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BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
BANK ONE, NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1999
Mortgage Asset-Backed Pass-Through Certificates
Series 1999-RS4
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS...................................................................4
Accrued Certificate Interest...........................................................4
Additional Servicing Fee...............................................................5
Adjusted Mortgage Rate.................................................................5
Adjustment Date........................................................................5
Advance ..............................................................................5
Affiliate..............................................................................5
Agreement..............................................................................5
Amount Held for Future Distribution....................................................5
Appraised Value........................................................................5
Assignment.............................................................................6
Available Distribution Amount..........................................................6
Bankruptcy Amount......................................................................6
Bankruptcy Code........................................................................6
Bankruptcy Loss........................................................................6
Basis Risk Shortfall...................................................................7
Basis Risk Shortfall Carry-Forward Amount..............................................7
Book-Entry Certificate.................................................................7
Business Day...........................................................................7
Cash Liquidation.......................................................................7
Certificate............................................................................7
Certificate Account....................................................................7
Certificate Account Deposit Date.......................................................7
Certificateholder or Holder............................................................8
Certificate Insurer Premium............................................................8
Certificate Insurer Premium Modified Rate..............................................8
Certificate Insurer Premium Rate.......................................................8
Certificate Owner......................................................................8
Certificate Principal Balance..........................................................8
Certificate Register and Certificate Registrar.........................................9
Class ..............................................................................9
Class A Certificates...................................................................9
Class A-I Certificate..................................................................9
Class A-II Certificate.................................................................9
Class A-II Margin......................................................................9
Class LT1-I Interest...................................................................9
Class LT2-I Interest...................................................................9
Class LT3-I Interest..................................................................10
(i)
Class LT1-II Interest.................................................................10
Class LT2-II Interest.................................................................10
Class LT3-II Interest.................................................................10
Class MT1-I Interest..................................................................10
Class MT2-I Interest..................................................................10
Class MT3-I Interest..................................................................10
Class MT4-I Interest..................................................................10
Class MT1-II Interest.................................................................11
Class MT2-II Interest.................................................................11
Class MT3-II Interest.................................................................11
Class MT4-II Interest.................................................................11
Class R Certificate...................................................................11
Class R-I Certificate.................................................................11
Class R-II Certificate................................................................11
Class R-III Certificate...............................................................11
Class R-IV Certificate................................................................12
Class SB Certificates.................................................................12
Class SB-I Certificate................................................................12
Class SB-II Certificate...............................................................12
Class UT1-I Interest..................................................................12
Class UT2-I Interest..................................................................12
Class UT2-I Distribution Amount.......................................................12
Class UT2-I Notional Balance..........................................................12
Class UT2-I Pass-Through Rate.........................................................12
Class UT3-I Interest..................................................................12
Class UT3-I Distribution Amount.......................................................13
Class UT3-I Notional Balance..........................................................13
Class UT3-I Pass-Through Rate.........................................................13
Class UT4-I Interest..................................................................13
Class UT5-I Interest..................................................................13
Class UT1-II Interest.................................................................13
Class UT2-II Interest.................................................................13
Class UT2-II Distribution Amount......................................................13
Class UT2-II Notional Balance.........................................................13
Class UT2-II Pass-Through Rate........................................................13
Class UT3-II Interest.................................................................14
Class UT3-II Distribution Amount......................................................14
Class UT3-II Notional Balance.........................................................14
Class UT3-II Pass-Through Rate........................................................14
Class UT4-II Interest.................................................................14
Class UT5-II Interest.................................................................14
Closing Date..........................................................................14
Code .............................................................................14
Compensating Interest.................................................................14
Corporate Trust Office................................................................15
Cumulative Insurance Payments.........................................................15
(ii)
Curtailment...........................................................................15
Custodial Account.....................................................................15
Custodial Agreement...................................................................15
Custodian.............................................................................15
Cut-off Date..........................................................................15
Cut-off Date Balance..................................................................15
Cut-off Date Principal Balance........................................................15
Debt Service Reduction................................................................15
Deficiency Amount.....................................................................16
Deficient Valuation...................................................................16
Definitive Certificate................................................................16
Deleted Mortgage Loan.................................................................16
Delinquency Ratio.....................................................................16
Delinquent............................................................................16
Depository............................................................................16
Depository Participant................................................................17
Designated Subservicer................................................................17
Destroyed Mortgage Note...............................................................17
Determination Date....................................................................17
Disqualified Organization.............................................................17
Distribution Date.....................................................................17
Due Date .............................................................................17
Due Period............................................................................18
Eligible Account......................................................................18
ERISA .............................................................................18
Event of Default......................................................................18
Excess Bankruptcy Loss................................................................18
Excess Cash Flow......................................................................18
Excess Fraud Loss.....................................................................18
Excess Loss...........................................................................18
Excess Overcollateralization Amount...................................................18
Excess Realized Loss..................................................................18
Excess Special Hazard Loss............................................................19
Extraordinary Events..................................................................19
Extraordinary Losses..................................................................19
Xxxxxx Mae............................................................................20
FASIT .............................................................................20
FDIC .............................................................................20
Xxxxxxx Mac...........................................................................20
Final Distribution Date...............................................................20
Fitch .............................................................................20
Foreclosure Profits...................................................................20
Fraud Loss Amount.....................................................................20
Fraud Losses..........................................................................21
Gross Margin..........................................................................21
Group I Aggregate Net Excess Turbo Amount.............................................21
(iii)
Group II Aggregate Net Excess Turbo Amount............................................21
Group I Excess Turbo Amount...........................................................21
Group II Excess Turbo Amount..........................................................21
Group I Loan..........................................................................21
Group II Loan.........................................................................22
Group I Net Mortgage Rate.............................................................22
Group II Net Mortgage Rate............................................................22
Group I Overcollateralization Amount..................................................22
Group II Overcollateralization Amount.................................................22
Group I Weighted Average Net Mortgage Rate............................................22
Group II Weighted Average Net Mortgage Rate...........................................22
HomeComings...........................................................................22
Independent...........................................................................22
Index .............................................................................22
Initial Certificate Principal Balance.................................................23
Insurance Account.....................................................................23
Insurance Agreement...................................................................23
Insurance Proceeds....................................................................23
Insured Amount........................................................................23
Insurer .............................................................................23
Insurer Account.......................................................................23
Insurer Default.......................................................................23
Interest Accrual Period...............................................................24
Interest Distribution Amount..........................................................24
Late Collections......................................................................24
Late Payment Rate.....................................................................24
LIBOR .............................................................................24
LIBOR Business Day....................................................................24
LIBOR Rate Adjustment Date............................................................24
Liquidation Proceeds..................................................................24
Loan-to-Value Ratio...................................................................24
Maturity Date.........................................................................24
Maximum Mortgage Rate.................................................................25
Maximum Net Mortgage Rate.............................................................25
Minimum Mortgage Rate.................................................................25
Modified Mortgage Loan................................................................25
Modified Net Mortgage Rate............................................................25
Monthly Payment.......................................................................25
Xxxxx'x .............................................................................25
Mortgage .............................................................................25
Mortgage File.........................................................................25
Mortgage Loan Purchase Agreement......................................................26
Mortgage Loan Schedule................................................................26
Mortgage Loans........................................................................27
Mortgage Note.........................................................................27
Mortgage Rate.........................................................................27
(iv)
Mortgaged Property....................................................................27
Mortgagor.............................................................................27
Net Mortgage Rate.....................................................................27
Net WAC Cap Rate......................................................................28
Non-Primary Residence Loans...........................................................28
Non-United States Person..............................................................28
Nonrecoverable Advance................................................................28
Nonsubserviced Mortgage Loan..........................................................28
Note Margin...........................................................................28
Notice .............................................................................28
Officers' Certificate.................................................................28
Opinion of Counsel....................................................................28
Optional Termination Date.............................................................29
Outstanding Mortgage Loan.............................................................29
Overcollateralization Amount..........................................................29
Overcollateralization Increase Amount.................................................29
Overcollateralization Reduction Amount................................................29
Ownership Interest....................................................................29
Pass-Through Rate.....................................................................29
Paying Agent..........................................................................29
Percentage Interest...................................................................29
Periodic Cap..........................................................................30
Permitted Investments.................................................................30
Permitted Transferee..................................................................31
Person .............................................................................31
Policy .............................................................................31
Prepayment Assumption.................................................................31
Prepayment Interest Shortfall.........................................................31
Prepayment Period.....................................................................32
Principal Collection Percentage.......................................................32
Principal Distribution Amount.........................................................32
Principal Prepayment..................................................................33
Principal Prepayment in Full..........................................................33
Program Guide.........................................................................33
Purchase Price........................................................................33
Qualified Substitute Mortgage Loan....................................................33
Rating Agency.........................................................................34
Realized Loss.........................................................................34
Record Date...........................................................................35
Regular Interest......................................................................35
Relief Act............................................................................35
REMIC .............................................................................35
REMIC Administrator...................................................................35
REMIC I .............................................................................35
REMIC Provisions......................................................................36
Remittance Rate.......................................................................36
(v)
REO Acquisition.......................................................................36
REO Disposition.......................................................................36
REO Imputed Interest..................................................................36
REO Proceeds..........................................................................36
REO Property..........................................................................36
Repurchase Event......................................................................36
Request for Release...................................................................36
Required Insurance Policy.............................................................37
Required Overcollateralization Amount.................................................37
Reserve Fund..........................................................................37
Required Reserve Fund Deposit.........................................................37
Reserve Fund Deposit..................................................................37
Residential Funding...................................................................37
Responsible Officer...................................................................37
Rolling Six-Month Delinquency Ratio...................................................37
Servicing Accounts....................................................................38
Servicing Advances....................................................................38
Servicing Fee.........................................................................38
Servicing Fee Rate....................................................................38
Servicing Modification................................................................38
Servicing Officer.....................................................................38
Servicing Trigger.....................................................................38
Simple Interest Mortgage Loans........................................................39
Special Hazard Amount.................................................................39
Special Hazard Loss...................................................................40
Standard & Poor's.....................................................................40
Startup Date..........................................................................40
Stated Principal Balance..............................................................40
Stepdown Date.........................................................................40
Subordination.........................................................................40
Subserviced Mortgage Loan.............................................................40
Subservicer...........................................................................40
Subservicer Advance...................................................................41
Subservicing Account..................................................................41
Subservicing Agreement................................................................41
Subservicing Fee......................................................................41
Tax Returns...........................................................................41
Transfer .............................................................................41
Transferee............................................................................41
Transferor............................................................................41
Trust Fund............................................................................41
Twelve-Month Loss Amount..............................................................41
Uniform Single Attestation Program for Mortgage Bankers...............................42
Uninsured Cause.......................................................................42
United States Person..................................................................42
Voting Rights.........................................................................42
(vi)
Section 1.02. Determination of LIBOR.......................................................42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.................................................44
Section 2.02. Acceptance by Trustee........................................................47
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Depositor
48
Section 2.04. Representations and Warranties of Residential Funding........................51
Section 2.05. Execution and Authentication of Certificates.................................52
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer...........................................54
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers' Obligations; Special Servicing..................55
Section 3.03. Successor Subservicers.......................................................56
Section 3.04. Liability of the Master Servicer.............................................57
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...........................................................57
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee..............57
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account......................................................................58
Section 3.08. Subservicing Accounts; Servicing Accounts....................................60
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage
Loans........................................................................61
Section 3.10. Permitted Withdrawals from the Custodial Account.............................62
Section 3.11. [Reserved]...................................................................64
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage............64
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments..............................................66
Section 3.14. Realization Upon Defaulted Mortgage Loans....................................68
Section 3.15. Trustee to Cooperate; Release of Mortgage Files..............................70
Section 3.16. Servicing and Other Compensation; Compensating Interest......................71
Section 3.17. Reports to the Trustee and the Depositor.....................................72
Section 3.18. Annual Statement as to Compliance............................................73
Section 3.19. Annual Independent Public Accountants' Servicing Report......................73
Section 3.20. Right of the Depositor in Respect of the Master Servicer.....................74
(vii)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account..........................................................75
Section 4.02. Distributions................................................................76
Section 4.03. Statements to Certificateholders.............................................81
Section 4.04. Distribution of Reports to the Trustee and the Depositor; Advances by the
Master Servicer..............................................................84
Section 4.05. Allocation of Realized Losses................................................85
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property................86
Section 4.07. Optional Purchase of Defaulted Mortgage Loans................................86
Section 4.08. The Policy...................................................................87
Section 4.09. Additional Servicing Fee.....................................................87
Section 4.10. Reserve Fund.................................................................88
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.............................................................90
Section 5.02. Registration of Transfer and Exchange of Certificates........................91
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates............................97
Section 5.04. Persons Deemed Owners........................................................97
Section 5.05. Appointment of Paying Agent..................................................97
Section 5.06. Optional Purchase of Certificates............................................98
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer.............100
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master Servicer............100
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer and Others....101
Section 6.04. Depositor and Master Servicer Not to Resign.................................102
ARTICLE VII
DEFAULT
Section 7.01. Events of Default...........................................................103
Section 7.02. Trustee or Depositor to Act; Appointment of Successor.......................105
Section 7.03. Notification to Certificateholders..........................................106
Section 7.04. Waiver of Events of Default.................................................106
Section 7.05. Servicing Trigger; Removal of Master Servicer...............................107
(viii)
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee...........................................................108
Section 8.02. Certain Matters Affecting the Trustee.......................................109
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.......................111
Section 8.04. Trustee May Own Certificates................................................111
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses; Indemnification.........111
Section 8.06. Eligibility Requirements for Trustee........................................112
Section 8.07. Resignation and Removal of the Trustee......................................113
Section 8.08. Successor Trustee...........................................................114
Section 8.09. Merger or Consolidation of Trustee..........................................115
Section 8.10. Appointment of Co-Trustee or Separate Trustee...............................115
Section 8.11. Appointment of Custodians...................................................116
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by the Master Servicer or Liquidation of All
Mortgage Loans..............................................................117
Section 9.02. Additional Termination Requirements.........................................119
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration........................................................121
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification............124
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment...................................................................126
Section 11.02. Recordation of Agreement; Counterparts......................................128
Section 11.03. Limitation on Rights of Certificateholders..................................129
Section 11.04. Governing Law...............................................................130
Section 11.05. Notices.....................................................................130
Section 11.06. Notices to Rating Agencies and the Insurer..................................130
Section 11.07. Severability of Provisions..................................................131
Section 11.08. Supplemental Provisions for Resecuritization................................132
Section 11.09. Rights of the Insurer.......................................................132
(ix)
Exhibit A Form of Class A Certificate
Exhibit B Form of Class SB Certificate
Exhibit C [Reserved]
Exhibit D Form of Class R Certificate
Exhibit E Form of Custodial Agreement
Exhibit F-1 Group I Loan Schedule
Exhibit F-2 Group II Loan Schedule
Exhibit G Forms of Request for Release
Exhibit H-1 Form of Transfer Affidavit and Agreement
Exhibit H-2 Form of Transferor Certificate
Exhibit I Form of Investor Representation Letter
Exhibit J Form of Transferor Representation Letter
Exhibit K Text of Amendment to Pooling and Servicing
Agreement Pursuant to Section 11.01(e) for a
Limited Guaranty
Exhibit L Form of Limited Guaranty
Exhibit M Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N Form of Rule 144A Investment Representation
Exhibit O Form of ERISA Letter
Exhibit P Certificate Guaranty Insurance Policy
Exhibit Q List of Simple Interest Mortgage Loans
(x)
This Pooling and Servicing Agreement, effective as of November
1, 1999, among BEAR XXXXXXX ASSET BACKED SECURITIES, INC., as the depositor
(together with its permitted successors and assigns, the "Depositor"),
RESIDENTIAL FUNDING CORPORATION, as master servicer (together with its permitted
successors and assigns, the "Master Servicer"), and BANK ONE, NATIONAL
ASSOCIATION, a national banking association, as trustee (together with its
permitted successors and assigns, the "Trustee"),
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in seven
classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Mortgage Loans (as defined herein).
REMIC BT
--------
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets (exclusive of the Reserve Fund) subject to this Agreement
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 BT."
The Class R-IV Certificates will represent the sole class of "residual
interests" in REMIC BT for purposes of the REMIC Provisions (as defined herein)
under federal income tax law. There will be a single REMIC BT Regular Interest
for each Simple Interest Mortgage Loan, having an Uncertificated Balance equal
to the balance of the corresponding Simple Interest Mortgage Loan and Remittance
Rate equal to that of the corresponding Simple Interest Mortgage Loan adjusted
to treat such Mortgage Loans as if payments thereon were made on a 360-day year
consisting of twelve 30- day months. The principal portions of any Monthly
Payments made by the related Mortgagor on a Simple Interest Mortgage Loan before
any Due Date in excess of the portion which would have been the principal
portion had such Monthly Payment been made on the related Due Date shall be
allocated to the corresponding REMIC BT Regular Interest as if a Curtailment had
been paid in the amount of such excess on the corresponding Mortgage Loan. There
will be a REMIC BT Regular Interest, the Class BT1 Interest, having a principal
balance equal to the aggregate principal balance of all Group I Mortgage Loans
other than the Simple Interest Mortgage Loans, and having a Remittance Rate
equal to the weighted average of the Net Mortgage Rates of all Group I Mortgage
Loans other than the Simple Interest Mortgage Loans. There will be a REMIC BT
Regular Interest, the Class BT2 Interest, having a principal balance equal to
the aggregate principal balance of all Group II Mortgage Loans, and having a
Remittance Rate equal to the Group II Net Mortgage Rate. The Maturity Date for
each of the REMIC BT Regular Interests shall be January 25, 2033. Neither the
Class BT1 Regular Interest nor the Class BT2 Regular Interest (together, the
"REMIC BT Regular Interests") will be certificated.
REMIC I
-------
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC BT Regular Interests
subject to this Agreement 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 Class R-I Certificates will represent
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance, and Maturity Date for each of the REMIC I Regular
Interests. None of the REMIC I Regular Interests will be certificated.
REMIC I Initial Uncertificated
Designation Remittance Rate Balance Maturity Date
---------------- ------------------------------ -------------------------- --------------------------
LT1-I Variable(1) $ 141,067,973.00 January 25, 2033
LT2-I Variable(1) $ 1,369,840.00 January 25, 2033
LT3-I Variable(1) $ 1,509,098.22 January 25, 2033
LT1-II Variable(1) $ 13,053,657.82 January 25, 2033
LT2-II Variable(1) $ 126,750.00 January 25, 2033
LT3-II Variable(1) $ 139,651.18 January 25, 2033
-------------------
(1) Calculated as provided in the definition of each respective Class Interest
herein.
REMIC II
--------
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as REMIC II. The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, remittance rate (the "REMIC II Remittance Rate"), initial
Uncertificated Balance and Maturity Date for each of the "regular interests" in
REMIC II (the "REMIC II Regular Interests"). None of the REMIC II Regular
Interests will be certificated.
REMIC II Initial Uncertificated
Designation Remittance Rate Balance Maturity
----------- --------------- ------- --------
MT1-I Variable(1) $ 141,067,973.00 January 25, 2033
MT2-I Variable(1) $ 1,369,840.00 January 25, 2033
MT3-I Variable(1) $ 1,509,098.22 January 25, 2033
MT1-II Variable(1) $ 13,053,657.82 January 25, 2033
MT2-II Variable(1) $ 126,750.00 January 25, 2033
MT3-II Variable(1) $ 139,651.18 January 25, 2033
MT4-I Variable(1) (2) January 25, 2033
MT4-II Variable(1) (2) January 25, 2033
-------------------
(1) Calculated as provided in the definition of the respective Class
Interest herein.
(2) Each of REMIC II Regular Interest MT4-I and MT4-II has no principal
balance but will have the terms provided in the definition of the Class
MT4-I Interest and Class MT4-II Interest.
REMIC III
As provided herein, the REMIC Administrator will elect to
treat the segregated pool of assets consisting of the REMIC II Regular Interests
as a REMIC for federal income tax purposes,
2
and such segregated pool of assets will be designated as REMIC III. The Class
R-III Certificates will represent the sole class of "residual interests" in
REMIC III for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, Pass-Through Rate,
aggregate Initial Certificate Principal Balance, certain features, Maturity Date
and initial ratings for each Class of Certificates comprising the interests
representing "regular interests" in REMIC III (the "REMIC III Regular
Certificates").
AGGREGATE INITIAL
PASS- CERTIFICATE
THROUGH PRINCIPAL
DESIGNATION TYPE RATE BALANCE FEATURES MATURITY DATE INITIAL RATINGS
----------- ---- ---- ------- -------- ------------- ---------------
S&P FITCH
Class A-I Senior 7.43%(1) $136,984,000.00 Senior January 25, 2033 AAA AAA
Class A-II Senior Adjustable(2) $ 12,675,000.00 Senior January 25, 2033 AAA AAA
Class SB-I Subordinate Adjustable(3) $ 6,962,911.00 Subordinate January 25, 2033 N/R N/R
Class SB-II Subordinate Adjustable(3) $ 645,059.00 Subordinate January 25, 2033 N/R N/R
Class R-I Residual N/A N/A Residual January 25, 2033 N/R N/R
Class R-II Residual N/A N/A Residual January 25, 2033 N/R N/R
Class R-III Residual N/A N/A Residual January 25, 2033 N/R N/R
------------------
(1) Subject to increase in accordance with the definition of "Pass-Through
Rate" herein.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class SB Certificates will accrue interest as described in the
definition of the Accrued Certificate Interest. The Class SB
Certificates will not accrue interest on their Certificate Principal
Balance.
The Class A-I Certificates will represent ownership interest
of the Class UT1-I Interest. The Class A-II Certificates will represent
ownership interest of the Class UT1-II Interest. The Class SB-1 Certificates
will represent ownership interest of the Class UT2-I Interest, Class UT3- I
Interest, Class UT4-I Interest and Class UT5-I Interest. The Class SB-II
Certificates will represent ownership interest of the Class UT2-II Interest,
Class UT3-II Interest, Class UT4-II Interest and Class UT5-II Interest.
The Group I Loans have an aggregate Cut-off Date Principal
Balance equal to approximately $143,946,911. The Group I Loans are fixed-rate,
first lien mortgage loans having terms to maturity at origination or
modification of generally not more than 30 years. The Group II Loans have an
aggregate Cut-off Date Principal Balance equal to approximately $13,320,059. The
Group II Loans are adjustable-rate, first lien mortgage loans having terms to
maturity at origination or modification of generally not more than 30 years.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
3
ARTICLE I
DEFINITIONS
-----------
Section 1.01. DEFINITIONS.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article.
ACCRUED CERTIFICATE INTEREST: With respect to each
Distribution Date and the Class A Certificates, interest accrued during the
preceding Interest Accrual Period at the related Pass- Through Rate less
interest shortfalls from the Mortgage Loans, if any, allocated thereto for such
Distribution Date, to the extent not covered by Subordination, on the
Certificate Principal Balance thereof immediately prior to such Distribution
Date (or in the case of the first Distribution Date, the Cut-off Date). Accrued
Certificate Interest on the Class A Certificates will be reduced by (i) the
interest portion (adjusted to the Net Mortgage Rate (or the Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan)) of Excess Losses to the
extent allocated to the Class A Certificates, (ii) 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 (iii) any other interest
shortfalls, other than Prepayment Interest Shortfalls, including interest that
is not collectible from the Mortgagor for the related Due Period pursuant to the
Relief Act or similar legislation or regulations as in effect from time to time,
with all such reductions allocated to the Class A Certificates on a PRO RATA
basis, in reduction of the Accrued Certificate Interest which would have
resulted absent such reductions. With respect to each Distribution Date and the
Class SB-I Certificates, the sum of the Class UT2-I Distribution Amount, the
Class UT3-I Distribution Amount and the interest accruing on the Class UT4-I
Interest (in each case, prior to the allocation of any shortfalls or losses),
reduced by any interest shortfalls including Prepayment Interest Shortfalls to
the extent not covered by Compensating Interest pursuant to Section 3.16 or by
Excess Cash Flow pursuant to clauses (vi) and (vii) of Section 4.01(g). With
respect to each Distribution Date and the Class SB-II Certificates, the sum of
the Class UT2-II Distribution Amount, the Class UT3-II Distribution Amount and
the interest accruing on the Class UT4-II Interest (in each case, prior to the
allocation of any shortfalls or losses), reduced by any interest shortfalls
including Prepayment Interest Shortfalls to the extent not covered by
Compensating Interest pursuant to Section 3.16 or by Excess Cash Flow pursuant
to clauses (vi) and (vii) of Section 4.01(g). In addition, Accrued Certificate
Interest with respect to each Distribution Date, as to any Class SB Certificate,
shall be reduced, on a pro rata basis, by an amount equal to the interest
portion of Realized Losses allocated to the Overcollateralization Amount
pursuant to Section 4.05 hereof. Accrued Certificate Interest on the Class A-I
Certificates and Class SB-I Certificates shall accrue on the basis of a 360-day
year consisting of twelve 30-day months. Accrued Certificate Interest on the
Class A-II Certificates and Class SB-II Certificates shall accrue on the basis
of a 360-day year and the actual number of days in the related Interest Accrual
Period.
4
ADDITIONAL SERVICING FEE: As defined in Section 4.09.
ADJUSTED MORTGAGE RATE: With respect to any Mortgage Loan and
any date of determination, the Mortgage Rate borne by the related Mortgage Note,
less the rate at which the related Subservicing Fee accrues.
ADJUSTMENT DATE: As to each Group II Loan, each date set forth
in the related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
ADVANCE: As to any Mortgage Loan, any advance made by the
Master Servicer, pursuant to Section 4.04.
AFFILIATE: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
AGREEMENT: This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution
Date, the total of the amounts held in the Custodial Account at the close of
business on the preceding Determination Date on account of (i) Liquidation
Proceeds, Insurance Proceeds, Principal Prepayments, Mortgage Loan purchases
made pursuant to Section 2.02, 2.03, 2.04 or 4.07 and Mortgage Loan
substitutions made pursuant to Section 2.03 or 2.04 received or made in the
month of such Distribution Date (other than such Liquidation Proceeds, Insurance
Proceeds and purchases of Mortgage Loans that the Master Servicer has deemed to
have been received in the preceding month in accordance with Section 3.07(b))
and (ii) payments which represent early receipt of scheduled payments of
principal and interest due on a date or dates subsequent to the Due Date in the
related Due Period.
APPRAISED VALUE: As to any Mortgaged Property, one of the
following: (i) the lesser of (a) the appraised value of such Mortgaged Property
based upon the appraisal made at the time of the origination of the related
Mortgage Loan, and (b) the sales price of the Mortgaged Property at such time of
origination, (ii) in the case of a Mortgaged Property securing a refinanced or
modified Mortgage Loan, one of (1) the appraised value based upon the appraisal
made at the time of origination of the loan which was refinanced or modified,
(2) the appraised value determined in an appraisal made at the time of
refinancing or modification or (3) the sales price of the Mortgaged Property, or
(iii) with respect to the Mortgage Loans for which a broker's price opinion was
obtained, the value contained in such opinion.
5
ASSIGNMENT: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that effect.
AVAILABLE DISTRIBUTION AMOUNT: As to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Mortgage Loans on
deposit in the Custodial Account as of the close of business on the immediately
preceding Determination Date and amounts deposited in the Custodial Account in
connection with the substitution of Qualified Substitute Mortgage Loans, (ii)
the amount of any Advance made on the immediately preceding Certificate Account
Deposit Date, (iii) any amount deposited in the Certificate Account on the
related Certificate Account Deposit Date pursuant to the second paragraph of
Section 3.12(a), (iv) any amount that the Master Servicer is not permitted to
withdraw from the Custodial Account pursuant to Section 3.16(e), and (v) any
amount deposited in the Certificate Account pursuant to Section 4.07 or 9.01,
reduced by (b) the sum as of the close of business on the immediately preceding
Determination Date of (x) the Amount Held for Future Distribution, (y) amounts
permitted to be withdrawn by the Master Servicer from the Custodial Account
pursuant to clauses (ii)-(x), inclusive, of Section 3.10(a) and (z) the
Certificate Insurer Premium payable with respect to the Class A Certificates on
such Distribution Date.
BANKRUPTCY AMOUNT: As of any date of determination, an amount
equal to $100,000, less the sum of any amounts allocated through Section 4.05
for Bankruptcy Losses up to such date of determination. The Bankruptcy 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 approval from the Insurer and
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Class A 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 without taking into
account the Policy, and (ii) provide a copy of such written confirmation to the
Trustee and the Insurer.
BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction; PROVIDED, HOWEVER, that neither a
Deficient Valuation nor a Debt Service Reduction shall be deemed a Bankruptcy
Loss hereunder so long as the Master Servicer has notified the Trustee and the
Insurer in writing that the Master Servicer is diligently pursuing any remedies
that may exist in connection with the representations and warranties made
regarding the related Mortgage Loan and either (A) the related Mortgage Loan is
not in default with regard to payments due thereunder or (B) delinquent payments
of principal and interest under the related Mortgage Loan and any premiums on
any applicable primary hazard insurance policy and any related escrow
6
payments in respect of such Mortgage Loan are being advanced on a current basis
by the Master Servicer or a Subservicer, in either case without giving effect to
any Debt Service Reduction.
BASIS RISK SHORTFALL: With respect to any Distribution Date
for which the Pass- Through Rate for the Class A-II Certificates is based on
clause (iii) of the definition thereof, the excess, if any, of (x) Accrued
Certificate Interest on the Class A-II Certificates for such Distribution Date
using a Pass-Through Rate equal to the lesser of those defined in clauses (i)
and (ii) of the definition thereof over (y) Accrued Certificate Interest on the
Class A-II Certificates for such Distribution Date using a Pass-Through Rate
equal to that defined in clause (iii) of the definition thereof.
BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to
each Distribution Date and the Class A-II Certificates, the aggregate amount of
Basis Risk Shortfall for such Class on such Distribution Date, plus any unpaid
Basis Risk Shortfall from prior Distribution Dates, plus accrued interest on any
unpaid related Basis Risk Shortfall from the Distribution Date when incurred to
the Distribution Date when paid at a rate equal to a Pass-Through Rate equal to
the lesser of those defined in clauses (i) and (ii) of such definition.
BOOK-ENTRY CERTIFICATE: Any Certificate registered in the name
of the Depository or its nominee.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York, the State of
Michigan, the State of California or the State of Illinois (and such other state
or states in which the Custodial Account or the Certificate Account are at the
time located) are required or authorized by law or executive order to be closed.
CASH LIQUIDATION: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, 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 and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
CERTIFICATE: Any Class A Certificate, Class SB Certificate or
Class R Certificate.
CERTIFICATE ACCOUNT: The account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled "Bank One, National
Association, as trustee, in trust for the registered holders of Bear Xxxxxxx
Asset Backed Securities, Inc., Mortgage Asset-Backed Pass- Through Certificates,
Series 1999-RS4" and which must be an Eligible Account. Any such account or
accounts created and maintained subsequent to the Closing Date shall be subject
to the approval of the Insurer, which approval shall not be unreasonably
withheld.
CERTIFICATE ACCOUNT DEPOSIT DATE: As to any Distribution Date,
the Business Day prior thereto.
7
CERTIFICATEHOLDER OR HOLDER: The Person in whose name a
Certificate is registered in the Certificate Register, except that neither a
Disqualified Organization nor a Non-United States Person shall be a holder of a
Class R Certificate for any purpose hereof. Solely for the purpose of giving any
consent or direction pursuant to this Agreement, any Certificate, other than a
Class R Certificate, registered in the name of the Depositor, the Master
Servicer or any Subservicer or any Affiliate thereof shall be deemed not to be
outstanding and the Percentage Interest or Voting Rights evidenced thereby shall
not be taken into account in determining whether the requisite amount of
Percentage Interests or Voting Rights necessary to effect any such consent or
direction has been obtained. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; PROVIDED, HOWEVER, that the
Trustee shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register. Unless otherwise indicated in this Agreement, the Custodial Agreement
or the Mortgage Loan Purchase Agreement, whenever reference is made to the
actions taken by the Trustee on behalf of the Certificateholders, such reference
shall include the Insurer as long as there is no Insurer Default continuing.
CERTIFICATE INSURER PREMIUM: The premium payable to the
Insurer on each Distribution Date in an amount equal to one-twelfth of the
product of the Certificate Insurer Premium Rate and the Certificate Principal
Balance of the Class A Certificates immediately prior to such Distribution Date.
CERTIFICATE INSURER PREMIUM MODIFIED RATE: With respect to the
Mortgage Loans and any date of determination, the Certificate Insurer Premium
Rate times a fraction equal to (x) the aggregate Certificate Principal Balance
of the Class A Certificates as of such date over (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of such date.
