PC MASTER TRUST AGREEMENT
Exhibit 10.59
Xxxxxxx
Mac
THIS PC MASTER TRUST AGREEMENT is entered into as of
March 17, 2008, by and among Xxxxxxx Mac in its corporate
capacity as Depositor, Administrator and Guarantor, Xxxxxxx Mac
in its capacity as Trustee, and the Holders of the PCs offered
from time to time pursuant to Xxxxxxx Mac’s Offering
Circular referred to herein.
WHEREAS:
(a) Xxxxxxx Mac is a corporation duly organized and
existing under and by virtue of the Xxxxxxx Mac Act and has full
corporate power and authority to enter into this Agreement and
to undertake the obligations undertaken by it herein; and
(b) Xxxxxxx Mac may from time to time (i) purchase
Mortgages, in accordance with the applicable provisions of the
Xxxxxxx Mac Act, (ii) as Depositor, transfer and deposit
such Mortgages into various trust funds that are established
pursuant to this Agreement and that are referred to herein as
“PC Pools,” (iii) as Trustee, create and issue
hereunder, on behalf of the related PC Pool, PCs representing
undivided beneficial ownership interests in the assets of that
PC Pool and otherwise act as trustee for each such PC Pool,
(iv) as Guarantor, guarantee the payment of interest and
principal for the benefit of the Holders of such PCs and
(v) as Administrator, administer the affairs of each such
PC Pool.
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained in this Agreement, the parties to
this Agreement, do hereby declare and establish this Agreement
and do hereby undertake and otherwise agree as follows with
respect to the transfer of the Mortgages to various PC Pools,
the issuance of the PCs and the establishment of the rights and
obligations of the parties.
Definitions
The following terms used in this Agreement have the respective
meanings set forth below.
Accrual Period: As to any PC and any Payment
Date, (i) the calendar month preceding the month of the
Payment Date for Gold PCs or (ii) the second calendar month
preceding the month of the Payment Date for ARM PCs.
Administrator: Xxxxxxx Mac, in its corporate
capacity, as administrator of the PC Pools created under this
Agreement.
Agreement: This PC Master
Trust Agreement, dated as of March 17, 2008, by and
among Xxxxxxx Mac in its corporate capacity as Depositor,
Administrator and Guarantor, Xxxxxxx Mac in its capacity as
Trustee, and the Holders of the various PCs, as originally
executed, or as modified, amended or supplemented in accordance
with the provisions set forth herein. Unless the context
requires otherwise, the term “Agreement” shall be
deemed to include any applicable Pool Supplement entered into
pursuant to Section 1.01.
ARM: An adjustable rate Mortgage.
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ARM PC: A PC with a Payment Delay of
75 days and which is backed by ARMs. ARM PCs include
Deferred Interest PCs.
Book-Entry Rules: The provisions from time to
time in effect, currently contained in Title 24,
Part 81, Subpart H of the Code of Federal Regulations,
setting forth the terms and conditions under which Xxxxxxx Mac
may issue securities on the book-entry system of the Federal
Reserve Banks and authorizing a Federal Reserve Bank to act as
its agent in connection with such securities.
Business Day: A day other than (i) a
Saturday or Sunday and (ii) a day when the Federal Reserve
Bank of New York (or other agent acting as Xxxxxxx Mac’s
fiscal agent) is closed or, as to any Holder, a day when the
Federal Reserve Bank that maintains the Holder’s account is
closed.
Conventional Mortgage: A Mortgage that is not
guaranteed or insured by the United States or any agency or
instrumentality of the United States.
Custodial Account: As defined in
Section 3.05(e) of this Agreement.
Deferred Interest: The amount by which the
interest due on a Mortgage exceeds the borrower’s monthly
payment, which amount is added to the unpaid principal balance
of the Mortgage.
Deferred Interest PC: A PC representing an
undivided beneficial ownership interest in a PC Pool that
includes Mortgages providing for negative amortization.
Depositor: Xxxxxxx Mac, in its corporate
capacity, as depositor of Mortgages into the PC Pools created
under this Agreement.
Eligible Investments: Any one or more of the
following obligations, securities or holdings maturing on or
before the Payment Date applicable to the funds so invested:
(i) obligations of, or obligations guaranteed as to the
full and timely payment of principal and interest by, the United
States;
(ii) obligations of any agency or instrumentality of the
United States (other than Xxxxxxx Mac) or taxable debt
obligations of any state or local government (or political
subdivision thereof) that have a long-term rating or a
short-term rating, as applicable, from S&P, Moody’s or
Fitch in any case in one of its two highest rating categories
for long-term securities or in its highest ratings category for
short-term securities;
(iii) time deposits of any depository institution or trust
company domiciled in the Cayman Islands or Nassau and affiliated
with a financial institution that is a member of the Federal
Reserve System, provided that the short-term securities of the
depository institution or trust company are rated by S&P,
Moody’s or Fitch in the highest applicable ratings category
for short-term securities;
(iv) federal funds, certificates of deposit, time deposits
and bankers’ acceptances with a fixed maturity of no more
than 365 days of any depository institution or trust
company, provided that the short-term securities of the
depository institution or trust company are rated by S&P,
Moody’s or Fitch in the highest applicable ratings category
for short-term securities;
(v) commercial paper with a fixed maturity of no more than
270 days, of any corporation that is rated by S&P,
Moody’s or Fitch in its highest short-term ratings category;
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(vi) debt securities that have a long-term rating or a
short-term rating, as applicable, from S&P, Moody’s or
Fitch, in any case in one of its two highest ratings categories
for long-term securities or in its highest ratings category for
short-term securities;
(vii) money market funds that are registered under the
Investment Company Act of 1940, as amended, are entitled,
pursuant to
Rule 2a-7
of the Securities and Exchange Commission, or any successor to
that rule, to hold themselves out to investors as money market
funds, and are rated by S&P, Moody’s or Fitch in one
of its two highest ratings categories for money market funds;
(viii) asset-backed commercial paper that is rated by
S&P, Moody’s or Fitch in its highest short-term
ratings category;
(ix) repurchase agreements on obligations that are either
specified in any of clauses (i), (ii), (iv), (v), (vi) or
(viii) above or are mortgage-backed securities insured or
guaranteed by an entity that is an agency or instrumentality of
the United States; provided that the counterparty to the
repurchase agreement is an entity whose short-term debt
securities are rated by S&P, Moody’s or Fitch in its
highest ratings category for short-term securities; and
(x) any other investment without options that is approved
by Xxxxxxx Mac and is within the two highest ratings categories
of the applicable rating agency for long-term securities or the
highest ratings category of the applicable rating agency for
short-term securities.
The rating requirement will be satisfied if the relevant
security, issue or fund at the time of purchase receives at
least the minimum stated rating from at least one of S&P,
Moody’s or Fitch. The rating requirement will not be
satisfied by a rating that is the minimum rating followed by a
minus sign or by a rating lower than Aa2 from Moody’s.
Event of Default: As defined in
Section 5.01 of this Agreement.
FHA/VA Mortgage: A Mortgage insured by the
Federal Housing Administration or by the Rural Housing Service
or guaranteed by the Department of Veterans Affairs.
Final Payment Date: As to any PC, the first
day of the latest month in which the related Pool Factor will be
reduced to zero. The Administrator publishes the Final Payment
Date upon formation of the related PC Pool.
Fitch: Fitch, Inc., also known as Fitch
Ratings, or any successor thereto.
Xxxxxxx Mac: The Federal Home Loan Mortgage
Corporation, a corporation created pursuant to the Xxxxxxx Mac
Act for the purpose of establishing and supporting a secondary
market in residential mortgages. Unless the context requires
otherwise, the term “Xxxxxxx Mac” shall be deemed to
refer to Xxxxxxx Mac acting in one or more of its corporate
capacities, as specified or as provided in context, and not in
its capacity as Trustee.
Xxxxxxx Mac Act: Title III of the
Emergency Home Finance Act of 1970, as amended, 12 U.S.C.
§§ 1451-1459.
Gold PC: A PC with a Payment Delay of
45 days and which is backed by fixed-rate Mortgages.
Guarantor: Xxxxxxx Mac, in its corporate
capacity, as guarantor of the PCs issued by each PC Pool.
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Guide: Xxxxxxx Mac’s Single-Family
Seller/Servicer Guide, as supplemented and amended from time to
time, in which Xxxxxxx Mac sets forth its mortgage purchase
standards, credit, appraisal and underwriting guidelines and
servicing policies.
Holder: With respect to any PC Pool, any
entity that appears on the records of a Federal Reserve Bank as
a holder of the related PCs.
Monthly Reporting Period: The period during
which servicers report Mortgage payments to the Administrator,
generally consisting of the calendar month preceding the related
Payment Date for Gold PCs and the second calendar month
preceding the related Payment Date for ARM PCs, which period the
Administrator has the right to change as provided in
Section 3.05(d); provided, however, that with
respect to prepayments on PCs issued before September 1,
1995, the Monthly Reporting Period generally is from the
16th of a month through the 15th of the next month.
Moody’s: Xxxxx’x Investors Service,
Inc., or any successor thereto.
Mortgage: A mortgage loan or a participation
interest in a mortgage loan that is secured by a first or second
lien on a one-to-four family dwelling and that has been
purchased by the Depositor and transferred by the Depositor to
the Trustee for inclusion in the related PC Pool. With respect
to each PC Pool, the Mortgages to be included therein shall be
identified on the books and records of the Depositor and the
Administrator.
