EXHIBIT 99.1
Exhibit 99.1
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GREENWICH CAPITAL ACCEPTANCE, INC.,
Depositor
FIRST REPUBLIC BANK,
Seller and Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2002
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First Republic Mortgage Loan Trust 2002-FRB2
Mortgage Loan Pass-Through Certificates, Series 2002-FRB2
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms..............................................................4
Section 1.02. Accounting................................................................40
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans..............................................40
Section 2.02. Acceptance by Trustee.....................................................43
Section 2.03. Repurchase or Substitution of Mortgage Loans by the Seller................45
Section 2.04. Representations and Warranties of the Seller with Respect to the
Mortgage Loans........................................................47
Section 2.05. Representations, Warranties and Covenants of the Servicer.................48
Section 2.06. Representations and Warranties of the Depositor...........................50
Section 2.06A. No Solicitations by the Depositor.........................................51
Section 2.07. Issuance of Certificates..................................................51
Section 2.08. Representations and Warranties of the Seller..............................52
Section 2.09. Covenants of the Seller...................................................54
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01. Servicer to Act as Servicer...............................................54
Section 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers...............56
Section 3.03. Successor Sub-Servicers...................................................57
Section 3.04. Liability of the Servicer.................................................57
Section 3.05. No Contractual Relationship Between Sub-Servicers and the Trustee
or Certificateholders.................................................57
Section 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee..........57
Section 3.07. Collection of Certain Mortgage Loan Payments..............................58
Section 3.08. Sub-Servicing Accounts....................................................59
Section 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts..............................................................59
Section 3.10. Collection Account and Distribution Account...............................60
Section 3.11. Withdrawals from the Collection Account and Distribution Account..........62
Section 3.12. Investment of Funds in the Collection Account.............................63
Section 3.13. [Reserved]................................................................64
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Section 3.14. Maintenance of Hazard Insurance Polices and Errors and Omissions
and Fidelity Coverage.................................................64
Section 3.15. Enforcement of Due-on-Sale Clauses; Assumption Agreements.................66
Section 3.16. Realization upon Defaulted Mortgage Loans.................................67
Section 3.17. Trustee to Cooperate; Release of Mortgage Files...........................69
Section 3.18. Servicing Compensation....................................................70
Section 3.19. Reports to the Trustee; Collection Account Statements.....................71
Section 3.20. Statement as to Compliance................................................71
Section 3.21. Independent Public Accountants' Servicing Report..........................71
Section 3.22. Access to Certain Documentation; Filing of Reports by Servicer............72
Section 3.23. Title, Management and Disposition of REO Property.........................72
Section 3.24. Obligations of the Servicer in Respect of Prepayment Interest
Shortfalls............................................................75
Section 3.25. [Reserved]................................................................76
Section 3.26. Obligations of the Servicer in Respect of Adjustments.....................76
Section 3.27. Solicitations.............................................................76
ARTICLE IV
FLOW OF FUNDS
Section 4.01. Distributions.............................................................77
Section 4.02. [Intentionally Deleted.]..................................................80
Section 4.03. Allocation of Realized Losses.............................................80
Section 4.04. Statements................................................................82
Section 4.05. Remittance Reports; Advances..............................................84
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates..........................................................85
Section 5.02. Registration of Transfer and Exchange of Certificates.....................86
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.........................91
Section 5.04. Persons Deemed Owners.....................................................92
Section 5.05. Appointment of Paying Agent...............................................92
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Seller, the Servicer and the Depositor...................93
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of,
the Seller, the Servicer or the Depositor.............................93
Section 6.03. Limitation on Liability of the Servicer and Others........................93
Section 6.04. Servicer Not to Resign....................................................94
Section 6.05. Delegation of Duties......................................................94
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Section 6.06. Auction Administration Agreement; Swap Agreement..........................94
ARTICLE VII
DEFAULT
Section 7.01. Servicer Events of Termination............................................95
Section 7.02. Trustee to Act; Appointment of Successor..................................96
Section 7.03. Waiver of Servicer Events of Termination..................................98
Section 7.04. Notification to Certificateholders........................................98
Section 7.05. Survivability of Servicer Liabilities.....................................98
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties of Trustee.........................................................98
Section 8.02. Certain Matters Affecting the Trustee....................................100
Section 8.02A. No Solicitations.........................................................101
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans....................101
Section 8.04. Trustee May Own Certificates.............................................102
Section 8.05. Trustee's Fees and Expenses; Indemnification of Trustee and Auction
Administrator........................................................102
Section 8.06. Eligibility Requirements for Trustee.....................................103
Section 8.07. Resignation or Removal of Trustee........................................103
Section 8.08. Successor Trustee........................................................104
Section 8.09. Merger or Consolidation of Trustee.......................................104
Section 8.10. Appointment of Co-Trustee or Separate Trustee............................104
Section 8.11. Limitation of Liability..................................................106
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates............106
Section 8.13. Suits for Enforcement....................................................106
Section 8.14. Waiver of Bond Requirement...............................................107
Section 8.15. Waiver of Inventory, Accounting and Appraisal Requirement................107
Section 8.16. Appointment of Custodians................................................107
Section 8.17. Assumption of Auction Administration Agreement and Swap Agreement........107
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01. REMIC Administration.....................................................108
Section 9.02. Prohibited Transactions and Activities...................................110
Section 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC
Status...............................................................110
Section 9.04. REO Property.............................................................111
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ARTICLE X
TERMINATION
Section 10.01. Termination..............................................................111
Section 10.02. Additional Termination Requirements......................................113
ARTICLE XI
[RESERVED]
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment................................................................114
Section 12.02. Recordation of Agreement; Counterparts...................................115
Section 12.03. Limitation on Rights of Certificateholders...............................115
Section 12.04. Governing Law; Jurisdiction..............................................116
Section 12.05. Notices..................................................................116
Section 12.06. Severability of Provisions...............................................117
Section 12.07. Article and Section References...........................................117
Section 12.08. Notice to the Rating Agencies............................................117
Section 12.09. Further Assurances.......................................................118
Section 12.10. Benefits of Agreement....................................................118
Section 12.11. Acts of Certificateholders...............................................118
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EXHIBITS AND SCHEDULES:
Exhibit A Form of Senior Certificates (other than the Class X Certificates
and the Class A-R Certificate) ..........................................A-1
Exhibit B Form of Class X Certificates............................................B-1
Exhibit C Form of Class A-R Certificate............................................C-1
Exhibit D Form of Subordinate Certificates.........................................D-1
Exhibit E Form of Reverse of Certificates..........................................E-1
Exhibit F Request for Release......................................................F-1
Exhibit G-1 Form of Trustee's Initial Certification................................G-1-1
Exhibit G-2 Form of Trustee's Final Certification..................................G-2-1
Exhibit G-3 Form of Receipt of Mortgage Note.......................................G-3-1
Exhibit H Form of Lost Note Affidavit..............................................H-1
Exhibit I Form of ERISA Representation.............................................I-1
Exhibit J Form of Investment Letter................................................J-1
Exhibit K Form of Transferor Certificate...........................................K-1
Exhibit L Form of Class A-R Certificate Transfer Affidavit.........................L-1
Exhibit M Form of Liquidation Report...............................................M-1
Exhibit N Form of Corporate Matters Opinion of Counsel.............................N-1
Exhibit O Form of Form 10-K Certification .........................................O-1
Exihibit P Form of Certification to be Provided to Depositor by the Trustee.........P-1
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Seller/Servicer
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This Pooling and Servicing Agreement is dated as of November 1, 2002
(the "Agreement"), among GREENWICH CAPITAL ACCEPTANCE, INC., as depositor (the
"Depositor"), FIRST REPUBLIC BANK, as seller (in such capacity, the "Seller")
and servicer (in such capacity, the "Servicer"), and XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of ten classes of
certificates, designated as (i) the Class A-1 Certificates, (ii) Class A-2
Certificates, (iii) the Class X Certificates, (iv) the Class A-R Certificate,
(v) the Class B-1 Certificates, (vi) the Class B-2 Certificates, (vii) the Class
B-3 Certificates, (viii) the Class B-4 Certificates, (ix) the Class B-5
Certificates and (x) the Class B-6 Certificates.
For federal income tax purposes, the Trust Fund will consist of two
REMICs. REMIC 1 will consist of all of the assets constituting the Trust Fund
(other than the Swap Agreement, Auction Administration Agreement and any
accounts created thereunder) and will be evidenced by the REMIC 1 Regular
Interests (which will be uncertificated and will represent the "regular
interests" in REMIC 1) and the R-1 Interest as the single "residual interest" in
REMIC 1. REMIC 2 will consist of the REMIC 1 Regular Interests and will be
evidenced by the Regular Certificates (which will represent the "regular
interests" in REMIC 2) and the R-2 Interest as the single "residual interest" in
REMIC 2. The Class A-R Certificate will represent beneficial ownership of the
R-1 Interest and the R-2 Interest. All REMIC regular and residual interests
created hereby will be retired on or before the Latest Possible Maturity Date.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate, Original Class Certificate Principal Balance or Original
Class Certificate Notional Balance and Assumed Final Distribution Date for each
Class of Certificates comprising the interests in the Trust Fund created
hereunder, each of which Classes (except for the Class A-R Certificate) is
hereby designated as a regular interest in REMIC 2:
========================= =========================== =================== =======================
Original Class
Certificate Principal
Balance or Class Month of
Certificate Assumed Final
Class Notional Balance Pass-Through Rate Distribution Date
------------------------- --------------------------- ------------------- -----------------------
Class A-1 $58,144,000.00 (1) November 2032
------------------------ --------------------------- ------------------- -----------------------
Class A-2 $310,464,000.00 (2) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class X (3) (4) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class A-R $100.00 (5) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class B-1 $3,799,000.00 (6) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class B-2 $1,519,000.00 (6) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class B-3 $2,279,000.00 (6) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class B-4 $1,519,000.00 (6) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class B-5 $1,139,000.00 (6) November 2032
------------------------- --------------------------- ------------------- -----------------------
Class B-6 $1,146,346.99 (6) November 2032
========================= =========================== =================== =======================
-------------------
(1) Calculated pursuant to the definition of "Class A-1 Pass-Through Rate."
(2) Calculated pursuant to the definition of "Class A-2 Pass-Through Rate."
(3) The Class Certificate Notional Balance. For federal income tax purposes,
the Class X Certificates will have a notional principal balance equal to
the aggregate principal balance of the Class XX-X-0, XX-X-0 and LT-B-1
Interests.
(4) Calculated pursuant to the definition of "Class X Pass-Through Rate." For
federal income tax purposes, the Class X Certificates will be comprised of
3 components, each of which is hereby designated a regular interest in
REMIC 2. On each Distribution Date following the allocation of Realized
Losses and principal, component 1 will have a notional balance equal to
the principal balance of the Class LT-A-1 Interest and bear interest at a
rate equal to the excess of the Class A-1 Cap over the pass through rate
in respect of the Class A-1 Certificates, component 2 will have a notional
balance equal to the principal balance of the Class LT-A-2 Interest and
bear interest at a rate equal to the excess of the Class A-2 Cap over the
pass through rate in respect of the Class A-2 Certificates and component 3
will have a notional balance equal to the principal balance of the Class
LT-B-1 Interest and bear interest at a rate equal to the excess of the
Class B-1 Cap over the pass through rate in respect of the Class B-1
Certificates, in each case, adjusted for the related Accrual Period.
(5) Calculated pursuant to the definition of "Class A-R Pass-Through Rate."
(6) Calculated pursuant to the definition of "Subordinate Pass-Through
Rate."
The following table sets forth the REMIC 1 Interest designations,
Initial Principal Balances, Interest Rates, Allocations of Principal and
Realized Losses and Allocations of Interest on the REMIC 1 Interests, each of
which (except for the Class R-1 Interest) is hereby designated a regular
interest in REMIC 1, and their corresponding Classes of Certificates:
REMIC 2
Allocation of
Initial Principal and
Principal Interest Realized Allocation of Corresponding
REMIC 1 Interest Balance (1) Rate Losses Interest Class
------------------ ----------------- ----------- ----------------- -------------- --------------
LT-A-1 $58,144,000.00 (2) Class A-1 Class A, X X-0
XX-XX $100.00 (2) AR AR AR
LT-A-2 $310,464,000.00 (2) Class X-0 Xxxxx X-0, X X-0
XX-X-0 $3,799,000.00 (3) Class B-1 Class B-1, X B-1
LT-B-2 $1,519,000.00 (3) Class B-2 Class X-0 X-0
XX-X-0 $2,279,000.00 (3) Class B-3 Class X-0 X-0
XX-X-0 $1,519,000.00 (3) Class B-4 Class B-4 B-4
2
REMIC 2
Allocation of
Initial Principal and
Principal Interest Realized Allocation of Corresponding
REMIC 1 Interest Balance (1) Rate Losses Interest Class
------------------ ----------------- ----------- ----------------- -------------- --------------
LT-B-5 $1,139,000.00 (3) Class B-5 Class X-0 X-0
XX-X-0 $1,146,346.99 (3) Class B-6 Class X-0 X-0
X-0 x/x x/x x/x n/a n/a
-------------
(1) On each Distribution Date following the allocation of principal and
Realized Losses, each class of LT Regular Interests will have a principal
balance equal to the principal balance of the Class of Certificates
referenced in the foregoing chart under "Allocation of Principal and
Realized Losses."
(2) Calculated pursuant to the definition of "Net WAC."
(3) Calculated pursuant to the definition of the "Subordinate Pass-Through
Rate."
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Calculations of interest shall be made
on the basis of an assumed 360-day year consisting of twelve 30-day months,
except as provided in the definition of "Accrual Period."
Many of the defined terms listed below may apply to both Loan Groups and
are sometimes used in this Agreement to refer to a particular Loan Group by the
adjectival use of the words "Group I" and "Group II".
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either the Collection Account or the Distribution Account.
"Accrual Period": With respect to each Distribution Date and any Class
of Certificates other than the LIBOR Certificates, the calendar month prior to
the month of that Distribution Date. With respect to each Distribution Date and
the LIBOR Certificates, the period commencing on the 15th day of the month prior
to the month of such Distribution Date (or in the case of the first Distribution
Date, the Closing Date) and ending on the 14th day of the month of such
Distribution Date. Interest on the Certificates will accrue on the basis of a
360-day year consisting of twelve 30-day months.
"Adjustment Date": With respect to each Mortgage Loan, each adjustment
date on which the related Mortgage Rate changes pursuant to the related Mortgage
Note. The first Adjustment Date following the Cut-off Date as to each Mortgage
Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Servicer in respect of any Distribution Date pursuant to Section 4.05
hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Aggregate Subordinate Percentage": As to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate of
the Class Certificate Principal
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Balances of the Subordinate Certificates immediately prior to such
Distribution Date and the denominator of which is the Pool Balance for such
Distribution Date, but in no event less than zero.
"Applicable Credit Support Percentage": As defined in Section 4.01(f).
"Applicable Regulations": As to any Mortgage Loan, all federal, state
and local laws, statutes, rules and regulations applicable thereto.
