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NORWEST ASSET SECURITIES CORPORATION
(Seller)
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Master Servicer)
and
FIRST BANK NATIONAL ASSOCIATION
(Trustee)
POOLING AND SERVICING AGREEMENT
Dated as of August 27, 1996
$383,166,930.66
Mortgage Pass-Through Certificates
Series 1996-4
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE
DEFINITIONS
Section 1.01. Definitions...................................................................................
Section 1.02. Acts of Holders...............................................................................
Section 1.03. Effect of Headings and Table of Contents......................................................
Section 1.04. Benefits of Agreement.........................................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF THE CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans..................................................................
Section 2.02. Acceptance by Trustee.........................................................................
Section 2.03. Representations and Warranties of the Master Servicer and the Seller..........................
Section 2.04. Execution and Delivery of Certificates........................................................
Section 2.05. Designation of Certificates; Designation of Startup Day and Latest Possible Maturity Date....
ARTICLE III
ADMINISTRATION OF THE TRUST ESTATE:
SERVICING OF THE MORTGAGE LOANS1
Section 3.01. Certificate Account...........................................................................
Section 3.02. Permitted Withdrawals from the Certificate Account............................................
Section 3.03. Advances by Master Servicer and Trustee.......................................................
Section 3.04. Trustee to Cooperate; Release of Owner Mortgage Loan Files...................................
Section 3.05. Reports to the Trustee; Annual Compliance Statements..........................................
Section 3.06. Title, Management and Disposition of Any REO Mortgage Loan....................................
Section 3.07. Amendments to Servicing Agreements, Modification of Standard Provisions......................
Section 3.08. Oversight of Servicing........................................................................
Section 3.09. Termination and Substitution of Servicing Agreements..........................................
Section 3.10. 1934 Act Reports..............................................................................
ARTICLE IV
DISTRIBUTIONS IN RESPECT OF CERTIFICATES; PAYMENTS TO CERTIFICATEHOLDERS; STATEMENTS AND REPORTS
Section 4.01. Distributions.................................................................................
Section 4.02. Allocation of Realized Losses.................................................................
Section 4.03. Paying Agent..................................................................................
Section 4.04. Statements to Certificateholders; Report to the Trustee and the Seller.......................
Section 4.05. Reports to Mortgagors and the Internal Revenue Service........................................
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates..............................................................................
Section 5.02. Registration of Transfer and Exchange of Certificates.........................................
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................
Section 5.04. Persons Deemed Owners.........................................................................
Section 5.05. Access to List of Certificateholders' Names and Addresses.....................................
Section 5.06. Maintenance of Office or Agency...............................................................
Section 5.07. Definitive Certificates.......................................................................
Section 5.08. Notices to Clearing Agency....................................................................
ARTICLE VI
THE SELLER AND THE MASTER SERVICER
Section 6.01. Liability of the Seller and the Master Servicer...............................................
Section 6.02. Merger or Consolidation of the Seller or the Master Servicer..................................
Section 6.03. Limitation on Liability of the Seller, the Master Servicer and Others.........................
Section 6.04. Resignation of the Master Servicer............................................................
Section 6.05. Compensation to the Master Servicer...........................................................
Section 6.06. Assignment or Delegation of Duties by Master Servicer.........................................
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.............................................................................
Section 7.02. Other Remedies of Trustee.....................................................................
Section 7.03. Directions by Certificateholders and Duties of Trustee During Event of Default...............
Section 7.04. Action upon Certain Failures of the Master Servicer and upon Event of Default................
Section 7.05. Trustee to Act; Appointment of Successor......................................................
Section 7.06. Notification to Certificateholders............................................................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.............................................................................
Section 8.02. Certain Matters Affecting the Trustee.........................................................
Section 8.03. Trustee not Required to Make Investigation....................................................
Section 8.04. Trustee not Liable for Certificates or Mortgage Loans.........................................
Section 8.05. Trustee May Own Certificates..................................................................
Section 8.06. The Master Servicer to Pay Fees and Expenses..................................................
Section 8.07. Eligibility Requirements......................................................................
Section 8.08. Resignation and Removal.......................................................................
Section 8.09. Successor.....................................................................................
Section 8.10. Merger or Consolidation.......................................................................
Section 8.11. Authenticating Agent..........................................................................
Section 8.12. Separate Trustees and Co-Trustees.............................................................
Section 8.13. Appointment of Custodians.....................................................................
Section 8.14. Tax Matters; Compliance with REMIC Provisions.................................................
Section 8.15. Monthly Advances..............................................................................
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Purchase by the Seller or Liquidation of All Mortgage Loans.................
Section 9.02. Additional Termination Requirements...........................................................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment....................................................................................
Section 10.02. Recordation of Agreement.....................................................................
Section 10.03. Limitation on Rights of Certificateholders...................................................
Section 10.04. Governing Law; Jurisdiction..................................................................
Section 10.05. Notices......................................................................................
Section 10.06. Severability of Provisions...................................................................
Section 10.07. Special Notices to Rating Agencies...........................................................
Section 10.08. Covenant of Seller...........................................................................
Section 10.09. Recharacterization...........................................................................
ARTICLE XI
TERMS FOR CERTIFICATES
Section 11.01. Class A Fixed Pass-Through Rate..............................................................
Section 11.02. Cut-Off Date.................................................................................
Section 11.03. Cut-Off Date Aggregate Principal Balance.....................................................
Section 11.04. Original Class A Percentage..................................................................
Section 11.05. Original Class A Subclass Principal Balances.................................................
Section 11.06. Original Class A Non-PO Principal Balance....................................................
Section 11.07. Original Subordinated Percentage.............................................................
Section 11.08. Original Class M Percentage..................................................................
Section 11.09. Original Class M Principal Balance...........................................................
Section 11.10. Original Class M Fractional Interest.........................................................
Section 11.11. Original Class B-1 Percentage................................................................
Section 11.12. Original Class B-2 Percentage................................................................
Section 11.13. Original Class B-3 Percentage................................................................
Section 11.14. Original Class B-4 Percentage................................................................
Section 11.15. Original Class B-5 Percentage................................................................
Section 11.16. Original Class B Principal Balance...........................................................
Section 11.17. Original Class B Subclass Principal Balances.................................................
Section 11.18. Original Class B-1 Fractional Interest.......................................................
Section 11.19. Original Class B-2 Fractional Interest.......................................................
Section 11.20. Original Class B-3 Fractional Interest.......................................................
Section 11.21. Original Class B-4 Fractional Interest.......................................................
Section 11.22. Closing Date.................................................................................
Section 11.23. Right to Purchase............................................................................
Section 11.24. Wire Transfer Eligibility....................................................................
Section 11.25. Single Certificate...........................................................................
Section 11.26. Servicing Fee Rate...........................................................................
Section 11.27. Master Servicing Fee Rate....................................................................
EXHIBITS
EXHIBIT A-1 - Form of Face of Class A-1 Certificate
EXHIBIT A-2 - Form of Face of Class A-2 Certificate
EXHIBIT A-3 - Form of Face of Class A-3 Certificate
EXHIBIT A-4 - Form of Face of Class A-4 Certificate
EXHIBIT A-5 - Form of Face of Class A-5 Certificate
EXHIBIT A-6 - Form of Face of Class A-6 Certificate
EXHIBIT A-7 - Form of Face of Class A-7 Certificate
EXHIBIT A-8 - Form of Face of Class A-8 Certificate
EXHIBIT A-9 - Form of Face of Class A-9 Certificate
EXHIBIT A-10 - Form of Face of Class A-10 Certificate
EXHIBIT A-11 - Form of Face of Class A-11 Certificate
EXHIBIT A-12 - Form of Face of Class A-12 Certificate
EXHIBIT A-13 - Form of Face of Class A-13 Certificate
EXHIBIT A-14 - Form of Face of Class A-14 Certificate
EXHIBIT A-15 - Form of Face of Class A-15 Certificate
EXHIBIT A-16 - Form of Face of Class A-16 Certificate
EXHIBIT A-R - Form of Face of Class A-R Certificate
EXHIBIT A-LR - Form of Face of Class A-LR Certificate
EXHIBIT B-1 - Form of Face of Class B-1 Certificate
EXHIBIT B-2 - Form of Face of Class B-2 Certificate
EXHIBIT B-3 - Form of Face of Class B-3 Certificate
EXHIBIT B-4 - Form of Face of Class B-4 Certificate
EXHIBIT B-5 - Form of Face of Class B-5 Certificate
EXHIBIT C - Form of Face of Class M Certificate
EXHIBIT D - Form of Reverse of Series 1996-4 Certificates
EXHIBIT E - Custodial Agreement
EXHIBIT F-1 - Schedule of Mortgage Loans Serviced by Norwest Mortgage
from locations other than Frederick, Maryland
EXHIBIT F-2 - Schedule of Mortgage Loans Serviced by Norwest Mortgage in
Frederick Maryland
EXHIBIT F-3 - Schedule of Mortgage Loans Serviced by Other Servicers
EXHIBIT G - Request for Release
EXHIBIT H - Affidavit Pursuant to Section 860E(e)(4) of
the Internal Revenue Code of 1986, as amended,
and for Non-ERISA Investors
EXHIBIT I - Letter from Transferor of Residual Certificates
EXHIBIT J - Transferee's Letter (Class [B-3] [B-4] [B-5] Certificates)
EXHIBIT K - Transferee's Letter (Class [M] [B-1] [B-2] Certificates)
EXHIBIT L - Servicing Agreements
EXHIBIT M - Form of Special Servicing Agreement
This Pooling and Servicing Agreement, dated as of August 27, 1996 executed
by NORWEST ASSET SECURITIES CORPORATION, as Seller, NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master Servicer and FIRST BANK NATIONAL ASSOCIATION, as
Trustee.
WITNESSETH THAT:
In consideration of the mutual agreements herein contained, the Seller, the
Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used herein, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Article.
Accepted Master Servicing Practices: Accepted Master Servicing Practices
shall consist of the customary and usual master servicing practices of prudent
master servicing institutions which service mortgage loans of the same type as
the Mortgage Loans in the jurisdictions in which the related Mortgaged
Properties are located, regardless of the date upon which the related Mortgage
Loans were originated.
Accretion Directed Certificates: Any of the Class A-2 Certificates, Class
A-10 Certificates, Class A-13 Certificates and Class A-16 Certificates.
Accretion Termination Dates: The Class A-11 Accretion Termination Date and
the Class A-12 TAC Accrual Component Accretion Termination Date.
Adjusted Pool Amount: With respect to any Distribution Date, the Cut-Off
Date Aggregate Principal Balance of the Mortgage Loans minus the sum of (i) all
amounts in respect of principal received in respect of the Mortgage Loans
(including, without limitation, amounts received as Monthly Payments, Periodic
Advances, Unscheduled Principal Receipts and Substitution Principal Amounts) and
distributed to Holders of the Certificates on such Distribution Date and all
prior Distribution Dates and (ii) the principal portion of all Realized Losses
(other than Debt Service Reductions) incurred on the Mortgage Loans from the
Cut-Off Date through the end of the month preceding such Distribution Date.
Adjusted Pool Amount (PO Portion): With respect to any Distribution Date,
the sum of the amounts, calculated as follows, with respect to all Outstanding
Mortgage Loans: the product of (i) the PO Fraction for each such Mortgage Loan
and (ii) the remainder of (A) the Cut-Off Date Principal Balance of such
Mortgage Loan minus (B) the sum of (x) all amounts in respect of principal
received in respect of such Mortgage Loan (including, without limitation,
amounts received as Monthly Payments, Periodic Advances, Unscheduled Principal
Receipts and Substitution Principal Amounts) and distributed to Holders of the
Certificates on such Distribution Date and all prior Distribution Dates and (y)
the principal portion of any Realized Loss (other than a Debt Service Reduction)
incurred on such Mortgage Loan from the Cut-Off Date through the end of the
month preceding such Distribution Date.
Adjusted Principal Balance: As to any Distribution Date and the Class M
Certificates or any Class B Subclass, the greater of (A) zero and (B) (i) the
principal balance of such Class or Subclass with respect to such Distribution
Date minus (ii) the Adjustment Amount for such Distribution Date less, with
respect to the Class M Certificates, the Class B Principal Balance or, with
respect to any Class B Subclass, the Class B Subclass Principal Balances for any
Class B Subclasses with higher numerical designations.
Adjustment Amount: For any Distribution Date, the difference between (A)
the sum of the Class A Non-PO Principal Balance, Class A-12 PO Component
Principal Balance, Class M Principal Balance and Class B Principal Balance as of
the related Determination Date and (B) the sum of (i) the sum of the Class A
Non-PO Principal Balance, Class A-12 PO Component Principal Balance, Class M
Principal Balance and Class B Principal Balance as of the Determination Date
succeeding such Distribution Date, (ii) the principal portion of Excess Special
Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses allocated to the
Certificates with respect to such Distribution Date and (iii) the aggregate
amount that would have been distributed to all Classes as principal in
accordance with Section 4.01(a)(i) for such Distribution Date without regard to
the provisos in the definitions of Class M Optimal Principal Amount, Class B-1
Optimal Principal Amount, Class B-2 Optimal Principal Amount, Class B-3 Optimal
Principal Amount, Class B-4 Optimal Principal Amount and Class B-5 Optimal
Principal Amount.
Aggregate Current Bankruptcy Losses: With respect to any Distribution Date,
the sum of all Bankruptcy Losses incurred on any of the Mortgage Loans in the
month preceding the month of such Distribution Date.
Aggregate Current Fraud Losses: With respect to any Distribution Date, the
sum of all Fraud Losses incurred on any of the Mortgage Loans in the month
preceding the month of such Distribution Date.
Aggregate Current Special Hazard Losses: With respect to any Distribution
Date, the sum of all Special Hazard Losses incurred on any of the Mortgage Loans
in the month preceding the month of such Distribution Date.
Aggregate Foreclosure Profits: As to any Distribution Date, the aggregate
amount of Foreclosure Profits with respect to all of the Mortgage Loans.
Agreement: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
Applicable Unscheduled Principal Receipt Period: With respect to the
Mortgage Loans serviced by each Servicer and each of Full Unscheduled Principal
Receipts and Partial Unscheduled Principal Receipts, the Unscheduled Principal
Receipt Period specified on Schedule I hereto, as amended from time to time by
the Master Servicer pursuant to Section 10.01(b) hereof.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 8.11. There shall initially be no Authenticating Agent for
the Certificates.
Available Master Servicer Compensation: As to any Distribution Date, the
sum of (a) the Master Servicing Fee for such Distribution Date, (b) interest
earned through the business day preceding the applicable Distribution Date on
any Prepayments in Full remitted to the Master Servicer and (c) the aggregate
amount of Month End Interest remitted by the Servicers to the Master Servicer
pursuant to the related Servicing Agreements.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction; provided, however, that a Bankruptcy Loss shall not
be deemed a Bankruptcy Loss hereunder so long as the applicable Servicer has
notified the Master Servicer and the Trustee in writing that such Servicer is
diligently pursuing any remedies that may exist in connection with the
representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by such Servicer without giving
effect to any Debt Service Reduction.
Bankruptcy Loss Amount: As of any Distribution Date prior to the first
anniversary of the Cut-Off Date, the Bankruptcy Loss Amount will equal $150,000
minus the aggregate amount of Bankruptcy Losses allocated solely to the Class B
Certificates or, following the reduction of the Class B Principal Balance to
zero, solely to the Class M Certificates in accordance with Section 4.02(a)
since the Cut-Off Date. As of any Distribution Date on or after the first
anniversary of the Cut-Off Date, an amount equal to (1) the lesser of (a) the
Bankruptcy Loss Amount calculated as of the close of business on the Business
Day immediately preceding the most recent anniversary of the Cut-Off Date
coinciding with or preceding such Distribution Date (the "Relevant Anniversary")
and (b) such lesser amount which, as determined on the Relevant Anniversary will
not cause any rated Certificates to be placed on credit review status (other
than for possible upgrading) by either Rating Agency minus (2) the aggregate
amount of Bankruptcy Losses allocated solely to the Class B Certificates or,
following the reduction of the Class B Principal Balance to zero, solely to the
Class M Certificates in accordance with Section 4.02(a) since the Relevant
Anniversary. On and after the Cross-Over Date the Bankruptcy Loss Amount shall
be zero.
Beneficial Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency), as the case may be.
Book-Entry Certificate: Any of the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8
Certificates, Class A-9 Certificates, Class A-10 Certificates, Class A-11
Certificates, Class A-13 Certificates, Class A-14 Certificates, Class A-15
Certificates or Class A-16 Certificates beneficial ownership and transfers of
which shall be evidenced by, and made through, book entries by the Clearing
Agency as described in Section 5.01(b).
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
legal holiday in the City of New York, State of Iowa, State of Maryland, State
of Minnesota or State of Missouri or (iii) a day on which banking institutions
in the City of New York, or the State of Maryland, State of Iowa, State of
Minnesota or State of Missouri are authorized or obligated by law or executive
order to be closed.
Certificate: Any one of the Class A Certificates, Class M Certificates or
Class B Certificates.
Certificate Account: The trust account established and maintained by the
Master Servicer in the name of the Master Servicer on behalf of the Trustee
pursuant to Section 3.01. The Certificate Account shall be an Eligible Account.
Certificate Register and Certificate Registrar: Respectively, the register
maintained pursuant to and the registrar provided for in Section 5.02. The
initial Certificate Registrar is the Trustee.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
the taking of any action under Articles VII or VIII, any Certificate registered
in the name of the Master Servicer, a Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Voting Interest evidenced thereby shall not
be taken into account in determining whether the requisite percentage of
Certificates necessary to effect any such action has been obtained.
Class: All certificates whose form is identical except for (i) variations
in the Percentage Interest evidenced thereby and (ii) in the case of the Class A
Certificates and Class B Certificates, variations in Subclass designation and
other Subclass characteristics.
Class A Certificate: Any one of Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8
Certificates, Class A-9 Certificates, Class A-10 Certificates, Class A-11
Certificates, Class A-12 Certificates, Class A-13 Certificates, Class A-14
Certificates, Class A-15 Certificates, Class A-16 Certificates, Class A-R
Certificate or Class A-LR Certificate.
Class A Certificateholder: The registered holder of a Class A Certificate.
Class A Distribution Amount: As to any Distribution Date, the aggregate
amount distributable to the Subclasses of Class A Certificates pursuant to
Paragraphs first, second, third and fourth of Section 4.01(a)(i) on such
Distribution Date.
Class A Fixed Pass-Through Rate: As to any Distribution Date, the rate per
annum set forth in Section 11.01.
Class A Interest Accrual Amount: As to any Distribution Date, the sum of
the Class A Subclass Interest Accrual Amounts with respect to such Distribution
Date.
Class A Loss Denominator: As to any Determination Date, an amount equal to
the sum of (i) the Class A Subclass Principal Balances of the Class A
Certificates (other than the Class A-11 and Class A-12 Certificates), (ii) the
lesser of the Class A Subclass Principal Balance of the Class A-11 Certificates
and the Original Class A Subclass Principal Balance of the Class A-11
Certificates and (iii) the lesser of the Class A-12 TAC Accrual Component
Principal Balance and the Original Class A-12 TAC Accrual Component Principal
Balance.
Class A Non-PO Optimal Amount: As to any Distribution Date, the sum for
such Distribution Date of (i) the Class A Interest Accrual Amount, (ii) the sum
of the Class A Subclass Unpaid Interest Shortfalls for each Class A Subclass and
(iii) the Class A Non-PO Optimal Principal Amount.
Class A Non-PO Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum, as to each Outstanding Mortgage Loan, of the product of
(x) the Non-PO Fraction with respect to such Mortgage Loan, and (y) the sum of:
(i) the Class A Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class A Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class A Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class A Percentage of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a defective Mortgage
Loan during the month preceding the month in which such Distribution
Date occurs over the unpaid principal balance of such defective
Mortgage Loan, less the amount allocable to the principal portion of
any unreimbursed Periodic Advances previously made by the Servicer,
the Master Servicer or the Trustee in respect of such defective
Mortgage Loan.
Class A Non-PO Principal Balance: As of any date, an amount equal to the
sum of the (i) Class A Subclass Principal Balances for the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7
Certificates, Class A-8 Certificates, Class A-9 Certificates, Class A-10
Certificates, Class A-11 Certificates, Class A-13 Certificates, Class A-14
Certificates, Class A-15 Certificates, Class A-16 Certificates, Class A-R
Certificate and Class A-LR Certificate and (ii) the Component Principal Balance
of the Class A-12 TAC Accrual Component.
Class A Non-PO Principal Amount: As to any Distribution Date, the aggregate
amount distributed in respect of the Class A Subclasses pursuant to Paragraph
third clause (A) of Section 4.01(a)(i).
Class A Non-PO Principal Distribution Amount: As to any Distribution Date,
the sum of (i) the Class A-11 Accrual Distribution Amount, if any, with respect
to such Distribution Date, (ii) the Class A-12 TAC Accrual Component
Distribution Amount, if any, with respect to such Distribution Date and (iii)
the Class A Non-PO Principal Amount with respect to such Distribution Date.
Class A Percentage: As to any Distribution Date occurring on or prior to
the Cross-Over Date, the lesser of (i) 100% and (ii) the percentage obtained by
dividing the Class A Non-PO Principal Balance (determined as of the
Determination Date preceding such Distribution Date) by the Pool Balance (Non-PO
Portion). As to any Distribution Date occurring subsequent to the Cross-Over
Date, 100% or such lesser percentage which will cause the Class A Non-PO
Principal Balance to decline to zero following the distribution made on such
Distribution Date.
Class A Prepayment Percentage: As to any Distribution Date to and including
the Distribution Date in August 2001, 100%. As to any Distribution Date
subsequent to August 2001 to and including the Distribution Date in August 2002,
the Class A Percentage as of such Distribution Date plus 70% of the Subordinated
Percentage as of such Distribution Date. As to any Distribution Date subsequent
to August 2002 to and including the Distribution Date in August 2003, the Class
A Percentage as of such Distribution Date plus 60% of the Subordinated
Percentage as of such Distribution Date. As to any Distribution Date subsequent
to August 2003 to and including the Distribution Date in August 2004, the Class
A Percentage as of such Distribution Date plus 40% of the Subordinated
Percentage as of such Distribution Date. As to any Distribution Date subsequent
to August 2004 to and including the Distribution Date in August 2005, the Class
A Percentage as of such Distribution Date plus 20% of the Subordinated
Percentage as of such Distribution Date. As to any Distribution Date subsequent
to August 2005, the Class A Percentage as of such Distribution Date. The
foregoing is subject to the following: (i) if the aggregate distribution to
Holders of Class A Certificates on any Distribution Date of the Class A
Prepayment Percentage provided above of (a) Unscheduled Principal Receipts
distributable on such Distribution Date would reduce the Class A Non-PO
Principal Balance below zero, the Class A Prepayment Percentage for such
Distribution Date shall be the percentage necessary to bring the Class A Non-PO
Principal Balance to zero and thereafter the Class A Prepayment Percentage shall
be zero and (ii) if the Class A Percentage as of any Distribution Date is
greater than the Original Class A Percentage, the Class A Prepayment Percentage
for such Distribution Date shall be 100%. Notwithstanding the foregoing, with
respect to any Distribution Date on which the following criteria are not met,
the reduction of the Class A Prepayment Percentage described in the second
through sixth sentences of this definition of Class A Prepayment Percentage
shall not be applicable with respect to such Distribution Date. In such event,
the Class A Prepayment Percentage for such Distribution Date will be determined
in accordance with the applicable provision, as set forth in the first through
fifth sentences above, which was actually used to determine the Class A
Prepayment Percentage for the Distribution Date occurring in the August
preceding such Distribution Date (it being understood that for the purposes of
the determination of the Class A Prepayment Percentage for the current
Distribution Date, the current Class A Percentage and Subordinated Percentage
shall be utilized). In order for the reduction referred to in the second through
sixth sentences to be applicable, with respect to any Distribution Date (a) the
average outstanding principal balance on such Distribution Date and for the
preceding five Distribution Dates on the Mortgage Loans that were delinquent 60
days or more (including for this purpose any payments due with respect to
Mortgage Loans in foreclosure and REO Mortgage Loans) must be less than 50% of
the current Class M Principal Balance and the current Class B Principal Balance
and (b) cumulative Realized Losses shall not exceed (1) 30% of the Original
Subordinated Principal Balance if such Distribution Date occurs between and
including September 2001 and August 2002, (2) 35% of the Original Subordinated
Principal Balance if such Distribution Date occurs between and including
September 2002 and August 2003, (3) 40% of the Original Subordinated Principal
Balance if such Distribution Date occurs between and including September 2003
and August 2004, (4) 45% of the Original Subordinated Principal Balance if such
Distribution Date occurs between and including September 2004 and August 2005,
and (5) 50% of the Original Subordinated Principal Balance if such Distribution
Date occurs during or after September 2005. With respect to any Distribution
Date on which the Class A Prepayment Percentage is reduced below the Class A
Prepayment Percentage for the prior Distribution Date, the Master Servicer shall
certify to the Trustee, based upon information provided by each Servicer as to
the Mortgage Loans serviced by it that the criteria set forth in the preceding
sentence are met.
Class A Principal Balance: As of any date, an amount equal to the sum of
the Class A Subclass Principal Balances for the Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8
Certificates, Class A-9 Certificates, Class A-10 Certificates, Class A-11
Certificates, Class A-12 Certificates, Class A-13 Certificates, Class A-14
Certificates, Class A-15 Certificates, Class A-16 Certificates, Class A-R
Certificate and Class A-LR Certificate.
Class A Subclass: Any of the Subclasses of Class A Certificates consisting
of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates,
Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates, Class
A-7 Certificates, Class A-8 Certificates, Class A-9 Certificates, Class A-10
Certificates, Class A-11 Certificates, Class A-12 Certificates, Class A-13
Certificates, Class A-14 Certificates, Class A-15 Certificates, Class A-16
Certificates, Class A-R Certificate and Class A-LR Certificate.
Class A Subclass Distribution Amount: As to any Distribution Date and any
Class A Subclass (other than the Class A-11 and Class A-12 Certificates), the
amount distributable to such Class A Subclass pursuant to Paragraphs first,
second and third clause (A) of Section 4.01(a)(i). As to the Class A-11
Certificates, (i) as to any Distribution Date prior to the Class A-11 Accretion
Termination Date, the amount distributable to the Class A-11 Certificates
pursuant to Paragraph third clause (A) of Section 4.01(a)(i) and (ii) as to any
Distribution Date on or after the Class A-11 Accretion Termination Date, the
amount distributable to the Class A-11 Certificates pursuant to Paragraphs
first, second and third clause (A) of Section 4.01(a)(i). As to the Class A-12
Certificates, the sum of (a) with respect to the Class A-12 TAC Accrual
Component, (i) as to any Distribution Date prior to the Class A-12 TAC Accrual
Component Accretion Termination Date, the amount distributable to the Class A-12
Certificates with respect to the Class A-12 TAC Accrual Component pursuant to
Paragraph third clause (A) of Section 4.01(a)(i) and (ii) as to any Distribution
Date on or after the Class A-12 TAC Accrual Component Accretion Termination, the
amount distributable to the Class A-12 Certificates with respect to the Class
A-12 TAC Accrual Component pursuant to Paragraphs first, second and third clause
(A) of Section 4.01(a)(i); (b) with respect to the Class A-12 IO A Component,
Class A-12 IO B Component and the Class A-12 IO C Component, the amount
distributable to the Class A-12 Certificates with respect to the Class A-12 IO A
Component, Class A-12 IO B Component and the Class A-12 IO C Component pursuant
to Paragraphs first and second of Section 4.01(a)(i) and (c) with respect to the
Class A-12 PO Component, the amount distributable to the Class A-12 Certificates
pursuant to Paragraphs third clause (B) and fourth of Section 4.01(a)(i).
Class A Subclass Interest Accrual Amount: As to any Distribution Date and
any Class A Subclass (other than the Class A-12 Certificates), (i) the product
of (a) 1/12th of the Class A Subclass Pass-Through Rate for such Class A
Subclass and (b) the Class A Subclass Principal Balance of such Class A Subclass
as of the Determination Date preceding such Distribution Date minus (ii) the
Class A Subclass Interest Percentage of such Class A Subclass of (x) any
Non-Supported Interest Shortfall allocated to the Class A Certificates with
respect to such Distribution Date, (y) the interest portion of any Excess
Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses
allocated to the Class A Certificates with respect to such Distribution Date
pursuant to Section 4.02(e) and (z) the interest portion of any Realized Losses
(other than Excess Special Hazard Losses, Excess Fraud Losses and Excess
Bankruptcy Losses) allocated to the Class A Certificates on or after the
Cross-Over Date pursuant to Section 4.02(e). As to the Class A-12 Certificates,
the sum of the Component Interest Accrual Amounts for the Class A-12 TAC Accrual
Component, the Class A-12 IO A Component, the Class A-12 IO B Component and the
Class A-12 IO C Component.
Class A Subclass Interest Percentage: As to any Distribution Date and any
Class A Subclass (other than the Class A-12 Certificates), the percentage
calculated by dividing the Class A Subclass Interest Accrual Amount of such
Class A Subclass (determined without regard to clause (ii) of the definition
thereof) by the Class A Interest Accrual Amount (determined without regard to
clause (ii) of the definition of each Class A Subclass Interest Accrual Amount
(other than for the Class A-12 Certificates) and each Component Interest Accrual
Amount).
Class A Subclass Interest Shortfall Amount: As to any Distribution Date and
any Subclass of Class A Certificates, any amount by which the Class A Subclass
Interest Accrual Amount of such Class A Subclass with respect to such
Distribution Date exceeds the amount distributed in respect of such Class A
Subclass on such Distribution Date pursuant to Paragraph first of Section
4.01(a)(i) (including in the case of the Class A-11 Certificates and the Class
A-12 Certificates with respect to the Class A-12 TAC Accrual Component prior to
their respective Accretion Termination Dates, the amount included in the Class
A-11 Accrual Distribution Amount or Class A-12 TAC Accrual Component
Distribution Amount, as the case may be, pursuant to clause (i) of the
definition thereof).
Class A Subclass Loss Percentage: As to any Determination Date and any
Subclass of Class A Certificates (other than the Class A-12 Certificates) then
outstanding, the percentage calculated by dividing the Class A Subclass
Principal Balance of such Subclass or, in the case of the Class A-11
Certificates, the Original Class A Subclass Principal Balance, if lower, by the
Class A Loss Denominator (determined without regard to any Class A Subclass
Principal Balance of any Class A Subclass (other than the Class A-12
Certificates) or Component Principal Balance of the Class A-12 TAC Accrual
Component if it is not then outstanding), in each case determined as of the
preceding Determination Date.
Class A Subclass Pass-Through Rate: As to each Class A Subclass, other than
the Class A-2, Class A-8, Class A-9, Class A-10, Class A-12, Class A-14, Class
A-15 and Class A-16 Certificates, the Class A Fixed Pass-Through Rate. As to the
Class A-2 Certificates, 7.000% per annum. As to the Class A-8 Certificates,
7.400% per annum. As to the Class A-9 Certificates, 7.150% per annum. As to the
Class A-10 Certificates, 7.000% per annum. The Class A-12 Certificates have no
Pass-Through Rate. As to the Class A-14 Certificates, 7.200% per annum. As to
the Class A-15 Certificates, 7.500% per annum. As to the Class A-16
Certificates, 7.000% per annum.
Class A Subclass Principal Balance: As of the first Determination Date and
as to any Class A Subclass, the Original Class A Subclass Principal Balance of
such Class A Subclass. As of any subsequent Determination Date prior to the
Cross-Over Date and as to any Class A Subclass (other than the Class A-12
Certificates), the Original Class A Subclass Principal Balance of such Class A
Subclass, increased in the case of the Class A-11 Certificates by the Class A-11
Principal Accretion Amounts with respect to prior Distribution Dates, less the
sum of (a) all amounts previously distributed in respect of such Class A
Subclass on prior Distribution Dates (A) pursuant to Paragraph third clause (A)
of Section 4.01(a)(i), (B) as a result of a Principal Adjustment and (C) if
applicable, from the Class A-11 Accrual Distribution Amount or the Class A-12
TAC Accrual Component Distribution Amount for such prior Distribution Dates and
(b) the Realized Losses previously allocated to such Class A Subclass with
respect to prior Distribution Dates pursuant to Section 4.02(b). After the
Cross-Over Date, each such Class A Subclass Principal Balance will also be
reduced on each Determination Date by an amount equal to the product of the
Class A Subclass Loss Percentage of such Class A Subclass and the excess, if
any, of (i) the Class A Non-PO Principal Balance for such Determination Date
without regard to this sentence over (ii) the difference between (A) the
Adjusted Pool Amount for the preceding Distribution Date and (B) the Adjusted
Pool Amount (PO Portion) for the preceding Distribution Date. As to the Class
A-12 Certificates, the Class A Subclass Principal Balance will equal the sum of
the Component Principal Balances of the Class A-12 TAC Accrual Component and the
Class A-12 PO Component.
Class A Subclass Unpaid Interest Shortfall: As to any Distribution Date and
Class A Subclass, the amount, if any, by which the aggregate of the Class A
Subclass Interest Shortfall Amounts for such Class A Subclass for prior
Distribution Dates is in excess of the amounts distributed in respect of such
Class A Subclass (or, in the case of the Class A-11 Certificates and the Class
A-12 Certificates with respect to the Class A-12 TAC Accrual Component prior to
their respective Accretion Termination Dates, the amount included in the Class
A-11 Accrual Distribution Amount or the Class A-12 TAC Accrual Component
Distribution Amount, as the case may be, pursuant to clause (ii) of the
definition thereof) on prior Distribution Dates pursuant to Paragraph second of
Section 4.01(a)(i).
Class A Unpaid Interest Shortfall: As to any Distribution Date, an amount
equal to the sum of the Class A Subclass Unpaid Interest Shortfalls for all the
Class A Subclasses.
Class A Voting Interest: The sum of (A) the product of (i) the then
applicable Class A Percentage and (ii) the Non-PO Voting Interest and (B) the
Pool Balance (PO Portion) divided by the Pool Balance (Non-PO Portion) and the
Pool Balance (PO Portion).
Class A-1 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-1 and Exhibit D hereto.
Class A-1 Certificateholder: The registered holder of a Class A-1
Certificate.
Class A-2 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-2 and Exhibit D hereto.
Class A-2 Certificateholder: The registered holder of a Class A-2
Certificate.
Class A-3 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-3 and Exhibit D hereto.
Class A-3 Certificateholder: The registered holder of a Class A-3
Certificate.
Class A-4 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-4 and Exhibit D hereto.
Class A-4 Certificateholder: The registered holder of a Class A-4
Certificate.
Class A-5 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-5 and Exhibit D hereto.
Class A-5 Certificateholder: The registered holder of a Class A-5
Certificate.
Class A-5 Percentage: The Class A Subclass Principal Balance of the Class
A-5 Certificates divided by the Pool Balance (Non-PO Portion).
Class A-5 Prepayment Shift Percentage: The Class A-5 Prepayment Shift
Percentage for any Distribution Date will be the percentage indicated below:
Distribution Date Occurring In Class A-5 Prepayment Shift Percentage
------------------------------ -------------------------------------
September 1996 through August 2001.... 0%
September 2001 through August 2002.... 30%
September 2002 through August 2003.... 40%
September 2003 through August 2004.... 60%
September 2004 through August 2005.... 80%
September 2004 and thereafter......... 100%
Class A-5 Priority Amount: For any Distribution Date, the lesser of (i) the
Class A Subclass Principal Balance of the Class A-5 Certificates and (ii) the
sum of (A) the product of (1) the Class A-5 Percentage and (2) the Scheduled
Principal Amount and (B) the product of (1) the Class A-5 Percentage, (2) the
Class A-5 Prepayment Shift Percentage, and (3) the Unscheduled Principal Amount.
Class A-6 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-6 and Exhibit D hereto.
Class A-6 Certificateholder: The registered holder of a Class A-6
Certificate.
Class A-7 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-7 and Exhibit D hereto.
Class A-7 Certificateholder: The registered holder of a Class A-7
Certificate.
Class A-8 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-8 and Exhibit D hereto.
Class A-8 Certificateholder: The registered holder of a Class A-8
Certificate.
Class A-9 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-9 and Exhibit D hereto.
Class A-9 Certificateholder: The registered holder of a Class A-9
Certificate.
Class A-10 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-10 and Exhibit D hereto.
Class A-10 Certificateholder: The registered holder of a Class A-10
Certificate.
Class A-11 Accretion Termination Date: The earlier of (i) the Distribution
Date following the Distribution Date on which the Class A Subclass Principal
Balance of the Class A-13 Certificates has been reduced to zero or (ii) the
Cross-Over Date.
Class A-11 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-11 and Exhibit D hereto.
Class A-11 Certificateholder: The registered holder of a Class A-11
Certificate.
Class A-11 Accrual Distribution Amount: As to any Distribution Date prior
to the Class A-11 Accretion Termination Date, an amount equal to the sum of (i)
the Class A Subclass Interest Percentage of the Class A-11 Certificates of the
Current Class A Interest Distribution Amount and (ii) the amount distributed in
respect of the Class A-11 Certificates pursuant to Paragraph second of Section
4.01(a)(i) on such Distribution Date. As to any Distribution Date on or after
the Class A-11 Accretion Termination Date, zero.
Class A-11 Principal Accretion Amount: As to any Distribution Date prior to
the Class A-11 Accretion Termination Date, an amount equal to the sum of the
amounts calculated pursuant to clauses (i) and (ii) of the definition of Class
A-11 Accrual Distribution Amount.
Class A-12 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-12 and Exhibit D hereto.
Class A-12 Certificateholder: The registered holder of a Class A-12
Certificate.
Class A-12 Component: Any of the Class A-12 IO A Component, Class A-12 IO B
Component, Class A-12 IO C Component, Class A-12 TAC Accrual Component or Class
A-12 PO Component.
Class A-12 IO A Component Interest Accrual Amount: As to any Distribution
Date the difference between (i) the sum of (A) the product of 1/12th of 0.35000%
and the Class A Subclass Principal Balance of the Class A-8 Certificates and (B)
the product of 1/12th of the 0.17724008% and the Class A Subclass Principal
Balance of the Class A-15 Certificates and (ii) the Component Interest
Percentage of such Component of (x) any Non-Supported Interest Shortfall
allocated to the Class A Certificates, (y) the interest portion of any Excess
Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses
allocated to the Class A Certificates and (z) the interest portion of any
Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses
and Excess Bankruptcy Losses) allocated to the Class A Certificates on or after
the Cross-Over Date pursuant to Section 4.02(e).
Class A-12 IO B Component Interest Accrual Amount: As to any Distribution
Date the difference between (i) the sum of (A) the product of 1/12th of 0.6000%
and the Class A Subclass Principal Balance of the Class A-9 Certificates, (B)
the product of 1/12th of the 0.55000% and the Class A Subclass Principal Balance
of the Class A-14 Certificates and (C) the product of 1/12th of 0.07275992% and
the Class A Subclass Principal Balance of the Class A-15 Certificates and (ii)
the Component Interest Percentage of such Component of (x) any Non-Supported
Interest Shortfall allocated to the Class A Certificates, (y) the interest
portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess
Bankruptcy Losses allocated to the Class A Certificates and (z) the interest
portion of any Realized Losses (other than Excess Special Hazard Losses, Excess
Fraud Losses and Excess Bankruptcy Losses) allocated to the Class A Certificates
on or after the Cross-Over Date pursuant to Section 4.02(e).