CERTIFICATE INSURER PREMIUM RATE: With respect to the Mortgage
Loans and any date of determination, the per annum rate specified in the
Insurance Agreement for the purpose of calculating the Certificate Insurer
Premium.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
CERTIFICATE PRINCIPAL BALANCE: With respect to any Class A
Certificate, on any date of determination, an amount equal to the Initial
Certificate Principal Balance of such Certificate as specified on the face
thereof, minus the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor Certificate)
(including such amounts paid pursuant to the Policy) and applied to reduce the
Certificate Principal Balance or amount thereof pursuant to Section 4.02(g) and
(y) the aggregate of all reductions in Certificate Principal Balance deemed to
have occurred in connection with Realized Losses which were previously allocated
to such Certificate (or any predecessor Certificate) pursuant to Section 4.05
(other than any such
8
amounts included in an Insured Amount and paid pursuant to the Policy). With
respect to each Class SB-I Certificate, on any date of determination, an amount
equal to the Percentage Interest evidenced by such Certificate times the excess,
if any, of (A) the then aggregate Stated Principal Balance of the Group I Loans
over (B) the then aggregate Certificate Principal Balance of the Class A-I
Certificates then outstanding. With respect to each Class SB-II Certificate, on
any date of determination, an amount equal to the Percentage Interest evidenced
by such Certificate times the excess, if any, of (A) the then aggregate Stated
Principal Balance of the Group II Loans over (B) the then aggregate Certificate
Principal Balance of the Class A-II Certificates then outstanding.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register
maintained and the registrar appointed pursuant to Section 5.02.
CLASS: Collectively, all of the Certificates or uncertificated
interests bearing the same designation.
CLASS A CERTIFICATES: Any one of the Class A-I or Class A-II
Certificates.
CLASS A-I CERTIFICATE: Any one of the Class A-I Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class SB-I,
Class SB-II and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing an
interest designated as a "regular interest" in REMIC III for purposes of the
REMIC Provisions.
CLASS A-II CERTIFICATE: Any one of the Class A-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class SB-I,
Class SB-II and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing an
interest designated as a "regular interest" in REMIC III for purposes of the
REMIC Provisions.
CLASS A-II MARGIN: With respect to the Class A-II
Certificates, on any Distribution Date on or prior to the first Distribution
Date after the first possible Optional Termination Date, 0.40% per annum, and on
any Distribution Date thereafter, 0.80% per annum.
CLASS LT1-I INTEREST: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to 98%
of the Stated Principal Balance of the Group I Loans as of the Cut-off Date,
that bears interest at a per annum rate equal to the Group I Net Mortgage Rate,
and that has such other terms as are described in Section 4.02.
CLASS LT2-I INTEREST: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group I Loans as of the Cut-off Date less
1% of the Group I Overcollateralization Amount as of the Closing Date, that
bears interest at a per annum rate equal to the Group I Net Mortgage Rate, and
that has such other terms as are described in Section 4.02.
9
CLASS LT3-I INTEREST: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group I Loans as of the Cut-off Date plus
1% of the Group I Overcollateralization Amount as of the Closing Date, that
bears interest at a per annum rate equal to the Group I Net Mortgage Rate, and
that has such other terms as are described in Section 4.02.
CLASS LT1-II INTEREST: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to 98%
of the Stated Principal Balance of the Group II Loans as of the Closing Date,
that bears interest at a per annum rate equal to the Group II Net Mortgage Rate,
and that has such other terms as are described in Section 4.02.
CLASS LT2-II INTEREST: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group II Loans as of the Cut-off Date
less 1% of the Group II Overcollateralization Amount as of the Closing Date,
that bears interest at a per annum rate equal to the Group II Net Mortgage Rate,
and that has such other terms as are described in Section 4.02.
CLASS LT3-II INTEREST: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group II Loans as of the Cut-off Date
plus 1% of the Group II Overcollateralization Amount as of the Closing Date,
that bears interest at a per annum rate equal to the Group II Net Mortgage Rate,
and that has such other terms as are described in Section 4.02.
CLASS MT1-I INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
98% of the Stated Principal Balance of the Group I Loans as of the Closing Date,
that bears interest at a per annum rate equal to the Group I Net Mortgage Rate,
and that has such other terms as are described in Section 4.02.
CLASS MT2-I INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group I Loans as of the Cut-off Date less
1% of the Group I Overcollateralization Amount as of the Closing Date, that
bears interest at a per annum rate equal to the lesser of (i) the Group I
Standard Rate, and (ii) the Group I Net Mortgage Rate, and that has such other
terms as are described in Section 4.02.
CLASS MT3-I INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group I Loans as of the Cut-off Date plus
1% of the Group I Overcollateralization Amount as of the Closing Date, that
bears interest at a per annum rate equal to the Group I Net Mortgage Rate, and
that has such other terms as are described in Section 4.02.
CLASS MT4-I INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has a notional balance equal to the
principal balance of the Class LT2-I Interest, that
10
bears interest at a per annum rate equal to the excess of (i) the Group I Net
Mortgage Rate over (ii) the Group I Standard Rate, and that has such other terms
as are described in Section 4.02.
CLASS MT1-II INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
98% of the Stated Principal Balance of the Group II Loans as of the Cut-off
Date, that bears interest at a per annum rate equal to the Group II Net Mortgage
Rate, and that has such other terms as are described in Section 4.02.
CLASS MT2-II INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group II Loans as of the Cut-off Date
less 1% of the Group II Overcollateralization Amount as of the Closing Date,
that bears interest at a per annum rate equal to the lesser of (i) the Group II
Standard Rate, and (ii) the Group II Net Mortgage Rate, and that has such other
terms as are described in Section 4.02.
CLASS MT3-II INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to 1%
of the Stated Principal Balance of the Group II Loans as of the Cut-off Date
plus 1% of the Group II Overcollateralization Amount as of the Closing Date,
that bears interest at a per annum rate equal to the Group II Net Mortgage Rate,
and that has such other terms as are described in Section 4.02.
CLASS MT4-II INTEREST: A regular interest in REMIC II that is
held as an asset of REMIC III, that has a notional balance equal to the
principal balance of the Class LT2-II Interest, that bears interest at a per
annum rate equal to the excess of (i) the Group II Net Mortgage Rate over (ii)
the Group II Standard Rate, and that has such other terms as are described in
Section 4.02.
CLASS R CERTIFICATE: Any one of the Class R-I, Class R-II,
Class R-III or Class R-IV Certificates.
CLASS R-I CERTIFICATE: Any one of the Class R-I Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC I for purposes of the REMIC
Provisions.
CLASS R-II CERTIFICATE: Any one of the Class R-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC II for purposes of the REMIC
Provisions.
CLASS R-III CERTIFICATE: Any one of the Class R-III
Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit D and evidencing
an interest designated as a "residual interest" in REMIC III for purposes of the
REMIC Provisions.
11
CLASS R-IV CERTIFICATE: Any one of the Class R-IV Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC BT for purposes
of the REMIC Provisions.
CLASS SB CERTIFICATES: Any one of the Class SB-I and Class
SB-II Certificates.
CLASS SB-I CERTIFICATE: Any one of the Class SB-I Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B, subordinate to the Class
A-I Certificates with respect to distributions and the allocation of Realized
Losses in respect of Loan Group I as set forth in Section 4.05, and evidencing
an interest designated as a "regular interest" in REMIC III for purposes of the
REMIC Provisions.
CLASS SB-II CERTIFICATE: Any one of the Class SB-II
Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B, subordinate to
the Class A-II Certificates with respect to distributions and the allocation of
Realized Losses in respect of Loan Group II as set forth in Section 4.05, and
evidencing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
CLASS UT1-I INTEREST: A regular interest in REMIC III that has
an initial principal balance of $136,984,000, that bears interest at a per annum
rate equal to the Group I Standard Rate, and that has such other terms as are
described in Section 4.02.
CLASS UT2-I INTEREST: A regular interest in REMIC III that has
such other terms as are described in Section 4.02.
CLASS UT2-I DISTRIBUTION AMOUNT: With respect to any
Distribution Date, a amount equal to the product of (i) a fraction equal to
1/12, (ii) the Class UT2-I Notional Balance immediately before such distribution
date, and (iii) the Class UT2-I Pass-Through Rate.
CLASS UT2-I NOTIONAL BALANCE: A notional balance equal as of
any date to the sum of the principal balances of the Class MT1-I and Class MT3-I
Interests for such date.
CLASS UT2-I PASS-THROUGH RATE: With respect to any
Distribution Date, a per annum rate equal to (i) the excess of the Group I Net
Mortgage Rate for such date over (ii) the product of two and a fraction, the
numerator of which is the product of (x) Group I Standard Rate, and (y) the
principal balance of the Class MT2-I Interest immediately prior to such
Distribution Date, and denominator of which is the sum of the principal balances
of the Class MT2-I and Class MT3-I Interests immediately before such
Distribution Date.
CLASS UT3-I INTEREST: A regular interest in REMIC III that has
such other terms as are described in Section 4.02.
12
CLASS UT3-I DISTRIBUTION AMOUNT: With respect to any
Distribution Date, a amount equal to the product of (i) a fraction equal to
1/12, (ii) the Class UT3-I Notional Balance immediately before such distribution
date, and (iii) the Class UT3-I Pass-Through Rate.
CLASS UT3-I NOTIONAL BALANCE: A notional balance equal as of
any date to the sum of the principal balance of the Class MT2-I Interest for
such date.
CLASS UT3-I PASS-THROUGH RATE: With respect to any
distribution Date, a per annum rate equal to (i) the excess of the Group I
Standard Rate for such date over (ii) the product of two and a fraction, the
numerator of which is the product of (x) Group I Standard Rate, and (y) the
principal balance of the Class MT2-I Interest immediately prior to such
Distribution Date, and denominator of which is the sum of the principal balances
of the Class MT2-I and Class MT3-I Interests immediately before such
Distribution Date.
CLASS UT4-I INTEREST: A regular interest in REMIC III that is
entitled to receive 100% of the amounts distributable with respect to the Class
MT4-I Interest, and that has such other terms
as are described in Section 4.02.
CLASS UT5-I INTEREST: A regular interest in REMIC III that
will have a principal balance to the extent of the excess of (i) the aggregate
Stated Principal Balance of the Group I Loans as of the Cut-off Date over (ii)
the aggregate Certificate Principal Balance of the Class A-I Certificates on the
Closing Date. The Class UT5-I Interest will not bear interest.
CLASS UT1-II INTEREST: A regular interest in REMIC III that
has an initial principal balance of $12,675,000, that bears interest at a per
annum rate equal to the Group II Standard Rate, and that has such other terms as
are described in Section 4.02.
CLASS UT2-II INTEREST: A regular interest in REMIC III that
has such other terms as are described in Section 4.02.
CLASS UT2-II DISTRIBUTION AMOUNT: With respect to any
Distribution Date, a amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Interest Accrual Period
and the denominator of which is 360, (ii) the Class UT2-II Notional Balance
immediately before such distribution date, and (iii) the Class UT2-II
Pass-Through Rate.
CLASS UT2-II NOTIONAL BALANCE: A notional balance equal as of
any date to the sum of the principal balances of the Class MT1-II and Class
MT3-II Interests for such date.
CLASS UT2-II PASS-THROUGH RATE: With respect to any
distribution Date, a per annum rate equal to (i) the excess of the Group II Net
Mortgage Rate for such date over (ii) the product of two and a fraction, the
numerator of which is the product of (x) Group II Standard Rate, and (y) the
principal balance of the Class MT2-II Interest immediately prior to such
Distribution Date, and
13
denominator of which is the sum of the principal balances of the Class MT2-II
and Class MT3-II Interests immediately before such Distribution Date.
CLASS UT3-II INTEREST: A regular interest in REMIC III that
has such other terms as are described in Section 4.02.
CLASS UT3-II DISTRIBUTION AMOUNT: With respect to any
Distribution Date, a amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Interest Accrual Period
and the denominator of which is 360, (ii) the Class UT3-II Notional Balance
immediately before such distribution date, and (iii) the Class UT3-II
Pass-Through Rate.
CLASS UT3-II NOTIONAL BALANCE: A notional balance equal as of
any date to the sum of the principal balance of the Class MT2-II Interest for
such date.
CLASS UT3-II PASS-THROUGH RATE: With respect to any
distribution Date, a per annum rate equal to (i) the excess of the Group II
Standard Rate for such date over (ii) the product of two and a fraction, the
numerator of which is the product of (x) Group II Standard Rate, and (y) the
principal balance of the Class MT2-II Interest immediately prior to such
Distribution Date, and denominator of which is the sum of the principal balances
of the Class MT2-II and Class MT3-II Interests immediately before such
Distribution Date.
CLASS UT4-II INTEREST: A regular interest in REMIC III that is
entitled to receive 100% of the amounts distributable with respect to the Class
MT4-II Interest, and that has such other terms
as are described in Section 4.02.
CLASS UT5-II INTEREST: A regular interest in REMIC III that
will have a principal balance to the extent of the excess of (i) the aggregate
stated principal balance of the Group II Loans as of the Cut-off Date over (ii)
the aggregate Certificate Principal Balance of the Class A-II Certificates on
the Closing Date. The Class UT5-II Interest will not bear interest.
CLOSING DATE: November 29, 1999.
CODE: The Internal Revenue Code of 1986.
COMPENSATING INTEREST: With respect to any Distribution Date,
an amount equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments in Full or Curtailments (other than Curtailments resulting from the
Master Servicer's treatment of Simple Interest Mortgage Loans in Section
3.10(d)) during the related Prepayment Period, but not more than the lesser of
(a) one-twelfth of 0.125% of the Stated Principal Balance of the Mortgage Loans
immediately preceding such Distribution Date and (b) the sum of the Servicing
Fee, all income and gain on amounts held in the Custodial Account and the
Certificate Account and payable to the Certificateholders with respect to such
Distribution Date and servicing compensation to which the Master Servicer may be
entitled pursuant to Section 3.10(a)(v) and (vi), in each case with respect to
the related Loan Group;
14
provided that for purposes of this definition the amount of the Servicing Fee
will not be reduced pursuant to Section 7.02 except as may be required pursuant
to the last sentence of such Section.
CORPORATE TRUST OFFICE: The principal office of the Trustee at
which at any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this instrument is located at 1 Bank Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx,
Xxxxxxxx 00000-0000, Attention: Bear Xxxxxxx ABS Inc. Series 1999-RS4.
CUMULATIVE INSURANCE PAYMENTS: As of any date of
determination, the aggregate amount of all Insured Amounts previously paid by
the Insurer under the Policy in respect of the Class A Certificates (other than
those attributable to Excess Losses) minus (a) the aggregate of all payments
previously made to the Insurer pursuant to Section 4.02(g)(iv) hereof as
reimbursement for such Insured Amounts, plus (b) interest thereon from the date
such amounts became due until paid in full, at a rate of interest equal to the
Late Payment Rate.
CURTAILMENT: Any Principal Prepayment made by a Mortgagor
which is not a Principal Prepayment in Full.
CUSTODIAL ACCOUNT: The custodial account or accounts created
and maintained pursuant to Section 3.07 in the name of a depository institution,
as custodian for the holders of the Certificates and for the Insurer, for the
holders of certain other interests in mortgage loans serviced or sold by the
Master Servicer and for the Master Servicer, into which the amounts set forth in
Section 3.07 shall be deposited directly. Any such account or accounts shall be
an Eligible Account.
CUSTODIAL AGREEMENT: An agreement that may be entered into
among the Depositor, the Master Servicer, the Trustee and a Custodian in
substantially the form of Exhibit E hereto.
CUSTODIAN: A custodian appointed pursuant to a Custodial
Agreement and reasonably acceptable to the Insurer.
CUT-OFF DATE: November 1, 1999.
CUT-OFF DATE BALANCE: $157,266,970.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
unpaid principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto (or due during the month of
November 1999), whether or not received.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
15
DEFICIENCY AMOUNT: With respect to the Class A Certificates as
of any Distribution Date, (i) any shortfall in amounts available in the
Certificate Account to pay Accrued Certificate Interest for the related Interest
Accrual Period on the Certificate Principal Balance of the Class A Certificates
at the then-applicable Pass-Through Rate, net of any interest shortfalls
relating to the Relief Act and any Prepayment Interest Shortfalls allocated to
the Class A Certificates, (ii) the principal portion of any Realized Losses
allocated to such Class A Certificates with respect to such Distribution Date
and (iii) the Certificate Principal Balance of the Class A Certificates to the
extent unpaid on the Final Distribution Date or earlier termination of the Trust
Fund pursuant to Section 9.01(a) hereof. The Deficiency Amount does not include
any Basis Risk Shortfalls.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.
DEFINITIVE CERTIFICATE: Any definitive, fully registered
Certificate.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced with a Qualified Substitute Mortgage Loan.
DELINQUENCY RATIO: With respect to the Mortgage Loans and any
Distribution Date, the percentage equivalent of a fraction (a) the numerator of
which equals the sum of (i) 100% of the aggregate Stated Principal Balance of
all Mortgage Loans that are 90 or more days Delinquent, 75% of the aggregate
Stated Principal Balance of all Mortgage Loans that are in foreclosure and (iii)
100% of the aggregate Stated Principal Balance of all Mortgage Loans that are
converted to REO Properties, in each case as of the last day of the related Due
Period and (b) the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of such Due Period.
DELINQUENT: As used herein, a Mortgage Loan is considered to
be: "30 to 59 days" or "30 or more days" delinquent when a payment due on any
scheduled due date remains unpaid as of the close of business on the next
following monthly scheduled due date; "60 to 89 days" or "60 or more days"
delinquent when a payment due on any scheduled due date remains unpaid as of the
close of business on the second following monthly scheduled due date; and so on.
The determination as to whether a Mortgage Loan falls into these categories is
made as of the close of business on the last business day of each month. For
example, a Mortgage Loan with a payment due on September 1 that remained unpaid
as of the close of business on October 31 would then be considered to be 30 to
59 days delinquent. Delinquency information as of the Cut-off Date is determined
and prepared as of the close of business on the last business day immediately
prior to the Cut-off Date.
DEPOSITORY: The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates is Cede
& Co. The Depository shall at all times be a "clearing
16
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities
Exchange Act of 1934, as amended.
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.
DESIGNATED SUBSERVICER: Either HomeComings, Cenlar Federal
Savings Bank or GMAC Mortgage Corporation, in each case as Subservicer of
certain of the Mortgage Loans as of the Closing Date.
DESTROYED MORTGAGE NOTE: A Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
DETERMINATION DATE: With respect to any Distribution Date, the
20th day (or if such 20th day is not a Business Day, the Business Day
immediately following such 20th day) of the month of the related Distribution
Date.
DISQUALIFIED ORGANIZATION: Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which includes
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 Xxxxxxx Mac, a
majority of its board of directors is not selected by such governmental unit),
(ii) a 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) and (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code. A Disqualified Organization also includes any "electing large
partnership," as defined in Section 775(a) of the Code and any other Person so
designated by the Trustee based upon an Opinion of Counsel that the holding of
an Ownership Interest in a Class R Certificate by such Person may cause the
REMIC or any Person having an Ownership Interest in any Class of Certificates
(other than such Person) to incur a liability for any federal tax imposed under
the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class R Certificate to such Person. The terms "United
States", "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
DISTRIBUTION DATE: The 25th day of any month beginning in the
month immediately following the month of the initial issuance of the
Certificates or, if such 25th day is not a Business Day, the Business Day
immediately following such 25th day.
DUE DATE: With respect to each Mortgage Loan, the date on
which the monthly payment is due.
17
DUE PERIOD: With respect to any Distribution Date, the
calendar month of such Distribution Date.
ELIGIBLE ACCOUNT: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial Account, a trust account or
accounts maintained in the corporate trust department of Bank One, National
Association, or (iv) in the case of the Certificate Account, a trust account or
accounts maintained in the corporate trust division of Bank One, National
Association, or (v) an account or accounts of a depository institution
acceptable to each Rating Agency (as evidenced in writing by each Rating Agency
that use of any such account as the Custodial Account or the Certificate Account
will 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).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: As defined in Section 7.01.
EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion
thereof, which exceeds the then-applicable Bankruptcy Amount.
EXCESS CASH FLOW: As defined in Section 4.02(g)(iii).
EXCESS FRAUD LOSS: Any Fraud Loss, or portion thereof, which
exceeds the then- applicable Fraud Loss Amount.
EXCESS LOSS: Any (i) Excess Fraud Loss, Excess Special Hazard
Loss, Excess Bankruptcy Loss or Extraordinary Loss or (ii) any Excess Realized
Loss.
EXCESS OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Amount
on such Distribution Date over (b) the Required Overcollateralization Amount.
EXCESS REALIZED LOSS: Any Realized Loss on a Mortgage Loan,
other than a Excess Fraud Loss, Excess Special Hazard Loss, Excess Bankruptcy
Loss or Extraordinary Loss, to the
18
extent that the amount of such Realized Loss, plus the aggregate amount of such
Realized Losses on all of the Mortgage Loans since the Cut-off Date, is in
excess of 25.00% of the Cut-off Date Balance.
EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss, or
portion thereof, that exceeds the then-applicable Special Hazard Amount.
EXTRAORDINARY EVENTS: Any of the following conditions with
respect to a Mortgaged Property or Mortgage Loan causing or resulting in a loss
which causes the liquidation of such Mortgage Loan:
(a) losses that are of the type that would be covered by the
fidelity bond and the errors and omissions insurance policy required to
be maintained pursuant to Section 3.12(b) but are in excess of the
coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
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";
(c) hostile or warlike action in time of peace or war,
including action in hindering, combatting or defending against an
actual, impending or expected attack;
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
4. any weapon of war employing atomic fission or
radioactive force whether in time of peace or war; or
5. insurrection, rebellion, revolution, civil war,
usurped power or action taken by governmental authority in
hindering, combatting or defending against such an occurrence,
seizure or destruction under quarantine or customs
regulations, confiscation by order of any government or public
authority; or risks of contraband or illegal transportation or
trade.
EXTRAORDINARY LOSSES: Any loss incurred on a Mortgage Loan
caused by or resulting from an Extraordinary Event.
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XXXXXX XXX: Xxxxxx Xxx, a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FASIT: A "financial asset securitization investment trust"
within the meaning of Section 860L of the Code.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
XXXXXXX MAC: Xxxxxxx Mac, a corporate instrumentality of the
United States created and existing under Title III of the Emergency Home Finance
Act of 1970, as amended, or any successor thereto.
FINAL DISTRIBUTION DATE: The Distribution Date on which the
final distribution in respect of the Certificates will be made pursuant to
Section 9.01, which Final Distribution Date shall in no event be later than the
end of the 90-day liquidation period described in Section 9.02.
FITCH: Fitch IBCA, Inc.
FORECLOSURE PROFITS: As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition occurred in the
related Prepayment Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
FRAUD LOSS AMOUNT: As of any date of determination after the
Cut-off Date, an amount equal to (X) prior to the first anniversary of the
Cut-off Date an amount equal to 5.00% of the aggregate outstanding principal
balance of all of the Mortgage Loans as of the Cut-off Date minus the aggregate
amount of Fraud Losses allocated through Subordination, in accordance with
Section 4.05 since the Cut-off Date up to such date of determination, (Y) from
the first to the second anniversary of the Cut-off Date, an amount equal to (1)
the lesser of (a) the Fraud Loss Amount as of the most recent anniversary of the
Cut-off Date and (b) 3.00% of the aggregate outstanding principal balance of all
of the Mortgage Loans as of the most recent anniversary of the Cut-off Date
minus (2) the Fraud Losses allocated through Subordination, in accordance with
Section 4.05 since the most recent anniversary of the Cut-off Date up to such
date of determination and (Z) from the second to the fifth anniversary of the
Cut-off Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as
of the most recent anniversary of the Cut-off Date and (b) 2.00% of the
aggregate outstanding principal balance of all of the Mortgage Loans as of the
most recent anniversary of the Cut-off Date minus (2) the Fraud Losses allocated
through Subordination, in accordance with
20
Section 4.05 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 approval from the Insurer and obtain written confirmation from each
Rating Agency that such reduction shall not reduce the rating assigned to any
Class of Class A 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, without taking into account the Policy; and
(ii) provide a copy of such written confirmation to the Trustee and the Insurer.
FRAUD LOSSES: Losses on Mortgage Loans as to which there was
fraud in the origination of such Mortgage Loan.
GROSS MARGIN: As to each Group II Loan, the fixed percentage
set forth in the related Mortgage Note and indicated in Exhibit F-2 hereto as
the "NOTE MARGIN," which percentage is added to the related Index on each
Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum
Mortgage Rate) the interest rate to be borne by such Mortgage Loan until the
next Adjustment Date.
GROUP I AGGREGATE NET EXCESS TURBO AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of all Group I Excess Turbo Amounts
for all prior Distribution Dates over (ii) the product of (x) 100 and (y) the
sum of the amounts, for each Distribution Date, added to the principal balance
of the Class LT3-I Interest in excess of 1% of the increase in the
Overcollateralization Amount from the immediately preceding Distribution Date.
GROUP II AGGREGATE NET EXCESS TURBO AMOUNT: With respect to
any Distribution Date, the excess of (i) the sum of all Group II Excess Turbo
Amounts for all prior Distribution Dates over (ii) the product of (x) 100 and
(y) the sum of the amounts, for each distribution Date, added to the principal
balance of the Class LT3-II Interest in excess of 1% of the increase in the
Overcollateralization Amount from the immediately preceding Distribution Date.
GROUP I EXCESS TURBO AMOUNT: With respect to any Distribution
Date, the excess of (i) the aggregate amount of interest paid as principal on
the Class A-I Certificates, over (ii) the product of (x) 100 and (y) the
interest accrued on the Class LT3-I Interest.
GROUP II EXCESS TURBO AMOUNT: With respect to any Distribution
Date, the excess of (i) the aggregate amount of interest paid as principal on
the Class A-II Certificates, over (ii) the product of (x) 100 and (y) the
interest accrued on the Class LT3-II Interest.
GROUP I LOAN: The Mortgage Loans designated on the Mortgage
Loan Schedule attached hereto as Exhibit F-1.
21
GROUP II LOAN: The Mortgage Loans designated on the Mortgage
Loan Schedule attached hereto as Exhibit F-2.
GROUP I NET MORTGAGE RATE: The weighted average Remittance
Rate of the Group I BT Regular Interests.
GROUP II NET MORTGAGE RATE: With respect to any Distribution
Date, the product of (a) the Group II Weighted Average Net Mortgage Rate and (b)
a fraction equal to (x) 30 divided by (y) the number of days in the immediately
preceding Interest Accrual Period for the Class A-II
Certificates.
GROUP I OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (a) the aggregate Stated Principal
Balances of the Group I Loans before giving effect to distributions of principal
to be made on such Distribution Date over (b) the aggregate Certificate
Principal Balance of the Class A-I Certificates immediately prior to such date.
GROUP II OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (a) the aggregate Stated Principal
Balances of the Group II Loans before giving effect to distributions of
principal to be made on such Distribution Date over (b) the aggregate
Certificate Principal Balance of the Class A-II Certificates immediately prior
to such date.
GROUP I WEIGHTED AVERAGE NET MORTGAGE RATE: With respect to
any Distribution Date a per annum rate equal to the weighted average of the Net
Mortgage Rates on the Group I Loans, weighted on the basis of the respective
Stated Principal Balances thereof immediately preceding such
Distribution Date.
GROUP II WEIGHTED AVERAGE NET MORTGAGE RATE: With respect to
any Distribution Date, a per annum rate equal to the weighted average of the Net
Mortgage Rates on the Group II Loans, weighted on the basis of the respective
Stated Principal Balances thereof immediately preceding such Distribution Date.
HOMECOMINGS: HomeComings Financial Network, Inc., a
wholly-owned subsidiary of Residential Funding.
INDEPENDENT: When used with respect to any specified Person,
means such a Person who (i) is in fact independent of the Depositor, the Master
Servicer and the Trustee, or any Affiliate thereof, (ii) does not have any
direct financial interest or any material indirect financial interest in the
Depositor, the Master Servicer or the Trustee or in an Affiliate thereof, and
(iii) is not connected with the Depositor, the Master Servicer or the Trustee as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
INDEX: With respect to any Group II Loan and as to any
Adjustment Date therefor, the related index as stated in the related Mortgage
Note.
22
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to each
Class of Certificates, the Certificate Principal Balance of such Class of
Certificates as of the Cut-off Date as set forth in the Preliminary Statement
hereto.
INSURANCE ACCOUNT: The account or accounts created and
maintained pursuant to Section 4.08, which shall be entitled "Bank One, National
Association, as trustee, in trust for the registered holders of Bear Xxxxxxx
Asset Backed Securities, Inc., Mortgage Asset-Backed Pass- Through Certificates,
Series 1999-RS4," and which must be an Eligible Account.
INSURANCE AGREEMENT: The Insurance and Indemnity Agreement,
dated as of November 29, 1999, among the Insurer, the Trustee, the Master
Servicer and the Depositor.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans pursuant to any insurance policy covering a Mortgage Loan, to the extent
such proceeds are payable to the mortgagee under the Mortgage, any Subservicer,
the Master Servicer or the Trustee and are not 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.
INSURED AMOUNT: With respect to the Class A Certificates, as
of any Distribution Date, the Deficiency Amount, if any, for such Distribution
Date.
INSURER: Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance corporation or its successors in interest.
INSURER ACCOUNT: An account of the Insurer maintained at
Citibank, N.A. (ABA No. 021-000089), Account No. 00000000, Attention: Xxxxxx
Xxxxxx, or such other account as may be designated by the Insurer to the Trustee
in writing not less than five Business Days prior to the related Distribution
Date.
INSURER DEFAULT: The existence and continuance of any of the
following: (a) a failure by the Insurer to make a payment required under the
Policy in accordance with its terms; or (b)(i) the Insurer (A) files any
petition or commences any case or proceeding under any provision or chapter of
the Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes
a general assignment for the benefit of its creditors, or (C) has an order for
relief entered against it under the Bankruptcy Code or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or (ii) a court of competent
jurisdiction, the Wisconsin insurance department or other competent regulatory
authority enters a final and nonappealable order, judgment or decree (A)
appointing a custodian, trustee, agent or receiver for the Insurer or for all or
any material portion of its property or (B) authorizing the taking of possession
by a custodian, trustee, agent or receiver of the Insurer (or the taking of
possession of all or any material portion of the property of the Insurer).
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INTEREST ACCRUAL PERIOD: With respect to the Class A-I
Certificates and any Distribution Date, the prior calendar month. With respect
to the Class A-II Certificates, (i) with respect to the Distribution Date in
December 1999, the period commencing the Closing Date and ending on the day
preceding the Distribution Date in December 1999, and (ii) with respect to any
Distribution Date after the Distribution Date in December 1999, the period
commencing on the Distribution Date in the month immediately preceding the month
in which such Distribution Date occurs and ending on the day preceding such
Distribution Date.
INTEREST DISTRIBUTION AMOUNT: As defined in Section
4.02(g)(i).
LATE COLLECTIONS: With respect to any Mortgage Loan, all
amounts received during any Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
LATE PAYMENT RATE: As defined in the Insurance Agreement.
LIBOR: With respect to any Distribution Date, the arithmetic
mean of the London interbank offered rate quotations for one-month U.S. Dollar
deposits, expressed on a per annum basis, determined in accordance with Section
1.02.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or
Sunday or (ii) a day on which banking institutions in London, England are
required or authorized to by law to be closed.
LIBOR RATE ADJUSTMENT DATE: With respect to each Distribution
Date, the second LIBOR Business Day immediately preceding the commencement of
the related Interest Accrual Period.
LIQUIDATION PROCEEDS: Amounts (other than Insurance Proceeds)
received by the Master Servicer in connection with the taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation or
in connection with the liquidation of a defaulted Mortgage Loan through
trustee's sale, foreclosure sale or otherwise, other than REO Proceeds.
LOAN-TO-VALUE RATIO: As of any date, the fraction, expressed
as a percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
MATURITY DATE: With respect to each "regular interest" issued
by each of REMIC BT, REMIC I, REMIC II and REMIC III, the latest possible
maturity date, solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, by which the principal balance of each such "regular
interest" would be reduced to zero, which is January 25, 2033, which is the
Distribution Date three years following the latest scheduled maturity date of
any Mortgage Loan.
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MAXIMUM CLASS A-II RATE: With respect to any Interest Accrual
Period, 14.00% per annum.
