates, it will
dispose of such Certificates prior to the date which is 18 months
after the 401(c) Regulations become final;
(iii) the transferee is an insurance company and (A) the source
of funds used to purchase such Certificates is an "insurance company
pooled separate account" (as such term is defined in PTCE 90-1), (B)
the conditions set forth in PTCE 90-1 have been satisfied and (C)
there is no Plan, together with all other Plans maintained by the same
employer (or any "affiliate" thereof, as defined in PTCE 90-1) or by
the same employee organization, with assets which exceed 10% of the
total of all assets in such pooled separate account (as determined
under PTCE 90-1) as of the date of the acquisition of such
Certificates;
(iv) the transferee is a bank and (A) the source of funds used to
purchase such Certificates is a "collective investment fund" (as
defined in PTCE
G-2
91-38), (B) the conditions set forth in PTCE 91-38 have been satisfied
and (C) there is no Plan, the interests of which, together with the
interests of any other Plans maintained by the same employer or
employee organization, in the collective investment fund exceed 10% of
the total of all assets in the collective investment fund (as
determined under PTCE 91-38) as of the date of acquisition of such
Certificates;
(v) the transferee is a "qualified professional asset manager"
described in PTCE 84-14 and the conditions set forth in PTCE 84-14
have been satisfied and will continue to be satisfied; or
(vi) the transferee is an "in-house asset manager" described in
PTCE 96-23 and the conditions set forth in PTCE 96-23 have been
satisfied and will continue to be satisfied.
Very truly yours,
___________________________________
By: _______________________________
Name:
Title:
G-3
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
[Name of Seller], a ______________ corporation (the "Mortgage Loan
Seller"), by its undersigned authorized representative, hereby certifies:
Pursuant to the Mortgage Loan Purchase Agreement, dated
_______________, between the Seller and Cendant Mortgage Capital LLC (the
"Depositor"), the Seller is granting all of its right, title and interest in and
to the Mortgage Loan identified below to the Depositor. Terms used but not
defined herein have the respective meanings assigned to them in the Mortgage
Loan Purchase Agreement.
Mortgage Loan Number:
Maker:
Original Principal Amount:
Original Mortgage Note Date:
Maturity Date:
The Seller is the current owner and holder of the indebtedness
evidenced by the original Mortgage Note.
After diligent search, the Seller has been unable to locate the
original Mortgage Note and believes it to be lost or misplaced.
A true, complete and correct photocopy of the original Mortgage Note
is attached hereto.
If at any time the Seller locates the original Mortgage Note, the
Mortgage Loan Seller shall endorse such original Mortgage Note in the following
form: "Pay to the order of [Name of Trustee], as Trustee for the registered
holders of Cendant Mortgage Capital LLC, Mortgage Pass-Through Certificates,
____ Series ____-__, without recourse," and shall promptly deliver to the
Trustee the original Mortgage Note so endorsed, with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to the
Seller.
The Seller hereby indemnifies the Depositor, the Trustee and the
Certificateholders from and against any and all losses, liabilities, damages,
claims or expenses of whatever kind (including without limitation attorneys'
fees and disbursements) arising from or in connection with the Seller's failure
to have delivered the original Mortgage Note (as required under the Mortgage
Loan Purchase Agreement) to the Trustee as designee of the Depositor, including
without limitation any such losses, liabilities, damages, claims or expenses
arising from or in connection with any claim by any third party who is the
holder of such indebtedness by virtue of its possession of such original
Mortgage Note.
H-1
This Lost Note Affidavit shall inure to the benefit of the Depositor,
the Trustee and the Certificateholders and their respective successors and
permitted assigns.
Dated:
[Seller]
By:______________________________
Name:____________________________
Title:___________________________
H-2
EXHIBIT I-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
________________________, ____
Cendant Mortgage Capital LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
[Master Servicer]
Re: Pooling and Servicing Agreement, dated as of ______ 1, ____,
among Cendant Mortgage Capital LLC, as depositor, [Name of
Master Servicer], as master servicer and [Name of Trustee], as
Trustee, Mortgage Pass-Through Certificates, ____ Series ____-__
----------------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in Section 2.01 of the
Pooling and Servicing Agreement.
[NAME OF TRUSTEE]
By:_________________________________
Name:
Title:
I-1-1
EXHIBIT I-2
FORM OF TRUSTEE FINAL CERTIFICATION
________________________, 2001
Cendant Mortgage Capital LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
[Master Servicer]
Re: Pooling and Servicing Agreement, dated as of ______ 1, ____,
among Cendant Mortgage Capital LLC, as depositor, [Name of
Master Servicer], as master servicer and [Name of Trustee], as
Trustee, Mortgage Pass-Through Certificates, ____ Series ____-__
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
I-2-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[NAME OF TRUSTEE], as Trustee
By:__________________________________
Name:
Title:
I-2-2
EXHIBIT J
MORTGAGE LOAN PURCHASE AGREEMENT
(Available upon request)
J-1