"Applicable State and Local Tax Laws": For purposes of Article IX, the
Applicable State and Local Income Tax Laws shall be (a) the law of the State of
California, (b) the law of the State of Maryland and (c) such other law whose
applicability shall have been brought to the attention of the Trustee by either
(i) an Opinion of Counsel delivered to it or (ii) written notice from the
appropriate taxing authority as to the applicability of such state or local
income tax law.
"Apportioned Principal Balance": As to any Distribution Date, Class of
Subordinate Certificates and Loan Group, an amount equal to the Class
Certificate Principal Balance of such Class multiplied by a fraction, the
numerator of which is the related Subordinated Loan Group Balance for that
Distribution Date and the denominator of which is the sum of the Subordinated
Loan Group Balances for both Loan Groups for that Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Distribution Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Auction Administration Agreement": The Auction Administration
Agreement, dated as of the Closing Date, between GCD and the Auction
Administrator.
"Auction Administrator": Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, or any successor auction
administrator appointed as herein provided.
"Auction Distribution Date": The Distribution Date occurring in
September 2007.
"Auction Price": With respect to each of the Class A-1 Certificates, the
price at which the Auction Administrator sells such Certificate to third-party
investors, such price to include interest on the Class Certificate Principal
Balance of the Class A-1 Certificates (after distribution of principal and
allocation of any Realized Losses on the Auction Distribution Date) accrued from
the first day of the month in which the Auction Distribution Date occurs up to
but excluding the Auction Distribution Date.
"Available Funds": With respect to any Distribution Date, the sum of the
Loan Group Available Funds for each Loan Group for that Distribution Date.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
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"Bankruptcy Coverage Termination Date": The date on which the
Bankruptcy Loss Coverage Amount is reduced to zero.
"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 Servicer has
notified the Trustee in writing that the Servicer is diligently pursuing any
remedies that may exist in connection with 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 related escrow payments in respect of the Mortgage
Loan are being advanced on a current basis by the Servicer, in either case
without giving effect to any Debt Service Reduction or Deficient Valuation.
"Bankruptcy Loss Coverage Amount": As of any Determination Date, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by the aggregate amount of Bankruptcy Losses allocated to the
Subordinate Certificates since the Closing Date; provided, however, that the
Bankruptcy Loss Coverage Amount may also be reduced pursuant to a letter from
each Rating Agency to the Trustee to the effect that any such reduction will not
result in a downgrading of the then current ratings assigned by such Rating
Agency to the Classes of Senior Certificates.
"Blanket Mortgage": The mortgage or mortgages encumbering the
Cooperative Property.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, all Classes of the Certificates other than the Physical Certificates shall
be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of California, the State of
Maryland, the State of New York or in the city in which the Corporate Trust
Office of the Trustee is located are authorized or obligated by law or executive
order to be closed.
"California Cooperative Loan": A Cooperative Loan secured by a Mortgaged
Property related to a Cooperative Property located in the State of California.
"Certificate": Any Regular Certificate or Class A-R Certificate.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization, non-U.S. Person or a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of a U.S. Person shall
not be a Holder of the Class A-R Certificate for any purpose hereof.
"Certificate Balance": With respect to each Certificate of a given Class
(other than the Class X Certificates) and any Distribution Date, the product of
(i) the Class Certificate Principal
6
Balance of such Class multiplied by (ii) the applicable Percentage Interest
represented by such Certificate.
"Certificate Notional Balance": With respect to each Class X
Certificate and any Distribution Date, the product of (i) the Class
Certificate Notional Balance of such Class multiplied by (ii) the Percentage
Interest represented by such Class X Certificate.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A-1 Cap": With respect to the Class A-1 Certificates and any
Distribution Date, the Net WAC of Loan Group I for that Distribution Date.
"Class A-1 Certificates": Any one of the Class A-1 Certificates as so
designated on the face thereof executed, authenticated and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A.
"Class A-1 Pass-Through Rate": With respect to the Class A-1
Certificates, (i) on any Distribution Date to and including the Auction
Distribution Date, a per annum rate equal to 3.986%, subject to the Class A-1
Cap; and (ii) on any and Distribution Date after the Auction Distribution
Date, the Net WAC of Loan Group I for that Distribution Date.
"Class A-2 Cap": With respect to the Class A-2 Certificates and any
Distribution Date, the Net WAC of Loan Group II for that Distribution Date,
multiplied by 30/10 in the case of the first Distribution Date.
"Class A-2 Certificates": Any one of the Class A-2 Certificates as so
designated on the face thereof executed, authenticated and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A.
"Class A-2 Pass-Through Rate": With respect to the Class A-2
Certificates, (i) on any Distribution Date to and including the Optional
Termination Date, a per annum rate equal to the sum of One-Month LIBOR plus
0.40%, subject to the Class A-2 Cap; and (ii) on any Distribution Date after the
Optional Termination Date, a per annum rate equal to the sum of One-Month LIBOR
plus 0.80%, subject to the Class A-2 Cap.
"Class A-R Certificate": The Class A-R Certificate as designated on the
face thereof executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit C,
and evidencing the beneficial ownership of the R-1 Interest and the R-2
Interest.
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"Class A-R Pass-Through Rate": With respect to the Class A-R Certificate
and any Distribution Date, a per annum rate equal to the Net WAC of Loan Group I
for such Distribution Date.
"Class B-1 Cap": With respect to the Class B-1 Certificates and any
Distribution Date, the weighted average of the Net WACs of Loan Group I and Loan
Group II for such Distribution Date, weighted on the basis of the related
Subordinated Loan Group Balance of each Loan Group on such Distribution Date.
"Class B-1 Certificates," "Class B-2 Certificates," "Class B-3
Certificates," "Class B-4 Certificates," "Class B-5 Certificates," and "Class
B-6 Certificates": Any one of the Certificates of the related Class as so
designated on the face thereof executed, authenticated and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit D.
"Class Certificate Notional Balance": As of any Distribution Date and
with respect to the Class X Certificates, an amount equal to the Pool Balance as
of the first day of the month immediately preceding such Distribution Date.
"Class Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class X Certificates) and any Distribution Date,
the respective Class Certificate Principal Balance thereof on the Closing Date
as set forth in the table appearing on page 2 hereof (the "Original Class
Certificate Principal Balance") as reduced by the sum of (x) all amounts
actually distributed in respect of principal of that Class on all prior
Distribution Dates and (y) all Realized Losses, Bankruptcy Losses, Special
Hazard Losses, Fraud Losses and Excess Losses, if any, without duplication,
actually allocated to that Class on all prior Distribution Dates.
"Class Subordination Percentage": With respect to each Class of
Subordinate Certificates and any Distribution Date, the percentage equivalent of
a fraction the numerator of which is the Class Certificate Principal Balance of
such Class immediately before such Distribution Date and the denominator of
which is the aggregate of the Class Certificate Principal Balances of all
Classes of Certificates (other than the Class X Certificates) immediately before
such Distribution Date.
"Class X Certificates": Any one of the Class X Certificates as
designated on the face thereof executed, authenticated and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit B.
"Class X Interest Distributable Amount": in respect of any Distribution
Date and Loan Group I, the sum of (a) the product of: (i) the Class A-1
Certificate Balance immediately prior to such Distribution Date, (ii) the
excess, if any, of the Class A-1 Cap over the Class A-1 Pass-Through Rate and
(iii) 1/12, and (b) the product of: (i) the Class B-1 Certificate Balance
immediately prior to such Distribution Date, (ii)(x) the Subordinated Loan Group
Balance for Loan Group I, divided by (y) the sum of the Subordinated Loan Group
Balances for Loan Group I and Loan Group II, (iii) the excess, if any, of the
Class B-1 Cap over the Class B-1 Pass-Through Rate and (iv) 10/360 for the
first Distribution Date and 1/12 for every Distribution Date thereafter, and any
such unpaid amounts from prior Distribution Dates. In respect of any
8
Distribution Date and Loan Group II, the Interest Distributable Amount for the
Class X Certificates less the Class X Interest Distributable Amount for Loan
Group I.
"Class X Pass-Through Rate": With respect to the Class X Certificates
and any Distribution Date, a per annum rate equal to the excess, if any, of
the weighted average of the Net WACs of Loan Group I and Loan Group II,
weighted on the basis of their respective Loan Group Balances for such
Distribution Date, over the weighted average of the Pass-Through Rates of the
Class A-1, the Class A-2, the Class A-R and the Subordinate Certificates for
such Distribution Date, weighted on the basis of their respective Class
Certificate Principal Balances immediately preceding such Distribution Date,
multiplied by 10/30 in the case of the Pass-Through Rate of the Class A-2 and
Class B-1 Certificates for the first Distribution Date.
"Close of Business": As used herein, with respect to any Business Day
and location, 5:00 p.m. at such location.
"Closing Date": December 5, 2002.
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained or
caused to be created and maintained by the Servicer pursuant to Section 3.10(a),
which shall be entitled "First Republic Bank, as Servicer for Xxxxx Fargo Bank
Minnesota, National Association, as Trustee, in trust for registered Holders of
First Republic Mortgage Loan Trust 2002-FRB2, Mortgage Loan Pass-Through
Certificates, Series 2002-FRB2", and which must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24 hereof.
"Coop Shares": Shares issued by a Cooperative Corporation.
"Cooperative Corporation": The entity that holds title to the real
property and improvements constituting the Cooperative Property and which
governs the Cooperative Property, which Cooperative Corporation must qualify as
a Cooperative Housing Corporation under Section 216 of the Code.
"Cooperative Loan": Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
"Cooperative Property": The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.
"Cooperative Unit": A one-family dwelling located in a Cooperative
Property.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Xxxxx Fargo Center, Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000,
9
Attention: Corporate Trust Services-Mortgage Loan Pass-Through Certificates,
Series 2002-FRB2, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor, the Servicer
and the Seller.
"Cut-off Date": With respect to any Mortgage Loan other than a Qualified
Substitute Mortgage Loan, the Close of Business on November 1, 2002. With
respect to any Qualified Substitute Mortgage Loan, the date designated as such
on the Mortgage Loan Schedule (as amended).
"Cut-off Date Aggregate Principal Balance": With respect to each Loan
Group, the aggregate of the Cut-off Date Principal Balances of the Mortgage
Loans in such Loan Group.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date (or as of the applicable
date of substitution with respect to a Qualified Substitute Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for that Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, unless the reduction
results from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(c) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"Delinquent": Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made.
"Depositor": Greenwich Capital Acceptance, Inc., a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
10
"Determination Date": With respect to any Distribution Date, the 10th
day of the month in which that Distribution Date occurs or, if the 10th day is
not a Business Day, the immediately following Business Day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by a REMIC other than through an
Independent Contractor; provided, however, that the Trustee (or the Servicer on
behalf of the Trustee) shall not be considered to Directly Operate an REO
Property solely because the Servicer, on behalf of the Trustee, establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or capital expenditures with
respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under Section
860E of the Code, which as of the Closing Date is any of:
(i) the United States, any state or political subdivision
thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing,
(ii) any organization (other than a cooperative described in
Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code,
(iii) any organization described in Section 1381(a)(2)(C) of
the Code,
(iv) an "electing large partnership" within the meaning of
Section 775 of the Code or
(v) any other Person so designated by the Trustee based upon an
Opinion of Counsel provided to the Trustee by nationally recognized
counsel acceptable to the Trustee that the holding of an ownership
interest in the Class A-R Certificate by such Person may cause the
Trust Fund or any Person having an ownership interest in any Class
of Certificates (other than such Person) to incur liability for any
federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in the Class
A-R Certificate to such Person.
A corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) hereof which shall be
entitled "Distribution Account, Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered Certificateholders of First
Republic Mortgage Loan Trust 2002-FRB2, Mortgage Loan Pass-Through Certificates,
Series 2002-FRB2" and which must be an Eligible Account.
11
"Distribution Date": The 15th day of any calendar month, or if such 15th
day is not a Business Day, the Business Day immediately following such 15th day,
commencing in December 2002.
"Distribution Date Statement": As defined in Section 4.04(a) hereof.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which that Distribution Date
occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive
of any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which that
Distribution Date occurs and ending on the first day of the month in which that
Distribution Date occurs.
"Eligible Account": Any of
(i) an account or accounts maintained with a federal or state
chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such
holding company) are rated A-1 or its equivalent by S&P and P-1 by
Xxxxx'x at the time any amounts are held on deposit therein;
(ii) an account or accounts the deposits in which are fully
insured by the FDIC (to the limits established by it), the uninsured
deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to
the Rating Agencies, the Certificateholders will have a claim with
respect to the funds in the account or a perfected first priority
security interest against the collateral (which shall be limited to
Permitted Investments) securing those funds that is superior to
claims of any other depositors or creditors of the depository
institution with which such account is maintained;
(iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution,
national banking association or trust company acting in its
fiduciary capacity; or
(iv) an account otherwise acceptable to the Rating Agencies
without reduction or withdrawal of its then current ratings of the
Certificates as evidenced by a letter from each Rating Agency to the
Trustee.
Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": The Class A-R Certificate and the
Private Certificates.
12
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Excess Loss": With respect to the Mortgage Loans, the amount of any (i)
Fraud Loss realized after the Fraud Loss Coverage Termination Date, (ii) Special
Hazard Loss realized after the Special Hazard Coverage Termination Date or (iii)
Bankruptcy Loss realized after the Bankruptcy Coverage Termination Date.
"Expense Fee Rate": With respect to each Mortgage Loan, the per annum
rate at which the related Expense Fees accrue, calculated on the Principal
Balance of such Mortgage Loan.
"Expense Fees": With respect to each Mortgage Loan, the sum of (x) the
Servicing Fee and (y) the Trustee Fee for such Mortgage Loan.
"FDIC": The Federal Deposit Insurance Corporation or any successor
thereto.
"Xxxxxx Mae": The Federal National Mortgage Association or any
successor thereto.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller or by the Servicer pursuant to or as contemplated by Section 2.03
or 10.01 hereof), a determination made by the Servicer (and with respect to
which written confirmation by a Servicing Officer shall have been received by
the Trustee) that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.
"Foreclosure Price": The amount reasonably expected to be received from
the sale of a Mortgaged Property net of any expenses associated with foreclosure
proceedings.
"Fraud Loan": A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
"Fraud Losses": Realized Losses on any Mortgage Loans sustained by
reason of a default arising from fraud, dishonesty or misrepresentation in
connection with that Mortgage Loan.
"Fraud Loss Coverage Amount": As of the Closing Date, $7,600,189 subject
to reduction from time to time by the amount of Fraud Losses allocated to the
Certificates. In addition, on each anniversary of the Cut-off Date, the Fraud
Loss Coverage Amount will be reduced as follows: (a) on the first, second, third
and fourth anniversaries of the Cut-off Date, to an amount equal to the lesser
of (i) 1.00% of the then current Mortgage Pool Balance and (ii) the excess of
the Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off
Date (or, in the case of the first anniversary, as of the Cut-off Date) over the
cumulative amount of Fraud Losses allocated to the Subordinate Certificates
since such preceding anniversary or the Cut-off Date, as the case may be; and
(b) on the fifth anniversary of the Cut-off Date, to zero; provided, however,
that the Fraud Loss Coverage Amount may also be reduced pursuant to a letter
from each Rating
13
Agency to the Trustee to the effect that any such reduction will not result
in the downgrading of the then current ratings assigned by such Rating
Agency to the Classes of Senior Certificates.