MAXIMUM MORTGAGE RATE: As to any Group II Loan, the rate
indicated in Exhibit F-2 hereto as the "NOTE CEILING," which rate is the maximum
interest rate that may be applicable to such Group II Loan at any time during
the life of such Mortgage Loan.
MAXIMUM NET MORTGAGE RATE: As to any Group II Loan and any
date of determination, the Maximum Mortgage Rate minus the sum of (i) the rate
at which the related Subservicing Fee accrues, (ii) the Servicing Fee Rate, and
(iii) the Certificate Insurer Premium Modified Rate as of such date.
MINIMUM MORTGAGE RATE: As to any Group II Loan, the greater of
(i) the Note Margin and (ii) the rate indicated in Exhibit F-2 hereto as the
"NOTE FLOOR", which rate may be applicable to such Group II Loan at any time
during the life of such Group II Loan.
MODIFIED MORTGAGE LOAN: Any Mortgage Loan that has been the
subject of a Servicing Modification.
MODIFIED NET MORTGAGE RATE: As to any Mortgage Loan that is
the subject of a Servicing Modification, the Net Mortgage Rate minus the rate
per annum by which the Mortgage Rate on such Mortgage Loan was reduced.
MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and the Due Date in any Due Period, the payment of principal
and interest due thereon in accordance with the amortization schedule at the
time applicable thereto (after adjustment, if any, for Curtailments and for
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than a
Deficient Valuation, or similar proceeding or any moratorium or similar waiver
or grace period and before any Servicing Modification that constitutes a
reduction of the interest rate on such Mortgage Loan).
MOODY'S: Xxxxx'x Investors Service, Inc., or its successor in
interest.
MORTGAGE: With respect to each Mortgage Note the mortgage,
deed of trust or other comparable instrument creating a first or junior lien on
an estate in fee simple or leasehold interest in real property securing a
Mortgage Note.
MORTGAGE FILE: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
25
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement, dated November 23, 1999, among Residential Funding, Bear, Xxxxxxx &
Co. Inc. and the Depositor relating to the sale of the Mortgage Loans to the
Depositor.
MORTGAGE LOAN SCHEDULE: The lists of the Mortgage Loans
attached hereto as Exhibit F-1 and Exhibit F-2 (as amended from time to time to
reflect the addition of Qualified Substitute Mortgage Loans), which lists shall
set forth at a minimum the following information as to each
Mortgage Loan:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) the street address of the Mortgaged Property
including state and zip code ("ADDRESS");
(iii) the maturity of the Mortgage Note ("MATURITY DATE",
or "MATURITY DT" for Mortgage Loans;
(iv) the Mortgage Rate as of the Cut-off Date ("ORIG
RATE")
(v) the Mortgage Rate as of the Cut-off Date for a Group
II Loan ("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR
NET");
(vii) the scheduled monthly payment of principal, if any,
and interest as of the Cutoff Date ("ORIGINAL P & I"
or "CURRENT P & I" for the Group II Loans);
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T", "BT" or "CT" under the column "LN
FEATURE," indicating that the Mortgage Loan is
secured by a second or vacation residence (the
absence of any such code means the Mortgage Loan is
secured by a primary residence);
(xi) a code "N" under the column "OCCP CODE", indicating
that the Mortgage Loan is secured by a non-owner
occupied residence (the absence of any such code
means the Mortgage Loan is secured by an owner
occupied residence);
(xii) the Maximum Mortgage Rate for the Group II Loans
("NOTE CEILING");
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(xiii) the maximum net mortgage rate for the Group II Loans
("NET CEILING");
(xiv) the Note Margin for the Group II Loans ("NOTE
MARGIN");
(xv) the first Adjustment Date after the Cut-off Date for
the Group II Loans ("NXT INT CHG DT");
(xvi) the Periodic Cap for the Group II Loans ("PERIODIC
DECR" or "PERIODIC INCR"); and
(xvii) the rounding of the semi-annual or annual adjustment
to the Mortgage Rate with respect to the Group II
Loans ("NOTE METHOD").
Such schedules may consist of multiple reports that
collectively set forth all of the information required.
MORTGAGE LOANS: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 as from time to time are held
or deemed to be held as a part of the Trust Fund, the Mortgage Loans originally
so held being identified in the initial Mortgage Loan Schedule, and Qualified
Substitute Mortgage Loans held or deemed held as part of the Trust Fund
including, without limitation, each related Mortgage Note, Mortgage and Mortgage
File and all rights appertaining thereto.
MORTGAGE NOTE: The originally executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan, together with any modification thereto.
MORTGAGE RATE: As to any Mortgage Loan, the interest rate
borne by the related Mortgage Note, or any modification thereto other than a
Servicing Modification. The Mortgage Rate on the Group II Loans will adjust on
each Adjustment Date to equal the sum (rounded to the nearest multiple of
one-eighth of one percent (0.125%) or up to the nearest one-eighth of one
percent, which are indicated by a "U" on Exhibit F-2 hereto, except in the case
of the Group II Loans indicated by an "X" on Exhibit F-2 hereto under the
heading "NOTE METHOD"), of the related Index plus the Note Margin, in each case
subject to the applicable Periodic Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
MORTGAGED PROPERTY: The underlying real property securing a
Mortgage Loan.
MORTGAGOR: The obligor on a Mortgage Note.
NET MORTGAGE RATE: With respect to any Mortgage Loan as of any
date of determination, a per annum rate equal to the Adjusted Mortgage Rate for
such Mortgage Loan as of such date minus the sum of (i) the Servicing Fee Rate
and (ii) the Certificate Insurer Premium
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Modified Rate; provided that, with respect to any Group II Loans, (i) the Net
Mortgage Rate becoming effective on any Adjustment Date shall not be greater or
less than the Net Mortgage Rate immediately prior to such Adjustment Date plus
or minus the Periodic Cap applicable to such Group II Loan and (ii) the Net
Mortgage Rate for any Group II Loan shall not exceed a rate equal to the Maximum
Net Mortgage Rate for such Group II Loan.
NET WAC CAP RATE: With respect to any Distribution Date and
the Pass-Through Rate on the Class A-II Certificates, the Group II Net Mortgage
Rate.
NON-PRIMARY RESIDENCE LOANS: The Mortgage Loans designated as
secured by second or vacation residences, or by non-owner occupied residences,
on the Mortgage Loan Schedule.
NON-UNITED STATES PERSON: Any Person other than a United
States Person.
NONRECOVERABLE ADVANCE: Any Advance previously made or
proposed to be made by the Master Servicer in respect of a Mortgage Loan (other
than a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds.
NONSUBSERVICED MORTGAGE LOAN: Any Mortgage Loan that, at the
time of reference thereto, is not subject to a Subservicing Agreement.
NOTE MARGIN: As to each Group II Loan, the fixed percentage
set forth in the related Mortgage Note and indicated in Exhibit F-2 hereto as
the "NOTE MARGIN," which percentage is added to the Index on each Adjustment
Date to determine (subject to rounding in accordance with the related Mortgage
Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate)
the interest rate to be borne by such Group II Loan until the next Adjustment
Date.
NOTICE: As defined in Section 4.04.
OFFICERS' CERTIFICATE: A certificate signed by the Chairman of
the Board, the President or a Vice President or Assistant Vice President, or a
Director or Managing Director, and by the Treasurer, the Secretary, or one of
the Assistant Treasurers or Assistant Secretaries of the Depositor or the Master
Servicer, as the case may be, and delivered to the Trustee and the Insurer, as
required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel acceptable to
the Trustee, the Insurer and the Master Servicer, who may be counsel for the
Depositor or the Master Servicer, provided that any opinion of counsel (i)
referred to in the definition of "Disqualified Organization" or (ii) relating to
the qualification of REMIC BT, REMIC I, REMIC II or REMIC III as REMICs or
compliance with the REMIC Provisions must, unless otherwise specified, be an
opinion of Independent counsel.
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OPTIONAL TERMINATION DATE: Any Distribution Date on or after
which the Stated Principal Balance (before giving effect to distributions to be
made on such Distribution Date) of the Mortgage Loans is less than 10.00% of the
Cut-off Date Balance.
OUTSTANDING MORTGAGE LOAN: As to the Due Date in any Due
Period, a Mortgage Loan (including an REO Property) that was not the subject of
a Principal Prepayment in Full, Cash Liquidation or REO Disposition and that was
not purchased, deleted or substituted for prior to such
Due Date pursuant to Section 2.02, 2.03, 2.04 or 4.07.
OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans before giving effect to distributions of principal to be made on
such Distribution Date over (b) the aggregate Certificate Principal Balance of
the Class A Certificates immediately prior to such date.
OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any
Distribution Date other than the first Distribution Date, the lesser of (a) the
Excess Cash Flow for such Distribution Date available to make payments pursuant
to Section 4.02(g)(v), and (b) the excess, if any, of (1) the Required
Overcollateralization Amount for such Distribution Date over (2) the
Overcollateralization Amount for such Distribution Date. With respect to the
first Distribution Date, the Overcollateralization Increase Amount shall be
equal to zero.
OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date, to the extent the Excess Overcollateralization Amount is, or
would be, after taking into account all other distributions to be made on such
Distribution Date, greater than zero, the Overcollateralization Reduction Amount
shall be equal to any amounts relating to principal which would otherwise be
distributed to the holders of the Class A Certificates on such Distribution
Date.
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.
PASS-THROUGH RATE: With respect to the Class A-I Certificates,
on any Distribution Date on or prior to the first Distribution Date after the
first possible Optional Termination Date, 7.43% per annum, and on any
Distribution Date thereafter, 7.93% per annum. With respect to the Class A-II
Certificates and each Interest Accrual Period, a per annum rate equal to the
least of (i) LIBOR plus the related Class A-II Margin, (ii) the Maximum Class
A-II Rate and (iii) the Net WAC Cap Rate.
PAYING AGENT: Bank One, National Association or any successor
Paying Agent appointed by the Trustee.
PERCENTAGE INTEREST: With respect to any Class A Certificate,
the undivided percentage ownership interest in the related Class evidenced by
such Certificate, which percentage ownership
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interest shall be equal to the Initial Certificate Principal Balance thereof
divided by the aggregate Initial Certificate Principal Balance of all of the
Certificates of the same Class. The Percentage Interest with respect to a Class
SB or Class R Certificate shall be stated on the face thereof.
PERIODIC CAP: With respect to each Group II Loan, the periodic
rate cap that limits the increase or the decrease of the related Mortgage Rate
on any Adjustment Date pursuant to the terms of the related Mortgage Note.
PERMITTED INVESTMENTS: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith
and credit of the United States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by each
Rating Agency in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard
& Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in its highest short-term
rating available; and provided further that, if the only Rating Agency
is Standard & Poor's and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations
of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and, provided further that,
if the original maturity of such short-term obligations of a domestic
branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1+
in the case of Standard & Poor's if Standard & Poor's is the Rating
Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in its highest short-term rating
available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
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(v) a money market fund or a qualified investment fund rated
by each Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to
each Rating Agency as a Permitted Investment hereunder and will 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, as evidenced in writing;
PROVIDED, HOWEVER, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Fitch and Aaa
in the case of Moody's, and references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean A-1 in the
case of Standard & Poor's, P-1 in the case of Moody's and either A-1 by Standard
& Poor's, P-1 by Moody's or F-1 by Fitch in the case of Fitch.
PERMITTED TRANSFEREE: Any Transferee of a Class R Certificate,
other than a Disqualified Organization or Non-United States Person.
PERSON: Any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
POLICY: The Certificate Guaranty Insurance Policy No. AB0316BE
issued by the Insurer in respect of the Class A Certificates, a copy of which is
attached hereto as Exhibit P.
PREPAYMENT ASSUMPTION: With respect to each Class of Class A
Certificates, the prepayment assumption to be used for determining the accrual
of original issue discount and premium and market discount on such Certificates
for federal income tax purposes, which assumes a prepayment rate of 100% of the
Prepayment Assumption with respect to the Group I Loans, and a constant
prepayment rate of 30% per annum with respect to the Group II Loans. 100% of the
Prepayment Assumption with respect to the Group I Loans assumes a constant
prepayment rate of 4% per annum for the first month, increasing each month by an
additional approximate 1.1429% until the fifteenth month. Beginning in the
fifteenth month and in each month thereafter during the life of the Home Loans,
100% of the Prepayment Assumption with respect to the Group I Loans assumes a
constant prepayment rate of 20% per annum each month.
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
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month's interest at the related Net Mortgage Rate (or Modified Net Mortgage Rate
in the case of a Modified Mortgage Loan) on the Stated Principal Balance of such
Mortgage Loan over the amount of interest (adjusted to the related Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan))
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 (other
than Curtailments resulting from the Master Servicer's treatment of Simple
Interest Mortgage Loans in Section 3.10(d)), an amount equal to one month's
interest at the related Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan) on the amount of such Curtailment.
PREPAYMENT PERIOD: As to any Distribution Date, the calendar
month preceding the month of distribution.
PRINCIPAL COLLECTION PERCENTAGE: With respect to any
Distribution Date and each Class of Class A Certificates, a fraction, expressed
as a percentage, equal to (x) the amount received from the Mortgage Loans in
Loan Group I, with respect to the Class A-I Certificates, or the Mortgage Loans
in Loan Group II, with respect to the Class A-II Certificates, described in
clauses (b)(i) through (iii) of the definition of Principal Distribution Amount
for such Distribution Date, divided by (y) the aggregate amount received from
all of the Mortgage Loans described in clauses (b)(i) through (iii) of the
definition of Principal Distribution Amount for such Distribution Date.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the lesser of (a) the excess of (i) the Available
Distribution Amount over (ii) the Interest Distribution Amount and (b) the sum
of:
(i) the principal portion of each Monthly Payment
received or Advanced with respect to the related Due
Period on each Outstanding Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period (or
deemed to have been so repurchased in accordance with
Section 3.07(b)) pursuant to Section 2.02, 2.03, 2.04
or 4.07 and the amount of any shortfall deposited in
the Custodial Account in connection with the
substitution of a Deleted Mortgage Loan pursuant to
Section 2.03 or 2.04 during the related Prepayment
Period;
(iii) the principal portion of all other unscheduled
collections on the Mortgage Loans (including, without
limitation, Principal Prepayments in Full,
Curtailments, Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during the
related Prepayment Period (or deemed to have been so
received) to the extent applied by the Master
Servicer as recoveries of principal of the Mortgage
Loans pursuant to Section 3.14;
(iv) the principal portion of any Realized Losses (other
than Excess Losses) incurred (or deemed to have been
incurred) on any Mortgage Loans in the
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calendar month preceding such Distribution Date to
the extent covered by Excess Cash Flow for such
Distribution Date; and
(v) except on the first Distribution Date, the amount of
any Overcollateralization Increase Amount for such
Distribution Date;
MINUS
(vi) the amount of any Overcollateralization Reduction
Amount for such Distribution Date.
PRINCIPAL PREPAYMENT: Any payment of principal or other
recovery on a Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds or Insurance Proceeds, which is received in advance of its
scheduled Due Date and is not accompanied by an amount as to interest
representing scheduled interest on such payment due on any date or dates 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 principal balance of a Mortgage Loan.
PROGRAM GUIDE: The AlterNet Seller Guide or the Residential
Funding Seller Guide, as applicable, for mortgage collateral sellers that
participate in Residential Funding's standard mortgage programs, and Residential
Funding's Servicing Guide and any other subservicing arrangements which
Residential Funding has arranged to accommodate the servicing of the Mortgage
Loans.
PURCHASE PRICE: With respect to any Mortgage Loan (or REO
Property) required to be or otherwise purchased on any date pursuant to Section
2.02, 2.03, 2.04 or 4.07, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof plus the principal portion of any related unreimbursed
Advances and (ii) unpaid accrued interest at the Adjusted Mortgage Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the Servicing Fee
and the Certificate Insurer Premium Modified Rate is calculated in the case of a
Modified Mortgage Loan) (or at the Net Mortgage Rate (or Modified Net Mortgage
Rate in the case of a Modified Mortgage Loan)) plus the Certificate Insurer
Premium Modified Rate, if any, in the case of a purchase made by the Master
Servicer) on the Stated Principal Balance thereof to the first day of the month
following the month of purchase from the Due Date to which interest was last
paid by the Mortgagor.
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan
substituted by Residential Funding or the Depositor for a Deleted Mortgage Loan
which must, on the date of such substitution, as confirmed in an Officers'
Certificate delivered to the Trustee, (i) have an outstanding principal balance,
after deduction of the principal portion of the monthly payment due in the month
of substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after
such deduction), not in excess of the Stated
33
Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to
be deposited by Residential Funding, in the Custodial Account in the month of
substitution); (ii) have a Mortgage Rate and a Net Mortgage Rate no lower than
and not more than 1% per annum higher than the Mortgage Rate and Net Mortgage
Rate, respectively, of the Deleted Mortgage Loan as of the date of substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no higher than that
of the Deleted Mortgage Loan at the time of substitution; (iv) have a remaining
term to stated maturity not greater than (and not more than one year less than)
that of the Deleted Mortgage Loan; (v) comply with each representation and
warranty set forth in Sections 2.03 and 2.04 hereof and Section 3.1(a) and (b)
of the Mortgage Loan Purchase Agreement and (vi) in the case of the Group II
Loans, (w) have a Mortgage Rate that adjusts with the same frequency and based
upon the same Index as that of the Deleted Mortgage Loan, (x) have a Note Margin
not less than that of the Deleted Mortgage Loan; (y) have a Periodic Rate Cap
that is equal to that of the Deleted Mortgage Loan; and (z) have a next
Adjustment Date no later than that of the Deleted Mortgage Loan.
RATING AGENCY: Standard & Poor's and Fitch. If either agency
or a successor is no longer in existence, "Rating Agency" shall be such
statistical credit rating agency, or other comparable Person, designated by the
Depositor and with respect to the Class A Certificates, the Insurer, notice of
which designation shall be given to the Trustee and the Master Servicer.
REALIZED LOSS: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net
Mortgage Rate and the Certificate Insurer Premium Modified Rate from the Due
Date as to which interest was last paid or advanced to Certificateholders up to
the last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate and the Certificate Insurer Premium
Modified Rate and to principal of the Mortgage Loan, net of the portion thereof
reimbursable to the Master Servicer or any Subservicer with respect to related
Advances or expenses as to which the Master Servicer or Subservicer is entitled
to reimbursement thereunder but which have not been previously reimbursed. With
respect to each Mortgage Loan which is the subject of a Servicing Modification,
(a) the amount by which the interest portion of a Monthly Payment or the
principal balance of such Mortgage Loan was reduced, and (b) any such amount
with respect to a Monthly Payment that was or would have been due in the month
immediately following the month in which a Principal Prepayment or the Purchase
Price of such Mortgage Loan is received or is deemed to have been received. With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the object of a Debt Service Reduction,
the amount of such Debt Service Reduction. Notwithstanding the above, neither a
Deficient Valuation nor a Debt Service Reduction shall be deemed a Realized Loss
hereunder so long as the Master Servicer has notified the Trustee and the
Insurer in writing that the Master Servicer is diligently pursuing any remedies
that may exist
34
in connection with the representations and warranties made regarding the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any premiums on any applicable
primary hazard insurance policy and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by the Master Servicer
or a Subservicer, in either case without giving effect to any Debt Service
Reduction.
RECORD DATE: With respect to each Distribution Date, the close
of business on the last Business Day of the month next preceding the month in
which the related Distribution Date occurs.
REGULAR INTEREST: Any one of the regular interests in the
Trust Fund.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code. As used herein, the term "the REMIC" shall
mean the Trust Fund created under this Agreement (excluding the Reserve Fund).
REMIC ADMINISTRATOR: Residential Funding Corporation. If
Residential Funding Corporation is found by a court of competent jurisdiction to
no longer be able to fulfill its obligations as REMIC Administrator under this
Agreement the Master Servicer or Trustee acting as Master Servicer shall appoint
a successor REMIC Administrator, acceptable to the Insurer, subject to
assumption of the REMIC Administrator obligations under this Agreement.
REMIC I: The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and to be
administered hereunder, with respect to which a separate REMIC election is to be
made (other than with respect to the items in clause (v) and the proceeds
thereof), consisting of:
(i) the Mortgage Loans and the related Mortgage
Files;
(ii) all payments on and collections in respect of
the Mortgage Loans due after the Cut-off Date (other than Monthly
Payments due in November 1999) as shall be on deposit in the Custodial
Account or in the Certificate Account and identified as belonging to
the Trust Fund;
(iii) property which secured a Mortgage Loan and
which has been acquired for the benefit of the Certificateholders by
foreclosure or deed in lieu of foreclosure;
(iv) the hazard insurance policies pertaining to the
Mortgage Loans, if any;
(v) the Policy; and
35
(vi) all proceeds of clauses (i) through (v) above.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and temporary and final regulations (or, to the extent not
inconsistent with such temporary or final regulations, proposed regulations) and
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
REMITTANCE RATE: With respect to each REMIC BT Regular
Interest (other than the Class BT1 Interest or the Class BT2 Interest), the Net
Mortgage Rate with respect to the related Mortgage Loan, adjusted to treat such
Mortgage Loan as if payments thereon were made on a 360- day year consisting of
twelve 30-day months. With respect to the Class BT1 Interest, the weighted
average of the Net Mortgage Rates on the Group I Loans other than the Simple
Interest Mortgage Loans. With respect to the Class BT2 Interest, the Group II
Net Mortgage Rate.
REO ACQUISITION: The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders of any REO
Property pursuant to Section 3.14.
REO DISPOSITION: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
REO IMPUTED INTEREST: As to any REO Property, for any period,
an amount equivalent to interest (at a rate equal to the sum of the Net Mortgage
Rate and the Certificate Insurer Premium Modified Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof for
such period.
REO PROCEEDS: Proceeds, net of expenses, received in respect
of any REO Property (including, without limitation, proceeds from the rental of
the related Mortgaged Property) which proceeds are required to be deposited into
the Custodial Account only upon the related REO
Disposition.
REO PROPERTY: A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed in lieu of foreclosure in connection with a
defaulted Mortgage Loan.
REPURCHASE EVENT: As defined in the Mortgage Loan Purchase
Agreement.
REQUEST FOR RELEASE: A request for release, the forms of which
are attached as Exhibit G hereto, or an electronic request in a form acceptable
to the Custodian.
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REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any insurance policy which is required to be maintained from time to time under
this Agreement, the Program Guide or the related Subservicing Agreement in
respect of such Mortgage Loan.
REQUIRED OVERCOLLATERALIZATION AMOUNT: As of any Distribution
Date, (a) if such Distribution Date is prior to the Stepdown Date, 6.65% of the
Cut-off Date Balance, or (b) if such Distribution Date is on or after the
Stepdown Date, the greatest of (i) 13.30% of the then current aggregate Stated
Principal Balances of the Mortgage Loans as of the end of the related Due
Period, (ii) the aggregate Stated Principal Balance of the Mortgage Loans with
the three largest Stated Principal Balances in the Trust Fund as of such
Distribution Date, (iii) 0.50% of the Cut-off Date Balance and (iv) an amount
equal to (a) 2 (two) times (b) the excess of (x) 50% of the aggregate Stated
Principal Balance of the Mortgage Loans which are 90 days or more Delinquent as
of such Distribution Date over (y) 5 (five) times the Excess Cash Flow for such
Distribution Date. The initial amount of overcollateralization is equal to
approximately 4.84% of the Cut-off Date Balance.
The Required Overcollateralization Amount may be reduced with
the prior written consent of the Insurer and notification to the Rating
Agencies.
RESERVE FUND: The account established and maintained pursuant
to Section 4.10.
REQUIRED RESERVE FUND DEPOSIT: With respect to any
Distribution Date for which the Net WAC Cap Rate is less than or does not exceed
the lesser of clauses (i) and (ii) of the definition of Pass-Through Rate of the
Class A-II Certificates by at least 0.25% per annum, an amount equal to the
excess of (x) 0.50% of the aggregate Stated Pool Principal Balance of the Group
II Loans for such Distribution Date over (y) the amount in the Reserve Fund on
such Distribution Date. With respect to any other Distribution Date, $10,000.
RESERVE FUND DEPOSIT: $10,000, to be deposited in the Reserve
Fund on the Closing Date.
RESIDENTIAL FUNDING: Residential Funding Corporation, a
Delaware corporation, in its capacity as seller of the Mortgage Loans to the
Depositor and any successor thereto.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
any officer of the Corporate Trust Department of the Trustee, including any
Senior Vice President, any Vice President, any Assistant Vice President, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers to whom, with respect to a
particular matter, such matter is referred.
ROLLING SIX-MONTH DELINQUENCY RATIO: As of any Distribution
Date, the fraction, expressed as a percentage, equal to the average of the
Delinquency Ratio for each of the six (or one,
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two, three, four and five in the case of the first, second, third, fourth and
fifth Distribution Dates) immediately preceding Due Periods.
SERVICING ACCOUNTS: The account or accounts created and
maintained pursuant to Section 3.08.
SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred 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,
(iii) the management and liquidation of any REO Property and (iv) compliance
with the obligations under Sections 3.01, 3.08, 3.12(a) and 3.14, including, if
the Master Servicer or any Affiliate of the Master Servicer provides services
such as appraisals and brokerage services that are customarily provided by
Persons other than servicers of mortgage loans, reasonable compensation for such
services.
SERVICING FEE: With respect to any Mortgage Loan and
Distribution Date, the fee payable monthly to the Master Servicer in respect of
master servicing compensation that accrues at an annual rate equal to the
Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the related Due Date in the related Due Period, as may be adjusted
pursuant to Section 3.16(e).
SERVICING FEE RATE: The per annum rate designated on the
Mortgage Loan Schedule as the "MSTR SERV FEE," as may be adjusted with respect
to successor Master Servicers as provided in Section 7.02.
SERVICING MODIFICATION: Any reduction of the interest rate on
or the outstanding principal balance of a Mortgage Loan that is in default or,
in the judgment of the Master Servicer, default is reasonably foreseeable
pursuant to a modification of such Mortgage Loan in accordance with Section
3.07(a).
SERVICING OFFICER: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Trustee and the Insurer by the Master Servicer, as such list
may from time to time be amended.
SERVICING TRIGGER: As of any Distribution Date, for purposes
of Section 7.05, "Servicing Trigger; Removal of Master Servicer," the occurrence
of any of the following scenarios:
(i) The aggregate Rolling Six-Month Delinquency Ratio is
greater than 12.00% for the then-current Distribution Date;
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(ii) the aggregate Rolling Six-Month Delinquency Ratio is
greater than 10.00% for the then-current and two preceding Distribution
Dates;
(iii) the aggregate Twelve-Month Loss Amount is greater than
or equal to 2.75% of the aggregate Stated Principal Balance of the
Mortgage Loans; or
(iv) the aggregate Realized Losses on the Mortgage Loans
exceed (a) with respect to the first 12 Distribution Dates, 4.00% of
the Cut-off Date Balance, (b) with respect to the next 12 Distribution
Dates, 5.50% of the Cut-off Date Balance, (c) with respect to the next
12 Distribution Dates, 7.50% of the Cut-off Date Balance, (d) with
respect to the next 12 Distribution Dates, 10.50% of the Cut-off Date
Balance, and (e) with respect to all Distribution Dates thereafter,
13.00% of the Cut-off Date Balance.
SIMPLE INTEREST MORTGAGE LOANS: A Mortgage Loan for which the
related Mortgage Note states that payments made will be applied first to
interest, then to principal, based on when such payments are received, as
indicated on Exhibit Q.
SPECIAL HAZARD AMOUNT: As of any Distribution Date, an amount
equal to $1,572,670 minus the sum of (i) the aggregate amount of Special Hazard
Losses allocated through Subordination in accordance with Section 4.05 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 that 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 3.2% (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 obtain the
written approval of the Insurer and obtain written confirmation from
39
each Rating Agency that such reduction shall not reduce the rating assigned to
each Class of Class A Certificates without regard to the Policy 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.
SPECIAL HAZARD LOSS: Any Realized Loss not in excess of the
lesser of the cost of repair or the cost of replacement of a Mortgaged Property
suffered by such Mortgaged Property on account of direct physical loss,
exclusive of (i) any loss of a type covered by a hazard policy or a flood
insurance policy required to be maintained in respect of such Mortgaged Property
pursuant to Section 3.12(a), except to the extent of the portion of such loss
not covered as a result of any coinsurance provision and (ii) any Extraordinary
Loss.
STANDARD & POOR'S: Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, or its successor in interest.
STARTUP DATE: The day designated as such pursuant to Article X
hereof.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property, at any given time, the Cut-off Date Principal Balance of
the Mortgage Loan, minus the sum of (a) the principal portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property during each Due
Period ending prior to the most recent Distribution Date which were received or
with respect to which an Advance was made, and (b) all Principal Prepayments
with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as recoveries of principal in accordance with Section 3.14 with respect
to such Mortgage Loan or REO Property, in each case which were distributed
pursuant to Section 4.02 or 4.03 on any previous Distribution Date, and (c) any
Realized Loss allocated to Certificateholders with respect thereto for any
previous Distribution Date.
STEPDOWN DATE: The later to occur of (i) the Distribution Date
occurring in January 2002 and (ii) the Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage Loans is less than one-half of the
Cut-off Date Balance.
SUBORDINATION: The provisions described in Section 4.05
relating to the allocation of Realized Losses (other than any Realized Losses
covered by the Policy).
SUBSERVICED MORTGAGE LOAN: Any Mortgage Loan that, at the time
of reference thereto, is subject to a Subservicing Agreement.
SUBSERVICER: Any Person with whom the Master Servicer has
entered into a Subservicing Agreement and who generally satisfied the
requirements set forth in the Program Guide in respect of the qualification of a
Subservicer as of the date of its approval as a Subservicer by the Master
Servicer.
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SUBSERVICER ADVANCE: Any delinquent installment of principal
and interest on a Mortgage Loan which is advanced by the related Subservicer
(net of its Subservicing Fee) pursuant to the Subservicing Agreement.
SUBSERVICING ACCOUNT: An account established by a Subservicer
in accordance with Section 3.08.
SUBSERVICING AGREEMENT: The written contract between the
Master Servicer and any Subservicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02, generally in the form of the
servicer contract referred to or contained in the Program Guide or in such other
form as has been approved by the Master Servicer and the Depositor.
SUBSERVICING FEE: As to any Mortgage Loan, the fee payable
monthly to the related Subservicer (or, in the case of a Nonsubserviced Mortgage
Loan, to the Master Servicer) in respect of subservicing and other compensation
that accrues with respect to each Distribution Date at an annual rate designated
as "SUBSERV FEE" in Exhibit F-1 and Exhibit F-2.
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 REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of REMIC BT, REMIC I, REMIC II and REMIC III due to their
classification as REMICs 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.
TRANSFER: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
TRANSFEREE: Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
TRANSFEROR: Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
TRUST FUND: Collectively, the assets of REMIC BT, REMIC I,
REMIC II and REMIC III and the Reserve Fund.
TWELVE-MONTH LOSS AMOUNT: With respect to any Distribution
Date, an amount equal to the aggregate of all Realized Losses on the Mortgage
Loans during the 12 preceding Due Periods.
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UNIFORM SINGLE ATTESTATION PROGRAM FOR MORTGAGE BANKERS: The
Uniform Single Attestation Program for Mortgage Bankers, as published by the
Mortgage Bankers Association of America and effective with respect to fiscal
periods ending on or after December 15, 1995.
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: A citizen or resident of the United
States, a corporation, partnership or other entity (treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations) or an estate that is described in Section 7701(a)(30)(D)
of the Code, or a trust that is described in Section 7701(a)(30)(E) of the Code.
VOTING RIGHTS: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. 97.25% of all of the Voting
Rights shall be allocated among Holders of the Class A Certificates, in
proportion to the outstanding Certificate Principal Balances of their respective
Certificates; 1% and 1% of all of the Voting Rights shall be allocated among the
Holders of the Class SB-I and Class SB-II Certificates, respectively; 0.25%,
0.25% and 0.25% of all of the Voting Rights shall be allocated among the Holders
of the Class R-I, Class R-II and Class R-III Certificates, respectively; in each
case to be allocated among the Certificates of such Class in accordance with
their respective Percentage Interest.
Section 1.02. DETERMINATION OF LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate
on the Class A-II Certificates for any Interest Accrual Period will be
determined on each LIBOR Rate Adjustment Date.
On each LIBOR Rate Adjustment Date, LIBOR shall be established
by the Trustee and, as to any Interest Accrual Period, will equal the rate for
one month United States dollar deposits that appears on the Telerate Screen Page
3750 as of 11:00 a.m., London time, on such LIBOR Rate Adjustment Date.