Class A-12 IO C Component Interest Accrual Amount: As to any Distribution
Date the difference between (i) the product of 1/12th of 0.75000% the sum of the
Class A Subclass Principal Balances of the Class A-2, Class A-10 and Class A-16
Certificates and (ii) the Component Interest Percentage of such Component of (x)
any Non-Supported Interest Shortfall allocated to the Class A Certificates, (y)
the interest portion of any Excess Special Hazard Losses, Excess Fraud Losses
and Excess Bankruptcy Losses allocated to the Class A Certificates and (z) the
interest portion of any Realized Losses (other than Excess Special Hazard
Losses, Excess Fraud Losses and Excess Bankruptcy Losses) allocated to the Class
A Certificates on or after the Cross-Over Date pursuant to Section 4.02(e).
Class A-12 PO Component Deferred Amount: For any Distribution Date prior to
the Cross-Over Date, the difference between (A) the sum of (i) the amount by
which the sum of the Class A-12 PO Component Optimal Principal Amounts for all
prior Distribution Dates exceeded the amounts distributed on the Class A-12
Certificates with respect to the Class A-12 PO Component on such prior
Distribution Dates pursuant to Paragraph third clause (B) of Section 4.01(a)(i)
and (ii) the sum of the product for each Discount Mortgage Loan which became a
Liquidated Loan at any time on or prior to the last day of the applicable
Unscheduled Principal Receipt Period for the current Distribution Date of (a)
the PO Fraction for such Discount Mortgage Loan and (b) an amount equal to the
principal portion of Realized Losses (other than Bankruptcy Losses due to Debt
Service Reductions) incurred with respect to such Mortgage Loan other than
Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses
and (B) amounts distributed on the Class A-12 Certificates with respect to the
Class A-12 PO Component on prior Distribution Dates pursuant to Paragraph fourth
of Section 4.01(a)(i). On and after the Cross-Over Date, the Class A-12 PO
Component Deferred Amount will be zero. No interest will accrue on any Class
A-12 PO Component Deferred Amount.
Class A-12 PO Component Optimal Principal Amount: As to any Distribution
Date, an amount equal to the sum as to each Outstanding Mortgage Loan, of the
product of (x) the PO Fraction with respect to such Mortgage Loan and (y) the
sum of
(i) (A) the principal portion of the Monthly Payment due on the
Due Date occurring in the month of such Distribution Date on such
Mortgage Loan, less (B) if the Bankruptcy Loss Amount has been reduced
to zero, the principal portion of any Debt Service Reduction with
respect to such Mortgage Loan;
(ii) all Unscheduled Principal Receipts that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution
Date for each applicable type of Unscheduled Principal Receipt;
(iii) the Scheduled Principal Balance of each Mortgage Loan that
was repurchased by the Seller during such preceding month pursuant to
Section 2.02 or 2.03;
(iv) the excess of the unpaid principal balance of such Mortgage
Loan substituted for a defective Mortgage Loan during the month
preceding the month in which such Distribution Date occurs over the
unpaid principal balance of such defective Mortgage Loan, less the
amount allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the Servicer, the Master Servicer or the
Trustee in respect of such defective Mortgage Loan.
Class A-12 PO Component Principal Balance: As of the first Determination
Date, the Original Class A-12 PO Component Principal Balance. As of any
subsequent Determination Date prior to the Cross-Over Date, the Original Class
A-12 PO Component Principal Balance less the sum of (a) all amounts previously
distributed in respect of the Class A-12 PO Component on prior Distribution
Dates pursuant to Paragraphs third clause (B) and fourth of Section 4.01(a)(i)
and (b) the Realized Losses previously allocated to the Class A-12 PO Component
pursuant to Section 4.02(b). On or after the Cross-Over Date, the Class A-12 PO
Component Principal Balance will also be reduced on each Determination Date by
an amount equal to the difference, if any, between the Class A-12 PO Component
Principal Balance as of such Determination Date and the Adjusted Pool Amount (PO
Portion) as of the preceding Distribution Date.
Class A-12 PO Component Principal Distribution Amount: As to any
Distribution Date, the aggregate amount distributable to the Class A-12
Certificates with respect to the Class A-12 PO Component pursuant to Paragraphs
third clause (B) and fourth of Section 4.01(a)(i) on such Distribution Date.
Class A-12 TAC Accrual Component Accretion Termination Date: The earlier of
(i) the Distribution Date following the Distribution Date on which the Class A
Subclass Principal Balance of the Class A-2 Certificates has been reduced to
zero or (ii) the Cross-Over Date.
Class A-12 TAC Accrual Component Distribution Amount: As to any
Distribution Date prior to the Class A-12 TAC Accrual Component Accretion
Termination Date, an amount equal to the sum of (i) the Component Interest
Percentage of the Class A-12 TAC Accrual Component of the Current Class A
Interest Distribution Amount and (ii) the Component Shortfall Percentage of the
Class A-12 TAC Accrual Component of the amount distributed in respect of the
Class A-12 Certificates pursuant to Paragraph second of Section 4.01(a)(i) on
such Distribution Date. As to any Distribution Date on or after the Class A-12
TAC Accrual Component Accretion Termination Date, zero.
Class A-12 TAC Accrual Component Interest Accrual Amount: As to any
Distribution Date, (i) the product of (a) 1/12th of the Component Rate for such
Component and (b) the Component Principal Balance for such Component as of the
Determination Date preceding such Distribution Date minus (ii) the Component
Interest Percentage of such Component of (x) any Non-Supported Interest
Shortfall allocated to the Class A Certificates with respect to such
Distribution Date, (y) the interest portion of any Excess Special Hazard Losses,
Excess Fraud Losses and Excess Bankruptcy Losses allocated to the Class A
Certificates with respect to such Distribution Date pursuant to Section 4.02(e)
and (z) the interest portion of any Realized Losses (other than Excess Special
Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) allocated to
the Class A Certificates on or after the Cross-Over Date pursuant to Section
4.02(e).
Class A-12 Accrual Component Loss Percentage: As to any Determination Date,
the percentage calculated by dividing (i) the lesser of the Class A-12 TAC
Accrual Component Principal Balance of such Component and the Original Class
A-12 TAC Accrual Component Principal Balance of such Component by (ii) the Class
A Loss Denominator (determined without regard to any Class A Subclass Principal
Balance or Component Principal Balance of any Class A Subclass or the Class A-12
TAC Accrual Component not then outstanding) determined as of the preceding
Determination Date.
Class A-12 TAC Accrual Component Principal Accretion Amount: As to any
Distribution Date prior to the Class A-12 TAC Accrual Component Accretion
Termination Date, an amount equal to the sum of the amounts calculated pursuant
to clauses (i) and (ii) of the definition of Class A-12 TAC Accrual Component
Distribution Amount with respect to such Distribution Date.
Class A-12 Accrual Component Principal Balance: As of the first
Determination Date, the Original Class A-12 TAC Accrual Component Principal
Balance. As of any subsequent Determination Date prior to the Cross-Over Date,
the Original Class A-12 TAC Accrual Component Principal Balance (increased by
the Class A-12 TAC Accrual Component Principal Accretion Amount with respect to
prior Distribution Dates) less the sum of (a) all amounts previously distributed
in respect of such Component on prior Distribution Dates (A) pursuant to
Paragraph third clause (A) of Section 4.01(a)(i), (B) as a result of a Principal
Adjustment and (C) from the Class A-12 TAC Accrual Component Distribution
Amounts for such prior Distribution Dates and (b) the Realized Losses previously
allocated to the Class A-12 TAC Accrual Component with respect to prior
Distribution Dates pursuant to Section 4.02(b). After the Cross-Over Date, the
Class A-12 TAC Accrual Component Principal Balance will also be reduced on each
Determination Date by an amount equal to the product of the Class A-12 TAC
Accrual Component Loss Percentage and the excess, if any, of (i) the Class A
Non-PO Principal Balance for such Determination Date without regard to this
sentence over (ii) the difference between (A) the Adjusted Pool Amount for the
preceding Distribution Date and (B) the Adjusted Pool Amount (PO Portion) for
the preceding Distribution Date.
Class A-13 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-13 and Exhibit D hereto.
Class A-13 Certificateholder: The registered holder of a Class A-13
Certificate.
Class A-14 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-14 and Exhibit D hereto.
Class A-14 Certificateholder: The registered holder of a Class A-14
Certificate.
Class A-15 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-15 and Exhibit D hereto.
Class A-15 Certificateholder: The registered holder of a Class A-15
Certificate.
Class A-16 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit A-16 and Exhibit D hereto.
Class A-16 Certificateholder: The registered holder of a Class A-16
Certificate.
Class A-L1 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L2 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L8 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L8 Interest Fraction: As of any Distribution Date, the fraction the
numerator of which is the amount of interest accrued pursuant to clause (A) of
the definition of Class A-12 IO A Component Interest Accrual Amount and the
denominator of which is the Class A-12 IO A Component Interest Accrual Amount
(determined without regard to clause (ii) of the definition thereof).
Class A-L9 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L9 Interest Fraction: As of any Distribution Date, the fraction the
numerator of which is an amount of interest accrued pursuant to Clause (A) of
the definition of Class A-12 IO B Component Interest Accrual Amount and the
denominator of which is the Class A-12 IO B Component Interest Accrual Amount
(determined without regard to clause (ii) of the definition thereof).
Class A-L11 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L12 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L14 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L14 Interest Fraction: As of any Distribution Date, the fraction
the numerator of which is the amount of interest accrued pursuant to clause (B)
of the definition of Class A-12 IO B Component Interest Accrual Amount and the
denominator of which is the Class A-12 IO B Component Interest Accrual Amount
(determined without regard to clause (ii) of the definition thereof).
Class A-L15 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-L15A Interest Fraction: As of any Distribution Date, the fraction
the numerator of which is the amount of interest accrued pursuant to clause (B)
of the definition of Class A-12 IO A Component Interest Accrual Amount and the
denominator of which is the Class A-12 IO A Component Interest Accrual Amount
(determined without regard to clause (ii) of the definition thereof).
Class A-L15B Interest Fraction: As of any Distribution Date, the fraction
the numerator of which is the amount of interest accrued pursuant to clause (C)
of the definition of Class A-12 IO B Component Interest Accrual Amount and the
denominator of which is the Class A-12 IO B Component Interest Accrual Amount
(determined without regard to clause (ii) of the definition thereof).
Class A-LR Certificate: The Certificate executed by the Trustee and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-LR and Exhibit D hereto.
Class A-LR Certificateholder: The registered holder of the Class A-LR
Certificate.
Class A-LUR Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class A-R Certificate: The Certificate executed by the Trustee and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-R and Exhibit D hereto.
Class A-R Certificateholder: The registered holder of the Class A-R
Certificate.
Class A-LPO Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class B Certificate: Any one of the Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class B-4 Certificates or Class B-5
Certificates.
Class B Certificateholder: The registered holder of a Class B Certificate.
Class B Interest Accrual Amount: As to any Distribution Date, the sum of
the Class B Subclass Interest Accrual Amounts with respect to such Distribution
Date.
Class B Pass-Through Rate: As to any Distribution Date, 7.750% per annum.
Class B Principal Balance: As of any date, an amount equal to the sum of
the Class B-1 Principal Balance, Class B-2 Principal Balance, Class B-3
Principal Balance, Class B-4 Principal Balance and Class B-5 Principal Balance.
Class B Subclass: Any of the Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class B-4 Certificates or Class B-5
Certificates.
Class B Subclass Distribution Amount: Any of the Class B-1, Class B-2,
Class B-3, Class B-4 or Class B-5 Distribution Amounts.
Class B Subclass Interest Accrual Amount: As to any Distribution Date and
any Class B Subclass, an amount equal to (i) the product of 1/12th of the Class
B Pass-Through Rate and the Class B Subclass Principal Balance of such Class B
Subclass as of the Determination Date preceding such Distribution Date minus
(ii) the Class B Subclass Interest Percentage of such Class B Subclass of (x)
any Non-Supported Interest Shortfall allocated to the Class B Certificates with
respect to such Distribution Date and (y) the interest portion of any Excess
Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses
allocated to the Class B Certificates with respect to such Distribution Date
pursuant to Section 4.02(e).
Class B Subclass Interest Percentage: As to any Distribution Date and any
Class B Subclass, the percentage calculated by dividing the Class B Subclass
Interest Accrual Amount of such Class B Subclass (determined without regard to
clause (ii) of the definition thereof) by the Class B Interest Accrual Amount
(determined without regard to clause (ii) of the definition of each Class B
Subclass Interest Accrual Amount).
Class B Subclass Interest Shortfall Amount: Any of the Class B-1 Interest
Shortfall Amount, Class B-2 Interest Shortfall Amount, Class B-3 Interest
Shortfall Amount, Class B-4 Interest Shortfall Amount or Class B-5 Interest
Shortfall Amount.
Class B Subclass Loss Percentage: As to any Determination Date and any
Class B Subclass then outstanding, the percentage calculated by dividing the
Class B Subclass Principal Balance of such Class B Subclass by the Class B
Principal Balance (determined without regard to any Class B Subclass Principal
Balance of any Class B Subclass not then outstanding), in each case determined
as of the preceding Determination Date.
Class B Subclass Percentage: Any one of the Class B-1 Percentage, Class B-2
Percentage, Class B-3 Percentage, Class B-4 Percentage or Class B-5 Percentage.
Class B Subclass Prepayment Percentage: Any of the Class B-1 Prepayment
Percentage, Class B-2 Prepayment Percentage, Class B-3 Prepayment Percentage,
Class B-4 Prepayment Percentage or Class B-5 Prepayment Percentage.
Class B Subclass Principal Balance: Any of the Class B-1 Principal Balance,
Class B-2 Principal Balance, Class B-3 Principal Balance, Class B-4 Principal
Balance or Class B-5 Principal Balance.
Class B Subclass Unpaid Interest Shortfall: Any of the Class B-1 Unpaid
Interest Shortfall, Class B-2 Unpaid Interest Shortfall, Class B-3 Unpaid
Interest Shortfall, Class B-4 Unpaid Interest Shortfall or Class B-5 Unpaid
Interest Shortfall.
Class B-1 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit B-1 and Exhibit D hereto.
Class B-1 Certificateholder: The registered holder of a Class B-1
Certificate.
Class B-1 Distribution Amount: As to any Distribution Date, any amount
distributable to the Holders of the Class B-1 Certificates pursuant to
Paragraphs eighth, ninth and tenth of Section 4.01(a)(i).
Class B-1 Interest Shortfall Amount: As to any Distribution Date, any
amount by which the Class B Subclass Interest Accrual Amount of the Class B-1
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-1 Certificates on such Distribution Date
pursuant to Paragraph eighth of Section 4.01(a)(i).
Class B-1 Optimal Principal Amount: As to any Distribution Date, an amount
equal to the sum, as to each Outstanding Mortgage Loan, of the product of (x)
the Non-PO Fraction with respect to such Mortgage Loan and (y) the sum of:
(i) the Class B-1 Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class B-1 Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class B-1 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class B-1 Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a defective
Mortgage Loan during the month preceding the month in which such
Distribution Date occurs over the unpaid principal balance of such
defective Mortgage Loan, less the amount allocable to the principal
portion of any unreimbursed Periodic Advances previously made by the
Servicer, the Master Servicer or the Trustee in respect of such
defective Mortgage Loan;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Subclass and such Distribution Date, the Class B-1 Optimal Principal Amount
will equal the lesser of (A) the Class B-1 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-1 Certificates.
Class B-1 Percentage: As to any Distribution Date, except as set forth in
the next sentence, the percentage calculated by multiplying (i) the Subordinated
Percentage by (ii) a fraction, the numerator of which is the Class B-1 Principal
Balance (determined as of the Determination Date preceding such Distribution
Date) and the denominator of which is the sum of the Class M Principal Balance
and the Class B Subclass Principal Balances of the Class B Subclasses eligible
to receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii),
in the event that the Class B-1 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Class B-1
Percentage for such Distribution Date will be zero.
Class B-1 Prepayment Percentage: As to any Distribution Date, except as set
forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Prepayment Percentage by (ii) a fraction, the numerator of which is
the Class B-1 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Class M Principal Balance and the Class B Subclass Principal Balances of the
Class B Subclasses eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-1
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Class B-1 Prepayment Percentage for such
Distribution Date will be zero.
Class B-1 Principal Balance: As to the first Determination Date, the
Original Class B-1 Principal Balance. As of any subsequent Determination Date,
the lesser of (i) the Original Class B-1 Principal Balance less the sum of (a)
all amounts previously distributed in respect of the Class B-1 Certificates on
prior Distribution Dates (A) pursuant to Paragraph tenth of Section 4.01(a)(i)
and (B) as a result of a Principal Adjustment and (b) the Realized Losses
previously allocated to the Class B-1 Certificates pursuant to Section 4.02(b)
and (ii) the Adjusted Pool Amount as of the preceding Distribution Date less the
sum of the Class A Non-PO Principal Balance, the Class A-12 PO Component
Principal Balance and the Class M Principal Balance as of such Determination
Date.
Class B-1 Unpaid Interest Shortfall: As to any Distribution Date, the
amount, if any, by which the aggregate of the Class B-1 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-1 Certificates on prior Distribution Dates pursuant to
Paragraph ninth of Section 4.01(a)(i).
Class B-2 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit B-2 and Exhibit D hereto.
Class B-2 Certificateholder: The registered holder of a Class B-2
Certificate.
Class B-2 Distribution Amount: As to any Distribution Date, any amount
distributable to the Holders of the Class B-2 Certificates pursuant to
Paragraphs eleventh, twelfth and thirteenth of Section 4.01(a)(i).
Class B-2 Interest Shortfall Amount: As to any Distribution Date, any
amount by which the Class B Subclass Interest Accrual Amount of the Class B-2
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-2 Certificates on such Distribution Date
pursuant to Paragraph eleventh of Section 4.01(a)(i).
Class B-2 Optimal Principal Amount: As to any Distribution Date, an amount
equal to the sum, as to each Outstanding Mortgage Loan, of the product of (x)
the Non-PO Fraction with respect to such Mortgage Loan and (y) the sum of:
(i) the Class B-2 Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class B-2 Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class B-2 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class B-2 Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a defective
Mortgage Loan during the month preceding the month in which such
Distribution Date occurs over the unpaid principal balance of such
defective Mortgage Loan, less the amount allocable to the principal
portion of any unreimbursed Periodic Advances previously made by the
Servicer, the Master Servicer or the Trustee in respect of such
defective Mortgage Loan;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Subclass and such Distribution Date, the Class B-2 Optimal Principal Amount
will equal the lesser of (A) the Class B-2 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-2 Certificates.
Class B-2 Percentage: As to any Distribution Date, except as set forth in
the next sentence, the percentage calculated by multiplying (i) the Subordinated
Percentage by (ii) a fraction, the numerator of which is the Class B-2 Principal
Balance (determined as of the Determination Date preceding such Distribution
Date) and the denominator of which is the sum of the Class M Principal Balance
and the Class B Subclass Principal Balances of the Class B Subclasses eligible
to receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii),
in the event that the Class B-2 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Class B-2
Percentage for such Distribution Date will be zero.
Class B-2 Prepayment Percentage: As to any Distribution Date, except as set
forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Prepayment Percentage by (ii) a fraction, the numerator of which is
the Class B-2 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Class M Principal Balance and the Class B Subclass Principal Balances of the
Class B Subclasses eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-2
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Class B-2 Prepayment Percentage for such
Distribution Date will be zero.
Class B-2 Principal Balance: As to the first Determination Date, the
Original Class B-2 Principal Balance. As of any subsequent Determination Date,
the lesser of (i) the Original Class B-2 Principal Balance less the sum of (a)
all amounts previously distributed in respect of the Class B-2 Certificates on
prior Distribution Dates (A) pursuant to Paragraph thirteenth of Section
4.01(a)(i) and (B) as a result of a Principal Adjustment and (b) the Realized
Losses previously allocated to the Class B-2 Certificates pursuant to Section
4.02(b) and (ii) the Adjusted Pool Amount as of the preceding Distribution Date
less the sum of the Class A Non-PO Principal Balance, the Class A-12 PO
Component Principal Balance the Class M Principal Balance and the Class B-1
Principal Balance as of such Determination Date.
Class B-2 Unpaid Interest Shortfall: As to any Distribution Date, the
amount, if any, by which the aggregate of the Class B-2 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-2 Certificates on prior Distribution Dates pursuant to
Paragraph twelfth of Section 4.01(a)(i).
Class B-3 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit B-3 and Exhibit D hereto.
Class B-3 Certificateholder: The registered holder of a Class B-3
Certificate.
Class B-3 Distribution Amount: As to any Distribution Date, any amount
distributable to the Holders of the Class B-3 Certificates pursuant to
Paragraphs fourteenth, fifteenth and sixteenth of Section 4.01(a)(i).
Class B-3 Interest Shortfall Amount: As to any Distribution Date, any
amount by which the Class B Subclass Interest Accrual Amount of the Class B-3
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-3 Certificates on such Distribution Date
pursuant to Paragraph fourteenth of Section 4.01(a)(i).
Class B-3 Optimal Principal Amount: As to any Distribution Date, an amount
equal to the sum, as to each Outstanding Mortgage Loan, of the product of (x)
the Non-PO Fraction with respect to such Mortgage Loan and (y) the sum of:
(i) the Class B-3 Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class B-3 Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class B-3 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class B-3 Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a defective
Mortgage Loan during the month preceding the month in which such
Distribution Date occurs over the unpaid principal balance of such
defective Mortgage Loan, less the amount allocable to the principal
portion of any unreimbursed Periodic Advances previously made by the
Servicer, the Master Servicer or the Trustee in respect of such
defective Mortgage Loan;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Subclass and such Distribution Date, the Class B-3 Optimal Principal Amount
will equal the lesser of (A) the Class B-3 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-3 Certificates.
Class B-3 Percentage: As to any Distribution Date, except as set forth in
the next sentence, the percentage calculated by multiplying (i) the Subordinated
Percentage by (ii) a fraction, the numerator of which is the Class B-3 Principal
Balance (determined as of the Determination Date preceding such Distribution
Date) and the denominator of which is the sum of the Class M Principal Balance
and the Class B Subclass Principal Balances of the Class B Subclasses eligible
to receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii),
in the event that the Class B-3 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Class B-3
Percentage for such Distribution Date will be zero.
Class B-3 Prepayment Percentage: As to any Distribution Date, except as set
forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Prepayment Percentage by (ii) a fraction, the numerator of which is
the Class B-3 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Class M Principal Balance and the Class B Subclass Principal Balances of the
Class B Subclasses eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-3
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Class B-3 Prepayment Percentage for such
Distribution Date will be zero.
Class B-3 Principal Balance: As to the first Determination Date, the
Original Class B-3 Principal Balance. As of any subsequent Determination Date,
the lesser of (i) the Original Class B-3 Principal Balance less the sum of (a)
all amounts previously distributed in respect of the Class B-3 Certificates on
prior Distribution Dates (A) pursuant to Paragraph sixteenth of Section
4.01(a)(i) and (B) as a result of a Principal Adjustment and (b) the Realized
Losses previously allocated to the Class B-3 Certificates pursuant to Section
4.02(b) and (ii) the Adjusted Pool Amount as of the preceding Distribution Date
less the sum of the Class A Non-PO Principal Balance, the Class A-12 PO
Component Principal Balance, the Class M Principal Balance, the Class B-1
Principal Balance and the Class B-2 Principal Balance as of such Determination
Date.
Class B-3 Unpaid Interest Shortfall: As to any Distribution Date, the
amount, if any, by which the aggregate of the Class B-3 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-3 Certificates on prior Distribution Dates pursuant to
Paragraph fifteenth of Section 4.01(a)(i).
Class B-4 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit B-4 and Exhibit D hereto.
Class B-4 Certificateholder: The registered holder of a Class B-4
Certificate.
Class B-4 Distribution Amount: As to any Distribution Date, any amount
distributable to the Holders of the Class B-4 Certificates pursuant to
Paragraphs seventeenth, eighteenth, and nineteenth of Section 4.01(a)(i).
Class B-4 Interest Shortfall Amount: As to any Distribution Date, any
amount by which the Class B Subclass Interest Accrual Amount of the Class B-4
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-4 Certificates on such Distribution Date
pursuant to Paragraph seventeenth of Section 4.01(a)(i).
Class B-4 Optimal Principal Amount: As to any Distribution Date, an amount
equal to the sum, as to each Outstanding Mortgage Loan, of the product of (x)
the Non-PO Fraction with respect to such Mortgage Loan and (y) the sum of:
(i) the Class B-4 Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class B-4 Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class B-4 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class B-4 Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a defective
Mortgage Loan during the month preceding the month in which such
Distribution Date occurs over the unpaid principal balance of such
defective Mortgage Loan, less the amount allocable to the principal
portion of any unreimbursed Periodic Advances previously made by the
Servicer, the Master Servicer or the Trustee in respect of such
defective Mortgage Loan;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Subclass and such Distribution Date, the Class B-4 Optimal Principal Amount
will equal the lesser of (A) the Class B-4 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-4 Certificates.
Class B-4 Percentage: As to any Distribution Date, except as set forth in
the next sentence, the percentage calculated by multiplying (i) the Subordinated
Percentage by (ii) a fraction, the numerator of which is the Class B-4 Principal
Balance (determined as of the Determination Date preceding such Distribution
Date) and the denominator of which is the sum of the Class M Principal Balance
and the Class B Subclass Principal Balances of the Class B Subclasses eligible
to receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii),
in the event that the Class B-4 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Class B-4
Percentage for such Distribution Date will be zero.
Class B-4 Prepayment Percentage: As to any Distribution Date, except as set
forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Prepayment Percentage by (ii) a fraction, the numerator of which is
the Class B-4 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Class M Principal Balance and the Class B Subclass Principal Balances of the
Class B Subclasses eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-4
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Class B-4 Prepayment Percentage for such
Distribution Date will be zero.
Class B-4 Principal Balance: As to the first Determination Date, the
Original Class B-4 Principal Balance. As of any subsequent Determination Date,
the lesser of (i) the Original Class B-4 Principal Balance less the sum of (a)
all amounts previously distributed in respect of the Class B-4 Certificates on
prior Distribution Dates (A) pursuant to Paragraph nineteenth of Section
4.01(a)(i) and (B) as a result of a Principal Adjustment and (b) the Realized
Losses previously allocated to the Class B-4 Certificates pursuant to Section
4.02(b) and (ii) the Adjusted Pool Amount as of the preceding Distribution Date
less the sum of the Class A Non-PO Principal Balance, the Class A-12 PO
Component Principal Balance, the Class M Principal Balance, the Class B-1
Principal Balance, the Class B-2 Principal Balance and the Class B-3 Principal
Balance as of such Determination Date.
Class B-4 Unpaid Interest Shortfall: As to any Distribution Date, the
amount, if any, by which the aggregate of the Class B-4 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-4 Certificates on prior Distribution Dates pursuant to
Paragraph eighteenth of Section 4.01(a)(i).
Class B-5 Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit B-5 and Exhibit D hereto.
Class B-5 Certificateholder: The registered holder of a Class B-5
Certificate.
Class B-5 Distribution Amount: As to any Distribution Date, any amount
distributable to the Holders of the Class B-5 Certificates pursuant to
Paragraphs twentieth, twenty-first, and twenty-second of Section 4.01(a)(i).
Class B-5 Interest Shortfall Amount: As to any Distribution Date, any
amount by which the Class B Subclass Interest Accrual Amount of the Class B-5
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-5 Certificates on such Distribution Date
pursuant to Paragraph twentieth of Section 4.01(a)(i).
Class B-5 Optimal Principal Amount: As to any Distribution Date, an amount
equal to the sum, as to each Outstanding Mortgage Loan, of the product of (x)
the Non-PO Fraction with respect to such Mortgage Loan and (y) the sum of:
(i) the Class B-5 Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class B-5 Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class B-5 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class B-5 Percentage of the excess of the unpaid
principal balance of such Mortgage Loan substituted for a defective
Mortgage Loan during the month preceding the month in which such
Distribution Date occurs over the unpaid principal balance of such
defective Mortgage Loan, less the amount allocable to the principal
portion of any unreimbursed Periodic Advances previously made by the
Servicer, the Master Servicer or the Trustee in respect of such
defective Mortgage Loan;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Subclass and such Distribution Date, the Class B-5 Optimal Principal Amount
will equal the lesser of (A) the Class B-5 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-5 Certificates.
Class B-5 Percentage: As to any Distribution Date, except as set forth in
the next sentence, the percentage calculated by multiplying (i) the Subordinated
Percentage by (ii) a fraction, the numerator of which is the Class B-5 Principal
Balance (determined as of the Determination Date preceding such Distribution
Date) and the denominator of which is the sum of the Class M Principal Balance
and the Class B Subclass Principal Balances of the Class B Subclasses eligible
to receive principal distributions for such Distribution Date in accordance with
the provisions of Section 4.01(d). Except as set forth in Section 4.01(d)(ii),
in the event that the Class B-5 Certificates are not eligible to receive
distributions of principal in accordance with Section 4.01(d)(i), the Class B-5
Percentage for such Distribution Date will be zero.
Class B-5 Prepayment Percentage: As to any Distribution Date, except as set
forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Prepayment Percentage by (ii) a fraction, the numerator of which is
the Class B-5 Principal Balance (determined as of the Determination Date
preceding such Distribution Date) and the denominator of which is the sum of the
Class M Principal Balance and the Class B Subclass Principal Balances of the
Class B Subclasses eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d). Except
as set forth in Section 4.01(d)(ii), in the event that the Class B-5
Certificates are not eligible to receive distributions of principal in
accordance with Section 4.01(d)(i), the Class B-5 Prepayment Percentage for such
Distribution Date will be zero.
Class B-5 Principal Balance: As to the first Determination Date, the
Original Class B-5 Principal Balance. As of any subsequent Determination Date,
the lesser of (i) the Original Class B-5 Principal Balance less the sum of (a)
all amounts previously distributed in respect of the Class B-5 Certificates on
prior Distribution Dates pursuant to Paragraph twenty-second of Section
4.01(a)(i) and (b) the Realized Losses previously allocated to the Class B-5
Certificates pursuant to Section 4.02(b) and (ii) the Adjusted Pool Amount as of
the preceding Distribution Date less the sum of the Class A Non-PO Principal
Balance, the Class A-12 PO Component Principal Balance, the Class M Principal
Balance, the Class B-1 Principal Balance, the Class B-2 Principal Balance, the
Class B-3 Principal Balance and the Class B-4 Principal Balance as of such
Determination Date.
Class B-5 Unpaid Interest Shortfall: As to any Distribution Date, the
amount, if any, by which the aggregate of the Class B-5 Interest Shortfall
Amounts for prior Distribution Dates is in excess of the amounts distributed in
respect of the Class B-5 Certificates on prior Distribution Dates pursuant to
Paragraph twenty-first of Section 4.01(a)(i).
Class B-L1 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class B-L2 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class B-L3 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class B-L4 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class B-L5 Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Class M Certificate: Any one of the Certificates executed by the Trustee
and authenticated by the Trustee or the Authenticating Agent in substantially
the form set forth in Exhibit C and Exhibit D hereto.
Class M Certificateholder: The registered holder of a Class M Certificate.
Class M Distribution Amount: As to any Distribution Date, any amount
distributable to the Holders of the Class M Certificates pursuant to Paragraphs
fifth, sixth and seventh of Section 4.01(a)(i).
Class M Interest Accrual Amount: As to any Distribution Date, an amount
equal to (i) the product of 1/12th of the Class M Pass-Through Rate and the
Class M Principal Balance as of the Determination Date preceding such
Distribution Date minus (ii) (x) any Non-Supported Interest Shortfall allocated
to the Class M Certificates with respect to such Distribution Date and (y) the
interest portion of any Excess Special Hazard Losses, Excess Fraud Losses and
Excess Bankruptcy Losses allocated to the Class M Certificates with respect to
such Distribution Date pursuant to Section 4.02(e).
Class M Interest Shortfall Amount: As to any Distribution Date, any amount
by which the Class M Interest Accrual Amount with respect to such Distribution
Date exceeds the amount distributed in respect of the Class M Certificates on
such Distribution Date pursuant to Paragraph fifth of Section 4.01(a)(i).
Class M Optimal Principal Amount: As to any Distribution Date, an amount
equal to the sum, as to each Outstanding Mortgage Loan, of the product of (x)
the Non-PO Fraction with respect to such Mortgage Loan and (y) the sum of:
(i) the Class M Percentage of (A) the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan, less (B) if the Bankruptcy
Loss Amount has been reduced to zero, the principal portion of any
Debt Service Reduction with respect to such Mortgage Loan;
(ii) the Class M Prepayment Percentage of all Unscheduled
Principal Receipts that were received by a Servicer with respect to
such Mortgage Loan during the Applicable Unscheduled Principal Receipt
Period relating to such Distribution Date for each applicable type of
Unscheduled Principal Receipt;
(iii) the Class M Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the month
preceding the month of such Distribution Date, was repurchased by the
Seller pursuant to Section 2.02 or 2.03; and
(iv) the Class M Percentage of the excess of the unpaid principal
balance of such Mortgage Loan substituted for a defective Mortgage
Loan during the month preceding the month in which such Distribution
Date occurs over the unpaid principal balance of such defective
Mortgage Loan, less the amount allocable to the principal portion of
any unreimbursed Periodic Advances previously made by the Servicer,
the Master Servicer or the Trustee in respect of such defective
Mortgage Loan;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class M Optimal Principal Amount will
equal the lesser of (A) the Class M Optimal Principal Amount calculated as
described in the preceding provisions and (B) the Adjusted Principal Balance for
the Class M Certificates.
Class M Pass-Through Rate: As to any Distribution Date, 7.750% per annum.
Class M Percentage: As to any Distribution Date, the percentage calculated
by multiplying the Subordinated Percentage by either (a) if any Class B
Certificates are eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d), a
fraction, the numerator of which is the Class M Principal Balance (determined as
of the Determination Date preceding such Distribution Date) and the denominator
of which is the sum of the Class M Principal Balance and the Class B Subclass
Principal Balances of the Class B Subclasses eligible to receive principal
distributions for such Distribution Date in accordance with the provisions of
Section 4.01(d) or (b) except as set forth in Section 4.01(d)(ii), if the Class
B Certificates are not eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d)(i), one.
Class M Prepayment Percentage: As to any Distribution Date, the percentage
calculated by multiplying the Subordinated Prepayment Percentage by either (a)
if any Class B Certificates are eligible to receive principal distributions for
such Distribution Date in accordance with the provisions of Section 4.01(d), a
fraction, the numerator of which is the Class M Principal Balance (determined as
of the Determination Date preceding such Distribution Date) and the denominator
of which is the sum of the Class M Principal Balance and the Class B Subclass
Principal Balances of the Class B Subclasses eligible to receive principal
distributions for such Distribution Date in accordance with the provisions of
Section 4.01(d) or (b) except as set forth in Section 4.01(d)(ii), if the Class
B Certificates are not eligible to receive principal distributions for such
Distribution Date in accordance with the provisions of Section 4.01(d)(i), one.
Class M Principal Balance: As to the first Determination Date, the Original
Class M Principal Balance. As of any subsequent Determination Date, the lesser
of (i) the Original Class M Principal Balance less the sum of (a) all amounts
previously distributed in respect of the Class M Certificates on prior
Distribution Dates (A) pursuant to Paragraph seventh of Section 4.01(a)(i) and
(B) as a result of a Principal Adjustment and (b) the Realized Losses previously
allocated to the Class M Certificates pursuant to Section 4.02(b) and (ii) the
Adjusted Pool Amount as of the preceding Distribution Date less the Class A
Principal Balance as of such Determination Date.
Class M Unpaid Interest Shortfall: As to any Distribution Date, the amount,
if any, by which the aggregate of the Class M Interest Shortfall Amounts for
prior Distribution Dates is in excess of the amounts distributed in respect of
the Class M Certificates on prior Distribution Dates pursuant to Paragraph sixth
of Section 4.01(a)(i).
Class M-L Interest: A regular interest in the Lower-Tier REMIC which is
held as an asset of the Upper-Tier REMIC and is entitled to monthly
distributions as provided in Section 4.01(a)(ii) hereof.
Clearing Agency: An organization registered as a "clearing agency" pursuant
to Section 17A of the Securities Exchange Act of 1934, as amended. The initial
Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, financial institution
or other Person for whom a Clearing Agency effects book-entry transfers of
securities deposited with the Clearing Agency.
Closing Date: The date of initial issuance of the Certificates, as set
forth in Section 11.24.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time, any successor statutes thereto, and applicable U.S. Department of the
Treasury temporary or final regulations promulgated thereunder.
Co-op Shares: Shares issued by private non-profit housing corporations.
Compensating Interest: As to any Distribution Date, the lesser of (a) the
product of (i) 1/12th of 0.20% and (ii) the Pool Scheduled Principal Balance for
such Distribution Date and (b) the Available Master Servicing Compensation for
such Distribution Date.
Component: Any one of the Class A-12 IO A Component, Class A-12 IO B
Component, Class A-12 IO C Component, Class A-12 TAC Accrual Component or Class
A-12 PO Component.
Component Interest Accrual Amount: Each of the Class A-12 IO A Component
Interest Accrual Amount, the Class A-12 IO B Component Interest Accrual Amount,
the Class A-12 IO C Component Interest Accrual Amount and the Class A-12 TAC
Accrual Component Interest Accrual Amount.
Component Interest Percentage: As to any Distribution Date and Class A-12
Component (other than the Class A-12 PO Component), the percentage calculated by
dividing the Component Interest Accrual Amount of such Component (determined
without regard to clause (ii) of the definition thereof) by the Class A Interest
Accrual Amount (determined without regard to clause (ii) of the definition of
each Class A Subclass Interest Accrual Amount (other than for the Class A-12
Certificates) and each Component Interest Accrual Amount).
Component Interest Shortfall Amount: As to any Distribution Date and Class
A-12 Component (other than the Class A-12 PO Component), the product of (a) the
Class A Subclass Interest Shortfall Amount of the Class A-12 Certificates for
such Distribution Date and (b) a fraction, the numerator of which is the
applicable Component Interest Accrual Amount and the denominator of which is the
Class A Subclass Interest Accrual Amount of the Class A-12 Certificates.
Component Interest Shortfall Distribution: As to any Distribution Date and
Class A-12 Component (other than the Class A-12 PO Component), the product of
(i) the amount that would be distributable in respect of the Class A-12
Certificates with respect to such Distribution Date pursuant to Paragraph second
of Section 4.01(a)(i) without regard to the proviso set forth in such Paragraph
and (ii) the Component Shortfall Percentage for such Distribution Date.
Component Principal Balance: The Class A-12 TAC Accrual Component Principal
Balance and the Class A-12 PO Component Principal Balance.
Component Rate: As to any Distribution Date and the Class A-12 TAC Accrual
Component, 7.750% per annum.
Component Shortfall Percentage: As to any Distribution Date and Class A-12
Component (other than the Class A-12 PO Component), the percentage calculated by
dividing the Component Unpaid Interest Shortfall for such Component by the Class
A Subclass Unpaid Interest Shortfall for the Class A-12 Certificates, in each
case determined as of the Business Day preceding the applicable Distribution
Date.
Component Unpaid Interest Shortfall: As to any Distribution Date and Class
A-12 Component (other than the Class A-12 PO Component), the product of (i) the
sum of the Component Interest Shortfall Amounts for such Component for prior
Distribution Dates minus (ii) the Component Interest Shortfall Distributions for
such Component for prior Distribution Dates.
Corporate Trust Office: The principal office of the Trustee, at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at 000 Xxxx
Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000.