"Fraud Loss Coverage Termination Date": The date on which the Fraud
Loss Coverage Amount is reduced to zero.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation or any
successor thereto.
"GCD": Greenwich Capital Derivatives, Inc. or any successor thereto.
"Gross Margin": With respect to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note that is added to the applicable Index on
each Adjustment Date in accordance with the terms of the related Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan.
"Group I Mortgage Loan": A Mortgage Loan that is identified as such on
the Mortgage Loan Schedule.
"Group II Mortgage Loan": A Mortgage Loan that is identified as such on
the Mortgage Loan Schedule.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Servicer and their
respective Affiliates, (b) does not have any direct financial interest in or any
material indirect financial interest in the Depositor or the Servicer or any
Affiliate thereof, and (c) is not connected with the Depositor or the Servicer
or any Affiliate thereof as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions; provided,
however, that a Person shall not fail to be Independent of the Depositor or the
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor or the
Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to the REMIC
within the meaning of Section 856(d)(3) of the Code if the REMIC were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as the REMIC does
not receive or derive any income from such Person and provided that the
relationship between such Person and the REMIC is at arm's length, all within
the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other
Person (including the Servicer) if the Trustee has received an Opinion of
Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
14
"Index": With respect to each Mortgage Loan and each Adjustment Date,
the index specified in the related Mortgage Note.
"Initial Bankruptcy Coverage Amount": $100,000.
"Initial Certificate Principal Balance": With respect to any Certificate
other than a Class X Certificate, the amount designated "Initial Certificate
Principal Balance" on the face thereof.
"Initial Certificate Notional Balance": With respect to any Class X
Certificate, the amount designated "Initial Certificate Notional Balance" on the
face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the related Mortgagor in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Distributable Amount": With respect to any Distribution Date
and each Class of Certificates, the sum of (i) the Monthly Interest
Distributable Amount for that Class and (ii) the Unpaid Interest Shortfall
Amount for that Class.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"Latest Possible Maturity Date": As determined as of the Cut-off Date,
the Distribution Date following the fourth anniversary of the scheduled maturity
date of the Mortgage Loan having the latest scheduled maturity date as of the
Cut-off Date.
"LIBOR Business Day": Any day on which banks in London, England and New
York, New York are open and conducting transactions in foreign currency and
exchange.
"LIBOR Certificates": The Class A-2 and Class B-1 Certificates.
"LIBOR Determination Date": With respect to the LIBOR Certificates and
each Accrual Period after the initial Accrual Period, the second LIBOR Business
Day preceding the commencement of such Accrual Period.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Prepayment
Period, that all Liquidation Proceeds which it expects to recover with respect
to the liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
15
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01 hereof.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.23 or Section 10.01 hereof.
"Liquidation Report": A report to be provided by the Servicer upon
request by the Trustee substantially in the form attached hereto in Exhibit M.
"Loan-to-Value Ratio": With respect to each Mortgage Loan and any date
of determination, a fraction, expressed as a percentage, the numerator of which
is the Principal Balance of the Mortgage Loan at such date of determination and
the denominator of which is the Value of the related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the context
requires.
"Loan Group Available Funds": With respect to each Loan Group and any
Distribution Date, an amount equal to (i) the sum of (a) the aggregate of the
related Monthly Payments received on or prior to the related Determination Date
(excluding Monthly Payments due in future Due Periods but received by the
related Determination Date), (b) Liquidation Proceeds, Insurance Proceeds,
Principal Prepayments and other unscheduled recoveries of principal and interest
in respect of the Mortgage Loans in that Loan Group received during the related
Prepayment Period, (c) the aggregate of any amounts received in respect of REO
Properties related to the Mortgage Loans in that Loan Group withdrawn from any
REO Account and deposited in the Collection Account for such Distribution Date,
(d) the aggregate of any amounts deposited in the Collection Account by the
Servicer in respect of Prepayment Interest Shortfalls with respect to the
Mortgage Loans in that Loan Group for that Distribution Date, (e) the aggregate
of the Purchase Prices and Substitution Adjustments related to the Mortgage
Loans in that Loan Group deposited in the Collection Account during the related
Prepayment Period, (f) the aggregate of any Advances related to the Mortgage
Loans in that Loan Group made by the Servicer for that Distribution Date, (g)
the aggregate of any advances related to the Mortgage Loans in that Loan Group
made by the Trustee for that Distribution Date pursuant to Section 7.02 hereof
and (h) the Termination Price allocable to such Loan Group on the Distribution
Date on which the Trust is terminated; minus (ii) the sum of (x) the amounts
related to the Mortgage Loans in that Loan Group reimbursable or payable to the
Servicer pursuant to Sections 3.11(a) and 6.03 hereof, (y) the amount payable to
the Trustee pursuant to Sections 3.11 (b), 7.02 and
16
8.05 hereof allocable to that Loan Group, on a pro rata basis, and (z)
amounts related to the Mortgage Loans in that Loan Group deposited in the
Collection Account or the Distribution Account, as the case may be, in error;
plus (iii) the amount of any Transfer Payment Received for that Distribution
Date; minus (iv) the amount of any Transfer Payment Made for that Distribution
Date.
"Loan Group Balance": As to each Loan Group and any Distribution Date,
the aggregate of the Principal Balances, as of the Due Date in the month
preceding the month in which such Distribution Date occurs, of the Mortgage
Loans in such Loan Group that were Outstanding Mortgage Loans on that Due Date.
"Loan Group I": At any time, the Group I Mortgage Loans in the aggregate
and any REO Properties acquired in respect thereof.
"Loan Group II": At any time, the Group II Mortgage Loans in the
aggregate and any REO Properties acquired in respect thereof.
"Losses": As defined in Section 9.03 hereof.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Seller certifying that the original Mortgage
Note has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note and indemnifying the Trust against any loss, cost or liability
resulting from the failure to deliver the original Mortgage Note) in the form of
Exhibit H hereto.
"LT Regular Interests": The Class XX-X-0, XX-X-0, XX-XX, XX-X-0, XX-X-0,
XX-X-0, XX-X-0, LT-B-5 and LT-B-6 Interests.
"Maintenance": With respect to any Cooperative Unit, the rent or fee
paid by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
"Majority Certificateholders": The Holders of Certificates evidencing at
least 51% of the Voting Rights.
"Maximum Mortgage Rate": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Mortgage Rate
thereunder.
"Minimum Mortgage Rate": With respect to each Mortgage Loan, the
percentage, if any, set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
"Monthly Interest Distributable Amount": With respect to each Class of
Certificates and for any Distribution Date, the amount of interest accrued
during the related Accrual Period at the related Pass-Through Rate on the
related Class Certificate Principal Balance or Class Certificate Notional
Balance, as applicable, immediately prior to that Distribution Date.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related
17
Mortgagor from time to time under the related Mortgage Note, determined: (a)
after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.01 hereof; and (c) on the assumption that
all other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's: Xxxxx'x Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) hereof as from time to time
held as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The Agreement between the Seller and
the Depositor, dated as of November 1, 2002, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in the Trust Fund on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule I.
The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth
the following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including
the state and five-digit ZIP code;
(iv) a code indicating whether the Mortgaged Property was
represented by the related Mortgagor, at the time of origination, as
being owner-occupied;
(v) a code indicating whether the Residential Dwelling
constituting the Mortgaged Property is (a) a detached one-family
dwelling, (b) a one-family dwelling in a PUD, (c) a condominium
unit, (d) a two- to four-unit residential property or (e) a
Cooperative Unit (and a code indicating whether the related
Cooperative Loan is an Unrecognized Cooperative Loan);
(vi) if the related Mortgage Note permits the Mortgagor to make
Monthly Payments of interest only for a specified period of time,
(a) the original number of such
18
specified Monthly Payments and (b) the remaining number of such Monthly
Payments as of the Cut-off Date;
(vii) [reserved];
(viii) the original months to maturity;
(ix) the stated remaining months to maturity from the Cut-off
Date based on the original amortization schedule;
(x) the Loan-to-Value Ratio at origination;
(xi) [reserved];
(xii) [reserved];
(xiii) the Mortgage Rate in effect immediately following the
Cut-off Date;
(xiv) the date on which the first Monthly Payment is or was due
on the Mortgage Loan;
(xv) the stated maturity date;
(xvi) the amount of the Monthly Payment at origination;
(xvii) the amount of the Monthly Payment due on the first Due
Date after the Cut-off Date;
(xviii) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xix) the original principal amount of the Mortgage Loan;
(xx) the Stated Principal Balance of the Mortgage Loan on the
Cut-off Date and a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, rate/term refinancing, cash-out
refinancing);
(xxi) the Mortgage Rate at origination;
(xxii) the Index and Gross Margin specified in related Mortgage
Note;
(xxiii) the next Adjustment Date;
(xxiv) the maximum Mortgage Rate;
(xxv) the rounding code;
(xxvi) the Value of the Mortgaged Property;
19
(xxvii) the sale price of the Mortgaged Property, if applicable;
(xxviii) [reserved]; and
(xxix) the program code.
The Mortgage Loan Schedule, as in effect from time to time, shall set
forth the following information, as of the Cut-off Date with respect to the
Mortgage Loans sold by the Seller in the aggregate and by Loan Group: (1) the
number of Mortgage Loans; (2) the current Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Seller in accordance with
the provisions of this Agreement.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool Balance": As of any date, the aggregate of the Principal
Balances of all the Mortgage Loans as of that date.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate (A) as of any date
of determination until the first Adjustment Date following the Cut-off Date
shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate
in effect immediately following the Cut-off Date and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date, to equal the sum, rounded to the next highest 0.125% (as
provided in the Mortgage Note), of the applicable Index, determined as set forth
in the related Mortgage Note, plus the related Gross Margin subject to the
limitations set forth in the related Mortgage Note. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of (x) an Estate in Real Property
improved by a Residential Dwelling or (y) in the case of a Cooperative Loan, the
related Coop Shares and Proprietary Lease.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan
or any other disposition of related Mortgaged Property (including REO Property)
the related Liquidation Proceeds net of Advances, Servicing Advances, Servicing
Fees and any other accrued and unpaid servicing fees received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property.
20
"Net Loan Rate": With respect to any Mortgage Loan (or the related REO
Property), as of any date of determination, a per annum rate of interest equal
to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
"Net Prepayment Interest Shortfall": As to any Distribution Date, the
amount by which the aggregate of the Prepayment Interest Shortfalls during the
related Prepayment Period exceeds an amount equal to the aggregate Servicing
Fee for such Distribution Date before reduction of the Servicing Fee in
respect of such Prepayment Interest Shortfalls in accordance with Section 3.18
hereof.
"Net WAC": With respect to each Loan Group and any Distribution Date,
the per annum rate equal to (x) the average of the Mortgage Rates of the
Mortgage Loans in that Loan Group minus (y) the average of the Expense Fee
Rates of such Mortgage Loans, in each case as of the first day of the month
preceding the month in which such Distribution Date occurs (or, in the case of
the first Distribution Date, as of the Cut-off Date), weighted on the basis of
the Principal Balances of the related Mortgage Loans as of the first day of
the month immediately preceding the month of such Distribution Date.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Servicer, will not ultimately be recoverable from Late
Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
"OC Condition": As to each Loan Group and any Distribution Date prior to
the Senior Credit Support Depletion Date, an "OC Condition" shall exist if the
aggregate Class Certificate Principal Balance of the Senior Certificates (other
than the Class X Certificates) in the related Senior Certificate Group is zero
and either (i) the Aggregate Subordinate Percentage on such Distribution Date is
less than 200% of the Aggregate Subordinate Percentage on the Closing Date or
(ii) the aggregate of the Principal Balances of all Mortgage Loans Delinquent 60
days or more (including Mortgage Loans in foreclosure and REO Property),
averaged over the preceding six-month period, as a percentage of the aggregate
of the Class Certificate Principal Balances of the Subordinate Certificates,
equals or exceeds 50%.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"One-Month LIBOR": With respect to the LIBOR Certificates and each
related Accrual Period other than the initial Accrual Period, the rate
determined by the Trustee on the related LIBOR Determination Date on the basis
of the interbank offered rate for one-month United States dollar deposits in the
London market as quoted on Telerate Screen 3750, as of 11:00 a.m. (London time)
on such LIBOR Determination Date. The One-Month LIBOR value for the initial
21
Accrual Period shall be 1.44% per annum. If on any LIBOR Determination Date
One-Month LIBOR does not appear on Telerate Screen 3750 or any page replacing
that page, One-Month LIBOR for the related Accrual Period shall be established
by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole
multiple of 0.001%); and
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for
the related Accrual Period shall be the higher of (x) One-Month
LIBOR as determined on the previous LIBOR Determination Date and (y)
the Reserve Interest Rate.
The establishment of One-Month LIBOR on each LIBOR Determination Date by
the Trustee and the Trustee's calculation of the rate of interest applicable to
each Class of Certificates for the related Interest Accrual Period shall (in the
absence of manifest error) be final and binding.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Servicer, acceptable
to the Trustee, except that any opinion of counsel relating to (a) the
qualification of the REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Servicer may opt to terminate this Agreement pursuant to Section 10.01 hereof.
"Original Applicable Credit Support Percentage": With respect to each
Class of Subordinate Certificates, the corresponding percentage set forth
below opposite its Class designation:
Class B-1 3.00%
Class B-2 2.00%
Class B-3 1.60%
Class B-4 1.00%
Class B-5 0.60%
Class B-6 0.30%
"Original Class Certificate Notional Balance": With respect to the
Class X Certificates, $380,009,446.99.
"Original Class Certificate Principal Balance": With respect to each
Class of Certificates (other than the Class X Certificates), the corresponding
amount set forth opposite the Class designation of such Class in the Preliminary
Statement.
"Original Subordinated Principal Balance": The aggregate of the
Original Class Certificate Principal Balances of the Classes of Subordinate
Certificates.
22
"Outstanding Mortgage Loan": As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero, which was not the subject of a
Prepayment in Full prior to such Due Date and which did not become a Liquidated
Mortgage Loan prior to such Due Date.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to each Class of Certificates and any
Distribution Date, the Class A-1 Pass-Through Rate, the Class A-2 Pass-Through
Rate, the Class X Pass-Through Rate, the Class A-R Pass-Through Rate or the
Subordinate Pass-Through Rate, as applicable.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05
hereof.