Mortgage Coupon: The per annum fixed or
adjustable interest rate of a Mortgage.
MultiLender Swap Program: A program under
which Xxxxxxx Mac purchases Mortgages from one or more sellers
in exchange for PCs representing undivided beneficial ownership
interests in a PC Pool consisting of Mortgages that may or may
not be those delivered by the seller(s).
Negative Amortization Factor: With respect to
PCs backed by Mortgages providing for negative amortization, a
truncated eight-digit decimal number that reflects the amount of
Deferred Interest added to the principal balances of the related
Mortgages in the preceding month.
Offering Circular: Xxxxxxx Mac’s Mortgage
Participation Certificates Offering Circular dated
March 17, 2008, as amended and supplemented by any
Supplements issued from time to time, or any successor thereto,
as it may be amended and supplemented from time to time.
Payment Date: The 15th of each month or,
if the 15th is not a Business Day, the next Business Day.
Payment Delay: The delay between the first day
of the Accrual Period for a PC and the related Payment Date.
PC: With respect to each PC Pool, a Mortgage
Participation Certificate issued pursuant to this Agreement,
representing a beneficial ownership interest in such PC Pool.
The term “PC” includes a Gold PC or an ARM PC unless
the context requires otherwise.
PC Coupon: The per annum fixed or adjustable
rate of a PC calculated as described in the Offering Circular or
the applicable Pool Supplement, computed on the basis of a
360-day year
of twelve
30-day
months.
PC Issue Date: With respect to each PC Pool,
the date specified in the related Pool Supplement or, if not
specified therein, the date on which Xxxxxxx Mac issues a PC in
exchange for the Mortgages delivered by a dealer or other
customer.
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PC Pool: With respect to each PC, the corpus
of the related trust fund created by this Agreement, consisting
of (i) the related Mortgages and all proceeds thereof,
(ii) amounts on deposit in the Custodial Account, to the
extent allocable to such PC Pool, (iii) the right to
receive payments under the related guarantee and (iv) any
other assets specified in the related Pool Supplement, excluding
any investment earnings on any of the assets of that PC Pool.
With respect to each PC Pool, and unless expressly stated
otherwise, the provisions of this Agreement will be interpreted
as referring only to the Mortgages included in that PC Pool, the
PCs issued by that PC Pool and the Holders of those PCs.
Person: Any legal person, including any
individual, corporation, partnership, limited liability company,
financial institution, joint venture, association, joint stock
company, trust, unincorporated organization or governmental unit
or political subdivision of any governmental unit.
Pool Factor: With respect to each PC Pool, a
truncated eight-digit decimal calculated for each month by the
Administrator which, when multiplied by the original principal
balance of the related PCs, will equal their remaining principal
amount. The Pool Factor for any month reflects the remaining
principal amount after the payment to be made on the Payment
Date in the same month for Gold PCs or in the following month
for ARM PCs.
Pool Supplement: Any physical or electronic
document or record (which may be a supplement to the Offering
Circular or any other supplemental document prepared by Xxxxxxx
Mac for the related PCs), which, together herewith, evidences
the establishment of a PC Pool and modifies, amends or
supplements the provisions hereof in any respect whatsoever. The
Pool Supplement for a particular PC Pool shall be binding and
effective upon formation of the related PC Pool and issuance of
the related PCs, whether or not such Pool Supplement is
executed, delivered or published by Xxxxxxx Mac.
Purchase Documents: The mortgage purchase
agreements between Xxxxxxx Mac and its Mortgage sellers and
servicers, which are the contracts that govern the purchase and
servicing of Mortgages and which include, among other things,
the Guide and any negotiated modifications, amendments or
supplements to the Guide.
Record Date: As to any Payment Date, the close
of business on the last day of (i) the preceding month for
Gold PCs or (ii) the second preceding month for ARM PCs.
S&P: Standard & Poor’s
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc.,
or any successor thereto.
Transferor: For purposes of
Section 7.06(a) with respect to each PC Pool created on or
after the date hereof, (a) a Person, acting in its capacity
as principal, that transfers Mortgages to the Depositor in
exchange for cash or PCs, or a combination of cash and PCs, for
conveyance to such PC Pool; or (b) if the Depositor
transfers Mortgages that it has previously been holding in its
own portfolio into such PC Pool, Xxxxxxx Mac, in its corporate
capacity as the Depositor.
Trustee: Xxxxxxx Mac, in its capacity as
trustee of each PC Pool formed under this Agreement, and its
successors and assigns, which will have the trustee
responsibilities specified in this Agreement, as amended or
supplemented from time to time.
Trustee Event of Default: As defined in
Section 6.06 of this Agreement.
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ARTICLE I
Conveyance
of Mortgages; Creation of PC Pools
Section 1.01. Declaration of Trust; Transfer of
Mortgages. The Depositor, by delivering any
Mortgages pursuant to this Agreement, unconditionally,
absolutely and irrevocably hereby transfers, assigns, sets over
and otherwise conveys to the Trustee, on behalf of the related
Holders, all of the Depositor’s right, title and interest
in and to such Mortgages, including all payments of principal
and interest thereon received after the month in which the PC
Issue Date occurs. Once Mortgages have been identified as being
part of a related PC Pool for which at least one PC has been
issued, they shall remain in that PC Pool unless removed in a
manner consistent with this Agreement. Concurrently with the
Depositor’s transferring, assigning, setting over and
otherwise conveying the Mortgages to the Trustee for a PC Pool,
the Trustee hereby accepts the Mortgages so conveyed and
acknowledges that it holds the entire corpus of each PC Pool in
trust for the exclusive benefit of the related Holders and shall
deliver to, or on the order of, the Depositor, the PCs issued by
such PC Pool. The Administrator agrees to administer the related
PC Pool and such PCs in accordance with the terms of this
Agreement. On the related PC Issue Date and upon payment to the
Depositor for any such PC by a Holder, such Holder shall, by
virtue thereof, acknowledge, accept and agree to be bound by all
of the terms and conditions of this Agreement.
A Pool Supplement shall evidence the establishment of a
particular PC Pool and shall relate to specific PCs representing
the entire beneficial ownership interests in such PC Pool. If
for any reason the creation of a Pool Supplement is delayed,
Xxxxxxx Mac shall create one as soon as practicable, and such
delay shall not affect the validity and existence of the PC Pool
or the related PCs. With respect to each PC Pool, the collective
terms hereof and of the related Pool Supplement shall govern the
issuance and administration of the PCs related to such PC Pool,
and all matters related thereto, and shall have no applicability
to any other PC Pool or PCs. As applied to each PC Pool, the
collective terms hereof and of the related Pool Supplement shall
constitute an agreement as if the collective terms of those
instruments were set forth in a single instrument. In the event
of a conflict between the terms hereof and the terms of a Pool
Supplement for a PC Pool, the terms of the Pool Supplement shall
control with respect to that PC Pool. A Pool Supplement is not
considered an amendment to this Agreement requiring approval
pursuant to Section 7.05.
Section 1.02. Identity of the Mortgages; Substitution
and Repurchase.
(a) In consideration for the transfer of the related
Mortgages by the Depositor to a PC Pool, the Depositor
(i) shall receive the PCs issued by such PC Pool and
(ii) may retain such PCs or transfer them to the related
Mortgage seller or otherwise, as the Depositor deems appropriate.
(b) After the PC Issue Date but prior to the first Payment
Date, the Depositor may, in accordance with its customary
mortgage purchase and pooling procedures, adjust the amount and
identity of the Mortgages to be transferred to a PC Pool, the PC
Coupon
and/or the
original unpaid principal balance of the PCs and the Mortgages
in the PC Pool, provided that any changes to the characteristics
of the PCs shall be evidenced by an amendment or supplement to
the related Pool Supplement.
(c) Except as provided in this Section 1.02 or in
Section 1.03, once the Depositor has transferred a Mortgage
to a particular PC Pool, such Mortgage may not be transferred
out of such PC Pool, except (x) if a mortgage insurer
exercises an option under an insurance contract to purchase such
Mortgage or (y) in the case of repurchase by the Guarantor,
the Administrator or the related Mortgage seller or servicer,
under the following circumstances:
(i) The Guarantor may repurchase from the related PC Pool a
Mortgage in connection with a guarantee payment under
Section 3.09(a)(ii).
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(ii) The Administrator may repurchase from the related PC
Pool, or require or permit a Mortgage seller or servicer to
repurchase, any Mortgage if a repurchase is necessary or
advisable (A) to maintain servicing of the Mortgage in
accordance with the provisions of the Guide, or (B) to
maintain the status of the PC Pool as a grantor trust for
federal income tax purposes.
(iii) The Guarantor may repurchase from the related PC
Pool, or require or permit a Mortgage seller or servicer to
repurchase, any Mortgage if (A) such Mortgage is 120 or
more days delinquent, or (B) the Guarantor determines, on
the basis of information from the related borrower or servicer,
that loss of ownership of the property securing a Mortgage is
likely or default is imminent due to borrower incapacity, death
or hardship or other extraordinary circumstances that make
future payments on such Mortgage unlikely or impossible.
(iv) The Guarantor may repurchase from the related PC Pool
a Mortgage if a bankruptcy court approves a plan that materially
affects the terms of the Mortgage or authorizes a transfer or
substitution of the underlying property.