Corresponding Upper-Tier Class or Component: As to the following
Uncertificated Lower-Tier Interests, the Corresponding Upper-Tier Class, Classes
or Components, as follows:
Uncertificated Lower-Tier Interest Corresponding Upper-Tier Class or Component
---------------------------------- -------------------------------------------
Class A-L1 Interest Class A-1 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6
Certificates, Class A-7 Certificates and Class A-13
Certificates
Class A-L2 Interest Class A-2 Certificates, Class A-10 Certificates, Class A-16
Certificates and Class A-12 IO C Component
Class A-L8 Interest Class A-8 Certificates
Class A-L9 Interest Class A-9 Certificates
Class A-L11 Interest Class A-11 Certificates
Class A-L12 Interest Class A-12 TAC Accrual Component
Class A-L14 Interest Class A-14 Certificates
Class A-L15 Interest Class A-15 Certificates
Class A-LPO Interest Class A-12 PO Component
Class A-LUR Interest Class A-R Certificate
Class B-L1 Interest Class B-1 Certificates
Class B-L2 Interest Class B-2 Certificates
Class B-L3 Interest Class B-3 Certificates
Class B-L4 Interest Class B-4 Certificates
Class B-L5 Interest Class B-5 Certificates
Class M-L Interest Class M Certificates
Cross-Over Date: The first Distribution Date with respect to which the
Class A Percentage (determined pursuant to clause (ii) of the definition
thereof) equals or exceeds 100%.
Cross-Over Date Interest Shortfall: With respect to any Distribution Date
that occurs on or after the Cross-Over Date with respect to any Unscheduled
Principal Receipt (other than a Prepayment in Full):
(A) in the case where the Applicable Unscheduled Principal Receipt
Period is the Mid-Month Receipt Period and such Unscheduled
Principal Receipt is received by the Servicer on or after the
Determination Date in the month preceding the month of such
Distribution Date but prior to the first day of the month of such
Distribution Date, the amount of interest that would have accrued
at the Net Mortgage Interest Rate on the amount of such
Unscheduled Principal Receipt from the day of its receipt or, if
earlier, its application by the Servicer through the last day of
the month preceding the month of such Distribution Date; and
(B) in the case where the Applicable Unscheduled Principal Receipt
Period is the Prior Month Receipt Period and such Unscheduled
Principal Receipt is received by the Servicer during the month
preceding the month of such Distribution Date, the amount of
interest that would have accrued at the Net Mortgage Interest
Rate on the amount of such Unscheduled Principal Receipt from the
day of its receipt or, if earlier, its application by the
Servicer through the last day of the month in which such
Unscheduled Principal Receipt is received.
Current Class A Interest Distribution Amount: As to any Distribution Date,
the amount distributed in respect of the Class A Subclasses pursuant to
Paragraph first of Section 4.01(a)(i) on such Distribution Date.
Current Class B Interest Distribution Amount: As to any Distribution Date,
the amount distributed in respect of the Class B Certificates pursuant to
Paragraphs eighth, eleventh, fourteenth, seventeenth and twentieth of Section
4.01(a)(i) on such Distribution Date.
Current Class B-1 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Class B Subclass Principal Balances of the Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates by the sum of the Class A Non-PO Principal
Balance, the Class M Principal Balance and the Class B Principal Balance. As to
the first Distribution Date, the Original Class B-1 Fractional Interest.
Current Class B-2 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Class B Subclass Principal Balances of the Class B-3, Class B-4
and Class B-5 Certificates by the sum of the Class A Non-PO Principal Balance,
the Class M Principal Balance and the Class B Principal Balance. As to the first
Distribution Date, the Original Class B-2 Fractional Interest.
Current Class B-3 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the sum of the Class B Subclass Principal Balances of the Class B-4 and Class
B-5 Certificates by the sum of the Class A Non-PO Principal Balance, the Class M
Principal Balance and the Class B Principal Balance. As to the first
Distribution Date, the Original Class B-3 Fractional Interest.
Current Class B-4 Fractional Interest: As to any Distribution Date
subsequent to the first Distribution Date, the percentage obtained by dividing
the Class B Subclass Principal Balance of the Class B-5 Certificates by the sum
of the Class A Non-PO Principal Balance, the Class M Principal Balance and the
Class B Principal Balance. As to the first Distribution Date, the Original Class
B-4 Fractional Interest.
Current Class M Fractional Interest: As to any Distribution Date subsequent
to the first Distribution Date, the percentage obtained by dividing the Class B
Principal Balance by the sum of the Class A Non-PO Principal Balance, the Class
M Principal Balance and the Class B Principal Balance. As to the first
Distribution Date, the Original Class M Fractional Interest.
Current Class M Interest Distribution Amount: As to any Distribution Date,
the amount distributed in respect of the Class M Certificates pursuant to
Paragraph fifth of Section 4.01(a)(i) on such Distribution Date.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Prepayment in Full.
Custodial Agreement: The Custodial Agreement, if any, from time to time in
effect between the Custodian named therein, a Servicer and the Trustee,
substantially in the form of Exhibit E hereto, as the same may be amended or
modified from time to time in accordance with the terms thereof.
Custodial P&I Account: The Custodial P&I Account, as defined in each of the
Servicing Agreements, with respect to the Mortgage Loans. In determining whether
the Custodial P&I Account under any Servicing Agreement is "acceptable" to the
Master Servicer (as may be required by the definition of "Eligible Account"
contained in the Servicing Agreements), the Master Servicer shall require that
any such account shall be acceptable to each of the Rating Agencies.
Custodian: Initially, the Trustee, and thereafter the Custodian, if any,
hereafter appointed by the Trustee pursuant to Section 8.13, or its successor in
interest under the Custodial Agreement. The Custodian may (but need not) be the
Trustee, the Trustee or any Person directly or indirectly controlling or
controlled by or under common control of the Trustee. Neither a Servicer, nor
the Seller nor the Master Servicer nor any Person directly or indirectly
controlling or controlled by or under common control with any such Person may be
appointed Custodian.
Cut-Off Date: The first day of the month of initial issuance of the
Certificates as set forth in Section 11.02.
Cut-Off Date Aggregate Principal Balance: The aggregate of the Cut-Off Date
Principal Balances of the Mortgage Loans is as set forth in Section 11.03.
Cut-Off Date Principal Balance: As to each Mortgage Loan, its unpaid
principal balance as of the close of business on the Cut-Off Date (but without
giving effect to any Unscheduled Principal Receipts received or applied on the
Cut-Off Date), reduced by all payments of principal due on or before the Cut-Off
Date and not paid, and increased by scheduled monthly payments of principal due
after the Cut-Off Date but received by the related Servicer on or before the
Cut-Off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then-outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.01(b).
Denomination: The amount, if any, specified on the face of each Certificate
representing the principal portion of the Cut-Off Date Aggregate Principal
Balance evidenced by such Certificate.
Determination Date: The 17th day of the month in which the related
Distribution Date occurs, or if such 17th day is not a Business Day, the
Business Day preceding such 17th day.
Discount Mortgage Loan: A Mortgage Loan with a Net Mortgage Interest Rate
of less than 7.75%.
Distribution Date: The 25th day of any month, beginning in the month
following the month of initial issuance of the Certificates, or if such 25th day
is not a Business Day, the Business Day following such 25th day.
Due Date: With respect to any Mortgage Loan, the day of the month in which
the Monthly Payment on such Mortgage Loan is scheduled to be paid.
Eligible Account: One or more accounts (i) that are maintained with a
depository institution (which may be the Master Servicer) whose long-term debt
obligations (or, in the case of a depository institution which is part of a
holding company structure, the long-term debt obligations of such parent holding
company) at the time of deposit therein are rated at least "AA" (or the
equivalent) by each of the Rating Agencies, (ii) the deposits in which are fully
insured by the FDIC through either the Bank Insurance Fund or the Savings
Association Insurance Fund, (iii) the deposits in which are insured by the FDIC
through either the Bank Insurance Fund or the Savings Association Insurance Fund
(to the limit established by the FDIC) and the uninsured deposits in which
accounts are otherwise secured, as evidenced by an Opinion of Counsel delivered
to the Trustee, such that the Trustee, on behalf of the Certificateholders has a
claim with respect to the funds in such accounts or a perfected first security
interest against any collateral securing such funds that is superior to claims
of any other depositors or creditors of the depository institution with which
such accounts are maintained, (iv) that are trust accounts maintained with the
trust department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity or (v) such other account that is
acceptable to each of the Rating Agencies and would not cause the Trust Estate
to fail to qualify as two separate REMICs or result in the imposition of any
federal tax on either the Upper-Tier REMIC or the Lower-Tier REMIC.
Eligible Investments: At any time, any one or more of the following
obligations and securities which shall mature not later than the Business Day
preceding the Distribution Date next succeeding the date of such investment,
provided that such investments continue to qualify as "cash flow investments" as
defined in Code Section 860G(a)(6):
(i) obligations of the United States of America or any agency
thereof, provided such obligations are backed by the full faith and
credit of the United States of America;
(ii) general obligations of or obligations guaranteed by any
state of the United States of America or the District of Columbia
receiving the highest short-term or highest long-term rating of each
Rating Agency, or such lower rating as would not result in the
downgrading or withdrawal of the rating then assigned to any of the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency;
(iii) commercial or finance company paper which is then rated in
the highest long-term commercial or finance company paper rating
category of each Rating Agency or the highest short-term rating
category of each Rating Agency, or such lower rating category as would
not result in the downgrading or withdrawal of the rating then
assigned to any of the Certificates by either Rating Agency or result
in any of such rated Certificates being placed on credit review status
(other than for possible upgrading) by either Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal
funds or banker's acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of
any state thereof and subject to supervision and examination by
federal and/or state banking authorities, provided that the commercial
paper and/or debt obligations of such depository institution or trust
company (or in the case of the principal depository institution in a
holding company system, the commercial paper or debt obligations of
such holding company) are then rated in the highest short-term or the
highest long-term rating category for such securities of each of the
Rating Agencies, or such lower rating categories as would not result
in the downgrading or withdrawal of the rating then assigned to any of
the Certificates by either Rating Agency or result in any of such
rated Certificates being placed on credit review status (other than
for possible upgrading) by either Rating Agency;
(v) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to each Rating
Agency at the time of the issuance of such agreements;
(vi) repurchase agreements on obligations with respect to any
security described in clauses (i) or (ii) above or any other security
issued or guaranteed by an agency or instrumentality of the United
States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in (iv)
above;
(vii) securities (other than stripped bonds or stripped coupon
securities) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of
America or any state thereof which, at the time of such investment or
contractual commitment providing for such investment, are then rated
in the highest short-term or the highest long-term rating category by
each Rating Agency, or in such lower rating category as would not
result in the downgrading or withdrawal of the rating then assigned to
any of the Certificates by either Rating Agency or result in any of
such rated Certificates being placed on credit review status by either
Rating Agency; and
(viii) such other investments acceptable to each Rating Agency as
would not result in the downgrading of the rating then assigned to the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency.
In no event shall an instrument be an Eligible Investment if such
instrument evidences either (i) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (ii) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provide a
yield to maturity at the date of investment of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Prohibited Holder: As defined in Section 5.02(d).
Errors and Omissions Policy: As defined in each of the Servicing
Agreements.
Event of Default: Any of the events specified in Section 7.01.
Excess Bankruptcy Loss: With respect to any Distribution Date and any
Mortgage Loan as to which a Bankruptcy Loss is realized in the month preceding
the month of such Distribution Date, (i) if the Aggregate Current Bankruptcy
Losses with respect to such Distribution Date exceed the then-applicable
Bankruptcy Loss Amount, then the portion of such Bankruptcy Loss represented by
the ratio of (a) the excess of the Aggregate Current Bankruptcy Losses over the
then-applicable Bankruptcy Loss Amount, divided by (b) the Aggregate Current
Bankruptcy Losses or (ii) if the Aggregate Current Bankruptcy Losses with
respect to such Distribution Date are less than or equal to the then-applicable
Bankruptcy Loss Amount, then zero. In addition, any Bankruptcy Loss occurring
with respect to a Mortgage Loan on or after the Cross-Over Date will be an
Excess Bankruptcy Loss.
Excess Fraud Loss: With respect to any Distribution Date and any Mortgage
Loan as to which a Fraud Loss is realized in the month preceding the month of
such Distribution Date, (i) if the Aggregate Current Fraud Losses with respect
to such Distribution Date exceed the then-applicable Fraud Loss Amount, then the
portion of such Fraud Loss represented by the ratio of (a) the excess of the
Aggregate Current Fraud Losses over the then-applicable Fraud Loss Amount,
divided by (b) the Aggregate Current Fraud Losses, or (ii) if the Aggregate
Current Fraud Losses with respect to such Distribution Date are less than or
equal to the then-applicable Fraud Loss Amount, then zero. In addition, any
Fraud Loss occurring with respect to a Mortgage Loan on or after the Cross-Over
Date will be an Excess Fraud Loss.
Excess Special Hazard Loss: With respect to any Distribution Date and any
Mortgage Loan as to which a Special Hazard Loss is realized in the month
preceding the month of such Distribution Date, (i) if the Aggregate Current
Special Hazard Losses with respect to such Distribution Date exceed the
then-applicable Special Hazard Loss Amount, then the portion of such Special
Hazard Loss represented by the ratio of (a) the excess of the Aggregate Current
Special Hazard Losses over the then-applicable Special Hazard Loss Amount,
divided by (b) the Aggregate Current Special Hazard Losses, or (ii) if the
Aggregate Current Special Hazard Losses with respect to such Distribution Date
are less than or equal to the then-applicable Special Hazard Loss Amount, then
zero. In addition, any Special Hazard Loss occurring with respect to a Mortgage
Loan on or after the Cross-Over Date will be an Excess Special Hazard Loss.
Exhibit F-1 Mortgage Loan: Any of the Mortgage Loans identified in Exhibit
F-1 hereto, as such Exhibit may be amended from time to time in connection with
a substitution pursuant to Section 2.02, which Mortgage Loan is serviced under
the Norwest Servicing Agreement.
Exhibit F-2 Mortgage Loan: Any of the Mortgage Loans identified in Exhibit
F-2 hereto, as such Exhibit may be amended from time to time in connection with
a substitution pursuant to Section 2.02, which Mortgage Loan is serviced under
the Norwest Servicing Agreement.
Exhibit F-3 Mortgage Loan: Any of the Mortgage Loans identified in Exhibit
F-3 hereto, as such Exhibit may be amended from time to time in connection with
a substitution pursuant to Section 2.02, which Mortgage Loan is serviced under
an Other Servicing Agreement.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor thereto.
Fidelity Bond: As defined in each of the Servicing Agreements.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates is made pursuant to Section 9.01.
Fitch: Fitch Investors Service, L.P., or its successor in interest.
Fixed Retained Yield: The fixed percentage of interest on each Mortgage
Loan with a Mortgage Interest Rate greater than the sum of (a) 7.75%, (b) the
Servicing Fee Rate and (c) the Master Servicing Fee Rate, which will be
determined on a loan by loan basis and will equal the Mortgage Interest Rate on
each Mortgage Loan minus the sum of (a), (b) and (c), which is not assigned to
and not part of the Trust Estate.
Fixed Retained Yield Rate: With respect to each Mortgage Loan, a per annum
rate equal to the greater of (a) zero and (b) the Mortgage Interest Rate on such
Mortgage Loan minus the sum of (i) 7.75%, (ii) the Servicing Fee Rate and (iii)
the Master Servicing Fee Rate.
FNMA: The Federal National Mortgage Association or any successor thereto.
Foreclosure Profits: As to any Distribution Date, the excess, if any, of
(i) Net Liquidation Proceeds in respect of each Mortgage Loan that became a
Liquidated Loan during the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date over
(ii) the sum of the unpaid principal balance of each such Liquidated Loan plus
accrued and unpaid interest at the applicable Mortgage Interest Rate on the
unpaid principal balance thereof from the Due Date to which interest was last
paid by the Mortgagor (or, in the case of a Liquidated Loan that had been an REO
Mortgage Loan, from the Due Date to which interest was last deemed to have been
paid) to the first day of the month in which such Distribution Date occurs.
Fraud Loss: A Liquidated Loan Loss as to which there was fraud in the
origination of such Mortgage Loan.
Fraud Loss Amount: As of any Distribution Date after the Cut-Off Date an
amount equal to: (X) prior to the first anniversary of the Cut-Off Date an
amount equal to $7,663,339.00 minus the aggregate amount of Fraud Losses
allocated solely to the Class B Certificates in accordance with Section 4.02(a)
since the Cut-Off Date, and (Y) from the first through fifth anniversary of the
Cut-Off Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as
of the most recent anniversary of the Cut-Off Date and (b) 1.00% of the
aggregate outstanding principal balance of all of the Mortgage Loans as of the
most recent anniversary of the Cut-Off Date minus (2) the Fraud Losses allocated
solely to the Class B Certificates in accordance with Section 4.02(a) since the
most recent anniversary of the Cut-Off Date. On and after the Cross-Over Date or
after the fifth anniversary of the Cut-Off Date the Fraud Loss Amount shall be
zero.
Full Unscheduled Principal Receipt: Any Unscheduled Principal Receipt with
respect to a Mortgage Loan (i) in the amount of the outstanding principal
balance of such Mortgage Loan and resulting in the full satisfaction of such
Mortgage Loan or (ii) representing Liquidation Proceeds other than Partial
Liquidation Proceeds.
Holder: See "Certificateholder."
Independent: When used with respect to any specified Person, such Person
who (i) is in fact independent of the Seller, the Master Servicer and any
Servicer, (ii) does not have any direct financial interest or any material
indirect financial interest in the Seller or the Master Servicer or any Servicer
or in an affiliate of either, and (iii) is not connected with the Seller, the
Master Servicer or any Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Insurance Policy: Any insurance or performance bond relating to a Mortgage
Loan or the Mortgage Loans, including any hazard insurance, special hazard
insurance, flood insurance, primary mortgage insurance, mortgagor bankruptcy
bond or title insurance.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any Insurance
Policy covering a Mortgage Loan.
Insured Expenses: Expenses covered by any Insurance Policy covering a
Mortgage Loan.
Liquidated Loan: A Mortgage Loan with respect to which the related
Mortgaged Property has been acquired, liquidated or foreclosed and with respect
to which the applicable Servicer determines that all Liquidation Proceeds which
it expects to recover have been recovered.
Liquidated Loan Loss: With respect to any Distribution Date, the aggregate
of the amount of losses with respect to each Mortgage Loan which became a
Liquidated Loan during the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date, equal
to the excess of (i) the unpaid principal balance of each such Liquidated Loan,
plus accrued interest thereon in accordance with the amortization schedule at
the time applicable thereto at the applicable Net Mortgage Interest Rate from
the Due Date as to which interest was last paid with respect thereto through the
last day of the month preceding the month in which such Distribution Date
occurs, over (ii) Net Liquidation Proceeds with respect to such Liquidated Loan.
Liquidation Expenses: Expenses incurred by a Servicer in connection with
the liquidation of any defaulted Mortgage Loan or property acquired in respect
thereof (including, without limitation, legal fees and expenses, committee or
referee fees, and, if applicable, brokerage commissions and conveyance taxes),
any unreimbursed advances expended by such Servicer pursuant to its Servicing
Agreement or the Master Servicer or Trustee pursuant hereto respecting the
related Mortgage Loan, including any unreimbursed advances for real property
taxes or for property restoration or preservation of the related Mortgaged
Property. Liquidation Expenses shall not include any previously incurred
expenses in respect of an REO Mortgage Loan which have been netted against
related REO Proceeds.
Liquidation Proceeds: Amounts received by a Servicer (including Insurance
Proceeds) in connection with the liquidation of defaulted Mortgage Loans or
property acquired in respect thereof, whether through foreclosure, sale or
otherwise, including payments in connection with such Mortgage Loans received
from the Mortgagor, other than amounts required to be paid to the Mortgagor
pursuant to the terms of the applicable Mortgage or to be applied otherwise
pursuant to law.
Loan-to-Value Ratio: The ratio, expressed as a percentage, the numerator of
which is the principal balance of a particular Mortgage Loan at origination and
the denominator of which is the lesser of (x) the appraised value of the related
Mortgaged Property determined in the appraisal used by the originator at the
time of origination of such Mortgage Loan, and (y) if the Mortgage is originated
in connection with a sale of the Mortgaged Property, the sale price for such
Mortgaged Property.
Lower-Tier Distribution Amount: As defined in Section 4.01(a)(ii).
Lower-Tier REMIC: One of two separate REMICs comprising the Trust Estate,
the assets of which consist of the Mortgage Loans, such amounts as shall from
time to time be held in the Certificate Account, the insurance policies, if any,
relating to a Mortgage Loan, property which secured a Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure.
Master Servicer: Norwest Bank Minnesota, National Association, or its
successor in interest.
Master Servicing Fee: With respect to any Mortgage Loan and any
Distribution Date, the fee payable monthly to the Master Servicer pursuant to
Section 6.05 equal to a fixed percentage (expressed as a per annum rate) of the
unpaid principal balance of such Mortgage Loan.
Master Servicing Fee Rate: As set forth in Section 11.29.
Mid-Month Receipt Period: With respect to each Distribution Date, the one
month period beginning on the Determination Date occurring in the calendar month
preceding the month in which such Distribution Date occurs and ending on the day
preceding the Determination Date immediately preceding such Distribution Date.
Monthly Payment: As to any Mortgage Loan (including any REO Mortgage Loan)
and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment for any Curtailments and Deficient Valuations occurring prior to such
Due Date but before any adjustment to such amortization schedule, other than for
Deficient Valuations, by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period).
Month End Interest: As defined in each Servicing Agreement.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on Mortgaged Property securing a Mortgage Note together with any Mortgage
Loan Rider, if applicable.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum rate at
which interest accrues on the unpaid principal balance thereof as set forth in
the related Mortgage Note, which rate is as indicated on the Mortgage Loan
Schedule.
Mortgage Loan Rider: The standard FNMA/FHLMC riders to the Mortgage Note
and/or Mortgage riders required when the Mortgaged Property is a condominium
unit or a unit in a planned unit development.
Mortgage Loan Schedule: The list of the Mortgage Loans transferred to the
Trustee on the Closing Date as part of the Trust Estate and attached hereto as
Exhibits F-1, F-2 and F-3, which list may be amended following the Closing Date
upon conveyance of a Substitute Mortgage Loan pursuant to Section 2.02 or 2.03
and which list shall set forth at a minimum the following information of the
close of business on the Cut-Off Date (or, with respect to Substitute Mortgage
Loans, as of the close of business on the day of substitution) as to each
Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the city, state and zip code of the Mortgaged Property;
(iii) the type of property;
(iv) the Mortgage Interest Rate;
(v) the Net Mortgage Interest Rate;
(vi) the Monthly Payment;
(vii) the original number of months to maturity;
(viii) the scheduled maturity date;
(ix) the Cut-Off Date Principal Balance;
(x) the Loan-to-Value Ratio at origination;
(xi) whether such Mortgage Loan is a Subsidy Loan;
(xii) whether such Mortgage Loan is covered by primary mortgage
insurance;
(xiii) the Servicing Fee Rate;
(xiv) whether such Mortgage Loan is a T.O.P. Mortgage Loan;
(xv) Fixed Retained Yield, if applicable;
(xvi) the Master Servicing Fee; and
(xvii) for Mortgage Loans identified on Exhibit F-3, the name of the
Servicer with respect thereto.
Such schedule may consist of multiple reports that collectively set forth
all of the information required.
Mortgage Loans: Each of the mortgage loans transferred and assigned to the
Trustee on the Closing Date pursuant to Section 2.01 and any mortgage loans
substituted therefor pursuant to Section 2.02 or 2.03, in each case as from time
to time are included in the Trust Estate as identified in the Mortgage Loan
Schedule.
Mortgage Note: The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan together with any related
Mortgage Loan Riders, if applicable.
Mortgaged Property: The property subject to a Mortgage, which may include
Co-op Shares.
Mortgagor: The obligor on a Mortgage Note.
Net Foreclosure Profits: As to any Distribution Date, the amount, if any,
by which (i) Aggregate Foreclosure Profits with respect to such Distribution
Date exceed (ii) Liquidated Loan Losses with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Loan, Liquidation Proceeds
net of Liquidation Expenses. For all purposes of this Agreement, Net Liquidation
Proceeds shall be allocated first to accrued and unpaid interest on the related
Mortgage Loan and then to the unpaid principal balance thereof.
Net Mortgage Interest Rate: With respect to each Mortgage Loan, a rate
equal to (i) the Mortgage Interest Rate on such Mortgage Loan minus (ii) the sum
of (a) the Servicing Fee Rate, as set forth in Section 11.28 with respect to
such Mortgage Loan, (b) the Master Servicing Fee Rate, as set forth in Section
11.29 with respect to such Mortgage Loan and (c) the Fixed Retained Yield Rate,
if any, with respect to such Mortgage Loan. Any regular monthly computation of
interest at such rate shall be based upon annual interest at such rate on the
applicable amount divided by twelve.
Net Partial Liquidation Proceeds: Partial Liquidation Proceeds with respect
to a Mortgage Loan net of unreimbursed Liquidation Expenses incurred with
respect to such Mortgage Loan. For all purposes of this Agreement, Net Partial
Liquidation Proceeds shall be allocated first to accrued and unpaid interest on
the related Mortgage Loan and then to the unpaid principal balance thereof.
Net REO Proceeds: As to any REO Mortgage Loan, REO Proceeds net of any
related expenses of the Servicer.
Non-permitted Foreign Holder: As defined in Section 5.02(d).
Non-PO Fraction: With respect to any Mortgage Loan, the quotient obtained
by dividing the Net Mortgage Interest Rate for such Mortgage Loan by 7.750%.
Non-PO Voting Interest: The ratio obtained by dividing the Pool Balance
(Non-PO Portion) by the sum of the Pool Balance (Non-PO Portion) and the Pool
Balance (PO Portion).
Nonrecoverable Advance: Any portion of a Periodic Advance previously made
or proposed to be made in respect of a Mortgage Loan which has not been
previously reimbursed to the Servicer, the Master Servicer or the Trustee, as
the case may be, and which the Servicer or the Master Servicer or the Trustee
determines will not, or in the case of a proposed Periodic Advance would not, be
ultimately recoverable from Liquidation Proceeds or other recoveries in respect
of the related Mortgage Loan. The determination by the Servicer, the Master
Servicer or the Trustee (i) that it has made a Nonrecoverable Advance or (ii)
that any proposed Periodic Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officer's Certificate of the Servicer
delivered to the Master Servicer for redelivery to the Trustee or, in the case
of a Master Servicer or Trustee determination, an Officer's Certificate of the
Master Servicer or the Trustee delivered to the Trustee, in each case detailing
the reasons for such determination.
Non-Supported Interest Shortfall: With respect to any Distribution Date,
the excess, if any, of the aggregate Prepayment Interest Shortfall on the
Mortgage Loans over the aggregate Compensating Interest with respect to such
Distribution Date. With respect to each Distribution Date occurring on or after
the Cross-Over Date, the Non-Supported Interest Shortfall determined pursuant to
the preceding sentence will be increased by the amount of any Cross-Over Date
Interest Shortfall for such Distribution Date. Any Non-Supported Interest
Shortfall will be allocated to (a) the Class A Certificates according to the
percentage obtained by dividing the Class A Non-PO Principal Balance by the sum
of the Class A Non-PO Principal Balance, the Class M Principal Balance and the
Class B Principal Balance, (b) the Class M Certificates according to the
percentage obtained by dividing the Class M Principal Balance by the sum of the
Class A Non-PO Principal Balance, the Class M Principal Balance and the Class B
Principal Balance and (c) the Class B Certificates according to the percentage
obtained by dividing the Class B Principal Balance by the sum of the Class A
Non-PO Principal Balance, the Class M Principal Balance and the Class B
Principal Balance.
Non-U.S. Person: As defined in Section 4.01(g).
Norwest Mortgage: Norwest Mortgage, Inc., or its successor in interest.
Norwest Mortgage Correspondents: The entities, other than PHMC, listed on
the Mortgage Loan Schedule, from which Norwest Mortgage purchased the Mortgage
Loans.
Norwest Servicing Agreement: The Servicing Agreement providing for the
servicing of the Exhibit F-1 and Exhibit F-2 Mortgage Loans initially by Norwest
Mortgage.
Officers' Certificate: With respect to any Person, a certificate signed by
the Chairman of the Board, the President or a Vice President, and by the
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who may be outside or
salaried counsel for the Seller, a Servicer or the Master Servicer, or any
affiliate of the Seller, a Servicer or the Master Servicer, acceptable to the
Trustee; provided, however, that with respect to REMIC matters, matters relating
to the determination of Eligible Accounts or matters relating to transfers of
Certificates, such counsel shall be Independent.
Optimal Adjustment Event: With respect to the Class M Certificates or any
Class B Subclass and any Distribution Date, an Optimal Adjustment Event will
occur with respect to such Class or Subclass if: (i) the principal balance of
such Class or Subclass on the Determination Date succeeding such Distribution
Date would have been reduced to zero (regardless of whether such principal
balance was reduced to zero as a result of principal distribution or the
allocation of Realized Losses) and (ii) any Class A Subclass Principal Balance
(other than with respect to the Class A-12 Certificates) or Component Principal
Balance would be subject to further reduction as a result of the third sentence
of the definition of Class A Subclass Principal Balance or Component Principal
Balance or, with respect to any Class B Subclass, the Class M Principal Balance
or the Class B Subclass Principal Balance of a Class B Subclass with a lower
numerical designation would be reduced with respect to such Distribution Date as
a result of the application of clause (ii) of the definition of Class M
Principal Balance, Class B-1 Principal Balance, Class B-2 Principal Balance,
Class B-3 Principal Balance, Class B-4 Principal Balance or Class B-5 Principal
Balance.
Original Class A Percentage: The Class A Percentage as of the Cut-Off Date,
as set forth in Section 11.04.
Original Class A Non-PO Principal Balance: The sum of (i) the Original
Class A Subclass Principal Balances of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10,
Class A-11, Class A-13, Class A-14, Class A-15, Class A-16, Class A-R and Class
A-LR Certificates and (ii) the Original Class A-12 TAC Accrual Component
Principal Balance as set forth in Section 11.08.
Original Class A Subclass Principal Balance: Any of the Original Class A
Subclass Principal Balances as set forth in Section 11.05.
Original Class A-12 PO Component Principal Balance: The Original Class A-12
PO Component Principal Balance, as set forth in Section 11.07.
Original Class A-12 TAC Accrual Component Principal Balance: The Original
Class A-12 TAC Accrual Component Principal Balance, as set forth in Section
11.08.
Original Class B Principal Balance: The sum of the Original Class B-1
Principal Balance, Original Class B-2 Principal Balance, Original Class B-3
Principal Balance, Original Class B-4 Principal Balance and Original Class B-5
Principal Balance, as set forth in Section 11.18.
Original Class B-1 Fractional Interest: As to the first Distribution Date,
the percentage obtained by dividing the sum of the Original Class B-2 Principal
Balance, the Original Class B-3 Principal Balance, the Original Class B-4
Principal Balance and the Original Class B-5 Principal Balance by the sum of the
Original Class A Non-PO Principal Balance, the Original Class M Principal
Balance and the Original Class B Principal Balance. The Original Class B-1
Fractional Interest is specified in Section 11.20.
Original Class B-2 Fractional Interest: As to the first Distribution Date,
the percentage obtained by dividing the sum of the Original Class B-3 Principal
Balance, the Original Class B-4 Principal Balance and the Original Class B-5
Principal Balance by the sum of the Original Class A Non-PO Principal Balance,
the Original Class M Principal Balance and the Original Class B Principal
Balance. The Original Class B-2 Fractional Interest is specified in Section
11.21.
Original Class B-3 Fractional Interest: As to the first Distribution Date,
the percentage obtained by dividing the sum of the Original Class B-4 Principal
Balance and the Original Class B-5 Principal Balance by the sum of the Original
Class A Non-PO Principal Balance, the Original Class M Principal Balance and the
Original Class B Principal Balance. The Original Class B-3 Fractional Interest
is specified in Section 11.22.
Original Class B-4 Fractional Interest: As to the first Distribution Date,
the percentage obtained by dividing the Original Class B-5 Principal Balance by
the sum of the Original Class A Non-PO Principal Balance, the Original Class M
Principal Balance and the Original Class B Principal Balance. The Original Class
B-4 Fractional Interest is specified in Section 11.23.
Original Class B-1 Percentage: The Class B-1 Percentage as of the Cut-Off
Date, as set forth in Section 11.13.
Original Class B-2 Percentage: The Class B-2 Percentage as of the Cut-Off
Date, as set forth in Section 11.14.
Original Class B-3 Percentage: The Class B-3 Percentage as of the Cut-Off
Date, as set forth in Section 11.15.
Original Class B-4 Percentage: The Class B-4 Percentage as of the Cut-Off
Date, as set forth in Section 11.16.
Original Class B-5 Percentage: The Class B-5 Percentage as of the Cut-Off
Date, as set forth in Section 11.17.
Original Class B-1 Principal Balance: The Class B-1 Principal Balance as of
the Cut-Off Date, as set forth in Section 11.19.
Original Class B-2 Principal Balance: The Class B-2 Principal Balance as of
the Cut-Off Date, as set forth in Section 11.19.
Original Class B-3 Principal Balance: The Class B-3 Principal Balance as of
the Cut-Off Date, as set forth in Section 11.19.
Original Class B-4 Principal Balance: The Class B-4 Principal Balance as of
the Cut-Off Date, as set forth in Section 11.19.
Original Class B-5 Principal Balance: The Class B-5 Principal Balance as of
the Cut-Off Date, as set forth in Section 11.19.
Original Class M Fractional Interest: As to the first Distribution Date,
the percentage obtained by dividing the Original Class B Principal Balance by
the sum of the Original Class A Non-PO Principal Balance, the Original Class M
Principal Balance and the Original Class B Principal Balance. The Original Class
M Fractional Interest is specified in Section 11.12.
Original Class M Percentage: The Class M Percentage as of the Cut-Off Date,
as set forth in Section 11.10.
Original Class M Principal Balance: The Class M Principal Balance as of the
Cut-Off Date, as set forth in Section 11.11.
Original Subordinated Percentage: The Subordinated Percentage as of the
Cut-Off Date, as set forth in Section 11.09.
Original Subordinated Principal Balance: The sum of the Original Class M
Principal Balance and the Original Class B Principal Balance.
Other Servicer: Any of the Servicers other than Norwest Mortgage.
Other Servicing Agreements: The Servicing Agreements other than the Norwest
Servicing Agreement.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan (including
an REO Mortgage Loan) which was not the subject of a Full Unscheduled Principal
Receipt prior to such Due Date and which was not repurchased by the Seller prior
to such Due Date pursuant to Section 2.02 or 2.03.
Owner Mortgage Loan File: A file maintained by the Trustee (or the
Custodian, if any) for each Mortgage Loan that contains the documents specified
in the Servicing Agreements under their respective "Owner Mortgage Loan File"
definition or similar definition and/or other provisions requiring delivery of
specified documents to the owner of the Mortgage Loan in connection with the
purchase thereof, and any additional documents required to be added to the Owner
Mortgage Loan File pursuant to this Agreement.
Partial Liquidation Proceeds: Liquidation Proceeds received by a Servicer
prior to the month in which the related Mortgage Loan became a Liquidated Loan.
Partial Unscheduled Principal Receipt: An Unscheduled Principal Receipt
which is not a Full Unscheduled Principal Receipt.
Paying Agent: The Person authorized on behalf of the Trustee, as agent for
the Master Servicer, to make distributions to Certificateholders with respect to
the Certificates and to forward to Certificateholders the periodic and annual
statements required by Section 4.04. The Paying Agent may be any Person directly
or indirectly controlling or controlled by or under common control with the
Master Servicer and may be the Trustee. The initial Paying Agent is appointed in
Section 4.03(a).
Payment Account: The account maintained pursuant to Section 4.03(b).
Percentage Interest: With respect to a Class A Certificate, the undivided
percentage interest obtained by dividing the original principal balance of such
Certificate by the aggregate original principal balance of all Certificates of
such Class A Subclass. With respect to a Class M Certificate, the undivided
percentage interest obtained by dividing the original principal balance of such
Certificate by the aggregate original principal balance of all Certificates of
such Class. With respect to a Class B Certificate, the undivided percentage
interest obtained by dividing the original principal balance of such Certificate
by the aggregate original principal balance of all Certificates of such Class B
Subclass.
Periodic Advance: The aggregate of the advances required to be made by a
Servicer on any Distribution Date pursuant to its Servicing Agreement or by the
Master Servicer or the Trustee hereunder, the amount of any such advances being
equal to the total of all Monthly Payments (adjusted, in each case (i) in
respect of interest, to the applicable Mortgage Interest Rate less the
applicable Servicing Fee in the case of Periodic Advances made by a Servicer and
to the applicable Net Mortgage Interest Rate in the case of Periodic Advances
made by the Master Servicer or Trustee and (ii) by the amount of any related
Debt Service Reductions or reductions in the amount of interest collectable from
the Mortgagor pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, or similar legislation or regulations then in effect) on the
Mortgage Loans, that (x) were delinquent as of the close of business on the
related Determination Date, (y) were not the subject of a previous Periodic
Advance by such Servicer or of a Periodic Advance by the Master Servicer or the
Trustee, as the case may be and (z) have not been determined by the Master
Servicer, such Servicer or Trustee to be Nonrecoverable Advances.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
PHMC: The Prudential Home Mortgage Company, Inc.
Plan: As defined in Section 5.02(c).
PO Fraction: With respect to any Discount Mortgage Loan, the difference
between 1.0 and the Non-PO Fraction for such Mortgage Loan; with respect to any
other Mortgage Loan, zero.
Pool Balance (Non-PO Portion): As of any Distribution Date, the sum of the
amounts for each Mortgage Loan that is an Outstanding Mortgage Loan of the
product of (i) the Non-PO Fraction for such Mortgage Loan and (ii) the Scheduled
Principal Balance of such Mortgage Loan.
Pool Balance (PO Portion): As of any Distribution Date, the sum of the
amounts for each Mortgage Loan that is an Outstanding Mortgage Loan of the
product of (i) the PO Fraction for such Mortgage Loan and (ii) the Scheduled
Principal Balance of such Mortgage Loan.
Pool Distribution Amount: As of any Distribution Date, the funds eligible
for distribution to the Holders of the Certificates on such Distribution Date,
which shall be the sum of (i) all previously undistributed payments or other
receipts on account of principal and interest on or in respect of the Mortgage
Loans (including, without limitation, the proceeds of any repurchase of a
Mortgage Loan by the Seller and any Substitution Principal Amount) received by
the Master Servicer with respect to the applicable Remittance Date in the month
of such Distribution Date and any Unscheduled Principal Receipts received by the
Master Servicer on or prior to the Business Day preceding such Distribution
Date, (ii) all Periodic Advances made by a Servicer pursuant to the related
Servicing Agreement or Periodic Advances made by the Master Servicer or the
Trustee pursuant to Section 3.03 and (iii) all other amounts required to be
placed in the Certificate Account by the Servicer on or before the applicable
Remittance Date or by the Master Servicer or the Trustee on or prior to the
Distribution Date, but excluding the following:
(a) amounts received as late payments of principal or interest
and respecting which the Master Servicer or the Trustee has made one
or more unreimbursed Periodic Advances;
(b) the portion of Net Liquidation Proceeds used to reimburse any
unreimbursed Periodic Advances by the Master Servicer or the Trustee;
(c) those portions of each payment of interest on a particular
Mortgage Loan which represent (i) the Fixed Retained Yield, if any,
(ii) the applicable Servicing Fee and (iii) the Master Servicing Fee;
(d) all amounts representing scheduled payments of principal and
interest due after the Due Date occurring in the month in which such
Distribution Date occurs;
(e) all Unscheduled Principal Receipts received by the Servicers
after the Applicable Unscheduled Principal Receipt Period relating to
the Distribution Date for the applicable type of Unscheduled Principal
Receipt, and all related payments of interest on such amounts;
(f) all repurchase proceeds with respect to Mortgage Loans
repurchased by the Seller pursuant to Section 2.02 or 2.03 on or
following the Due Date in the month in which such Distribution Date
occurs and the difference between the unpaid principal balance of such
Mortgage Loan substituted for a defective Mortgage Loan during the
month preceding the month in which such Distribution Date occurs and
the unpaid principal balance of such defective Mortgage Loan;
(g) that portion of Liquidation Proceeds and REO Proceeds which
represents any unpaid Servicing Fee or Master Servicing Fee or any
unpaid Fixed Retained Yield;
(h) all income from Eligible Investments that is held in the
Certificate Account for the account of the Master Servicer;
(i) all other amounts permitted to be withdrawn from the
Certificate Account in respect of the Mortgage Loans, to the extent
not covered by clauses (a) through (h) above, or not required to be
deposited in the Certificate Account under this Agreement;
(j) Net Foreclosure Profits;
(k) Month End Interest; and
(l) the amount of any recoveries in respect of principal which
had previously been allocated as a loss to one or more Subclasses of
Class A or Class B Certificates or the Class M Certificates pursuant
to Section 4.02.