"Percentage Interest": With respect to any Certificate other than the
Class A-R Certificate, a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance or Initial Certificate
Notional Balance, as applicable, represented by such Certificate and the
denominator of which is the Original Class Certificate Principal Balance or
Original Class Certificate Notional Balance, as applicable, of the related
Class. With respect to the Class A-R Certificate, 100%.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Servicer, the Seller, the
Trustee or any of their respective Affiliates or for which an Affiliate of the
Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or
its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment
or contractual commitment providing for such investment, such
depository institution or trust company or its ultimate parent has a
short-term uninsured debt rating in one of the two highest available
rating categories of Moody's and in the highest rating category of
S&P and provided that each such investment has an original maturity
of no more than 365 days and (B) any other demand or time deposit or
deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting
as principal) with a short-term uninsured debt rating in one of the
two highest available rating categories of Moody's and in the
highest available rating category of S&P; provided, however, that
collateral transferred pursuant to such
23
repurchase obligation must be of the type described in clause (i)
above and must (A) be valued daily at current market prices plus
accrued interest or (B) pursuant to such valuation, be equal, at all
times, to 105% of the cash transferred by the Trustee in exchange for
such collateral and (C), be delivered to the Trustee or, if the
Trustee is supplying the collateral, an agent for the Trustee, in such
a manner as to accomplish perfection of a security interest in the
collateral by possession of certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by the
Rating Agencies in its highest long-term unsecured rating categories
at the time of such investment or contractual commitment providing
for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by the Rating Agencies in its
highest short-term unsecured debt rating available at the time of
such investment;
(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by
the Trustee or an affiliate thereof having the highest applicable
rating from S&P and Moody's; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies
in writing as a permitted investment of funds backing securities
having ratings equivalent to its highest initial ratings of the
Senior Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of the Class A-R Certificate
other than a Disqualified Organization, a non-U.S. Person or a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of a U.S. Person.
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Physical Certificates": The Private Certificates and the Class A-R
Certificate.
"Pool Balance": With respect to any Distribution Date, the aggregate
of the Loan Group Balances for such Distribution Date.
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"Prepayment Interest Shortfall": With respect to any Distribution Date
and each Mortgage Loan that was the subject of a Principal Prepayment during the
related Prepayment Period, an amount equal to the excess of one month's interest
at the applicable Net Loan Rate on the amount of such Principal Prepayment over
the amount of interest (adjusted to the Net Loan Rate) actually paid by the
related Mortgagor with respect to such Prepayment Period. The obligations of the
Servicer in respect of any Prepayment Interest Shortfall are set forth in
Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
"Principal Balance": As to any Mortgage Loan, other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance minus all
collections credited against the Principal Balance of such Mortgage Loan. For
purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have
a Principal Balance equal to the Principal Balance of the related Mortgage Loan
as of the final recovery of related Liquidation Proceeds and a Principal Balance
of zero thereafter. As to any REO Property and any day, the Principal Balance of
the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO
Property minus any REO Principal Amortization received with respect thereto on
or prior to such day.
"Principal Distribution Amount": With respect to each Loan Group and any
Distribution Date, (i) the sum of (a) each scheduled payment of principal
collected or advanced by the Servicer on the Mortgage Loans in that Loan Group
in respect of the related Due Period (without giving effect to Debt Service
Reductions or Deficient Valuations), (b) that portion of the Purchase Price,
representing principal of any repurchased Mortgage Loan in such Loan Group and
deposited to the Collection Account during the related Prepayment Period, (c)
the principal portion of any Substitution Adjustments relating to Mortgage Loans
in that Loan Group deposited in the Collection Account during the related
Prepayment Period, (d) the principal portion of all Insurance Proceeds received
during the related Prepayment Period with respect to Mortgage Loans in that Loan
Group which are not yet Liquidated Mortgage Loans, (e) the principal portion of
all related Net Liquidation Proceeds received during the related Prepayment
Period with respect to Liquidated Mortgage Loans in that Loan Group, (f) the
principal portion of all partial and full principal prepayments of Mortgage
Loans in that Loan Group received by the Servicer during the related Prepayment
Period, and (g) on the Distribution Date on which the Trust is to be terminated
pursuant to Section 10.01 hereof, the portion of the Termination Price in
respect of principal for that Loan Group; plus (ii) the amount of any Transfer
Payment Received for that Loan Group related to principal on that Distribution
Date; minus (iii) the amount of any Transfer Payment Made related to principal
for that Loan Group on that Distribution Date.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing the full amount
of scheduled interest due on any Due Date in any month or months subsequent to
the month of prepayment.
"Private Certificates": The Class B-4, Class B-5 and Class B-6
Certificates.
25
"Pro Rata Senior Percentage": For each Loan Group and any Distribution
Date, the percentage equivalent of a fraction the numerator of which is the
aggregate of the Class Certificate Principal Balances of the Classes of Senior
Certificates (other than the Class X Certificates) relating to that Loan Group
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans in that Loan Group on
such Distribution Date.
"Pro Rata Share": As to any Distribution Date, the Subordinated
Principal Distribution Amount and any Class of Subordinate Certificates, the
portion of the Subordinated Principal Distribution Amount allocable to such
Class, equal to the product of the Subordinated Principal Distribution Amount on
such date and a fraction, the numerator of which is the related Class
Certificate Principal Balance of that Class immediately prior to such
Distribution Date and the denominator of which is the aggregate of the Class
Certificate Principal Balances of all the Classes of Subordinate Certificates
immediately prior to such Distribution Date.
"Proprietary Lease": With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and the holder of the
related Coop Shares.
"Prospectus Supplement": That certain Prospectus Supplement dated
November 22, 2002 relating to the initial sale of the Class X-0, Xxxxx X-0,
Class X, Class A-R, Class B-1, Class B-2 and Class B-3 Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or Section 10.01
hereof, and as confirmed by an Officers' Certificate from the Servicer to the
Trustee, an amount equal to the sum of (i) 100% of the Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Principal
Balance at the applicable Mortgage Rate from the Due Date as to which interest
was last covered by a payment by the Mortgagor or an Advance by the Servicer,
which payment or Advance had as of the date of purchase been distributed
pursuant to Section 4.01 hereof, through the end of the calendar month in which
the purchase is to be effected, and (y) an REO Property, the sum of (1) accrued
interest on such Principal Balance at the applicable Mortgage Rate (or at the
applicable Net Loan Rate if the purchaser is the Servicer or if the purchaser is
the Seller and the Seller is the Servicer) from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an Advance by the
Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed as or to cover REO Imputed Interest
pursuant to Section 4.04 hereof, (iii) any unreimbursed Servicing Advances and
Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the Collection Account in
respect of such Mortgage Loan or REO Property pursuant to Section 3.23 hereof,
and (v) in the case of a Mortgage Loan required to be purchased pursuant to
Section 2.03 hereof, expenses reasonably incurred or to be incurred by the
Servicer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation.
26
"Qualified Insurer": A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
Xxxxxx Mae-approved mortgage insurer and having a claims paying ability rating
of at least "AA" or equivalent rating by a nationally recognized statistical
rating organization. Any replacement insurer with respect to a Mortgage Loan
must have at least as high a claims paying ability rating as the insurer it
replaces had on the Closing Date.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of, and not more than 5% less
than, the outstanding Principal Balance of the Deleted Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) have a
Maximum Mortgage Rate not less than the Maximum Mortgage Rate of the Deleted
Mortgage Loan, (iii) have a Gross Margin equal to or greater than the Gross
Margin of the Deleted Mortgage Loan, (iv) have the same Index as the Deleted
Mortgage Loan, (v) have the same Due Date as the Deleted Mortgage Loan, (vi)
have its next Adjustment Date not more than two months after the next Adjustment
Date of the Deleted Mortgage Loan, (vii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (viii) be current as of the date of substitution, (ix) have a
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have a
risk grading determined by the Seller to be at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (xi) have been underwritten or
re-underwritten by the Seller in accordance with the same underwriting criteria
and guidelines as the Deleted Mortgage Loan and (xii) conform to each
representation and warranty set forth in Section 2.04 hereof applicable to the
Deleted Mortgage Loan. In the event that one or more Mortgage Loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate Principal
Balances, the terms described in clause (vii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such Mortgage
Loan, the risk gradings described in clause (x) hereof shall be satisfied as to
each such Mortgage Loan, and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
"R-1 Interest": As defined in the Preliminary Statement.
"R-2 Interest": As defined in the Preliminary Statement.
"Rating Agencies": S&P and Xxxxx'x or their respective successors. If
either such agency or its successors shall no longer be in existence, "Rating
Agencies" shall include such nationally recognized statistical rating agency, or
other comparable Person, as shall have been designated by the Depositor, notice
of which designation shall be given to the Trustee and the Servicer.
27
"Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Mortgage Loan.
"Recognition Agreement": With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the Cooperative
Property.
"Record Date": With respect to each Distribution Date and each
Certificate (other than the LIBOR Certificates so long as they are represented
by Book-Entry Certificates), the last Business Day of the calendar month
preceding the month in which such Distribution Date occurs (except that, in the
case of the first Distribution Date, the Record Date for such Classes of
Certificates shall be the Closing Date); and with respect to each Distribution
Date and the LIBOR Certificates so long as they are represented by Book-Entry
Certificates, the Close of Business on the Business Day immediately preceding
such Distribution Date.
"Reference Banks": Leading banks selected by the Trustee which are
engaged in transactions in United States dollar deposits in the international
Eurocurrency market with an established place of business in London, England
which have been designated as such by the Trustee.
"Refinancing Mortgage Loan": Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
"Regular Certificate": Any Certificate other than the Class A-R
Certificate.
"Related Loan Group": With respect to the Class A-1 and Class A-R
Certificates, Loan Group I; and with respect to the Class A-2 Certificates, Loan
Group II.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Reductions": With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act, the amount, if any, by which (i) interest
collectible on that Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Mortgage
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1": As defined in the Preliminary Statement.
"REMIC 2": As defined in the Preliminary Statement.
"REMIC 1 Interest": As defined in the Preliminary Statement.
"REMIC 1 Regular Interest": As defined in the Preliminary Statement.
28
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Report": A report prepared by the Servicer and delivered to
the Trustee pursuant to Section 4.05 hereof.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Servicer in
respect of an REO Property pursuant to Section 3.23 hereof.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Loan Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the Due
Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 hereof that is allocable to
such REO Property) or otherwise, net of any portion of such amounts (i) payable
pursuant to Section 3.23 hereof in respect of the proper operation, management
and maintenance of such REO Property or (ii) payable or reimbursable to the
Servicer pursuant to Section 3.23 for unpaid Servicing Fees in respect of the
related Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23 hereof.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit F attached hereto.
"Reserve Interest Rate": With respect to any LIBOR Determination Date,
the rate per annum that the Trustee determines to be either (i) the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of 0.001%) of
the one-month United States dollar lending rates which banks in The City of New
York selected by the Trustee are quoting on the relevant LIBOR Determination
Date to the principal London offices of leading banks in the London interbank
market or (ii) in the event that the Trustee can determine no such arithmetic
mean, the lowest one-month United States dollar lending rate which such New York
banks
29
selected by the Trustee are quoting on such LIBOR Determination Date to
leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project, (iv) a manufactured home, (v)
a detached or attached one-family dwelling in a planned unit development or (vi)
a Cooperative Unit, none of which is a mobile home.
"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, any vice president, any assistant 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, with respect to a particular matter, to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
"Restricted Classes": As defined in Section 4.01(f).
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Seller": First Republic Bank, a Nevada state-chartered commercial
bank, and its successors in interest, in its capacity as seller under this
Agreement.
"Senior Certificate": Any one of the Class X-0, Xxxxx X-0, Class X
Certificates or the Class A-R Certificate as designated on the face thereof,
substantially in the form annexed hereto as Exhibit A, Exhibit B or Exhibit C,
as applicable, executed, authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and therein.
"Senior Certificate Group": Either (x) the Class A-1 Certificates and
the Class A-R Certificate or (y) the Class A-2 Certificates as applicable.
"Senior Certificateholder": Any Holder of a Senior Certificate.
"Senior Credit Support Depletion Date": The date on which the aggregate
of the Class Certificate Principal Balances of the Subordinate Certificates has
been reduced to zero.
"Senior Percentage": Except as described below, with respect to each
Loan Group and any Distribution Date occurring before December 2012, 100%. For
any Distribution Date occurring (i) before December 2012 but in or after
December 2005 on which the Two Times Test is satisfied, or (ii) in or after
December 2012, the Pro Rata Senior Percentage for that Loan Group. For any
Distribution Date occurring prior to December 2005 on which the Two Times Test
is satisfied, an amount equal to (a) the Pro Rata Senior Percentage for such
Loan Group plus (b) 50% of an amount equal to 100% minus the related Pro Rata
Senior Percentage.
30
"Senior Prepayment Percentage": With respect to each Loan Group and any
Distribution Date occurring before December 2012, 100%. Except as provided
herein, the Senior Prepayment Percentage for each Loan Group and any
Distribution Date occurring on or after the tenth anniversary of the first
Distribution Date will be as follows: (i) from December 2012 through November
2013, the Senior Percentage plus 70% of the related Subordinate Percentage for
that Distribution Date; (ii) from December 2013 through November 2014, the
related Senior Percentage plus 60% of the related Subordinate Percentage for
that Distribution Date; (iii) from December 2014 through November 2015, the
related Senior Percentage plus 40% of the related Subordinate Percentage for
that Distribution Date; (iv) from December 2015 through November 2016, the
related Senior Percentage plus 20% of the related Subordinate Percentage for
that Distribution Date; and (v) from and after December 2016, the related Senior
Percentage for that Distribution Date; provided, however, that there shall be no
reduction in the Senior Prepayment Percentage unless both Step Down Conditions
are satisfied; and provided, further, that if on any such Distribution Date the
Pro Rata Senior Percentage for such Loan Group exceeds the initial Pro Rata
Senior Percentage for such Loan Group, the Senior Prepayment Percentage for that
Distribution Date will again equal 100%.
Notwithstanding the above, if on any Distribution Date the Two Times
Test is satisfied, the Senior Prepayment Percentage for each Loan Group will
equal the related Senior Percentage.
"Senior Principal Distribution Amount": With respect to each Loan Group
and any Distribution Date, the sum of:
(1) the related Senior Percentage of all amounts described
in clauses (a) through (d) and (g) of the definition of "Principal
Distribution Amount" with respect to that Loan Group for that
Distribution Date;
(2) with respect to each Mortgage Loan in that Loan Group
which became a Liquidated Mortgage Loan during the related Prepayment
Period, the lesser of
(x) the related Senior Percentage of the Stated
Principal Balance of that Mortgage Loan and
(y) either
(i) the related Senior Prepayment
Percentage of the amount of the Net
Liquidation Proceeds allocable to principal
received with respect to that Mortgage Loan
or
(ii) if an Excess Loss was sustained with respect
to such Liquidated Mortgage Loan during such
Prepayment Period, the related Senior
Percentage of the amount of Net Liquidation
Proceeds allocable to principal received
with respect to that Mortgage Loan;
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(3) the related Senior Prepayment Percentage of the amounts
described in clause (f) of the definition of "Principal Distribution
Amount" for that Loan Group and Distribution Date; and
(4) the amount of any Transfer Payment Received for that
Loan Group related to principal and Distribution Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to any Mortgage Loan in that Loan Group which is not a Liquidated
Mortgage Loan, such Senior Principal Distribution Amount will be reduced on that
Distribution Date by the related Senior Percentage of the principal portion of
such Bankruptcy Loss.
"Senior Termination Date": For each Senior Certificate Group, the
Distribution Date on which the aggregate of the Class Certificate Principal
Balances of the related Senior Certificates (other than the Class X
Certificates) is reduced to zero.
"Servicer": First Republic Bank, a Nevada state-chartered commercial
bank, or any successor servicer appointed as herein provided.
"Servicer Affiliate": A Person (i) controlling, controlled by or under
common control with the Servicer or which is 50% or more owned by the Servicer
and (ii) which is qualified to service residential mortgage loans.