"Telerate Screen Page 3750" means the display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks). If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, LIBOR shall be so
established by use of such other service for displaying LIBOR or comparable
rates as may be selected by the Trustee after consultation with the Master
Servicer and the Insurer), the rate will be the Reference Bank Rate. The
"Reference Bank Rate" will be determined on the basis of the rates at which
deposits in U.S. Dollars are offered by the reference banks (which shall be any
three major banks that are engaged in transactions in the London interbank
market, selected by the Trustee after consultation with the Master Servicer and
the Insurer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment Date to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the Certificate Principal Balance of the Class A-II
42
Certificates then outstanding. The Trustee will request the principal London
office of each of the reference banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate will be the arithmetic mean of
the quotations rounded up to the next multiple of 1/16%. If on such date fewer
than two quotations are provided as requested, the rate will be the arithmetic
mean of the rates quoted by one or more major banks in New York City, selected
by the Trustee after consultation with the Master Servicer and the Insurer, as
of 11:00 a.m., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately equal
to the aggregate Certificate Principal Balance of the Class A-II Certificates
then outstanding. If no such quotations can be obtained, the rate will be LIBOR
for the prior Distribution Date; provided however, if, under the priorities
described above, LIBOR for a Distribution Date would be based on LIBOR for the
previous Distribution Date for the third consecutive Distribution Date, the
Trustee, after consultation with the Insurer, shall select an alternative
comparable index (over which the Trustee has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party.
The establishment of LIBOR by the Trustee on any LIBOR Rate
Adjustment Date and the Trustee's subsequent calculation of the Pass-Through
Rate applicable to the Class A-II Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final
and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee
shall supply the Master Servicer with the results of its determination of LIBOR
on such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by telephone the Pass-Through Rate on the Class A-II Certificates for
the current and the immediately preceding Interest Accrual Period.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby assign to the Trustee without recourse all the
right, title and interest of the Depositor in and to (i) the Mortgage Loans,
including all interest and principal received on or with respect to the Mortgage
Loans after the Cut-off Date (other than payments of principal and interest due
on the Mortgage Loans in the month of November 1999), (ii) the Reserve Fund
Deposit and (iii) all proceeds of the foregoing.
(b) In connection with such assignment, and contemporaneously
with the delivery of this Agreement, the Depositor delivered or caused to be
delivered hereunder to the Trustee the Policy, and except as set forth in
Section 2.01(c) below, the Depositor does hereby deliver to, and deposit with,
the Trustee, or to and with one or more Custodians, as the duly appointed agent
or agents of the Trustee for such purpose, the following documents or
instruments (or copies thereof as permitted by this Section):
(i) The original Mortgage Note, endorsed without
recourse to the order of the Trustee and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing it to
the Trustee, or with respect to any Destroyed Mortgage Note, an
original lost note affidavit from Residential Funding stating that the
original Mortgage Note was lost, misplaced or destroyed, together with
a copy of the related Mortgage Note;
(ii) the original Mortgage with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from
the public recording office, a copy of the original Mortgage certified
by the public recording office in which such original Mortgage has been
recorded;
(iii) assignments (which may be included in one or
more blanket assignments if permitted by applicable law) of the
Mortgage in recordable form to "Bank One, National Association as
trustee" c/o Residential Funding at an address specified by the
Residential Funding;
(iv) originals of any intervening assignments of the
Mortgage, with evidence of recording thereon, or, if the original of
any such intervening assignment has not yet been returned from the
public recording office, a copy of such original intervening
44
assignment certified by the public recording office in which such
original intervening assignment has been recorded; and
(v) a true and correct copy of each assumption,
modification, consolidation or substitution agreement, if any, relating
to the Mortgage Loan.
(c) The Depositor may, in lieu of delivering the documents set
forth in Section 2.01(b)(iv) and (v), to the Trustee or the Custodian or
Custodians, deliver such documents to the Master Servicer, and the Master
Servicer shall hold such documents in trust for the use and benefit of all
present and future Certificateholders until such time as is set forth below.
Within ten Business Days following the earlier of (i) the receipt of the
original of each of the documents or instruments set forth in Section
2.01(b)(iv) and (v) (or copies thereof as permitted by such Section) for any
Mortgage Loan and (ii) a written request by the Trustee to deliver those
documents with respect to any or all of the Mortgage Loans then being held by
the Master Servicer, the Master Servicer shall deliver a complete set of such
documents to the Trustee or the Custodian or Custodians that are the duly
appointed agent or agents of the Trustee.
On the Closing Date, the Master Servicer shall certify that it
has in its possession an original or copy of each of the documents referred to
in Section 2.01(b)(iv) and (v) which has been
delivered to it by the Depositor.
(d) In connection with any Mortgage Loan, if the Depositor
cannot deliver the Mortgage, any assignment, modification, assumption agreement
or preferred loan agreement (or copy thereof certified by the public recording
office) with evidence of recording thereon concurrently with the execution and
delivery of this Agreement because of (i) a delay caused by the public recording
office where such Mortgage, assignment, modification, assumption agreement or
preferred loan agreement as the case may be, has been delivered for recordation,
or (ii) a delay in the receipt of certain information necessary to prepare the
related assignments, the Depositor shall deliver or cause to be delivered to the
Trustee or the respective Custodian a true and correct photocopy of such
Mortgage, assignment, modification, assumption agreement or preferred loan
agreement.
The Depositor shall promptly cause to be recorded in the
appropriate public office for real property records the Assignment referred to
in clause (iii) of Section 2.01(b), except in states where, in the opinion of
counsel acceptable to the Trustee, the Insurer and the Master Servicer, such
recording is not required to protect the Trustee's interests in the Mortgage
Loan against the claim of any subsequent transferee or any successor to or
creditor of the Depositor.
The Depositor shall deliver to the Trustee or the Custodian
within 120 days of the Closing Date the original or a copy of the title
insurance policy, with respect to each Mortgaged Property that is delivered to
the related seller at origination of the Mortgage Loan, to the extent the
Depositor has such title insurance policy in its possession as of the Closing
Date. The Depositor or the Master Servicer shall hold in trust for the use and
benefit of all present and future Certificateholders and the Insurer, the
original or a copy of the title insurance binder with respect to each Mortgaged
Property that is delivered to the related seller at origination of the Mortgage
Loan,
45
to the extent the Depositor or the Master Servicer, as applicable, has such
title insurance binder in its possession as of the Closing Date.
(e) It is intended that the conveyances by the Depositor to
the Trustee of the Mortgage Loans as provided for in this Section 2.01 be
construed as a sale by the Depositor to the Trustee of the Mortgage Loans for
the benefit of the Certificateholders. Further, it is not intended that any such
conveyance be deemed to be a pledge of the Mortgage Loans by the Depositor to
the Trustee to secure a debt or other obligation of the Depositor. However, in
the event that the Mortgage Loans are held to be property of the Depositor or of
Residential Funding, or if for any reason this Agreement is held or deemed to
create a security interest in the Mortgage Loans, then it is intended that (a)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code and the
Uniform Commercial Code of any other applicable jurisdiction; (b) the
conveyances provided for in this Section 2.01 shall be deemed to be (1) a grant
by the Depositor to the Trustee of a security interest in all of the Depositor's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to (A) the Mortgage Loans, including the
related Mortgage Note, the Mortgage, any insurance policies and all other
documents in the related Mortgage File, (B) all amounts payable pursuant to the
Mortgage Loans in accordance with the terms thereof and (C) any and all general
intangibles consisting of, arising from or relating to any of the foregoing, and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held or invested in the Certificate Account or the
Custodial Account, whether in the form of cash, instruments, securities or other
property and (2) an assignment by the Depositor to the Trustee of any security
interest in any and all of Residential Funding's right (including the power to
convey title thereto), title and interest, whether now owned or hereafter
acquired, in and to the property described in the foregoing clauses (1)(A), (B)
and (C) granted by Residential Funding to the Depositor pursuant to the Mortgage
Loan Purchase Agreement; (c) the possession by the Trustee, the Custodian or any
other agent of the Trustee of Mortgage Notes or such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party," or possession by a purchaser or
a person designated by such secured party, for purposes of perfecting the
security interest pursuant to the Minnesota Uniform Commercial Code and the
Uniform Commercial Code of any other applicable jurisdiction (including, without
limitation, Section 9-305, 8-313 or 8-321 thereof); and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law.
The Depositor and, at the Depositor's direction, Residential
Funding and the Trustee shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property described above, such security interest would be deemed to be
a perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Depositor shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date and, the Trustee shall
forward for
46
filing, or shall cause to be forwarded for filing, at the expense of the
Depositor, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien on the
Mortgage Loans as evidenced by an Officer's Certificate of the Depositor, with a
copy delivered to the Insurer, including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by (1) any change
of name of Residential Funding, the Depositor or the Trustee (such preparation
and filing shall be at the expense of the Trustee, if occasioned by a change in
the Trustee's name), (2) any change of location of the place of business or the
chief executive office of Residential Funding or the Depositor or (3) any
transfer of any interest of Residential Funding or the Depositor in any Mortgage
Loan.
Section 2.02. ACCEPTANCE BY TRUSTEE.
The Trustee acknowledges receipt (or, with respect to Mortgage
Loans subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(i) through (iii) above (except that for purposes of such acknowledgment
only, a Mortgage Note may be endorsed in blank and an Assignment of Mortgage may
be in blank) and declares that it, or a Custodian as its agent, holds and will
hold such documents and the other documents constituting a part of the Mortgage
Files delivered to it, or a Custodian as its agent, in trust for the use and
benefit of all present and future Certificateholders. The Trustee or Custodian
(such Custodian being so obligated under a Custodial Agreement) agrees, for the
benefit of Certificateholders, to review each Mortgage File delivered to it
pursuant to Section 2.01(b) within 45 days after the Closing Date to ascertain
that all required documents (specifically as set forth in Section 2.01(b)), have
been executed and received, and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, as supplemented, that have been
conveyed to it. Upon delivery of the Mortgage Files by the Depositor or the
Master Servicer, the Trustee shall acknowledge receipt (or, with respect to
Mortgage Loans subject to a Custodial Agreement, and based solely upon a receipt
or certification executed by the Custodian, receipt by the respective Custodian
as the duly appointed agent of the Trustee) of the documents referred to in
Section 2.01(c) above. The Trustee or Custodian (such Custodian being so
obligated under a Custodial Agreement) agrees to review each Mortgage File
delivered to it pursuant to Section 2.01(c) within 45 days after receipt thereof
to ascertain that all documents required to be delivered pursuant to such
Section have been received, and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, as supplemented, that have been
conveyed to it.
If the Custodian, as the Trustee's agent, finds any document
or documents constituting a part of a Mortgage File to be missing or defective,
the Trustee shall promptly so notify the Master Servicer and the Depositor;
provided, that if the Mortgage Loan related to such Mortgage File is listed on
Schedule A of the Mortgage Loan Purchase Agreement, no notification shall be
necessary. Pursuant to Section 2.3 of the Custodial Agreement, the Custodian
will notify the Master Servicer, the Depositor and the Trustee of any such
omission or defect found by it in respect of any Mortgage File held by it. The
Master Servicer shall promptly notify the related Subservicer of such omission
or defect and request that such Subservicer correct or cure such omission or
defect within 60 days from the date the Master Servicer was notified of such
omission or defect and, if such
47
Subservicer does not correct or cure such omission or defect within such period,
that such Subservicer purchase such Mortgage Loan from the Trust Fund at its
Purchase Price, in either case within 90 days from the date the Master Servicer
was notified of such omission or defect; provided that if the omission or defect
would cause the Mortgage Loan to be other than a "qualified mortgage" as defined
in Section 860G(a)(3) of the Code, any such cure or repurchase must occur within
90 days from the date such breach was discovered; and provided further, that no
cure, substitution or repurchase shall be required if such omission or defect is
in respect of a Mortgage Loan listed on Schedule A of the Mortgage Loan Purchase
Agreement. The Purchase Price for any such Mortgage Loan shall be deposited or
caused to be deposited by the Master Servicer in the Custodial Account
maintained by it pursuant to Section 3.07 and, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Trustee
or any Custodian, as the case may be, shall release to the Master Servicer the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Subservicer or its designee, as
the case may be, any Mortgage Loan released pursuant hereto and thereafter such
Mortgage Loan shall not be part of the Trust Fund. It is understood and agreed
that the obligation of the Subservicer, to so cure or purchase any Mortgage Loan
as to which a defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to
Certificateholders or the Trustee on behalf of Certificateholders (except for
the Insurer's rights under the Insurance Agreement).
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
MASTER SERVICER AND THE DEPOSITOR.
(a) The Master Servicer hereby represents and warrants to the
Trustee for the benefit of the Certificateholders and the Insurer that:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws
governing its creation and existence and is or will be in compliance
with the laws of each state in which any Mortgaged Property is located
to the extent necessary to ensure the enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;
(ii) The execution and delivery of this Agreement by
the Master Servicer and its performance and compliance with the terms
of this Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a
material default) under, or result in the material breach of, any
material contract, agreement or other instrument to which the Master
Servicer is a party or which may be applicable to the Master Servicer
or any of its assets;
(iii) This Agreement, assuming due authorization,
execution and delivery by the Trustee and the Depositor, constitutes a
valid, legal and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof subject to
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applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(iv) The Master Servicer is not in default with
respect to any order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental agency, which
default might have consequences that would materially and adversely
affect the condition (financial or other) or operations of the Master
Servicer or its properties or might have consequences that would
materially adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the
Master Servicer's knowledge, threatened against the Master Servicer
which would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
(vi) The Master Servicer will comply in all material
respects in the performance of this Agreement with all reasonable rules
and requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer,
statement furnished in writing or report delivered to the Depositor,
any Affiliate of the Depositor or the Trustee by the Master Servicer
will, to the knowledge of the Master Servicer, contain any untrue
statement of a material fact or omit a material fact necessary to make
the information, certificate, statement or report not misleading; and
(viii) The Master Servicer has examined each
existing, and will examine each new, Subservicing Agreement and is or
will be familiar with the terms thereof. The terms of each existing
Subservicing Agreement and each designated Subservicer are acceptable
to the Master Servicer and any new Subservicing Agreements will comply
with the provisions of Section 3.02.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(a) shall survive delivery of the respective Mortgage Files to
the Trustee or any Custodian.
Upon discovery by either the Depositor, the Master Servicer,
the Insurer, the Trustee or any Custodian of a breach of any representation or
warranty set forth in this Section 2.03(a) which materially and adversely
affects the interests of the Certificateholders or the Insurer in any Mortgage
Loan, the party discovering such breach shall give prompt written notice to the
other parties (any Custodian being so obligated under a Custodial Agreement).
Within 90 days of its discovery or its receipt of notice of such breach, the
Master Servicer shall either (i) cure such breach in all material respects or
(ii) to the extent that such breach is with respect to a Mortgage Loan or a
related document, purchase such Mortgage Loan from the Trust Fund at the
Purchase Price and in the manner set forth in Section 2.02; provided that if the
omission or defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such
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cure or repurchase must occur within 90 days from the date such breach was
discovered. The obligation of the Master Servicer to cure such breach or to so
purchase such Mortgage Loan shall constitute the sole remedy in respect of a
breach of a representation and warranty set forth in this Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders (except for the Insurer's rights under Section 3.03 of the
Insurance Agreement).
(b) The Depositor hereby represents and warrants to the
Trustee for the benefit of the Certificateholders and the Insurer that as of the
Closing Date (or, if otherwise specified below,
as of the date so specified):
(i) The information set forth in Exhibit F-1 and
Exhibit F-2 hereto with respect to each Mortgage Loan or the Mortgage
Loans, as the case may be, is true and correct in all material respects
at the respective date or dates which such information is furnished;
(ii) Immediately prior to the conveyance of the
Mortgage Loans to the Trustee, the Depositor had good title to, and was
the sole owner of, each Mortgage Loan free and clear of any pledge,
lien, encumbrance or security interest (other than rights to servicing
and related compensation) and such conveyance validly transfers
ownership of the Mortgage Loans to the Trustee free and clear of any
pledge, lien, encumbrance or security interest; and
(iii) Each Mortgage Loan constitutes a qualified
mortgage under Section 860G(a)(3)(A) of the Code and Treasury
Regulations Section 1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(b) shall survive delivery of the respective Mortgage Files to
the Trustee or any Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the
Insurer, the Trustee or any Custodian of a breach of any of the representations
and warranties set forth in this Section 2.03(b) which materially and adversely
affects the interests of the Certificateholders or the Insurer in any Mortgage
Loan, the party discovering such breach shall give prompt written notice to the
other parties (including the Insurer) (any Custodian being so obligated under a
Custodial Agreement); PROVIDED, HOWEVER, that in the event of a breach of the
representation and warranty set forth in Section 2.03(b)(iii), the party
discovering such breach shall give such notice within five days of discovery.
Within 90 days of its discovery or its receipt of notice of breach, the
Depositor shall either (i) cure such breach in all material respects or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in the
manner set forth in Section 2.02; provided that the Depositor shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs within two years following the Closing
Date; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure, substitution or repurchase must occur within 90 days from
the date such breach was discovered. Any such substitution shall be effected by
the Depositor under the same terms and conditions as provided in Section 2.04
for substitutions by Residential Funding. It is understood and agreed that the
obligation of the Depositor to cure such breach or to so purchase or substitute
for any Mortgage Loan as to which such a breach has occurred and is
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continuing shall constitute the sole remedy respecting such breach available to
the Certificateholders (other than the Insurer) or the Trustee on behalf of the
Certificateholders (other than the Insurer). Notwithstanding the foregoing, the
Depositor shall not be required to cure breaches or purchase or substitute for
Mortgage Loans as provided in this Section 2.03(b) if the substance of the
breach of a representation set forth above also constitutes fraud in the
origination of the Mortgage Loan.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF RESIDENTIAL
FUNDING.
The Depositor, as assignee of Residential Funding under the
Mortgage Loan Purchase Agreement, hereby assigns to the Trustee for the benefit
of the Certificateholders all of its right, title and interest in respect of the
Mortgage Loan Purchase Agreement applicable to a Mortgage Loan. Insofar as the
Mortgage Loan Purchase Agreement relates to the representations and warranties
made by Residential Funding in respect of such Mortgage Loan and any remedies
provided thereunder for any breach of such representations and warranties, such
right, title and interest may be enforced by the Master Servicer on behalf of
the Trustee and the Certificateholders. Upon the discovery by the Depositor, the
Master Servicer, the Trustee, the Insurer or any Custodian of a breach of any of
the representations and warranties made in the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan or of any Repurchase Event which materially and
adversely affects the interests of the Certificateholders or the Insurer in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties (including the Insurer) (any Custodian being so
obligated under a Custodial Agreement). The Master Servicer shall promptly
notify Residential Funding of such breach or Repurchase Event and request that
Residential Funding either (i) cure such breach or Repurchase Event in all
material respects within 90 days from the date the Master Servicer was notified
of such breach or Repurchase Event or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
provided that, in the case of a breach or Repurchase Event under the Mortgage
Loan Purchase Agreement, Residential Funding shall have the option to substitute
a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan if such
substitution occurs within two years following the Closing Date; provided that
if the breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
substitution must occur within 90 days from the date the breach was discovered.
In the event that Residential Funding elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this
Section 2.04, Residential Funding shall deliver to the Trustee for the benefit
of the Certificateholders with respect to such Qualified Substitute Mortgage
Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment of the
Mortgage in recordable form, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed as required by Section
2.01. No substitution will be made in any calendar month after the Determination
Date for such month. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall not be part of the Trust Fund
and will be retained by the Master Servicer and remitted by the Master Servicer
to Residential Funding on the next succeeding Distribution Date. For the month
of substitution, distributions to the Certificateholders will include the
Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter
Residential Funding shall be entitled to retain all amounts received in respect
of such Deleted Mortgage Loan. The Master Servicer shall amend or cause to be
amended the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
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Qualified Substitute Mortgage Loan or Loans and the Master Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Qualified Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement and the related Subservicing Agreement in all
respects, and Residential Funding shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage
Loan contained in Section 3.1(b) of the Mortgage Loan Purchase Agreement, as of
the date of substitution, and the covenants, representations and warranties set
forth in this Section 2.04, and in Section 2.03 hereof and in Section 3.1(a) and
(b) of the Mortgage Loan Purchase Agreement, and the Master Servicer shall be
obligated to repurchase or substitute for any Qualified Substitute Mortgage Loan
as to which a Repurchase Event (as defined in the Mortgage Loan Purchase
Agreement) has occurred pursuant to Section 3.1(c) of the Mortgage Loan Purchase
Agreement.
In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (in each case after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to the Certificateholders in the month of substitution). Residential
Funding shall deposit the amount of such shortfall into the Custodial Account on
the day of substitution, without any reimbursement therefor. Residential Funding
shall give notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and by 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 portion of REMIC BT, REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
It is understood and agreed that the obligation of the
Residential Funding to cure such breach or purchase (or in the case of
Residential Funding to substitute for) such Mortgage Loan as to which such a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Certificateholders (other than the
Insurer) or the Trustee on behalf of the Certificateholders (other than the
Insurer). If the Master Servicer is Residential Funding, then the Trustee shall
also have the right to give the notification and require the purchase or
substitution provided for in the second preceding paragraph in the event of such
a breach of a representation or warranty made by Residential Funding in the
Mortgage Loan Purchase Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the Trustee
shall assign to Residential Funding all of the right, title and interest in
respect of the Mortgage Loan Purchase Agreement applicable to such Mortgage
Loan.
Section 2.05. EXECUTION AND AUTHENTICATION OF CERTIFICATES.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery of the Mortgage Files to it, or any Custodian on its
behalf, subject to any exceptions noted, together with the assignment to it of
all other assets included in the Trust Fund, receipt of which is
52
hereby acknowledged. Concurrently with such delivery and in exchange therefor,
the Trustee, pursuant to the written request of the Depositor executed by an
officer of the Depositor, has executed and caused to be authenticated and
delivered to or upon the order of the Depositor the Certificates in authorized
denominations which evidence ownership of the entire Trust Fund.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
------------------------------
Section 3.01. MASTER SERVICER TO ACT AS SERVICER.
(a) The Master Servicer shall service and administer the Mortgage
Loans in accordance with the terms of this Agreement and the respective Mortgage
Loans and in a manner consistent with industry practice and shall have full
power and authority, acting alone or through Subservicers as provided in Section
3.02, to do any and all things which it may deem necessary or desirable in
connection with such servicing and administration. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the name
of a Subservicer is hereby authorized and empowered by the Trustee when the
Master Servicer or the Subservicer, as the case may be, believes it appropriate
in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
consent to assumption or modification in connection with a proposed conveyance,
or of assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments, or with
respect to the modification or re-recording of a Mortgage for the purpose of
correcting the Mortgage, the subordination of the lien of the Mortgage in favor
of a public utility company or government agency or unit with powers of eminent
domain, the taking of a deed in lieu of foreclosure, the completion of judicial
or non-judicial foreclosure, the conveyance of a Mortgaged Property to the
related insurer, the acquisition of any property acquired by foreclosure or deed
in lieu of foreclosure, or the management, marketing and conveyance of any
property acquired by foreclosure or deed in lieu of foreclosure with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. Notwithstanding
the foregoing, subject to Section 3.07(a), the Master Servicer shall not permit
any modification with respect to any Mortgage Loan that would both constitute a
sale or exchange of such Mortgage Loan within the meaning of Section 1001 of the
Code and any proposed, temporary or final regulations promulgated thereunder
(other than in connection with a proposed conveyance or assumption of such
Mortgage Loan that is treated as a Principal Prepayment in Full pursuant to
Section 3.13(d) hereof) and cause any of REMIC BT, REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC under the Code. The Trustee shall furnish the
Master Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to service and administer the Mortgage
Loans. The Trustee shall not be liable for any action taken by the Master
Servicer or any Subservicer pursuant to such powers of attorney. In servicing
and administering any Nonsubserviced Mortgage Loan, the Master Servicer shall,
to the extent not inconsistent with this Agreement, comply with the Program
Guide as if it were the originator of such Mortgage Loan and had retained the
servicing rights and obligations in respect thereof. In connection with
servicing and administering the Mortgage Loans, the Master Servicer and any
Affiliate of the Master Servicer (i) may perform services such as appraisals and
brokerage services that are customarily provided by Persons other than servicers
of mortgage loans, and shall be entitled to reasonable compensation therefor in
accordance with Section 3.10 and (ii) may, at its own
54
discretion and on behalf of the Trustee, obtain credit information in the form
of a "credit score" from a credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the amount owing under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in
connection with the offering of pass-through certificates evidencing interests
in one or more of the Certificates providing for the payment by the Master
Servicer of amounts received by the Master Servicer as servicing compensation
hereunder and required to cover certain Prepayment Interest Shortfalls on the
Mortgage Loans, which payment obligation will thereafter be an obligation of the
Master Servicer hereunder.
Section3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUBSERVICERS; ENFORCEMENT OF SUBSERVICERS' OBLIGATIONS;
SPECIAL SERVICING.
(a) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
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 Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, and in either case shall be a
Xxxxxxx Mac, Xxxxxx Xxx or HUD approved mortgage servicer. Each Subservicer of a
Mortgage Loan shall be entitled to receive and retain, as provided in the
related Subservicing Agreement and in Section 3.07, the related Subservicing Fee
from payments of interest received on such Mortgage Loan after payment of all
amounts required to be remitted to the Master Servicer in respect of such
Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced Mortgage Loan, the
Master Servicer shall be entitled to receive and retain an amount equal to the
Subservicing Fee from payments of interest. Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Master Servicer in servicing the Mortgage Loans include actions taken or to be
taken by a Subservicer on behalf of the Master Servicer. Each Subservicing
Agreement will be upon such terms and conditions as are generally required by,
permitted by or consistent with the Program Guide and are not inconsistent with
this Agreement and as the Master Servicer and the Subservicer have agreed. With
the approval of the Master Servicer, a Subservicer may delegate its servicing
obligations to third-party servicers, but such Subservicer will remain obligated
under the related Subservicing Agreement. The Master Servicer and a Subservicer
may enter into amendments thereto or a different form of Subservicing Agreement,
and the form referred to or included in the Program Guide is merely provided for
information and shall not be deemed to limit in any respect the discretion of
the
55
Master Servicer to modify or enter into different Subservicing Agreements;
PROVIDED, HOWEVER, that any such amendments or different forms shall be
consistent with and not violate the provisions of either this Agreement or the
Program Guide in a manner which would materially and adversely affect
the interests of the Certificateholders or the Insurer.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee, the Insurer and the
Certificateholders, shall use its best reasonable efforts to enforce the
obligations of each Subservicer under the related Subservicing Agreement, to the
extent that the non-performance of any such obligation would have a material and
adverse effect on a Mortgage Loan, including, without limitation, the obligation
to purchase a Mortgage Loan on account of defective documentation, as described
in Section 2.02, or on account of a breach of a representation or warranty, as
described in Section 2.04. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, as
appropriate, 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
would employ in its good faith business judgment and which are normal and usual
in its general mortgage servicing activities. 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 Loan or (ii) from a specific recovery of costs, expenses or attorneys
fees against the party against whom such enforcement is directed.
(c) As to each Mortgage Loan that (i) is subserviced by a Designated
Subservicer as of the Closing Date, and (ii) becomes 90 or more days Delinquent
at any time after the Closing Date:
(i) the Master Servicer shall cause the subservicing of such
Mortgage Loan to be transferred to HomeComings as soon as reasonably
practicable (unless HomeComings is already acting as subservicer for such
Mortgage Loan); and
(ii) subject to the completion of the subservicing transfer
described in (i) above (if applicable), the Master Servicer shall perform
the servicing activities described in Section 3.14, either directly or
through HomeComings or another affiliate.
Section 3.03. SUCCESSOR SUBSERVICERS.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
PROVIDED, HOWEVER, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use
56
reasonable efforts to have the successor Subservicer assume liability for the
representations and warranties made by the terminated Subservicer in respect of
the related Mortgage Loans and, in the event of any such assumption by the
successor Subservicer, the Master Servicer may, in the exercise of its business
judgment, release the terminated Subservicer from liability for such
representations and warranties.
Section 3.04. LIABILITY OF THE MASTER SERVICER.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable to the Trustee,
the Insurer and 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 Subservicing
Agreements or arrangements or by virtue of indemnification from the Subservicer
or the Depositor 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
Subservicer for indemnification of the Master Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICER AND
TRUSTEE OR CERTIFICATEHOLDERS.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer 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 Subservicer in
its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an
omission or defect or to repurchase a Mortgage Loan as referred to in Section
2.02 hereof.
Section 3.06. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
TRUSTEE.
(a) In the event the Master Servicer shall for any reason no longer be
the master servicer (including by reason of an Event of Default), the Trustee,
its designee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer under each Subservicing Agreement that may
have been entered into. The Trustee, its designee or the successor servicer for
the Trustee shall be deemed to have assumed all of the Master Servicer's
interest therein and to have replaced the Master Servicer as a party to the
Subservicing Agreement to the same extent as if the Subservicing Agreement had
been assigned to the assuming party except that the Master Servicer shall not
thereby be relieved of any liability or obligations under the Subservicing
Agreement.
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(b) The Master Servicer shall, upon request of the Trustee but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
each Subservicing Agreement to the assuming party.
(c) Unless an Insurer Default exists, the Master Servicer will, if it
is authorized to do so under the relevant Subservicing Agreement, upon request
of the Insurer at a time when the Insurer may remove the Master Servicer under
the terms hereof, terminate any Subservicing Agreement.
Section 3.07. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS; DEPOSITS
TO CUSTODIAL ACCOUNT.
(a) 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,
follow such collection procedures as it would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or any prepayment charge or penalty
interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the Due Date for payments due on a Mortgage Loan in accordance with the Program
Guide, PROVIDED, HOWEVER, that the Master Servicer shall first determine that
any such waiver or extension will not materially adversely affect the lien of
the related Mortgage. In the event of any such arrangement, the Master Servicer
shall make timely advances on the related Mortgage Loan during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements unless otherwise
agreed to by the Holders of the Classes of Certificates affected thereby;
PROVIDED, HOWEVER, that no such extension shall be made if any advance would be
a Nonrecoverable Advance. Consistent with the terms of this Agreement, the
Master Servicer may also waive, modify or vary any term of any Mortgage Loan or
consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if in the Master Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders or the Insurer
(taking into account any estimated Realized Loss that might result absent such
action), PROVIDED, HOWEVER, that the Master Servicer may not modify materially
or permit any Subservicer to modify any Mortgage Loan, including without
limitation any modification that would change the Mortgage Rate, forgive the
payment of any principal or interest (unless in connection with the liquidation
of the related Mortgage Loan or except in connection with prepayments to the
extent that such reamortization is not inconsistent with the terms of the
Mortgage Loan), or extend the final maturity date of such Mortgage Loan, unless
such Mortgage Loan is in default or, in the judgment of the Master Servicer,
such default is reasonably foreseeable. In connection with any Curtailment of a
Mortgage Loan, the Master Servicer, to the extent not inconsistent with the
terms of the Mortgage Note and local law and practice, may permit the Mortgage
Loan to be re-amortized such that the Monthly Payment is recalculated as an
amount that will fully amortize the remaining Stated Principal Amount thereof by
the original Maturity Date
58
based on the original Mortgage Rate; provided, that such reamortization shall
not be permitted if it would constitute a reissuance of the Mortgage Loan for
federal income tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial
Account in which the Master Servicer shall deposit or cause to be deposited on a
daily basis, except as otherwise specifically provided herein, the following
payments and collections remitted by Subservicers or received by it in respect
of the Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest on the Mortgage Loans due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage
Rate on the Mortgage Loans, and the interest component of any Subservicer
Advance or of any REO Proceeds received in connection with an REO Property
for which an REO Disposition has occurred;
(iii) Insurance Proceeds and Liquidation Proceeds (net of any
related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03, 2.04 or 4.07 and all amounts required to be deposited
in connection with the substitution of a Qualified Substitute Mortgage Loan
pursuant to Section 2.03 or 2.04; and
(v) Any amounts required to be deposited pursuant to Section
3.07(c) or 3.21.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in
the nature of prepayment charges or late payment charges or assumption fees may
but need not be deposited by the Master Servicer in the Custodial Account. In
the event any amount not required to be deposited in the Custodial Account is so
deposited, the Master Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The
Custodial Account may contain funds that belong to one or more trust funds
created for mortgage pass-through certificates of other series and may contain
other funds respecting payments on mortgage loans belonging to the Master
Servicer or serviced or master serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Master Servicer shall keep
records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Mortgage Loans.