Pool Scheduled Principal Balance: As to any Distribution Date, the
aggregate Scheduled Principal Balances of all Mortgage Loans that were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
Premium Mortgage Loan: A Mortgage Loan with a Net Mortgage Interest Rate of
greater than 7.750%.
Prepayment In Full: With respect to any Mortgage Loan, a Mortgagor payment
consisting of a Principal Prepayment in the amount of the outstanding principal
balance of such loan and resulting in the full satisfaction of such obligation.
Prepayment Interest Shortfall: On any Distribution Date, the amount of
interest, if any, that would have accrued on any Mortgage Loan which was the
subject of a Prepayment in Full at the Net Mortgage Interest Rate for such
Mortgage Loan from the date of its Prepayment in Full (but in the case of a
Prepayment in Full where the Applicable Unscheduled Principal Receipt Period is
the Mid-Month Receipt Period, only if the date of the Prepayment in Full is on
or after the Determination Date in the month prior to the month of such
Distribution Date and prior to the first day of the month of such Distribution
Date) through the last day of the month prior to the month of such Distribution
Date.
Principal Adjustment: In the event that the Class M Optimal Principal
Amount, Class B-1 Optimal Principal Amount, Class B-2 Optimal Principal Amount,
Class B-3 Optimal Principal Amount, Class B-4 Optimal Principal Amount or Class
B-5 Optimal Principal Amount is calculated in accordance with the proviso in
such definition with respect to any Distribution Date, the Principal Adjustment
for the Class M Certificates or such Class B Subclass shall equal the difference
between (i) the amount that would have been distributed to such Class or
Subclass as principal in accordance with Section 4.01(a) for such Distribution
Date, calculated without regard to such proviso and assuming there are no
Principal Adjustments for such Distribution Date and (ii) the Adjusted Principal
Balance for such Class or Subclass.
Principal Balance: Each of the Class A Subclass Principal Balances, the
Class M Principal Balance, the Class B-1 Principal Balance, the Class B-2
Principal Balance, the Class B-3 Principal Balance, the Class B-4 Principal
Balance and the Class B-5 Principal Balance.
Principal Prepayment: Any Mortgagor payment on a Mortgage Loan which is
received in advance of its Due Date and is not accompanied by an amount
representing scheduled interest for any period subsequent to the date of
prepayment.
Prior Month Receipt Period: With respect to each Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
Prohibited Transaction Tax: Any tax imposed under Section 860F of the Code.
Prudent Servicing Practices: The standard of care set forth in each
Servicing Agreement.
Rating Agency: Any nationally recognized statistical credit rating agency,
or its successor, that rated one or more Classes of the Certificates at the
request of the Seller at the time of the initial issuance of the Certificates.
The Rating Agencies for the Class A Certificates and Class M Certificates are
Fitch and S&P. The Rating Agency for the Class B-1, Class B-2, Class B-3 and
Class B-4 Certificates is Fitch. If any such agency or a successor is no longer
in existence, "Rating Agency" shall be such statistical credit rating agency, or
other comparable Person, designated by the Seller, notice of which designation
shall be given to the Trustee and the Master Servicer. References herein to the
highest short-term rating category of a Rating Agency shall mean F-1+ in the
case of Fitch, A-1+ in the case of S&P and in the case of any other Rating
Agency shall mean its equivalent of such ratings. References herein to the
highest long-term rating categories of a Rating Agency shall mean AAA and in the
case of any other Rating Agency shall mean its equivalent of such rating without
any plus or minus.
Realized Losses: With respect to any Distribution Date, (i) Liquidated Loan
Losses (including Special Hazard Losses and Fraud Losses) and (ii) Bankruptcy
Losses incurred in the month preceding the month of such Distribution Date.
Record Date: The last Business Day of the month preceding the month of the
related Distribution Date.
Relevant Anniversary: See "Bankruptcy Loss Amount."
REMIC: A "real estate mortgage investment conduit" as defined in Code
Section 860D.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury temporary, proposed or final regulations promulgated thereunder,
as the foregoing are in effect (or, with respect to proposed regulations, are
proposed to be in effect) from time to time.
Remittance Date: As defined in each of the Servicing Agreements.
REO Mortgage Loan: Any Mortgage Loan which is not a Liquidated Loan and as
to which the indebtedness evidenced by the related Mortgage Note is discharged
and the related Mortgaged Property is held as part of the Trust Estate.
REO Proceeds: Proceeds received in respect of any REO Mortgage Loan
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
Request for Release: A request for release in substantially the form
attached as Exhibit G hereto.
Responsible Officer: When used with respect to the Trustee, the Chairman or
Vice-Chairman of the Board of Directors or Trustees, the Chairman or
Vice-Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, the Controller and any Assistant Controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
Rule 144A: Rule 144A promulgated under the Securities Act of 1933, as
amended.
S&P: Standard & Poor's, or its successor in interest.
Scheduled Principal Amount: The sum for each outstanding Mortgage Loan
(including each defaulted Mortgage Loan, other than a Liquidated Loan, with
respect to which the related Mortgaged Property has been acquired by the Trust
Estate) of the product of (A) the Non-PO Fraction for such Mortgage Loan and (B)
the sum of the amounts described in clauses y(i) and y(iv) of the definition of
Class A Non-PO Optimal Principal Amount, but without that amount being
multiplied by the Class A Percentage.
Scheduled Principal Balance: As to any Mortgage Loan and Distribution Date,
the principal balance of such Mortgage Loan as of the Due Date in the month
preceding the month of such Distribution Date as specified in the amortization
schedule at the time relating thereto (before any adjustment to such
amortization schedule by reason of any bankruptcy (other than Deficient
Valuations) or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to (A) Unscheduled Principal Receipts received or
applied by the related Servicer during the related Unscheduled Principal Receipt
Period for each applicable type of Unscheduled Principal Receipt related to the
Distribution Date occurring in the month preceding such Distribution Date, (B)
Deficient Valuations incurred prior to such Due Date and (C) the payment of
principal due on such Due Date and irrespective of any delinquency in payment by
the related Mortgagor. Accordingly, the Scheduled Principal Balance of a
Mortgage Loan which becomes a Liquidated Loan at any time through the last day
of such related Unscheduled Principal Receipt Period shall be zero.
Seller: Norwest Asset Securities Corporation, or its successor in interest.
Senior Optimal Amount: As to any Distribution Date, the sum for such
Distribution Date of (a) the Class A Non-PO Optimal Amount and (b) the Class
A-PO Optimal Principal Amount.
Servicer Mortgage Loan File: As defined in each of the Servicing
Agreements.
Servicers: Each of Norwest Mortgage, Citicorp Mortgage, Inc., Suntrust
Mortgage, Inc., HomeSide Lending, First Union Mortgage Corporation, Countrywide
Home Loans, Inc. and Cimarron Mortgage, as Servicer under the related Servicing
Agreement.
Servicing Agreements: Each of the Servicing Agreements executed with
respect to a portion of the Mortgage Loans by one of the Servicers, which
agreements are attached hereto, collectively, as Exhibit L.
Servicing Fee: With respect to any Servicer, as defined in its Servicing
Agreement.
Servicing Fee Rate: With respect to a Mortgage Loan, as set forth in
Section 11.28.
Servicing Officer: Any officer of a Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans.
Similar Law: As defined in Section 5.02(e).
Single Certificate: A Certificate of any Class or Subclass that evidences
the smallest permissible Denomination for such Class or Subclass, as set forth
in Section 11.27.
Special Hazard Loss: (i) A Liquidated Loan Loss suffered by a Mortgaged
Property on account of direct physical loss, exclusive of (a) any loss covered
by a hazard policy or a flood insurance policy maintained in respect of such
Mortgaged Property pursuant to a Servicing Agreement and (b) any loss caused by
or resulting from:
(1) normal wear and tear;
(2) infidelity, conversion or other dishonest act on the part of
the Trustee, the Servicer or any of their agents or
employees; or
(3) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof
ensues;
or (ii) any Liquidated Loan Loss suffered by the Trust Estate arising from or
related to the presence or suspected presence of hazardous wastes or hazardous
substances on a Mortgaged Property unless such loss to a Mortgaged Property is
covered by a hazard policy or a flood insurance policy maintained in respect of
such Mortgaged Property pursuant to a Servicing Agreement.
Special Hazard Loss Amount: As of any Distribution Date, an amount equal to
$3,898,940.00 minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated solely to the Class B Certificates in accordance with Section 4.02(a)
and (ii) the Special Hazard Adjustment Amount (as defined below) as most
recently calculated. For each anniversary of the Cut-Off Date, the Special
Hazard Adjustment Amount shall be calculated and shall be equal to the amount,
if any, by which the amount calculated in accordance with the preceding sentence
(without giving effect to the deduction of the Special Hazard Adjustment Amount
for such anniversary) exceeds the greater of (A) the product of the Special
Hazard Percentage for such anniversary multiplied by the outstanding principal
balance of all the Mortgage Loans on the Distribution Date immediately preceding
such anniversary, (B) twice the outstanding principal balance of the Mortgage
Loan in the Trust Estate which has the largest outstanding principal balance on
the Distribution Date immediately preceding such anniversary and (C) that which
is necessary to maintain the original ratings on the Certificates, other than
the Class B Certificates, as evidenced by letters to that effect delivered by
Rating Agencies to the Master Servicer and the Trustee. On and after the
Cross-Over Date, the Special Hazard Loss Amount shall be zero.
Special Hazard Percentage: As of each anniversary of the Cut-Off Date, the
greater of (i) 1.00% and (ii) the largest percentage obtained by dividing the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the Mortgage Loans secured by Mortgaged Properties located
in a single, five-digit zip code area in the State of California by the
outstanding principal balance of all the Mortgage Loans as of the immediately
preceding Distribution Date.
Startup Day: As defined in Section 2.05.
Subclass: Each subdivision of the Class A Certificates, denominated
respectively as Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class
A-13, Class A-14, Class A-15, Class A-16, Class A-R and Class A-LR and each
subdivision of the Class B Certificates, denominated respectively as Class B-1,
Class B-2, Class B-3, Class B-4 and Class B-5.
Subordinated Percentage: As to any Distribution Date, the percentage which
is the difference between 100% and the Class A Percentage for such date.
Subordinated Prepayment Percentage: As to any Distribution Date, the
percentage which is the difference between 100% and the Class A Prepayment
Percentage for such date.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
by the employer of the Mortgagor. Each Subsidy Loan will be identified as such
in the Mortgage Loan Schedule.
Substitute Mortgage Loan: As defined in Section 2.02
Substitution Principal Amount: With respect to any Mortgage Loan
substituted in accordance with Section 2.02 or pursuant to Section 2.03, the
excess of (x) the unpaid principal balance of the Mortgage Loan which is
substituted for over (y) the unpaid principal balance of the Substitute Mortgage
Loan, each balance being determined as of the date of substitution.
TAC Certificates: Any of the Class A-7 Certificates, Class A-8
Certificates, Class A-9 Certificates, Class A-14 Certificates and Class A-15
Certificates.
TAC Principal Amount: As defined in Section 4.01(b).
T.O.P. Mortgage Loan: Any Mortgage Loan that was originated by Norwest
Mortgage or an affiliate thereof in connection with the "Title Option Plus"
program and which is not covered by a title insurance policy. Each T.O.P.
Mortgage Loan shall be identified as such in the Mortgage Loan Schedule.
Trust Estate: The corpus of the trust created by this Agreement, consisting
of the Mortgage Loans (other than any Fixed Retained Yield), such amounts as may
be held from time to time in the Certificate Account (other than any Fixed
Retained Yield), and the rights of the Trustee to receive the proceeds of all
insurance policies and performance bonds, if any, required to be maintained
hereunder or under the related Servicing Agreement, property which secured a
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure.
Trustee: First Bank National Association, a national banking association,
or any successor trustee appointed as herein provided.
Uncertificated Lower-Tier Interests: Any of the Class A-L1, Class A-L2,
Class A-L8, Class A-L9, Class A-L11, Class A-L12, Class A-L14, Class A-L15,
Class A-LPO, Class A-LUR, Class M-L, Class B-L1, Class B-L2, Class B-L3, Class
B-L4 and Class B-L5 Interests.
Unpaid Interest Shortfalls: Each of the Class A Subclass Unpaid Interest
Shortfalls, the Class M Unpaid Interest Shortfall, the Class B-1 Unpaid Interest
Shortfall, the Class B-2 Unpaid Interest Shortfall, the Class B-3 Unpaid
Interest Shortfall, the Class B-4 Unpaid Interest Shortfall and the Class B-5
Unpaid Interest Shortfall.
Unscheduled Principal Amount: The sum for each outstanding Mortgage Loan
(including each defaulted Mortgage Loan, other than a Liquidated Loan, with
respect to which the related Mortgaged Property has been acquired by the Trust
Estate) of the product of (A) the Non-PO Fraction for such Mortgage Loan and (B)
the sum of the amounts described in clauses y(ii) and y(iii) of the definition
of Class A Non-PO Optimal Principal Amount, but without that amount being
multiplied by the Class A Prepayment Percentage.
Unscheduled Principal Receipt: Any Mortgagor payment or other recovery of
principal on a Mortgage Loan which is received in advance of its Due Date and is
not accompanied by an amount representing scheduled interest for any period
subsequent to the date of prepayment, including, without limitation, Principal
Prepayments, Liquidation Proceeds, Net REO Proceeds and proceeds received from
any condemnation award or proceeds in lieu of condemnation other than that
portion of such proceeds released to the Mortgagor in accordance with the terms
of the Mortgage or Prudent Servicing Practices and excluding any Net Foreclosure
Profits and proceeds of a repurchase of a Mortgage Loan by the Seller and any
Substitution Principal Amounts.
Unscheduled Principal Receipt Period: Either a Mid-Month Receipt Period or
a Prior Month Receipt Period.
Upper-Tier Certificate: Any one of the Class A Certificates (other than the
Class A-LR Certificate), the Class M Certificates and the Class B Certificates.
Upper-Tier Certificate Account: The trust account established and
maintained pursuant to Section 4.01(e).
Upper-Tier REMIC: One of the two separate REMICs comprising the Trust
Estate, the assets of which consist of the Uncertificated Lower-Tier Interests
and such amounts as shall from time to time be held in the Upper-Tier
Certificate Account.
Voting Interest: With respect to any provisions hereof providing for the
action, consent or approval of the Holders of all Certificates evidencing
specified Voting Interests in the Trust Estate, (a) the Holders of the Class A
Certificates will collectively be entitled to the Class A Voting Interest, (b)
the Holders of the Class M Certificates will collectively be entitled to the
then applicable percentage of the aggregate Voting Interest represented by all
Certificates equal to the product of (i) the ratio obtained by dividing the
Class M Principal Balance by the sum of the Class A Non-PO Principal Balance,
the Class M Principal Balance and the Class B Principal Balance and (ii) the
Non-PO Voting Interest and (c) the Holders of the Class B Certificates will
collectively be entitled to the balance of the aggregate Voting Interest
represented by all Series 1996-4 Certificates. The aggregate Voting Interests of
each Subclass of Class A Certificates on any date will be equal to the product
of (a) the Class A Voting Interest represented by clause (A) of the definition
thereof and (b) the fraction obtained by dividing the Class A Subclass Principal
Balance of such Class A Subclass less, in the case of the Class A-12
Certificates, the Component Principal Balance of the Class A-12 PO Component on
such date, by the Class A Non-PO Principal Balance on such date. In addition to
the Voting Interest of the Class A-12 Certificates determined in accordance with
the preceding sentence, the Class A-12 Certificates will be entitled to the
Class A Voting Interest represented by clause (B) of the definition thereof. The
aggregate Voting Interests of each Subclass of Class B Certificates will equal
such Subclass's pro rata portion of the Voting Interest allocated to the Class B
Certificates based on such Subclass's outstanding principal balance. Each
Certificateholder of a Class or Subclass will have a Voting Interest equal to
the product of the Voting Interest to which such Class or Subclass is
collectively entitled and the Percentage Interest in such Class or Subclass
represented by such Holder's Certificates. With respect to any provisions hereof
providing for action, consent or approval of each Class or Subclass of
Certificates or specified Classes or Subclasses of Certificates, each
Certificateholder of a Class or Subclass will have a Voting Interest in such
Class or Subclass equal to such Holder's Percentage Interest in such Class or
Subclass.
Weighted Average Net Mortgage Interest Rate: As to any Distribution Date, a
rate per annum equal to the average, expressed as a percentage of the Net
Mortgage Interest Rates of all Mortgage Loans that were Outstanding Mortgage
Loans as of the Due Date in the month preceding the month of such Distribution
Date, weighted on the basis of the respective Scheduled Principal Balances of
such Mortgage Loans.
Section 1.02. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and conclusive in
favor of the Trustee, if made in the manner provided in this Section 1.02. The
Trustee shall promptly notify the Master Servicer in writing of the receipt of
any such instrument or writing.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. When such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee and the Authenticating Agent)
shall be proved by the Certificate Register, and neither the Trustee, the Seller
nor the Master Servicer shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the Holder of any Certificate shall bind every future Holder
of the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, the
Seller or the Master Servicer in reliance thereon, whether or not notation of
such action is made upon such Certificate.
Section 1.03. Effect of Headings and Table of Contents.
The Article and Section headings in this Agreement and the Table of
Contents are for convenience of reference only and shall not affect the
interpretation or construction of this Agreement.
Section 1.04. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or implied, shall
give to any Person, other than the parties to this Agreement and their
successors hereunder, the Holders of the Certificates any benefit or any legal
or equitable right, power, remedy or claim under this Agreement.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF THE CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
The Seller, concurrently with the execution and delivery hereof, does
hereby assign to the Trustee, without recourse all the right, title and interest
of the Seller in and to (a) the Trust Estate, including all interest (other than
the portion, if any, representing the Fixed Retained Yield) and principal
received by the Seller on or with respect to the Mortgage Loans after the
Cut-Off Date (and including scheduled payments of principal and interest due
after the Cut-Off Date but received by the Seller on or before the Cut-Off Date
and Unscheduled Principal Receipts received or applied on the Cut-Off Date, but
not including payments of principal and interest due on the Mortgage Loans on or
before the Cut-Off Date), (b) the Insurance Policies, (c) the obligations of the
Servicers under the Servicing Agreements with respect to the Mortgage Loans and
(d) proceeds of all the foregoing.
In connection with such assignment, the Seller shall, with respect to each
Mortgage Loan, deliver, or cause to be delivered, to the Trustee, as initial
custodian, on or before the Closing Date, an Owner Mortgage Loan File. If any
Mortgage or an assignment of a Mortgage to the Trustee or any prior assignment
is in the process of being recorded on the Closing Date, the Seller shall
deliver a copy thereof, certified by Norwest Mortgage or the applicable Norwest
Mortgage Correspondent to be a true and complete copy of the document sent for
recording, and the Seller shall use its best efforts to cause each such original
recorded document or certified copy thereof to be delivered to the Trustee
promptly following its recordation. The Seller shall also cause to be delivered
to the Trustee any other original mortgage loan document to be included in the
Owner Mortgage Loan File if a copy thereof has been delivered.
In lieu of recording an assignment of any Mortgage the Seller may, to the
extent set forth in any Servicing Agreement, deliver or cause to be delivered to
the Trustee the assignment of the Mortgage Loan from the Seller to the Trustee
in a form suitable for recordation, together with an Opinion of Counsel (of
which S&P will be an addressee or with respect to which S&P shall be delivered a
reliance letter) to the effect that recording is not required to protect the
Trustee's right, title and interest in and to the related Mortgage Loan or, in
case a court should recharacterize the sale of the Mortgage Loans as a
financing, to perfect a first priority security interest in favor of the Trustee
in the related Mortgage Loan. In the event that the Master Servicer receives
notice that recording is required to protect the right, title and interest of
the Trustee in and to any such Mortgage Loan for which recordation of an
assignment has not previously been required, the Master Servicer shall promptly
notify the Trustee and the Trustee shall within five Business Days (or such
other reasonable period of time mutually agreed upon by the Master Servicer and
the Trustee) of its receipt of such notice deliver each previously unrecorded
assignment to the related Servicer for recordation.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt of the Mortgage Notes, the Mortgages, the
assignments and other documents referred to in Section 2.01 above and declares
that it holds and will hold such documents and the other documents constituting
a part of the Owner Mortgage Loan Files delivered to it in trust, upon the
trusts herein set forth, for the use and benefit of all present and future
Certificateholders. The Trustee agrees, for the benefit of Certificateholders,
to review each Owner Mortgage Loan File within 45 days after execution of this
Agreement in order to ascertain that all required documents set forth in Section
2.01 have been executed and received and appear regular on their face, and that
such documents relate to the Mortgage Loans identified in the Mortgage Loan
Schedule, and in so doing the Trustee may rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If within such 45 day period the Trustee finds any document
constituting a part of an Owner Mortgage Loan File not to have been executed or
received or to be unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule or not to appear regular on its face, the Trustee shall promptly
(and in no event more than 30 days after the discovery of such defect) notify
the Seller, which shall have a period of 60 days after the date of such notice
within which to correct or cure any such defect. The Seller hereby covenants and
agrees that, if any material defect is not so corrected or cured, the Seller
will, not later than 60 days after the Trustee's notice to it referred to above
respecting such defect, either (i) repurchase the related Mortgage Loan or any
property acquired in respect thereof from the Trust Estate at a price equal to
(a) 100% of the unpaid principal balance of such Mortgage Loan plus (b) accrued
interest at the Mortgage Interest Rate less any Fixed Retained Yield through the
last day of the month in which such repurchase takes place or (ii) if within two
years of the Startup Day, or such other period permitted by the REMIC
Provisions, substitute for any Mortgage Loan to which such material defect
relates, a new mortgage loan (a "Substitute Mortgage Loan") having such
characteristics so that the representations and warranties of the Seller set
forth in Section 2.03(b) hereof (other than Section 2.03(b)(i)) would not have
been incorrect had such Substitute Mortgage Loan originally been a Mortgage
Loan. In no event shall any Substitute Mortgage Loan have an unpaid principal
balance, as of the date of substitution, greater than the Scheduled Principal
Balance (reduced by the scheduled payment of principal due on the Due Date in
the month of substitution) of the Mortgage Loan for which it is substituted. In
addition, such Substitute Mortgage Loan shall have a Loan-to-Value Ratio less
than or equal to and a Mortgage Interest Rate equal to that of the Mortgage Loan
for which it is substituted.
In the case of a repurchased Mortgage Loan or property, the purchase price
shall be deposited by the Seller in the Certificate Account maintained by the
Master Servicer pursuant to Section 3.01. In the case of a Substitute Mortgage
Loan, the Owner Mortgage Loan File relating thereto shall be delivered to the
Trustee and the Substitution Principal Amount, together with (i) interest on
such Substitution Principal Amount at the applicable Net Mortgage Interest Rate
to the following Due Date of such Mortgage Loan which is being substituted for
and (ii) an amount equal to the aggregate amount of unreimbursed Periodic
Advances in respect of interest previously made by the Servicer, Master Servicer
or Trustee with respect to such Mortgage Loan, shall be deposited in the
Certificate Account. The Monthly Payment on the Substitute Mortgage Loan for the
Due Date in the month of substitution shall not be part of the Trust Estate.
Upon receipt by the Trustee of written notification of any such deposit signed
by an officer of the Seller, or the new Owner Mortgage Loan File, as the case
may be, the Trustee shall release to the Seller the related Owner Mortgage Loan
File and shall execute and deliver such instrument of transfer or assignment, in
each case without recourse, as shall be necessary to vest in the Seller legal
and beneficial ownership of such substituted or repurchased Mortgage Loan or
property. It is understood and agreed that the obligation of the Seller to
substitute a new Mortgage Loan for or repurchase any Mortgage Loan or property
as to which such a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to the
Certificateholders or the Trustee on behalf of the Certificateholders. The
failure of the Trustee to give any notice contemplated herein within forty-five
(45) days after the execution of this Agreement shall not affect or relieve the
Seller's obligation to repurchase any Mortgage Loan pursuant to this Section
2.02.
The Trustee may, concurrently with the execution and delivery hereof or at
any time thereafter, enter into a Custodial Agreement substantially in the form
of Exhibit E hereto pursuant to which the Trustee appoints a Custodian to hold
the Mortgage Notes, the Mortgages, the assignments and other documents related
to the Mortgage Loans received by the Trustee in trust for the benefit of all
present and future Certificateholders, which may provide, among other things,
that the Custodian shall conduct the review of such documents required under the
first paragraph of this Section 2.02.
Section 2.03. Representations and Warranties of the Master Servicer and the
Seller.
(a) The Master Servicer hereby represents and warrants to the Trustee for
the benefit of Certificateholders that, as of the date of execution of this
Agreement:
(i) The Master Servicer is a national banking association duly
chartered and validly existing in good standing under the laws of the
United States;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's corporate charter or
by-laws or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result
in the breach of, any material contract, agreement or other instrument
to which the Master Servicer is a party or which may be applicable to
the Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Seller, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Master Servicer or
its properties or might have consequences that would affect its
performance hereunder; and
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
would prohibit its entering into this Agreement or performing its
obligations under this Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(a) shall survive delivery of the respective Owner
Mortgage Loan Files to the Trustee or the Custodian.
(b) The Seller hereby represents and warrants to the Trustee for the
benefit of Certificateholders that, as of the date of execution of this
Agreement, with respect to the Mortgage Loans, or each Mortgage Loan, as the
case may be:
(i) The information set forth in the Mortgage Loan Schedule was
true and correct in all material respects at the date or dates
respecting which such information is furnished as specified in the
Mortgage Loan Schedule;
(ii) Immediately prior to the transfer and assignment
contemplated herein, the Seller was the sole owner and holder of the
Mortgage Loan free and clear of any and all liens, pledges, charges or
security interests of any nature and has full right and authority to
sell and assign the same;
(iii) The Mortgage is a valid, subsisting and enforceable first
lien on the property therein described, and the Mortgaged Property is
free and clear of all encumbrances and liens having priority over the
first lien of the Mortgage except for liens for real estate taxes and
special assessments not yet due and payable and liens or interests
arising under or as a result of any federal, state or local law,
regulation or ordinance relating to hazardous wastes or hazardous
substances, and, if the related Mortgaged Property is a condominium
unit, any lien for common charges permitted by statute or homeowners
association fees; and if the Mortgaged Property consists of shares of
a cooperative housing corporation, any lien for amounts due to the
cooperative housing corporation for unpaid assessments or charges or
any lien of any assignment of rents or maintenance expenses secured by
the real property owned by the cooperative housing corporation; and
any security agreement, chattel mortgage or equivalent document
related to, and delivered to the Trustee or to the Custodian with, any
Mortgage establishes in the Seller a valid and subsisting first lien
on the property described therein and the Seller has full right to
sell and assign the same to the Trustee;
(iv) Neither the Seller nor any prior holder of the Mortgage or
the related Mortgage Note has modified the Mortgage or the related
Mortgage Note in any material respect, satisfied, canceled or
subordinated the Mortgage in whole or in part, released the Mortgaged
Property in whole or in part from the lien of the Mortgage, or
executed any instrument of release, cancellation, modification or
satisfaction, except in each case as is reflected in an agreement
delivered to the Trustee or the Custodian pursuant to Section 2.01;
(v) All taxes, governmental assessments, insurance premiums, and
water, sewer and municipal charges, which previously became due and
owing have been paid, or an escrow of funds has been established, to
the extent permitted by law, in an amount sufficient to pay for every
such item which remains unpaid; and the Seller has not advanced funds,
or received any advance of funds by a party other than the Mortgagor,
directly or indirectly (except pursuant to any Subsidy Loan
arrangement) for the payment of any amount required by the Mortgage,
except for interest accruing from the date of the Mortgage Note or
date of disbursement of the Mortgage Loan proceeds, whichever is
later, to the day which precedes by thirty days the first Due Date
under the related Mortgage Note;
(vi) The Mortgaged Property is undamaged by water, fire,
earthquake, earth movement other than earthquake, windstorm, flood,
tornado or similar casualty (excluding casualty from the presence of
hazardous wastes or hazardous substances, as to which the Seller makes
no representations), so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended and to the best of the Seller's
knowledge, there is no proceeding pending or threatened for the total
or partial condemnation of the Mortgaged Property;
(vii) The Mortgaged Property is free and clear of all mechanics'
and materialmen's liens or liens in the nature thereof; provided,
however, that this warranty shall be deemed not to have been made at
the time of the initial issuance of the Certificates if a title policy
affording, in substance, the same protection afforded by this warranty
is furnished to the Trustee by the Seller;
(viii) Except for Mortgage Loans secured by Co-op Shares, the
Mortgaged Property consists of a fee simple estate in real property;
all of the improvements which are included for the purpose of
determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property
and no improvements on adjoining properties encroach upon the
Mortgaged Property (unless insured against under the related title
insurance policy); and to the best of the Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances;
(ix) The Mortgage Loan meets, or is exempt from, applicable state
or federal laws, regulations and other requirements, pertaining to
usury, and the Mortgage Loan is not usurious;
(x) To the best of the Seller's knowledge, all inspections,
licenses and certificates required to be made or issued with respect
to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including, but not limited to,
certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities;
(xi) All payments required to be made up to the Due Date
immediately preceding the Cut-Off Date for such Mortgage Loan under
the terms of the related Mortgage Note have been made and no Mortgage
Loan had more than one delinquency in the 13 months preceding the
Cut-Off Date;
(xii) The Mortgage Note, the related Mortgage and other
agreements executed in connection therewith are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally
and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and,
to the best of the Seller's knowledge, all parties to the Mortgage
Note and the Mortgage had legal capacity to execute the Mortgage Note
and the Mortgage and each Mortgage Note and Mortgage has been duly and
properly executed by the Mortgagor;
(xiii) Any and all requirements of any federal, state or local
law with respect to the origination of the Mortgage Loans including,
without limitation, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loans have been complied
with;
(xiv) The proceeds of the Mortgage Loans have been fully
disbursed, there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with (except for escrow funds for exterior items which
could not be completed due to weather); and all costs, fees and
expenses incurred in making, closing or recording the Mortgage Loan
have been paid, except recording fees with respect to Mortgages not
recorded as of the Closing Date;
(xv) The Mortgage Loan (except any Mortgage Loan identified on
the Mortgage Loan Schedule as a T.O.P. Mortgage Loan and any Mortgage
Loan secured by Mortgaged Property located in Iowa, as to which an
opinion of counsel of the type customarily rendered in such State in
lieu of title insurance is instead received) is covered by an American
Land Title Association mortgagee title insurance policy or other
generally acceptable form of policy or insurance acceptable to FNMA or
FHLMC, issued by a title insurer acceptable to FNMA or FHLMC insuring
the originator, its successors and assigns, as to the first priority
lien of the Mortgage in the original principal amount of the Mortgage
Loan and subject only to (A) the lien of current real property taxes
and assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the Mortgaged
Property is located or specifically referred to in the appraisal
performed in connection with the origination of the related Mortgage
Loan, (C) liens created pursuant to any federal, state or local law,
regulation or ordinance affording liens for the costs of clean-up of
hazardous substances or hazardous wastes or for other environmental
protection purposes and (D) such other matters to which like
properties are commonly subject which do not individually, or in the
aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage; the Seller is the sole
insured of such mortgagee title insurance policy, the assignment to
the Trustee of the Seller's interest in such mortgagee title insurance
policy does not require any consent of or notification to the insurer
which has not been obtained or made, such mortgagee title insurance
policy is in full force and effect and will be in full force and
effect and inure to the benefit of the Trustee, no claims have been
made under such mortgagee title insurance policy, and no prior holder
of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such mortgagee
title insurance policy;
(xvi) The Mortgaged Property securing each Mortgage Loan is
insured by an insurer acceptable to FNMA or FHLMC against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement, in an amount which is not less than the lesser of 100% of
the insurable value of the Mortgaged Property and the outstanding
principal balance of the Mortgage Loan, but in no event less than the
minimum amount necessary to fully compensate for any damage or loss on
a replacement cost basis; if the Mortgaged Property is a condominium
unit, it is included under the coverage afforded by a blanket policy
for the project; if upon origination of the Mortgage Loan, the
improvements on the Mortgaged Property were in an area identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of
(A) the outstanding principal balance of the Mortgage Loan, (B) the
full insurable value of the Mortgaged Property and (C) the maximum
amount of insurance which was available under the Flood Disaster
Protection Act of 1973; and each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense;
(xvii) To the best of the Seller's knowledge, there is no
default, breach, violation or event of acceleration existing under the
Mortgage or the related Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration; the Seller has not waived any default, breach, violation
or event of acceleration; and no foreclosure action is currently
threatened or has been commenced with respect to the Mortgage Loan;
(xviii) No Mortgage Note or Mortgage is subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
or Mortgage, or the exercise of any right thereunder, render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject it to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(xix) Each Mortgage Note is payable in monthly payments,
resulting in complete amortization of the Mortgage Loan over a term of
not more than 360 months;
(xx) Each Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including realization by judicial
foreclosure (subject to any limitation arising from any bankruptcy,
insolvency or other law for the relief of debtors), and there is no
homestead or other exemption available to the Mortgagor which would
interfere with such right of foreclosure;
(xxi) To the best of the Seller's knowledge, no Mortgagor is a
debtor in any state or federal bankruptcy or insolvency proceeding;
(xxii) Each Mortgaged Property is located in the United States
and consists of a one- to four-unit residential property, which may
include a detached home, townhouse, condominium unit or a unit in a
planned unit development or, in the case of Mortgage Loans secured by
Co-op Shares, leases or occupancy agreements; and
(xxiii) The Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Code.
Notwithstanding the foregoing, no representations or warranties are made by
the Seller as to the absence or effect of hazardous wastes or hazardous
substances on any of the Mortgaged Properties or on the lien of any Mortgage. In
addition, no representations or warranties are made by the Seller with respect
to the absence or effect of fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Owner
Mortgage Loan Files to the Trustee and shall inure to the benefit of the Trustee
notwithstanding any restrictive or qualified endorsement or assignment.
(c) Upon discovery by either the Seller, the Master Servicer, the Trustee
or the Custodian that any of the representations and warranties made in
subsection (b) above is not accurate (referred to herein as a "breach") and that
such breach materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties (any Custodian
being so obligated under a Custodial Agreement). Within 60 days of the earlier
of its discovery or its receipt of notice of any such breach, the Seller shall
cure such breach in all material respects or shall either (i) repurchase the
Mortgage Loan or any property acquired in respect thereof from the Trustee at a
price equal to (A) 100% of the unpaid principal balance of such Mortgage Loan
plus (B) accrued interest at the Net Mortgage Interest Rate for such Mortgage
Loan through the last day of the month in which such repurchase took place or
(ii) if within two years of the Startup Day, or such other period permitted by
the REMIC Provisions, substitute for such Mortgage Loan in the manner described
in Section 2.02. The purchase price of any repurchase described in this
paragraph and the Substitution Principal Amount, if any, plus accrued interest
thereon and the other amounts referred to in Section 2.02, shall be deposited in
the Certificate Account. It is understood and agreed that the obligation of the
Seller to repurchase or substitute for any Mortgage Loan or property as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to Certificateholders or the Trustee on behalf
of Certificateholders, and such obligation shall survive until termination of
the Trust Estate hereunder.
Section 2.04. Execution and Delivery of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the
delivery of the Owner Mortgage Loan Files to it, and, concurrently with such
delivery, (i) acknowledges the issuance of and hereby declares that it holds the
Uncertificated Lower-Tier Interests on behalf of the Upper-Tier REMIC and
Certificateholders and (ii) has executed and delivered to or upon the order of
the Seller, in exchange for the Mortgage Loans and Uncertificated Lower-Tier
Interests together with all other assets included in the definition of "Trust
Estate", receipt of which is hereby acknowledged, Certificates in authorized
denominations which, together with the Uncertificated Lower-Tier Interests,
evidence ownership of the entire Trust Estate.
Section 2.05. Designation of Certificates; Designation of Startup Day and Latest
Possible Maturity Date.
The Seller hereby designates the Subclasses of Class A Certificates (other
than the Class A-12, Class A-R and Class A-LR Certificates), the Class M
Certificates, the Subclasses of Class B Certificates, and each Component of the
Class A-12 Certificates as classes of "regular interests" and the Class A-R
Certificate as the single class of "residual interest" in the Upper-Tier REMIC
for the purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively. The
Closing Date is hereby designated as the "Startup Day" of the REMIC within the
meaning of Code Section 860G(a)(9). The Seller hereby further designates the
Class AL-1 Interest, Class A-L2 Interest, Class A-L8 Interest, Class A-L9
Interest, Class A-L11 Interest, Class A-L12 Interest, Class A-L14 Interest,
Class A-L15 Interest, Class A-LPO Interest, Class A-LUR Interest, Class B-L1
Interest, Class B-L2 Interest, Class B-L3 Interest, Class B-L4 Interest, Class
B-L5 Interest and Class M-L Interest as classes of "regular interests" and the
Class A-LR Certificate as the single class of "residual interest" in the
Lower-Tier REMIC for the purposes of Code Sections 860G(a)(1) and 860G(a)(2),
respectively. The "latest possible maturity date" of the regular interests in
the Upper-Tier REMIC and Lower-Tier REMIC is September 25, 2026 for purposes of
Code Section 860G(a)(1).
ARTICLE III
ADMINISTRATION OF THE TRUST ESTATE: SERVICING
OF THE MORTGAGE LOANS
Section 3.01. Certificate Account.
(a) The Master Servicer shall establish and maintain a Certificate Account
for the deposit of funds received by the Master Servicer with respect to the
Mortgage Loans serviced by each Servicer pursuant to each of the Servicing
Agreements. Such account shall be maintained as an Eligible Account. The Master
Servicer shall give notice to each Servicer and the Seller of the location of
the Certificate Account and of any change in the location thereof.
(b) The Master Servicer shall deposit into the Certificate Account on the
day of receipt thereof all amounts received by it from any Servicer pursuant to
any of the Servicing Agreements, and shall, in addition, deposit into the
Certificate Account the following amounts, in the case of amounts specified in
clause (i), not later than the Distribution Date on which such amounts are
required to be distributed to Certificateholders and, in the case of the amounts
specified in clause (ii), not later than the Business Day next following the day
of receipt and posting by the Master Servicer:
(i) Periodic Advances pursuant to Section 3.03(a) made by the
Master Servicer or the Trustee, if any; and
(ii) in the case of any Mortgage Loan that is repurchased by the
Seller pursuant to Section 2.02 or 2.03 or that is auctioned by the
Master Servicer pursuant to Section 3.08 or purchased by the Master
Servicer pursuant to Section 3.08 or 9.01, the purchase price therefor
or, where applicable, any Substitution Principal Amount and any
amounts received in respect of the interest portion of unreimbursed
Periodic Advances.