"Servicer Event of Termination": One or more of the events described in
Section 7.01 hereof.
"Servicer Remittance Date": With respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09 hereof.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Servicer in the performance of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property and (iv) compliance with the obligations under
Sections 3.01, 3.09, 3.16, and 3.23 hereof.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment made by the Mortgagor
during such calendar month, interest for the number of days covered by such
payment of interest) at the related Servicing Fee Rate on the same principal
amount on which interest on such Mortgage Loan accrues for such calendar month.
The Servicing Fee may be retained by any Sub-Servicer as its servicing
compensation.
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"Servicing Fee Rate": 0.30% per annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Servicer to the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01 hereof.
"Special Hazard Coverage Termination Date": The date on which the
Special Hazard Loss Coverage Amount is reduced to zero.
"Special Hazard Loss": Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss but not including (i) any loss of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained with respect to such Mortgaged Property pursuant to Section
3.14 hereof to the extent of the amount of such loss covered thereby, or (ii)
any loss caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Servicer or any of their agents or employees (without regard to any
portion of the loss not covered by any errors and omissions policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then only for
the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or uncontrolled,
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";
(e) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending or
expected attack:
1. by any government or sovereign power, de jure or de
facto, or by any authority maintaining or using military, naval or air
forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped power
or action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure
33
or destruction under quarantine or customs regulations, confiscation
by order of any government or public authority or risks of contraband or
illegal transportation or trade.
"Special Hazard Loss Coverage Amount": With respect to the first
Distribution Date, $11,400,283. With respect to any Distribution Date after
the first Distribution Date, the lesser of (a) the greatest of (i) 1% of the
aggregate of the Principal Balances of the Mortgage Loans, (ii) twice the
Principal Balance of the largest Mortgage Loan and (iii) the aggregate of the
Principal Balances of the Mortgage Loans secured by Mortgaged Properties
located in the single five-digit ZIP Code area in the State of California
having the highest aggregate Principal Balance of any such ZIP Code area and
(b) the Special Hazard Loss Coverage Amount as of the Closing Date less the
amount, if any, of Special Hazard Losses allocated to the Subordinate
Certificates since the Closing Date; provided, however, that the Special
Hazard Loss Coverage Amount may also be reduced pursuant to a letter from each
Rating Agency to the Trustee to the effect that any such reduction will not
result in the downgrading of the then current ratings assigned by such Rating
Agency to the Classes of Senior Certificates. All Principal Balances for the
purpose of this definition will be calculated as of the first day of the
calendar month preceding the month of such Distribution Date after giving
effect to scheduled payments on the Mortgage Loans then due, whether or not
paid.
"Special Hazard Mortgage Loan": A Liquidated Mortgage Loan as to which
a Special Hazard Loss has occurred.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as of
the Distribution Date in December 2002, the outstanding Principal Balance of
such Mortgage Loan as of the Cut-off Date, as reflected in the Mortgage Loan
Schedule (b) thereafter as of any date of determination up to and including the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such Mortgage Loan would be distributed, the outstanding principal
balance of such Mortgage Loan as of the Cut-off Date, as shown in the Mortgage
Loan Schedule, minus, in the case of each Mortgage Loan, the sum of (i) the
principal portion of each Monthly Payment due on a Due Date subsequent to the
Cut-off Date, to the extent received from the Mortgagor or advanced by the
Servicer and distributed pursuant to Section 4.01 hereof before such date of
determination, (ii) all Principal Prepayments received on or after the Cut-off
Date, to the extent distributed pursuant to Section 4.01 before such date of
determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by
the Servicer as recoveries of principal in accordance with the provisions of
Section 3.16 hereof, to the extent distributed pursuant to Section 4.01 before
such date of determination, and (iv) any Realized Loss incurred with respect
thereto as a result of a Deficient Valuation made during or prior to the
Prepayment Period for the most recent Distribution Date preceding such date of
determination; and (c) as of any date of determination subsequent to the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such Mortgage Loan would be distributed, zero. With respect to any
REO Property: (x) as of any date of determination up to and including the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, an amount (not less than
zero) equal to the Stated Principal Balance of the related Mortgage Loan as of
the date on which such REO Property was acquired on behalf of the Trust Fund,
minus the aggregate amount of REO Principal Amortization in respect of such REO
34
Property for all previously ended calendar months, to the extent distributed
pursuant to Section 4.01 before such date of determination; and (y) as of any
date of determination subsequent to the Distribution Date on which the proceeds,
if any, of a Liquidation Event with respect to such REO Property would be
distributed, zero.
"Step Down Conditions": Both (i) the outstanding Principal Balance of
all Mortgage Loans 60 days or more Delinquent (averaged over the preceding
six-month period), as a percentage of the aggregate of the Class Certificate
Principal Balances of the Classes of Subordinate Certificates on such
Distribution Date, does not equal or exceed 50% and (ii) cumulative Realized
Losses with respect to the Mortgage Loans do not exceed (a) with respect to
Distribution Date in December 2012, 30% of the Original Subordinated Principal
Balance, (b) with respect to the Distribution Date in December 2013, 35% of
the Original Subordinated Principal Balance, (c) with respect to Distribution
Date in December 2014, 40% of the Original Subordinated Principal Balance, (d)
with respect to the Distribution Date in December 2015, 45% of the Original
Subordinated Principal Balance and (e) with respect to the Distribution Date
in December 2016, 50% of the Original Subordinated Principal Balance.
"Subordinate Certificate": Any one of the Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 or Class B-6 Certificates as so designated on the face
thereof substantially in the form annexed hereto as Exhibit C, executed by the
Trustee and authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and therein.
"Subordinate Pass-Through Rate": With respect to (a) the Class B-1
Certificates, and (i) any Distribution Date to and including the Optional
Termination Date, a per annum rate equal to the sum of One-Month LIBOR plus
1.05%, subject to the Class B-1 Cap and (ii) any Distribution date after the
Optional Termination Date, a per annum rate equal to the sum of One-Month LIBOR
plus 1.575%, subject to the Class B-1 Cap; and (b) the Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates, each class of REMIC I Regular
Interests designated "LT-B" and any Distribution Date, the weighted average of
the Net WACs of Loan Group I and Loan Group II (weighted on the basis of their
respective Subordinated Loan Group Balances) for such Distribution Date.
"Subordinate Percentage": With respect to each Loan Group and any
Distribution Date, the difference between 100% and the Senior Percentage for
such Loan Group on such Distribution Date.
"Subordinate Prepayment Percentage": With respect to each Loan Group and
any Distribution Date, the difference between 100% and the Senior Prepayment
Percentage with respect to that Loan Group for that Distribution Date.
"Subordinate Principal Distribution Amount": With respect to each Loan
Group and any Distribution Date, an amount equal to (x) the sum of:
(1) the related Subordinate Percentage of all amounts
described in clauses (a) through (d) and (g) of the definition of
"Principal Distribution Amount" for that Loan Group and Distribution
Date;
35
(2) with respect to each Mortgage Loan in that Loan Group
which became a Liquidated Mortgage Loan during the related Prepayment
Period, the amount of the Net Liquidation Proceeds allocated to
principal received with respect thereto remaining after application
thereof pursuant to clause (2) of the definition of "Senior Principal
Distribution Amount" for that Loan Group and Distribution Date, up to
the related Subordinate Percentage of the Stated Principal Balance of
such Mortgage Loan; and
(3) the related Subordinate Prepayment Percentage of all
amounts described in clause (f) of the definition of "Principal
Distribution Amount" for that Loan Group and Distribution Date;
minus (y) any Transfer Payment Made related to principal for that Distribution
Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to any Mortgage Loan in the related Loan Group that is not a
Liquidated Mortgage Loan, such Subordinated Principal Distribution Amount will
be reduced on such Distribution Date by the related Subordinate Percentage of
the principal portion of such Bankruptcy Loss.
"Subordinated Loan Group Balance": For Loan Group I and any Distribution
Date, the excess of the Loan Group Balance of Loan Group I over the sum of the
Class Certificate Principal Balances of the Class A-1 Certificates and the Class
A-R Certificate immediately prior to such Distribution Date; and for Loan Group
II and any Distribution Date, the excess of the Loan Group Balance of Loan Group
II over the Class Certificate Principal Balance of the Class A-2 Certificates
immediately prior to such Distribution Date.
"Sub-Servicer": Any Person with which the Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Servicer.
"Sub-Servicing Agreement": The written contract between the Servicer
and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d) hereof.
"Swap Agreement": The transactions evidenced by the ISDA Master
Agreement, together with the Schedule, the Swap Confirmation and any related
documents thereto, dated as of the Closing Date, between GCD and the Auction
Administrator.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be
filed on behalf of the Trust in its capacity as a
36
REMIC under the REMIC Provisions, together with any and all other information
reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal tax
laws or under Applicable State and Local Income Tax Laws.
"Telerate Screen 3750": The display designated as page 3750 on Bridge
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying interbank offered rates of major London banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in the Class A-R Certificate.
"Transfer Affidavit": As defined in Section 5.02(e)(ii) hereof.
"Transfer Condition": As to each Loan Group and any Distribution Date
prior to the Senior Credit Support Depletion Date, the existence of an OC
Condition or a UC Condition. No Loan Group can have both an OC Condition and a
UC Condition simultaneously.
"Transfer Payment Made": As to a Loan Group and any Distribution Date
prior to the Senior Credit Support Depletion Date (so long as any Class of
Senior Certificates is still outstanding), payable from amounts otherwise due
the Subordinate Certificates, an amount equal to the following: (a) if an OC
Condition exists with respect to such Loan Group (unless a UC Condition exists
with respect to the other Loan Group), the Principal Distribution Amount for
such Loan Group (prior to any reduction for any Transfer Payment Made on such
Distribution Date) and Distribution Date; (b) if a UC Condition exists with
respect to the other Loan Group, the amount necessary to eliminate the UC
Condition in such other Loan Group plus any accrued but unpaid interest on the
related Senior Certificates and one month's interest on the UC at the related
Pass-Through Rate if necessary (prior to any reduction for any Transfer Payment
Made for such Distribution Date); or (c) otherwise, zero.
"Transfer Payment Received": As to a Loan Group and any Distribution
Date prior to the Senior Credit Support Depletion Date (so long as any Class of
Senior Certificates is still outstanding), an amount equal to the following: (a)
if such Loan Group has an OC Condition, zero; and (b) if such Loan Group has a
UC Condition or if the other Loan Group has an OC Condition, the amount of the
Transfer Payment Made for such Distribution Date by such other Loan Group.
"Trust": First Republic Mortgage Loan Trust 2002-FRB2, the trust
created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered
hereunder, with respect to which REMIC elections are to be made as specified
in the Preliminary Statement, such Trust Fund consisting of: (i) such Mortgage
Loans as from time to time are subject to this Agreement, together with the
Mortgage Files relating thereto, and together with all collections thereon and
proceeds thereof, (ii) any REO Property, together with all collections thereon
and proceeds thereof, (iii) the Trustee's rights with respect to the Mortgage
Loans under all insurance policies required to be maintained
37
pursuant to this Agreement and any proceeds thereof, (iv) the Depositor's
rights under the Mortgage Loan Purchase Agreement (including any security
interest created thereby) and (v) the Collection Account, the Distribution
Account and any REO Account (subject to the last sentence of this definition)
and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, the Trust Fund
specifically excludes (1) all payments and other collections of interest and
principal due on the Mortgage Loans on or before the Cut-off Date and (2) all
income and gain realized from Permitted Investments of funds on deposit in the
Collection Account, the Distribution Account and the REO Account.
"Trustee": Xxxxx Fargo Bank Minnesota, National Association, a
national banking association, or any successor trustee appointed as herein
provided.
"Trustee Fee": As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate of the
Principal Balances of all the Mortgage Loans as of the beginning of the
related Due Period.
"Trustee Fee Rate": 0.005% per annum.
"Two Times Test": As to any Distribution Date, (i) the Aggregate
Subordinate Percentage is at least two times the Aggregate Subordinate
Percentage as of the Closing Date; (ii) the aggregate of the Principal Balances
of all Mortgage Loans 60 days or more Delinquent (averaged over the preceding
six-month period), as a percentage of the aggregate of the Class Certificate
Principal Balances of the Subordinate Certificates, does not equal or exceed
50%; and (iii) cumulative Realized Losses do not exceed (a) 20% of the Original
Subordinated Principal Balance if such Distribution Date is prior to December
2005 or (b) 30% of the Original Subordinated Principal Balance if such
Distribution Date is in or after December 2005.
"UC Condition": As to each Loan Group and any Distribution Date prior
to the Senior Credit Support Depletion Date, a "UC Condition" shall exist if
the aggregate Class Certificate Principal Balance of the Senior Certificates
(other than the Class X Certificates) after principal distributions on such
Distribution Date but prior to any Transfer Payment Received on such
Distribution Date in the related Senior Certificate Group is greater than the
Loan Group Balance of the Related Loan Group as of the first day of the month
of such Distribution Date (such difference being "UC") and there is no UC
Condition in the other Loan Group.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14 hereof.
"United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation, partnership or other entity treated as a
corporation or partnership for federal income tax purposes (other than a
partnership that is not treated as a U.S. Person pursuant to any applicable
Treasury regulations) created or organized in, or under the laws of, the
United States, any state thereof or the District of Columbia, or an estate the
income of which from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United
38
States, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more
United States persons have authority to control all substantial decisions
of the trust. The term "United States" shall have the meaning set forth in
Section 7701 of the Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to each Class of
Certificates and (i) the first Distribution Date, zero, and (ii) any
Distribution Date after the first Distribution Date, the amount, if any, by
which (a) the sum of (1) the Monthly Interest Distributable Amount for that
Class outstanding Unpaid Interest Shortfall Amount, if any, for that Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed
on that Class in respect of interest pursuant to clause (a) of this definition
on the preceding Distribution Date.
"Unrecognized Cooperative Loan": A Cooperative Loan which is not
recognized by the related Cooperative Corporation.
"Value": With respect to any Mortgage Loan and the related Mortgaged
Property, the lesser of:
(i) the value of such Mortgaged Property as determined by an
appraisal made for the originator of the Mortgage Loan at the time
of origination of the Mortgage Loan by an appraiser who met the
minimum requirements of Xxxxxx Xxx and Xxxxxxx Mac; and
(ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan;
provided, however, that in the case of a Refinancing Mortgage Loan, such value
of the Mortgaged Property is based solely upon (i) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. For so long as the Class X
Certificates are outstanding, 1% of the voting rights shall be allocated to the
Class X Certificates (such Voting Rights to be allocated among the Holders of
the Class X Certificates in accordance with the respective Percentage Interests)
and the remainder of the voting rights (or 100% thereof when the Class X
Certificates are no longer outstanding) shall be allocated among the Classes of
Certificates other than the Class X Certificates, pro rata, based on a fraction,
expressed as a percentage, the numerator of which is the Class Certificate
Principal Balance of such Class and the denominator of which is the aggregate of
the Class Certificate Principal Balances then outstanding; provided, however,
that the Class A-R Certificate and the Subordinate Certificates shall not be
entitled to any voting rights for so long as any Senior Certificates (other than
the Class A-R Certificate) remain outstanding; and, provided, further, that when
none of the Regular Certificates is outstanding, 100% of the voting rights shall
be allocated to the Holder of the Class A-R Certificate. The voting rights
allocated to a Class of Certificates shall be allocated among all Holders of
such Class, pro rata, based on a fraction the numerator of which is the
Certificate Balance or Certificate Notional Balance of each Certificate of such
Class and the denominator of which is the Class Certificate Principal Balance or
Class Certificate Notional Balance of such Class.