(v) The Administrator may require or permit a Mortgage
seller or servicer to repurchase from the related PC Pool any
Mortgage or (within six months of the issuance of the related
PCs) substitute for any Mortgage a Mortgage of comparable type,
unpaid principal balance, remaining term and yield, if there is
(A) a material breach of warranty by the Mortgage seller or
servicer, (B) a material defect in documentation as to such
Mortgage or (C) a failure by a seller or servicer to comply
with any requirements or terms set forth in the Guide and, if
applicable, other Purchase Documents.
(vi) The Administrator shall repurchase from the related PC
Pool any Mortgage or (within two years of the issuance of the
related PCs) substitute for any Mortgage a Mortgage of
comparable type, unpaid principal balance, remaining term and
yield, if (A) a court of competent jurisdiction or a
federal government agency duly authorized to oversee or regulate
Xxxxxxx Mac’s mortgage purchase business determines that
Xxxxxxx Mac’s purchase of such Mortgage was unauthorized
and Xxxxxxx Mac determines that a cure is not practicable
without unreasonable effort or expense or (B) such court or
government agency requires repurchase of such Mortgage.
(vii) To the extent a PC Pool includes convertible ARMs or
Balloon/Reset Mortgages (each, as defined in the Offering
Circular), the Administrator shall repurchase from the related
PC Pool or require or allow the Mortgage seller or servicer to
repurchase such Mortgages (a) when the borrower exercises
its option to convert the related interest rate from an
adjustable rate to a fixed rate, in the case of a convertible
ARM; and (b) shortly before such Mortgage reaches its
scheduled balloon repayment date, in the case of a Balloon/Reset
Mortgage.
(d) The purchase price of a Mortgage repurchased by a
Mortgage seller or servicer shall be equal to the then unpaid
principal balance of such Mortgage, less any principal on such
Mortgage that the Mortgage seller or servicer advanced to the
Depositor or the Administrator. The purchase price of a Mortgage
repurchased by the Administrator or the Guarantor under this
Agreement shall be equal to the then unpaid principal balance of
such Mortgage, less any outstanding advances of principal on
such Mortgage that the Administrator, on behalf of the Trustee,
distributed to Holders. The Administrator, on behalf of the
Trustee, agrees to release any Mortgage from the PC Pool upon
payment of the applicable purchase price.
(e) In determining whether a Mortgage shall be repurchased
from the related PC Pool as described in this Section 1.02,
the Guarantor and the Administrator may consider such factors as
they deem appropriate, including the reduction of administrative
costs (in the case of the Administrator) or possible exposure as
Guarantor under its guarantee (in the case of the Guarantor).
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Section 1.03. Post-Settlement Purchase Adjustments
(a) The Administrator shall make any post-settlement
purchase adjustments necessary to reflect the actual aggregate
unpaid principal balance of the related Mortgages or other
Mortgage characteristics as of the date of their purchase by the
Depositor or their delivery to the Trustee in exchange for PCs,
as the case may be.
(b) Post-settlement adjustments may be made in such manner
as the Administrator deems appropriate, but shall not adversely
affect any Holder’s rights to monthly payments of interest
at the PC Coupon, any Holder’s pro rata share of principal
or any Holder’s rights under the Guarantor’s
guarantees. Any reduction in the principal balance of the
Mortgages held by a PC Pool shall be reflected by the
Administrator as a corresponding reduction in the principal
balance of the related PCs with a corresponding principal
payment to the related Holders, on a pro rata basis.
Section 1.04. Custody of Mortgage
Documents. With respect to each PC Pool, the
Administrator, a custodian acting as its agent (which may be a
third party or a trust or custody department of the related
seller or servicer), or the originator or seller of the Mortgage
may hold the related Mortgage documents, including Mortgage
notes and participation certificates evidencing the
Trustee’s legal ownership interest in the Mortgages. The
Administrator may adopt and modify its policies and procedures
for the custody of Mortgage documents at any time, provided such
modifications are prudent and do not materially and adversely
affect the Holders’ interests.
Section 1.05. Interests Held or Acquired by Xxxxxxx
Mac. Xxxxxxx Mac shall have the right to purchase
and hold for its own account any PCs. Subject to
Section 7.06, PCs held or acquired by Xxxxxxx Mac from time
to time and PCs held by other Holders shall have equal and
proportionate benefits, without preference, priority or
distinction. In the event that Xxxxxxx Mac retains any interest
in a Mortgage, the remaining interest in which is part of a PC
Pool, Xxxxxxx Mac’s interest in such Mortgage shall rank
equally with that of the related PC Pool, without preference,
priority or distinction. No Holder shall have any priority over
any other Holder.
Section 1.06. Intended
Characterization. It is intended that the
conveyance, transfer, assignment and setting over of the
Mortgages by the Depositor to the Trustee pursuant to this
Agreement be a true, absolute and unconditional sale of the
related Mortgages by the Depositor to the Trustee, and not a
pledge of the Mortgages to secure a debt or other obligation of
the Depositor, and that the Holders of the related PCs shall be
the beneficial owners of such Mortgages. Notwithstanding this
express intention, however, if the Mortgages are determined by a
court of competent jurisdiction or other competent authority to
be the property of the Depositor, then it is intended that:
(a) this Agreement be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the Uniform
Commercial Code; (b) the conveyances provided for in
Section 1.01 shall be deemed to be (1) a grant by the
Depositor to the Trustee on behalf of the related Holders 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 the
related Mortgages, 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 Custodial Account and allocable to such
Mortgages, whether in the form of cash, instruments, securities
or other property and (2) an assignment by the Depositor to
the Trustee on behalf of the related Holders of any security
interest in any and 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 the property
described in the foregoing clause (1); and
(c) 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
on behalf of the related Holders, for the purpose of perfecting
such security interest under applicable law.
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Section 1.07. Encumbrances. Except as may
otherwise be provided expressly in this Agreement, neither
Xxxxxxx Mac nor the Trustee shall directly or indirectly,
assign, sell, dispose of or transfer all or any portion of or
interest in any PC Pool, or permit all or any portion of any PC
Pool to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance of any other Person. This
Section shall not be construed as a limitation on Xxxxxxx
Mac’s rights with respect to PCs held by it in its
corporate capacity.
ARTICLE II
Administration
and Servicing of the Mortgages
Section 2.01. The Administrator as Primary
Servicer. With respect to each PC Pool, the
Administrator shall service or supervise servicing of the
related Mortgages and administer, on behalf of the Trustee, in
accordance with the provisions of the Guide and this Agreement,
including management of any property acquired through
foreclosure or otherwise, all for the benefit of the related
Holders. The Administrator shall have full power and authority
to do or cause to be done any and all things in connection with
such servicing and administration that the Administrator deems
necessary or desirable. The Administrator shall seek from the
Trustee, as representative of the related Holders, any consents
or approvals relating to the control, management and servicing
of the Mortgages included in any PC Pool and that are required
hereunder.
Section 2.02. Servicing
Responsibilities. With respect to each PC Pool,
the Administrator shall service or supervise servicing of the
related Mortgages in a manner consistent with prudent servicing
standards and in substantially the same manner as the
Administrator services or supervises the servicing of unsold
mortgages of the same type in its portfolio. In performing its
servicing responsibilities hereunder, the Administrator may
engage servicers, subservicers and other independent contractors
or agents. The Administrator may discharge its responsibility to
supervise servicing of the Mortgages by monitoring
servicers’ performance on a reporting and exception basis.
Except as provided in Articles V and VI and
Sections 7.05 and 7.06 of this Agreement, Xxxxxxx Mac, as
Administrator shall not be subject to the control of the Holders
in the discharge of its responsibilities pursuant to this
Article. Except with regard to its guarantee obligations
pursuant to Section 3.09 with respect to a PC Pool, the
Administrator shall have no liability to any related Holder for
the Administrator’s actions or omissions in discharging its
responsibilities under this Article II other than for any
direct damage resulting from its failure to exercise that degree
of ordinary care it exercises in the conduct and management of
its own affairs. In no event shall the Administrator have any
liability for consequential damages.
Section 2.03. Realization Upon Defaulted
Mortgages. With respect to each PC Pool, unless
the Administrator deems that another course of action (e.g.,
charge-off) would be in the best economic interest of the
Holders, the Administrator (or its authorized designee or
representative) shall, as soon as practicable, foreclose upon
(or otherwise comparably convert the ownership of) any real
property securing a Mortgage which comes into and continues in
default and as to which no satisfactory arrangements can be made
for collection of delinquent payments. In connection with such
foreclosure or conversion, the Administrator (or its authorized
designee or representative) shall follow such practices or
procedures as it deems necessary or advisable and consistent
with general mortgage servicing standards.
Section 2.04. Automatic Acceleration and Assumptions.
(a) With respect to each PC Pool, to the extent provided in
the Guide, the Administrator shall enforce the terms of each
applicable Mortgage that gives the mortgagee the right to demand
full payment of the unpaid principal balance of the Mortgage
upon sale or transfer of the property securing the Mortgage
regardless of the creditworthiness of the transferee (a right of
“automatic acceleration”), subject to applicable state
and federal law and the Administrator’s then-current
servicing policies.
9
(b) With respect to each PC Pool, the Administrator shall
permit the assumption by a new mortgagor of an FHA/VA Mortgage
upon the sale or transfer of the underlying property, as
required by applicable regulations. Any such assumption shall be
in accordance with applicable regulations, policies, procedures
and credit requirements and shall not result in loss or
impairment of any insurance or guaranty.