(c) The Master Servicer shall cause the funds in the Certificate Account to
be invested in Eligible Investments. No such Eligible Investments will be sold
or disposed of at a gain prior to maturity unless the Master Servicer has
received an Opinion of Counsel or other evidence satisfactory to it that such
sale or disposition will not cause the Trust Estate to be subject to Prohibited
Transactions Tax, otherwise subject the Trust Estate to tax, or cause either of
the Upper-Tier REMIC or the Lower-Tier REMIC to fail to qualify as a REMIC while
any Certificates are outstanding. Any amounts deposited in the Certificate
Account prior to the Distribution Date shall be invested for the account of the
Master Servicer and any investment income thereon shall be additional
compensation to the Master Servicer for services rendered under this Agreement.
The amount of any losses incurred in respect of any such investments shall be
deposited in the Certificate Account by the Master Servicer out of its own funds
immediately as realized.
Section 3.02. Permitted Withdrawals from the Certificate Account.
(a) The Master Servicer may, from time to time, make withdrawals from the
Certificate Account for the following purposes (limited, in the case of Servicer
reimbursements, to cases where funds in the respective Custodial P&I Account are
not sufficient therefor):
(i) to reimburse the Master Servicer, the Trustee or any Servicer
for Periodic Advances made by the Master Servicer or the Trustee
pursuant to Section 3.03(a) or any Servicer pursuant to any Servicing
Agreement with respect to previous Distribution Dates, such right to
reimbursement pursuant to this subclause (i) being limited to amounts
received on or in respect of particular Mortgage Loans (including, for
this purpose, Liquidation Proceeds, REO Proceeds and proceeds from the
purchase, sale, repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 3.08 or 9.01) respecting which any such
Periodic Advance was made;
(ii) to reimburse any Servicer, the Master Servicer or the
Trustee for any Periodic Advances determined in good faith to have
become Nonrecoverable Advances provided, however, that any portion of
Nonrecoverable Advances representing Fixed Retained Yield shall be
reimbursable only from amounts constituting Fixed Retained Yield and
not from the assets of the Trust Estate;
(iii) to reimburse the Master Servicer or any Servicer from
Liquidation Proceeds for Liquidation Expenses and for amounts expended
by the Master Servicer or any Servicer pursuant hereto or to any
Servicing Agreement, respectively, in good faith in connection with
the restoration of damaged property or for foreclosure expenses;
(iv) from any Mortgagor payment on account of interest or other
recovery (including Net REO Proceeds) with respect to a particular
Mortgage Loan, to pay the Master Servicing Fee with respect to such
Mortgage Loan to the Master Servicer;
(v) to reimburse the Master Servicer, any Servicer or the Trustee
(or, in certain cases, the Seller) for expenses incurred by it
(including taxes paid on behalf of the Trust Estate) and recoverable
by or reimbursable to it pursuant to Section 3.03(c), 3.03(d) or 6.03
or the second sentence of Section 8.14(a) or pursuant to such
Servicer's Servicing Agreement, provided such expenses are
"unanticipated" within the meaning of the REMIC Provisions;
(vi) to pay to the Seller or other purchaser with respect to each
Mortgage Loan or property acquired in respect thereof that has been
repurchased or replaced pursuant to Section 2.02 or 2.03 or auctioned
pursuant to Section 3.08 or to pay to the Master Servicer with respect
to each Mortgage Loan or property acquired in respect thereof that has
been purchased pursuant to Section 3.08 or 9.01, all amounts received
thereon and not required to be distributed as of the date on which the
related repurchase or purchase price or Scheduled Principal Balance
was determined;
(vii) to remit funds to the Paying Agent in the amounts and in
the manner provided for herein;
(viii) to pay to the Master Servicer any interest earned on or
investment income with respect to funds in the Certificate Account;
(ix) to pay to the Master Servicer or any Servicer out of Net
Liquidation Proceeds allocable to interest the amount of any unpaid
Master Servicing Fee or Servicing Fee (as adjusted pursuant to such
Servicer's Servicing Agreement) and any unpaid assumption fees, late
payment charges or other Mortgagor charges on the related Mortgage
Loan;
(x) to withdraw from the Certificate Account any amount deposited
in the Certificate Account that was not required to be deposited
therein;
(xi) to clear and terminate the Certificate Account pursuant to
Section 9.01; and
(xii) to pay to Norwest Mortgage from any Mortgagor payment on
account of interest or other recovery (including Net REO Proceeds)
with respect to a particular Mortgage Loan, the Fixed Retained Yield,
if any, with respect to such Mortgage Loan; provided, however, that
with respect to any payment of interest received by the Master
Servicer in respect of a Mortgage Loan (whether paid by the Mortgagor
or received as Liquidation Proceeds, Insurance Proceeds or otherwise)
which is less than the full amount of interest then due with respect
to such Mortgage Loan, only that portion of such payment of interest
that bears the same relationship to the total amount of such payment
of interest as the Fixed Retained Yield Rate, if any, in respect of
such Mortgage Loan bears to the Mortgage Interest Rate shall be
allocated to the Fixed Retained Yield with respect thereto.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any payment
to and withdrawal from the Certificate Account.
Section 3.03. Advances by Master Servicer and Trustee.
(a) In the event an Other Servicer fails to make any required Periodic
Advances of principal and interest on a Mortgage Loan as required by the related
Other Servicing Agreement prior to the Distribution Date occurring in the month
during which such Periodic Advance is due, the Master Servicer shall make
Periodic Advances to the extent provided hereby. In the event Norwest Mortgage
fails to make any required Periodic Advances of principal and interest on a
Mortgage Loan as required by the Norwest Servicing Agreement prior to the
Distribution Date occurring in the month during which such Periodic Advance is
due, the Trustee shall, to the extent required by Section 8.15, make such
Periodic Advance to the extent provided hereby, provided that the Trustee has
previously received the certificate of the Master Servicer described in the
following sentence. The Master Servicer shall certify to the Trustee with
respect to any such Distribution Date (i) the amount of Periodic Advances
required of Norwest Mortgage or such Other Servicer, as the case may be, (ii)
the amount actually advanced, (iii) the amount that the Trustee or Master
Servicer is required to advance hereunder and (iv) whether the Master Servicer
has determined that it reasonably believes that such Periodic Advance is a
Nonrecoverable Advance. Amounts advanced by the Trustee or Master Servicer shall
be deposited in the Certificate Account on the related Distribution Date.
Notwithstanding the foregoing, neither the Master Servicer nor the Trustee will
be obligated to make a Periodic Advance that it reasonably believes to be a
Nonrecoverable Advance. The Trustee may conclusively rely for any determination
to be made by it hereunder upon the determination of the Master Servicer as set
forth in its certificate.
(b) To the extent an Other Servicer fails to make an advance on account of
the taxes or insurance premiums with respect to a Mortgage Loan required
pursuant to the related Other Servicing Agreement, the Master Servicer shall, if
the Master Servicer knows of such failure of the Servicer, advance such funds
and take such steps as are necessary to pay such taxes or insurance premiums. To
the extent Norwest Mortgage fails to make an advance on account of the taxes or
insurance premiums with respect to a Mortgage Loan required pursuant to the
Norwest Servicing Agreement, the Master Servicer shall, if the Master Servicer
knows of such failure of Norwest Mortgage, certify to the Trustee that such
failure has occurred. Upon receipt of such certification, the Trustee shall
advance such funds and take such steps as are necessary to pay such taxes or
insurance premiums.
(c) The Master Servicer and the Trustee shall each be entitled to be
reimbursed from the Certificate Account for any Periodic Advance made by it
under Section 3.03(a) to the extent described in Section 3.02(a)(i) and (a)(ii).
The Master Servicer and the Trustee shall be entitled to be reimbursed pursuant
to Section 3.02(a)(v) for any advance by it pursuant to Section 3.03(b). The
Master Servicer shall diligently pursue restoration of such amount to the
Certificate Account from the related Servicer. The Master Servicer shall, to the
extent it has not already done so, upon the request of the Trustee, withdraw
from the Certificate Account and remit to the Trustee any amounts to which the
Trustee is entitled as reimbursement pursuant to Section 3.02 (a)(i), (ii) and
(v).
(d) Except as provided in Section 3.03(a) and (b), neither the Master
Servicer nor the Trustee shall be required to pay or advance any amount which
any Servicer was required, but failed, to deposit in the Certificate Account.
Section 3.04. Trustee to Cooperate; Release of Owner Mortgage Loan Files.
Upon the receipt by the Master Servicer of a Request for Release in
connection with the deposit by a Servicer into the Certificate Account of the
proceeds from a Liquidated Loan or of a Prepayment in Full, the Master Servicer
shall confirm to the Trustee that all amounts required to be remitted to the
Certificate Account in connection with such Mortgage Loan have been so
deposited, and shall deliver such Request for Release to the Trustee. The
Trustee shall, within five Business Days of its receipt of such a Request for
Release, release the related Owner Mortgage Loan File to the Master Servicer or
such Servicer, as requested by the Master Servicer. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Certificate Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, including but not limited to, collection under any insurance
policies, or to effect a partial release of any Mortgaged Property from the lien
of the Mortgage, the Servicer of such Mortgage Loan shall deliver to the Master
Servicer a Request for Release. Upon the Master Servicer's receipt of any such
Request for Release, the Master Servicer shall promptly forward such request to
the Trustee and the Trustee shall, within five Business Days, release the
related Owner Mortgage Loan File to the Master Servicer or such Servicer, as
requested by the Master Servicer. Any such Request for Release shall obligate
the Master Servicer or such Servicer, as the case may be, to return each and
every document previously requested from the Owner Mortgage Loan File to the
Trustee by the twenty-first day following the release thereof, unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account or (ii) the Owner
Mortgage Loan File or such document has been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of the Master Servicer or
such Servicer certifying as to the name and address of the Person to which such
Owner Mortgage Loan File or such document was delivered and the purpose or
purposes of such delivery. Upon receipt of an Officer's Certificate of the
Master Servicer or such Servicer stating that such Mortgage Loan was liquidated
and that all amounts received or to be received in connection with such
liquidation which are required to be deposited into the Certificate Account have
been so deposited, or that such Mortgage Loan has become an REO Mortgage Loan,
the Request for Release shall be released by the Trustee to the Master Servicer
or such Servicer, as appropriate.
Upon written certification of the Master Servicer or the Servicer of such
Mortgage Loan, the Trustee shall execute and deliver to the Master Servicer or
such Servicer, as directed by the Master Servicer, court pleadings, requests for
trustee's sale or other documents necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure proceeding
or trustee's sale.
Section 3.05. Reports to the Trustee; Annual Compliance Statements.
(a) Not later than 15 days after each Distribution Date, the Master
Servicer shall deliver to the Trustee a statement setting forth the status of
the Certificate Account as of the close of business on such Distribution Date
stating that all distributions required to be made by the Master Servicer under
this Agreement have been made (or, if any required distribution has not been
made by the Master Servicer, specifying the nature and status thereof) and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from such account for each category of deposit and
withdrawal specified in Sections 3.01 and 3.02. Such statement may be in the
form of the then current FNMA monthly accounting report for its Guaranteed
Mortgage Pass-Through Program with appropriate additions and changes, and shall
also include information as to the aggregate unpaid principal balance of all of
the Mortgage Loans as of the close of business as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon written
request, provided such statement is delivered, or caused to be delivered, by the
Master Servicer to the Trustee.
(b) The Master Servicer shall deliver to the Trustee on or before April 30
of each year, a certificate signed by an officer of the Master Servicer,
certifying that (i) such officer has reviewed the activities of the Master
Servicer during the preceding calendar year or portion thereof and its
performance under this agreement and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has performed and fulfilled
its duties, responsibilities and obligations under this agreement in all
material respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such officer and the nature and status thereof, and, (iii)
(A) the Master Servicer has received from each Servicer any financial
statements, officer's certificates, accountant's statements or other information
required to be provided to the Master Servicer pursuant to the related Servicing
Agreement and (B) to the best of such officer's knowledge, based on a review of
the information provided to the Master Servicer by each Servicer as described in
(iii)(A) above, each Servicer has performed and fulfilled its duties,
responsibilities and obligations under the related Servicing Agreement in all
material respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such officer and the nature and status thereof. Copies of
such officers' certificate shall be provided by the Trustee to any
Certificateholder upon written request provided such certificate is delivered,
or caused to be delivered, by the Master Servicer to the Trustee.
Section 3.06. Title, Management and Disposition of Any REO Mortgage Loan.
The Master Servicer shall ensure that each REO Mortgage Loan is
administered by the related Servicer at all times so that it qualifies as
"foreclosure property" under the REMIC Provisions and that it does not earn any
"net income from foreclosure property" which is subject to tax under the REMIC
Provisions. In the event that a Servicer is unable to dispose of any REO
Mortgage Loan within the period mandated by each of the Servicing Agreements,
the Master Servicer shall monitor such Servicer to verify that such REO Mortgage
Loan is auctioned to the highest bidder within the period so specified. In the
event of any such sale of REO Mortgage Loan, the Trustee shall, at the written
request of the Master Servicer and upon being supported with appropriate forms
therefor, within five Business Days of the deposit by the Master Servicer of the
proceeds of such sale or auction into the Certificate Account, release or cause
to be released to the entity identified by the Master Servicer the related Owner
Mortgage Loan File and Servicer Mortgage Loan File and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
shall be necessary to vest in the auction purchaser title to the REO Mortgage
Loan and the Trustee shall have no further responsibility with regard to such
Owner Mortgage Loan File or Servicer Mortgage Loan File. Neither the Trustee,
the Master Servicer nor any Servicer, acting on behalf of the Trust Estate,
shall provide financing from the Trust Estate to any purchaser of an REO
Mortgage Loan.
Section 3.07. Amendments to Servicing Agreements, Modification of Standard
Provisions.
(a) Subject to the prior written consent of the Trustee pursuant to Section
3.07(b), the Master Servicer from time to time may, to the extent permitted by
the applicable Servicing Agreement, make such modifications and amendments to
such Servicing Agreement as the Master Servicer deems necessary or appropriate
to confirm or carry out more fully the intent and purpose of such Servicing
Agreement and the duties, responsibilities and obligations to be performed by
the Servicer thereunder. Such modifications may only be made if they are
consistent with the REMIC Provisions, as evidenced by an Opinion of Counsel.
Prior to the issuance of any modification or amendment, the Master Servicer
shall deliver to the Trustee such Opinion of Counsel and an Officer's
Certificate setting forth (i) the provision that is to be modified or amended,
(ii) the modification or amendment that the Master Servicer desires to issue and
(iii) the reason or reasons for such proposed amendment or modification.
(b) The Trustee shall consent to any amendment or supplement to a Servicing
Agreement proposed by the Master Servicer pursuant to Section 3.07(a), which
consent and amendment shall not require the consent of any Certificateholder if
it is (i) for the purpose of curing any mistake or ambiguity or to further
effect or protect the rights of the Certificateholders or (ii) for any other
purpose, provided such amendment or supplement for such other purpose cannot
reasonably be expected to adversely affect Certificateholders. The lack of an
adverse effect on Certificateholders may be established through various means,
including the delivery to the Trustee of (i) an Opinion of Counsel to such
effect or (ii) written notification from each Rating Agency to the effect that
such amendment or supplement will not result in reduction of the current rating
assigned by that Rating Agency to the Certificates. The Trustee may, in its
discretion, decline to enter into or consent to any such supplement or amendment
if its own rights, duties or immunities shall be adversely affected.
(c)(i) Notwithstanding anything to the contrary in this Section 3.07, the
Master Servicer from time to time may, without the consent of any
Certificateholder or the Trustee, enter into an amendment (A) to an Other
Servicing Agreement for the purpose of (i) eliminating or reducing Month End
Interest and (ii) providing for the remittance of Full Unscheduled Principal
Receipts by the applicable Servicer to the Master Servicer not later than the
24th day of each month (or if such day is not a Business Day, on the previous
Business Day) or (B) to the Norwest Servicing Agreement for the purpose of
changing the applicable Remittance Date to the 18th day of each month (or if
such day is not a Business Day, on the previous Business Day).
(ii) The Master Servicer may direct Norwest Mortgage to enter into an
amendment to the Norwest Servicing Agreement for the purposes described in
Sections 3.07(c)(i)(B) and 10.01(b)(iii).
Section 3.08. Oversight of Servicing.
The Master Servicer shall supervise, monitor and oversee the servicing of
the Mortgage Loans by each Servicer and the performance by each Servicer of all
services, duties, responsibilities and obligations that are to be observed or
performed by the Servicer under its respective Servicing Agreement. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices and with the Trustee's and
the Certificateholders' reliance on the Master Servicer, and in a manner
consistent with the terms and provisions of any insurance policy required to be
maintained by the Master Servicer or any Servicer pursuant to this Agreement or
any Servicing Agreement. The Master Servicer acknowledges that prior to taking
certain actions required to service the Mortgage Loans, each Servicing Agreement
provides that the Servicer thereunder must notify, consult with, obtain the
consent of or otherwise follow the instructions of the Master Servicer. The
Master Servicer is also given authority to waive compliance by a Servicer with
certain provisions of its Servicing Agreement. In each such instance, the Master
Servicer shall promptly instruct such Servicer or otherwise respond to such
Servicer's request. In no event will the Master Servicer instruct such Servicer
to take any action, give any consent to action by such Servicer or waive
compliance by such Servicer with any provision of such Servicer's Servicing
Agreement if any resulting action or failure to act would be inconsistent with
the requirements of the Rating Agencies that rated the Certificates or would
otherwise have an adverse effect on the Certificateholders. Any such action or
failure to act shall be deemed to have an adverse effect on the
Certificateholders if such action or failure to act either results in (i) the
downgrading of the rating assigned by any Rating Agency to the Certificates,
(ii) the loss by the Upper-Tier REMIC or the Lower-Tier REMIC of REMIC status
for federal income tax purposes or (iii) the imposition of any Prohibited
Transaction Tax or any federal taxes on either the Upper-Tier REMIC, the
Lower-Tier REMIC or the Trust Estate. The Master Servicer shall have full power
and authority in its sole discretion to take any action with respect to the
Trust Estate as may be necessary or advisable to avoid the circumstances
specified including clause (ii) or (iii) of the preceding sentence.
For the purposes of determining whether any modification of a Mortgage Loan
shall be permitted by the Trustee or the Master Servicer, such modification
shall be construed as a substitution of the modified Mortgage Loan for the
Mortgage Loan originally deposited in the Trust Estate if it would be a
"significant modification" within the meaning of Section 1.860G-2(b) of the
regulations of the U.S. Department of the Treasury. No modification shall be
approved unless (i) the modified Mortgage Loan would qualify as a Substitute
Mortgage Loan under Section 2.02 and (ii) with respect to any modification that
occurs more than three months after the Closing Date and is not the result of a
default or a reasonably foreseeable default under the Mortgage Loan, there is
delivered to the Trustee an Opinion of Counsel (at the expense of the party
seeking to modify the Mortgage Loan) to the effect that such modification would
not be treated as giving rise to a new debt instrument for federal income tax
purposes.
During the term of this Agreement, the Master Servicer shall consult fully
with each Servicer as may be necessary from time to time to perform and carry
out the Master Servicer's obligations hereunder and otherwise exercise
reasonable efforts to encourage such Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by it under
its Servicing Agreement.
The relationship of the Master Servicer to the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
The Master Servicer shall administer the Trust Estate on behalf of the
Trustee and shall have full power and authority, acting alone or (subject to
Section 6.06) through one or more subcontractors, to do any and all things in
connection with such administration which it may deem necessary or desirable.
Upon the execution and delivery of this Agreement, and from time to time as may
be required thereafter, the Trustee shall furnish the Master Servicer or its
subcontractors with any powers of attorney and such other documents as may be
necessary or appropriate to enable the Master Servicer to carry out its
administrative duties hereunder.
The Seller shall be entitled, at its option, to repurchase any defaulted
Mortgage Loan or any Mortgage Loan as to which default is reasonably foreseeable
from the Trust Estate if, in the Seller's judgment, the default is not likely to
be cured by the Mortgagor; provided, however, that the Cut-Off Date Principal
Balances of the Mortgage Loans repurchased pursuant to this provision shall not
exceed 2.5% of the Cut-Off Date Aggregate Principal Balance of the Mortgage
Loans. The purchase price for any such Mortgage Loan shall be 100% of the unpaid
principal balance of such Mortgage Loan plus accrued interest thereon at the
Mortgage Interest Rate, less any Fixed Retained Yield for such Mortgage Loan,
through the last day of the month in which such repurchase occurs. Upon the
receipt of such purchase price, the Master Servicer shall provide to the Trustee
the certification required by Section 3.04 and the Trustee and the Custodian, if
any, shall promptly release to the Seller the Owner Mortgage Loan File relating
to the Mortgage Loan being repurchased.
In the event that (i) the Master Servicer determines at any time that,
notwithstanding the representations and warranties set forth in Section 2.03(b),
any Mortgage Loan is not a "qualified mortgage" within the meaning of Section
860G of the Code and (ii) the Master Servicer is unable to enforce the
obligation of the Seller to purchase such Mortgage Loan pursuant to Section 2.02
within two months of such determination, the Master Servicer shall cause such
Mortgage Loan to be auctioned to the highest bidder and sold out of the Trust
Estate no later than the date 90 days after such determination. In the event of
any such sale of a Mortgage Loan, the Trustee shall, at the written request of
the Master Servicer and upon being supported with appropriate forms therefor,
within five Business Days of the deposit by the Master Servicer of the proceeds
of such auction into the Certificate Account, release or cause to be released to
the entity identified by the Master Servicer the related Owner Mortgage Loan
File and Servicer Mortgage Loan File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the auction purchaser title to the Mortgage Loan and the
Trustee shall have no further responsibility with regard to such Owner Mortgage
Loan File or Servicer Mortgage Loan File. Neither the Trustee, the Master
Servicer nor any Servicer, acting on behalf of the Trustee, shall provide
financing from the Trust Estate to any purchaser of a Mortgage Loan.
The Master Servicer, on behalf of the Trustee, shall, pursuant to the
Servicing Agreements, object to the foreclosure upon, or other related
conversion of the ownership of, any Mortgaged Property by the related Servicer
if (i) the Master Servicer believes such Mortgaged Property may be contaminated
with or affected by hazardous wastes or hazardous substances or (ii) such
Servicer does not agree to administer such Mortgaged Property, once the related
Mortgage Loan becomes an REO Mortgage Loan, in a manner which would not result
in a federal tax being imposed upon the Trust Estate or the Upper-Tier REMIC or
Lower-Tier REMIC.
The Master Servicer may enter into a special servicing agreement with an
unaffiliated holder of 100% Percentage Interest of a Class B Subclass or a
holder of a class of securities representing interests in the Class B
Certificates and/or other subordinated mortgage pass-through certificates, such
agreement to be substantially in the form of Exhibit M hereto or subject to each
Rating Agency's acknowledgment that the ratings of the Certificates in effect
immediately prior to the entering into of such agreement would not be qualified,
downgraded or withdrawn and the Certificates would not be placed on credit
review status (except for possible upgrading) as a result of such agreement. Any
such agreement may contain provisions whereby such holder may instruct the
Master Servicer to instruct a Servicer to the extent provided in the applicable
Servicing Agreement to commence or delay foreclosure proceedings with respect to
delinquent Mortgage Loans and will contain provisions for the deposit of cash by
the holder that would be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had the Servicer
acted in accordance with its normal procedures.
Section 3.09. Termination and Substitution of Servicing Agreements.
Upon the occurrence of any event for which a Servicer may be terminated
pursuant to its Servicing Agreement, the Master Servicer shall promptly deliver
to the Seller and the Trustee an Officer's Certificate certifying that an event
has occurred which may justify termination of such Servicing Agreement,
describing the circumstances surrounding such event and recommending what action
should be taken by the Trustee with respect to such Servicer. If the Master
Servicer recommends that such Servicing Agreement be terminated, the Master
Servicer's certification must state that the breach is material and not merely
technical in nature. Upon written direction of the Master Servicer, based upon
such certification, the Trustee shall promptly terminate such Servicing
Agreement. Notwithstanding the foregoing, in the event that (i) Norwest Mortgage
fails to make any advance, as a consequence of which the Trustee is obligated to
make an advance pursuant to Section 3.03 and (ii) the Trustee provides Norwest
Mortgage written notice of the failure to make such advance and such failure
shall continue unremedied for a period of 15 days after receipt of such notice,
the Trustee shall terminate the Norwest Servicing Agreement without the
recommendation of the Master Servicer. The Master Servicer shall indemnify the
Trustee and hold it harmless from and against any and all claims, liabilities,
costs and expenses (including, without limitation, reasonable attorneys' fees)
arising out of, or assessed against the Trustee in connection with termination
of such Servicing Agreement at the direction of the Master Servicer. If the
Trustee terminates such Servicing Agreement, the Trustee may enter into a
substitute Servicing Agreement with the Master Servicer or, at the Master
Servicer's nomination, with another mortgage loan service company acceptable to
the Trustee, the Master Servicer and each Rating Agency under which the Master
Servicer or such substitute servicer, as the case may be, shall assume, satisfy,
perform and carry out all liabilities, duties, responsibilities and obligations
that are to be, or otherwise were to have been, satisfied, performed and carried
out by such Servicer under such terminated Servicing Agreement. Until such time
as the Trustee enters into a substitute servicing agreement with respect to the
Mortgage Loans previously serviced by such Servicer, the Master Servicer shall
assume, satisfy, perform and carry out all obligations which otherwise were to
have been satisfied, performed and carried out by such Servicer under its
terminated Servicing Agreement. However, in no event shall the Master Servicer
be deemed to have assumed the obligations of a Servicer to advance payments of
principal and interest on a delinquent Mortgage Loan in excess of the Master
Servicer's independent Periodic Advance obligation under Section 3.03 of this
Agreement. As compensation for the Master Servicer of any servicing obligations
fulfilled or assumed by the Master Servicer, the Master Servicer shall be
entitled to any servicing compensation to which a Servicer would have been
entitled if the Servicing Agreement with such Servicer had not been terminated.
Section 3.10. 1934 Act Reports.
The Master Servicer shall, on behalf of the Seller, make all filings
required to be made by the Seller with respect to the Class A Certificates
(other than the Class A-12 Certificates), the Class M Certificates and the Class
B-1 and Class B-2 Certificates pursuant to the Securities Exchange Act of 1934,
as amended.
ARTICLE IV
DISTRIBUTIONS IN RESPECT OF CERTIFICATES;
PAYMENTS TO CERTIFICATEHOLDERS;
STATEMENTS AND REPORTS
Section 4.01. Distributions.
(a)(i) On each Distribution Date, the Pool Distribution Amount will be
applied in the following amounts, to the extent the Pool Distribution Amount is
sufficient therefor, in the manner and in the order of priority as follows:
first, to the Subclasses of Class A Certificates, pro rata based on their
respective Class A Subclass Interest Accrual Amounts, in an aggregate amount up
to the sum of the Class A Subclass Interest Accrual Amounts with respect to such
Distribution Date; provided that prior to their respective Accretion Termination
Dates, an amount equal to the amount that would otherwise be distributable in
respect of interest to the Class A-11 Certificates and to the Class A-12
Certificates with respect to the Class A-12 TAC Accrual Component will instead
be distributed in reduction of the Class A Subclass Principal Balances of the
Accretion Directed Certificates and the Class A-11 Certificates and the
Component Principal Balance of the Class A-12 TAC Accrual Component in
accordance with Section 4.01(b).
second, to the Subclasses of Class A Certificates, pro rata based on their
respective unpaid Class A Subclass Interest Shortfall Amounts, in an aggregate
amount up to the sum of the previously unpaid Class A Subclass Interest
Shortfall Amounts; provided that prior to their respective Accretion Termination
Dates, an amount equal to the amount that would otherwise be distributable in
respect of interest shortfalls to the Class A-11 Certificates and to the Class
A-12 Certificates with respect to the Class A-12 TAC Accrual Component will
instead be distributed in reduction of the Class A Subclass Principal Balances
of the Accretion Directed Certificates and the Class A-11 Certificates and the
Component Principal Balance of the Class A-12 TAC Accrual Component in
accordance with Section 4.01(b).
third, concurrently, to the Class A Certificates (other than the Class A-12
Certificates with respect to the Class A-12 PO Component) and the Class A-12
Certificates with respect to the Class A-12 PO Component, pro rata based on the
Class A Non-PO Optimal Principal Amount and the Class A-12 PO Component Optimal
Principal Amount, (A) to the Subclasses of Class A Certificates (other than the
Class A-12 Certificates with respect to the Class A-12 PO Component), in an
aggregate amount up to the Class A Non-PO Optimal Principal Amount, such
distribution to be allocated among such Subclasses in accordance with Section
4.01(b) or Section 4.01(c), as applicable. and (B) to the Class A-12
Certificates with respect to the Class A-12 PO Component in an amount up to the
Class A-12 PO Component Optimal Principal Amount;
fourth, to the Class A-12 Certificates with respect to the Class A-12 PO
Component in an amount up to the Class A-12 PO Component Deferred Amount, but
only from amounts otherwise distributable (without regard to this Paragraph
fourth) to the Subclasses of Class B Certificates in reverse numerical order
pursuant to priorities twenty-second, nineteenth, sixteenth, thirteenth and
tenth of this Pool Distribution Amount Allocation and then from amounts
otherwise distributable (without regard to this Paragraph fourth) to the Class M
Certificates pursuant to priority seventh of this Pool Distribution Amount
Allocation;
fifth, to the Class M Certificates in an amount up to the Class M Interest
Accrual Amount with respect to such Distribution Date;
sixth, to the Class M Certificates in an amount up to the previously unpaid
Class M Interest Shortfall Amounts;
seventh, to the Class M Certificates in an amount up to the Class M Optimal
Principal Amount; provided, however, that the amount distributable pursuant to
this priority seventh to the Class M Certificates will be reduced by the amount,
if any, otherwise distributable as principal hereunder used to pay the Class
A-12 PO Component Deferred Amount in accordance with priority fourth;
eighth, to the Class B-1 Certificates in an amount up to the Class B
Subclass Interest Accrual Amount for such Subclass;
ninth, to the Class B-1 Certificates in an amount up to the sum of the
previously unpaid Class B Subclass Interest Shortfall Amounts for such Subclass;
tenth, to the Class B-1 Certificates in an amount up to the Subclass B
Optimal Principal Amount for such Subclass; provided, however, that the amount
distributable pursuant to this priority tenth will be reduced by the amount, if
any, otherwise distributable as principal hereunder used to pay the Class A-12
PO Component Deferred Amount in accordance with priority fourth;
eleventh, to the Class B-2 Certificates in an amount up to the Class B
Subclass Interest Accrual Amount for such Subclass;
twelfth, to the Class B-2 Certificates in an amount up to the sum of the
previously unpaid Class B Subclass Interest Shortfall Amounts for such Subclass;
thirteenth, to the Class B-2 Certificates in an amount up to the Subclass B
Optimal Principal Amount for such Subclass; provided, however, that the amount
distributable pursuant to this priority thirteenth will be reduced by the
amount, if any, otherwise distributable as principal hereunder used to pay the
Class A-12 PO Component Deferred Amount in accordance with priority fourth;
fourteenth, to the Class B-3 Certificates in an amount up to the Class B
Subclass Interest Accrual Amount for such Subclass;
fifteenth, to the Class B-3 Certificates in an amount up to the sum of the
previously unpaid Class B Subclass Interest Shortfall Amounts for such Subclass;
sixteenth, to the Class B-3 Certificates in an amount up to the Subclass B
Optimal Principal Amount for such Subclass; provided, however, that the amount
distributable pursuant to this priority sixteenth will be reduced by the amount,
if any, otherwise distributable as principal hereunder used to pay the Class
A-12 PO Component Deferred Amount in accordance with priority fourth;
seventeenth, to the Class B-4 Certificates in an amount up to the Class B
Subclass Interest Accrual Amount for such Subclass;
eighteenth, to the Class B-4 Certificates in an amount up to the sum of the
previously unpaid Class B Subclass Interest Shortfall Amounts for such Subclass;
nineteenth, to the Class B-4 Certificates in an amount up to the Subclass B
Optimal Principal Amount for such Subclass; provided, however, that the amount
distributable pursuant to this priority nineteenth will be reduced by the
amount, if any, otherwise distributable as principal hereunder used to pay the
Class A-12 PO Component Deferred Amount in accordance with priority fourth;
twentieth, to the Class B-5 Certificates in an amount up to the Class B
Subclass Interest Accrual Amount for such Subclass;
twenty-first, to the Class B-5 Certificates in an amount up to the sum of
the previously unpaid Class B Subclass Interest Shortfall Amounts for such
Subclass; and
twenty-second, to the Class B-5 Certificates in an amount up to the
Subclass B Optimal Principal Amount for such Subclass; provided, however, that
the amount distributable pursuant to this priority twenty-second will be reduced
by the amount, if any, otherwise distributable as principal hereunder used to
pay the Class A-12 PO Component Deferred Amount in accordance with priority
fourth; and
Notwithstanding the foregoing, after the Principal Balance of any Subclass
(other than the Class A-12, Class A-R or Class A-LR Certificates) has been
reduced to zero or, in the case of the Class A-12 Certificates, after the later
to occur of (i) the Principal Balance of such Class A Subclass being reduced to
zero or (ii) the Principal Balances of the Class A-2, Class A-8, Class A-9,
Class A-10, Class A-14, Class A-15 and Class A-16 Certificates being reduced to
zero, such Subclass will be entitled to no further distributions of principal or
interest (including, without limitation, any Unpaid Interest Shortfalls).
In addition, Net Foreclosure Profits, if any, with respect to such
Distribution Date minus any portion thereof payable to a Servicer pursuant to
Section 3.02(ix) hereof shall be distributed to the Holder of the Class A-LR
Certificate.
With respect to any Distribution Date, the amount of the Principal
Adjustment, if any, attributable to any Class B Subclass will be allocated pro
rata based on principal balance among the Class A Certificates (other than the
Class A-12 Certificates with respect to the Class A-12 PO Component), the Class
M Certificates and any Class B Subclass with a lower numerical designation and
the amount of the Principal Adjustment, if any, attributable to the Class M
Certificates will be allocated to the Subclasses of Class A Certificates (other
than the Class A-12 Certificates with respect to the Class A-12 PO Component)
pro rata based on Class A Subclass Principal Balance (less, in the case of the
Class A-12 Certificates, the Class A-12 PO Component Principal Balance).
(ii) Distributions on the Uncertificated Lower-Tier Interests. On each
Distribution Date, each Uncertificated Lower-Tier Interest shall receive
distributions in respect of principal in an amount equal to the amount of
principal distributed to its respective Corresponding Upper-Tier Class, Classes,
Component or Components as provided herein. On each Distribution Date, each
Uncertificated Lower-Tier Interest (other than the Class A-L8 Interest, Class
A-L9 Interest, Class A-L14 Interest, Class A-L15 Interest and Class A-LPO
Interest) shall receive distributions in respect of interest in an amount equal
to the (i) Class A Subclass Interest Accrual Amount and Class A Subclass Unpaid
Interest Shortfall, (ii) Component Interest Accrual Amount and Component Unpaid
Interest Shortfall, (iii) Class M Interest Accrual Amount and Class M Unpaid
Interest Shortfall or (iv) Class B Subclass Interest Accrual Amount and Class B
Subclass Unpaid Interest Shortfall, as the case may be, in respect of its
Corresponding Upper-Tier Class, Classes, Component or Components in each case to
the extent actually distributed thereon. The Class A-L8 Interest shall receive
distributions in respect of interest in an amount equal to the sum of (i) the
amount of interest distributed on the Class A-8 Certificates and (ii) an amount
equal to the product of the Class A-L8 Interest Fraction and the amount of
interest distributed on the Class A-12 IO A Component. The Class A-L9 Interest
shall receive distributions in respect of interest in an amount equal to the sum
of (i) the amount of interest distributed on the Class A-9 Certificates and (ii)
an amount equal to the product of the Class A-L9 Interest Fraction and the
amount of interest distributed on the Class A-12 IO B Component. The Class A-L14
Interest shall receive distributions in respect of interest in an amount equal
to the sum of (i) the amount of interest distributed on the Class A-14
Certificates and (ii) an amount equal to the product of the Class A-L14 Interest
Fraction and the amount of interest distributed on the Class A-12 IO B
Component. The Class A-L15 Interest shall receive distributions in respect of
interest in an amount equal to the sum of (i) the amount of interest distributed
on the Class A-15 Certificates, (ii) an amount equal to the product of the Class
A-L15A Interest Fraction and the amount of interest distributed on the Class
A-12 IO A Component and (iii) an amount equal to the product of the Class A-L15B
Interest Fraction and the amount of interest distributed on the Class A-12 IO B
Component. Such amounts distributed to the Uncertificated Lower-Tier Interests
in respect of principal and interest with respect to any Distribution Date are
referred to herein collectively as the "Lower-Tier Distribution Amount."
As of any date, the principal balance of each Uncertificated Lower-Tier
Interest equals the Class A Subclass Principal Balance, Component Principal
Balance, Class M Principal Balance or Class B Subclass Principal Balance, as the
case may be, of the respective Corresponding Upper-Tier Class, Classes,
Component or Components. The initial principal balance of each Uncertificated
Lower-Tier Interest equals the Original Class A Subclass Principal Balance,
Original Component Principal Balance, Original Class M Principal Balance,
Original Class B-1 Principal Balance, Original Class B-2 Principal Balance,
Original Class B-3 Principal Balance, Original Class B-4 Principal Balance or
Original Class B-5 Principal Balance as the case may be, of the respective
Corresponding Upper-Tier Class, Classes, Component or Components.
The pass-through rate with respect to each Uncertificated Lower-Tier
Interest (other than the Class A-LPO Interest) will be 7.750% per annum. Prior
to the Cross-Over Date, interest will accrue in respect of the Class A-L11
Interest and Class A-L12 Interest and will be added to the principal balance
thereof to the same extent that interest accrues and is added to the Class A
Subclass Principal Balance of the Class A-11 Certificates and the Component
Principal Balance of the Class A-12 TAC Accrual Component, respectively. The
Class A-LPO Interest is a principal-only interest and is not entitled to
distributions of interest. Any Non-Supported Interest Shortfalls will be
allocated to each Uncertificated Lower-Tier Interest in the same relative
proportions as interest is allocated to such Uncertificated Lower-Tier Interest.
(b) On each Distribution Date occurring prior to the Class A-11 Accretion
Termination Date, an amount equal to the Class A-11 Accrual Distribution Amount,
if any, for such Determination Date will be allocated sequentially to the Class
A-13 Certificates and Class A-11 Certificates, in that order, until the Class A
Subclass Principal Balance of each such Subclass has been reduced to zero.
On each Distribution Date occurring prior to the Class A-12 TAC Accrual
Component Accretion Termination Date, an amount equal to the Class A-12 TAC
Accrual Component Distribution Amount, if any, for such Distribution Date will
be allocated sequentially to the Class A-10 Certificates, the Class A-16
Certificates, the Class A-2 Certificates and the Class A-12 TAC Accrual
Component, in that order, until the Class A Subclass Principal Balance of each
such Subclass and the Component Principal Balance of such Component have been
reduced to zero.