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With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar month, the Master Servicer may
elect to treat such amounts as included in the Available Distribution Amount for
the Distribution Date in the month of receipt, but is not obligated to do so. If
the Master Servicer so elects, such amounts will be deemed to have been received
(and any related Realized Loss shall be deemed to have occurred) on the last day
of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution maintaining the Custodial Account to invest the funds in the
Custodial Account attributable to the Mortgage Loans in Permitted Investments
which shall mature not later than the Certificate Account Deposit Date next
following the date of such investment (with the exception of the Amount Held for
Future Distribution) and which shall not be sold or disposed of prior to their
maturities. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments attributable to the
investment of amounts in respect of the Mortgage Loans shall be deposited in the
Custodial Account by the Master Servicer out of its own funds immediately as
realized.
(d) The Master Servicer shall give notice to the Trustee and the
Depositor of any change in the location of the Custodial Account and the
location of the Certificate Account prior to the use thereof.
Section 3.08. SUBSERVICING ACCOUNTS; SERVICING ACCOUNTS.
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to establish and maintain
one or more Subservicing Accounts which shall be an Eligible Account or, if such
account is not an Eligible Account, shall generally satisfy the requirements of
the Program Guide and be otherwise acceptable to the Master Servicer, the
Insurer and each Rating Agency. The Subservicer will be required thereby to
deposit into the Subservicing Account on a daily basis all proceeds of Mortgage
Loans received by the Subservicer, less its Subservicing Fees and unreimbursed
advances and expenses, to the extent permitted by the Subservicing Agreement. If
the Subservicing Account is not an Eligible Account, the Master Servicer shall
be deemed to have received such monies upon receipt thereof by the Subservicer.
The Subservicer shall not be required to deposit in the Subservicing Account
payments or collections in the nature of prepayment charges or late charges or
assumption fees. On or before the date specified in the Program Guide, but in no
event later than the Determination Date, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the Subservicing
Account with respect to each Mortgage Loan serviced by such Subservicer that are
required to be remitted to the Master Servicer. The Subservicer will also be
required, pursuant to the Subservicing Agreement, to advance on such scheduled
date of remittance amounts equal to any scheduled monthly installments of
principal and interest less its Subservicing Fees on any Mortgage Loans for
which payment was not received by the Subservicer. This obligation to advance
with respect to each Mortgage Loan will continue up
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to and including the first of the month following the date on which the related
Mortgaged Property is sold at a foreclosure sale or is acquired by the Trust
Fund by deed in lieu of foreclosure or otherwise. All such advances received by
the Master Servicer shall be deposited promptly by it in
the Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the
rate per annum at which the Servicing Fee and the Certificate Insurer Premium
Modified Rate accrues in the case of a Modified Mortgage Loan) on any
Curtailment received by such Subservicer in respect of a Mortgage Loan from the
related Mortgagor during any month that is to be applied by the Subservicer to
reduce the unpaid principal balance of the related Mortgage Loan as of the first
day of such month, from the date of application of such Curtailment to the first
day of the following month. Any amounts paid by a Subservicer pursuant to the
preceding sentence shall be for the benefit of the Master Servicer as additional
servicing compensation and shall be subject to its withdrawal or order from time
to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account,
the Master Servicer shall for any Nonsubserviced Mortgage Loan, and shall cause
the Subservicers for Subserviced Mortgage Loans to, establish and maintain one
or more Servicing Accounts and deposit and retain therein all collections from
the Mortgagors (or advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums, if applicable, or comparable items for
the account of the Mortgagors. Each Servicing Account shall satisfy the
requirements for a Subservicing Account and, to the extent permitted by the
Program Guide or as is otherwise acceptable to the Master Servicer, may also
function as a Subservicing Account. Withdrawals of amounts related to the
Mortgage Loans from the Servicing Accounts may be made only to effect timely
payment of taxes, assessments, hazard insurance premiums, if applicable, or
comparable items, to reimburse the Master Servicer or Subservicer out of related
collections for any payments made pursuant to 3.12(a) (with respect to hazard
insurance), to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required, to Mortgagors on balances in the
Servicing Account or to clear and terminate the Servicing Account at the
termination of this Agreement in accordance with Section 9.01 or in accordance
with the Program Guide. As part of its servicing duties, the Master Servicer
shall, and the Subservicers will, pursuant to the Subservicing Agreements, be
required to pay to the Mortgagors interest on funds in this account to the
extent required by law.
(d) The Master Servicer shall advance the payments referred to in the
preceding subsection that are not timely paid by the Mortgagors or advanced by
the Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of the
Master Servicer, will be recoverable by the Master Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS.
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In the event that compliance with this Section 3.09 shall make any
Class of Certificates legal for investment by federally insured savings and loan
associations, the Master Servicer shall provide, or cause the Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the
supervisory agents and examiners thereof access to the documentation regarding
the Mortgage Loans required by applicable regulations of the Office of Thrift
Supervision, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices designated by the Master
Servicer. The Master Servicer shall permit such representatives to photocopy any
such documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.
(a) The Master Servicer may, from time to time as provided herein,
make withdrawals from the Custodial Account of amounts on deposit therein
pursuant to Section 3.07 that are attributable to the Mortgage Loans for the
following purposes:
(i) to make deposits into the Certificate Account in the amounts
and in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for
previously unreimbursed advances or expenses made pursuant to Sections
3.01, 3.08, 3.12(a), 3.14 and 4.04 or otherwise reimbursable pursuant to
the terms of this Agreement, such withdrawal right being limited to amounts
received on particular Mortgage Loans (including, for this purpose, REO
Proceeds, Insurance Proceeds, Liquidation Proceeds and proceeds from the
purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04 or 4.07)
which represent (A) Late Collections of Monthly Payments for which any such
advance was made in the case of Subservicer Advances or Advances pursuant
to Section 4.04 and (B) late recoveries of the payments for which such
advances were made in the case of Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not
previously retained by such Subservicer) out of each payment received by
the Master Servicer on account of interest on a Mortgage Loan as
contemplated by Sections 3.14 and 3.16, an amount equal to that remaining
portion of any such payment as to interest (but not in excess of the
Servicing Fee and the Subservicing Fee, if not previously retained) which,
when deducted, will result in the remaining amount of such interest being
interest at a rate per annum equal to the Net Mortgage Rate (or Modified
Net Mortgage Rate in the case of a Modified Mortgage Loan) plus the
Certificate Insurer Premium Modified Rate on the amount specified in the
amortization schedule of the related Mortgage Loan as the principal balance
thereof at the beginning of the period respecting which such interest was
paid after giving effect to any previous Curtailments;
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(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds deposited in the Custodial
Account that it is entitled to withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers as interest
in respect of Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, Residential Funding, the
Depositor or any other appropriate Person, as the case may be, with respect
to each Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred pursuant to Section 2.02, 2.03, 2.04,
4.07 or 9.01, all amounts received thereon and not required to be
distributed to Certificateholders as of the date on which the related
Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent provided
in subsection (c) below, any Advance made in connection with a modification
of a Mortgage Loan that is in default or, in the judgment of the Master
Servicer, default is reasonably foreseeable pursuant to Section 3.07(a), to
the extent the amount of the Advance has been added to the outstanding
principal balance of the Mortgage Loan;
(viii) to reimburse itself or the Depositor for expenses incurred
by and reimbursable to it or the Depositor pursuant to Section 3.14(c),
6.03, 10.01 or otherwise;
(ix) to reimburse itself for amounts expended by it (a) pursuant
to Section 3.14 in good faith in connection with the restoration of
property damaged by an Uninsured Cause, and (b) in connection with the
liquidation of a Mortgage Loan or disposition of an REO Property to the
extent not otherwise reimbursed pursuant to clause (ii) or (viii) above;
and
(x) to withdraw any amount deposited in the Custodial Account
that was not required to be deposited therein pursuant to Section 3.07,
including any payoff fees or penalties or any other additional amounts
payable to the Master Servicer or Subservicer pursuant to the terms of the
Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses (ii),
(iii), (v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, 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
Custodial Account pursuant to such clauses.
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(c) The Master Servicer shall be entitled to reimburse itself or the
related Subservicer for any advance made in respect of a Mortgage Loan that the
Master Servicer determines to be a Nonrecoverable Advance by withdrawal from the
Custodial Account of amounts on deposit therein attributable to the Mortgage
Loans on any Certificate Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a Nonrecoverable
Advance on any such Certificate Account Deposit Date shall be limited to an
amount not exceeding the portion of such advance previously paid to
Certificateholders (and not theretofore reimbursed to the Master Servicer or the
related Subservicer).
(d) With respect to the Simple Interest Mortgage Loans,
notwithstanding the terms of the related Mortgage Note, the Master Servicer
shall treat such Mortgage Loans as if payments thereon were made on a 360-day
year consisting of twelve 30-day months (a "30/360 basis"). In the event the
related Mortgagor makes a Monthly Payment prior to any Due Date, the Master
Servicer shall treat the principal portion of the Monthly Payment in excess of
what such portion would be had such Monthly Payment been made on the related Due
Date as a Curtailment (other than with respect to the calculation of
Compensating Interest) and shall advance any shortfall in interest.
Notwithstanding anything in this Agreement to the contrary, to the extent the
Master Servicer makes advances of interest or principal with respect to the
Simple Interest Mortgage Loans as a result of treating them as if they paid on a
30/360 basis, the Master Servicer shall first be entitled to reimburse itself
from future Monthly Payments with respect to such Mortgage Loans to the extent
the interest component or principal component, as applicable, of any subsequent
Monthly Payment exceeds the amount of interest accrued or principal that would
have been paid, as applicable, on a 30/360 basis with respect to any Simple
Interest Mortgage Loan, and if the Master Servicer determines that it is unable
to reimburse itself from such subsequent Monthly Payments, it shall be entitled
to reimburse itself as if such advances had been Nonrecoverable Advances.
Section 3.11. [RESERVED].
Section 3.12. MAINTENANCE OF FIRE INSURANCE AND OMISSIONS AND FIDELITY
COVERAGE.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage in an amount which is equal to the
lesser of the principal balance owing on such Mortgage Loan (together with the
principal balance of any mortgage loan secured by a lien that is senior to the
Mortgage Loan) or 100 percent of the insurable value of the improvements;
PROVIDED, HOWEVER, that such coverage may not be less than the minimum amount
required to fully compensate for any loss or damage on a replacement cost basis.
To the extent it may do so without breaching the related Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not cause such
insurance, to the extent it is available, to be maintained. The Master Servicer
shall also cause to be maintained on property acquired upon foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan, fire insurance with extended
coverage in an amount which is at least equal to the amount necessary to avoid
the application of any co-insurance clause contained in the related hazard
insurance policy. Pursuant to Section 3.07, any amounts collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in
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accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10. Any cost incurred by the Master Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of related late payments by the
Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to the extent
permitted by Section 3.10. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Whenever the improvements securing a Mortgage
Loan are located at the time of origination of such Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer shall cause flood
insurance (to the extent available) to be maintained in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the amount
required to compensate for any loss or damage to the Mortgaged Property on a
replacement cost basis 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 fire insurance policy with extended coverage insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first sentence of this Section
3.12(a), 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 a policy
complying with the first sentence of this Section 3.12(a) and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense
and keep in full force and effect throughout the term of this Agreement a
blanket fidelity bond and an errors and omissions insurance policy covering the
Master Servicer's officers and employees and other persons acting on behalf of
the Master Servicer in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for Xxxxxx Mae or Xxxxxxx Mac. In the event that any such bond or
policy ceases to be in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the case may be,
meeting the requirements, if any, of the Program Guide and acceptable to the
Depositor. Coverage of the Master
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Servicer under a policy or bond obtained by an Affiliate of the Master Servicer
and providing the coverage required by this Section 3.12(b) shall satisfy the
requirements of this Section 3.12(b).
Section 3.13. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND
MODIFICATION AGREEMENTS; CERTAIN ASSIGNMENTS.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the
Master Servicer or Subservicer, to the extent it has knowledge of such
conveyance, shall enforce any due-on-sale clause contained in any Mortgage Note
or Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default
under this Section 3.13(a) by reason of any transfer or assumption which
the Master Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably
likely that any Mortgagor will bring, or if any Mortgagor does bring, legal
action to declare invalid or otherwise avoid enforcement of a due-on-sale
clause contained in any Mortgage Note or Mortgage, the Master Servicer
shall not be required to enforce the due-on-sale clause or to contest such
action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption or modification agreement or supplement to the
Mortgage Note or Mortgage which requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Master Servicer is authorized, subject
to the requirements of the sentence next following, to execute and deliver, on
behalf of the Trustee, the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person; PROVIDED, HOWEVER, none of
such terms and requirements shall both constitute a "significant modification"
effecting an exchange or reissuance of such Mortgage Loan under the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
cause any of REMIC BT, REMIC I, REMIC II or REMIC III to fail to qualify as
REMICs under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the startup date under the REMIC Provisions. The Master
Servicer shall execute and deliver such documents only if it reasonably
determines that (i) its execution and delivery thereof will not conflict with or
violate any terms of this Agreement or cause the unpaid balance and interest on
the Mortgage Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been obtained
and (iii) subsequent to the closing of the transaction involving the assumption
or transfer (A) the Mortgage Loan will continue to be secured by a first
mortgage lien (or junior lien of the same
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priority in relation to any senior mortgage loan, with respect to any Mortgage
Loan secured by a junior Mortgage) pursuant to the terms of the Mortgage, (B)
such transaction will not adversely affect the coverage under any Required
Insurance Policies, (C) the Mortgage Loan will fully amortize over the remaining
term thereof, (D) no material term of the Mortgage Loan (including the interest
rate on the Mortgage Loan) will be altered nor will the term of the Mortgage
Loan be changed and (E) if the seller/transferor of the Mortgaged Property is to
be released from liability on the Mortgage Loan, the buyer/transferee of the
Mortgaged Property would be qualified to assume the Mortgage Loan based on
generally comparable credit quality and such release will not (based on the
Master Servicer's or Subservicer's good faith determination) adversely affect
the collectability of the Mortgage Loan. Upon receipt of appropriate
instructions from the Master Servicer in accordance with the foregoing, the
Trustee shall execute any necessary instruments for such assumption or
substitution of liability as directed by the Master Servicer. Upon the closing
of the transactions contemplated by such documents, the Master Servicer shall
cause the originals or true and correct copies of the assumption agreement, the
release (if any), or the modification or supplement to the Mortgage Note or
Mortgage to be delivered to the Trustee or the Custodian and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the Master Servicer
or such related Subservicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer or such Subservicer
as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may
be, shall be entitled to approve a request from a Mortgagor for a partial
release of the related Mortgaged Property, the granting of an easement thereon
in favor of another Person, any alteration or demolition of the related
Mortgaged Property or other similar matters if it has determined, exercising its
good faith business judgment in the same manner as it would if it were the owner
of the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby
and that each of REMIC BT, REMIC I, REMIC II or REMIC III would continue to
qualify as a REMIC under the Code as a result thereof and that no tax on
"prohibited transactions" or "contributions" after the startup day would be
imposed on any of REMIC BT, REMIC I, REMIC II or REMIC III as a result thereof.
Any fee collected by the Master Servicer or the related Subservicer for
processing such a request will be retained by the Master Servicer or such
Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this
Agreement, the Trustee and Master Servicer shall be entitled to approve an
assignment in lieu of satisfaction with respect to any Mortgage Loan, provided
the obligee with respect to such Mortgage Loan following such proposed
assignment provides the Trustee and Master Servicer with a "Lender Certification
for Assignment of Mortgage Loan" in the form attached hereto as Exhibit M, in
form and substance satisfactory to the Trustee and Master Servicer, providing
the following: (i) that the Mortgage Loan is secured by Mortgaged Property
located in a jurisdiction in which an assignment in lieu of satisfaction is
required to preserve lien priority, minimize or avoid mortgage recording taxes
or otherwise comply with, or facilitate a refinancing under, the laws of such
jurisdiction; (ii) that the substance of the assignment is, and is intended to
be, a refinancing of such Mortgage Loan and that the form of the transaction is
solely to comply with, or facilitate the transaction under, such local laws;
(iii) that the Mortgage Loan following the proposed assignment will have a rate
of interest at least 0.25 percent below or above the rate of interest on such
Mortgage Loan prior to such proposed
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assignment; and (iv) that such assignment is at the request of the borrower
under the related Mortgage Loan. Upon approval of an assignment in lieu of
satisfaction with respect to any Mortgage Loan, the Master Servicer shall
receive cash in an amount equal to the unpaid principal balance of and accrued
interest on such Mortgage Loan and the Master Servicer shall treat such amount
as a Principal Prepayment in Full with respect to such Mortgage Loan for all
purposes hereof.
Section 3.14. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall foreclose upon or otherwise comparably
convert (which may include an REO Acquisition) 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. Alternatively, the Master Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may include (i)
accepting a short sale (a payoff of the Mortgage Loan for an amount less than
the total amount contractually owed in order to facilitate a sale of the
Mortgaged Property by the Mortgagor) or permitting a short refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount contractually owed
in order to facilitate refinancing transactions by the Mortgagor not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii)
agreeing to a modification in accordance with Section 3.07. In connection with
such foreclosure or other conversion or action, the Master Servicer shall,
consistent with Section 3.11, follow such practices and procedures as it shall
deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities and as shall be required or permitted by the
Program Guide; provided that the Master Servicer shall not be liable in any
respect hereunder if the Master Servicer is acting in connection with any such
foreclosure or other conversion or action in a manner that is consistent with
the provisions of this Agreement. The Master Servicer, however, shall not be
required to expend its own funds or incur other reimbursable charges in
connection with any foreclosure, or attempted foreclosure which is not
completed, or towards the correction of any default on a related senior mortgage
loan, or towards the restoration of any property unless it shall determine (i)
that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Holders of Certificates of one or more
Classes or the Insurer after reimbursement to itself for such expenses or
charges and (ii) that such expenses and charges will be recoverable to it
through Liquidation Proceeds, Insurance Proceeds, or REO Proceeds (respecting
which it shall have priority for purposes of withdrawals from the Custodial
Account pursuant to Section 3.10, whether or not such expenses and charges are
actually recoverable from related Liquidation Proceeds, Insurance Proceeds or
REO Proceeds). In the event of such a determination by the Master Servicer
pursuant to this Section 3.14(a), the Master Servicer shall be entitled to
reimbursement of its funds so expended pursuant to Section 3.10.
In addition, the Master Servicer may pursue any remedies that may be
available in connection with a breach of a representation and warranty with
respect to any such Mortgage Loan in accordance with Sections 2.03 and 2.04.
However, the Master Servicer is not required to continue to pursue both
foreclosure (or similar remedies) with respect to the Mortgage Loans and
remedies in connection with a breach of a representation and warranty if the
Master Servicer determines in its reasonable discretion that one such remedy is
more likely to result in a greater recovery as to the Mortgage Loan. Upon the
occurrence of a Cash Liquidation or REO Disposition, following the
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deposit in the Custodial Account of all Insurance Proceeds, Liquidation Proceeds
and other payments and recoveries referred to in the definition of "Cash
Liquidation" or "REO Disposition," as applicable, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Trustee
or any Custodian, as the case may be, shall release to the Master Servicer the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Master Servicer or its designee,
as the case may be, the related Mortgage Loan, and thereafter such Mortgage Loan
shall not be part of the Trust Fund. Notwithstanding the foregoing or any other
provision of this Agreement, in the Master Servicer's sole discretion with
respect to any defaulted Mortgage Loan or REO Property as to either of the
following provisions, (i) a Cash Liquidation or REO Disposition may be deemed to
have occurred if substantially all amounts expected by the Master Servicer to be
received in connection with the related defaulted Mortgage Loan or REO Property
have been received, and (ii) for purposes of determining the amount of any
Liquidation Proceeds, Insurance Proceeds, REO Proceeds or other unscheduled
collections or the amount of any Realized Loss, the Master Servicer may take
into account minimal amounts of additional receipts expected to be received or
any estimated additional liquidation expenses expected to be incurred in
connection with the related defaulted Mortgage Loan or REO Property.
(b) In the event that title to any Mortgaged Property is acquired by
the Trust Fund as an REO Property by foreclosure or by deed in lieu of
foreclosure, the deed or certificate of sale shall be issued to the Trustee or
to its nominee on behalf of Certificateholders. Notwithstanding any such
acquisition of title and cancellation of the related Mortgage Loan, such REO
Property shall (except as otherwise expressly provided herein) be considered to
be an Outstanding Mortgage Loan held in the Trust Fund until such time as the
REO Property shall be sold. Consistent with the foregoing for purposes of all
calculations hereunder so long as such REO Property shall be considered to be an
Outstanding Mortgage Loan it shall be assumed that, notwithstanding that the
indebtedness evidenced by the related Mortgage Note shall have been discharged,
such Mortgage Note and the related amortization schedule in effect at the time
of any such acquisition of title (after giving effect to any previous
Curtailments and before any adjustment thereto by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period) remain
in effect.
(c) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer on behalf of the Trust Fund shall dispose of
such REO Property within three full years after the taxable year of its
acquisition by the Trust Fund for purposes of Section 860G(a)(8) of the Code (or
such shorter period as may be necessary under applicable state (including any
state in which such property is located) law to maintain the status of each of
REMIC BT, REMIC I, REMIC II or REMIC III as a REMIC under applicable state law
and avoid taxes resulting from such property failing to be foreclosure property
under applicable state law) or, at the expense of the Trust Fund, request, more
than 60 days before the day on which such grace period would otherwise expire,
an extension of such grace period unless the Master Servicer obtains for the
Trustee and the Insurer an Opinion of Counsel, addressed to the Trustee, the
Insurer and the Master Servicer, to the effect that the holding by the Trust
Fund of such REO Property subsequent to such period will not result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code or cause any
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of REMIC BT, REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC (for
federal (or any applicable State or local) income tax purposes) at any time that
any Certificates are outstanding, in which case the Trust Fund may continue to
hold such REO Property (subject to any conditions contained in such Opinion of
Counsel). The Master Servicer shall be entitled to be reimbursed from the
Custodial Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.10. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or (ii) subject REMIC BT, REMIC I, REMIC II or
REMIC III to the imposition of any federal income taxes on the income earned
from such REO Property, including any taxes imposed by reason of Section 860G(c)
of the Code, unless the Master Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase
or repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as
well as any recovery resulting from a collection of Liquidation Proceeds,
Insurance Proceeds or REO Proceeds, will be applied in the following order of
priority: first, to reimburse the Master Servicer or the related Subservicer in
accordance with Section 3.10(a)(ii); second, to the Certificateholders to the
extent of accrued and unpaid interest on the Mortgage Loan, and any related REO
Imputed Interest, at the Net Mortgage Rate (or the Modified Net Mortgage Rate in
the case of a Modified Mortgage Loan), to the Due Date in the related Due Period
prior to the Distribution Date on which such amounts are to be distributed;
third, to the Certificateholders as a recovery of principal on the Mortgage Loan
(or REO Property) (provided that if any such Class of Certificates to which such
Realized Loss was allocated is no longer outstanding, such subsequent recovery
shall be distributed to the persons who were the Holders of such Class of
Certificates when it was retired); fourth, to all Servicing Fees and
Subservicing Fees payable therefrom (and the Master Servicer and the Subservicer
shall have no claims for any deficiencies with respect to such fees which result
from the foregoing allocation); fifth, to the Insurer for reimbursement for any
payments made pursuant to the Policy to the extent not reimbursed pursuant to
Section 4.02(g)(iv); and sixth, to Foreclosure Profits.
Section 3.15. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon becoming aware of the payment in full of any Mortgage Loan,
or upon the receipt by the Master Servicer of a notification that payment in
full will be escrowed in a manner customary for such purposes, the Master
Servicer will immediately notify the Trustee (if it holds the related Mortgage
File) or the Custodian by a certification of 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 Custodial Account pursuant to Section 3.07 have been or will be
so deposited), substantially in one of the forms attached hereto as Exhibit G
requesting delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release, or cause the
Custodian to release, the related Mortgage File to the Master Servicer. The
Master Servicer is authorized to execute and deliver to the Mortgagor the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage, together with
the Mortgage Note with, as appropriate,
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written evidence of cancellation thereon. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Master Servicer shall deliver to the
Custodian, with a copy to the Trustee, a certificate of a Servicing Officer
substantially in one of the forms attached as Exhibit G hereto, requesting that
possession of all, or any document constituting part of, the Mortgage File be
released to the Master Servicer and certifying as to the reason for such release
and that such release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any Required Insurance Policy. Upon receipt
of the foregoing, the Trustee shall deliver, or cause the Custodian to deliver,
the Mortgage File or any document therein to the Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Master Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Mortgage File or
such document has been delivered directly or through a Subservicer 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 directly or through a Subservicer 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. In the event of the liquidation of
a Mortgage Loan, the Trustee shall deliver the Request for Release with respect
thereto to the Master Servicer upon deposit of the related Liquidation Proceeds
in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall
execute and deliver to the Master Servicer, if necessary, any court pleadings,
requests for trustee's sale or other documents necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Together with such documents or pleadings (if signed by the Trustee),
the Master Servicer shall deliver to the Trustee a certificate of a Servicing
Officer requesting that such pleadings or documents be executed by the Trustee
and certifying as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate any
insurance coverage under any Required Insurance Policy or 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 3.16. SERVICING AND OTHER COMPENSATION; COMPENSATING INTEREST.
(a) The Master Servicer, as compensation for its activities hereunder,
shall be entitled to receive on each Distribution Date the amounts provided for
by clauses (iii), (iv), (v) and (vi) of Section 3.10(a), subject to clause (e)
below. The amount of servicing compensation provided for in such clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of amounts
reimbursable
71
therefrom pursuant to Section 3.10(a)(ii)) in respect of a Cash Liquidation or
REO Disposition exceed the unpaid principal balance of such Mortgage Loan plus
unpaid interest accrued thereon (including REO Imputed Interest) at a per annum
rate equal to the related Net Mortgage Rate (or the Modified Net Mortgage Rate
in the case of a Modified Mortgage Loan), the Master Servicer shall be entitled
to retain therefrom and to pay to itself and/or the related Subservicer, any
Foreclosure Profits and any Servicing Fee or Subservicing Fee considered to be
accrued but unpaid.
(b) Additional servicing compensation in the form of prepayment
charges, assumption fees, late payment charges, investment income on amounts in
the Custodial Account or the Certificate Account or otherwise shall be retained
by the Master Servicer or the Subservicer to the extent provided herein, subject
to clause (e) below.
(c) The Master Servicer shall be required to pay, or cause to be paid,
all expenses incurred by it in connection with its servicing activities
hereunder (including payment of the fees and expenses of the Trustee and any
Custodian) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may
not be transferred in whole or in part except in connection with the transfer of
all of its responsibilities and obligations of the Master Servicer under this
Agreement.
(e) Notwithstanding clauses (a) and (b) above, the amount of servicing
compensation that the Master Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to Compensating Interest (if
any) for such Distribution Date. Such reduction shall be applied during such
period as follows: first, to any Servicing Fee or Subservicing Fee to which the
Master Servicer is entitled pursuant to Section 3.10(a)(iii); second, to any
income or gain realized from any investment of funds held in the Custodial
Account or the Certificate Account to which the Master Servicer is entitled
pursuant to Sections 3.07(c) or 4.01(b), respectively; and third, to any amounts
of servicing compensation to which the Master Servicer is entitled pursuant to
Section 3.10(a)(v) or (vi). In making such reduction, the Master Servicer will
not withdraw from the Custodial Account any such amount representing all or a
portion of the Servicing Fee to which it is entitled pursuant to Section
3.10(a)(iii); (ii) will not withdraw from the Custodial Account or Certificate
Account any such amount to which it is entitled pursuant to Section 3.07(c) or
4.01(b) and (iii) will not withdraw from the Custodial Account any such amount
of servicing compensation to which it is entitled pursuant to Section 3.10(a)(v)
or (vi).
Section 3.17. REPORTS TO THE TRUSTEE AND THE DEPOSITOR.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee and the Depositor a statement, certified
by a Servicing Officer, setting forth the status of the Custodial Account as of
the close of business on such Distribution Date as it relates to the Mortgage
Loans and showing, for the period covered by such statement, the aggregate of
deposits in or withdrawals from the Custodial Account in respect of the Mortgage
Loans for each
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category of deposit specified in Section 3.07 and each category of withdrawal
specified in Section 3.10.
Section 3.18. ANNUAL STATEMENT AS TO COMPLIANCE.
The Master Servicer will deliver to the Depositor, the Trustee and the
Insurer on or before March 31 of each year, beginning with the first March 31
that occurs at least six months after the Cut-off Date, an Officers' Certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year related to its servicing of
mortgage loans and of its performance under the pooling and servicing
agreements, including this Agreement, has been made under such officers'
supervision, (ii) to the best of such officers' knowledge, based on such review,
the Master Servicer has complied in all material respects with the minimum
servicing standards set forth in the Uniform Single Attestation Program for
Mortgage Bankers and has fulfilled all of its material obligations in all
material respects throughout such year, or, if there has been material
noncompliance with such servicing standards or a default in the fulfillment in
all material respects of any such obligation relating to this Agreement, such
statement shall include a description of such noncompliance or specify each such
default, as the case may be, known to such officer and the nature and status
thereof and that the Master Servicer has met the most recent Annual Servicing
Test, or if such Annual Servicing Test has not been met, specifying the nature
of such failure, such statement with respect to a failure of the Annual
Servicing Test may be delivered as a separate Officers' Certificate, and (iii)
to the best of such officers' knowledge, each Subservicer has complied in all
material respects with the minimum servicing standards set forth in the Uniform
Single Attestation Program for Mortgage Bankers and has fulfilled all of its
material obligations under its Subservicing Agreement in all material respects
throughout such year, or if there has been material noncompliance with such
servicing standards or a material default in the fulfillment of such obligations
relating to this Agreement, specifying such statement shall include a
description of such noncompliance or specify each such default, as the case may
be, known to such officer and the nature and status thereof.
Section 3.19. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before March 31 of each year, beginning with the first March 31
that occurs at least six months after the Cut-off Date, the Master Servicer at
its expense shall cause a firm of independent public accountants which is any
one of the six major nationally recognized firms of independent public
accountants and which is also a member of the American Institute of Certified
Public Accountants to furnish a report to the Depositor, the Insurer and the
Trustee stating its opinion that, on the basis of an examination conducted by
such firm substantially in accordance with standards established by the American
Institute of Certified Public Accountants, the assertions made pursuant to
Section 3.18 regarding compliance with the minimum servicing standards set forth
in the Uniform Single Attestation Program for Mortgage Bankers during the
preceding calendar year are fairly stated in all material respects, subject to
such exceptions and other qualifications that, in the opinion of such firm, such
accounting standards require it to report. In rendering such statement, such
firm may rely, as to matters relating to the direct servicing of mortgage loans
by Subservicers, upon comparable statements for examinations conducted by
independent public accountants
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substantially in accordance with standards established by the American Institute
of Certified Public Accountants (rendered within one year of such statement)
with respect to such Subservicers.
Section 3.20. RIGHT OF THE DEPOSITOR IN RESPECT OF THE MASTER
SERVICER.
The Master Servicer shall afford the Depositor, upon reasonable
notice, during normal business hours access to all records maintained by the
Master Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish the Depositor with its most recent financial
statements and such other information as the Master Servicer possesses regarding
its business, affairs, property and condition, financial or otherwise. The
Master Servicer shall also cooperate with all reasonable requests for
information including, but not limited to, notices, tapes and copies of files,
regarding itself, the Mortgage Loans or the Certificates from any Person or
Persons identified by the Depositor or Residential Funding. The Insurer hereby
is so identified. The Depositor may, but is not obligated to perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer hereunder
or exercise the rights of the Master Servicer hereunder; provided that the
Master Servicer shall not be relieved of any of its obligations hereunder by
virtue of such performance by the Depositor or its designee. The Depositor shall
not have the responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
------------------------------
Section 4.01. CERTIFICATE ACCOUNT.
(a) The Master Servicer acting as agent of the Trustee shall establish
and maintain a Certificate Account in which the Master Servicer shall cause to
be deposited on behalf of the Trustee on or before 2:00 P.M. New York time on
each Certificate Account Deposit 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
Certificate Account pursuant to Section 3.12(a), (iii) any amount required to be
deposited in the Certificate Account pursuant to Section 3.16(e) or Section
4.07, (iv) any amount required to be paid pursuant to Section 9.01, (v) an
amount equal to the Certificate Insurer Premium payable on such Distribution
Date and (vi) all other amounts constituting the Available Distribution Amount
for the immediately succeeding Distribution Date. In addition, as and to the
extent required pursuant to Section 4.08(b), the Trustee shall withdraw from the
Insurance Account and deposit into the Certificate Account the amount necessary
to pay the Insured Amount on each Distribution Date to the extent received from
the Insurer. In addition, as and to the extent required pursuant to Section
4.09, the Trustee shall withdraw from the Reserve Fund and deposit into the
Certificate Account any amounts required to be distributed to the
Certificateholders on the immediately succeeding Distribution Date.