Section 2.05. Prepayment
Penalties. Unless otherwise provided in the Pool
Supplement for a PC Pool, the related Holders shall not be
entitled to receive any prepayment penalties, assumption fees or
other fees charged on the Mortgages included in such PC Pool,
and either the related servicer or the Administrator shall
retain such amounts.
Section 2.06. Mortgage Insurance and Guarantees.
(a) With respect to each PC Pool, if a Conventional
Mortgage is insured by a mortgage insurer and the mortgage
insurance policy is an asset of such PC Pool, the related
Holders acknowledge that the insurer shall have no obligation to
recognize or deal with any Person other than the Administrator,
the Trustee, or their respective authorized designees or
representatives regarding the mortgagee’s rights, benefits
and obligations under the related insurance contract.
(b) With respect to each PC Pool, each FHA/VA Mortgage
shall have in full force and effect a certificate or other
satisfactory evidence of insurance or guaranty, as the case may
be, as may be issued by the applicable government agency from
time to time. None of these agencies has any obligation to
recognize or deal with any Person other than the Administrator,
the Trustee, or their respective authorized designees or
representatives with regard to the rights, benefits and
obligations of the mortgagee under the contract of insurance or
guaranty relating to each FHA/VA Mortgage included in such PC
Pool.
ARTICLE III
Distributions
to Holders; Guarantees
Section 3.01. Monthly Reporting
Period. For purposes of this Agreement with
respect to any PC Pool, any payment or any event with respect to
any Mortgage included in such PC Pool that is reported to the
Administrator by the related servicer as having been made or
having occurred within a Monthly Reporting Period shall be
deemed to have been received by the Administrator or to have in
fact occurred within such Monthly Reporting Period used by the
Administrator for such purposes. Payments reported by servicers
include all principal and interest payments made by a borrower,
insurance proceeds, liquidation proceeds and repurchase
proceeds. Events reported by servicers include foreclosure
sales, payments of insurance claims and payments of guarantee
claims.
Section 3.02. Holder’s Undivided Beneficial
Ownership Interest. With respect to each PC Pool,
the Holder of a PC on the Record Date shall be the owner of
record of a pro rata undivided beneficial ownership interest in
the remaining principal balance of the Mortgages in the related
PC Pool as of such date and shall be entitled to interest at the
PC Coupon on such pro rata undivided beneficial ownership
interest, in each case on the related Payment Date. Such pro
rata undivided beneficial ownership interest shall change
accordingly if any Mortgage is added to or removed from such PC
Pool in accordance with this Agreement. A Holder’s pro rata
undivided beneficial ownership interest in the Mortgages
included in a PC Pool is calculated by dividing the original
unpaid principal balance of the Holder’s PC by the original
unpaid principal balance of all the Mortgages in the related PC
Pool.
Section 3.03. Distributions of
Principal. With respect to each PC Pool, the
Administrator, on behalf of the Trustee, shall withdraw from the
Custodial Account and shall distribute to each related Holder
its pro rata share of principal collections with respect to the
Mortgages in such PC Pool, including, if applicable, each
Holder’s pro rata share of the aggregate amount of any
Deferred Interest that has been
10
added to the principal balance of the related Mortgages;
provided, however, that with respect to guarantee
payments, the Guarantor’s obligations herein shall be
subject to its subrogation rights pursuant to Section 3.10.
The Administrator may retain from any prepayment or delinquent
principal payment on any Mortgage, for reimbursement to the
Guarantor, any amount not previously received with respect to
such Mortgage but paid by the Guarantor to the related Holders
under its guarantee. For Mortgages purchased by the Depositor in
exchange for PCs under its MultiLender Swap Program, the
Depositor shall retain principal payments made on such Mortgages
in the amount of any difference between the aggregate unpaid
principal balance of the Mortgages as of delivery by the seller
and the aggregate unpaid principal balance as of the PC Issue
Date, and the Depositor shall purchase additional Mortgages with
such principal payments; such additional Mortgages may or may
not be included in the related PC Pool represented by the PCs
received by the seller.
Section 3.04. Distributions of
Interest. With respect to each PC Pool, the
Administrator, on behalf of the Trustee, shall withdraw from the
Custodial Account and shall distribute to each related Holder
its pro rata share of interest collections with respect to the
Mortgages included in such PC Pool, at a rate equal to the PC
Coupon (excluding, if applicable, each Holder’s pro rata
share of any Deferred Interest that has been added to the
principal balance of the related Mortgages). Interest shall
accrue during the applicable Accrual Periods. The Administrator
may retain from any delinquent interest payment on any Mortgage,
for reimbursement to the Guarantor, any amount not previously
received with respect to such Mortgage but paid by the Guarantor
to the related Holders under its guarantee. With respect to each
PC Pool, a partial month’s interest retained by Xxxxxxx Mac
or remitted to the related Holders with respect to prepayments
shall constitute an adjustment to the fee payable to the
Administrator and the Guarantor pursuant to Section 3.08(a)
for such PC Pool.
Section 3.05. Payments.
(a) With respect to each PC Pool, distributions of
principal and interest on the related PCs shall begin in the
month after issuance for Gold PCs and in the second month after
issuance for ARM PCs. The Administrator, on behalf of the
Trustee, shall calculate, or cause to be calculated, for each PC
the distribution amount for the current calendar month.
(b) On or before each Payment Date, the Administrator, on
behalf of the Trustee, shall instruct the Federal Reserve Banks
to credit payments on PCs from the Custodial Account to the
appropriate Holders’ accounts. The related PC Pool’s
payment obligations shall be met upon transmittal of the
Administrator’s payment order to the Federal Reserve Banks
provided sufficient funds are then on deposit in the Custodial
Account. A Holder shall receive the payment of principal, if
applicable, and interest on each Payment Date on each PC held by
such Holder as of the related Record Date.
(c) The Administrator relies on servicers’ reports of
mortgage activity to prepare the Pool Factors. There may be
delays or errors in processing mortgage information, such as a
servicer’s failure to file an accurate or timely report of
its collections of principal or its having filed a report that
cannot be processed. In these situations the
Administrator’s calculation of scheduled principal to be
made on Gold PCs may not reflect actual payments on the related
Mortgages. The Administrator shall account for and reconcile any
differences as soon as practicable.
(d) The Administrator reserves the right to change the
period during which a servicer may hold funds prior to payment
to the Administrator, as well as the period for which servicers
report payments to the Administrator, including adjustments to
the Monthly Reporting Period. Either change may change the time
at which prepayments are distributed to Holders. Any such
change, however, shall not impair Holders’ rights to
payments as otherwise provided in this Section.
(e) The Administrator shall maintain one or more accounts
(together, the “Custodial Account”), segregated from
the general funds of Xxxxxxx Mac, in its corporate capacity, for
the deposit of collections of
11
principal (including full and partial principal prepayments) and
interest received from or advanced by the servicers in respect
of the Mortgages. Mortgage collections in respect of the PC
Pools established by Xxxxxxx Mac under this Agreement or trust
funds established by Xxxxxxx Mac pursuant to any other trust
agreements may be commingled in the Custodial Account, provided
that the Administrator keeps, or causes to be kept, separate
records of funds with respect to each such PC Pool and other
trust fund. Collections due to Xxxxxxx Mac, in its corporate
capacity as owner of mortgages held in its portfolio, may also
be commingled in the Custodial Account, provided that the
Administrator shall withdraw such amounts for remittance to
Xxxxxxx Mac on a monthly basis. Funds on deposit in the
Custodial Account may be invested by the Administrator in
Eligible Investments. Investment earnings on deposits in the
Custodial Account shall be for the benefit of the Administrator,
and any losses on such investments shall be paid by the
Administrator. On each Payment Date, amounts on deposit in the
Custodial Account shall be withdrawn upon the order of the
Administrator, on behalf of the Trustee, for the purpose of
making distributions to the related Holders, in accordance with
this Agreement.
Section 3.06. Pool Factors.
(a) The Administrator, on behalf of the Trustee, shall
calculate and make payments to Holders on each Payment Date
based on the monthly Pool Factors (including Negative
Amortization Factors) until such time as the Administrator
determines that a more accurate and practicable method for
calculating such payments is available and implements that
method. Pursuant to Section 7.05(e), the Administrator may
modify the Pool Factor methodology from time to time, without
the consent of Holders. With respect to each PC Pool, the
Administrator, on behalf of the Trustee, shall do the following:
(i) The Administrator shall publish or cause to be
published for each month a Pool Factor with respect to each PC
Pool. Beginning in the month after formation of a PC Pool, Pool
Factors shall be published on or about the fifth Business Day of
the month, which Pool Factors may reflect prepayments reported
to the Administrator after the end of the related Monthly
Reporting Period and before the publication of the applicable
Pool Factors. However, the Administrator may, in its own
discretion, publish Pool Factors on any other Business Day. The
Pool Factor for the month in which the PC Pool is established is
1.00000000 and need not be published.
(ii) The Administrator shall distribute principal each
month to a Holder of a Gold PC in an amount equal to such
Holder’s pro rata share of such principal, calculated by
multiplying the original principal balance of the Gold PC by the
difference between its Pool Factors for the preceding and
current months.
(iii) The Administrator shall distribute principal each
month to a Holder of an ARM PC in an amount equal to such
Holder’s pro rata share of such principal, calculated by
multiplying the original principal balance of the ARM PC by the
difference between its Pool Factors for the two preceding months.