On each Distribution Date prior to the Cross-Over Date, the Class A Non-PO
Principal Amount will be allocated among and distributed in reduction of the
Class A Subclass Principal Balances of the Class A Certificates (other than the
Class A-12 Certificates) and the Component Principal Balance of the Class A-12
TAC Accrual Component:
first, to the Class A-5 Certificates, up to the Class A-5 Priority Amount;
second, concurrently as follows:
(A) 14.09588399% sequentially as follows:
(i) concurrently, to the Class A-R and Class A-LR Certificates, pro
rata, until the Class A Subclass Principal Balance of each such
Subclass has been reduced to zero;
(ii) concurrently, 15.85138132% to the Class A-1 Certificates and
84.14861868% to the Class A-6 Certificates, until the sum of
their Class A Subclass Principal Balances has been reduced to
36.3608831098% of the sum of their Original Class A Subclass
Principal Balances;
(iii)concurrently, 12.73828787% to the Class A-1 Certificates and
87.26171213% to the Class A-6 Certificates, until the Class A
Subclass Principal Balance of the Class A-1 Certificates has been
reduced to zero;
(iv) concurrently, 79.94991891% to the Class A-6 Certificates and
20.05008109% to the Class A-3 Certificates, until the Class A
Subclass Principal Balance of the Class A-6 Certificates has been
reduced to zero;
(v) to the Class A-3 Certificates, until the Class A Subclass
Principal Balance thereof has been reduced to zero;
(vi) to the Class A-4 Certificates, until the Class A Subclass
Principal Balance thereof has been reduced to zero;
(B) 85.90411601% sequentially as follows:
(i) concurrently, 8.83419499% to the Class A-7 Certificates,
72.08577066% to the Class A-8 Certificates and 19.08003435% to
the Class A-15 Certificates, until the Class A-8 Certificates
have received their TAC Principal Amount with respect to such
Distribution Date;
(ii) concurrently, 11.04279433% to the Class A-7 Certificates,
9.71918183% to the Class A-9 Certificates, 64.52991885% to the
Class A-14 Certificates and 14.70810500% to the Class A-15
Certificates, up to their respective TAC Principal Amounts with
respect to such Distribution Date;
(iii)to the Class A-12 TAC Accrual Component, up to its TAC Principal
Amount with respect to such Distribution Date;
(iv) sequentially, to the Class A-13 and Class A-11 Certificates, in
that order, until the Class A Subclass Principal Balance of each
such Subclass has been reduced to zero;
(v) concurrently, 8.83419499% to the Class A-7 Certificates,
72.08577066% to the Class A-8 Certificates and 19.08003435% to
the Class A-15 Certificates, without regard to the TAC Principal
Amount of the Class A-8 Certificates and until the Class A
Subclass Principal Balance of the Class A-8 Certificates has been
reduced to zero;
(vi) concurrently, 11.04279433% to the Class A-7 Certificates,
9.71918183% to the Class A-9 Certificates, 64.52991885% to the
Class A-14 Certificates and 14.70810500% to the Class A-15
Certificates, without regard to their TAC Principal Amounts and
until the Class A Subclass Principal Balance of each such
Subclass has been reduced to zero;
(vii)sequentially, to the Class A-10, Class A-16 and Class A-2
Certificates, in that order, until the Class A Subclass Principal
Balance of each such Subclass has been reduced to zero;
(viii)to the Class A-12 TAC Accrual Component, without regard to its
TAC Principal Amount and until the Component Principal Balance
thereof has been reduced to zero; and
third, to the Class A-5 Certificates, until the Class A Subclass Principal
Balance thereof has been reduced to zero.
As used above, the "TAC Principal Amount" for any Distribution Date and for
any Subclass of TAC Certificates and the Class A-12 TAC Accrual Component means
the amount, if any, that would reduce the Class A Subclass Principal Balance of
such Subclass or Component Principal Balance of such Component to the percentage
of its initial Class A Subclass Principal Balance or initial Component Principal
Balance shown in the following tables with respect to such Distribution Date.
The following tables set forth for each Distribution Date the targeted
Class A Subclass Principal Balance and the targeted Component Principal Balance
of the TAC Certificates and the Class A-12 TAC Accrual Component, each expressed
as a percentage of the initial Class A Subclass Principal Balance or initial
Component Principal Balance, as the case may be.
Targeted Balances
Targeted Class A Subclass Principal Balances
as Percentages of Initial Class A Subclass Principal Balances
Class A-7 Certificates
Percentage of Percentage of Percentage of
Initial Class A Initial Class Initial Class A
Subclass A Subclass Subclass
Principal Principal Principal
Distribution Date Balance Distribution Date Balance Distribution Date Balance
----------------- ------- ----------------- ------- ----------------- -------
September 1996..... 99.71475211% June 1999......... 63.87077168% February 2002..... 24.30539498%
October 1996....... 99.37351635 July 1999......... 62.46256408 March 2002........ 23.25615748
November 1996...... 98.97642343 August 1999....... 61.07295150 April 2002........ 22.22184013
December 1996...... 98.52367143 September 1999.... 59.70169942 May 2002.......... 21.20224904
January 1997....... 98.01552599 October 1999...... 58.34857618 June 2002......... 20.19719270
February 1997...... 97.45232029 November 1999..... 57.01335325 July 2002......... 19.20648199
March 1997......... 96.83449012 December 1999..... 55.69580485 August 2002....... 18.22993034
April 1997......... 96.16250200 January 2000...... 54.39570811 September 2002.... 17.29853969
May 1997........... 95.43688911 February 2000..... 53.11284314 October 2002...... 16.38059551
June 1997.......... 94.65825097 March 2000........ 51.84699265 November 2002..... 15.47592017
July 1997.......... 93.82725252 April 2000........ 50.59794221 December 2002..... 14.58433835
August 1997........ 92.94462355 May 2000.......... 49.36548021 January 2003...... 13.70567708
September 1997..... 92.01115770 June 2000......... 48.14939757 February 2003..... 12.83976555
October 1997....... 91.02771123 July 2000......... 46.94948793 March 2003........ 11.98643513
November 1997...... 89.99520214 August 2000....... 45.76554770 April 2003........ 11.14551939
December 1997...... 88.91460851 September 2000.... 44.59737576 May 2003.......... 10.31685408
January 1998....... 87.78699664 October 2000...... 43.44477347 June 2003......... 9.50027690
February 1998...... 86.61350689 November 2000..... 42.30754491 July 2003......... 8.69562778
March 1998......... 85.39539506 December 2000..... 41.18549658 August 2003....... 7.90274873
April 1998......... 84.13401563 January 2001...... 40.07843746 September 2003.... 7.17934642
May 1998........... 82.83072319 February 2001..... 38.74161436 October 2003...... 6.46652964
June 1998.......... 81.48698545 March 2001........ 37.39455305 November 2003..... 5.76415463
July 1998.......... 80.10430439 April 2001........ 36.06553001 December 2003..... 5.07207937
August 1998........ 78.68474679 May 2001.......... 34.75431855 January 2004...... 4.39016394
September 1998..... 77.23054260 June 2001......... 33.46069468 February 2004..... 3.71827003
October 1998....... 75.74575704 July 2001......... 32.18443732 March 2004........ 3.05626124
November 1998...... 74.23922735 August 2001....... 30.92532828 April 2004........ 2.40400298
December 1998...... 72.71915854 September 2001.... 29.78235299 May 2004.......... 1.76136240
January 1999....... 71.19915865 October 2001...... 28.65551561 June 2004......... 1.12820835
February 1999...... 69.69435028 November 2001..... 27.54460665 July 2004......... 0.50441146
March 1999......... 68.20935588 December 2001..... 26.44941927 August 2004
April 1999......... 66.74392538 January 2002...... 25.36974927 and thereafter.... 0.00000000
Targeted Class A Subclass Principal Balances
as Percentages of Initial Class A Subclass Principal Balances
Class A-8 Certificates
Percentage of Percentage of Percentage of
Initial Class A Initial Class Initial Class A
Subclass A Subclass Subclass
Principal Principal Principal
Distribution Date Balance Distribution Date Balance Distribution Date Balance
----------------- ------- ----------------- ------- ----------------- -------
September 1996..... 99.52486863% April 1998........ 73.57236676% October 1999...... 30.62210776%
October 1996....... 98.95647948 May 1998.......... 71.40150020 November 1999..... 28.39805524
November 1996...... 98.29505025 June 1998......... 69.16326473 December 1999..... 26.20344283
December 1996...... 97.54091087 July 1998......... 66.86016228 January 2000...... 24.03789935
January 1997....... 96.69450379 August 1998....... 64.49563533 February 2000..... 21.90105836
February 1997...... 95.75638399 September 1998.... 62.07339828 March 2000........ 19.79255807
March 1997......... 94.72727740 October 1998...... 59.60022251 April 2000........ 17.71204132
April 1997......... 93.60796103 November 1998..... 57.09082798 May 2000.......... 15.65915549
May 1997........... 92.39932306 December 1998..... 54.55888161 June 2000......... 13.63355245
June 1997.......... 91.10236202 January 1999...... 52.02705013 July 2000......... 11.63488852
July 1997.......... 89.71818556 February 1999..... 49.52052273 August 2000....... 9.66282440
August 1997........ 88.24800927 March 1999........ 47.04699907 September 2000.... 7.71702513
September 1997..... 86.69315499 April 1999........ 44.60606261 October 2000...... 5.79716002
October 1997....... 85.05504913 May 1999.......... 42.19730210 November 2000..... 3.90290257
November 1997...... 83.33522063 June 1999......... 39.82031152 December 2000..... 2.03393049
December 1997...... 81.53529875 July 1999......... 37.47469003 January 2001...... 0.18992557
January 1998....... 79.65705962 August 1999....... 35.16004189 February 2001
February 1998...... 77.70240267 September 1999.... 32.87597637 and thereafter.... 0.00000000
March 1998......... 75.67341963
Class A-9 Certificates
Percentage of Percentage of Percentage of
Initial Class A Initial Class Initial Class A
Subclass A Subclass Subclass
Principal Principal Principal
Distribution Date Balance Distribution Date Balance Distribution Date Balance
----------------- ------- ----------------- ------- ----------------- -------
Up to and including April 2002........ 55.60406781% July 2003......... 21.75842667%
January 2001....... 100.00000000% May 2002.......... 53.05282036 August 2003....... 19.77446390
February 2001...... 96.94027760 June 2002......... 50.53794224 September 2003.... 17.96434782
March 2001......... 93.56962557 July 2002......... 48.05896008 October 2003...... 16.18071914
April 2001......... 90.24410957 August 2002....... 45.61540699 November 2003..... 14.42321801
May 2001........... 86.96316195 September 2002.... 43.28485716 December 2003..... 12.69148924
June 2001.......... 83.72622254 October 2002...... 40.98795314 January 2004...... 10.98518262
July 2001.......... 80.53273825 November 2002..... 38.72425085 February 2004..... 9.30395215
August 2001........ 77.38216280 December 2002..... 36.49331172 March 2004........ 7.64745654
September 2001..... 74.52218007 January 2003...... 34.29470258 April 2004........ 6.01535886
October 2001....... 71.70257828 February 2003..... 32.12799618 May 2004.......... 4.40732687
November 2001...... 68.92283296 March 2003........ 29.99277053 June 2004......... 2.82303228
December 2001...... 66.18242653 April 2003........ 27.88860929 July 2004......... 1.26215161
January 2002....... 63.48084810 May 2003.......... 25.81510122 August 2004
February 2002...... 60.81759315 June 2003......... 23.77184060 and thereafter.... 0.00000000
March 2002......... 58.19216351
Targeted Component Principal Balances
as Percentages of Initial Component Principal Balance
Class A-12 TAC Accrual Component
Percentage of Percentage of Percentage of
Initial Initial Initial
Component Component Component
Principal Principal Principal
Distribution Date Balance Distribution Date Balance Distribution Date Balance
----------------- ------- ----------------- ------- ----------------- -------
September 1996..... 100.64583334% December 2001..... 150.98409741% March 2007........ 101.99863236%
October 1996....... 101.29583768 January 2002...... 151.95920305 April 2007........ 99.98810750
November 1996...... 101.95003995 February 2002..... 152.94060622 May 2007.......... 98.00432692
December 1996...... 102.60846731 March 2002........ 153.92834765 June 2007......... 96.04694579
January 1997....... 103.27114699 April 2002........ 154.92246824 July 2007......... 94.11562346
February 1997...... 103.93810649 May 2002.......... 155.92300915 August 2007....... 92.21002377
March 1997......... 104.60937342 June 2002......... 156.93001194 September 2007.... 90.32981474
April 1997......... 105.28497561 July 2002......... 157.94351827 October 2007...... 88.47466871
May 1997........... 105.96494108 August 2002....... 158.96357015 November 2007..... 86.64426210
June 1997.......... 106.64929801 September 2002.... 159.99020986 December 2007..... 84.83827548
July 1997.......... 107.33807471 October 2002...... 161.02347996 January 2008...... 83.05639353
August 1997........ 108.03129977 November 2002..... 162.06342328 February 2008..... 81.29830485
September 1997..... 108.72900191 December 2002..... 163.11008289 March 2008........ 79.56370214
October 1997....... 109.43121007 January 2003...... 164.16350218 April 2008........ 77.85228193
November 1997...... 110.13795329 February 2003..... 165.22372478 May 2008.......... 76.16374457
December 1997...... 110.84926092 March 2003........ 166.29079469 June 2008......... 74.49779430
January 1998....... 111.56516239 April 2003........ 167.36475605 July 2008......... 72.85413914
February 1998...... 112.28568740 May 2003.......... 168.44565346 August 2008....... 71.23249078
March 1998......... 113.01086577 June 2003......... 169.53353161 September 2008.... 69.63256459
April 1998......... 113.74072764 July 2003......... 170.62843568 October 2008...... 68.05407961
May 1998........... 114.47530315 August 2003....... 171.73041099 November 2008..... 66.49675838
June 1998.......... 115.21462283 September 2003.... 172.83950323 December 2008..... 64.96032710
July 1998.......... 115.95871727 October 2003...... 173.95575835 January 2009...... 63.44451534
August 1998........ 116.70761732 November 2003..... 175.07922264 February 2009..... 61.94905612
September 1998..... 117.46135401 December 2003..... 176.20994262 March 2009........ 60.47368600
October 1998....... 118.21995858 January 2004...... 177.34796516 April 2009........ 59.01814473
November 1998...... 118.98346249 February 2004..... 178.49333743 May 2009.......... 57.58217547
December 1998...... 119.75189735 March 2004........ 179.64610690 June 2009......... 56.16552467
January 1999....... 120.52529501 April 2004........ 180.80632136 July 2009......... 54.76794193
February 1999...... 121.30368757 May 2004.......... 181.97402886 August 2009....... 53.38918014
March 1999......... 122.08710722 June 2004......... 183.14927778 September 2009.... 52.02899527
April 1999......... 122.87558644 July 2004......... 184.33211686 October 2009...... 50.68714642
May 1999........... 123.66915793 August 2004....... 183.65276562 November 2009..... 49.36339581
June 1999.......... 124.46785457 September 2004.... 180.23939407 December 2009..... 48.05750863
July 1999.......... 125.27170947 October 2004...... 176.87485681 January 2010...... 46.76925307
August 1999........ 126.08075593 November 2004..... 173.55848661 February 2010..... 45.49840036
September 1999..... 126.89502749 December 2004..... 170.28962513 March 2010........ 44.24472452
October 1999....... 127.71455788 January 2005...... 167.06762276 April 2010........ 43.00800255
November 1999...... 128.53938105 February 2005..... 163.89183858 May 2010.......... 41.78801430
December 1999...... 129.36953122 March 2005........ 160.76164012 June 2010......... 40.58454236
January 2000....... 130.20504277 April 2005........ 157.67640345 July 2010......... 39.39737215
February 2000...... 131.04595033 May 2005.......... 154.63551286 August 2010....... 38.22629182
March 2000......... 131.89228875 June 2005......... 151.63836082 September 2010.... 37.07109221
April 2000......... 132.74409315 July 2005......... 148.68434798 October 2010...... 35.93156686
May 2000........... 133.60139874 August 2005....... 145.77288292 November 2010..... 34.80751191
June 2000.......... 134.46424110 September 2005.... 143.18240682 December 2010..... 33.69872612
July 2000.......... 135.33265598 October 2005...... 140.62614237 January 2011...... 32.60501085
August 2000........ 136.20667939 November 2005..... 138.10364964 February 2011..... 31.52616995
September 2000..... 137.08634754 December 2005..... 135.61449434 March 2011........ 30.46200978
October 2000....... 137.97169685 January 2006...... 133.15824765 April 2011........ 29.41233924
November 2000...... 138.86276406 February 2006..... 130.73448626 May 2011.......... 28.37696959
December 2000...... 139.75958609 March 2006........ 128.34279219 June 2011......... 27.35571453
January 2001....... 140.66220007 April 2006........ 125.98275283 July 2011......... 26.34839017
February 2001...... 141.57064345 May 2006.......... 123.65396072 August 2011....... 25.35481494
March 2001......... 142.48495385 June 2006......... 121.35601366 September 2011.... 24.37480958
April 2001......... 143.40516920 July 2006......... 119.08851460 October 2011...... 23.40819720
May 2001........... 144.33132758 August 2006....... 116.85107137 November 2011..... 22.45480302
June 2001.......... 145.26346741 September 2006.... 114.64329699 December 2011..... 21.51445470
July 2001.......... 146.20162731 October 2006...... 112.46480928 January 2012...... 20.58698190
August 2001........ 147.14584614 November 2006..... 110.31523095 February 2012..... 19.67221661
September 2001..... 148.09616305 December 2006..... 108.19418951 March 2012........ 18.76999287
October 2001....... 149.05261746 January 2007...... 106.10131720 April 2012........ 17.88014694
November 2001...... 150.01524892 February 2007..... 104.03625100 May 2012.......... 17.00251709
June 2012.......... 16.13694369 February 2013..... 9.62789574 October 2013...... 3.80481669
July 2012.......... 15.28326913 March 2013........ 8.86397584 November 2013..... 3.12166296
August 2012........ 14.44133790 April 2013........ 8.11062435 December 2013..... 2.44801785
September 2012..... 13.61099637 May 2013.......... 7.36770266 January 2014...... 1.78375645
October 2012....... 12.79209296 June 2013......... 6.63507412 February 2014..... 1.12875541
November 2012...... 11.98447803 July 2013......... 5.91260362 March 2014........ 0.48289297
December 2012...... 11.18800375 August 2013....... 5.20015801 April 2014
January 2013....... 10.40252434 September 2013.... 4.49760565 and thereafter.... 0.00000000
Class A-14 Certificates
Percentage of Percentage of Percentage of
Initial Class A Initial Class Initial Class A
Subclass A Subclass Subclass
Principal Principal Principal
Distribution Date Balance Distribution Date Balance Distribution Date Balance
----------------- ------- ----------------- ------- ----------------- -------
Up to and including April 2002........ 55.60406780% July 2003......... 21.75842660%
January 2001....... 100.00000000% May 2002.......... 53.05282041 August 2003....... 19.77446396
February 2001...... 96.94027763 June 2002......... 50.53794220 September 2003.... 17.96434782
March 2001......... 93.56962559 July 2002......... 48.05896006 October 2003...... 16.18071909
April 2001......... 90.24410957 August 2002....... 45.61540698 November 2003..... 14.42321795
May 2001........... 86.96316202 September 2002.... 43.28485712 December 2003..... 12.69148929
June 2001.......... 83.72622260 October 2002...... 40.98795318 January 2004...... 10.98518264
July 2001.......... 80.53273821 November 2002..... 38.72425091 February 2004..... 9.30395218
August 2001........ 77.38216275 December 2002..... 36.49331168 March 2004........ 7.64745656
September 2001..... 74.52218012 January 2003...... 34.29470254 April 2004........ 6.01535893
October 2001....... 71.70257828 February 2003..... 32.12799614 May 2004.......... 4.40732686
November 2001...... 68.92283295 March 2003........ 29.99277054 June 2004......... 2.82303232
December 2001...... 66.18242654 April 2003........ 27.88860926 July 2004......... 1.26215155
January 2002....... 63.48084808 May 2003.......... 25.81510121 August 2004
February 2002...... 60.81759308 June 2003......... 23.77184054 and thereafter.... 0.00000000
March 2002......... 58.19216356
Targeted Class A Subclass Principal Balances
as Percentages of Initial Class A Subclass Principal Balances
Class A-15 Certificates
Percentage of Percentage of Percentage of
Initial Class A Initial Class Initial Class A
Subclass A Subclass Subclass
Principal Principal Principal
Distribution Date Balance Distribution Date Balance Distribution Date Balance
----------------- ------- ----------------- ------- ----------------- -------
September 1996..... 99.66315084% June 1999......... 57.33498860% February 2002..... 17.70033270%
October 1996....... 99.26018531 July 1999......... 55.67203607 March 2002........ 16.93622852
November 1996...... 98.79125831 August 1999....... 54.03104247 April 2002........ 16.18298999
December 1996...... 98.25660345 September 1999.... 52.41173065 May 2002.......... 15.44047576
January 1997....... 97.65653436 October 1999...... 50.81382725 June 2002......... 14.70854641
February 1997...... 96.99144471 November 1999..... 49.23706222 July 2002......... 13.98706425
March 1997......... 96.26184881 December 1999..... 47.68116900 August 2002....... 13.27589336
April 1997......... 95.46829795 January 2000...... 46.14588461 September 2002.... 12.59761088
May 1997........... 94.61142160 February 2000..... 44.63094930 October 2002...... 11.92912070
June 1997.......... 93.69192761 March 2000........ 43.13610608 November 2002..... 11.27029350
July 1997.......... 92.71060144 April 2000........ 41.66110229 December 2002..... 10.62100168
August 1997........ 91.66830477 May 2000.......... 40.20568773 January 2003...... 9.98111918
September 1997..... 90.56597498 June 2000......... 38.76961547 February 2003..... 9.35052165
October 1997....... 89.40462294 July 2000......... 37.35264211 March 2003........ 8.72908627
November 1997...... 88.18533276 August 2000....... 35.95452697 April 2003........ 8.11669186
December 1997...... 86.90925936 September 2000.... 34.57503238 May 2003.......... 7.51321874
January 1998....... 85.57766244 October 2000...... 33.21392421 June 2003......... 6.91854880
February 1998...... 84.19188831 November 2000..... 31.87097076 July 2003......... 6.33256546
March 1998......... 82.75341967 December 2000..... 30.54594388 August 2003....... 5.75515363
April 1998......... 81.26385654 January 2001...... 29.23861761 September 2003.... 5.22833800
May 1998........... 79.72479843 February 2001..... 28.21346723 October 2003...... 4.70923127
June 1998.......... 78.13797824 March 2001........ 27.23247376 November 2003..... 4.19772871
July 1998.......... 76.50516996 April 2001........ 26.26461657 December 2003..... 3.69372694
August 1998........ 74.82881408 May 2001.......... 25.30973066 January 2004...... 3.19712403
September 1998..... 73.11154413 June 2001......... 24.36765286 February 2004..... 2.70781925
October 1998....... 71.35816075 July 2001......... 23.43822217 March 2004........ 2.22571328
November 1998...... 69.57909972 August 2001....... 22.52127972 April 2004........ 1.75070813
December 1998...... 67.78405003 September 2001.... 21.68891131 May 2004.......... 1.28270699
January 1999....... 65.98908201 October 2001...... 20.86829529 June 2004......... 0.82161443
February 1999...... 64.21205363 November 2001..... 20.05927909 July 2004......... 0.36733618
March 1999......... 62.45842332 December 2001..... 19.26171211 August 2004
April 1999......... 60.72789622 January 2002...... 18.47544558 and thereafter.... 0.00000000
May 1999........... 59.02018076
(c) Notwithstanding the foregoing, on each Distribution Date occurring on
or subsequent to the Cross-Over Date, the Class A Non-PO Principal Distribution
Amount shall be distributed among the Subclasses of Class A Certificates (other
than the Class A-12 Certificates with respect to the Class A-12 PO Component)
pro rata in accordance with their outstanding Class A Subclass Principal
Balances (less in the case of the Class A-12 Certificates the Component
Principal Balance of the Class A-12 PO Component) without regard to either the
proportions or the priorities set forth in Section 4.01(b).
(d) (i) For purposes of determining whether the Subclasses of Class B
Certificates are eligible to receive distributions of principal with respect to
any Distribution Date, the following tests shall apply:
(A) if the Current Class M Fractional Interest is less than the
Original Class M Fractional Interest and the Class M Principal Balance
is greater than zero, the Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates shall not be eligible to receive
distributions of principal; or
(B) if the Current Class B-1 Fractional Interest is less than the
Original Class B-1 Fractional Interest and the Class B-1 Principal
Balance is greater than zero, the Class B-2, Class B-3, Class B-4 and
Class B-5 Certificates shall not be eligible to receive distributions
of principal; or
(C) if the Current Class B-2 Fractional Interest is less than the
Original Class B-2 Fractional Interest and the Class B-2 Principal
Balance is greater than zero, the Class B-3, Class B-4 and Class B-5
Certificates shall not be eligible to receive distributions of
principal; or
(D) if the Current Class B-3 Fractional Interest is less than the
Original Class B-3 Fractional Interest and the Class B-3 Principal
Balance is greater than zero, the Class B-4 and Class B-5 Certificates
shall not be eligible to receive distributions of principal; or
(E) if the Current Class B-4 Fractional Interest is less than the
Original Class B-4 Fractional Interest and the Class B-4 Principal
Balance is greater than zero, the Class B-5 Certificates shall not be
eligible to receive distributions of principal.
(ii) Notwithstanding the foregoing, if on any Distribution Date the
aggregate distributions to Holders of the Class M Certificates and/or the
Subclasses of Class B Certificates entitled to receive distributions of
principal would reduce the Class M Principal Balance and/or the Class B Subclass
Principal Balances of the Subclasses of Class B Certificates entitled to receive
distributions of principal below zero, first the Class M Prepayment Percentage
and/or the Class B Subclass Prepayment Percentage of any affected Class B
Subclass for such Distribution Date beginning with the affected Subclass with
the lowest numerical Subclass designation and then, if necessary, the Class M
Percentage and/or the Class B Subclass Percentage of such Subclass of the Class
B Certificates for such Distribution Date shall be reduced to the respective
percentages necessary to bring the Class M Principal Balance and/or the Class B
Subclass Principal Balance of such Class B Subclass to zero. The Class B
Subclass Prepayment Percentages and the Class B Subclass Percentages of the
remaining Class B Subclasses will be recomputed substituting for the
Subordinated Prepayment Percentage and Subordinated Percentage in such
computations the difference between (A) the Subordinated Prepayment Percentage
or Subordinated Percentage, as the case may be, and (B) the percentages
determined in accordance with the preceding sentence necessary to bring the
Class M Principal Balance and/or the Class B Subclass Principal Balances of the
affected Class B Subclasses to zero; provided, however, that if the Class B
Subclass Principal Balances of all the Class B Subclasses eligible to receive
distributions of principal shall be reduced to zero on such Distribution Date,
the Class B Subclass Prepayment Percentage and the Class B Subclass Percentage
of the Class B Subclass with the lowest numerical Subclass designation which
would otherwise be ineligible to receive distributions of principal in
accordance with this Section shall equal the remainder of the Subordinated
Prepayment Percentage for such Distribution Date minus the sum of the Class M
Prepayment Percentage and the Class B Subclass Prepayment Percentages of the
Class B Subclasses having lower numerical Subclass designations, if any, and the
remainder of the Subordinated Percentage for such Distribution Date minus the
sum of the Class M Percentage and the Class B Subclass Percentages of the Class
B Subclasses having lower numerical Subclass designations, if any, respectively.
Any entitlement of any Class B Subclass to principal payments solely pursuant to
this clause (ii) shall not cause such Subclass to be regarded as being eligible
to receive principal distributions for the purpose of applying the definition of
its Class B Subclass Percentage or Class B Subclass Prepayment Percentage.
(e) The Trustee shall establish and maintain the Upper-Tier Certificate
Account, which shall be a separate trust account and an Eligible Account. On
each Distribution Date other than the Final Distribution Date (if such Final
Distribution Date is in connection with a purchase of the assets of the Trust
Estate by the Seller), the Paying Agent shall, on behalf of the Master Servicer,
from funds available on deposit in the Payment Account, (i) deposit, in
immediately available funds, by wire transfer or otherwise, into the Upper-Tier
Certificate Account the Lower-Tier Distribution Amount and (ii) distribute to
the Class A-LR Certificateholder (other than as provided in Section 9.01
respecting the final distribution to Certificateholders) by check mailed to such
Holder at the address of such Holder appearing in the Certificate Register, the
Class A Subclass Distribution Amount with respect to the Class A-LR Certificate
and all other amounts distributable to the Class A-LR Certificate. The Trustee
may clear and terminate the Upper-Tier Certificate Account pursuant to Section
9.01.
(f) On each Distribution Date other than the Final Distribution Date (if
such Final Distribution Date is in connection with a purchase of the assets of
the Trust Estate by the Seller), the Paying Agent shall, on behalf of the Master
Servicer, from funds remitted to it by the Master Servicer, distribute to each
Certificateholder of record (other than the Class A-LR Certificateholder) on the
preceding Record Date (other than as provided in Section 9.01 respecting the
final distribution to Certificateholders or in the last paragraph of this
Section 4.01(f) respecting the final distribution in respect of any Class or
Subclass) either in immediately available funds by wire transfer to the account
of such Certificateholder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder holds Certificates having a
Denomination at least equal to that specified in Section 11.26, and has so
notified the Master Servicer or, if applicable, the Paying Agent at least seven
Business Days prior to the Distribution Date or, if such Holder holds
Certificates having, in the aggregate, a Denomination less than the requisite
minimum Denomination or if such Holder holds the Class A-R Certificate or has
not so notified the Paying Agent, by check mailed to such Holder at the address
of such Holder appearing in the Certificate Register, such Holder's share (based
on, with respect to each Class or Subclass, the aggregate of the Percentage
Interests represented by Certificates of the applicable Class or Subclass of
Certificates held by such Holder of the Class A Subclass Distribution Amount
with respect to each Subclass of Class A Certificates, the Class M Distribution
Amount with respect to the Class M Certificates and the Class B Subclass
Distribution Amount with respect to each such Subclass of Class B Certificates.
In the event that, on any Distribution Date prior to the Final Distribution
Date, the Class A Subclass Principal Balance of any Subclass of Class A
Certificates (other than the Class A-12, Class A-R or Class A-LR Certificates),
the Class M Principal Balance of the Class M Certificates or the Class B
Subclass Principal Balance of any Subclass of Class B Certificates would be
reduced to zero, or in the case of the Class A-12 Certificates, upon the later
of (i) the Class A Subclass Principal Balance being reduced to zero or (ii) the
Class A Subclass Principal Balances of the Class A-2, Class A-8, Class A-9,
Class A-14 and Class A-16 Certificates being reduced to zero, the Master
Servicer shall, as soon as practicable after the Determination Date relating to
such Distribution Date, send a notice to the Trustee. The Trustee will then send
a notice to each Certificateholder of such Class or Subclass with a copy to the
Certificate Registrar, specifying that the final distribution with respect to
such Class or Subclass will be made on such Distribution Date only upon the
presentation and surrender of such Certificateholder's Certificates at the
office or agency of the Trustee therein specified; provided, however, that the
failure to give such notice will not entitle a Certificateholder to any interest
beyond the interest payable with respect to such Distribution Date in accordance
with Section 4.01(a)(i).
(g) The Paying Agent (or if no Paying Agent is appointed by the Master
Servicer, the Master Servicer) shall withhold or cause to be withheld such
amounts as may be required by the Code (giving full effect to any exemptions
from withholding and related certifications required to be furnished by
Certificateholders and any reductions to withholding by virtue of any bilateral
tax treaties and any applicable certification required to be furnished by
Certificateholders with respect thereto) from distributions to be made to
Non-U.S. Persons. Amounts withheld pursuant to this Section 4.01(g) shall be
treated as having been distributed to the related Certificateholder for all
purposes of this Agreement. For the purposes of this paragraph, a "Non-U.S.
Person" is an individual, corporation, partnership or other person other than a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or an estate or trust that is subject to U.S.
federal income tax regardless of the source of its income.
Section 4.02. Allocation of Realized Losses.
(a) With respect to any Distribution Date, the principal portion of
Realized Losses (other than Debt Service Reductions, Excess Special Hazard
Losses, Excess Fraud Losses and Excess Bankruptcy Losses) will be allocated as
follows:
first, to the Class B-5 Certificates until the Class B-5 Principal Balance
has been reduced to zero;
second, to the Class B-4 Certificates until the Class B-4 Principal Balance
has been reduced to zero;
third, to the Class B-3 Certificates until the Class B-3 Principal Balance
has been reduced to zero;
fourth, to the Class B-2 Certificates until the Class B-2 Principal Balance
has been reduced to zero;
fifth, to the Class B-1 Certificates until the Class B-1 Principal Balance
has been reduced to zero;
sixth, to the Class M Certificates until the Class M Principal Balance has
been reduced to zero; and
seventh, concurrently, to the Class A Certificates (other than the Class
A-12 Certificates with respect to the Class A-12 PO Component) and Class A-12
Certificates with respect to the Class A-12 PO Component, pro rata, based on the
Non-PO Fraction and the PO Fraction, respectively.
This allocation of Realized Losses will be effected through the reduction
of the applicable Class's or Subclass's Principal Balance.
(b) With respect to any Distribution Date, the principal portion of Excess
Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses
occurring with respect to any Mortgage Loan allocable to the Class A-12
Certificates with respect to the Class A-12 PO Component will equal the product
of the amount of any such principal loss and the PO Fraction for such Mortgage
Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud
Losses and Excess Bankruptcy Losses remaining after allocation to the Class A-12
Certificates with respect to the Class A-12 PO Component in accordance with the
preceding sentence shall be allocated pro rata among the Class A Certificates
(other than the Class A-12 Certificates with respect to the Class A-12 PO
Component), Class M Certificates and Class B Certificates based on the Class A
Non-PO Principal Balance, Class M Principal Balance and the Class B Principal
Balance, respectively. Any such loss allocated to the Class A Certificates
(other than the Class A-12 Certificates with respect to the Class A-12 PO
Component) shall be allocated on the subsequent Determination Date among the
outstanding Subclasses of Class A Certificates (other than the Class A-12
Certificates with respect to the Class A-12 PO Component) and the Class A-12 TAC
Accrual Component in accordance with the Class A Subclass Loss Percentages and
the Class A-12 TAC Accrual Component Loss Percentage, respectively, as of such
Determination Date. Any such loss allocated to the Class B Certificates shall be
allocated pro rata among the outstanding Subclasses of Class B Certificates
based on their Class B Subclass Principal Balances.
(c) Any Realized Losses allocated to a Subclass of Class A Certificates or
Class B Certificates or to the Class M Certificates pursuant to Section 4.02(a)
or Section 4.02(b) shall be allocated among the Certificates of such Subclass or
Class based on their Percentage Interests.
(d) In the event that there is a recovery of an amount in respect of
principal of a Mortgage Loan which had previously been allocated as a Realized
Loss to any Subclasses of Class A Certificates, the Class M Certificates or any
Subclasses of Class B Certificates, each outstanding Class or Subclass to which
such Realized Loss had previously been allocated shall be entitled to its share
(with respect to the Class A-12 Certificates with respect to the Class A-12 PO
Component, based on the PO Fraction of such Mortgage Loan and, with respect to
the Class A Certificates (other than the Class A-12 Certificates with respect to
the Class A-12 PO Component), Class M Certificates and Class B Certificates,
based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of
such recovery up to the amount of such Realized Loss previously allocated to
such Class or Subclass on the Distribution Date in the month following the month
in which such recovery is received. When the Principal Balance of a Class or
Subclass of Certificates has been reduced to zero, such Class or Subclass shall
not be entitled to any share of such recovery. In the event that the amount of
such recovery exceeds the amount of such recovery allocated to each outstanding
Class or Subclass in accordance with the preceding provisions, each outstanding
Class or Subclass shall be entitled to its pro rata share (determined as
described above) of such excess up to the amount of any unrecovered Realized
Loss previously allocated to such Class or Subclass.
(e) The interest portion of Excess Special Hazard Losses, Excess Fraud
Losses and Excess Bankruptcy Losses shall be allocated among the Class A
Certificates, Class M Certificates and Class B Certificates, pro rata based on
the Class A Interest Accrual Amount, the Class M Interest Accrual Amount and the
Class B Interest Accrual Amount for the related Distribution Date, without
regard to any reduction pursuant to this sentence. Any such loss allocated to
the Class A Certificates shall be allocated among the outstanding Subclasses of
Class A Certificates (other than the Class A-12 Certificates) and the Class A-12
Components (other than the Class A-12 PO Component) based on their Class A
Subclass Interest Percentages and Component Interest Percentages, as the case
may be. Any such loss allocated to the Class B Certificates will be allocated
among the outstanding Subclasses of Class B Certificates based on their Class B
Subclass Interest Percentages. In addition, after the Class M Principal Balance
and the Class B Principal Balance have been reduced to zero, the interest
portion of Realized Losses (other than Excess Special Hazard Losses, Excess
Fraud Losses and Excess Bankruptcy Losses) will be allocated among the
outstanding Subclasses of Class A Certificates (other than the Class A-12
Certificates) and the Class A-12 Components (other than the Class A-12 PO
Component) based on their Class A Subclass Interest Percentages and Component
Interest Percentages, as the case may be.
(f) Realized Losses allocated in accordance with this Section 4.02 will be
allocated on the Determination Date in the second month following the month in
which such loss was incurred with respect to the preceding Distribution Date.
(g) With respect to any Distribution Date, the principal portion of
Realized Losses and recoveries attributable to previously allocated Realized
Losses allocated pursuant to this Section 4.02 will be allocated to each
Uncertificated Lower-Tier Interest in an amount equal to the amount allocated to
its respective Corresponding Upper-Tier Class, Classes, Component or Components
as provided above.
With respect to any Distribution Date, the interest portion of Realized
Losses allocated pursuant to this Section 4.02 will be allocated to each
Uncertificated Lower-Tier Interest in the same relative proportions as interest
is allocated to such Uncertificated Lower-Tier Interest.
Section 4.03. Paying Agent.
(a) The Master Servicer hereby appoints the Trustee as initial Paying Agent
to make distributions to Certificateholders and to forward to Certificateholders
the periodic statements and the annual statements required by Section 4.04 as
agent of the Master Servicer.
The Master Servicer may, at any time, remove or replace the Paying Agent.
The Master Servicer shall cause any Paying Agent that is not the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
agrees with the Trustee that such Paying Agent shall:
(i) hold all amounts remitted to it by the Master Servicer for
distribution to Certificateholders in trust for the benefit of
Certificateholders until such amounts are distributed to
Certificateholders or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Master
Servicer in remitting any required amount; and
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all amounts held in trust by such Paying Agent.
(b) The Paying Agent shall establish and maintain a Payment Account, which
shall be a separate trust account and an Eligible Account, in which the Master
Servicer shall cause to be deposited from funds in the Certificate Account or,
to the extent required hereunder, from its own funds (i) at or before 10:00
a.m., New York time, on the Business Day preceding each Distribution Date, by
wire transfer of immediately available funds, any Periodic Advance for such
Distribution Date, pursuant to Section 3.03 and (ii) at or before 10:00 a.m.,
New York time, on the Business Day preceding each Distribution Date, by wire
transfer of immediately available funds, (a) an amount equal to the Pool
Distribution Amount, (b) Net Foreclosure Profits, if any, with respect to such
Distribution Date and (c) the amount of any recovery in respect of a Realized
Loss. The Master Servicer may cause the Paying Agent to invest the funds in the
Payment Account. Any such investment shall be in Eligible Investments, which
shall mature not later than the Business Day preceding the related Distribution
Date (unless the Eligible Investments are obligations of the Trustee, in which
case such Eligible Investments shall mature not later than the Distribution
Date), and shall not be sold or disposed of prior to maturity. All income and
gain realized from any such investment shall be for the benefit of the Master
Servicer and shall be subject to its withdrawal or order from time to time. The
amount of any losses incurred in respect of any such investments shall be
deposited in the Payment Account by the Master Servicer out of its own funds
immediately as realized. The Paying Agent may withdraw from the Payment Account
any amount deposited in the Payment Account that was not required to be
deposited therein and may clear and terminate the Payment Account pursuant to
Section 9.01.