(b) On each Distribution Date, prior to making any other distributions
referred to in Section 4.02 herein, the Trustee shall withdraw from the
Certificate Account and pay to the Insurer, by wire transfer of immediately
available funds to the Insurer Account, the Certificate Insurer Premium for such
Distribution Date. The Trustee shall deposit any amounts received pursuant to
the Policy into the Certificate Account. Any such amounts shall be distributed
on the immediately following Distribution Date as part of the Available
Distribution Amount.
(c) The Trustee shall, upon written request from the Master Servicer,
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders and the Insurer,
which shall mature not later than the Business Day next preceding the
Distribution Date next following the date of such investment (except that (i)
any investment in the institution with which the Certificate Account is
maintained may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Certificate Account in the amount payable on such
investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized.
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Section 4.02. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate and distribute the Principal Distribution
Amount for such date to the interest issued in respect of REMIC BT, REMIC I,
REMIC II and REMIC III as specified in this Section.
(b) The initial principal balances of the Class LT1-I, Class LT2-I and
Class LT3-I Interests shall equal 98% of the Stated Principal Balance of the
Group I Loans as of the Cut-off Date, 1% of the Stated Principal Balance of the
Group I Loans as of the Cut-off Date less 1% of the Group I
Overcollateralization Amount on the Closing Date and 1% of the Stated Principal
Balance of the Group I Loans as of the Cut-off Date plus 1% of the Group I
Overcollateralization Amount on the Closing Date, respectively. On each
Distribution Date, 98% of the Principal Distribution Amount in respect of the
Group I Loans for the related Due Period shall be allocated to the Class LT1-I
Interest. Remaining amounts of such Principal Distribution Amount for the
related Due Period shall be allocated, first, to the Class LT3-I Interest up to
an amount equal to 2% of any amounts that represents an Excess
Overcollateralization Amount attributable to the Group I Loans with respect to
such Distribution Date and then equally between the Class LT2-I and Class LT3-I
Interests. Interest accruing on the Class LT3-I Interest in respect of each
Distribution Date in an amount equal to the sum of (i) 1% of the increase in the
Group I Overcollateralization Amount from the immediately preceding Distribution
Date, and (ii) 1% of the Group I Aggregate Net Excess Turbo Amount, shall be
deferred and added to the principal balance of the Class LT3-I Interest. The
amount of interest accrued and deferred on the Class LT3-I Interest in
accordance with the preceding sentence in respect of each Distribution Date
shall be distributed as principal on such date to the Class LT2-I Interest.
On each Distribution Date, Realized Losses with respect to the Class
A-I Certificates for such date shall be allocated 98% to the Class LT1-I
Interest. The remaining 2% of such Realized Losses shall be allocated to the
Class LT3-I Interest to the extent that the principal balance of the Class LT3-
I Interest exceeds 1% of the aggregate of the Stated Principal Balance of the
Group I Loans as of such date and then equally between the Class LT2-I and Class
LT3-I Interests.
(c) The initial principal balances of the Class LT1-II, Class LT2-II
and Class LT3- II Interests shall equal 98% of the Stated Principal Balance of
the Group II Loans as of the Cut-off Date, 1% of the Stated Principal Balance of
the Group II Loans as of the Cut-off Date less 1% of the Group II
Overcollateralization Amount on the Closing Date and 1% of the Stated Principal
Balance of the Group II Loans as of the Cut-off Date plus 1% of the Group II
Overcollateralization Amount on the Closing Date, respectively. On each
Distribution Date, 98% of the Principal Distribution Amount in respect of the
Group II Loans for the related Due Period shall be allocated to the Class LT1-II
Interest. Remaining amounts of such Principal Distribution Amount for the
related Due Period shall be allocated, first, to the Class LT3-II Interest up to
an amount equal to 2% of any amount that represents an Excess
Overcollateralization Amount attributable to the Group II Loans with respect to
such Distribution Date and then equally between the Class LT2-II and Class
LT3-II Interests. Interest accruing on the Class LT3-II Interest in respect of
each Distribution Date in an amount equal to the sum of (i) 1% of the increase
in the Group II Overcollateralization Amount from the immediately preceding
Distribution Date, and (ii) 1% of the Group II Aggregate Net Excess
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Turbo Amount, shall be deferred and added to the principal balance of the Class
LT3-II Interest. The amount of interest accrued and deferred on the Class LT3-II
Interest in accordance with the preceding sentence in respect of each
Distribution Date shall be distributed as principal on such date to the Class
LT2-II Interest.
On each Distribution Date, Realized Losses with respect to the Class A-II
Certificates for such date shall be allocated 98% to the Class LT1-II Interest.
The remaining 2% of such Realized Losses shall be allocated to the Class LT3-II
Interest to the extent that the principal balance of the Class LT3-II Interest
exceeds 1% of the aggregate of the Stated Principal Balance of the Group II
Loans as of such date and then equally between the Class LT2-II and Class LT3-II
Interests.
(d) The initial principal balances of the Class MT1-I, Class MT2-I and
Class MT3-I Interests shall equal 98% of the Stated Principal Balance of the
Group I Loans as of the Cutoff Date, 1% of the Stated Principal Balance of the
Group I Loans as of the Cut-off Date less 1% of the Group I
Overcollateralization Amount on the Closing Date and 1% of the Stated Principal
Balance of the Group I Loans as of the Cut-off Date plus 1% of the Group I
Overcollateralization Amount on the Closing Date, respectively. The Class MT4-I
Interest shall not have a principal balance. On each Distribution Date, 98% of
the Principal Distribution Amount in respect of the Group I Loans for the
related Due Period shall be allocated to the Class MT1-I Interest. Remaining
amounts of such Principal Distribution Amount for the related Due Period shall
be allocated, first, to the Class MT3-I Interest up to an amount equal to 2% of
any amounts that represents an Excess Overcollateralization Amount attributable
to the Group I Loans with respect to such Distribution Date and then equally
between the Class MT2-I and Class MT3-I Interests. Interest accruing on the
Class MT3-I Interest in respect of each Distribution Date in an amount equal to
the sum of (i) 1% of the increase in the Group I Overcollateralization Amount
from the immediately preceding Distribution Date, and (ii) 1% of the Group I
Aggregate Net Excess Turbo Amount, shall be deferred and added to the principal
balance of the Class MT3-I Interest. The amount of interest accrued and deferred
on the Class MT3-I Interest in accordance with the preceding sentence in respect
of each Distribution Date shall be distributed as principal on such date to the
Class MT2-I Interest.
On each Distribution Date, Realized Losses with respect to the Class A-I
Certificates for such date shall be allocated 98% to the Class MT1-I Interest.
The remaining 2% of such Realized Losses shall be allocated to the Class MT3-I
Interest to the extent that the principal balance of the Class MT3-I Interest
exceeds 1% of the aggregate of the Stated Principal Balance of the Group I Loans
as of such date and then equally between the Class MT2-I and Class MT3-I
Interests.
(e) The initial principal balances of the Class MT1-II, Class MT2-II
and Class MT3-II Interests shall equal 98% of the Stated Principal Balance of
the Group II Loans as of the Cutoff Date, 1% of the Stated Principal Balance of
the Group II Loans as of the Cut-off Date less 1% of the Group II
Overcollateralization Amount on the Closing Date and 1% of the Stated Principal
Balance of the Group II Loans as of the Cut-off Date plus 1% of the Group II
Overcollateralization Amount on the Closing Date, respectively. The Class MT4-II
Interest shall not have a principal balance. On each Distribution Date, 98% of
the Principal Distribution Amount in respect of the Group II Loans for the
related Due Period shall be allocated to the Class MT1-II Interest. Remaining
amounts of such Principal Distribution Amount for the related Due Period shall
be allocated, first,
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to the Class MT3-II Interest up to an amount equal to 2% of any amounts that
represents an Excess Overcollateralization Amount attributable to the Group II
Loans with respect to such Distribution Date and then equally between the Class
MT2-II and Class MT3-II Interests. Interest accruing on the Class MT3-II
Interest in respect of each Distribution Date in an amount equal to the sum of
(i) 1% of the increase in the Group II Overcollateralization Amount from the
immediately preceding Distribution Date, and (ii) 1% of the Group II Aggregate
Net Excess Turbo Amount, shall be deferred and added to the principal balance of
the Class MT3-II Interest. The amount of interest accrued and deferred on the
Class MT3-II Interest in accordance with the preceding sentence in respect of
each Distribution Date shall be distributed as principal on such date to the
Class MT2-II Interest.
On each Distribution Date, Realized Losses with respect to the Class A-II
Certificates for such date shall be allocated 98% to the Class MT1-II Interest.
The remaining 2% of such Realized Losses shall be allocated to the Class MT3-II
Interest to the extent that the principal balance of the Class MT3-II Interest
exceeds 1% of the aggregate of the Stated Principal Balance of the Group II
Loans as of such date and then equally between the Class MT2-II and Class MT3-II
Interests. For purposes of Section 4.02(b), (c), (d) and (e), following the
application of Realized Losses on any Distribution Date, the payment of Excess
Cash Flow pursuant to Section 4.02(g)(iii) as principal on the Class A-I
Certificates or Class A-II Certificates to achieve the Required
Overcollateralization Amount will be treated as an increase in the Group I
Overcollateralization Amount or Group II Overcollateralization Amount, as
applicable.
(f) On each Distribution Date, interest accrues with respect to the
Class UT2-I, Class UT3-I, Class UT4-I, Class UT5-I, Class UT2-II, Class UT3-II,
Class UT4-II and Class UT5-II Interests shall be distributed as principal on the
Class UT1-I and Class UT1-II Interest, respectively, to achieve the Required
Overcollateralization Amount for such Distribution Date. To the extent not
needed for this purpose, excess collections of principal and interest shall be
distributed with respect to the Class UT2-I, Class UT3-I, Class UT4-I, Class
UT2-II, Class UT3-II and Class UT4-II Interests in proportion to their
entitlements to current and accrued undistributed interest (the Class UT5-I and
Class UT5-II Interest will receive their entitlements to current and
undistributed principal). Interest that accrues on the Class UT2-I, Class UT3-I,
Class UT4-I, Class UT2-II, Class UT3-II and Class UT4-II Interests shall not
itself bear interest.
(g) On each Distribution Date (x) the Master Servicer on behalf of the
Trustee or (y) the Paying Agent appointed by the Trustee, shall distribute to
each Certificateholder of record on the next preceding Record Date (other than
as provided in Section 9.01 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 Master Servicer or the
Paying Agent, as the case may be, or, if such Certificateholder has not so
notified the Master Servicer or the Paying Agent by the Record Date, by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register such Certificateholder's share (which share with respect to
each Class of Certificates, shall be 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), in each
case to the extent of the Available Distribution Amount:
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(i) to the Class A Certificateholders, Accrued Certificate
Interest payable on such Certificates with respect to such
Distribution Date, plus any Accrued Certificate Interest remaining
unpaid from any prior Distribution Date, less any Prepayment Interest
Shortfalls, to the extent not covered by Compensating Interest
pursuant to Section 3.16 (the "Interest Distribution Amount"), with
such amount allocated among the Class A Certificateholders on a PRO
RATA basis;
(ii) to the Class A Certificateholders, the lesser of (a) the
excess of (i) the Available Distribution Amount over (ii) the Interest
Distribution Amount and (b) the Principal Distribution Amount (other
than with respect to clauses (iv) and (v) thereof), on a pro rata
basis, based on the Principal Collection Percentages thereof, until
the Certificate Principal Balances of the Class A Certificates have
been reduced to zero;
(iii) to the Class A Certificateholders, from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions (such amount, the "Excess Cash Flow"), pro rata, based
on the Principal Collection Percentages thereof, an amount equal to
the Realized Losses on the Mortgage Loans during the immediately
preceding Due Period, applied to reduce the Certificate Principal
Balances of the Class A Certificates, but in no event more than the
aggregate of the outstanding Certificate Principal Balances of the
Class A Certificates, until the Certificate Principal Balances of the
Class A Certificates have been reduced to zero;
(iv) to the Insurer, from the amount, if any, of the Available
Distribution Amount remaining after the foregoing distributions, in
respect of any Cumulative Insurance Payments;
(v) except on the first Distribution Date, to the Class A
Certificateholders, from the amount, if any, of the Available
Distribution Amount remaining after the foregoing distributions, the
Overcollateralization Increase Amount for such Distribution Date, on a
pro rata basis, based on the Principal Collection Percentages thereof,
until the Certificate Principal Balances of the Class A Certificates
have been reduced to zero;
(vi) to the Class A Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the amount of any Prepayment Interest Shortfalls
allocated thereto, to the extent not covered by Compensating Interest
on such Distribution Date, with such amount allocated among the Class
A Certificateholders, pro rata, based on the Accrued Certificate
Interest otherwise due thereon;
(vii) to the Class A Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the
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amount of any Prepayment Interest Shortfalls allocated thereto
remaining unpaid from prior Distribution Dates together with interest
thereon, with such amount allocated among the Class A
Certificateholders, pro rata, based on the Accrued Certificate
Interest otherwise due thereon;
(viii) to be deposited in the Reserve Fund, the Required Reserve
Fund Deposit for such Distribution Date;
(ix) to the Class SB Certificates, concurrently on a pro rata
basis, from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, Accrued Certificate
Interest thereon for such Distribution Date;
(x) to the Class SB Certificates, on a pro rata basis, based on
the Certificate Principal Balance thereof immediately prior to such
Distribution Date, the amount of any Overcollateralization Reduction
Amount for such Distribution Date; and
(xi) to the Class R-III Certificateholders, the balance, if any,
of the Available Distribution Amount.
(h) Within five Business Days before the related Distribution Date,
the Master Servicer shall notify the Trustee of the amounts, if any, payable to
the Insurer pursuant to Section 4.02(g)(iv).
(i) In addition to the foregoing distributions, with respect to any
Mortgage Loan that was previously the subject of a Cash Liquidation or an REO
Disposition that resulted in a Realized Loss, in the event that within two years
of the date on which such Realized Loss was determined to have occurred the
Master Servicer receives amounts which the Master Servicer reasonably believes
to represent subsequent recoveries (net of any related liquidation expenses), or
determines that it holds surplus amounts previously reserved to cover estimated
expenses specifically related to such Mortgage Loan (including, but not limited
to, recoveries (net of any related liquidation expenses) in respect of the
representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement), the Master Servicer shall distribute such
amounts to the Class or Classes to which such Realized Loss was allocated (with
the amounts to be distributed allocated among such Classes in the same
proportions as such Realized Loss was allocated), and within each such Class to
the Certificateholders of record as of the Record Date immediately preceding the
date of such distribution (or if such Class of Certificates is no longer
outstanding, to the Certificateholders of record at the time that such Realized
Loss was allocated); provided that no such distribution to any Class of
Certificates of subsequent recoveries related to a Mortgage Loan shall exceed,
either individually or in the aggregate and together with any other amounts paid
in reimbursement therefor, the amount of the related Realized Loss that was
allocated to such Class of Certificates. For the purposes of this Section
4.02(i) any allocation of a Realized Loss to Excess Cash Flow will be treated as
an allocation of a Realized Loss to the Class A Certificates. Notwithstanding
the foregoing, to the extent that the Master Servicer receives
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recoveries with respect to Realized Losses which were allocated to the related
Class A Certificates and which were paid by the Insurer pursuant to the Policy
and not previously reimbursed pursuant to Section 4.02(g)(iv), such recoveries
shall be paid directly to the Insurer and applied to reduce the Cumulative
Insurance Payments then due to the Insurer prior to any payment of such amounts
to any current Certificateholder or any previous Certificateholder. Any amounts
to be so distributed shall not be remitted to or distributed from the Trust
Fund, and shall constitute subsequent recoveries with respect to Mortgage Loans
that are no longer assets of the Trust Fund.
(j) 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
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(k) Except as otherwise provided in Section 9.01, 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. In the event that
Certificateholders required to surrender their Certificates pursuant to Section
9.01(c) do not surrender their Certificates for final cancellation, the Trustee
shall cause funds distributable with respect to such Certificates to be
withdrawn from the Certificate Account and credited to a separate escrow account
for the benefit of such Certificateholders as provided in Section 9.01(d).
Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.
(a) Concurrently with each distribution charged to the Certificate
Account and with respect to each Distribution Date the Master Servicer shall
forward to the Trustee and the Trustee shall forward by mail to each Holder, the
Insurer and the Depositor a statement setting forth the following information as
to each Class of Certificates, in each case to the extent applicable:
(i) (A) the amount of such distribution to the Certificateholders
of such Class applied to reduce the Certificate Principal
Balance thereof, and (B) the aggregate amount included therein
representing Principal Prepayments;
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(ii) the amount of such distribution to Holders of such Class of
Certificates allocable to interest;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall;
(iv) the amount of any Advance by the Master Servicer with respect
to the Group I Loans and Group II Loans pursuant to Section
4.04;
(v) the number of Group I and Group II Loans and the Stated
Principal Balance after giving effect to the distribution of
principal on such Distribution Date;
(vi) the aggregate Certificate Principal Balance of each Class of
the Certificates, after giving effect to the amounts
distributed on such Distribution Date, separately identifying
any reduction thereof due to Realized Losses other than
pursuant to an actual distribution of principal;
(vii) on the basis of the most recent reports furnished to it by
Subservicers, the number and aggregate principal balances of
Group I Loans and Group II Loans that are Delinquent (A) one
month, (B) two months and (C) three or more months and the
number and aggregate principal balance of Group I Loans and
Group II Loans that are in foreclosure;
(viii) the number, aggregate principal balance and book value of any
REO Properties;
(ix) the aggregate Accrued Certificate Interest remaining unpaid, if
any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(x) the aggregate amount of Realized Losses for such Distribution
Date and the aggregate amount of Realized Losses on the Group I
Loans and Group II Loans incurred since the Cut-off Date;
(xi) the Special Hazard Amount, Fraud Loss Amount and Bankruptcy
Amount as of the close of business on such Distribution Date
and a description of any change in the calculation of such
amounts;
(xii) the amount of any Insured Amount paid on such Distribution
Date, the amount of any reimbursement payment made to the
Insurer on such Distribution Date pursuant to Section
4.02(g)(iv) and the amount of
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Cumulative Insurance Payments after giving effect to any such
Insured Amount or any such reimbursement payment to the
Insurer;
(xiii) the Pass-Through Rate on each Class of Certificates, the Group
I and Group II Weighted Average Net Mortgage Rate and the Net
WAC Cap Rate;
(xiv) the weighted average of the Maximum Net Mortgage Rates on the
Group I Loans and Group II Loans;
(xv) the related Basis Risk Shortfall, Basis Risk Shortfall
Carry-Forward Amount and Prepayment Interest Shortfalls and the
amount on deposit in the Reserve Fund;
(xvi) the Overcollateralization Amount and the Required
Overcollateralization Amount following such Distribution Date;
(xvii) the number and aggregate principal balance of Group I and Group
II Loans repurchased under Section 4.07;
(xviii) the aggregate amount of any recoveries on previously
foreclosed loans from Residential Funding due to a breach of
representation or warranty;
(xix) the weighted average remaining term to maturity of the Group I
and Group II Loans after giving effect to the amounts
distributed on such Distribution Date; and
(xx) the weighted average Mortgage Rates of the Group I and Group II
Loans after giving effect to the amounts distributed on such
Distribution Date.
In the case of information furnished pursuant to clauses (i) and (ii) above, the
amounts shall be expressed as a dollar amount per Certificate with a $1,000
denomination. In addition to the statement provided to the Trustee as set forth
in this Section 4.03(a), the Master Servicer shall provide to any manager of a
trust fund consisting of some or all of the Certificates, upon reasonable
request, such additional information as is reasonably obtainable by the Master
Servicer at no additional expense to the Master Servicer.
(b) Within a reasonable period of time after the end of each calendar
year, the Master Servicer shall prepare, or cause to be prepared, and the
Trustee shall forward, or cause to be forwarded, to each Person who at any time
during the calendar year was the Holder of a Certificate, other than a Class R
Certificate, a statement containing the information set forth in clauses (i) and
(ii) of subsection (a) above aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer and Trustee shall
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be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Master Servicer and Trustee pursuant to any
requirements of the Code.
(c) As soon as reasonably practicable, upon the written request of any
Certificateholder, the Master Servicer shall provide the requesting
Certificateholder with such information as is necessary and appropriate, in the
Master Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A.
Section 4.04. DISTRIBUTION OF REPORTS TO THE TRUSTEE AND THE
DEPOSITOR; ADVANCES BY THE MASTER SERVICER.
(a) Prior to the close of business on the Business Day next succeeding
each Determination Date, the Master Servicer shall furnish a written statement
to the Trustee, the Insurer, any Paying Agent and the Depositor (the information
in such statement to be made available to Certificateholders by the Master
Servicer on request) (provided that the Master Servicer will use its best
efforts to deliver such written statement not later than 12:00 p.m. New York
time on the second Business Day prior to the Distribution Date) setting forth
(i) the Available Distribution Amount, (ii) the amounts required to be withdrawn
from the Custodial Account and the Reserve Fund and deposited into the
Certificate Account on the immediately succeeding Certificate Account Deposit
Date pursuant to clause (iii) of Section 4.01(a), (iii) the Certificate Insurer
Premium and, if the Master Servicer determines that a Deficiency Amount exists
for such Distribution Date, the amount necessary to complete the notice in the
form of Exhibit A to the Policy (the "Notice"), (iv) the amount of Prepayment
Interest Shortfalls and Basis Risk Shortfalls, and (v) to the extent required, a
report detailing the Stated Principal Balance, Mortgage Rate, Modified Mortgage
Rate, remaining term to maturity and Monthly Payment for any Modified Mortgage
Loan pursuant to Section 3.13. The determination by the Master Servicer of such
amounts shall, in the absence of obvious error, be presumptively deemed to be
correct for all purposes hereunder and the Trustee shall be protected in relying
upon the same without any independent check or verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account
Deposit Date, the Master Servicer shall either (i) deposit in the Certificate
Account from its own funds, or funds received therefor from the Subservicers, an
amount equal to the Advances to be made by the Master Servicer in respect of the
related Distribution Date, which shall be in an aggregate amount equal to the
aggregate amount of Monthly Payments (with each interest portion thereof
adjusted to a per annum rate equal to the Net Mortgage Rate plus the Certificate
Insurer Premium Modified Rate), less the amount of any related Servicing
Modifications, Debt Service Reductions or reductions in the amount of interest
collectable from the Mortgagor pursuant to the Relief Act or similar legislation
or regulations then in effect, on the Outstanding Mortgage Loans as of the
related Due Date in the related Due Period, which Monthly Payments were due
during the related Due Period and not received as of the close of business as of
the related Determination Date; provided that no Advance shall be made if it
would be a Nonrecoverable Advance, (ii) withdraw from amounts on deposit in the
Custodial Account and deposit in the Certificate Account all or a portion of the
Amount Held for Future Distribution in discharge of any such Advance, or (iii)
make advances in the form of any combination of (i) and (ii) aggregating the
amount of such Advance. Any portion of the Amount Held for Future Distribution
so used shall be replaced by the Master Servicer by
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deposit in the Certificate Account on or before 11:00 A.M. New York time on any
future Certificate Account Deposit Date to the extent that funds attributable to
the Mortgage Loans that are available in the Custodial Account for deposit in
the Certificate Account on such Certificate Account Deposit Date shall be less
than payments to Certificateholders required to be made on the following
Distribution Date. The Master Servicer shall be entitled to use any Advance made
by a Subservicer as described in Section 3.07(b) that has been deposited in the
Custodial Account on or before such Distribution Date as part of the Advance
made by the Master Servicer pursuant to this Section 4.04. The Master Servicer
shall treat any Advances with respect to the Simple Interest Mortgage Loans as
if the related Mortgagor had made its Monthly Payment on the related Due Date.
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 a certificate of a Servicing
Officer delivered to the Depositor, the Insurer and the Trustee.
In the event that the Master Servicer determines as of the Business
Day preceding any Certificate Account Deposit Date that it will be unable to
deposit in the Certificate Account an amount equal to the Advance required to be
made for the immediately succeeding Distribution Date, it shall give notice to
the Trustee and the Insurer of its inability to advance (such notice may be
given by telecopy), not later than 3:00 P.M., New York time, on such Business
Day, specifying the portion of such amount that it will be unable to deposit.
Not later than 3:00 P.M., New York time, on the Certificate Account Deposit Date
the Trustee shall, unless by 12:00 Noon, New York time, on such day the Trustee
shall have been notified in writing (by telecopy) that the Master Servicer shall
have directly or indirectly deposited in the Certificate Account such portion of
the amount of the Advance as to which the Master Servicer shall have given
notice pursuant to the preceding sentence, pursuant to Section 7.01, (a)
terminate all of the rights and obligations of the Master Servicer under this
Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master Servicer hereunder, including the obligation to
deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this
Section 4.04 into the Certificate Account.
Section 4.05. ALLOCATION OF REALIZED LOSSES.
(a) Prior to each Distribution Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient
Valuation or REO Disposition that occurred during the related Prepayment Period
or, in the case of a Servicing Modification that constitutes a reduction of the
interest rate on a Mortgage Loan, the amount of the reduction in the interest
portion of the Monthly Payment due in the month in which such Distribution Date
occurs. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate. All Realized Losses on the Mortgage Loans (other than Excess
Losses) shall be allocated as follows: first, to the Excess Cash Flow as
provided in Section 4.02(g)(iii), to the extent of the Excess Cash Flow for such
Distribution Date; second, in
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reduction of the Overcollateralization Amount, until such amount has been
reduced to zero; and thereafter, to the extent not covered by the Policy, to the
Class A-I Certificates and Class A-II Certificates, to the extent of Realized
Losses on the Group I Loans and Group II Loans, respectively. Any Excess Losses
on the Mortgage Loans, to the extent not covered by the Policy, will be
allocated to the Class A Certificates, PRO RATA, based on the Principal
Collection Percentage attributable to each Loan Group for the related
Distribution Date, in an amount equal to a fraction of such losses equal to (x)
the aggregate Certificate Principal Balance of the Class A Certificates over (y)
the aggregate Stated Principal Balance of the Mortgage Loans, and the remainder
of such losses shall be allocated to the Overcollateralization Amount in
reduction of the amount thereof.
(b) Any allocation of the principal portion of Realized Losses (other
than Debt Service Reductions) to the Class A Certificates shall be made by
reducing the Certificate Principal Balance thereof by the amount so allocated,
which allocation shall be deemed to have occurred on such Distribution Date.
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 4.02(g). 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 4.06. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY.
The Master Servicer or the Subservicers shall file information returns
with respect to the receipt of mortgage interest received in a trade or
business, the reports of foreclosures and abandonments of any Mortgaged Property
and the informational 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 on or before March 31 of each year 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 4.07. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
As to any Mortgage Loan which is delinquent in payment by 90 days or
more, the Master Servicer may, at its option, purchase such Mortgage Loan from
the Trustee at the Purchase Price therefor. If at any time the Master Servicer
makes a payment to the Certificate Account covering the amount of the Purchase
Price for such a Mortgage Loan, and the Master Servicer provides to the Trustee
a certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Certificate Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of the Master
Servicer without recourse to the Master Servicer which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
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Section 4.08. THE POLICY.
(a) If pursuant to Section 4.04(a)(iii), the Master Servicer
determines that a Deficiency Amount exists for such Distribution Date, the
Trustee shall complete the Notice and submit such Notice in accordance with the
Policy to the Insurer no later than 12:00 P.M., New York City time, on the
Business Day immediately preceding each Distribution Date, as a claim for an
Insured Amount (provided that the Trustee shall submit such notice on the second
Business Day immediately preceding such Distribution Date if it is able to do
so) in an amount equal to such Deficiency Amount.
(b) The Trustee shall establish and maintain the Insurance Account on
behalf of the Holders of the Class A Certificates. Upon receipt of an Insured
Amount from the Insurer on behalf of the Class A Certificateholders, the Trustee
shall deposit such Insured Amount in the Insurance Account. All amounts on
deposit in the Insurance Account shall remain uninvested. On each Distribution
Date, the Trustee shall transfer any Insured Amount then on deposit in the
Insurance Account to the Certificate Account. The Trustee shall distribute on
each Distribution Date the Deficiency Amount for such Distribution Date from the
Certificate Account, together with the distributions due to the Class A
Certificateholders on such Distribution Date, as follows: (i) the portion of any
such Deficiency Amount related to clauses (i) and (ii) of the definition of
Deficiency Amount shall be distributed among the related Class A
Certificateholders on a pro rata basis in accordance with their respective
shortfalls or allocations of Realized Losses; and (ii) the portion of any such
Deficiency Amount related to clause (iii) of the definition of Deficiency Amount
shall be distributed to the related Class A Certificateholders in accordance
with Section 9.01(c).
(c) The Trustee shall (i) receive as attorney-in-fact of each Class A
Certificateholder any Insured Amount from the Insurer and (ii) distribute such
Insured Amount to such Class A Certificateholders as set forth in subsection (b)
above. Insured Amounts disbursed by the Trustee from proceeds of the Policy
shall not be considered payment by the Trust Fund with respect to the Class A
Certificates, nor shall such disbursement of such Insured Amounts discharge the
obligations of the Trust Fund with respect to the amounts thereof, and the
Insurer shall become owner of such amounts to the extent covered by such Insured
Amounts as the deemed assignee of such Class A Certificateholders. The Trustee
hereby agrees on behalf of each Class A Certificateholder (and each Class A
Certificateholder, by its acceptance of its Class A Certificates, hereby agrees)
for the benefit of the Insurer that the Trustee shall recognize that to the
extent the Insurer pays Insured Amounts, either directly or indirectly (as by
paying through the Trustee), to the Class A Certificateholders, the Insurer will
be entitled to be subrogated to the rights of the Class A Certificateholders to
the extent of such payments.
Section 4.09. ADDITIONAL SERVICING FEE.
REMIC III shall pay to the Special Servicer the Additional Special
Servicing Fee as an additional fee for services rendered as Special Servicer.
Such fee shall be due and payable on any
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Distribution Date only to the extent that there are amounts remaining after all
amounts required to be distributed with respect to the REMIC III regular
interests have been made for that Distribution Date. With respect to each
Distribution Date, the Additional Special Servicing Fee shall equal the sum of
the following:
(i) the product of the Group I Standard Rate and the Group I
Aggregate Net Excess Turbo Amount; and
(ii) the product of the Group II Standard Rate and the Group II
Aggregate Net Excess Turbo Amount.
The Special Servicer will deposit the Additional Servicing Fee in the
Reserve Fund to be paid: first, as reimbursement of the Certificate Insurer with
respect to Cumulative Insurance Payments; second, to pay the Class A
Certificates, pursuant to Section 4.05, in respect of any Realized Losses to the
extent not covered by Excess Cash Flow; third, to the holders of the Class A
Certificates, any Basis-Risk Shortfall Carryforward Amount; and fourth, to the
Special Servicer.
Section 4.10. RESERVE FUND.
(a) On the Closing Date, the Trustee shall deposit into the Reserve
Fund the Reserve Fund Deposit. On each Distribution Date, the Trustee shall
deposit in the Reserve Fund the Required Reserve Fund Deposit. On any
Distribution Date, the Trustee shall withdraw from the Reserve Fund and
distribute to the Holders of the Class A-II Certificates an amount equal to the
lesser of (i) any Basis Risk Shortfall Carry-Forward Amount for such
Distribution Date and (ii) the excess of (x) the amount in the Reserve Fund
(including amounts deposited in the Reserve Fund on such Distribution Date) over
(y) $10,000. Following the payments described in the preceding sentence, any
amounts remaining in the Reserve Fund in excess of the Required Reserve Fund
Deposit shall be distributed to the Class SB-II Certificates.
(b) The Reserve Fund shall be an Eligible Account. Amounts held in the
Reserve Fund from time to time shall continue to constitute assets of the Trust
Fund, but not of the REMICs, until released from the Reserve Fund pursuant to
this Section 4.10. The Reserve Fund constitutes an "outside reserve fund" within
the meaning of Treasury Regulation ss.1.860G-2(h) and is not an asset of the
REMICs. The Holders of the Class SB-II Certificates are the owners of the
Reserve Fund and, for all federal tax purposes, amounts transferred by the
REMICs to the Reserve Fund are treated as amounts distributed by the REMICs to
the Holders of the Class SB-II Certificates and then transferred by the Holder
of the Class SB-II Certificate to the Reserve Fund.