39
Section 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or
added or any distributions are taken into account such definition or
calculation and any related definitions or calculations shall be determined
without duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right,
title and interest of the Depositor, including any security interest therein
for the benefit of the Depositor, in and to (i) each Mortgage Loan identified
on the Mortgage Loan Schedule, including the related Cut-off Date Principal
Balance, all interest and principal due thereon after the Cut-off Date and all
collections in respect of interest and principal due after the Cut-off Date;
(ii) any real property that secured each such Mortgage Loan and that has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; and (v) all other assets included or to be
included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
In connection with such transfer and assignment, the Seller, on behalf
of the Depositor, does hereby deliver on the Closing Date, unless otherwise
specified in this Section 2.01, to, and deposit with the Trustee the following
documents or instruments with respect to each Mortgage Loan (a "Mortgage File")
so transferred and assigned:
(i) the original Mortgage Note, endorsed either on its face or
by allonge attached thereto in the following form: "Pay to the order
of Xxxxx Fargo Bank Minnesota, National Association, as Trustee
under the Pooling and Servicing Agreement, dated as of November 1,
2002, Mortgage Loan Trust 2002-FRB2, Mortgage Pass-Through
Certificates, Series 2002-FRB2, without recourse", or with respect
to any lost Mortgage Note, an original Lost Note Affidavit stating
that the original Mortgage Note was lost, misplaced or destroyed,
together with a copy of the related Mortgage Note; provided,
however, that such substitutions of Lost Note Affidavits for
original Mortgage Notes may occur only with respect to Mortgage
Loans in each Loan Group, the aggregate Cut-off Date Principal
Balance of which is less than or equal to 2% of the Cut-off Date
Aggregate Principal Balance of such Loan Group;
(ii) except with respect to a Cooperative Loan and except as
provided below, the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with
40
evidence of recording thereon or, if such Mortgage or power of attorney
has been submitted for recording but has not been returned from the
applicable public recording office, has been lost or is not
otherwise available, a copy of such Mortgage or power of attorney,
as the case may be, certified to be a true and complete copy of the
original submitted for recording;
(iii) except with respect to a Cooperative Loan, an original
Assignment of Mortgage, in form and substance acceptable for
recording. The Mortgage shall be assigned to "Xxxxx Fargo Bank
Minnesota, National Association, as Trustee";
(iv) an original copy of any intervening Assignment of Mortgage
showing a complete chain of assignments;
(v) except with respect to a Cooperative Loan, the original or
a duplicate lender's title insurance policy or a certified copy
thereof;
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(vii) in the case of a Cooperative Loan other than a California
Cooperative Loan, the following documents or instruments:
(A) the original Coop Shares, together with an original
stock power in blank;
(B) the original executed Security Agreement or a copy
thereof;
(C) the original executed Proprietary Lease or a copy
thereof;
(D) the original executed Recognition Agreement or a copy
thereof;
(E) the original executed UCC-1 financing statement with
evidence of recording thereon which has been filed in all
places required to perfect the Seller's interest in the Coop
Shares and the Proprietary Lease; and
(F) the original executed UCC-3 financing statements or
other appropriate UCC financing statements required by state
law, evidencing a complete and unbroken line from the mortgagee
to the Trustee with evidence of recording thereon (or in a form
suitable for recordation); and
(viii) in the case of a California Cooperative Loan, the
following documents or instruments:
(A) the original Coop Shares, together with an original
stock power in blank;
(B) the original executed Security Agreement or a copy
thereof;
41
(C) the original executed Proprietary Lease or a copy
thereof;
(D) the original executed Recognition Agreement or a copy
thereof;
(E) the original executed leasehold deed of trust for the
related Mortgaged Property with evidence of recording thereon
or, if such leasehold deed of trust has been submitted for
recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available,
a copy of such leasehold deed of trust certified to be a true
and complete copy of the original submitted for recording;
(F) an original assignment of leasehold deed of trust, in
form and substance acceptable for recording, assigned to "Xxxxx
Fargo Bank Minnesota, National Association, as Trustee"; and
(G) an original copy of any intervening assignment of
leasehold deed of trust showing a complete chain of
assignments.
The Seller shall deliver the required documents to the Trustee prior to the
Closing Date.
The Trustee agrees to execute and deliver to the Depositor on or prior
to the Closing Date an acknowledgment of receipt of the original Mortgage Note
(with any exceptions noted), substantially in the form attached as Exhibit G-3
hereto.
If, as of the Closing Date, any of the documents referred to in
Section 2.01(ii) or (iv) above has been submitted for recording but either (x)
has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee, no later than the
Closing Date, of a copy of each such document certified by the Seller in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee, promptly upon receipt thereof, of either the original or a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original. If the original lender's title insurance
policy, or a certified copy thereof, was not delivered pursuant to Section
2.01(v) above, the Seller shall deliver or cause to be delivered to the
Trustee the original or a copy of a written commitment or interim binder or
preliminary report of title issued by the title insurance or escrow company,
with the original or a certified copy thereof to be delivered to the Trustee,
promptly upon receipt thereof. The Seller shall deliver or cause to be
delivered to the Trustee, promptly upon receipt thereof, any other documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan sold to the Depositor by the Seller, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 90 days to cure such defect or deliver such missing document to the
Trustee. If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute
42
for such Mortgage Loan in accordance with Section 2.03 hereof. If any
event that is described in clause (iii) or clause (iv) of the definition of
"Servicer Event of Termination" shall occur and be continuing, the Trustee
shall cause the Assignments of Mortgage referred to in Section 2.01(iii)
hereof and, to the extent necessary, in Section 2.01(iv) hereof to be recorded
at the Seller's expense; provided, however, that the Trustee need not cause to
be recorded any Assignment of Mortgage that relates to a Mortgaged Property
located in a jurisdiction under the laws of which, as evidenced by an Opinion
of Counsel delivered by the Seller to the Trustee and the Rating Agencies, the
recordation of such Assignment of Mortgage is not necessary to protect the
Trustee's interest in the related Mortgage Loan. The opinion set forth in Part
B clause (5) of the Opinion of Counsel to the Seller set forth as Exhibit N
hereto shall be deemed to satisfy the proviso to the preceding sentence. From
time to time, the Servicer will cause the recording of such Assignments of
Mortgage as the Servicer may deem appropriate to enable it to carry out its
servicing duties. The Trustee, at the Servicer's request and expense, shall
cooperate with the Servicer, in connection with such recording.
The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement.
The Servicer shall forward to the Trustee original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks
of their execution; provided, however, that the Servicer shall provide the
Trustee with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original
of any document submitted for recordation or a copy of such document certified
by the appropriate public recording office to be a true and complete copy of
the original within 270 days of its submission for recordation. In the event
that the Servicer cannot provide a copy of such document certified by the
public recording office within such 270 day period, the Servicer shall deliver
to the Trustee, within such 270 day period, an Officers' Certificate of the
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Trustee due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Trustee, if known, and,
upon receipt of a copy of such document certified by the public recording
office, the Servicer shall immediately deliver such document to the Trustee.
In the event the appropriate public recording office will not certify as to
the accuracy of such document, the Servicer shall deliver a copy of such
document certified by an officer of the Servicer to be a true and complete
copy of the original to the Trustee.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges the receipt, subject to the provisions of
Section 2.01 and subject to the review described below and any exceptions
noted on the exception report described in the next paragraph below, of the
documents referred to in Section 2.01 above and all other assets included in
the definition of "Trust Fund" that from time to time come into the possession
of the Trustee and declares that it holds and will hold such documents and the
other documents delivered to it constituting a Mortgage File, and that it
holds or will hold all such
43
assets and such other assets included in the definition of "Trust Fund" in
trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee further agrees, for the benefit of the Certificateholders,
to review each Mortgage File delivered to it and to certify and deliver to the
Depositor, the Servicer and each Rating Agency in substantially the form
attached hereto as Exhibit G-1, within 45 days after the Closing Date (or,
with respect to any document delivered after the Startup Day, within 45 days
of receipt and with respect to any Qualified Substitute Mortgage, within 45
days after the assignment thereof) that, as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto
as not being covered by such certification), (i) all documents required to be
delivered to it pursuant Section 2.01 of this Agreement are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged or torn and relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i) and (ii) of the Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage File.
It is herein acknowledged that, in conducting such review, the Trustee is
under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
Prior to the first anniversary date of this Agreement, the Trustee
shall deliver to the Depositor and the Servicer a final certification in the
form annexed hereto as Exhibit G-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon.
If, in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Trustee shall so notify the Seller, the Depositor and the Servicer.
In addition, upon the discovery by the Seller, the Depositor or the Servicer
(or upon receipt by the Trustee of written notification of such breach) of a
breach of any of the representations and warranties made by the Seller in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the
related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties to this
Agreement.
The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans, the related
Mortgage Notes and the related documents, conveying good title thereto free
and clear of any liens and encumbrances, from the Depositor to the Trustee and
that such property not be part of the Depositor's estate or property of the
Depositor in the event of any insolvency by the Depositor. In the event that
such conveyance is deemed to be, or to be made as security for, a loan, the
parties intend that the Depositor shall be deemed to have granted and does
hereby grant to the Trustee a first priority perfected security interest in
all of the Depositor's right, title and interest in and to the Mortgage Loans,
the related Mortgage Notes and the related documents, and that this Agreement
shall constitute a security agreement under applicable law.
44
Section 2.03. Repurchase or Substitution of Mortgage Loans by the
Seller.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or
of the breach by the Seller of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement or in Section 2.04 or Section 2.08 hereof
in respect of any Mortgage Loan which materially adversely affects the value
of that Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly notify the Seller and the Servicer of such defect,
missing document or breach and request that the Seller deliver such missing
document or cure such defect or breach within 90 days from the date that the
Seller was notified of such missing document, defect or breach, and if the
Seller does not deliver such missing document or cure such defect or breach in
all material respects during such period, the Trustee shall enforce the
Seller's obligation under the Mortgage Loan Purchase Agreement and cause the
Seller to repurchase that Mortgage Loan from the Trust Fund at the Purchase
Price on or prior to the Determination Date following the expiration of such
90 day period (subject to Section 2.03(e) below); provided, however, that, in
connection with any such breach that could not reasonably have been cured
within such 90 day period, if the Seller shall have commenced to cure such
breach within such 90 day period, the Seller shall be permitted to proceed
thereafter diligently and expeditiously to cure the same within the additional
period provided under the Mortgage Loan Purchase Agreement; and, provided
further, that, in the case of the breach of any representation, warranty or
covenant made by the Seller in Section 3.01 of the Mortgage Loan Purchase
Agreement, the Servicer shall be obligated to cure such breach or purchase the
affected Mortgage Loans. The Purchase Price for the repurchased Mortgage Loan
shall be deposited in the Collection Account, and the Trustee, upon receipt of
written certification from the Servicer of such deposit, shall release to the
Seller the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall furnish to it and as shall be necessary to vest in the Seller any
Mortgage Loan released pursuant hereto and the Trustee shall have no further
responsibility with regard to such Mortgage File (it being understood that the
Trustee shall have no responsibility for determining the sufficiency of such
assignment for its intended purpose). In lieu of repurchasing any such
Mortgage Loan as provided above, the Seller may cause such Mortgage Loan to be
removed from the Trust Fund (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d) below. It
is understood and agreed that the obligation of the Seller to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which
such a breach has occurred and is continuing shall constitute the sole remedy
against the Seller respecting such omission, defect or breach available to the
Trustee on behalf of the Certificateholders.
The Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement including, without limitation, any obligation
of the Seller to purchase a Mortgage Loan on account of missing or defective
documentation or on account of a breach of a representation, warranty or
covenant as described in this Section 2.03(a).
(b) [Reserved]
45
(c) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, the Servicer shall cure such breach in all material
respects.
(d) Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) above must be effected
prior to the last Business Day that is within two years after the Closing
Date. As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be
effected by the Seller delivering to the Trustee, for such Qualified
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the
Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01 hereof,
together with an Officers' Certificate stating that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Adjustment (as described below), if any, in connection with such
substitution. The Trustee shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within 45 days thereafter, shall review
such documents as specified in Section 2.02 hereof and deliver to the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit G-1, with
any exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Servicer a certification substantially in the
form of Exhibit G-2 hereto with respect to such Qualified Substitute Mortgage
Loan or Loans, with any exceptions noted thereon. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
are not part of the Trust Fund and will be retained by the Seller. For the
month of substitution, distributions to Certificateholders will reflect the
collections and recoveries in respect of such Deleted Mortgage Loan in the Due
Period preceding the month of substitution and the Depositor or the Seller, as
the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Seller
shall give or cause to be given written notice to the Certificateholders that
such substitution has taken place, shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, such Qualified Substitute Mortgage Loan or
Loans shall constitute part of the Trust Fund and shall be subject in all
respects to the terms of this Agreement and, in the case of a substitution
effected by the Seller, the Mortgage Loan Purchase Agreement, including, in
the case of a substitution effected by the Seller all representations and
warranties thereof included in the Mortgage Loan Purchase Agreement and all
representations and warranties thereof set forth in Section 2.04 hereof, in
each case as of the date of substitution.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (each, a "Substitution Adjustment"), if any, by which
the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate, as to each such Qualified Substitute Mortgage Loan, of the principal
balance thereof as of the date of substitution, together with one month's
interest on such principal balance at the applicable Net Loan Rate. On the date
of such substitution, the Seller shall deliver or cause to be delivered to the
Servicer for deposit in the Collection Account an amount equal to the related
Substitution Adjustment, if any, and the Trustee, upon receipt of
46
the related Qualified Substitute Mortgage Loan or Loans and certification by
the Servicer of such deposit, shall release to the Seller the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Seller shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee an Opinion of Counsel to the effect that such substitution (either
specifically or as a class of transactions) will not cause (a) any federal tax
to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or
on "contributions after the startup date" under Section 860G(d)(l) of the
Code, or (b) any REMIC created hereunder to fail to qualify as a REMIC at any
time that any Certificate is outstanding. If such Opinion of Counsel can not
be delivered, then such substitution may only be effected at such time as the
required Opinion of Counsel can be given.
(e) Upon discovery by the Seller, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code, the party discovering such fact shall within
two Business Days give written notice thereof to the other parties. In
connection therewith, the Seller shall repurchase or, subject to the
limitations set forth in Section 2.03(d), substitute one or more Qualified
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Any such repurchase or substitution shall be made in the same
manner as set forth in Section 2.03(a) above, if made by the Seller. The
Trustee shall reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty.
Section 2.04. Representations and Warranties of the Seller with
Respect to the Mortgage Loans.