Section 4.04. Statements to Certificateholders; Report to the Trustee and the
Seller.
Concurrently with each distribution pursuant to Section 4.01(f), the Master
Servicer, or the Paying Agent appointed by the Master Servicer (upon receipt of
such statement from the Master Servicer), shall forward or cause to be forwarded
by mail to each Holder of a Certificate and the Seller a statement setting
forth:
(i) the amount of such distribution to Holders of each Class A
Subclass allocable to principal, separately identifying the aggregate
amount of any Unscheduled Principal Receipts included therein;
(ii) (a) the amount of such distribution to Holders of each
Subclass of Class A Certificates allocable to interest, (b) the amount
of the Current Class A Interest Distribution Amount allocated to each
Class A Subclass, (c) any Class A Subclass Interest Shortfall Amounts
arising with respect to such Distribution Date and any remaining Class
A Subclass Unpaid Interest Shortfall with respect to each Subclass
after giving effect to such distribution, (d) the amount of any
Non-Supported Interest Shortfall allocated to each Class A Subclass
for such Distribution Date and (e) the interest portion of Excess
Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy
Losses allocated to each Subclass for such Distribution Date;
(iii) the amount of such distribution to Holders of the Class
A-12 Certificates attributable to the Class A-12 PO Component,
identifying the aggregate amount of any Unscheduled Principal Receipts
included therein;
(iv) the amount of such distribution to Holders of the Class M
Certificates allocable to principal, separately identifying the
aggregate amount of any Unscheduled Principal Receipts included
therein;
(v) (a) the amount of such distribution to Holders of the Class M
Certificates allocable to interest, (b) the amount of the Current
Class M Interest Distribution Amount, (c) any Class M Interest
Shortfall Amount arising with respect to such Distribution Date and
any remaining Class M Unpaid Interest Shortfall after giving effect to
such distribution, (d) the amount of any Non-Supported Interest
Shortfall allocated to the Class M Certificates for such Distribution
Date and (e) the interest portion of Excess Special Hazard Losses,
Excess Fraud Losses and Excess Bankruptcy Losses allocated to the
Class M Certificates for such Distribution Date;
(vi) the amount of such distribution to Holders of each Class B
Subclass allocable to principal, separately identifying the aggregate
amount of any Unscheduled Principal Receipts included therein;
(vii) (a) the amount of such distribution to Holders of each
Class B Subclass allocable to interest, (b) the amount of the Current
Class B Interest Distribution Amount allocated to each Class B
Subclass and the Pass-Through Rate applicable to such Distribution
Date, (c) any Class B Subclass Interest Shortfall Amounts arising with
respect to such Distribution Date and any remaining Class B Subclass
Unpaid Interest Shortfall with respect to each Class B Subclass after
giving effect to such distribution, (d) the amount of any
Non-Supported Interest Shortfall allocated to each Class B Subclass
for such Distribution Date, and (e) the interest portion of Excess
Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy
Losses allocated to each Class B Subclass for such Distribution Date;
(viii) the amount of any Periodic Advance by any Servicer, the
Master Servicer or the Trustee pursuant to the Servicing Agreements or
this Agreement;
(ix) the number of Mortgage Loans outstanding as of the preceding
Determination Date;
(x) the Class A Non-PO Principal Balance, the Component Principal
Balances of the Class A-12 PO Component and the Class A-12 TAC Accrual
Component, the Class A Subclass Principal Balance of each Subclass of
Class A Certificates, the Class M Principal Balance, the Class B
Principal Balance and the Class B Subclass Principal Balance of each
Subclass of Class B Certificates as of the following Determination
Date after giving effect to the distributions of principal made, and
the principal portion of Realized Losses, if any, allocated with
respect to such Distribution Date;
(xi) the Adjusted Pool Amount, the Adjusted Pool Amount (PO
Portion), the Pool Scheduled Principal Balance of the Mortgage Loans
for such Distribution Date and the aggregate Scheduled Principal
Balance of the Discount Mortgage Loans for such Distribution Date;
(xii) the aggregate Scheduled Principal Balances of the Mortgage
Loans serviced by Norwest Mortgage and, collectively, by the Other
Servicers as of such Distribution Date;
(xiii) the Class A Percentage for the following Distribution Date
(without giving effect to Unscheduled Principal Receipts received
after the Applicable Unscheduled Principal Receipt Period for the
current Distribution Date which are applied by a Servicer during such
Applicable Unscheduled Principal Receipt Period);
(xiv) the Class A Prepayment Percentage for the following
Distribution Date (without giving effect to Unscheduled Principal
Receipts received after the Applicable Unscheduled Principal Receipt
Period for the current Distribution Date which are applied by a
Servicer during such Applicable Unscheduled Principal Receipt Period);
(xv) the Class M Percentage for the following Distribution Date
(without giving effect to Unscheduled Principal Receipts received
after the Applicable Unscheduled Principal Receipt Period for the
current Distribution Date which are applied by a Servicer during such
Applicable Unscheduled Principal Receipt Period);
(xvi) the Class M Prepayment Percentage for the following
Distribution Date (without giving effect to Unscheduled Principal
Receipts received after the Applicable Unscheduled Principal Receipt
Period for the current Distribution Date which are applied by a
Servicer during such Applicable Unscheduled Principal Receipt Period);
(xvii) the Class B-1, Class B-2, Class B-3, Class B-4 and Class
B-5 Percentages for the following Distribution Date (without giving
effect to Unscheduled Principal Receipts received after the Applicable
Unscheduled Principal Receipt Period for the current Distribution Date
which are applied by a Servicer during such Applicable Unscheduled
Principal Receipt Period);
(xviii) the Class B-1, Class B-2, Class B-3, Class B-4 and Class
B-5 Prepayment Percentages for the following Distribution Date
(without giving effect to Unscheduled Principal Receipts received
after the Applicable Unscheduled Principal Receipt Period for the
current Distribution Date which are applied by a Servicer during such
Applicable Unscheduled Principal Receipt Period);
(xix) the number and aggregate principal balances of Mortgage
Loans delinquent (a) one month, (b) two months and (c) three months or
more;
(xx) the number and aggregate principal balances of the Mortgage
Loans in foreclosure as of the preceding Determination Date;
(xxi) the book value of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure;
(xxii) the amount of the remaining Special Hazard Loss Amount,
Fraud Loss Amount and Bankruptcy Loss Amount as of the close of
business on such Distribution Date;
(xxiii) the principal and interest portions of Realized Losses
allocated as of such Distribution Date and the amount of such Realized
Losses constituting Excess Special Hazard Losses, Excess Fraud Losses
or Excess Bankruptcy Losses;
(xxiv) the aggregate amount of Bankruptcy Losses allocated to
each Subclass of Class B Certificates or, following the reduction of
the Class B Principal Balance to zero, solely to the Class M
Certificates in accordance with Section 4.02(a) since the Relevant
Anniversary;
(xxv) the amount by which the Class B Subclass Principal Balance
of each Subclass of Class B Certificates and the Class M Principal
Balance has been reduced as a result of Realized Losses allocated as
of such Distribution Date;
(xxvi) the unpaid principal balance of any Mortgage Loan as to
which the Servicer of such Mortgage Loan has determined not to
foreclose because it believes the related Mortgaged Property may be
contaminated with or affected by hazardous wastes or hazardous
substances;
(xxvii) the amount of the aggregate Servicing Fees and Master
Servicing Fees paid (and not previously reported) with respect to the
related Distribution Date and the amount by which the aggregate
Available Master Servicer Compensation has been reduced by the
Prepayment Interest Shortfall for the related Distribution Date;
(xxviii) the Class A-12 PO Component Deferred Amount, if any;
(xxix) such other customary information as the Master Servicer
deems necessary or desirable to enable Certificateholders to prepare
their tax returns;
and shall deliver a copy of each type of statement to the Trustee, who shall
provide copies thereof to Persons making written request therefor at the
Corporate Trust Office.
In the case of information furnished with respect to a Subclass of Class A
Certificates pursuant to clauses (i), (ii) and (iii) above, with the Class M
Certificates pursuant to clauses (iv) and (v) above and with respect to a Class
B Subclass pursuant to clauses (vi) and (vii) above, the amounts shall be
expressed as a dollar amount per Class A, Class M or Class B Certificate (other
than a Class A-12, Class A-R or Class A-LR Certificate) with a $1,000
Denomination, as a dollar amount per Class A-R or Class A-LR Certificate with a
$100 Denomination and as a dollar amount per Class A-12 Certificate with a $1
Denomination.
Within a reasonable period of time after the end of each calendar year, the
Master Servicer shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Certificate a statement
containing the information set forth in clauses (i), (ii)(a) and (iii) above in
the case of a Class A Certificateholder, the information set forth in clauses
(iv) and (v)(a) above in the case of a Class M Certificateholder and the
information contained in clauses (vi) and (vii)(a) above in the case of a Class
B Certificateholder aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Master Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Master Servicer
pursuant to any requirements of the Code.
Prior to the close of business on the third Business Day preceding each
Distribution Date, the Master Servicer shall furnish a statement to the Trustee,
any Paying Agent and the Seller (the information in such statement to be made
available to Certificateholders by the Master Servicer on written request)
setting forth the Class A Subclass Distribution Amount with respect to each
Class A Subclass, the Class M Distribution Amount and the Class B Subclass
Distribution Amount with respect to each Class B Subclass. The determination by
the Master Servicer of such amounts shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder and the Trustee
and the Paying Agent shall be protected in relying upon the same without any
independent check or verification.
In addition to the reports required pursuant to this Section 4.04, the
Master Servicer shall make available upon request to each Holder and each
proposed transferee of a Class M or Class B Certificate such additional
information, if any, as may be required to permit the proposed transfer to be
effected pursuant to Rule 144A.
Section 4.05. Reports to Mortgagors and the Internal Revenue Service.
The Master Servicer shall, in each year beginning after the Cut-Off Date,
make the reports of foreclosures and abandonments of any Mortgaged Property as
required by Code Section 6050J. In order to facilitate this reporting process,
the Master Servicer shall request that each Servicer, on or before January 15th
of each year, shall provide to the Internal Revenue Service, with copies to the
Master Servicer, reports relating to each instance occurring during the previous
calendar year in which such Servicer (i) on behalf of the Trustee acquires an
interest in a Mortgaged Property through foreclosure or other comparable
conversion in full or partial satisfaction of a Mortgage Loan serviced by such
Servicer, or (ii) knows or has reason to know that a Mortgaged Property has been
abandoned. Reports from the Servicers shall be in form and substance sufficient
to meet the reporting requirements imposed by Code Section 6050J. In addition,
each Servicer shall provide the Master Servicer with sufficient information to
allow the Master Servicer to, for each year ending after the Cut-Off Date,
provide, or cause to be provided, to the Internal Revenue Service and the
Mortgagors such information as is required under Code Sections 6050H (regarding
payment of interest) and 6050P (regarding cancellation of indebtedness).
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Class A, Class M and Class B Certificates shall be issued only in
minimum denominations of a Single Certificate and, except for the Class A-R,
Class A-LR, Class B-2 and Class B-3 Certificates, integral multiples of $1,000
(or $1 in the case of the Class B-2 and Class B-3 Certificates) in excess
thereof (except, if necessary, for one Certificate of each Class or Subclass
(other than the Class A-R or Class A-LR Certificate) that evidences one Single
Certificate plus such additional principal portion as is required in order for
all Certificates of such Class or Subclass to equal the aggregate Original Class
A Subclass Principal Balance, Original Class M Principal Balance or the
aggregate Original Class B Subclass Principal Balance of such Class or Subclass,
as the case may be), and shall be substantially in the respective forms set
forth as Exhibits X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, A-10, X-00, X-00,
X-00, X-00, X-00, X-00, X-X, X-XX, X-0, X-0, X-0, X-0, X-0, C, and D (reverse
side of Certificates) hereto. On original issue the Certificates shall be
executed and delivered by the Trustee to or upon the order of the Seller upon
receipt by the Trustee or the Custodian of the documents specified in Section
2.01. The aggregate principal portion evidenced by the Class A, Class M and
Class B Certificates shall be the sum of the amounts specifically set forth in
the respective Certificates. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee by any Responsible Officer thereof.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless manually countersigned by a Responsible Officer of the Trustee, or unless
there appears on such Certificate a certificate of authentication executed by
the Authenticating Agent by manual signature, and such countersignature or
certificate upon a Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Until such time as Definitive Certificates are issued pursuant to Section
5.07, each Book-Entry Certificate shall bear the following legend:
"Unless this certificate is presented by an authorized representative of
[the Clearing Agency] to the Trustee or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
[the Clearing Agency] or such other name as requested by an authorized
representative of [the Clearing Agency] and any payment is made to [the Clearing
Agency], any transfer, pledge or other use hereof for value or otherwise by or
to any person is wrongful since the registered owner hereof, [the Clearing
Agency], has an interest herein."
(b) Upon original issuance, the Book-Entry Certificates shall be issued in
the form of one or more typewritten certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Seller. Such Certificates shall initially be registered in the Certificate
Register in the name of the nominee of the initial Clearing Agency, and no
Beneficial Owner will receive a definitive certificate representing such
Beneficial Owner's interest in the Book-Entry Certificates, except as provided
in Section 5.07. Unless and until definitive, fully registered certificates
("Definitive Certificates") have been issued to Beneficial Owners pursuant to
Section 5.07:
(i) the provisions of this Section 5.01(b) shall be in full force
and effect;
(ii) the Seller, the Master Servicer, the Certificate Registrar
and the Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Book-Entry Certificates
and the taking of actions by the Holders of Book-Entry Certificates)
as the authorized representative of the Beneficial Owners;
(iii) to the extent that the provisions of this Section 5.01(b)
conflict with any other provisions of this Agreement, the provisions
of this Section 5.01(b) shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law, the rules, regulations and procedures of the Clearing Agency
and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants, and all references in this
Agreement to actions by Certificateholders shall, with respect to the
Book-Entry Certificates, refer to actions taken by the Clearing Agency
upon instructions from the Clearing Agency Participants, and all
references in this Agreement to distributions, notices, reports and
statements to Certificateholders shall, with respect to the Book-Entry
Certificates, refer to distributions, notices, reports and statements
to the Clearing Agency or its nominee, as registered holder of the
Book-Entry Certificates, as the case may be, for distribution to
Beneficial Owners in accordance with the procedures of the Clearing
Agency; and
(v) the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Certificates to the
Clearing Agency Participants, for distribution by such Clearing Agency
Participants to the Beneficial Owners or their nominees.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Holders of Book-Entry
Certificates evidencing specified Voting Interests, such direction or consent
shall be given by Beneficial Owners having the requisite Voting Interests,
acting through the Clearing Agency.
Unless and until Definitive Certificates have been issued to Beneficial
Owners pursuant to Section 5.07, copies of the reports or statements referred to
in Section 4.04 shall be available to Beneficial Owners upon written request to
the Trustee at the Corporate Trust Office.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to
be maintained in accordance with the provisions of Section 5.06 a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee shall act as, or
shall appoint, a Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency maintained for such purpose pursuant to Section 5.06 (and
subject to the provisions of this Section 5.02) the Trustee shall execute, and
shall date, authenticate (or cause the Authenticating Agent to authenticate) and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of a like aggregate principal portion or Percentage Interest
and of the same Class or Subclass.
At the option of the Certificateholders, Certificates may be exchanged for
other Certificates of authorized Denominations of a like aggregate principal
portion or Percentage Interest and of the same Class or Subclass upon surrender
of the Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and
shall date, authenticate (or cause the Authenticating Agent to authenticate) and
deliver, the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar or the Trustee) be
duly endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be canceled by
the Certificate Registrar, the Trustee or the Authenticating Agent in accordance
with their standard procedures.
(b) No transfer of a Class A-12, Class B-3, Class B-4 or Class B-5
Certificate shall be made unless the registration requirements of the Securities
Act of 1933, as amended, and any applicable State securities laws are complied
with, or such transfer is exempt from the registration requirements under said
Act and laws. In the event that a transfer is to be made in reliance upon an
exemption from said Act or laws, (i) unless such transfer is made in reliance on
Rule 144A, the Trustee or the Seller may, if such transfer is to be made within
three years after the later of (i) the date of the initial sale of Certificates
or (ii) the last date on which the Seller or any affiliate thereof was a Holder
of the Certificates proposed to be transferred, require a Class A-12, Class B-3,
Class B-4 or Class B-5 Certificateholder to deliver a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Seller, to the effect that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from said Act and
laws or is being made pursuant to said Act and laws, which Opinion of Counsel
shall not be an expense of the Trustee, the Seller or the Master Servicer, and
(ii) the Trustee shall require the transferee to execute an investment letter in
the form of Exhibit J hereto certifying to the Seller and the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee, the Seller or the Master Servicer. The Holder of a Class A-12,
Class B-3, Class B-4 or Class B-5 Certificate desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Seller, the Master
Servicer and any Paying Agent acting on behalf of the Trustee against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws. Neither the Seller nor the Trustee
is under an obligation to register the Class A-12, Class B-3, Class B-4 or Class
B-5 Certificates under said Act or any other securities law.
(c) No transfer of a Class M or Class B Certificate shall be made unless
the Trustee shall have received (i) a representation letter from the transferee
in the form of Exhibit J hereto, in the case of a Class B-3, Class B-4 or Class
B-5 Certificate, or in the form of Exhibit K hereto, in the case of a Class M,
Class B-1 or Class B-2 Certificate, to the effect that either (a) such
transferee is not an employee benefit plan subject to Title I of ERISA or Code
Section 4975, or a governmental plan as defined in Section 3(32) of ERISA or
Code Section 4975 or subject to any federal, state or local law ("Similar Law")
which is to a material extent similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") and is not a person acting on behalf of or
using the assets of any such Plan, which representation letter shall not be an
expense of the Trustee, the Seller or the Master Servicer or (b) if such
transferee is an insurance company, the source of funds used to purchase the
Class M or Class B Certificate is an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995)) and there is no Plan
with respect to which the amount of such general account's reserves and
liabilities for the contract(s) held by or on behalf of such Plan and all other
Plans maintained by the same employer (or affiliate thereof as defined in
Section V(a)(1) of PTE 95-60) or by the same employee organization exceeds 10%
of the total of all reserves and liabilities of such general account (as such
amounts are determined under Section I(a) of PTE 95-60) at the date of
acquisition or (ii) in the case of any such Class M or Class B Certificate
presented for registration in the name of a Plan, or a trustee of any such Plan,
an Opinion of Counsel satisfactory to the Trustee and the Seller to the effect
that the purchase or holding of such Class M or Class B Certificate will not
result in the assets of the Trust Estate being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA, the Code or Similar
Law and will not subject the Trustee, the Seller or the Master Servicer to any
obligation in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer. The Class M and Class B Certificates shall bear a legend referring to
the foregoing restrictions contained in this paragraph.
(d) No legal or beneficial interest in all or any portion of the Class A-R
or Class A-LR Certificate may be transferred directly or indirectly to a
"disqualified organization" within the meaning of Code Section 860E(e)(5) or an
agent of a disqualified organization (including a broker, nominee, or
middleman), to a Plan or a Person investing the assets of a Plan (such plan or
Person, an "ERISA Prohibited Holder") or to an individual, corporation,
partnership or other person unless such transferee (i) is not a Non-U.S. Person
or (ii) is a Non-U.S. Person that holds the Class A-R or Class A-LR Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Trustee with an effective Internal
Revenue Service Form 4224 or (iii) is a Non-U.S. Person that has delivered to
both the transferor and the Trustee an opinion of a nationally recognized tax
counsel to the effect that the transfer of the Class A-R or Class A-LR
Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class A-R or
Class A-LR Certificate will not be disregarded for federal income tax purposes
(any such person who is not covered by clauses (i), (ii) or (iii) above being
referred to herein as a "Non-permitted Foreign Holder"), and any such purported
transfer shall be void and have no effect. The Trustee shall not execute, and
shall not authenticate (or cause the Authenticating Agent to authenticate) and
deliver, a new Class A-R or Class A-LR Certificate in connection with any such
transfer to a disqualified organization or agent thereof (including a broker,
nominee or middleman), an ERISA Prohibited Holder or a Non-permitted Foreign
Holder, and neither the Certificate Registrar nor the Trustee shall accept a
surrender for transfer or registration of transfer, or register the transfer of,
the Class A-R or Class A-LR Certificate, unless the transferor shall have
provided to the Trustee an affidavit, substantially in the form attached as
Exhibit H hereto, signed by the transferee, to the effect that the transferee is
not such a disqualified organization, an agent (including a broker, nominee, or
middleman) for any entity as to which the transferee has not received a
substantially similar affidavit, an ERISA Prohibited Holder or a Non-permitted
Foreign Holder, which affidavit shall contain the consent of the transferee to
any such amendments of this Agreement as may be required to further effectuate
the foregoing restrictions on transfer of the Class A-R or Class A-LR
Certificate to disqualified organizations, ERISA Prohibited Holders or
Non-permitted Foreign Holders. Such affidavit shall also contain the statement
of the transferee that (i) the transferee has historically paid its debts as
they have come due and intends to do so in the future, (ii) the transferee
understands that it may incur liabilities in excess of cash flows generated by
the residual interest, (iii) the transferee intends to pay taxes associated with
holding the residual interest as they become due and (iv) the transferee will
not transfer the Class A-R or Class A-LR Certificate to any Person who does not
provide an affidavit substantially in the form attached as Exhibit H hereto.
The affidavit described in the preceding paragraph, if not executed in
connection with the initial issuance of the Class A-R or Class A-LR Certificate,
shall be accompanied by a written statement in the form attached as Exhibit I
hereto, signed by the transferor, to the effect that as of the time of the
transfer, the transferor has no actual knowledge that the transferee is a
disqualified organization, ERISA Prohibited Holder or Non-permitted Foreign
Holder, and has no knowledge or reason to know that the statements made by the
transferee with respect to clauses (i) and (iii) of the last sentence of the
preceding paragraph are not true. The Class A-R and Class A-LR Certificates
shall bear a legend referring to the foregoing restrictions contained in this
paragraph and the preceding paragraph.
Upon notice to the Master Servicer that any legal or beneficial interest in
any portion of the Class A-R or Class A-LR Certificate has been transferred,
directly or indirectly, to a disqualified organization or agent thereof
(including a broker, nominee, or middleman) in contravention of the foregoing
restrictions, (i) such transferee shall be deemed to hold the Class A-R or Class
A-LR Certificate in constructive trust for the last transferor who was not a
disqualified organization or agent thereof, and such transferor shall be
restored as the owner of such Class A-R or Class A-LR Certificate as completely
as if such transfer had never occurred, provided that the Master Servicer may,
but is not required to, recover any distributions made to such transferee with
respect to Class A-R or Class A-LR Certificate, and (ii) the Master Servicer
agrees to furnish to the Internal Revenue Service and to any transferor of the
Class A-R or Class A-LR Certificate or such agent (within 60 days of the request
therefor by the transferor or agent) such information necessary to the
application of Code Section 860E(e) as may be required by the Code, including
but not limited to the present value of the total anticipated excess inclusions
with respect to the Class A-R or Class A-LR Certificate (or portion thereof) for
periods after such transfer. At the election of the Master Servicer, the cost to
the Master Servicer of computing and furnishing such information may be charged
to the transferor or such agent referred to above; however, the Master Servicer
shall in no event be excused from furnishing such information.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee or the
Authenticating Agent, or the Trustee or the Authenticating Agent receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee or the Authenticating
Agent such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Trustee or the Authenticating
Agent that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and authenticate (or cause the Authenticating Agent to
authenticate) and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
principal portion or Percentage Interest and of the same Class or Subclass. Upon
the issuance of any new Certificate under this Section, the Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expense (including the fees and expenses of the Trustee or the
Authenticating Agent) in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the Trust Estate, as if originally issued, whether or not the lost,
stolen, or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
Prior to the due presentation of a Certificate for registration of
transfer, the Seller, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of the Seller, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01, and for all other purposes whatsoever,
and neither the Seller, the Master Servicer, the Trustee, the Certificate
Registrar nor any agent of the Seller, the Master Servicer, the Trustee or the
Certificate Registrar shall be affected by notice to the contrary.
Section 5.05. Access to List of Certificateholders' Names and Addresses.
(a) If the Trustee is not acting as Certificate Registrar, the Certificate
Registrar shall furnish or cause to be furnished to the Trustee, within 15 days
after receipt by the Certificate Registrar of a request by the Trustee in
writing, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Certificateholders of each Class or Subclass as of
the most recent Record Date.
(b) If five or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application states that
the applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days following the
receipt of such application, afford such applicants access during normal
business hours to the most recent list of Certificateholders held by the
Trustee. If such a list is as of the date more than 90 days prior to the date of
receipt of such applicants' request and the Trustee is not the Certificate
Registrar, the Trustee shall promptly request from the Certificate Registrar a
current list as provided in paragraph (a) hereof, and shall afford such
applicants access to such list promptly upon receipt.
(c) Every Certificateholder, by receiving and holding a Certificate, agrees
with the Seller, the Master Servicer, the Certificate Registrar and the Trustee
that neither the Seller, the Master Servicer, the Certificate Registrar nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names, addresses and Percentage Interests of the
Certificateholders hereunder, regardless of the source from which such
information was delivered.
Section 5.06. Maintenance of Office or Agency.
The Trustee will maintain, at its expense, an office or agency where
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Certificate Registrar in respect of the
Certificates and this Agreement may be served. The Trustee initially designates
the Corporate Trust Office and the principal corporate trust office of the
Authenticating Agent, if any, as its offices and agencies for said purposes.
Section 5.07. Definitive Certificates.
If (i)(A) the Master Servicer advises the Trustee in writing that the
Clearing Agency is no longer willing or able properly to discharge its
responsibilities as depository with respect to the Book-Entry Certificates, and
(B) the Master Servicer is unable to locate a qualified successor, (ii) the
Master Servicer, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of dismissal or resignation of the Master Servicer, Beneficial Owners
representing aggregate Voting Interests of not less than 51% of the aggregate
Voting Interests of each outstanding Subclass of Book-Entry Certificates advise
the Trustee through the Clearing Agency and Clearing Agency Participants in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of the Beneficial Owners, the Trustee shall
notify the Beneficial Owners, through the Clearing Agency, of the occurrence of
any such event and of the availability of Definitive Certificates to Beneficial
Owners requesting the same. Upon surrender to the Trustee by the Clearing Agency
of the Certificates held of record by its nominee, accompanied by reregistration
instructions and directions to execute and authenticate new Certificates from
the Master Servicer, the Trustee shall execute and authenticate Definitive
Certificates for delivery at its Corporate Trust Office. The Master Servicer
shall arrange for, and will bear all costs of, the printing and issuance of such
Definitive Certificates. Neither the Seller, the Master Servicer nor the Trustee
shall be liable for any delay in delivery of such instructions by the Clearing
Agency and may conclusively rely on, and shall be protected in relying on, such
instructions.
Section 5.08. Notices to Clearing Agency.
Whenever notice or other communication to the Holders of Book-Entry
Certificates is required under this Agreement, unless and until Definitive
Certificates shall have been issued to Beneficial Owners pursuant to Section
5.07, the Trustee shall give all such notices and communications specified
herein to be given to Holders of Book-Entry Certificates to the Clearing Agency.
ARTICLE VI
THE SELLER AND THE MASTER SERVICER
Section 6.01. Liability of the Seller and the Master Servicer.
The Seller and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically imposed by this
Agreement and undertaken hereunder by the Seller and the Master Servicer.
Section 6.02. Merger or Consolidation of the Seller or the Master Servicer.
Subject to the following paragraph, the Seller and the Master Servicer each
will keep in full effect its existence, rights and franchises as a corporation
under the laws of the jurisdiction of its incorporation, and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
The Seller or the Master Servicer may be merged or consolidated with or
into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Seller or Master Servicer shall be a party, or any Person succeeding
to the business of the Seller or Master Servicer, shall be the successor of the
Seller or Master Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that, in the case of
the Master Servicer, any such successor or resulting Person shall be qualified
to service mortgage loans for FNMA or FHLMC.
Section 6.03. Limitation on Liability of the Seller, the Master Servicer and
Others.
Neither the Seller nor the Master Servicer nor any subcontractor nor any of
the partners, directors, officers, employees or agents of any of them shall be
under any liability to the Trust Estate or the Certificateholders and all such
Persons shall be held harmless for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect any such
Person against any breach of warranties or representations made herein or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Seller,
the Master Servicer, any subcontractor, and any partner, director, officer,
employee or agent of any of them shall be entitled to indemnification by the
Trust Estate and will be held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of his or
its duties hereunder or by reason of reckless disregard of his or its
obligations and duties hereunder. The Seller, the Master Servicer and any of the
directors, officers, employees or agents of either may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by
any Person respecting any matters arising hereunder. Neither the Seller nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and which in its opinion does not involve it in any expense or
liability; provided, however, that the Seller or the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder if the Certificateholders
offer to the Seller or the Master Servicer, as the case may be, reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Estate, and the Seller or the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account, and such
amounts shall, on the following Distribution Date or Distribution Dates, be
allocated in reduction of distributions on the Class A and Class B Certificates
in the same manner as Realized Losses are allocated pursuant to Section 4.02(a).
Section 6.04. Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
servicer shall have assumed the Master Servicer's responsibilities, duties,
liabilities and obligations hereunder.
Section 6.05. Compensation to the Master Servicer.
The Master Servicer shall be entitled to receive a monthly fee equal to the
Master Servicing Fee, as compensation for services rendered by the Master
Servicer under this Agreement. The Master Servicer also will be entitled to any
late reporting fees paid by a Servicer pursuant to its Servicing Agreement and
any investment income on funds on deposit in the Certificate Account as
additional compensation.
Section 6.06. Assignment or Delegation of Duties by Master Servicer.
The Master Servicer shall not assign or transfer any of its rights,
benefits or privileges under this Agreement to any other Person, or delegate to
or subcontract with, or authorize or appoint any other Person to perform any of
the duties, covenants or obligations to be performed by the Master Servicer
without the prior written consent of the Trustee, and any agreement, instrument
or act purporting to effect any such assignment, transfer, delegation or
appointment shall be void. Notwithstanding the foregoing, the Master Servicer
shall have the right without the prior written consent of the Trustee (i) to
assign its rights and delegate its duties and obligations hereunder; provided,
however, that (a) the purchaser or transferee accepting such assignment or
delegation is qualified to service mortgage loans for FNMA or FHLMC, is
satisfactory to the Trustee, in the exercise of its reasonable judgment, and
executes and delivers to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
purchaser or transferee of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Master Servicer
hereunder from and after the date of such agreement; and (b) each applicable
Rating Agency's rating of any Certificates in effect immediately prior to such
assignment, sale or transfer is not reasonably likely to be qualified,
downgraded or withdrawn as a result of such assignment, sale or transfer and the
Certificates are not reasonably likely to be placed on credit review status by
any such Rating Agency; and (ii) to delegate to, subcontract with, authorize, or
appoint an affiliate of the Master Servicer to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Master Servicer
under this Agreement and hereby agrees so to delegate, subcontract, authorize or
appoint to an affiliate of the Master Servicer any duties, covenants or
obligations to be performed and carried out by the Master Servicer to the extent
that such duties, covenants or obligations are to be performed in any state or
states in which the Master Servicer is not authorized to do business as a
foreign corporation but in which the affiliate is so authorized. In no case,
however, shall any permitted assignment and delegation relieve the Master
Servicer of any liability to the Trustee or the Seller under this Agreement,
incurred by it prior to the time that the conditions contained in clause (i)
above are met.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
In case one or more of the following Events of Default by the Master
Servicer shall occur and be continuing, that is to say:
(i) any failure by the Master Servicer (a) to remit any funds to
the Paying Agent as required by Section 4.03 or (b) to distribute or
cause to be distributed to Certificateholders any payment required to
be made by the Master Servicer under the terms of this Agreement
which, in either case, continues unremedied for a period of three
business days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Master Servicer by the Trustee or to the Master Servicer and the
Trustee by the holders of Certificates evidencing in the aggregate not
less than 25% of the aggregate Voting Interest represented by all
Certificates; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer in the Certificates
or in this Agreement which continues unremedied for a period of 60
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Master Servicer
by the Trustee, or to the Master Servicer and the Trustee by the
holders of Certificates evidencing in the aggregate not less than 25%
of the aggregate Voting Interest represented by all Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
trustee, conservator, receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such
decree or order shall have remained in force undischarged and unstayed
for a period of 60 days; or
(iv) the Master Servicer shall consent to the appointment of a
trustee, conservator, receiver or liquidator or liquidating committee
in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities, voluntary liquidation or similar proceedings
of or relating to the Master Servicer, or of or relating to all or
substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;
(vi) the Master Servicer shall be dissolved, or shall dispose of
all or substantially all of its assets; or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the
criteria for a successor servicer, as specified in Section 6.02
hereof; or
(vii) the Master Servicer and any subservicer appointed by it
becomes ineligible to service for both FNMA and FHMLC, which
ineligibility continues unremedied for a period of 90 days;
then, and in each and every such case, subject to applicable law, so long as an
Event of Default shall not have been remedied, either the Trustee or the holders
of Certificates evidencing in the aggregate not less than 66 2/3% of the
aggregate Voting Interest represented by all Certificates, by notice in writing
to the Master Servicer (and to the Trustee if given by the Certificateholders)
may terminate all of the rights and obligations of the Master Servicer under
this Agreement and in and to the Mortgage Loans, but without prejudice to any
rights which the Master Servicer may have to the aggregate Master Servicing Fees
due prior to the date of transfer of the Master Servicer's responsibilities
hereunder, reimbursement of expenses to the extent permitted by this Agreement,
Periodic Advances and other advances of its own funds. Upon receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section, subject to the provisions of Section 7.05; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder and shall promptly provide the
Trustee all documents and records reasonably requested by it to enable it to
assume the Master Servicer's functions hereunder and shall promptly also
transfer to the Trustee all amounts which then have been or should have been
deposited in the Certificate Account by the Master Servicer or which are
thereafter received by the Master Servicer with respect to the Mortgage Loans.
Section 7.02. Other Remedies of Trustee.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 7.01, shall have the right, in its own name as trustee of
an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filing of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 7.03. Directions by Certificateholders and Duties of Trustee During
Event of Default.
During the continuance of any Event of Default, Holders of Certificates
evidencing in the aggregate not less than 25% of the aggregate Voting Interest
represented by all Certificates may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Agreement; provided,
however, that the Trustee shall be under no obligation to pursue any such
remedy, or to exercise any of the trusts or powers vested in it by this
agreement (including, without limitation, (i) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto and (ii) the
terminating of the Master Servicer from its rights and duties as servicer
hereunder) at the request, order or direction of any of the Certificateholders,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the cost, expenses and liabilities which may be
incurred therein or thereby and, provided further, that, subject to the
provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the nonassenting Certificateholders.
Section 7.04. Action upon Certain Failures of the Master Servicer and upon Event
of Default.
In the event that the Trustee shall have knowledge of any failure of the
Master Servicer specified in Section 7.01(i) or (ii) which would become an Event
of Default upon the Master Servicer's failure to remedy the same after notice,
the Trustee may, but need not if the Trustee deems it not in the
Certificateholders' best interest, give notice thereof to the Master Servicer.
For all purposes of this Agreement, in the absence of actual knowledge by a
corporate trust officer of the Trustee, the Trustee shall not be deemed to have
knowledge of any failure of the Master Servicer as specified in Section 7.01(i)
and (ii) or any Event of Default unless notified thereof in writing by the
Master Servicer or by a Certificateholder.
Section 7.05. Trustee to Act; Appointment of Successor.
When the Master Servicer receives notice of termination pursuant to Section
7.01 or the Trustee receives the resignation of the Master Servicer evidenced by
an Opinion of Counsel pursuant to Section 6.04, the Trustee shall be the
successor in all respects to the Master Servicer in its capacity as master
servicer under this Agreement and the transactions set forth or provided for
herein and shall have the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof and in its capacity as such
successor shall have the same limitation of liability herein granted to the
Master Servicer. In the event that the Trustee is succeeding to the Master
Servicer as the Master Servicer, as compensation therefor, the Trustee shall be
entitled to receive monthly such portion of the Master Servicing Fee, together
with such other servicing compensation as is agreed to at such time by the
Trustee and the Master Servicer, but in no event more than 25% thereof until the
date of final cessation of the Master Servicer's servicing activities hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act or to obtain a qualifying bid as described
below, appoint, or petition a court of competent jurisdiction to appoint, any
housing and home finance institution, bank or mortgage servicing institution
having a net worth of not less than $10,000,000 and meeting such other standards
for a successor servicer as are set forth herein, as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder; provided, however, that
until such a successor master servicer is appointed and has assumed the
responsibilities, duties and liabilities of the Master Servicer hereunder, the
Trustee shall continue as the successor to the Master Servicer as provided
above. The compensation of any successor master servicer so appointed shall not
exceed the compensation specified in Section 6.05 hereof. In the event the
Trustee is required to solicit bids as provided above, the Trustee shall
solicit, by public announcement, bids from housing and home finance
institutions, banks and mortgage servicing institutions meeting the
qualifications set forth in the preceding sentence for the purchase of the
master servicing functions. Such public announcement shall specify that the
successor master servicer shall be entitled to the full amount of the Master
Servicing Fee as compensation together with the other servicing compensation in
the form of late reporting fees or otherwise as provided in Section 6.05. Within
30 days after any such public announcement, the Trustee shall negotiate and
effect the sale, transfer and assignment of the master servicing rights and
responsibilities hereunder to the qualified party submitting the highest
qualifying bid. The Trustee shall deduct all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities hereunder from any sum received by the Trustee from the
successor to the Master Servicer in respect of such sale, transfer and
assignment. After such deductions, the remainder of such sum shall be paid by
the Trustee to the Master Servicer at the time of such sale, transfer and
assignment to the Master Servicer's successor. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Master Servicer agrees to cooperate with the
Trustee and any successor servicer in effecting the termination of the Master
Servicer's servicing responsibilities and rights hereunder and shall promptly
provide the Trustee or such successor master servicer, as applicable, all
documents and records reasonably requested by it to enable it to assume the
Master Servicer's function hereunder and shall promptly also transfer to the
Trustee or such successor master servicer, as applicable, all amounts which then
have been or should have been deposited in the Certificate Account by the Master
Servicer or which are thereafter received by the Master Servicer with respect to
the Mortgage Loans. Neither the Trustee nor any other successor master servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in delivering,
cash, documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer. Notwithstanding anything
to the contrary contained in Section 7.01 above or this Section 7.05, the Master
Servicer shall retain all of its rights and responsibilities hereunder, and no
successor (including the Trustee) shall succeed thereto, if the assumption
thereof by such successor would cause the rating assigned to any Certificates to
be revoked, downgraded or placed on credit review status (other than for
possible upgrading) by either Rating Agency and the retention thereof by the
Master Servicer would avert such revocation, downgrading or review.
Section 7.06. Notification to Certificateholders.
Upon any termination of the Master Servicer or appointment of a successor
master servicer, in each case as provided herein, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register. The Trustee shall also, within 45 days
after the occurrence of any Event of Default known to the Trustee, give written
notice thereof to Certificateholders at their respective addresses appearing in
the Certificate Register, unless such Event of Default shall have been cured or
waived within said 45 day period.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured),
the Trustee, subject to the provisions of Sections 7.01, 7.03, 7.04 and 7.05,
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in its exercise as a prudent investor
would exercise or use under the circumstances in the conduct of such investor's
own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee, which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any certificate, statement,
instrument, report, notice or other document furnished by the Servicers pursuant
to Articles III, IV and IX.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee, and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of holders of Certificates which
evidence in the aggregate not less than 25% of the Voting Interest
represented by all Certificates relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Agreement; and
(iii) the Trustee shall not be liable for any error of judgment
made in good faith by any of its Responsible Officers, unless it shall
be proved that the Trustee or such Responsible Officer was negligent
in ascertaining the pertinent facts.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers if there is reasonable ground for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred
upon it by this Agreement; and
(iv) 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.