(iv) The Administrator shall distribute interest each month
in arrears to a Holder (assuming no Deferred Interest) in an
amount equal to 1/12th of the applicable PC Coupon
multiplied by such Holder’s pro rata share of principal,
calculated by multiplying the original principal balance of such
Holder’s PC by the preceding month’s Pool Factor for
Gold PCs or by the second preceding month’s Pool Factor for
ARM PCs.
(v) For any month that Deferred Interest has accrued on a
Deferred Interest PC, the Administrator shall distribute
principal (if any is due) to a Holder in an amount equal to such
Holder’s pro rata share of principal, calculated by
(A) subtracting the preceding month’s Pool Factor from
the second preceding month’s Pool Factor, (B) adding
to the difference the Negative Amortization Factor for the
preceding month and (C) multiplying the resulting sum by
the original PC principal balance. The interest payment on the
Deferred Interest PC in that month shall be
(i) 1/12th of the PC Coupon
12
multiplied by (ii) the original principal balance of the
Holder’s PC multiplied by (iii) the preceding month’s
Pool Factor minus the preceding month’s Negative
Amortization Factor.
(b) With respect to each PC Pool, a Pool Factor shall
reflect prepayments reported for the applicable Monthly
Reporting Period. The Administrator, on behalf of the Trustee,
may also, in its discretion, reflect in a Pool Factor any
prepayments reported after the end of the applicable Monthly
Reporting Period. To the extent a given Pool Factor (adjusted as
necessary for payments made pursuant to the Guarantor’s
guarantee of timely payment of scheduled principal on Gold PCs)
does not reflect the actual unpaid principal balance of the
related Mortgages, the Administrator shall account for any
difference by adjusting subsequent Pool Factors as soon as
practicable.
(c) In the case of a PC Pool that is comprised of ARMs, a
Pool Factor shall be based upon the unpaid principal balance of
the related Mortgages that servicers report to the Administrator
for the Monthly Reporting Period that ended in the second month
preceding the month in which the Pool Factor is published. The
Administrator, on behalf of the Trustee, may also, in its
discretion, include as part of the aggregate principal payment
in any month any prepayments received after the Monthly
Reporting Period that ended in the second month preceding the
month in which the Pool Factor is published. To the extent a
given Pool Factor does not reflect the actual aggregate unpaid
principal balance of the Mortgages, the Administrator shall
account for any difference by adjusting subsequent Pool Factors
as soon as practicable.
(d) The Pool Factor method for a PC Pool may affect the
timing of receipt of payments by related Holders but shall not
affect the Guarantor’s guarantee with respect to such PC
Pool, as set forth in Section 3.09. The Guarantor’s
guarantee shall not be affected by the implementation of any
different method for calculating and paying principal and
interest for any PC Pool, as permitted by this Section 3.06.
Section 3.07. Servicing Fees; Retained Interest.
(a) To the extent provided by contractual arrangement with
the Administrator, with respect to each PC Pool, the related
servicer of each Mortgage included in such PC Pool shall be
entitled to retain each month, as a servicing fee, any interest
payable by the borrower on a Mortgage that exceeds the
servicer’s required remittance with respect to such
Mortgage. Each servicer is required to pay all expenses incurred
by it in connection with its servicing activities and shall not
be entitled to reimbursement for those expenses, except as
provided in Section 3.08(c). If a servicer advances any
principal
and/or
interest on a Mortgage to the Administrator prior to the receipt
of such funds from the borrower, the servicer may retain
(i) from prepayments or collections of delinquent principal
on such Mortgage any payments of principal so advanced, or
(ii) from collections of delinquent interest on such
Mortgage any payments of interest so advanced. To the extent
permitted by its servicing agreement, the servicer is entitled
to retain as additional compensation certain incidental fees
related to Mortgages it services.
(b) With respect to a PC Pool, pursuant to the related
Purchase Documents, a seller may retain each month as extra
compensation a fixed amount of interest on a Mortgage included
in such PC Pool. In such event, the related servicer shall
retain each month as a servicing fee the excess of any interest
payable by the borrower on such Mortgage (less the seller’s
retained interest amount) over the servicer’s required
remittance with respect to such Mortgage.
Section 3.08. Administration Fee; Guarantee Fee.
(a) Subject to any adjustments required by
Section 3.04, with respect to any PC Pool, the
Administrator and the Guarantor shall be entitled to receive
from monthly interest payments on each related Mortgage a fee
(to be allocated between the Administrator and the Guarantor as
they may agree) equal to the excess of any interest received by
the Administrator from the servicer over the amount of interest
payable to the related Holders; provided, however, that
the aggregate fee amount shall be automatically adjusted with
respect to each PC Pool to the extent a Pool Factor does not
reflect the unpaid principal
13
balance of the Mortgages. Any such adjustment shall equal the
difference between (i) interest at the applicable PC Coupon
computed on the aggregate unpaid principal balance of the
Mortgages for such month based on monthly principal payments
actually received by the Administrator and (ii) interest at
the applicable PC Coupon computed on the remaining balance of
the Mortgages included in the PC Pool derived from the Pool
Factor. The Administrator shall (i) withdraw the aggregate
fee amount from the Custodial Account prior to distributions to
the related Holders, (ii) retain its portion of the fee for
the Administrator’s own account and (iii) remit the
remaining portion of the fee to the Guarantor as the guarantee
fee. In addition, the Administrator is entitled to retain as
additional compensation certain incidental fees on the Mortgages
as provided in Section 2.05 and certain investment earnings
as provided in Section 3.05(e).
(b) The Depositor shall pay all expenses incurred in
connection with the transfer of the Mortgages, the establishment
and administration of each PC Pool and the issuance of the PCs.
Any amounts (including attorney’s fees) expended by the
Trustee or the Administrator (or the servicers on the
Administrator’s behalf) for the protection, preservation or
maintenance of the Mortgages, or of the real property securing
the Mortgages, or of property received in liquidation of or
realization upon the Mortgages, shall be expenses to be borne
pro rata by the Administrator and the Holders in accordance with
their interests in each Mortgage. The Administrator, on behalf
of the Trustee, may retain an amount sufficient to pay the
portion of such expenses borne pro rata by the Depositor and the
Holders from payments otherwise due to Holders, which may affect
the timing of receipt of payments by Holders but shall not
affect the Guarantor’s obligations under Section 3.09.
(c) The Administrator shall reimburse a servicer for any
amount (including attorney’s fees) it expends (on the
Administrator’s behalf and with its approval) for the
protection, preservation or maintenance of the Mortgages, or of
the real property securing the Mortgages, or of property
received in liquidation of or realization upon the Mortgages.
Such expenses shall be reimbursable to the servicer from the
assets of the related PC Pool, to the extent provided in the
Guide.
(d) Any fees and expenses described above shall not affect
the Guarantor’s guarantee with respect to any PC Pool, as
set forth in Section 3.09.
Section 3.09. Guarantees.
(a) With respect to each PC Pool, the Guarantor guarantees
to the Trustee and to each Holder of a PC:
(i) the timely payment of interest at the applicable PC
Coupon;
(ii) the full and final payment of principal on the
underlying Mortgages on or before the Payment Date that falls
(A) in the month of its Final Payment Date, for Gold PCs,
or (B) in the month after its Final Payment Date, for ARM
PCs; and
(iii) for Gold PCs only, the timely payment of scheduled
principal on the underlying Mortgages.
In the case of Deferred Interest PCs, the Guarantor’s
guarantee of principal includes, and its guarantee of interest
excludes, any Deferred Interest added to the principal balances
of the related Mortgages. The Guarantor shall make payments of
any guaranteed amounts by transfer to the Custodial Account for
distribution to the related Holders, in accordance with Sections
3.03 and 3.04. The guarantees pursuant to this Section will
inure to the benefit of each PC Pool and its related Holders,
and shall be enforceable by the Trustee of that PC Pool and by
such Holders, as provided in Article V of this Agreement.
(b) The Guarantor shall compute guaranteed scheduled
monthly principal payments on any Gold PC, subject to any
applicable adjustments, in accordance with procedures adopted by
the Guarantor from time to time. With respect to each PC Pool,
any payment the Guarantor makes to the Administrator, on behalf
14
of the Trustee, on account of the Guarantor’s guarantee of
scheduled principal payments shall be considered to be a payment
of principal for purposes of calculating the Pool Factor for
such PC Pool and the Holder’s pro rata share of the
remaining unpaid principal balance of the related Mortgages.
(c) The Guarantor’s guarantees shall continue to be
effective or shall be reinstated (i) in the event that any
principal or interest payment made to a Holder is for any reason
returned by the Holder pursuant to an order, decree or judgment
of any court of competent jurisdiction that the Holder was not
entitled to retain such payment pursuant to this Agreement and
(ii) notwithstanding any provision hereof permitting fees,
expenses, indemnities or other amounts to be paid from the
assets of any PC Pool.
Section 3.10. Subrogation. With respect
to each PC Pool, the Guarantor shall be subrogated to all the
rights, interests, remedies, powers and privileges of each
related Holder in respect of any Mortgage included in such PC
Pool on which it has made guarantee payments of principal
and/or
interest to the extent of such payments. Nothing in this Section
shall impair the Guarantor’s right to receive distributions
in its capacity as Holder, if it is a Holder of any PCs.
Section 3.11. Termination Upon Final
Payment. Each PC Pool is irrevocable and will
terminate only in accordance with the terms of this Agreement.