The Seller hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that, as of the Closing Date or as of such
other date specifically provided herein, the representations and warranties
made by the Seller pursuant to Section 3.01 of the Mortgage Loan Purchase
Agreement are hereby being made to the Trustee and are true and correct as of
the Closing Date.
With respect to the representations and warranties incorporated in
this Section 2.04 that are made to the best of the Seller's knowledge or as to
which the Seller has no knowledge, if it is discovered by the Depositor, the
Seller, the Servicer or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan or the interest therein of the
Certificateholders then, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty being inaccurate
at the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
Within 90 days of its discovery or its receipt of notice of any such
missing or materially defective documentation or any such breach of a
representation or warranty, the Seller shall
47
promptly deliver such missing document or cure such defect or breach in all
material respects or, in the event such defect or breach cannot be
cured, the Seller shall repurchase the affected Mortgage Loan or cause the
removal of such Mortgage Loan from the Trust Fund and substitute for it one or
more Qualified Substitute Mortgage Loans, in either case, in accordance with
Section 2.03 hereof.
It is understood and agreed that the representations and warranties
incorporated in this Section 2.04 shall survive delivery of the Mortgage Files
to the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. Upon
discovery by any of the Depositor, the Servicer, the Seller or the Trustee of
a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of any Mortgage Loan or the
interests therein of the Certificateholders, the party discovering such breach
shall give prompt written notice to the other parties, and in no event later
than two Business Days from the date of such discovery. It is understood and
agreed that the obligations of the Seller set forth in Section 2.03(a) hereof
to cure, substitute for or repurchase a related Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement constitute the sole remedies available to the
Certificateholders or to the Trustee on their behalf respecting a breach of
the representations and warranties incorporated in this Section 2.04.
Section 2.05. Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the Trustee,
for the benefit of each of the Trustee, the Certificateholders and to the
Depositor that as of the Closing Date or as of such date specifically provided
herein:
(i) The Servicer is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation and has
all licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing or is exempt from such
licensure, qualification or requirement of good standing in each state
where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Servicer or is a condition to the enforceability
or validity of each Mortgage Loan; the Servicer has the power and
authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Servicer and the consummation of
the transactions contemplated hereby have been duly and validly
authorized and are part of its official records; this Agreement
constitutes the valid, binding and enforceable obligation of the
Servicer, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or the rights of federally
insured financial institutions; and all requisite corporate action has
been taken by the Servicer to make this Agreement valid and binding
upon the Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and
will not result in the breach of any term or provision of the charter
or by-laws of the Servicer or result in the breach of any term or
provision of, or conflict with or constitute a default under or result
in the
48
acceleration of any obligation under, any agreement, indenture
or loan or credit agreement or other instrument to which the
Servicer or its property is subject, or result in the violation
of any law, rule, regulation, order, judgment or decree to which
the Servicer or its property is subject;
(iii) The execution and delivery of this Agreement by the
Servicer and the performance and compliance with its obligations and
covenants hereunder do not require the consent or approval of any
governmental authority or, if such consent or approval is required, it
has been obtained;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Servicer,
constitute and will constitute valid, legal and binding obligations of
the Servicer, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, or the
rights of creditors of federally insured financial institutions, and
general principles of equity;
(v) The Servicer is a servicer approved by Xxxxxx Xxx and
Xxxxxxx Mac;
(vi) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vii) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Servicer that,
either individually or in the aggregate, (A) could reasonably be
expected to prohibit or materially and adversely affect the
performance by the Servicer of its obligations under, or validity or
enforceability of, this Agreement, or (B) could reasonably be expected
to result in any material impairment of the right or ability of the
Servicer to carry on its business substantially as now conducted, or
(C) could reasonably be expected to result in any material liability
on the part of the Servicer, or (D) would draw into question the
validity or enforceability of this Agreement or of any action taken or
to be taken in connection with the obligations of the Servicer
contemplated herein, or (E) would otherwise be likely to impair
materially the ability of the Servicer to perform under the terms of
this Agreement; and
(viii) Neither this Agreement nor any information, certificate of
an officer, statement furnished in writing or report delivered to the
Trustee by the Servicer in connection with the transactions
contemplated hereby contains any untrue statement of a material fact.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the Trustee,
the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer, the Seller or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of
the Certificateholders, the party discovering such
49
breach shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the Depositor, the Servicer, the
Seller and the Trustee.
Section 2.06. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general an except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security
interest, pledge, charge or other encumbrance or other interest of any
nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor is a
party or by which it or its properties may be bound, which default
might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which
might materially and adversely affect the properties or assets, taken
as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the
knowledge of the Depositor, constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party or by which the Depositor
is bound or to which any of the property or assets of the Depositor is
subject, nor will such actions result in any violation of the
provisions of the certificate of incorporation or by-laws of the
Depositor or, to the best of the Depositor's
50
knowledge without independent investigation, any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets
(except for such conflicts, breaches, violations and defaults as would
not have a material adverse effect on the ability of the Depositor to
perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as (a) may be required under State
securities or "blue sky" laws, (b) have been previously obtained or
(c) the failure of which to obtain would not have a material adverse
effect on the performance by the Depositor of its obligations under,
or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a
party or of which any of its properties is the subject: (a) which if
determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition
of the Depositor; (b) asserting the invalidity of this Agreement or
the Certificates; (c) seeking to prevent the issuance of the
Certificates or the consummation by the Depositor of any of the
transactions contemplated by this Agreement, as the case may be; or
(d) which might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability
of, this Agreement.
Section 2.06A. No Solicitations by the Depositor.
From and after the Closing Date, the Depositor agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Depositor's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan for any purpose; provided,
however, that it is understood and agreed that promotions undertaken by the
Depositor or any of its Affiliates which are directed to the customers of the
Depositor or its Affiliates or to the general public, including, without
limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this section, nor is the Depositor prohibited from responding to
unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor.
Section 2.07. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Mortgage Files, subject to the provisions of Sections
2.01 and 2.02 hereof, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
51
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.
Section 2.08. Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders that as of the Closing Date or as of such
date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a bank under the laws of the State of Nevada and has the
power and authority to own its assets and to transact the business in
which it is currently engaged. The Seller is duly qualified to do
business and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure to
so qualify would have a material adverse effect on (a) its business,
properties, assets or condition (financial or other), (b) the
performance of its obligations under this Agreement, (c) the value or
marketability of the related Mortgage Loans, or (d) its ability to
foreclose on the related Mortgaged Properties to the extent such
foreclosure is conducted by the Servicer.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement
which is part of its official records. When executed and delivered,
this Agreement will constitute the Seller's legal, valid and binding
obligations enforceable in accordance with its terms, except as
enforcement of such terms may be limited by (1) bankruptcy,
insolvency, reorganization, receivership, moratorium or similar laws
affecting the enforcement of creditors' rights generally and the
rights of creditors of federally insured financial institutions and by
the availability of equitable remedies, (2) general equity principles
(regardless of whether such enforcement is considered in a proceeding
in equity or at law) or (3) public policy considerations underlying
the securities laws, to the extent that such policy considerations
limit the enforceability of the provisions of this Agreement which
purport to provide indemnification from securities laws liabilities.
(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its
business as it is currently conducted. It is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement by
the Seller will not conflict with or result in a breach of, or
constitute a default under, any provision
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of any existing law or regulation or any order or decree of any
court applicable to the Seller or any of its properties or any
provision of its articles of incorporation, charter or by-laws, or
constitute a material breach of, or result in the creation or
imposition of any lien, charge or encumbrance upon any of its
properties pursuant to any mortgage, indenture, contract or other
agreement to which it is a party or by which it may be bound.
(v) No certificate of an officer, written statement or written
report delivered pursuant to the terms hereof of the Seller contains
any untrue statement of a material fact or omits to state any material
fact necessary to make the certificate, statement or report not
misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans to the Depositor, nor
is the Seller aware of any pending insolvency of the Seller.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a
violation with respect to, any order or decree of any court, or any
order or regulation of any federal, state, municipal or governmental
agency having jurisdiction, which violation would materially and
adversely affect the Seller's financial condition (financial or
otherwise) or operations, or materially and adversely affect the
performance of any of its duties hereunder.
(ix) There are no actions or proceedings against the Seller, or
pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal; nor, to the Seller's
knowledge, are there any investigations (i) that, if determined
adversely, would prohibit the Seller from entering into this
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) that, if
determined adversely, would prohibit or materially and adversely
affect the Seller's ability to perform any of its respective
obligations under, or the validity or enforceability of, this
Agreement.
(x) The Seller did not transfer the Mortgage Loans to the
Depositor with any intent to hinder, delay or defraud any of its
creditors.
(xi) The Seller acquired title to the Mortgage Loans in good
faith, without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller to the Depositor are not subject
to the bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(xiii) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement.
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Section 2.09. Covenants of the Seller. The Seller hereby covenants
that, except for the transfer hereunder, the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any lien on any Mortgage Loan, or any interest therein; the
Seller will notify the Trustee, as assignee of the Depositor, and the Servicer
of the existence of any lien on any Mortgage Loan immediately upon discovery
thereof, and the Seller will defend the right, title and interest of the
Trust, as assignee of the Depositor, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Seller;
provided, however, that nothing in this Section 2.09 shall prevent or be
deemed to prohibit the Seller from suffering to exist upon any of the Mortgage
Loans any liens for municipal or other local taxes and other governmental
charges if such taxes or governmental charges shall not at the time be due and
payable or if the Seller shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
Section 3.01. Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans on behalf
of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment)
in accordance with the terms of this Agreement and the Mortgage Loans and, to
the extent consistent with such terms, in the same manner in which it services
and administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Sub-Servicer
or any Affiliate of the Servicer or any Sub-Servicer may have
with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by
the Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the Mortgage Loans, the Servicer shall have
full power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02 hereof, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary
or desirable. Without limiting the generality of the foregoing, the Servicer
in its own name or in the name of a Sub-Servicer is hereby authorized and
empowered by the Trustee, when the Servicer believes it appropriate in its
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best judgment in accordance with the servicing standards set forth above, to
execute and deliver, on behalf of the Certificateholders and the Trustee, and
upon notice to the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu
of foreclosure so as to convert the ownership of such properties, and to hold
or cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Servicer shall service and administer the Mortgage
Loans in accordance with applicable state and federal law and shall provide to
the Mortgagors any reports required to be provided to them thereby. The
Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.17 hereof, the Trustee shall execute,
at the written request of the Servicer, and furnish to the Servicer and any
Sub-Servicer any special or limited powers of attorney and other documents
prepared by the Servicer and necessary or appropriate to enable the Servicer
or any Sub-Servicer to carry out their servicing and administrative duties
hereunder; provided, however, such limited powers of attorney or other
documents shall be prepared by the Servicer and submitted to the Trustee for
execution. The Trustee shall not be liable for the actions of the Servicer or
any Sub-Servicers under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes
and assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11
hereof. Any cost incurred by the Servicer or by Sub-Servicers in effecting the
timely payment of taxes and assessments on a Mortgaged Property shall not, for
the purpose of calculating distributions to Certificateholders, be added to
the unpaid Principal Balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan and
the Servicer shall not (i) permit any modification with respect to any
Mortgage Loan that would change the Mortgage Rate, reduce or increase the
Principal Balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such Mortgage Loan (unless, as
provided in Section 3.07 hereof, the Mortgagor is in default with respect to
the Mortgage Loan or such default is, in the judgment of the Servicer,
reasonably foreseeable) or (ii) permit any modification, waiver or amendment
of any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury
regulations promulgated thereunder in connection with the REMIC regulations)
and (B) cause an Adverse REMIC Event.
The Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release the Servicer from the
responsibilities or liabilities arising under this Agreement.
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Section 3.02. Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by the Rating Agencies of the rating on any Class of Certificates
and the Servicer provides written notification to the Trustee of each such
Sub-Servicing Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a mortgage servicer approved by Xxxxxx Xxx or Xxxxxxx Mac.
Each Sub-Servicing Agreement must impose on the Sub-Servicer requirements
conforming to the provisions set forth in Section 3.08 hereof and provide for
servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Sub-Servicing Agreement and will be familiar
with the terms thereof. The terms of any Sub-Servicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and
the Sub-Servicers may enter into and make amendments to the Sub-Servicing
Agreements or enter into different forms of Sub-Servicing Agreements;
provided, however, that any such amendments or different forms shall be
consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights; provided, further, that the consent of
the Holders of Certificates entitled to at least 66% of the Voting Rights
shall not be required (i) to cure any ambiguity or defect in a Sub-Servicing
Agreement, (ii) to correct, modify or supplement any provisions of a
Sub-Servicing Agreement, or (iii) to make any other provisions with respect to
matters or questions arising under a Sub-Servicing Agreement, which, in each
case, shall not be inconsistent with the provisions of this Agreement. Any
variation without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights from the provisions set forth in Section 3.08
hereof relating to insurance or priority requirements of Sub-Servicing
Accounts, or credits and charges to the Sub-Servicing Accounts or the timing
and amount of remittances by the Sub-Servicers to the Servicer, are
conclusively deemed to be inconsistent with this Agreement and therefore
prohibited. The Servicer shall deliver to the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof,
promptly upon the Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement
including, without limitation, any obligation to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were
it the owner of the related Mortgage Loans. The Servicer shall pay the costs
of such enforcement at its own expense, and shall be reimbursed therefor only
(i) from a general recovery resulting from such enforcement, to the extent, if
any, that such recovery exceeds all
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amounts due in respect of the related Mortgage Loans, or (ii) from a
specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed.
Section 3.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Servicer without any act or deed on the part of such Sub-Servicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Sub-Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 3.02 hereof.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Servicer or the Trustee (if the
Trustee is acting as successor Servicer) without fee, in accordance with the
terms of this Agreement, in the event that the Servicer (or the Trustee, if
such party is then acting as successor Servicer) shall, for any reason, no
longer be the Servicer (including termination due to a Servicer Event of
Termination).
Section 3.04. Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee and the Certificateholders for the servicing and administering of the
Mortgage Loans in accordance with the provisions of Section 3.01 hereof
without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled to enter into any agreement
with a Sub-Servicer for indemnification of the Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify
such indemnification.
Section 3.05. No Contractual Relationship Between Sub-Servicers and
the Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Trustee and the Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section 3.06
hereof. The Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.
Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee.
In the event the Servicer shall for any reason no longer be the Servicer
(including by reason of the occurrence of a Servicer Event of Termination), the
Trustee shall thereupon assume
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all of the rights and obligations of the Servicer under each Sub-Servicing
Agreement that the Servicer may have entered into, unless the Trustee elects
to terminate any Sub-Servicing Agreement in accordance with its terms as
provided in Section 3.03 hereof. Upon such assumption, the Trustee (or the
successor Servicer appointed pursuant to Section 7.02 hereof) shall be deemed,
subject to Section 3.03, to have assumed all of the departing Servicer's
interest therein and to have replaced the departing Servicer as a party to
each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the
departing Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement that arose before it ceased to
be the Servicer and (ii) neither the Trustee nor any successor Servicer shall
be deemed to have assumed any liability or obligation of the Servicer that
arose before it ceased to be the Servicer.