(c) The Trustee shall keep records that accurately reflect the funds
on deposit in the Reserve Fund. The Trustee shall invest the Reserve Fund in
Permitted Investments at the direction of the Holder of at least a 50.01%
Percentage Interest of the Class SB-II Certificates. On each Distribution Date,
the Trustee shall distribute to the holder of the Class SB-II Certificates any
investment earnings on amounts on deposit in the Reserve Fund. Upon the
termination of the Trust
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Fund pursuant to Section 9.01 of this Agreement, any amounts remaining in the
Reserve Fund shall be distributed to the holder of the Class SB-II Certificates.
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ARTICLE V
THE CERTIFICATES
----------------
Section 5.01. THE CERTIFICATES.
(a) The Class A Certificates, Class SB Certificates and Class R
Certificates shall be substantially in the forms set forth in Exhibits A, B and
D, respectively, and shall, on original issue, be executed and delivered by the
Trustee to the Certificate Registrar for authentication and delivery to or upon
the order of the Depositor upon receipt by the Trustee or one or more Custodians
of the documents specified in Section 2.01. The Class A Certificates shall be
issuable in minimum dollar denominations of $25,000 and integral multiples of $1
in excess thereof. The Class SB Certificates shall be issuable in registered,
certificated form in minimum percentage interests of 5.00% and integral
multiples of 0.01% in excess thereof. Each Class of Class R Certificates shall
be issued in registered, certificated form in minimum percentage interests of
20.00% and integral multiples of 0.01% in excess thereof; PROVIDED, HOWEVER,
that one Class R Certificate of each Class will be issuable to the REMIC
Administrator as "tax matters person" pursuant to Section 10.01(c) in a minimum
denomination representing a Percentage Interest of not less than 0.01%.
The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Certificate Registrar by manual signature, and such certificate
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.
(b) The Class A Certificates shall initially be issued as one or more
Certificates registered in the name of the Depository or its nominee and, except
as provided below, registration of such Certificates may not be transferred by
the Trustee except to another Depository that agrees to hold such Certificates
for the respective Certificate Owners with Ownership Interests therein. The
Certificate Owners shall hold their respective Ownership Interests in and to
each Class A Certificate, through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to Definitive Certificates
in respect of such Ownership Interests. All transfers by Certificate Owners of
their respective Ownership Interests in the Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall transfer the Ownership Interests only in the Book-Entry
Certificates of Certificate Owners it represents or of brokerage firms for which
it acts as agent in accordance with the Depository's normal procedures.
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The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book- Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee may establish a reasonable record date
in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates. Neither the
Depositor, the Master Servicer nor the Trustee shall be liable for any actions
taken by the Depository or its nominee, including, without limitation, 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 all references herein to obligations imposed upon or to be
performed by the Depositor in connection with the issuance of the Definitive
Certificates pursuant to this Section 5.01 shall be deemed to be imposed upon
and performed by the Trustee, and the Trustee and the Master Servicer shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall cause to be kept at one of the offices or
agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided. The Trustee is initially appointed Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided. The Certificate Registrar, or the Trustee, shall provide the
Master Servicer with a certified list of Certificateholders as of each Record
Date prior to the related Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose pursuant to
Section 8.12 and, in the case of any Class SB or R Certificate, upon
satisfaction of the conditions set forth below, the Trustee shall execute and
the Certificate Registrar shall authenticate and deliver, in the name of the
designated
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transferee or transferees, one or more new Certificates of a like Class and
aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates of such Class which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class SB or
Class R Certificate shall be made unless such transfer, sale, pledge or other
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 said Act and laws. Except as otherwise provided in
this Section 5.02(d), in the event that a transfer of a Class SB or Class R
Certificate is to be made, (i) unless the Depositor directs the Trustee
otherwise, the Trustee shall require a written Opinion of Counsel acceptable to
and in form and substance 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 said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Trust Fund, the Depositor or the Master Servicer, and (ii)
the Trustee shall require the transferee to execute a representation letter,
substantially in the form of Exhibit I hereto, and the Trustee shall require the
transferor to execute a representation letter, substantially in the form of
Exhibit J hereto, each acceptable to and in form and substance satisfactory to
the Depositor and the Trustee certifying to the Depositor and the Trustee the
facts surrounding such transfer, which representation letters shall not be an
expense of the Trustee, the Trust Fund, the Depositor or the Master Servicer. In
lieu of the requirements set forth in the preceding sentence, transfers of Class
SB or Class R Certificates may be made in accordance with this Section 5.02(d)
if the prospective transferee of such a Certificate provides the Trustee and the
Master Servicer with an investment letter substantially in the form of Exhibit N
attached hereto, which investment letter shall not be an expense of the Trustee,
the Depositor, or the Master Servicer, and which investment letter states that,
among other things, such transferee (i) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (ii) is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the 1933 Act provided by Rule 144A. The Holder of a Class SB
or Class R Certificate desiring to effect any transfer, sale, pledge or other
disposition shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Master Servicer and the Certificate Registrar against any
liability that may result if the transfer, sale, pledge or other disposition is
not so exempt or is not made in accordance with such federal and state laws and
this Agreement.
(e) In the case of any Class A Certificate presented for registration
in the name of any Person, the prospective transferee shall be deemed to have
represented that such prospective
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transferee is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code, or any
Person (including an insurance company investing its general accounts, an
investment manager, a named fiduciary or a trustee of any such plan) who is
using "plan assets" of any such plan to effect such acquisition. In the case of
any Class SB or Class R Certificate presented for registration in the name of
any Person, either (i) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee, the
Depositor and the Master Servicer to the effect that the purchase or holding of
such Class SB or Class R Certificate is permissible under applicable law, will
not constitute or result in any non-exempt prohibited transaction under Section
406 of ERISA, or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), and will not subject the Trustee, the Depositor or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor or the Master Servicer or (ii) the prospective
transferee shall be required to provide the Trustee, the Depositor and the
Master Servicer with a certification to the effect set forth in paragraph
fourteen of Exhibit H-1, which the Trustee may rely upon without further inquiry
or investigation, or such other certifications as the Trustee may deem desirable
or necessary in order to establish that such transferee or the Person in whose
name such registration is requested is not an employee benefit plan or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the Code, or any Person (including an insurance company investing its general
accounts, an investment manager, a named fiduciary or a trustee of any such
plan) who is using "plan assets" of any such plan to effect such acquisition.
(f) (i) Each Person who has or who acquires any Ownership Interest in
a Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) 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.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall
require delivery to it, and shall not register the
Transfer of any Class R Certificate until its receipt of,
(I) an affidavit and agreement (a "Transfer Affidavit and
Agreement," in the form attached hereto as Exhibit H-1)
from the proposed Transferee, in form and substance
satisfactory to the Master Servicer, representing and
warranting, among other things, that it is a Permitted
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Transferee, that it is not acquiring its Ownership
Interest in the Class R Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee, that for so
long as it retains its Ownership Interest in a Class R
Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of
this Section 5.02(f) and agrees to be bound by them, and
(II) a certificate, in the form attached hereto as Exhibit
H-2, from the Holder wishing to transfer the Class R
Certificate, in form and substance satisfactory to the
Master Servicer, representing and warranting, among other
things, that no purpose of the proposed Transfer is to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above,
if a Responsible Officer of the Trustee who is assigned to
this Agreement has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of
an Ownership Interest in a Class R Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (x) to require a
Transfer Affidavit and Agreement from any other Person to
whom such Person attempts to transfer its Ownership
Interest in a Class R Certificate and (y) not to transfer
its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit H-2.
(E) Each Person holding or acquiring an Ownership Interest in
a Class R Certificate, by purchasing an Ownership Interest
in such Certificate, agrees to give the Trustee written
notice that it is a "pass-through interest holder" within
the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Class R Certificate, if it is, or
is holding an Ownership Interest in a Class R Certificate
on behalf of, a "pass-through interest holder."
(i) The Trustee will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the form
attached hereto as Exhibit H-2 and all of such other documents as shall
have been reasonably required by the Trustee as a condition to such
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registration. Transfers of the Class R Certificates to Non-United States
Persons and Disqualified Organizations (as defined in Section 860E(e)(5) of
the Code) are prohibited.
(A) If any Disqualified Organization shall become a holder of
a Class R Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by
law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer
of such Class R Certificate. If a Non-United States Person
shall become a holder of a Class R Certificate, then the
last preceding United States Person shall be restored, to
the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration
of such Transfer of such Class R Certificate. If a
transfer of a Class R Certificate is disregarded pursuant
to the provisions of Treasury Regulations Section 1.860E-1
or Section 1.860G-3, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by
law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such 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 5.02(f) or for making any payments due on
such Certificate to the holder thereof or for taking any
other action with respect to such holder under the
provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in
this Section 5.02(f) and to the extent that the
retroactive restoration of the rights of the Holder of
such Class R Certificate as described in clause (iii)(A)
above shall be invalid, illegal or unenforceable, then the
Master Servicer shall have the right, without notice to
the holder or any prior holder of such Class R
Certificate, to sell such Class R Certificate to a
purchaser selected by the Master Servicer on such terms as
the Master Servicer may choose. Such purported Transferee
shall promptly endorse and deliver each Class R
Certificate in accordance with the instructions of the
Master Servicer. Such purchaser may be the Master Servicer
itself or any Affiliate of the Master Servicer. The
proceeds of such sale, net of the commissions (which may
include commissions payable to the Master Servicer or its
Affiliates), expenses and taxes due, if any, will be
remitted by the Master Servicer to such purported
Transferee. The terms and conditions of any sale under
this
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clause (iii)(B) shall be determined in the sole discretion
of the Master Servicer, and the Master Servicer 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.
(ii) The Master Servicer, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information necessary
to compute any tax imposed (A) as a result of the Transfer of an Ownership
Interest in a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of
such Class R Certificates required to be provided to the Internal Revenue
Service and certain Persons as described in Treasury Regulations Sections
1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the
Code that holds an Ownership Interest in a Class R Certificate having as
among its record holders at any time any Person who is a Disqualified
Organization. Reasonable compensation for providing such information may be
required by the Master Servicer from such Person.
(iii) The provisions of this Section 5.02(f) set forth prior to
this clause (v) may be modified, added to or eliminated, provided that
there shall have been delivered to the Trustee the following:
(A) Written consent of the Insurer and written notification
from each Rating Agency to the effect that the
modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade
its then-current ratings, if any, of the Class A
Certificates 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
(B) a certificate of the Master Servicer stating that the
Master Servicer has received an Opinion of Counsel, in
form and substance satisfactory to the Master Servicer, to
the effect that such modification, addition to or absence
of such provisions will not cause any of REMIC BT, REMIC
I, REMIC II or REMIC III to cease to qualify as a REMIC
and will not cause (x) any of REMIC BT, REMIC I, REMIC II
or REMIC III to be subject to an entity-level tax caused
by the Transfer of any Class R Certificate to a Person
that is a Disqualified Organization or (y) a
Certificateholder or another Person to be subject to a
REMIC-related tax caused by the Transfer of a Class R
Certificate to a Person that is not a Permitted
Transferee.
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(g) No service charge shall be made for any transfer or exchange of
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee 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 and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration of
transfer, the Depositor, the Master Servicer, the Insurer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Insurer, the Trustee or the Certificate Registrar may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.02 and for all other
purposes whatsoever, except as and to the extent provided in the definition of
"Certificateholder" and in Section 4.08, and neither the Depositor, the Master
Servicer, the Insurer, the Trustee, the Certificate Registrar nor any agent of
the Depositor, the Master Servicer, the Trustee or the Certificate Registrar
shall be affected by notice to the contrary except as provided in Section
5.02(g).
Section 5.05. APPOINTMENT OF PAYING AGENT.
The Trustee may, with the consent of the Insurer (so long as no
Insurer Default exists), which consent shall not be unreasonably withheld,
appoint a Paying Agent for the purpose of making distributions to
Certificateholders pursuant to Section 4.02. In the event of any such
appointment, on or prior to each Distribution Date the Master Servicer on behalf
of the Trustee shall deposit or cause to be deposited with the Paying Agent a
sum sufficient to make the payments to
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Certificateholders in the amounts and in the manner provided for in Section 4.02
and 4.03, such sum to be held in trust for the benefit of Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the
Trustee that such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent
such sums are not distributed to the Certificateholders on the date of receipt
by such Paying Agent.
Section 5.06. OPTIONAL PURCHASE OF CERTIFICATES.
(a) On any Distribution Date on or after the Optional Termination
Date, the Master Servicer shall have the right, at its option, to purchase the
Class A Certificates in whole, but not in part, at a price equal to the sum of
the outstanding Certificate Principal Balance of such Certificates plus the sum
of one month's Accrued Certificate Interest thereon, any previously unpaid
Accrued Certificate Interest (including any unpaid Prepayment Interest
Shortfall), any Basis Risk Carry-Forward Amount, and accrued interest thereon.
(b) The Master Servicer shall give the Trustee not less than 60 days'
prior notice of the Distribution Date on which the Master Servicer anticipates
that it will purchase the related Certificates pursuant to Section 5.06(a).
Notice of any such purchase, specifying the Distribution Date upon which the
Holders may surrender their Certificates to the Trustee for payment in
accordance with this Section 5.06, shall be given promptly by the Master
Servicer by letter to Certificateholders (with a copy to the Certificate
Registrar, the Insurer and each Rating Agency) 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:
(i) the Distribution Date upon which purchase of the related
Certificates is anticipated to be made upon presentation and surrender of
such Certificates at the office or agency of the Trustee therein
designated,
(ii) the purchase price therefor, if known, and
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified.
If the Master Servicer gives the notice specified above, the Master Servicer
shall deposit in the Certificate Account before the Distribution Date on which
the purchase pursuant to Section 5.06(a) is to be made, in immediately available
funds, an amount equal to the purchase price for the Certificates computed as
provided above.
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(c) Upon presentation and surrender of the Certificates to be
purchased pursuant to Section 5.06(a) by the Holders thereof, the Trustee shall
distribute to such Holders an amount equal to the outstanding Certificate
Principal Balance thereof plus one month's Accrued Certificate Interest thereon
and any previously unpaid Accrued Certificate Interest with respect thereto.
(d) In the event that any Certificateholders do not surrender their
Certificates on or before the Distribution Date on which a purchase pursuant to
this Section 5.06 is to be made, the Trustee shall on such date cause all funds
in the Certificate Account deposited therein by the Master Servicer pursuant to
Section 5.06(b) to be withdrawn therefrom and deposited in a separate escrow
account for the benefit of such Certificateholders, and the Master Servicer
shall give a second written notice to such Certificateholders to surrender their
Certificates for payment of the purchase price therefor. If within six months
after the second notice any Certificate shall not have been surrendered for
cancellation, the Trustee shall take appropriate steps as directed by the Master
Servicer to contact the Holders of such Certificates concerning surrender of
their Certificates. The costs and expenses of maintaining the escrow account and
of contacting Certificateholders shall be paid out of the assets which remain in
the escrow account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation in accordance with
this Section 5.06, the Trustee shall pay to the Master Servicer all amounts
distributable to the Holders thereof and the Master Servicer shall thereafter
hold such amounts until distributed to such Holders. No interest shall accrue or
be payable to any Certificateholder on any amount held in the escrow account or
by the Master Servicer as a result of such Certificateholder's failure to
surrender its Certificate(s) for payment in accordance with this Section 5.06.
Any Certificate that is not surrendered on the Distribution Date on which a
purchase pursuant to this Section 5.06 occurs as provided above will be deemed
to have been purchased and the Holder as of such date will have no rights with
respect thereto except to receive the purchase price therefor minus any costs
and expenses associated with such escrow account and notices allocated thereto.
Any Certificates so purchased or deemed to have been purchased on such
Distribution Date shall remain outstanding hereunder. The Master Servicer shall
be for all purposes the Holder thereof as of such date subject to any rights of
the Insurer hereunder with respect thereto.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
-------------------------------------
Section 6.01. RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE MASTER
SERVICER.
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by the Depositor and the Master
Servicer herein. By way of illustration and not limitation, the Depositor is not
liable for the servicing and administration of the Mortgage Loans, nor is it
obligated by Section 7.01 or 10.01 to assume any obligations of the Master
Servicer or to appoint a designee to assume such obligations, nor is it liable
for any other obligation hereunder that it may, but is not obligated to, assume
unless it elects to assume such obligation in accordance herewith.
Section 6.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
SERVICER; ASSIGNMENT OF RIGHTS AND DELEGATION OF DUTIES
BY MASTER SERVICER.
(a) The Depositor and the Master Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the state of its incorporation, and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; PROVIDED, HOWEVER, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Xxx or Xxxxxxx Mac; and provided further that each Rating Agency's
ratings, if any, of the Class A Certificates without taking into account the
Policy in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to
such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section
6.04 to the contrary, the Master Servicer may assign its rights and delegate its
duties and obligations under this Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx Mac, is reasonably
satisfactory to the Trustee, the Insurer and the Depositor, is willing to
service the Mortgage Loans
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and executes and delivers to the Depositor, the Insurer and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor, the
Insurer and the Trustee, which contains an assumption by such Person of the due
and punctual performance and observance of each covenant and condition to be
performed or observed by the Master Servicer under this Agreement; provided
further that each Rating Agency's rating of the Classes of Certificates (without
taking into account the Policy) that have been rated in effect immediately prior
to such assignment and delegation will not be qualified, reduced or withdrawn as
a result of such assignment and delegation (as evidenced by a letter to such
effect from each Rating Agency). In the case of any such assignment and
delegation, the Master Servicer shall be released from its obligations under
this Agreement, except that the Master Servicer shall remain liable for all
liabilities and obligations incurred by it as Master Servicer hereunder prior to
the satisfaction of the conditions to such assignment and delegation set forth
in the next preceding sentence.
Section 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER AND OTHERS.
Neither the Depositor, the Master Servicer nor any of the directors,
officers, employees or agents of the Depositor or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; PROVIDED, HOWEVER, that this
provision shall not protect the Depositor, the Master Servicer or any such
Person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
by the Trust Fund 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 willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal or administrative action,
proceeding, hearing or examination that is not incidental to its respective
duties under this Agreement and which in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Depositor or the Master
Servicer may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Master Servicer shall be entitled to be reimbursed therefor
out of amounts attributable to the Mortgage Loans on deposit in the
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Custodial Account as provided by Section 3.10 and, on the Distribution Date(s)
following such reimbursement, the aggregate of such expenses and costs shall be
allocated in reduction of the Accrued Certificate Interest on each Class
entitled thereto in the same manner as if such expenses
and costs constituted a Prepayment Interest Shortfall.
Section 6.04. DEPOSITOR AND MASTER SERVICER NOT TO RESIGN.
Subject to the provisions of Section 6.02, neither the Depositor nor
the Master Servicer shall resign from its respective obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Depositor or the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning party) to such effect
delivered to the Trustee and the Insurer. No such resignation by the Master
Servicer shall become effective until the Trustee or a successor servicer shall
have assumed the Master Servicer's responsibilities and obligations in
accordance with Section 7.02.
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ARTICLE VII
DEFAULT
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Section 7.01. EVENTS OF DEFAULT.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute or cause to be
distributed to Holders of Certificates of any Class any
distribution required to be made under the terms of the
Certificates of such Class and this Agreement and, in either
case, such failure shall continue unremedied for a period of 5
days after the date upon which written notice of such failure,
requiring such failure to be remedied, shall have been given to
the Master Servicer by the Trustee, the Insurer or the Depositor
or to the Master Servicer, the Depositor and the Trustee by the
Holders of Certificates of such Class evidencing Percentage
Interests aggregating not less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the
part of the Master Servicer contained in the Certificates of any
Class or in this Agreement and such failure shall continue
unremedied for a period of 30 days (except that such number of
days shall be 15 in the case of a failure to pay the premium for
any Required Insurance Policy) after the date on which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Trustee, the
Insurer or the Depositor, or to the Master Servicer, the
Depositor and the Trustee by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests
aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or
similar law or appointing a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
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(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings of, or relating to, the Master Servicer or
of, or relating to, all or substantially all of the property of
the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to Section
4.04(b) that it is unable to deposit in the Certificate Account
an amount equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, either the Depositor or the Trustee shall
at the direction of the Insurer (unless an Insurance Default is continuing) or
at the direction of Holders of Certificates entitled to at least 51% of the
Voting Rights (which Voting Rights of the Class A Certificateholders may be
exercised by the Insurer without the consent of such Holders and may only be
exercised by such Holders with the prior written consent of the Insurer so long
as there does not exist a failure by the Insurer to make a required payment
under the Policy), by notice in writing to the Master Servicer (and to the
Depositor and the Insurer if given by the Trustee or to the Trustee and the
Insurer if given by the Depositor), terminate all of the rights and obligations
of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that unless an Insurer Default is continuing the successor to
the Master Servicer appointed pursuant to Section 7.02 shall be acceptable to
the Insurer and shall have accepted the duties of Master Servicer effective upon
the resignation of the Master Servicer. If an Event of Default described in
clause (vi) hereof shall occur, the Trustee with the consent of the Insurer
shall, by notice to the Master Servicer, the Insurer and the Depositor,
immediately terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder as provided in Section
4.04(b). On or after the receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer under this Agreement, whether
with respect to the Certificates (other than as a Holder thereof) or the
Mortgage Loans or otherwise, shall subject to Section 7.02 pass to and be vested
in the Trustee or the Trustee's designee appointed pursuant to Section 7.02;
and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee or its designee for administration by it
of
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all cash amounts which shall at the time be credited to the Custodial Account or
the Certificate Account or thereafter be received with respect to the Mortgage
Loans. No such termination shall release the Master Servicer for any liability
that it would otherwise have hereunder for any act or omission prior to the
effective time of such termination.
Notwithstanding any termination of the activities of Residential
Funding in its capacity as Master Servicer hereunder, Residential Funding shall
be entitled to receive, out of any late collection of a Monthly Payment on a
Mortgage Loan which was due prior to the notice terminating Residential
Funding's rights and obligations as Master Servicer hereunder and received after
such notice, that portion to which Residential Funding would have been entitled
pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in
respect thereof, and any other amounts payable to Residential Funding hereunder
the entitlement to which arose prior to the termination of its activities
hereunder. Upon the termination of Residential Funding as Master Servicer
hereunder the Depositor shall deliver to the Trustee a copy of the Program Guide
and upon the request of the Insurer, a copy of the Program Guide to the Insurer.
Section 7.02. TRUSTEE OR DEPOSITOR TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
the Insurer may appoint a successor Master Servicer and if the Insurer fails to
do so within 30 days, the Trustee or, upon notice to the Insurer and the
Depositor and with the Depositor's and the Insurer's consent (which shall not be
unreasonably withheld) a designee (which meets the standards set forth below) of
the Trustee, 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 (except for the
responsibilities, duties and liabilities contained in Sections 2.02 and 2.03(a),
excluding the duty to notify related Subservicers as set forth in such Sections,
and its obligations to deposit amounts in respect of losses incurred prior to
such notice or termination on the investment of funds in the Custodial Account
or the Certificate Account pursuant to Sections 3.07(c) and 4.01(c) by the terms
and provisions hereof); PROVIDED, HOWEVER, that any failure to perform such
duties or responsibilities caused by the preceding Master Servicer's failure to
provide information required by Section 4.04 shall not be considered a default
by the Trustee hereunder. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Mortgage Loans which the Master Servicer
would have been entitled to charge to the Custodial Account or the Certificate
Account if the Master Servicer had continued to act hereunder and, in addition,
shall be entitled to the income from any Permitted Investments made with amounts
attributable to the Mortgage Loans held in the Custodial Account or the
Certificate Account. If the Trustee has become the successor to the Master
Servicer in accordance with Section 6.04 or Section 7.01, then notwithstanding
the above, the Insurer may appoint a successor Master Servicer and if the
Insurer fails to do so within 30 days, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, which is also a Xxxxxx Xxx- or Xxxxxxx Mac-approved mortgage
servicing institution, having a net worth of not less than $10,000,000 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.
Pending appointment of a successor to the Master
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Servicer hereunder, the Trustee shall become successor to the Master Servicer
and shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; PROVIDED, HOWEVER, that no such compensation shall be in
excess of that permitted the initial Master Servicer hereunder. The Depositor,
the Trustee, the Custodian and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
The Servicing Fee for any successor Master Servicer appointed pursuant to this
Section 7.02 will be lowered with respect to those Mortgage Loans, if any, where
the Subservicing Fee accrues at a rate of less than 0.50% per annum in the event
that the successor Master Servicer is not servicing such Mortgage Loans directly
and it is necessary to raise the related Subservicing Fee to a rate of 0.50% per
annum in order to hire a Subservicer with respect to such Mortgage Loans.
Section 7.03. NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to the
Insurer and to the Certificateholders at their respective addresses appearing in
the Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates and the Insurer
notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived as provided in Section 7.04
hereof.
Section 7.04. WAIVER OF EVENTS OF DEFAULT.
The Insurer or the Holders representing at least 66% of the Voting
Rights of Certificates affected by a default or Event of Default hereunder may
waive any default or Event of Default, with the written consent of the Insurer,
which consent shall not be unreasonably withheld; PROVIDED, HOWEVER, that (a) a
default or Event of Default under clause (i) of Section 7.01 may be waived with
the written consent of the Insurer, only by all of the Holders of Certificates
affected by such default or Event of Default (which Voting Rights of the Class A
Certificateholders may be exercised by the Insurer without the consent of such
Holders and may only be exercised by such Holders with the prior written consent
of the Insurer so long as there does not exist a failure by the Insurer to make
a required payment under the Policy) and (b) no waiver pursuant to this Section
7.04 shall affect the Holders of Certificates in the manner set forth in Section
11.01(b)(i), (ii) or (iii). Upon any such waiver of a default or Event of
Default by the Insurer or the Holders representing the requisite percentage of
Voting Rights of Certificates affected by such default or Event of Default with
the consent of the Insurer, which consent shall not be unreasonably withheld,
such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon except to the extent expressly so waived.
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Section 7.05. SERVICING TRIGGER; REMOVAL OF MASTER SERVICER.
(a) Upon determination by the Insurer that a Servicing Trigger has
occurred, the Insurer shall give notice of such Servicing Trigger to the Master
Servicer, the Depositor, the Trustee and to each Rating Agency.
(b) At any time after such determination and while a Servicing Trigger
is continuing, the Insurer may direct the Trustee to remove the Master Servicer
if the Insurer makes a determination that the manner of master servicing was a
factor contributing to the size of the delinquencies or losses incurred in the
Trust Fund.
(c) Upon receipt of directions to remove the Master Servicer pursuant
to the preceding clause (b), the Trustee shall notify the Master Servicer that
it has been terminated and the Master Servicer shall be terminated in the same
manner as specified in Sections 7.01 and 7.02.
(d) After notice of occurrence of a Servicing Trigger has been given
and while a Servicing Trigger is continuing, until and unless the Master
Servicer has been removed as provided in clause (b), the Master Servicer
covenants and agrees to act as the Master Servicer for a term from the
occurrence of the Servicing Trigger to the end of the calendar quarter in which
such Servicing Trigger occurs, which term may at the Insurer's discretion be
extended by notice to the Trustee for successive terms of three (3) calendar
months each, until the termination of the Trust Fund. The Master Servicer will,
upon the receipt of each such notice of extension (a "Master Servicer Extension
Notice") become bound for the duration of the term covered by such Master
Servicer Extension Notice to continue as Master Servicer subject to and in
accordance with this Agreement. If, as of the fifteenth (15th) day prior to the
last day of any term as the Master Servicer, the Trustee shall not have received
any Master Servicer Extension Notice from the Insurer, the Trustee shall, within
five (5) days thereafter, give written notice of such nonreceipt to the Insurer
and the Master Servicer. If any such term expires without a Master Servicer
Extension Notice then the Trustee shall act as Master Servicer as provided in
Section 7.02.
(e) No provision of this Section 7.05 shall have the effect of
limiting the rights of the Depositor, the Trustee, the Certificateholders or the
Insurer under Section 7.01.
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ARTICLE VIII
CONCERNING THE TRUSTEE
----------------------
Section 8.01. DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Insurer and the Certificateholders of any such documents which do not materially
conform to the requirements of this Agreement in the event that the Trustee,
after so requesting, does not receive satisfactorily corrected documents.
The Trustee shall forward or cause to be forwarded in a timely fashion
the notices, reports and statements required to be forwarded by the Trustee
pursuant to Sections 4.03, 4.06, 7.03, and 10.01. The Trustee shall furnish in a
timely fashion to the Master Servicer such information as the Master Servicer
may reasonably request from time to time for the Master Servicer to fulfill its
duties as set forth in this Agreement and the Trustee shall furnish in a timely
fashion to the Insurer such information as the Insurer may reasonably request
from time to time for the Insurer to protect its interests and to fulfill its
duties under the Policy. The Trustee covenants and agrees that it shall perform
its obligations hereunder in a manner so as to maintain the status of each of
REMIC BT, REMIC I, REMIC II or REMIC III as a REMIC under the REMIC Provisions
and to prevent the imposition of any federal, state or local income, prohibited
transaction (except as provided in Section 3.22(d) herein), contribution or
other tax on the Trust Fund to the extent that maintaining such status and
avoiding such taxes are reasonably within the control of the Trustee and are
reasonably within the scope of its duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
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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 by the Depositor or the Master Servicer and which on their
face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Insurer or the Certificateholders
holding Certificates which evidence, Percentage Interests aggregating not
less than 25% of the affected classes as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any
default (other than a default in payment to the Trustee) specified in
clauses (i) and (ii) of Section 7.01 or an Event of Default under clauses
(iii), (iv) and (v) of Section 7.01 unless a Responsible Officer of the
Trustee assigned to and working in the Corporate Trust Office obtains
actual knowledge of such failure or event or the Trustee receives written
notice of such failure or event at its Corporate Trust Office from the
Master Servicer, the Insurer, the Depositor or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision
in this Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance) or otherwise
incur any personal financial liability in the performance of any of its
duties as Trustee hereunder, or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of
any and all federal, state and local taxes imposed on the Trust Fund or its
assets or transactions including, without limitation, (A) "prohibited
transaction" penalty taxes as defined in Section 860F of the Code, if, when and
as the same shall be due and payable, (B) any tax on contributions to a REMIC
after the Closing Date imposed by Section 860G(d) of the Code and (C) any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, but only if such taxes arise out of a breach by the Trustee of its
obligations hereunder, which breach constitutes negligence or willful misconduct
of the Trustee.
Section 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.
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(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders or the
Insurer, pursuant to the provisions of this Agreement, unless such
Certificateholders or the Insurer shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby and the Insurer has
given its consent; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent investor would exercise or use under
the circumstances in the conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by the Insurer or
the Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests, aggregating not less than 50% with the written
consent of the Insurer; PROVIDED, HOWEVER, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a condition to so
proceeding. The reasonable expense of every such examination shall be paid
by the Master Servicer, if an Event of Default shall have occurred and is
continuing, and otherwise by the Certificateholder or the Insurer
requesting the investigation;
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(vi) 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 provided that the Trustee shall remain liable for any
acts of such agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate hereby
irrevocably appoints and authorizes the Trustee to be its attorney-in-fact
for purposes of signing any Tax Returns required to be filed on behalf of
the Trust Fund. The Trustee shall sign on behalf of the Trust Fund and
deliver to the Master Servicer in a timely manner any Tax Returns prepared
by or on behalf of the Master Servicer that the Trustee is required to sign
as determined by the Master Servicer pursuant to applicable federal, state
or local tax laws, provided that the Master Servicer shall indemnify the
Trustee for signing any such Tax Returns that contain errors or omissions.
(b) Following the issuance of the Certificates (and except as provided
for in Section 3.22(d)), the Trustee shall not accept any contribution of assets
to the Trust Fund unless it shall have obtained or been furnished with an
Opinion of Counsel to the effect that such contribution will not (i) cause any
of REMIC BT, REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificates are outstanding or (ii) cause the Trust Fund to be
subject to any federal tax as a result of such contribution (including the
imposition of any federal tax on "prohibited transactions" imposed under Section
860F(a) of the Code).
Section 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Depositor or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document. Except as
otherwise provided herein, the Trustee shall not be accountable for the use or
application by the Depositor or the Master Servicer of any of the Certificates
or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Depositor or the Master Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Custodial Account or the Certificate
Account by the Depositor or the 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 it would have if it were
not Trustee.
Section 8.05. MASTER SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES;
INDEMNIFICATION.