Except as provided in Sections 3.05(e), 6.06 and 7.01, with
respect to each PC Pool, Xxxxxxx Mac’s and the
Trustee’s obligations and responsibilities under this
Agreement shall terminate as to a PC Pool and its Holders upon
(i) the full payment to such Holders of all principal and
interest due to the Holders based on the Pool Factors or by
reason of the Guarantor’s guarantees or (ii) the
payment to the Holder of all amounts held by Xxxxxxx Mac and the
Trustee, respectively, and required to be paid hereunder;
provided, however, that in no event shall any PC Pool
created hereby continue beyond the expiration of 21 years
from the death of the survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court
of St. James’s, living on the date hereof.
Section 3.12. Effect of Final Payment
Date. The actual final payment on a PC may occur
prior to the Payment Date specified in Section 3.09(a)(ii)
due to prepayments of principal, including prepayments made in
connection with the repurchase of any Mortgage from the related
PC Pool.
Section 3.13. Payment Error
Corrections. In the event of a principal or
interest payment error, the Administrator, in its sole
discretion, may effect corrections by the adjustment of payments
to be made on future Payment Dates or in such other manner as it
deems appropriate.
ARTICLE IV
PCs
Section 4.01. Form and
Denominations. With respect to each PC Pool, the
principal balances, PC Coupons and other characteristics of the
PCs to be issued shall be specified in the related Pool
Supplement. Delivery of the PCs of a PC Pool shall constitute
the issuance of the PCs for that PC Pool. PCs shall be issued,
held and transferable only on the book-entry system of the
Federal Reserve Banks in minimum original principal amounts of
$1,000 and additional increments of $1. PCs shall at all times
remain on deposit with a Federal Reserve Bank in accordance with
the provisions of the Book-Entry Rules. A Federal Reserve Bank
will maintain a book-entry recordkeeping system for all
transactions in PCs with respect to Holders.
Section 4.02. Transfer of PCs. PCs may be
transferred only in minimum original principal amounts of $1,000
and additional increments of $1. PCs may not be transferred if,
as a result of the transfer, the
15
transferor or the new Holder would have on deposit in its
account PCs of the same issue with an original principal amount
of less than $1,000. The transfer, exchange or pledge of PCs
shall be governed by the fiscal agency agreement between Xxxxxxx
Mac and a Federal Reserve Bank, the Book-Entry Rules and such
other procedures as shall be agreed upon from time to time by
Xxxxxxx Mac and a Federal Reserve Bank. A Federal Reserve Bank
shall act only upon the instructions of the Holder in recording
transfers of a PC. A charge may be made for any transfer of a PC
and shall be made for any tax or other governmental charge
imposed in connection with a transfer of a PC. Xxxxxxx Mac
hereby assigns to the Trustee Xxxxxxx Mac’s rights under
each fiscal agency agreement with respect to PCs issued by any
PC Pool.
Section 4.03. Record Date. The Record
Date for each Payment Date shall be the close of business on the
last day of the preceding month for Gold PCs and the second
preceding month for ARM PCs. A Holder of a PC on the books and
records of a Federal Reserve Bank on the Record Date shall be
entitled to payment of principal and interest on the related
Payment Date. A transfer of a PC made on or before the Record
Date in a month shall be recognized as effective as of the first
day of such month.
ARTICLE V
Remedies
Section 5.01. Events of Default. With
respect to each PC Pool, an “Event of Default” means
any one of the following events:
(a) Default by the Guarantor or the Administrator in the
payment of interest or principal to the related Holders as and
when the same shall become due and payable as provided in this
Agreement, and the continuance of such default for a period of
30 days.
(b) Failure by the Guarantor or the Administrator to
observe or perform any other covenants of this Agreement
relating to their respective obligations, and the continuance of
such failure for a period of 60 days after the date of
receipt by such party of written notice of such failure and a
demand for remedy by the affected Holders representing not less
than 65 percent of the remaining principal balance of any
affected PC Pool.
(c) The entry by any court having jurisdiction over the
Guarantor or the Administrator of a decree or order for relief
in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
for the appointment of a receiver, liquidator, assignee,
custodian or sequestrator (or other similar official) of the
Guarantor or the Administrator or for any substantial part of
its property, or for the winding up or liquidation of its
affairs, if such decree or order remains unstayed and in effect
for a period of 60 consecutive days.
(d) Commencement by the Guarantor or the Administrator of a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent by the
Guarantor or the Administrator to the entry of an order for
relief in an involuntary case under any such law, or its consent
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Guarantor or the Administrator or
for any substantial part of their respective properties, or any
general assignment made by the Guarantor or the Administrator
for the benefit of creditors, or failure by the Guarantor or the
Administrator generally to pay their debts as they become due.
The appointment of a conservator (or other similar official) by
a regulator having jurisdiction over the Guarantor or the
Administrator, whether or not such party consents to such
appointment, shall not constitute an Event of Default.
16
Section 5.02. Remedies.
(a) If an Event of Default occurs and is continuing with
respect to a PC Pool, the Holders of PCs representing a majority
of the remaining principal balance of such PC Pool may, by
written notice to Xxxxxxx Mac, remove Xxxxxxx Mac as
Administrator and nominate its successor under this Agreement
with respect to such PC Pool. The nominee shall be deemed
appointed as Xxxxxxx Mac’s successor as Administrator
unless Xxxxxxx Mac objects within 10 days after such
nomination. Upon such objection:
(i) The Administrator may petition any court of competent
jurisdiction for the appointment of its successor; or
(ii) Any bona fide Holder that has been a Holder for at
least six months may, on behalf of such Holder and all others
similarly situated, petition any such court for appointment of
the Administrator’s successor.
(b) If a successor Administrator is appointed, the
Administrator shall submit to its successor a complete written
report and accounting of the Mortgages in the affected PC Pool
and shall take all other steps necessary or desirable to
transfer its interest in and administration of such PC Pool to
its successor.
(c) Subject to the Xxxxxxx Mac Act, a successor may take
any action with respect to the Mortgages as may be reasonable
and appropriate in the circumstances. Prior to the designation
of a successor, the Holders of PCs representing a majority of
the remaining principal balance of any affected PC Pool may
waive any past or current Event of Default.
(d) Appointment of a successor shall not relieve Xxxxxxx
Mac, in its capacity as Guarantor, of its guarantee obligations
as set forth in this Agreement.
Section 5.03. Limitation on Suits by Holders.
(a) With respect to any PC Pool, except as provided in
Section 5.02, no Holder shall have any right to institute
any action or proceeding at law or in equity or in bankruptcy or
otherwise or seek any other remedy whatsoever against Xxxxxxx
Mac or the Trustee with respect to this Agreement or the related
PCs or Mortgages, unless:
(i) Such Holder previously has given the Trustee written
notice of an Event of Default and the continuance thereof;
(ii) The Holders of PCs representing a majority of the
remaining principal balance of any affected PC Pool have made a
written request to the Trustee to institute an action or
proceeding in its own name and have offered the Trustee
reasonable indemnity against the costs, expenses and liabilities
to be incurred;
(iii) The Trustee has failed to institute any such action
or proceeding for 60 days after its receipt of the written
notice, request and offer of indemnity described above; and
(iv) The Trustee has not received from such Holders any
direction inconsistent with the written request described above
during the
60-day
period.
(b) No Holder shall have any right under this Agreement to
prejudice the rights of any other Holder, to obtain or seek
preference or priority over any other Holder or to enforce any
right under this Agreement, except for the ratable and common
benefit of all Holders of PCs representing interests in any
affected PC Pool.
17
(c) For the protection and enforcement of the provisions of
this Section, Xxxxxxx Mac, the Trustee and each and every Holder
shall be entitled to such relief as can be given either at law
or in equity. Notwithstanding the foregoing, no Holder’s
right to receive payment (or to institute suit to enforce
payment) of principal and interest as provided herein on or
after the due date of such payment shall be impaired or affected
without the consent of the Holder.
ARTICLE VI
Trustee
Section 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing
with respect to a PC Pool, the Trustee shall exercise the rights
and powers vested in it by this Agreement and use the same
degree of care and skill in its exercise as a prudent person
would exercise or use under the circumstances in the conduct of
such person’s own affairs.
(b) Except during the continuance of an Event of Default,
the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement and shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement and
no implied covenants or obligations shall be read into this
Agreement against the Trustee.
(c) The Trustee and its directors, officers, employees and
agents may not be protected from liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of their respective duties or by
reason of reckless disregard of obligations and duties under
this Agreement, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any action taken,
or not taken, by the Trustee in good faith pursuant to this
Agreement or for errors in judgment; and
(iii) the Trustee shall not be required to take notice or
be deemed to have notice or knowledge of any default or Event of
Default, unless the Trustee obtains actual knowledge or written
notice of such default or Event of Default. In the absence of
such actual knowledge or notice, the Trustee may conclusively
assume that there is no default or Event of Default.
(d) Every provision of this Agreement shall be subject to
the provisions of this Section and Section 6.02.
(e) The Trustee shall not be liable for indebtedness
evidenced by or arising under this Agreement, including
principal of or interest on the PCs, or interest on any money
received by it except as the Trustee may agree in writing.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law
or the terms of this Agreement.
(g) No provision of this Agreement shall require the
Trustee to expend, advance or risk its own funds or otherwise
incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
18
(h) The Trustee may, but shall not be obligated to,
undertake any legal action that it deems necessary or desirable
in the interest of Holders. The Trustee may be reimbursed for
the legal expenses and costs of such action from the assets of
the related PC Pool.