Section 8.03. Trustee not Required to Make Investigation.
Prior to the occurrence of an Event of Default hereunder and after the
curing of all Events of Default which may have occurred, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond, Mortgage, Mortgage Note or other paper
or document (provided the same appears regular on its face), unless requested in
writing to do so by holders of Certificates evidencing in the aggregate not less
than 51% of the Voting Interest represented by all Certificates; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding. The reasonable expense of every such investigation
shall be paid by the Master Servicer or, if paid by the Trustee, shall be repaid
by the Master Servicer upon demand.
Section 8.04. Trustee not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Seller, and the Trustee assumes no responsibility as to the
correctness of the same. The Trustee makes no representation for the correctness
of the same. The Trustee makes no representation as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. Subject to Section 2.04, the Trustee shall not be accountable
for the use or application by the Seller of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Master Servicer in respect of the Mortgage Loans deposited into the
Certificate Account by the Master Servicer or, in its capacity as trustee, for
investment of any such amounts.
Section 8.05. Trustee May Own Certificates.
The Trustee and any agent thereof, in its individual or any other capacity,
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee or such agent.
Section 8.06. The Master Servicer to Pay Fees and Expenses.
The Master Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to receive, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Master Servicer will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by it in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement,
or advance as may arise from its negligence or bad faith.
Section 8.07. Eligibility Requirements.
The Trustee hereunder shall at all times (i) be a corporation or
association having its principal office in a state and city acceptable to the
Seller, organized and doing business under the laws of such state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, or shall
be a member of a bank holding system, the aggregate combined capital and surplus
of which is at least $50,000,000, provided that its separate capital and surplus
shall at all times be at least the amount specified in Section 310(a)(2) of the
Trust Indenture Act of 1939, (ii) be subject to supervision or examination by
federal or state authority and (iii) have a credit rating which would not cause
either of the Rating Agencies to reduce their respective then current ratings of
the Certificates (or have provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.08.
Section 8.08. Resignation and Removal.
The Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice of resignation to the Master Servicer, such
resignation to be effective upon the appointment of a successor trustee. Upon
receiving such notice of resignation, the Master Servicer shall promptly appoint
a successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning entity and one copy to its
successor. If no successor trustee shall have been appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.07 and shall fail to resign after written request
for its resignation by the Master Servicer, or if at any time the Trustee shall
become incapable of acting, or an order for relief shall have been entered in
any bankruptcy or insolvency proceeding with respect to such entity, or a
receiver of such entity or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of the property or
affairs of the Trustee for the purpose of rehabilitation, conversion or
liquidation, or the Master Servicer shall deem it necessary in order to change
the situs of the Trust Estate for state tax reasons, then the Master Servicer
shall remove the Trustee and appoint a successor trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate not less than 51%
of the Voting Interests represented by all Certificates (except that any
Certificate registered in the name of the Seller, the Master Servicer or any
affiliate thereof will not be taken into account in determining whether the
requisite Voting Interests has been obtained) may at any time remove the Trustee
and appoint a successor by written instrument or instruments, in triplicate,
signed by such holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Master Servicer, one complete
set of which shall be delivered to the entity or entities so removed and one
complete set of which shall be delivered to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a successor
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor as provided in Section 8.09.
Section 8.09. Successor.
Any successor trustee appointed as provided in Section 8.08 shall execute,
acknowledge and deliver to the Master Servicer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective, and such
successor, without any further act, deed or reconveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein. The
predecessor trustee shall deliver to its successor all Owner Mortgage Loan Files
and related documents and statements held by it hereunder (other than any Owner
Mortgage Loan Files at the time held by a Custodian, which Custodian shall
become the agent of any successor trustee hereunder), and the Seller, the Master
Servicer and the predecessor entity shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations. No successor shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
shall be eligible under the provisions of Section 8.07.
Upon acceptance of appointment by a successor as provided in this Section,
the Master Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Master Servicer fails to mail such notice within
ten days after acceptance of the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Master Servicer.
Section 8.10. Merger or Consolidation.
Any Person into which either the Trustee may be merged or converted or with
which it may be consolidated, to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole or any Person
resulting from any merger, sale, transfer, conversion or consolidation to which
the Trustee shall be a party, or any Person succeeding to the business of such
entity, shall be the successor of the Trustee hereunder; provided, however, that
(i) such Person shall be eligible under the provisions of Section 8.07, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding, and (ii)
the Trustee shall deliver an Opinion of Counsel to the Seller and the Master
Servicer to the effect that such merger, consolidation, sale or transfer will
not subject either the Upper-Tier REMIC or the Lower-Tier REMIC to federal,
state or local tax or cause either the Upper-Tier REMIC or the Lower-Tier REMIC
to fail to qualify as a REMIC, which Opinion of Counsel shall be at the sole
expense of the Trustee.
Section 8.11. Authenticating Agent.
The Trustee may appoint an Authenticating Agent, which shall be authorized
to act on behalf of the Trustee in authenticating Certificates. Wherever
reference is made in this Agreement to the authentication of Certificates by the
Trustee or the Trustee's countersignature, such reference shall be deemed to
include authentication on behalf of the Trustee by the Authenticating Agent and
a certificate of authentication executed on behalf of the Trustee by the
Authenticating Agent. The Authenticating Agent must be acceptable to the Seller
and the Master Servicer and must be a corporation organized and doing business
under the laws of the United States of America or of any state, having a
principal office and place of business in a state and city acceptable to the
Seller and the Master Servicer, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities.
Any corporation into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of the Authenticating Agent, shall be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at least 30 days'
advance written notice of resignation to the Trustee, the Seller and the Master
Servicer. The Trustee may at any time terminate the agency of the Authenticating
Agent by giving written notice thereof to the Authenticating Agent, the Seller
and the Master Servicer. Upon receiving a notice of resignation or upon such a
termination, or in case at any time the Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 8.11, the Trustee
promptly shall appoint a successor Authenticating Agent, which shall be
acceptable to the Master Servicer, and shall give written notice of such
appointment to the Seller, and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section
8.11.
The Authenticating Agent shall have no responsibility or liability for any
action taken by it as such at the direction of the Trustee. Any reasonable
compensation paid to the Authenticating Agent shall be a reimbursable expense
under Section 8.06.
Section 8.12. Separate Trustees and Co-Trustees.
The Trustee shall have the power from time to time to appoint one or more
persons or corporations to act either as co-trustees jointly with the Trustee,
or as separate trustees, for the purpose of holding title to, foreclosing or
otherwise taking action with respect to any Mortgage Loan outside the state
where the Trustee has its principal place of business, where such separate
trustee or co-trustee is necessary or advisable (or the Trustee is advised by
the Master Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a Mortgaged Property is located
or for the purpose of otherwise conforming to any legal requirement, restriction
or condition in any state in which a Mortgaged Property is located or in any
state in which any portion of the Trust Estate is located. The Master Servicer
shall advise the Trustee when, in its good faith opinion, a separate trustee or
co-trustee is necessary or advisable as aforesaid. The separate trustees or
co-trustees so appointed shall be trustees for the benefit of all of the
Certificateholders and shall have such powers, rights and remedies as shall be
specified in the instrument of appointment; provided, however, that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee. The Seller and the Master Servicer shall join in any such
appointment, but such joining shall not be necessary for the effectiveness of
such appointment.
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 powers, duties, obligations and rights conferred upon the
Trustee, in respect of the receipt, custody and payment of moneys
shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder) the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee;
(iii) no separate trustee or co-trustee hereunder shall be
personally liable by reason of any act or omission of any other
separate trustee or co-trustee hereunder; and
(iv) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee so appointed by it, if such
resignation or removal does not violate the other terms of this
Agreement.
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, co-trustee, or custodian shall refer to this Agreement and the
conditions of this Article. 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 furnished to the Trustee.
Any separate trustee, co-trustee, or custodian 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.
No separate trustee or co-trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.07 hereunder and no
notice to Certificateholders of the appointment thereof shall be required under
Section 8.09 hereof.
The Trustee agrees to instruct its co-trustees, if any, to the extent
necessary to fulfill such entity's obligations hereunder.
The Master Servicer shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 8.06 hereof.
Section 8.13. Appointment of Custodians.
The Trustee may at any time on or after the Closing Date, with the consent
of the Master Servicer and the Seller, appoint one or more Custodians to hold
all or a portion of the Owner Mortgage Loan Files as agent for the Trustee, by
entering into a Custodial Agreement. Subject to this Article VIII, the Trustee
agrees to comply with the terms of each Custodial Agreement and to enforce the
terms and provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian shall be a depository institution subject to
supervision by federal or state authority, shall have a combined capital and
surplus of at least $10,000,000 and shall be qualified to do business in the
jurisdiction in which it holds any Owner Mortgage Loan File. Each Custodial
Agreement may be amended only as provided in Section 10.01(a).
Section 8.14. Tax Matters; Compliance with REMIC Provisions.
(a) Each of the Trustee and the Master Servicer covenants and agrees that
it shall perform its duties hereunder in a manner consistent with the REMIC
Provisions and shall not knowingly take any action or fail to take any action
that would (i) affect the determination of the Trust Estate's status as two
separate REMICs; or (ii) cause the imposition of any federal, state or local
income, prohibited transaction, contribution or other tax on either the
Upper-Tier REMIC, the Lower-Tier REMIC or the Trust Estate. The Master Servicer,
or, in the case of the execution of any tax return or other action required by
law to be performed directly by the Trustee, the Trustee, shall (i) prepare or
cause to be prepared, timely cause to be signed by the Trustee and file or cause
to be filed annual federal and applicable state and local income tax returns for
each of the Upper-Tier REMIC and the Lower-Tier REMIC using a calendar year as
the taxable year and the accrual method of accounting; (ii) in the first such
federal tax returns, make, or cause to be made, elections satisfying the
requirements of the REMIC Provisions, on behalf of the Trust Estate, to treat
each of the Upper-Tier REMIC and the Lower-Tier REMIC as a REMIC; (iii) prepare,
execute and forward, or cause to be prepared, executed and forwarded, to the
Certificateholders all information reports or tax returns required with respect
to the Trust Estate, as and when required to be provided to the
Certificateholders, and to the Internal Revenue Service and any other relevant
governmental taxing authority in accordance with the REMIC Provisions and any
other applicable federal, state or local laws, including without limitation
information reports relating to "original issue discount" and "market discount"
as defined in the Code based upon the issue prices, prepayment assumption and
cash flows provided by the Seller to the Trustee and calculated on a monthly
basis by using the issue price of the Certificates; (iv) make available
information necessary for the application of any tax imposed on transferors of
residual interests to "disqualified organizations" (as defined in the REMIC
Provisions); (v) file Forms SS-4 and 8811 and respond to inquiries by
Certificateholders or their nominees concerning information returns, reports or
tax returns; (vi) maintain (or cause to be maintained by the Servicers) such
records relating to the Upper-Tier REMIC and the Lower-Tier REMIC, including but
not limited to the income, expenses, individual Mortgage Loans (including REO
Mortgage Loans, other assets and liabilities of each REMIC, and the fair market
value and adjusted basis of the property of each REMIC determined at such
intervals as may be required by the Code, as may be necessary to prepare the
foregoing returns or information reports; (vii) exercise reasonable care not to
allow the creation of any "interests" in either the Upper-Tier REMIC or the
Lower-Tier REMIC within the meaning of Code Section 860D(a)(2) other than the
interests in the Upper-Tier REMIC represented by the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11, Class A-13, Class A-14, Class A-15, Class A-16 and Class A-R
Certificates, the Class A-12 IO A Component, the Class A-12 IO B Component, the
Class A-12 IO C Component, the Class A-12 TAC Accrual Component, the Class A-12
PO Component, the Class M Certificates and the Class X-x, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates and the interests in the Lower-Tier REMIC
represented by the Class A-L1, Class A-L2, Class A-L8, Class A-L9, Class A-L11,
Class A-L12, Class A-L14, Class A-L15, Class A-LPO, Class A-LUR, Class B-L1,
Class B-L2, Class B-L3, Class B-L4, Class B-L5 and Class M-L Interests and the
Class A-LR Certificate; (viii) exercise reasonable care not to allow the
occurrence of any "prohibited transactions" within the meaning of Code Section
860F(a), unless the Master Servicer shall have provided an Opinion of Counsel to
the Trustee and that such occurrence would not (a) result in a taxable gain, (b)
otherwise subject either the Upper-Tier REMIC or Lower-Tier REMIC or the Trust
Estate to tax or (c) cause the Trust Estate to fail to qualify as two separate
REMICs; (ix) exercise reasonable care not to allow either the Upper-Tier REMIC
or the Lower-Tier REMIC to receive income from the performance of services or
from assets not permitted under the REMIC Provisions to be held by a REMIC; (x)
pay (on behalf of the Upper-Tier REMIC or the Lower-Tier REMIC) the amount of
any federal income tax, including, without limitation, prohibited transaction
taxes, taxes on net income from foreclosure property, and taxes on certain
contributions to a REMIC after the Startup Day, imposed on the Upper-Tier REMIC
or Lower-Tier REMIC, as the case may be, when and as the same shall be due and
payable (but such obligation shall not prevent the Master Servicer or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Master Servicer from withholding or depositing payment of
such tax, if permitted by law, pending the outcome of such proceedings); and
(xi) if required or permitted by the Code and applicable law, act as "tax
matters person" for the Upper-Tier REMIC or the Lower-Tier REMIC within the
meaning of Treasury Regulations Section 1.860F-4(d), and the Master Servicer is
hereby designated as agent of the Class A-R and Class A-LR Certificateholders
for such purpose (or if the Master Servicer is not so permitted, the Holders of
the Class A-R and Class A-LR Certificates shall be tax matters persons in
accordance with the REMIC Provisions). The Master Servicer shall be entitled to
be reimbursed pursuant to Section 3.02 for any taxes paid by it pursuant to
clause (x) of the preceding sentence, except to the extent that such taxes are
imposed as a result of the bad faith, willful misfeasance or gross negligence of
the Master Servicer in the performance of its obligations hereunder. The Trustee
shall sign the tax returns referred to in clause (i) of the second preceding
sentence. In order to enable the Master Servicer or the Trustee, as the case may
be, to perform its duties as set forth above, the Seller shall provide, or cause
to be provided, to the Master Servicer within ten days after the Closing Date
all information or data that the Master Servicer determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flows of each Class and Subclass of Certificates and the Mortgage
Loans in the aggregate. Thereafter, the Seller shall provide to the Master
Servicer or the Trustee, as the case may be, promptly upon request therefor, any
such additional information or data that the Master Servicer or the Trustee, as
the case may be, may from time to time, request in order to enable the Master
Servicer to perform its duties as set forth above. The Seller hereby indemnifies
the Master Servicer or the Trustee, as the case may be, for any losses,
liabilities, damages, claims or expenses of the Master Servicer or the Trustee
arising from any errors or miscalculations by the Master Servicer or the Trustee
pursuant to this Section that result from any failure of the Seller to provide,
or to cause to be provided, accurate information or data to the Master Servicer
or the Trustee, as the case may be, on a timely basis. The Master Servicer
hereby indemnifies the Seller and the Trustee for any losses, liabilities,
damages, claims or expenses of the Seller or the Trustee arising from the Master
Servicer's willful misfeasance, bad faith or gross negligence in preparing any
of the federal, state and local tax returns of either the Upper-Tier REMIC or
the Lower-Tier REMIC as described above. In the event that the Trustee prepares
any of the federal, state and local tax returns of the REMIC as described above,
the Trustee hereby indemnifies the Seller and the Master Servicer for any
losses, liabilities, damages, claims or expenses of the Seller or the Master
Servicer arising from the Trustee's willful misfeasance, bad faith or negligence
in connection with such preparation.
(b) Notwithstanding anything in this Agreement to the contrary, each of the
Master Servicer and the Trustee shall pay from its own funds, without any right
of reimbursement therefor, the amount of any costs, liabilities and expenses
incurred by the Trust Estate (including, without limitation, any and all
federal, state or local taxes, including taxes imposed on "prohibited
transactions" within the meaning of the REMIC Provisions) if and to the extent
that such costs, liabilities and expenses arise from a failure of the Master
Servicer or the Trustee to perform its obligations under this Section 8.14.
Section 8.15. Monthly Advances.
In the event that Norwest Mortgage fails to make a Periodic Advance
required to be made pursuant to the Norwest Servicing Agreement on or before the
Distribution Date, the Trustee shall make a Periodic Advance as required by
Section 3.03 hereof; provided, however, the Trustee shall not be required to
make such Periodic Advances if prohibited by law or if it determines that such
Periodic Advance would be a Nonrecoverable Advance. With respect to those
Periodic Advances which should have been made by Norwest Mortgage, the Trustee
shall be entitled, pursuant to Section 3.02(a)(i), (ii) or (v) hereof, to be
reimbursed from the Certificate Account for Periodic Advances and Nonrecoverable
Advances made by it.
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Purchase by the Seller or Liquidation of All
Mortgage Loans.
Subject to Section 9.02, the respective obligations and responsibilities of
the Seller, the Master Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments after the Final Distribution
Date to Certificateholders and the obligation of the Master Servicer to send
certain notices as hereinafter set forth and the tax reporting obligations under
Sections 4.05 and 8.14 hereof) shall terminate upon the last action required to
be taken by the Trustee on the Final Distribution Date pursuant to this Article
IX following the earlier of (i) the purchase by the Seller of all Mortgage Loans
and all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate at a price equal to the sum of (x) 100% of the unpaid principal balance
of each Mortgage Loan (other than any REO Mortgage Loan) as of the Final
Distribution Date, and (y) the fair market value of the Mortgaged Property
related to any REO Mortgage Loan (as determined by the Master Servicer as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to Certificateholders pursuant to
the third paragraph of this Section 9.01), plus any accrued and unpaid interest
through the last day of the month preceding the month of such purchase at the
applicable Mortgage Interest Rate less any Fixed Retained Yield on each Mortgage
Loan (including any REO Mortgage Loan) and (ii) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Estate (including for this purpose the discharge of any
Mortgagor under a defaulted Mortgage Loan on which a Servicer is not obligated
to foreclose due to environmental impairment) or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof.
The right of the Seller to purchase all the assets of the Trust Estate
pursuant to clause (i) of the preceding paragraph are subject to Section 9.02
and conditioned upon the Pool Scheduled Principal Balance of the Mortgage Loans
as of the Final Distribution Date being less than the amount set forth in
Section 11.25. In the case of any purchase by the Seller pursuant to said clause
(i), the Seller shall provide to the Trustee the certification required by
Section 3.04 and the Trustee and the Custodian shall, promptly following payment
of the purchase price, release to the Seller the Owner Mortgage Loan Files
pertaining to the Mortgage Loans being purchased.
Notice of any termination, specifying the Final Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Master Servicer (if it is exercising its right to purchase the assets of the
Trust Estate) or by the Trustee (in any other case) by letter to
Certificateholders mailed not earlier than the 15th day of the month preceding
the month of such final distribution and not later than the twentieth day of the
month of such final distribution specifying (A) the Final Distribution Date upon
which final payment of the Certificates will be made upon presentation and
surrender of Certificates at the office or agency of the Trustee therein
designated, (B) the amount of any such final payment and (C) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made (except in the case of any Class A Certificate surrendered on a prior
Distribution Date pursuant to Section 4.01) only upon presentation and surrender
of the Certificates at the office or agency of the Trustee therein specified. If
the Master Servicer is obligated to give notice to Certificateholders as
aforesaid, it shall give such notice to the Trustee and the Certificate
Registrar at the time such notice is given to Certificateholders. In the event
such notice is given by the Master Servicer, the Master Servicer shall deposit
in the Certificate Account on or before the Final Distribution Date in
immediately available funds an amount equal to the purchase price for the assets
of the Trust Estate computed as above provided. Failure to give notice of
termination as described herein shall not entitle a Certificateholder to any
interest beyond the interest payable on the Final Distribution Date.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders on the Final Distribution Date in
proportion to their respective Percentage Interests an amount equal to (i) as to
the Subclasses of Class A Certificates, the respective Class A Subclass
Principal Balance together with any related Class A Subclass Unpaid Interest
Shortfall and one month's interest in an amount equal to the respective Class A
Subclass Interest Accrual Amount, (ii) as to the Class M Certificates, the Class
M Principal Balance together with any related Class M Unpaid Interest Shortfall
and one month's interest at the Class M Pass-Through Rate on the Class M
Principal Balance, (iii) as to the Subclasses of Class B Certificates, the
respective Class B Subclass Principal Balance together with any related Class B
Subclass Unpaid Interest Shortfall and one month's interest in an amount equal
to the respective Class B Subclass Interest Accrual Amount and (iv) as to the
Class A-R and Class A-LR Certificates, the amounts, if any, which remain on
deposit in the Upper-Tier Certificate Account and the Certificate Account,
respectively (other than amounts retained to meet claims) after application
pursuant to clauses (i), (ii) and (iii) above and payment to the Master Servicer
of any amounts it is entitled as reimbursement or otherwise hereunder. Such
amount shall be distributed in respect of interest and principal in respect of
the Uncertificated Lower-Tier Interests in the same amounts as distributed to
their Corresponding Upper-Tier Class, Classes, Component or Components in the
manner specified in Section 4.01(a)(ii). Notwithstanding the foregoing, if the
price paid pursuant to clause (i) of the first paragraph of this Section 9.01,
after reimbursement to the Servicers, the Master Servicer and the Trustee of any
Periodic Advances, is insufficient to pay in full the amounts set forth in
clauses (i), (ii) and (iii) of this paragraph, then any shortfall in the amount
available for distribution to Certificateholders shall be allocated in reduction
of the amounts otherwise distributable on the Final Distribution Date in the
same manner as Realized Losses are allocated pursuant to Sections 4.02(b) and
4.02(g) hereof. Such distribution on the Final Distribution Date shall be in
lieu of the distribution otherwise required to be made on such Distribution Date
in respect of each Class of Certificates.
In the event that all of the Certificateholders shall not surrender their
Certificates for final payment and cancellation within three months following
the Final Distribution Date, the Trustee shall on such date cause all funds, if
any, in the Certificate Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer (if it exercised its
right to purchase the assets of the Trust Estate) or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within three months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds on deposit in
such escrow account.
Section 9.02. Additional Termination Requirements.
In the event of a termination of the Trust Estate upon the exercise by the
Seller of its purchase option as provided in Section 9.01, the Trust Estate
shall be terminated in accordance with the following additional requirements,
unless the Trustee has received an Opinion of Counsel to the effect that any
other manner of termination (i) will constitute a "qualified liquidation" of the
Trust Estate within the meaning of Code Section 860F(a)(4)(A) and (ii) will not
subject either the Upper-Tier REMIC or the Lower-Tier REMIC to federal tax or
cause the Trust Estate to fail to qualify as two separate REMICs at any time
that any Certificates are outstanding:
(i) The notice given by the Master Servicer under Section 9.01
shall provide that such notice constitutes the adoption of a plan of
complete liquidation of the Upper-Tier REMIC and Lower-Tier REMIC as
of the date of such notice (or, if earlier, the date on which the
first such notice is mailed to Certificateholders). The Master
Servicer shall also specify such date in a statement attached to the
final tax returns of the Upper-Tier REMIC and Lower-Tier REMIC; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the Final Distribution Date, the
Trustee shall sell all of the assets of the Trust Estate to the Seller
for cash at the purchase price specified in Section 9.01 and shall
distribute such cash within 90 days of such adoption in the manner
specified in Section 9.01.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Seller, the Master Servicer and the Trustee, without the consent of
any of the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to
correct or supplement any provisions herein or therein which may be inconsistent
with any other provisions herein or therein, (iii) to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust Estate as two separate REMICs at all times that any
Certificates are outstanding or to avoid or minimize the risk of the imposition
of any federal tax on the Trust Estate, the Upper-Tier REMIC or the Lower-Tier
REMIC pursuant to the Code that would be a claim against the Trust Estate,
provided that (a) the Trustee has received an Opinion of Counsel to the effect
that such action is necessary or desirable to maintain such qualification or to
avoid or minimize the risk of the imposition of any such tax and (b) such action
shall not, as evidenced by such Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder, (iv) to change the
timing and/or nature of deposits into the Upper-Tier Certificate Account and
Certificate Account provided that (a) such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder and (b) such change shall not adversely affect the
then-current rating of the Certificates as evidenced by a letter from each
Rating Agency to such effect, (v) to modify, eliminate or add to the provisions
of Section 5.02 or any other provisions hereof restricting transfer of the
Certificates, provided that the Master Servicer for purposes of Section 5.02 has
determined in its sole discretion that any such modifications to this Agreement
will neither adversely affect the rating on the Certificates nor give rise to a
risk that either the Upper-Tier REMIC or the Lower-Tier REMIC or any of the
Certificateholders will be subject to a tax caused by a transfer to a
non-permitted transferee and (vi) to make any other provisions with respect to
matters or questions arising under this Agreement or such Custodial Agreement
which shall not be materially inconsistent with the provisions of this
Agreement, provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time to
time by the Seller, the Master Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the
aggregate Voting Interests of each Class or Subclass of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or such Custodial Agreement
or of modifying in any manner the rights of the Holders of Certificates of such
Class or Subclass; provided, however, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) adversely affect in any material
respect the interest of the Holders of Certificates of any Class or Subclass in
a manner other than as described in clause (i) hereof without the consent of
Holders of Certificates of such Class or Subclass evidencing, as to such Class
or Subclass, Voting Interests aggregating not less than 66-2/3% or (iii) reduce
the aforesaid percentage of Certificates of any Class or Subclass the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates of such Class or Subclass then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless each shall have first
received an Opinion of Counsel to the effect that such amendment will not
subject either the Upper-Tier REMIC or the Lower-Tier REMIC to tax or cause
either the Upper-Tier REMIC or the Lower-Tier REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment requiring the consent of
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under this
Section 10.01(a) to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
(b) Notwithstanding any contrary provision of this Agreement, the Master
Servicer may, from time to time, amend Schedule I hereto without the consent of
any Certificateholder or the Trustee; provided, however, (i) that such amendment
does not conflict with any provisions of the related Servicing Agreement, (ii)
that the related Servicing Agreement provides for the remittance of each type of
Unscheduled Principal Receipts received by such Servicer during the Applicable
Unscheduled Principal Receipt Period (as so amended) related to each
Distribution Date to the Master Servicer no later than the 24th day of the month
in which such Distribution Date occurs and (iii) that such amendment is for the
purpose of:
(a) changing the Applicable Unscheduled Principal Receipt Period for
Exhibit F-1 Mortgage Loans to a Mid-Month Receipt Period with
respect to all Unscheduled Principal Receipts; or
(b) changing the Applicable Unscheduled Principal Receipt Period for
all Mortgage Loans serviced by any Servicer to a Mid-Month
Receipt Period with respect to Full Unscheduled Principal
Receipts and to a Prior Month Receipt Period with respect to
Partial Unscheduled Principal Receipts.
A copy of any amendment to Schedule I pursuant to this Section 10.01(b)
shall be promptly forwarded to the Trustee.
Section 10.02. Recordation of Agreement.
This Agreement (or an abstract hereof, if acceptable to the applicable
recording office) is subject to recordation in all appropriate public offices
for real property records in all the towns or other comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public office or elsewhere, such recordation to be effected by the
Master Servicer and at its expense on direction by the Trustee, but only upon
direction accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 10.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Estate, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of the
Trust Estate, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
Except as otherwise expressly provided herein, no Certificateholder, solely
by virtue of its status as a Certificateholder, shall have any right to vote or
in any manner otherwise control the operation and management of the Trust
Estate, or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder, solely by virtue of its status as Certificateholder,
shall have any right by virtue or by availing of any provision of this Agreement
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Agreement, unless such Holder previously shall have given
to the Trustee a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates evidencing
not less than 25% of the Voting Interest represented by all Certificates shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the cost, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 10.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the State
of New York (without regard to conflicts of laws principles), and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 10.05. Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
certified or registered mail, return receipt requested (i) in the case of the
Seller, to Norwest Asset Securities Corporation, 0000 Xxx Xxxxxxx Xxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer, or such other
address as may hereafter be furnished to the Master Servicer and the Trustee in
writing by the Seller, (ii) in the case of the Master Servicer, to Norwest Bank
Minnesota, National Association, 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Vice President or such other address as may hereafter be furnished to
the Seller and the Trustee in writing by the Master Servicer and (iii) in the
case of the Trustee, to 000 Xxxx 0xx Xxxxxx, 0xx Xxxxx, Xx. Xxxx, Xxxxxxxxx
00000, Attention: Corporate Trust Office, or such other address as may hereafter
be furnished to the Seller and the Master Servicer in writing by the Trustee.
Any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice mailed or transmitted within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the addressee receives such notice, provided,
however, that any demand, notice or communication to or upon the Seller, the
Master Servicer or the Trustee shall not be effective until received.
For all purposes of this Agreement, in the absence of actual knowledge by
an officer of the Master Servicer, the Master Servicer shall not be deemed to
have knowledge of any act or failure to act of any Servicer unless notified
thereof in writing by the Trustee, such Servicer or a Certificateholder.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07. Special Notices to Rating Agencies.
(a) The Trustee shall give prompt notice to each Rating Agency of the
occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 10.01(a);
(ii) any sale or transfer of the Class B Certificates pursuant to
Section 5.02 to an affiliate of the Seller;
(iii) any assignment by the Master Servicer of its rights and
delegation of its duties pursuant to Section 6.06;
(iv) any resignation of the Master Servicer pursuant to Section
6.04;
(v) the occurrence of any of the Events of Default described in
Section 7.01;
(vi) any notice of termination given to the Master Servicer
pursuant to Section 7.01;
(vii) the appointment of any successor to the Master Servicer
pursuant to Section 7.05; or
(viii) the making of a final payment pursuant to Section 9.01.
(b) The Master Servicer shall give prompt notice to each Rating Agency of
the occurrence of any of the following events:
(i) the appointment of a Custodian pursuant to Section 2.02;
(ii) the resignation or removal of the Trustee pursuant to
Section 8.08;
(iii) the appointment of a successor trustee pursuant to Section
8.09; or
(iv) the sale, transfer or other disposition in a single
transaction of 50% or more of the equity interests in the Master
Servicer.
(c) The Master Servicer shall deliver to each Rating Agency:
(i) reports prepared pursuant to Section 3.05; and
(ii) statements prepared pursuant to Section 4.04.
Section 10.08. Covenant of Seller.
The Seller shall not amend Article Third of its Certificate of
Incorporation without the prior written consent of each Rating Agency rating the
Certificates.
Section 10.09. Recharacterization.
The Parties intend the conveyance by the Seller to the Trustee of all of
its right, title and interest in and to the Mortgage Loans pursuant to this
Agreement to constitute a purchase and sale and not a loan. Notwithstanding the
foregoing, to the extent that such conveyance is held not to constitute a sale
under applicable law, it is intended that this Agreement shall constitute a
security agreement under applicable law and that the Seller shall be deemed to
have granted to the Trustee a first priority security interest in all of the
Seller's right, title and interest in and to the Mortgage Loans.
ARTICLE XI
TERMS FOR CERTIFICATES
Section 11.01. Class A Fixed Pass-Through Rate. The Class A Fixed
Pass-Through Rate is 7.750% per annum.
Section 11.02. Cut-Off Date. The Cut-Off Date for the Certificates is
August 1, 1996.
Section 11.03. Cut-Off Date Aggregate Principal Balance. The Cut-Off Date
Aggregate Principal Balance is $383,166,930.66.
Section 11.04. Original Class A Percentage. The Original Class A Percentage
is 93.92234281%.
Section 11.05. Original Class A Subclass Principal Balances. As to the
following Subclasses of Class A Certificates, the Class A Subclass Principal
Balance of such Subclass as of the Cut-Off Date, as follows:
Original Class A
Class A Subclass Subclass Principal Balance
---------------- --------------------------
Class A-1 $ 5,072,504.00
Class A-2 $ 4,165,803.00
Class A-3 $ 6,985,000.00
Class A-4 $ 2,600,000.00
Class A-5 $35,530,400.00
Class A-6 $30,416,084.00
Class A-7 $20,082,904.00
Class A-8 $98,382,494.00
Class A-9 $ 7,064,000.00
Class A-10 $13,902,764.00
Class A-11 $ 2,872,631.00
Class A-12 $34,368,787.43
Class A-13 $ 8,300,986.00
Class A-14 $46,901,000.00
Class A-15 $36,730,387.00
Class A-16 $ 6,800,000.00
Class A-R $ 100.00
Class A-LR $ 100.00
Section 11.06. Original Class A Non-PO Principal Balance. The Original
Class A Non-PO Principal Balance is $355,296,000.00.
Section 11.07. Original Class A-12 PO Component Principal Balance. The
Original Class A-12 PO Component Principal Balance is $4,879,944.43.
Section 11.08. Original Class A-12 TAC Accrual Component Principal Balance.
The Original Class A-12 TAC Accrual Component Principal Balance is $29,488,843.
Section 11.09. Original Subordinated Percentage. The Original Class M
Percentage is 6.07765719%.
Section 11.10. Original Class M Percentage. The Original Class M Percentage
is 2.53246882%.
Section 11.11. Original Class M Principal Balance. The Original Class M
Principal Balance is $9,580,000.
Section 11.12. Original Class M Fractional Interest. The Original Class M
Fractional Interest is 3.54518836%.
Section 11.13. Original Class B-1 Percentage. The Original Class B-1
Percentage is 1.26597006%.
Section 11.14. Original Class B-2 Percentage. The Original Class B-2
Percentage is 1.01298753%.
Section 11.15. Original Class B-3 Percentage. The Original Class B-3
Percentage is 0.50649376%.
Section 11.16. Original Class B-4 Percentage. The Original Class B-4
Percentage is 0.25324688%.
Section 11.17. Original Class B-5 Percentage. The Original Class B-5
Percentage is 0.50649012%.
Section 11.18. Original Class B Principal Balance. The Original Class B
Principal Balance is $13,411,620.65.
Section 11.19. Original Class B Subclass Principal Balances. As to any
Class B Certificate, the Class B Subclass Principal Balance of such Subclass as
of the Cut-Off Date, is as follows:
Original Class B
Class B Subclass Subclass Principal Balance
---------------- --------------------------
Class B-1 $4,789,000.00
Class B-2 $3,832,000.00
Class B-3 $1,916,000.00
Class B-4 $ 958,000.00
Class B-5 $1,916,986.23
Section 11.20. Original Class B-1 Fractional Interest. The Original Class
B-1 Fractional Interest is 2.27921830%.
Section 11.21. Original Class B-2 Fractional Interest. The Original Class
B-2 Fractional Interest is 1.26623077%.
Section 11.22. Original Class B-3 Fractional Interest. The Original Class
B-3 Fractional Interest is 0.75973700%.
Section 11.23. Original Class B-4 Fractional Interest. The Original Class
B-4 Fractional Interest is 0.50649012%.
Section 11.24. Closing Date. The Closing Date is August 27, 1996.
Section 11.25. Right to Purchase. The right of the Seller to purchase all
of the Mortgage Loans pursuant to Section 9.01 hereof shall be conditioned upon
the Pool Scheduled Principal Balance of the Mortgage Loans being less than
$38,316,693.07(10% of the Cut-Off Date Aggregate Principal Balance) at the time
of any such purchase.
Section 11.26. Wire Transfer Eligibility. With respect to the Certificates
(other than the Class A-2, Class A-4, Class A-11, Class A-R, Class A-LR, Class
B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates), the minimum
Denomination eligible for wire transfer on each Distribution Date is $5,000,000.
The Class A-2, Class A-4, Class A-11, Class A-R, Class A-LR, Class B-1, Class
B-2, Class B-3, Class B-4 and Class B-5 Certificates are not eligible for wire
transfer; provided, however, that notwithstanding the foregoing for so long as
the Class A-12, Class A-4 or Class A-11 Certificates are held in the name of the
Clearing Agency or a nominee thereof, the Holder will be entitled to a wire
transfer.
Section 11.27. Single Certificate. A Single Certificate for each Subclass
of Class A Certificates (other than Class A-3, Class A-4, Class A-9, Class A-R
and Class A-LR Certificates), Class M Certificates, Class B-1 and Class B-2
Certificates represents a $100,000 Denomination. A Single Certificate for the
Class B-3, Class B-4 and Class B-5 Certificates represents a $250,000
Denomination. A Single Certificate for the Class A-3, Class A-4 and Class A-9
Certificates represents a $1,000 Denomination. A Single Certificate for the
Class A-R and Class A-LR Certificates represents a $100 Denomination.
Section 11.28. Servicing Fee Rate. The rate used to calculate the Servicing
Fee is equal to 0.250% per annum.
Section 11.29. Master Servicing Fee Rate. The rate used to calculate the
Master Servicing Fee for each Mortgage Loan is 0.02% per annum.
IN WITNESS WHEREOF, the Seller, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
NORWEST ASSET SECURITIES CORPORATION
as Seller
By:
--------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
as Master Servicer
By:
---------------------------------
Name:
Title:
FIRST BANK MINNESOTA, NATIONAL ASSOCATION
as Trustee
By:
----------------------------------
Name:
Title:
Attest:
By:
------------------------
Name:
---------------------
Title:
---------------------
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this 27th day of August, 1996, before me, a notary public in and for the
State of New York, personally B. Xxxxx Xxxxxxx, known to me who, being by me
duly sworn, did depose and say that he resides at Frederick, Maryland; that he
is a Vice President of Norwest Asset Securities Corporation., a Delaware
corporation, one of the parties that executed the foregoing instrument; and that
he signed his name thereto by order of the Board of Directors of said
corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF )
ss.:
COUNTY OF )
On this 27th day of August, 1996, before me, a notary public in and for the
State of ___________, personally appeared ______________, known to me who, being
by me duly sworn, did depose and say that he resides at ____________,
____________; that he is a Vice President of Norwest Bank Minnesota, National
Association, a national banking association, one of the parties that executed
the foregoing instrument; and that he signed his name thereto by order of the
Board of Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA)
ss.:
COUNTY OF )
On this 27th day of August, 1996, before me, a notary public in and for the
State of Minnesota, personally appeared ___________________, known to me who,
being by me duly sworn, did depose and say that she resides at
_________________, Minnesota; that she is a ____________________ of First Bank
National Association, a national banking association, one of the parties that
executed the foregoing instrument; and that she signed her name thereto by order
of the Board of Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA)
ss.:
COUNTY OF )
On this 27th day of August, 1996, before me, a notary public in and for the
State of Minnesota, personally appeared _____________________, known to me who,
being by me duly sworn, did depose and say that he resides at
__________________, Minnesota; that he is a _____________________ of First Bank
National Association, a national banking association, one of the parties that
executed the foregoing instrument; and that he signed his name thereto by order
of the Board of Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
SCHEDULE I
Norwest Asset Securities Corporation, Mortgage Pass-Through Certificates,
Series 1996-4 Applicable Unscheduled Principal Receipt Period
Full Unscheduled Partial Unscheduled
Servicer Principal Receipts Principal Receipts
-------- ------------------ ------------------
Cimarron Mortgage Prior Month Prior Month
Citicorp Mortgage, Inc. Prior Month Prior Month
Countrywide Home Loans, Inc. Prior Month Prior Month
First Union Mortgage Corporation Prior Month Prior Month
HomeSide Lending Prior Month Prior Month
National City Mortgage Company Prior Month Prior Month
Norwest Mortgage, Inc. (Exhibit F-1) Prior Month Prior Month
Norwest Mortgage, Inc. (Exhibit F-2) Mid-Month Mid-Month
Suntrust Mortgage, Inc. Prior Month Prior Month