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(a) The Master Servicer covenants and agrees to pay to the Trustee and
any co-trustee from time to time, and the Trustee and any co-trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by each of them in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and any co-trustee, and the Master Servicer will pay or
reimburse the Trustee and any co-trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or any
co-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, and the expenses incurred by the
Trustee or any co-trustee in connection with the appointment of an office or
agency pursuant to Section 8.12) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to
hold the Trustee harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on its part, arising out of, or in
connection with, the acceptance and administration of the Trust Fund, including
the costs and expenses (including reasonable legal fees and expenses) of
defending itself against any claim in connection with the exercise or
performance of any of its powers or duties under this Agreement, provided that:
(i) with respect to any such claim, the Trustee shall have given
the Master Servicer written notice thereof promptly after the Trustee shall
have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Master Servicer in preparing
such defense; and
(iii) notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not be liable for settlement of any claim by the
Trustee entered into without the prior consent of the Master Servicer which
consent shall not be unreasonably withheld.
No termination of this Agreement shall affect the obligations created by this
Section 8.05(b) of the Master Servicer to indemnify the Trustee under the
conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Master Servicer in this Section 8.05(b) shall not pertain to any loss, liability
or expense of the Trustee, including the costs and expenses of defending itself
against any claim, incurred in connection with any actions taken by the Trustee
at the direction of Certificateholders pursuant to the terms of this Agreement.
Section 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall at all times be a national banking
association or a New York banking corporation having its principal office in a
state and city acceptable to the Depositor
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and the Insurer and organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Insurer. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor trustee acceptable to the Insurer
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 have accepted appointment
within 30 days after the giving of such notice of resignation then the Insurer
may appoint a successor trustee and if the Insurer fails to do so within 30
days, the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Insurer or the Depositor with the consent of the
Insurer, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Insurer or the Depositor with the consent
of the Insurer may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee. In addition, in the
event that the Insurer or the Depositor determines that the Trustee has failed
(i) to distribute or cause to be distributed to Certificateholders any amount
required to be distributed hereunder, if such amount is held by the Trustee or
its Paying Agent (other than the Master Servicer or the Depositor) for
distribution or (ii) to otherwise observe or perform in any material respect any
of its covenants, agreements or obligations hereunder, and such failure shall
continue unremedied for a period of 5 days (in respect of clause (i) above) or
30 days (in respect of clause (ii) above) after the date on which written notice
of such failure, requiring that the same be remedied, shall have been given to
the Trustee by the Depositor or the Insurer, then the Depositor with the consent
of the Insurer, which consent shall not be unreasonably withheld, may remove the
Trustee and appoint a successor trustee by written instrument delivered as
provided in the preceding sentence. In connection with the appointment of a
successor trustee pursuant to the preceding sentence, the Depositor shall, on or
before the date on which any such appointment becomes effective, obtain from
each Rating Agency written confirmation that the appointment of any such
successor trustee will not result in the reduction of the ratings on any class
of the Certificates
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below the lesser of the then current or original ratings on such Certificates
without taking into account the Policy.
(c) During the continuance of an Insurer Default, the Holders of
Certificates entitled to at least 51% of the Voting Rights may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
Section 8.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and the Insurer 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 shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
predecessor trustee shall deliver to the successor trustee all Mortgage Files
and related documents and statements held by it hereunder (other than any
Mortgage Files at the time held by a Custodian, which shall become the agent of
any successor trustee hereunder), and 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 more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Depositor fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.
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Section 8.09. MERGER OR CONSOLIDATION OF TRUSTEE.
Any corporation or national banking association into which the Trustee
may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall mail notice of any such merger or
consolidation to the Certificateholders at their address as shown in the
Certificate Register.
Section 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of
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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.
(d) Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. APPOINTMENT OF CUSTODIANS.
The Trustee may, with the consent of the Master Servicer, the Insurer
and the Depositor, appoint one or more Custodians who are not Affiliates of the
Depositor or the Master Servicer to hold all or a portion of the Mortgage Files
as agent for the Trustee, by entering into a Custodial Agreement. Subject to
Article VIII, the Trustee agrees to comply with the terms of each Custodial
Agreement and to enforce the terms and provisions thereof against the Custodian
for the benefit of the Certificateholders. Each Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. Each
Custodial Agreement may be amended only as provided in Section 11.01. The
Trustee shall notify the Certificateholders of the appointment of any Custodian
(other than the Custodian appointed as of the Closing Date) pursuant to this
Section 8.11.
Section 8.12. APPOINTMENT OF OFFICE OR AGENCY.
The Trustee will maintain an office or agency in the City of New York
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially designates its offices located at 00 Xxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 for the purpose of keeping the Certificate
Register. The Trustee will maintain an office at the address stated in Section
11.05(c) hereof where notices and demands to or upon the Trustee in respect of
this Agreement may be served.
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ARTICLE IX
TERMINATION
-----------
Section 9.01. TERMINATION UPON PURCHASE BY THE MASTER SERVICER OR
LIQUIDATION OF ALL MORTGAGE LOANS.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the obligation of the Depositor to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Final Distribution Date pursuant to this Article IX following the earlier
of:
(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, or
(ii) the purchase by the Master Servicer of all Mortgage Loans
and all property acquired in respect of any Mortgage Loan remaining in the
Trust Fund (other than the Policy) at a price equal to 100% of the unpaid
principal balance of each Mortgage Loan (or, if less than such unpaid
principal balance, the fair market value of the related underlying property
of such Mortgage Loan with respect to Mortgage Loans as to which title has
been acquired if such fair market value is less than such unpaid principal
balance) (net of any unreimbursed Advances attributable to principal) on
the day of repurchase, plus accrued interest thereon at the Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of any Modified Mortgage
Loan), plus the Certificate Insurer Premium Modified Rate, to, but not
including, the first day of the month in which such repurchase price is
distributed, including the payment of any amounts due to the Insurer under
the Insurance Agreement; PROVIDED, HOWEVER, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late ambassador of the United States to the Court of St. Xxxxx, living on
the date hereof and provided further that the purchase price set forth
above shall be increased as is necessary, as determined by the Master
Servicer, to avoid disqualification of any of REMIC BT, REMIC I, REMIC II
or REMIC III as a REMIC.
The right of the Master Servicer to purchase all the assets of the
Trust Fund relating to the Mortgage Loans, pursuant to clause (ii) above is
conditioned upon the occurrence of the Optional Termination Date. If such right
is exercised by the Master Servicer, the Master Servicer shall be deemed to have
been reimbursed for the full amount of any unreimbursed Advances theretofore
made by it with respect to the Mortgage Loans being purchased. In addition, the
Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and
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any Custodian shall, promptly following payment of the purchase price, release
to the Master Servicer the Mortgage Files pertaining to the Mortgage Loans being
purchased. No purchase pursuant to clause (ii) of this Section 9.01(a) is
permitted if it would result in a draw on the Policy
unless the Insurer consents in writing.
(b) The Master Servicer shall give the Trustee and the Insurer not
less than 60 days' prior notice of the Distribution Date on which the Master
Servicer anticipates that the final distribution will be made to
Certificateholders (whether as a result of the exercise by the Master Servicer
of its right to purchase the assets of the Trust Fund or otherwise). Notice of
any termination, specifying the anticipated Final Distribution Date (which shall
be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Master Servicer (if it is exercising its right to purchase the assets of the
Trust Fund), or by the Trustee (in any other case) by letter to
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:
(i) the anticipated Final Distribution Date upon which final
payment of the Certificates is anticipated to be made upon presentation and
surrender of Certificates at the office or agency of the Trustee therein
designated,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, and that payment will be made only
upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.
If the Master Servicer is obligated to give notice to Certificateholders as
aforesaid, it shall give such notice to the Certificate Registrar at the time
such notice is given to Certificateholders. In the event such notice is given by
the Master Servicer, the Master Servicer shall deposit in the Certificate
Account before the Final Distribution Date in immediately available funds an
amount equal to the purchase price for the assets of the Trust Fund computed as
above provided.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders and
the Insurer (i) the amount otherwise distributable on such Distribution Date, if
not in connection with the Master Servicer's election to repurchase, or (ii) if
the Master Servicer elected to so repurchase, an amount determined as follows:
(A) with respect to the Class A Certificates, the outstanding Certificate
Principal Balance thereof, plus Accrued Certificate Interest thereon for the
related Interest Accrual Period and any previously unpaid Accrued Certificate
Interest, and (B) with respect to the Insurer, any amounts owed to it pursuant
to the Insurance Agreement.
(d) In the event that any Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to
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Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer (if it exercised its
right to purchase the assets of the Trust Fund), 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 six months after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee shall
take appropriate steps as directed by the Master Servicer to contact the
remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the escrow account and of contacting
Certificateholders shall be paid out of the assets which remain in the escrow
account. If within nine months after the second notice any Certificates shall
not have been surrendered for cancellation, the Trustee shall pay to the Master
Servicer all amounts distributable to the holders thereof and the Master
Servicer shall thereafter hold such amounts until distributed to such holders.
No interest shall accrue or be payable to any Certificateholder on any amount
held in the escrow account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01 and the Certificateholders shall
look only to the Master Servicer for such payment.
Section 9.02. ADDITIONAL TERMINATION REQUIREMENTS.
(a) Each of REMIC BT, REMIC I, REMIC II and REMIC III, as the case may
be, shall be terminated in accordance with the following additional
requirements, unless the Trustee and the Master Servicer have received an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee) to the effect that the failure of any of REMIC BT, REMIC I, REMIC II
and REMIC III, as the case may be, to comply with the requirements of this
Section 9.02 will not (i) result in the imposition on the Trust Fund of taxes on
"prohibited transactions," as described in Section 860F of the Code, or (ii)
cause any of REMIC BT, REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC at any time that any Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation
period for each of REMIC BT, REMIC I, REMIC II and REMIC III, and specify
the first day of such period in a statement attached to the Trust Fund's
final Tax Return pursuant to Treasury regulations Section 1.860F-1. The
Master Servicer also shall satisfy all of the requirements of a qualified
liquidation for each of REMIC BT, REMIC I, REMIC II and REMIC III, under
Section 860F of the Code and the regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the time
of making of the final payment on the Certificates, the Trustee shall sell
or otherwise dispose of all of the remaining assets of the Trust Fund in
accordance with the terms hereof; and
(iii) If the Master Servicer is exercising its right to purchase
the assets of the Trust Fund, the Master Servicer shall, during the 90-day
liquidation period and at or prior to the Final Distribution Date, purchase
all of the assets of the Trust Fund for cash; PROVIDED, HOWEVER, that in
the event that a calendar quarter ends after the commencement of the 90-day
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liquidation period but prior to the Final Distribution Date, the Master
Servicer shall not purchase any of the assets of the Trust Fund prior to
the close of that calendar quarter.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for each of REMIC BT, REMIC I, REMIC II and REMIC
III at the expense of the Trust Fund in accordance with the terms and conditions
of this Agreement.
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ARTICLE X
REMIC PROVISIONS
----------------
Section 10.01. REMIC ADMINISTRATION.
(a) The REMIC Administrator shall make an election to treat each of
REMIC BT, REMIC I, REMIC II and REMIC III as a REMIC under the Code and, if
necessary, under applicable state law. Such election will be made on Form 1066
or other appropriate federal tax or information return (including Form 8811) or
any appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The REMIC BT Regular
Interests shall be designated as the "regular interests" and the Class R-IV
Certificates shall be designated as the sole class of "residual certificates" in
the REMIC BT. The REMIC I Regular Interests shall be designated as the "regular
interests" and the Class R-I Certificates shall be designated as the sole class
of "residual interests" in the REMIC I. The REMIC II Regular Interests 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 Class A-I,
Class A-II, Class SB-I and Class SB-II Certificates shall be designated as the
"regular interests" in REMIC III and the Class R-III Certificates shall be
designated the sole class of "residual interests" in REMIC III. The REMIC
Administrator and the Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860G of the Code) in the REMIC other than the
Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each
of REMIC BT, REMIC I, REMIC II and REMIC III within the meaning of Section
860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate in each
REMIC representing a 0.01% Percentage Interest of the Class R Certificates in
each REMIC and shall be designated as the "tax matters person" with respect to
each of REMIC BT, REMIC I, REMIC II and REMIC III in the manner provided under
Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall (i) act
on behalf of each of REMIC BT, REMIC I, REMIC II and REMIC III 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.
The legal expenses, including without limitation attorneys' or accountants'
fees, and costs of any such proceeding and any liability resulting therefrom
shall be expenses of the Trust Fund and the REMIC Administrator shall be
entitled to reimbursement therefor out of amounts attributable to the Mortgage
Loans on deposit in the Custodial Account as provided by Section 3.10 unless
such legal expenses and costs are incurred by reason of the REMIC
Administrator's willful misfeasance, bad faith or gross negligence. If the REMIC
Administrator is no longer the Master Servicer hereunder, at its option the
REMIC Administrator may continue its duties as REMIC Administrator and shall be
paid reasonable compensation not to exceed $3,000 per year by any successor
Master Servicer hereunder for so acting as the REMIC Xxxxxxxxxxxxx.
000
(x) The REMIC Administrator shall prepare or cause to be prepared all
of the Tax Returns that it determines are required with respect to the REMIC
created hereunder and deliver such Tax Returns in a timely manner to the Trustee
and the Trustee shall sign and file such Tax Returns in a timely manner. The
expenses of preparing such returns shall be borne by the REMIC Administrator
without any right of reimbursement therefor. The REMIC Administrator agrees to
indemnify and hold harmless the Trustee with respect to any tax or liability
arising from the Trustee's signing of Tax Returns that contain errors or
omissions. The Trustee and Master Servicer shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time to
time request for the purpose of enabling the REMIC Administrator to prepare Tax
Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a
Class R Certificate such information as is necessary for the application of any
tax relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee and the Trustee shall forward 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, if any, and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
REMIC created hereunder.
(f) The Master Servicer and the REMIC Administrator shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status thereof as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically
set forth herein, the Master Servicer and the REMIC Administrator shall not
knowingly or intentionally take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action reasonably
within their respective control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any of REMIC BT, REMIC I, REMIC II
or REMIC III as a REMIC or (ii) result in the imposition of a tax upon any of
REMIC BT, REMIC I, REMIC II or REMIC III (including but not limited to the tax
on prohibited transactions as defined in Section 860F(a)(2) of the Code (except
as provided in Section 3.22(d)) and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, in the absence of an
Opinion of Counsel or the indemnification referred to in this sentence, an
"Adverse REMIC Event") unless the Master Servicer or the REMIC Administrator, as
applicable, has received an Opinion of Counsel (at the expense of the party
seeking to take such action or, if such party fails to pay such expense, and the
Master Servicer or the REMIC Administrator, as applicable, determines that
taking such action is in the best interest of the Trust Fund and the
Certificateholders and is not adverse to the interest of the Insurer, at the
expense of the Trust Fund, but in no event at the expense of the Master
Servicer, the REMIC Administrator or the Trustee) to the effect that the
contemplated action will not, with respect to the Trust Fund created hereunder,
endanger such status or, unless the Master Servicer or the REMIC Administrator
or both, as applicable, determine in its or their sole discretion to indemnify
the Trust Fund against the
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imposition of such a tax, result in the imposition of such a tax. Wherever in
this Agreement a contemplated action may not be taken because the timing of such
action might result in the imposition of a tax on the Trust Fund, or may only be
taken pursuant to an Opinion of Counsel that such action would not impose a tax
on the Trust Fund, such action may nonetheless be taken provided that the
indemnity given in the preceding sentence with respect to any taxes that might
be imposed on the Trust Fund has been given and that all other preconditions to
the taking of such action have been satisfied. The Trustee shall not take or
fail to take any action (whether or not authorized hereunder) as to which the
Master Servicer or the REMIC Administrator, as applicable, 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 the Trust Fund or its assets, or causing the
Trust Fund to take any action, which is not expressly permitted under the terms
of this Agreement, the Trustee will consult with the Master Servicer or the
REMIC Administrator, as applicable, or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
the Trust Fund and the Trustee shall not take any such action or cause the Trust
Fund to take any such action as to which the Master Servicer or the REMIC
Administrator, as applicable, has advised it in writing that an Adverse REMIC
Event could occur. The Master Servicer or the REMIC Administrator, as
applicable, 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 expressly
permitted by this Agreement, but in no event at the expense of the Master
Servicer or the REMIC Administrator. At all times as may be required by the
Code, the Master Servicer or the REMIC Administrator, as applicable, will to the
extent within its control and the scope of its duties more specifically set
forth herein, maintain substantially all of the assets of the REMIC as
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any REMIC as defined in Section
860G(c) of the Code, on any contributions to any REMIC after the startup day
therefor pursuant to Section 860G(d) of the Code, or any other tax imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer of any of its obligations under this Agreement
or the Master Servicer has in its sole discretion determined to indemnify the
Trust Fund against such tax, (ii) to the Trustee, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article X, or (iii) otherwise against amounts on deposit in the Custodial
Account as provided by Section 3.10 and on the Distribution Date(s) following
such reimbursement the aggregate of such taxes shall be allocated in reduction
of the Accrued Certificate Interest on each Class entitled thereto in the same
manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the startup day, neither the Master Servicer nor the
Trustee shall accept any contributions of assets to any REMIC unless (subject to
Section 10.01(f)) the Master
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Servicer and the Trustee shall have received an Opinion of Counsel (at the
expense of the party seeking to make such contribution) to the effect that the
inclusion of such assets in any REMIC will not cause any of REMIC BT, REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to
Section 10.01(f)) enter into any arrangement by which any of REMIC BT, REMIC I,
REMIC II or REMIC III will receive a fee or other compensation for services nor
permit any of REMIC BT, REMIC I, REMIC II or REMIC III 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.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" by which the principal
balance of each regular interest in each REMIC would be reduced to zero is
January 25, 2033.
(l) Within 30 days after the Closing Date, the REMIC Administrator
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 the Trust Fund.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of
or substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or 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 any REMIC pursuant to Article IX of this Agreement or (iv) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement) or
acquire any assets for any REMIC or sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, or accept any
contributions to any REMIC after the Closing Date unless it has received an
Opinion of Counsel that such sale, disposition, substitution or acquisition will
not (a) affect adversely the status of any of REMIC BT, REMIC I, REMIC II or
REMIC III as a REMIC or (b) unless the Master Servicer has determined in its
sole discretion to indemnify the Trust Fund against such tax, cause any REMIC to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions.
Section 10.02. MASTER SERVICER, REMIC ADMINISTRATOR AND TRUSTEE
INDEMNIFICATION.
(a) The Trustee agrees to indemnify the Trust Fund, the Insurer, the
Depositor, the REMIC Administrator and the Master Servicer for any taxes and
costs including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Insurer, the Depositor or the Master Servicer,
as a result of a breach of the Trustee's covenants set forth in Article VIII or
this Article X. In the event that Residential Funding is no longer the Master
Servicer, the Trustee shall indemnify Residential Funding for any taxes and
costs including, without
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limitation, any reasonable attorneys fees imposed on or incurred by Residential
Funding as a result of a breach of the Trustee's covenants set forth in Article
VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the
Insurer, the Depositor, the Master Servicer and the Trustee for any taxes and
costs (including, without limitation, any reasonable attorneys' fees) imposed on
or incurred by the Trust Fund, the Insurer, the Depositor, the Master Servicer
or the Trustee, as a result of a breach of the REMIC Administrator's covenants
set forth in this Article X with respect to compliance with the REMIC
Provisions, including without limitation, any penalties arising from the
Trustee's execution of Tax Returns prepared by the REMIC Administrator that
contain errors or omissions; provided, however, that such liability will not be
imposed to the extent such breach is a result of an error or omission in
information provided to the REMIC Administrator by the Master Servicer in which
case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the
Insurer, the Depositor, the REMIC Administrator and the Trustee for any taxes
and costs (including, without limitation, any reasonable attorneys' fees)
imposed on or incurred by the Trust Fund, the Insurer, the Depositor or the
Trustee, as a result of a breach of the Master Servicer's covenants set forth in
this Article X or in Article III with respect to compliance with the REMIC
Provisions, including without limitation, any penalties arising from the
Trustee's execution of Tax Returns prepared by the Master Servicer that contain
errors or omissions.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
Section 11.01. AMENDMENT.
(a) This Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer and the Trustee, with the consent
of the Insurer and without the consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein,
which may be inconsistent with any other provisions herein or therein or to
correct any error,
(iii) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or desirable to maintain the
qualification of REMIC BT, REMIC I, REMIC II or REMIC III as REMICs at all
times that any Certificate is outstanding or to avoid or minimize the risk
of the imposition of any tax on the Trust Fund pursuant to the Code that
would be a claim against the Trust Fund, provided that the Trustee has
received an Opinion of Counsel to the effect that (A) such action is
necessary or desirable to maintain such qualification or to avoid or
minimize the risk of the imposition of any such tax and (B) such action
will not adversely affect in any material respect the interests of any
Certificateholder,
(iv) to change the timing and/or nature of deposits into the
Custodial Account or the Certificate Account or to change the name in which
the Custodial Account is maintained, provided that (A) the Certificate
Account Deposit Date shall in no event be later than the related
Distribution Date, (B) such change shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder and (C) such change shall not result in a reduction of
the rating assigned to any Class of Certificates below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date (without taking into account the Policy), as evidenced by a
letter from each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section
5.02(g) or any other provision hereof restricting transfer of the Class R
Certificates by virtue of their being the "residual interests" in the Trust
Fund provided that (A) such change shall not result in reduction of the
rating assigned to any such Class of Certificates below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date, as evidenced by a letter from each Rating Agency to such
effect, and (B) such change shall not, as evidenced by an Opinion of
Counsel (at the expense of the party seeking so to modify,
126
eliminate or add such provisions), cause the Trust Fund or any of the
Certificateholders (other than the transferor) to be subject to a federal
tax caused by a transfer to a Person that is not a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or
questions arising under this Agreement or such Custodial Agreement which
shall not be materially inconsistent with the provisions of this Agreement,
provided that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any
Certificateholder and is authorized or permitted under Section 11.09(d).
(b) This Agreement or any Custodial Agreement may also be amended from
time to time with the consent of the Insurer by the Depositor, the Master
Servicer, the Trustee and the Holders of Certificates evidencing in the
aggregate not less than 66% of the Percentage Interests of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
such Custodial Agreement or of modifying in any manner the rights of the Holders
of Certificates of such Class; PROVIDED, HOWEVER, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the
Holders of Certificates of any Class in a manner other than as described in
clause (i) hereof without the consent of Holders of Certificates of such
Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66%, or
(iii) reduce the aforesaid percentage of Certificates of any
Class the Holders of which are required to consent to any such amendment,
in any such case without the consent of the Holders of all Certificates of
such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (at the expense of the party seeking
such amendment) to the effect that such amendment or the exercise of any power
granted to the Master Servicer, the Depositor or the Trustee in accordance with
such amendment will not result in the imposition of a federal tax on the Trust
Fund or cause REMIC BT, REMIC I, REMIC II or REMIC III to fail to qualify as
REMICs at any time that any Certificate is outstanding. The Trustee may but
shall not be obligated to enter into any amendment pursuant to this Section that
affects its rights, duties and immunities and this agreement or otherwise;
provided however, such consent shall not be unreasonably withheld.
(d) Promptly after the execution of any such amendment the Trustee
shall furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular
127
form of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
(e) The Depositor shall have the option, in its sole discretion, to
obtain and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class R Certificates against any or all
Realized Losses or other shortfalls. Any such instrument or fund shall be held
by the Trustee for the benefit of the Class R Certificateholders, but shall not
be and shall not be deemed to be under any circumstances included in the REMIC.
To the extent that any such instrument or fund constitutes a reserve fund for
federal income tax purposes, (i) any reserve fund so established shall be an
outside reserve fund and not an asset of the REMIC, (ii) any such reserve fund
shall be owned by the Depositor, and (iii) amounts transferred by the REMIC to
any such reserve fund shall be treated as amounts distributed by the REMIC to
the Depositor or any successor, all within the meaning of Treasury regulations
Section 1.860G-2(h). In connection with the provision of any such instrument or
fund, this Agreement and any provision hereof may be modified, added to, deleted
or otherwise amended in any manner that is related or incidental to such
instrument or fund or the establishment or administration thereof, such
amendment to be made by written instrument executed or consented to by the
Depositor and such related insurer but without the consent of any
Certificateholder and without the consent of the Master Servicer or the Trustee
being required unless any such amendment would impose any additional obligation
on, or otherwise adversely affect the interests of the Certificateholders, the
Master Servicer or the Trustee, as applicable; provided that the Depositor
obtains an Opinion of Counsel (which need not be an opinion of Independent
counsel) to the effect that any such amendment 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
and (b) any of REMIC BT, REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC at any time that any Certificate is outstanding. In the event that the
Depositor elects to provide such coverage in the form of a limited guaranty
provided by General Motors Acceptance Corporation, the Depositor may elect that
the text of such amendment to this Agreement shall be substantially in the form
attached hereto as Exhibit K (in which case Residential Funding's Subordinate
Certificate Loss Obligation as described in such exhibit shall be established by
Residential Funding's consent to such amendment) and that the limited guaranty
shall be executed in the form attached hereto as Exhibit L, with such changes as
the Depositor shall deem to be appropriate; it being understood that the Trustee
has reviewed and approved the content of such forms and that the Trustee's
consent or approval to the use thereof is not required.
Section 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
(a) 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
128
the Master Servicer and at its expense on direction by the Trustee (pursuant to
the request of the Insurer or the Holders of Certificates entitled to at least
25% of the Voting Rights), but only upon direction accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders.
(b) For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of any
of the parties hereto.
(b) No Certificateholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) 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 and the Insurer a written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates of any Class evidencing in the aggregate
not less than 25% of the related Percentage Interests of such Class, 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 Insurer shall have
given its written consent and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class 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 of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section
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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 11.04. GOVERNING LAW.
This agreement and the Certificates shall be governed by and construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.05. NOTICES.
All demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid (except for notices to the Trustee which shall
be deemed to have been duly given only when received), to (a) in the case of the
Depositor, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxxxxx,
or such other address as may hereafter be furnished to the Master Servicer and
the Trustee in writing by the Depositor; (b) in the case of the Master Servicer,
00 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000,
Attention: Bond Administration or such other address as may be hereafter
furnished to the Depositor and the Trustee by the Master Servicer in writing;
(c) in the case of the Trustee, 0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx,
Xxxxxxxx 00000-0000, Attention: Bear Xxxxxxx Asset Backed Securities, Inc.
Series 1999-RS4 or such other address as may hereafter be furnished to the
Depositor and the Master Servicer in writing by the Trustee; (d) in the case of
Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Mortgage
Surveillance or such other address as may be hereafter furnished to the
Depositor, Trustee and Master Servicer by Standard & Poor's; (e) in the case of
Fitch, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other address as
may be hereafter furnished to the Depositor, the Trustee and the Master Servicer
in writing by Fitch; and (f) in the case of the Insurer, Ambac Assurance
Corporation, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Structured Finance--Mortgage Backed Securities or such other address as may be
hereafter furnished to the Depositor, the Trustee and the Master Servicer in
writing by the Insurer. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.06. NOTICES TO RATING AGENCIES AND THE INSURER.
The Depositor, the Master Servicer or the Trustee, as applicable,
shall notify each Rating Agency, the Insurer and each Subservicer at such time
as it is otherwise required pursuant to this Agreement to give notice of the
occurrence of, any of the events described in clause (a), (b), (c), (d), (g),
(h), (i) or (j) below or provide a copy to each Rating Agency and the Insurer at
such time as otherwise required to be delivered pursuant to this Agreement of
any of the statements described in clauses (e) and (f) below:
130
(i) a material change or amendment to this Agreement,
(ii) the occurrence of an Event of Default,
(iii) the termination or appointment of a successor Master Servicer
or Trustee or a change in the majority ownership of the
Trustee,
(iv) the filing of any claim under the Master Servicer's blanket
fidelity bond and the errors and omissions insurance policy
required by Section 3.12 or the cancellation or modification of
coverage under any such instrument,
(v) the statement required to be delivered to the Holders of each
Class of Certificates pursuant to Section 4.03,
(vi) the statements required to be delivered pursuant to Sections
3.18 and 3.19,
(vii) a change in the location of the Custodial Account or the
Certificate Account,
(viii) the occurrence of any monthly cash flow shortfall to the
Holders of any Class of Certificates resulting from the failure
by the Master Servicer to make an Advance pursuant to Section
4.04 or the failure by the Master Servicer to meet the Annual
Servicing Test,
(ix) the occurrence of the Final Distribution Date, and
(x) the repurchase of or substitution for any Mortgage Loan,
PROVIDED, HOWEVER, that with respect to notice of the occurrence of the events
described in clauses (d), (g) or (h) above, the Master Servicer shall provide
prompt written notice to each Rating Agency, the Insurer and the Subservicer of
any such event known to the Master Servicer.
In addition to the above delivery requirements, the Depositor, the
Master Servicer or the Trustee, as applicable, shall provide a copy to the
Insurer, at such time as it otherwise is required to deliver pursuant to this
Agreement, of any other written confirmation, written notice or legal opinion.
Section 11.07. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions
131
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 or the Insurer.
Section 11.08. SUPPLEMENTAL PROVISIONS FOR RESECURITIZATION.
(a) This Agreement may be supplemented by means of the addition of a
separate Article hereto (a "Supplemental Article") for the purpose of
resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Depositor or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Depositor may deposit such Resecuritized
Certificates into a new REMIC, grantor trust, FASIT or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Depositor, the Master Servicer and the Trustee; provided, that neither the
Master Servicer nor the Trustee shall withhold their consent thereto if their
respective interests would not be materially adversely affected thereby. To the
extent that the terms of the Supplemental Article do not in any way affect any
provisions of this Agreement as to any of the Certificates initially issued
hereunder, the adoption of the Supplemental Article shall not constitute an
"amendment" of this Agreement.
Each Supplemental Article shall set forth all necessary provisions
relating to the holding of the Resecuritized Certificates by the Trustee, the
establishment of the Restructuring Vehicle, the issuing of various classes of
new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary to the purposes thereof. In
connection with each Supplemental Article, the Depositor shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust, FASIT or other entity not subject to
taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of any of REMIC BT, REMIC I,
REMIC II or REMIC III as a REMIC or result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transaction as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC as set forth in Section 860G(d) of the Code.
Section 11.09. RIGHTS OF THE INSURER.
(a) The Insurer is an express third-party beneficiary of this
Agreement.
(b) On each Distribution Date the Trustee shall forward to the Insurer
a copy of the reports furnished to the Class A Certificateholders and the
Depositor on such Distribution Date.
(c) The Trustee shall provide to the Insurer copies of any report,
notice, Opinion of counsel, Officer's Certificate, request for consent or
request for amendment to any document related hereto promptly upon the Trustee's
production or receipt thereof.
132
(d) Unless an Insurer Default exists, the Trustee and the Depositor
shall not agree to any amendment to this Agreement without first having obtained
the prior written consent of the Insurer, which consent shall not be
unreasonably withheld.
(e) So long as there does not exist a failure by the Insurer to make a
required payment under the Policy, the Insurer shall have the right to exercise
all rights of the Holders of the Class A Certificates under this Agreement
without any consent of such Holders, and such Holders may exercise such rights
only with the prior written consent of the Insurer, except as provided herein.
(f) The Insurer shall not be entitled to exercise any of its rights
hereunder so long as there exists a failure by the Insurer to make a required
payment under the Policy.
133
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 and their respective seals, duly attested, to be
hereunto affixed, all as of the date and year first above written.
BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
[Seal] By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
Attest:
-------------------------
Name:
Title:
RESIDENTIAL FUNDING CORPORATION
[Seal] By: /s/ Xxxxxxx Xxxxx
--------------------------
Name: Xxxxxxx Xxxxx
Title: Director
Attest: /s/ Xxxxx Xxxx
-------------------------
Name: Xxxxx Xxxx
Title: Managing Director
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
[Seal] By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
Attest: /s/ X.X. Xxxxxx
-------------------------
Name: X.X. Xxxxxx
Title: Vice President
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 29th day of November, 1999 before me, a notary public in and
for said State, personally appeared __________________, known to me to be a
_____________ of Bear Xxxxxxx Asset Backed Securities, Inc., Inc., one of the
corporations 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
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of November, 1999 before me, a notary public in and
for said State, personally appeared Xxxxxxx Xxxxx, known to me to be a Director
of Residential Funding Corporation, one of the corporations 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
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the 29th day of November, 1999 before me, a notary public in and
for said State, personally appeared ________________, known to me to be a First
Vice President of Bank One, National Association, a national banking 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
[Notarial Seal]