Section 6.02. Certain Matters Affecting the Trustee.
(a) The Trustee, and any director, officer, employee or
agent of the Trustee may rely in good faith on any certificate,
opinion or other document of any kind which, prima facie, is
properly executed and submitted by any appropriate Person
respecting any matters arising hereunder. The Trustee may rely
on any such documents believed by it to be genuine and to have
been signed or presented by the proper Person and on their face
conforming to the requirements of this Agreement. The Trustee
need not investigate any fact or matter stated in such documents.
(b) Before the Trustee acts or refrains from acting, it may
require an officer’s certificate or an opinion of counsel,
which shall not be at the expense of the Trustee. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on an officer’s certificate or
opinion of counsel. The right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be
construed as a duty and the Trustee shall not be answerable for
other than its willful misfeasance, bad faith or gross
negligence in the performance of such act.
(c) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys or a custodian or nominee.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, that the
Trustee’s conduct does not constitute willful misfeasance,
bad faith or gross negligence. In no event shall the Trustee
have any liability for consequential damages.
(e) The Trustee may consult with and rely on the advice of
counsel, accountants and other advisors and shall not be liable
for errors in judgment or for anything it does or does not do in
good faith if it so relies. Any opinion of counsel with respect
to legal matters relating to this Agreement and the PCs shall be
full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with any opinion of such counsel.
(f) Any fees, expenses and indemnities payable from the
assets of any PC Pool to Xxxxxxx Mac, in its capacity as
Trustee, in the performance of its duties and obligations
hereunder shall not affect Xxxxxxx Mac’s guarantee with
respect to that PC Pool, as set forth in Section 3.09.
Section 6.03. Trustee’s
Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy
of this Agreement, the assets of the PC Pool or the PCs.
Section 6.04. Trustee May Own
PCs. Subject to Section 7.06, the Trustee in
its individual or any other capacity may become the owner or
pledgee of PCs with the same rights as it would have if it were
not the Trustee.
Section 6.05. Indemnity. Each PC Pool
shall indemnify the Trustee and the Trustee’s employees,
directors, officers and agents, as provided in this Agreement,
against any and all claims, losses, liabilities or expenses
(including attorneys’ fees) incurred by it in connection
with the administration of this trust and the performance of its
duties under this Agreement (to the extent not previously
reimbursed above), including, without limitation, the execution
and filing of any federal or state tax returns and information
returns and being the mortgagee of record with respect to the
related Mortgages. The Trustee shall notify the Administrator
promptly of any claim for which it may seek indemnity. Failure
by the Trustee to so
19
notify the Administrator shall not relieve the related PC Pool
of its obligations hereunder. A PC Pool shall not be required to
reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee’s
own willful misfeasance, bad faith or gross negligence.
The Trustee’s rights pursuant to this Section shall survive
the discharge of this Agreement.
Section 6.06. Replacement of Trustee. The
Trustee may resign at any time. Any successor Trustee shall
resign if it ceases to be eligible in accordance with the
provisions of Section 6.09. In either case, the resignation
of the Trustee shall become effective, and the resigning Trustee
shall be discharged from its obligations with respect to the PC
Pools created under this Agreement by giving 90 days’
written notice of the resignation to the Depositor, the
Guarantor and the Administrator and upon the effectiveness of an
appointment of a successor Trustee, which may be as of a date
prior to the end of the
90-day
period. Upon receiving such notice of resignation, the Depositor
shall promptly appoint one or more successor Trustees by written
instrument, one copy of which is delivered to the resigning
Trustee and one copy of which is delivered to the successor
Trustee. The successor Trustee need not be the same Person for
all PC Pools. If no successor Trustee has been appointed for a
PC Pool, or one that has been appointed has not accepted the
appointment within 90 days after giving such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
Prior to an Event of Default, or if an Event of Default has
occurred and has been cured with respect to a PC Pool, Xxxxxxx
Mac cannot be removed as Trustee with respect to that PC Pool.
If an Event of Default has occurred and is continuing while
Xxxxxxx Mac is the Trustee, at the direction of Holders of PCs
representing a majority of the remaining principal balance of
such PC Pool, Xxxxxxx Mac shall resign or be removed as Trustee,
and to the extent permitted by law, all of the rights and
obligations of the Trustee with respect to the related PC Pool
only, will be terminated by notifying the Trustee in writing.
Holders of PCs representing a majority of the remaining
principal balance of the PC Pool will then be authorized to name
and appoint one or more successor Trustees. Notwithstanding the
termination of the Trustee, its liability under this Agreement
and arising prior to such termination shall survive such
termination.
If a successor Trustee is serving as the Trustee, the following
events are “Trustee Events of Default” with respect to
a PC Pool:
(i) the Trustee fails to comply with Section 6.09;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of
the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
If at any time a Trustee Event of Default has occurred and is
continuing, the Guarantor (or if an Event of Default has
occurred and is continuing, the Depositor) may, and if directed
by Holders of PCs representing a majority of the remaining
principal balance of such PC Pool, shall, remove the Trustee as
to such PC pool and appoint a successor Trustee by written
instrument, one copy of which shall be delivered to the Trustee
so removed and one copy of which shall be delivered to the
successor Trustee, and the Guarantor (or if an Event of Default
has occurred and is continuing, the Depositor) shall give
written notice of the successor Trustee to the Holders affected
by the succession. Notwithstanding the termination of the
Trustee, its liability under this Agreement arising prior to
such termination will survive such termination.
If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the
Depositor shall promptly appoint a successor Trustee that
satisfies the eligibility requirements of Section 6.09.
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The retiring Trustee agrees to cooperate with the Depositor and
any successor Trustee in effecting the termination of the
retiring Trustee’s responsibilities and rights hereunder
and shall promptly provide such successor Trustee all documents
and records reasonably requested by it to enable it to assume
the Trustee’s functions hereunder.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Depositor, the
Guarantor and the Administrator. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties
of the Trustee under this Agreement with respect to such PC
Pool. The successor Trustee shall mail a notice of its
succession to the related Holders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the
successor Trustee.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring
Trustee or the Depositor may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
Section 6.07. Successor Trustee By
Merger. If a successor Trustee consolidates with,
merges or converts into, or transfers all or substantially all
its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor
Trustee; provided, that such corporation or banking association
shall be otherwise qualified and eligible under
Section 6.09.
Section 6.08. Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding any other provisions of this Agreement,
at any time, for the purpose of meeting any legal requirement of
any jurisdiction in which any part of a PC Pool may at the time
be located, the Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of such PC Pool and to vest in such
Person or Persons, in such capacity and for the benefit of the
related Holders, such title to such PC Pool, or any part
thereof, and, subject to the other provisions of this Section,
such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.09
and no notice to the related Holders of the appointment of any
co-trustee or separate trustee shall be required under
Section 6.06 hereof.
(b) With respect to each PC Pool, every separate trustee
and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular
act or acts are to be performed 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 related PC Pool or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee
hereunder; and
21
(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-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 VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee.
(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 6.09. Eligibility;
Disqualification. Xxxxxxx Mac is eligible to act
as the Trustee and is initially the Trustee for the PC Pools
created under this Agreement. Any successor to Xxxxxxx Mac
(i) at the time of its appointment as Trustee, must be
reasonably acceptable to Xxxxxxx Mac and (ii) must be
organized as a corporation or association doing business under
the laws of the United States or any State thereof, be
authorized under such laws to exercise corporate trust powers,
have combined capital and surplus of at least $50,000,000 and be
subject to supervision or examination by federal or state
financial regulatory authorities. If any successor Trustee shall
cease to satisfy the eligibility requirements set forth in
(ii) above, that successor Trustee shall resign immediately
in the manner and with the effect specified in Section 6.06.
ARTICLE VII
Miscellaneous
Provisions
Section 7.01. Annual Statements. Within a
reasonable time after the end of each calendar year, the
Administrator (or its agent) shall furnish to each Holder on any
Record Date during such year information that the Administrator
deems necessary or desirable to enable Holders and beneficial
owners of PCs to prepare their United States federal income tax
returns, if applicable.
Section 7.02. Limitations on
Liability. Neither Xxxxxxx Mac, in its corporate
capacity, nor any of its directors, officers, employees,
authorized designees, representatives or agents (“related
persons”) shall be liable to Holders for any action taken,
or not taken, by them or by a servicer in good faith pursuant to
this Agreement or for errors in judgment. This provision shall
not protect Xxxxxxx Mac or any related person against any
liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and
duties under this Agreement. In no event shall Xxxxxxx Mac or
any related person be liable for any consequential damages.
Xxxxxxx Mac and any related person may rely in good faith on any
document or other communication of any kind properly executed
and submitted by any Person with respect to any matter arising
under this Agreement. Xxxxxxx Mac has no obligation to appear
in, prosecute or defend any legal action which is not incidental
to its duties to service or supervise the servicing of the
Mortgages in accordance with this Agreement and which in its
opinion may involve any expense or liability for Xxxxxxx Mac.
Xxxxxxx Mac may, in its discretion, undertake or participate in
any action it deems necessary or
22
desirable with respect to any Mortgage, this Agreement, the PCs
or the rights and duties of the parties hereto and the interests
of the Holders hereunder. In such event, the legal expenses and
costs of such action and any resulting liability shall be
expenses for the protection, preservation and maintenance of the
Mortgages borne pro rata by Xxxxxxx Mac and Holders as provided
in Section 3.08(b).
Section 7.03. Limitation on Rights of
Holders. The death or incapacity of any Person
having an interest in a PC shall not terminate this Agreement or
any PC Pool. Such death or incapacity shall not entitle the
legal representatives or heirs of such Person, or any Holder for
such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the
related PC Pool, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
Section 7.04. Control by Holders. With
respect to any PC Pool, except as otherwise provided in
Articles V and VI and Sections 7.05 and 7.06, no
Holder shall have any right to vote or to otherwise control in
any manner the operation and management of the Mortgages
included in such PC Pool, or the obligations of the parties
hereto. This Agreement shall not be construed so as to make the
Holders from time to time partners or members of an association.
Holders shall not be liable to any third person by reason of any
action taken by the parties to this Agreement pursuant to any
provision hereof.
Section 7.05. Amendment.
(a) Xxxxxxx Mac and the Trustee may amend this Agreement
(including any related Pool Supplement) from time to time
without the consent of any Holders to (i) cure any
ambiguity or correct or supplement any provision in this
Agreement, provided, however, that any such amendment
shall not have a material adverse effect on any Holder;
(ii) maintain the classification of any PC Pool as a
grantor trust for federal income tax purposes; or
(iii) avoid the imposition of any state or federal tax on a
PC Pool; it being understood that any amendment permitting the
repurchase of a Mortgage by Xxxxxxx Mac due to a delinquency of
less than 120 days, other than in the circumstances
described in Section 1.02(c)(iii), may not be adopted under
this clause (a).
(b) Except as provided in Section 7.05(c), Xxxxxxx Mac
and the Trustee may amend this Agreement as to any PC Pool, with
the consent of Holders representing not less than a majority of
the remaining principal balance of the affected PC Pool.
(c) Xxxxxxx Mac and the Trustee may not amend this
Agreement, without the consent of a Holder, if such amendment
would impair or affect the right of such Holder to receive
payment of principal and interest on or after the due date of
such payment or to institute suit for the enforcement of any
such payment on or after such date.
(d) To the extent that any provisions of this Agreement
differ from the provisions of any Xxxxxxx Mac Mortgage
Participation Certificates Agreement or PC Master
Trust Agreement dated prior to the date of this Agreement,
this Agreement shall be deemed to amend such provisions of the
prior agreement, but only to the extent that Xxxxxxx Mac, under
the terms of such prior agreement, could have effected such
change as an amendment of such prior agreement without the
consent of Holders of PCs thereunder; provided, however,
that the trust declarations and related provisions set forth
in Section 7.05(d) of the PC Master Trust Agreement
dated as of December 31, 2007 are hereby reaffirmed with
respect to each PC Pool created before December 31, 2007.
(e) Notwithstanding any other provision of this Section,
(i) the Administrator (in its own discretion and in its own
interest) and the Trustee (at the Administrator’s
direction) may amend this Agreement to reflect any modification
in the Administrator’s methodology of calculating payments
to Holders, including any modifications described in
Section 3.05(d) and Section 3.06(a) and the manner in
which it distributes prepayments to Holders, (ii) the
Administrator (in its own discretion and in its own interest)
and the Trustee (at the Administrator’s direction) may
amend this Agreement to cure any inconsistency between this
23
Agreement and the provisions of the Guide and (iii) the
Depositor (in its own discretion and in its own interest) and
the Trustee (at the Administrator’s direction) may amend
any Pool Supplement to make the adjustments described in
Section 1.02(b) to the characteristics of the Mortgages to
be transferred to a PC Pool or to the related PCs.
Section 7.06. Voting Rights.
(a) Except as otherwise provided in Section 7.06(b),
in determining whether Holders of the requisite amount of PCs of
a PC Pool have given any request, demand, authorization,
direction, notice, consent or waiver requested or permitted
under this Agreement, any PCs beneficially held by a Transferor
of Mortgages in such PC Pool, or the affiliates or agents of a
Transferor, will be disregarded and deemed not to be
outstanding. In addition, if Xxxxxxx Mac is acting as
Administrator or Trustee and an Event of Default has occurred
and is continuing, any PCs held by Xxxxxxx Mac shall be
disregarded and deemed not to be outstanding for purposes of
exercising the remedies set forth in Section 5.02 and the
second paragraph of Section 6.06.
(b) The first sentence of Subsection 7.06(a) shall not
apply when determining whether Holders of the requisite amount
of PCs of a PC Pool have given any request, demand,
authorization, direction, notice, consent or waiver under this
Agreement (i) in respect of any matter regarding an Event
of Default or a Trustee Event of Default or succession upon such
Event of Default or Trustee Event of Default, (ii) in
accordance with Section 7.05(c) of this Agreement or
(iii) in respect of any matter the outcome of which would
not affect the classification of the transfer of Mortgages by
the Depositor to the related PC Pool as a sale under accounting
principles generally accepted in the United States.
Section 7.07. Persons Deemed Owners. With
respect to each PC Pool, Xxxxxxx Mac, the Trustee, the
Administrator and a Federal Reserve Bank (or any agent of any of
them) may deem and treat the related Holder(s) as the absolute
owner(s) of a PC and the undivided beneficial ownership
interests in the Mortgages included in the related PC Pool for
the purpose of receiving payments and for all other purposes,
and none of Xxxxxxx Mac, the Trustee, the Administrator or a
Federal Reserve Bank (nor any agent of any of them) shall be
affected by any notice to the contrary. All payments made to a
Holder, or upon such Holder’s order, shall be valid, and,
to the extent of the payment, shall satisfy and discharge the
related PC Pool’s payment obligations with respect to the
Holder’s PC. None of Xxxxxxx Mac, the Trustee, the
Administrator or any Federal Reserve Bank shall have any direct
obligation to any beneficial owner unless it is also the Holder
of a PC.
Section 7.08. Governing Law. THIS
AGREEMENT AND THE PARTIES’ RIGHTS AND OBLIGATIONS WITH
RESPECT TO PCs, SHALL BE GOVERNED BY THE LAWS OF THE UNITED
STATES. INSOFAR AS THERE MAY BE NO APPLICABLE PRECEDENT, AND
INSOFAR AS TO DO SO WOULD NOT FRUSTRATE THE PURPOSES OF THE
XXXXXXX MAC ACT OR ANY PROVISION OF THIS AGREEMENT OR THE
TRANSACTIONS GOVERNED HEREBY, THE LOCAL LAWS OF THE STATE OF NEW
YORK SHALL BE DEEMED REFLECTIVE OF THE LAWS OF THE UNITED STATES.
Section 7.09. Grantor
Trust Status. No provision in this Agreement
shall be construed to xxxxx Xxxxxxx Mac, the Trustee or any
other Person authority to act in any manner which would cause a
PC Pool not to be treated as a grantor trust for federal income
tax purposes.
Section 7.10. Payments Due on Non-Business
Days. If the date fixed for any payment on any PC
is a day that is not a Business Day, then such payment shall be
made on the next succeeding Business Day, with the same force
and effect as though made on the date fixed for such payment,
and no interest shall accrue for the period after such date.
24
Section 7.11. Successors. This Agreement
shall be binding upon and inure to the benefit of the parties
and their respective successors, including any successor by
operation of law, and permitted assigns.
Section 7.12. Headings. The headings in
this Agreement are for convenience only and shall not affect the
construction of this Agreement.
Section 7.13. Notice and Demand.
(a) Any notice, demand or other communication required or
permitted under this Agreement to be given to or served upon any
Holder may be given or served (i) in writing by deposit in
the United States mail, postage prepaid, and addressed to such
Holder as such Holder’s name and address may appear on the
books and records of a Federal Reserve Bank or (ii) by
transmission to such Holder through the communication system of
the Federal Reserve Banks. Any notice, demand or other
communication to or upon a Holder shall be deemed to have been
sufficiently given or made, for all purposes, upon mailing or
transmission.
(b) Any notice, demand or other communication which is
required or permitted to be given to or served under this
Agreement may be given in writing addressed as follows
(i) in the case of Xxxxxxx Mac in its corporate capacity,
to Xxxxxxx Mac, 0000 Xxxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx 00000,
Attention: Executive Vice President — General Counsel
and Secretary and (ii) in the case of the Trustee, to:
Xxxxxxx Mac (as Trustee), 0000 Xxxxx Xxxxxx Xxxxx, XxXxxx,
Xxxxxxxx 00000, Attention: Executive Vice President —
General Counsel and Secretary.
(c) Any notice, demand or other communication to or upon
Xxxxxxx Mac or the Trustee shall be deemed to have been
sufficiently given or made only upon its actual receipt of the
writing.
25
THE SALE OF A PC AND RECEIPT AND ACCEPTANCE OF A PC BY OR ON
BEHALF OF A HOLDER, WITHOUT ANY SIGNATURE OR FURTHER
MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL
INTEREST IN SUCH PC OF ALL THE TERMS AND PROVISIONS OF THIS
AGREEMENT (INCLUDING THE RELATED POOL SUPPLEMENT) AND THE
AGREEMENT OF XXXXXXX MAC, SUCH HOLDER AND SUCH OTHERS THAT THOSE
TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE.
FEDERAL HOME LOAN MORTGAGE CORPORATION,
in its corporate capacity and as Trustee
in its corporate capacity and as Trustee
/s/ Xxxxxx
X. Xxxx
Authorized Signatory
26