The Servicer at its expense shall deliver to the assuming party all
documents and records relating to each Sub-Servicing Agreement and the
Mortgage Loans then being serviced and an accounting of amounts collected and
held by or on behalf of it, and otherwise use its best efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.
Section 3.07. Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater
than 180 days; provided, however, that any extension pursuant to clause (ii)
above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below. In the event
of any such arrangement pursuant to clause (ii) above, the Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to
Section 4.04 hereof and in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangement.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable, the Servicer, consistent with the standards set forth in Section
3.01 hereof, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less
than the Stated Principal Balance in final satisfaction of such Mortgage Loan,
or consent to the postponement of strict compliance with any such term or
otherwise grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest, postponements,
or indulgences collectively referred to herein as "forbearance"); provided,
however, that in no event shall the Servicer grant any such forbearance (other
than as permitted by the second sentence of this Section) with respect to any
one Mortgage Loan more than once in any 12-month period or more than three
times over the life of such Mortgage Loan. The Servicer's analysis supporting
any forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 hereof
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(including the standard that such forbearance will maximize the timely and
complete recovery of principal and interest on the Mortgage Notes) shall be
reflected in writing in the Mortgage File.
Section 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
The Servicer shall establish and maintain, or cause to be established
and maintained, one or more accounts (the "Servicing Accounts"), into which
all Escrow Payments shall be deposited and retained. Servicing Accounts shall
be Eligible Accounts. The Servicer shall deposit in the clearing account in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and
in no event more than one Business Day after the Servicer's receipt thereof,
all Escrow Payments collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Servicing Accounts, in no event
more than two Business Days after the receipt of such Escrow Payments, all
Escrow Payments collected on account of the Mortgage Loans for the purpose of
effecting the timely payment of any such items as required under the terms of
this Agreement. Withdrawals of amounts from a Servicing Account may be made
only to (i) effect payment of taxes, assessments, hazard insurance premiums,
and comparable items in a manner and at a time that assures that the lien
priority of the Mortgage is not jeopardized (or, with respect to the payment
of taxes, in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien); (ii)
reimburse the Servicer (or a Sub-Servicer to the extent provided in the
related Sub-Servicing Agreement) out of related collections for any Servicing
Advances made pursuant to Section 3.01 hereof (with respect to taxes and
assessments) and Section 3.14 hereof (with respect to hazard insurance); (iii)
refund to Mortgagors any sums as may be determined to be overages; (iv) pay
interest, if required and as described below, to Mortgagors on balances in the
Servicing Account; or (v) clear and terminate the Servicing Account at the
termination of the Servicer's obligations and responsibilities in respect of
the Mortgage Loans under this Agreement in accordance with Article X hereof.
The Servicer will be responsible for the administration of the Servicing
Accounts and will be obligated to make Servicing Advances to such accounts
when and as necessary to avoid the lapse
59
of insurance coverage on the Mortgaged Property, or which the Servicer
knows, or in the exercise of the required standard of care of the Servicer
hereunder should know, is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien. If
any such payment has not been made and the Servicer receives notice of a tax
lien with respect to the Mortgage being imposed, the Servicer will, within ten
business days of such notice, advance or cause to be advanced funds necessary
to discharge such lien on the Mortgaged Property. As part of its servicing
duties, the Servicer or Sub-Servicers shall pay to the Mortgagors interest on
funds in the Servicing Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Servicing Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor.
Section 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts
(such account or accounts, the "Collection Account"), held in trust for the
benefit of the Trustee and the Certificateholders. The Servicer shall deposit
into the Collection Account, no later than two Business Days following the
Closing Date, any amounts representing payments of principal due in respect of
the Mortgage Loans on or after the Cut-off Date and received by the Servicer
prior to the Closing Date and any amounts representing payments of interest
due in respect of the Mortgage Loans after the Cut-off Date and received by
the Servicer prior to the Closing Date. Thereafter, on behalf of the Trust
Fund, the Servicer shall deposit or cause to be deposited in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, and shall thereafter deposit in the Collection Account, in no event
more than two Business Days after the Servicer's receipt thereof, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than
in respect of principal or interest on the Mortgage Loans due on or before the
Cut-off Date) or payments (other than Principal Prepayments) received by it on
or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and
amounts paid in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 10.01 hereof);
(iv) any amounts required to be deposited pursuant to Section
3.12 hereof in connection with any losses realized on Permitted
Investments with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to the second paragraph of Section 3.14(a) hereof in respect of any
blanket policy deductibles;
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(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with Section 2.03 or Section 10.01 hereof; and
(vii) all amounts required to be deposited in connection with
Substitution Adjustments pursuant to Section 2.03 hereof.
The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
assumption fees, insufficient funds charges, prepayment premiums or other
ancillary income need not be deposited by the Servicer in the Collection Account
and may be retained by the Servicer as additional compensation. In the event the
Servicer shall deposit in the Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account on or before the Close of Business New York time on the Servicer
Remittance Date, that portion of the Available Funds (calculated without
regard to the references in the definition thereof to amounts that may be
withdrawn from the Distribution Account) for the related Distribution Date
then on deposit in the Collection Account.
(c) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12
hereof. The Servicer shall give notice to the Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. The Trustee shall give notice to the Servicer and the Depositor of
the location of the Distribution Account when established and prior to any
change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Servicer to the Trustee for deposit in an account (which may be the
Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held in the Distribution Account pursuant to this subsection (d). In the event
the Servicer shall deliver to the Trustee for deposit in the Distribution
Account any amount not required to be deposited therein, it may at any time
request that the Trustee withdraw such amount from the Distribution Account
and remit to it any such amount, any provision herein to the contrary
notwithstanding. In addition, the Servicer, with respect to items (i) through
(iv) below, shall deliver to the Trustee from time to time for deposit, and
the Trustee, with respect to items (i) through (iv) below, shall so deposit,
in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.05 hereof;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) hereof in connection with any REO Property;
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(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01 hereof;
and
(iv) any Compensating Interest to be deposited pursuant to
Section 3.24 hereof in connection with any Prepayment Interest
Shortfall.
(e) [Reserved].
(f) The Servicer shall deposit in the Collection Account any amounts
required to be deposited pursuant to Section 3.12(b) hereof in connection with
losses realized on Permitted Investments with respect to funds held in the
Collection Account.
Section 3.11. Withdrawals from the Collection Account and Distribution
Account.
(a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in
Section 4.05 hereof:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) hereof or permitted to be so remitted pursuant to the first
sentence of Section 3.10(d) hereof;
(ii) subject to Section 3.16(d) hereof, to reimburse the Servicer
for Advances, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of
Monthly Payments, Liquidation Proceeds and Insurance Proceeds on
Mortgage Loans with respect to which such Advances were made in
accordance with the provisions of Section 4.05;
(iii) subject to Section 3.16(d), to pay the Servicer or any
Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan, and (c) any
Servicing Advances with respect to the final liquidation of a Mortgage
Loan that are Nonrecoverable Advances, but only to the extent that
Late Collections, Liquidation Proceeds and Insurance Proceeds received
with respect to such Mortgage Loan are insufficient to reimburse the
Servicer or any Sub-Servicer for Servicing Advances;
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any
interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Servicer or the Seller, as applicable, with
respect to each related Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 hereof all amounts
received thereon subsequent to the date of substitution;
(vi) to reimburse the Servicer for any Advance previously made
which the Servicer has determined to be a Nonrecoverable Advance in
accordance with the provisions of Section 4.05;
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(vii) to pay, or to reimburse the Servicer for Servicing Advances
in respect of expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.16(b) hereof;
(viii) to pay or reimburse the Servicer and the Trustee pursuant
to Section 9.01(c) and 9.01(f), respectively;
(ix) to pay or reimburse the Servicer for certain indemnification
amounts as described in Section 6.03; and
(x) to clear and terminate the Collection Account pursuant to
Section 10.01 hereof.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The Servicer shall
provide written notification to the Trustee, on or prior to the next succeeding
Servicer Remittance Date, upon making any withdrawals from the Collection
Account pursuant to subclause (vi) above; provided, however, that an Officers'
Certificate in the form described under Section 4.05(d) shall suffice for such
written notification to the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions in accordance with Sections 4.01
and 8.05 hereof;
(ii) to pay any amounts in respect of taxes pursuant to
Section 9.01(g) hereof; and
(iii) to clear and terminate the Distribution Account
pursuant to Section 10.01 hereof.
Section 3.12. Investment of Funds in the Collection Account.
(a) The Servicer may direct any depository institution maintaining the
Collection Account (each such account, for purposes of this Section 3.12, an
"Investment Account"), to invest the funds in such Investment Account in one
or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. Funds in the Distribution Account may be
held uninvested. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds in an Investment Account
shall be made in the name of the Trustee (in its capacity as such), or in the
name of a nominee of the Trustee. The Trustee may be entitled to sole
possession or control (except with respect to investment direction of funds
held in the Collection Account and any income and gain realized thereon) over
each such investment, and any certificate, securities entitlement or other
instrument evidencing any such investment shall be delivered directly to the
Trustee or its agent, together with any document of transfer necessary
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to transfer title to such investment to the Trustee or its nominee. In the
event amounts on deposit in an Investment Account are at any time invested
in a Permitted Investment payable on demand, the Servicer shall:
(i) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the
lesser of (A) all amounts then payable thereunder and (B) the amount
required to be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account and any REO Account held by or on behalf
of the Servicer shall be for the benefit of the Servicer and shall be subject
to its withdrawal in accordance with Section 3.11 or Section 3.23 hereof, as
applicable. The Servicer shall deposit in the Collection Account or any REO
Account, as applicable, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(c) All benefit derived from funds deposited in the Distribution
Account shall be for the benefit of the Trustee.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment,
or if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
Section 3.13. [Reserved]
Section 3.14. Maintenance of Hazard Insurance Polices and Errors and
Omissions and Fidelity Coverage.
(a) Except in the case of Cooperative Loans, the Servicer shall cause
to be maintained for each Mortgage Loan fire insurance with extended coverage
on all buildings upon the Mortgaged Property in an amount which is at least
equal to the lesser of the current Principal Balance of such Mortgage Loan and
the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis, in
each case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard
insurance policy. The Servicer shall also cause to be maintained fire
insurance with extended coverage on each REO Property in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding
Principal Balance of the
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related Mortgage Loan at the time it became an REO Property. The Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to be
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11 hereof, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to
Section 3.23 hereof, if received in respect of an REO Property. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid Principal Balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any
time be in force and as shall require such additional insurance. If the
Mortgaged Property or REO Property is at any time in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards and flood insurance has been made available, the Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid
Principal Balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
If a Mortgage is secured by a unit in a condominium, the Servicer
shall have received a certificate of insurance evidencing a master policy held
by the owner's association and naming the Servicer as loss payee. All policies
required hereunder shall name the Servicer as loss payee and shall be endorsed
with standard mortgage clauses, which shall provide for at least 30 days'
prior written notice of any cancellation, reduction in amount or material
change in coverage. The Servicer shall not interfere with the Mortgagor's
freedom of choice in selecting an insurance carrier or agent; provided,
however, that the Servicer shall not accept any such insurance policies from
insurance companies unless such companies satisfy the requirements of Xxxxxx
Xxx or Xxxxxxx Mac and are licensed to do business in the jurisdiction in
which the Mortgaged Property is located. Any amounts collected by the Servicer
under any such policies (other than the amounts to be deposited in the Escrow
Account and to be applied to the restoration or repair of the related
Mortgaged Property) (or, in the case of a Cooperative Loan, the related
Cooperative Unit) or property acquired in liquidation of the Mortgage Loan, or
amounts released to the Mortgagor in accordance with the Servicer's normal
servicing procedures) shall be deposited in the Collection Account. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating monthly distributions to the Certificateholders or
remittances to the Trustee for their benefit, be added to the Principal
Balance of the Mortgage Loan, notwithstanding that the terms of the Mortgage
Loan so permit. Such costs shall be recoverable by the Servicer out of late
payments by the related Mortgagor or out of Liquidation Proceeds to the extent
permitted by Section 3.10 hereof. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor or
maintained on property acquired in respect of a Mortgage other than pursuant
to such applicable laws and regulations as shall at any time be in force and
as shall require such additional insurance.
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In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of AX or better in Best's
Key Rating Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of the first two paragraphs of this Section 3.14, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with the
first two sentences of this Section 3.14, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare
and present, on behalf of itself, the Trustee and the Certificateholders, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy.
(b) [Reserved.]
(c) [Reserved.]
(d) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the Servicer's obligations under this Agreement, which
policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Mae or
Xxxxxxx Mac, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall be deemed to have complied
with this provision if an Affiliate of the Servicer has such errors and
omissions and fidelity bond coverage and, by the terms of such insurance
policy or fidelity bond, the coverage afforded thereunder extends to the
Servicer. Any such errors and omissions policy and fidelity bond shall by its
terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Sub-Servicer to maintain a policy
of insurance covering errors and omissions and a fidelity bond which would
meet such requirements.
Section 3.15. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if in its sole business
judgment the Servicer believes it is not in the best interests of the Trust Fund
and shall not exercise any such rights if prohibited by law from doing so. If
the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is
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proposed to be conveyed, pursuant to which such person becomes liable
under the Mortgage Note and, to the extent permitted by applicable state law,
the Mortgagor remains liable thereon. The Servicer is also authorized to enter
into a substitution of liability agreement with such person, pursuant to which
the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with
any assumption or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and
usual in its general mortgage servicing activities and as it applies to other
mortgage loans owned solely by it. The Servicer shall not take or enter into
any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited
to the related Mortgage Rate and the amount of the Monthly Payment) may be
amended or modified, except as otherwise required pursuant to the terms
thereof. The Servicer shall notify the Trustee that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Trustee the executed original of such substitution, modification or assumption
agreement, which document shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part
thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.16. Realization upon Defaulted Mortgage Loans.
(a) The Servicer shall use its best efforts, consistent with Servicing
Standard, to foreclose upon or otherwise comparably convert the ownership of
properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07 hereof. The
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Servicer as contemplated in Section
3.11 and Section 3.23 hereof. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Servicer shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
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(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trustee, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
from time to time, or any comparable law, unless the Servicer has also
previously determined, based on its reasonable judgment and a report prepared
by a Person who regularly conducts environmental audits using customary
industry standards, that:
(i) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(ii) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such
action could be required, that it would be in the best economic interest
of the Trust Fund to take such actions with respect to the affected
Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.16 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(vii) above, such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in the best
economic interest of the Trust Fund to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials,
hazardous wastes or petroleum-based materials affecting any such Mortgaged
Property, then the Servicer shall take such action as it deems to be in the
best economic interest of the Trust Fund; provided that any amounts disbursed
by the Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.05(d) hereof. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account
as provided in Section 3.11(a)(iii) and (a)(vii) hereof, such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
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(c) [Reserved].
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan
will be applied in the following order of priority: first, to reimburse the
Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances
and Advances, pursuant to Section 3.11(a)(ii) or (a)(iii) hereof; second, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount of such recovery will be allocated by the Servicer as follows: first,
to unpaid Servicing Fees; and second, to the balance of the interest then due
and owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall be reimbursed to the Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
Section 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon (i) the payment in full of any Mortgage Loan, (ii) the
receipt by the Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes or (iii) in the case of a
Mortgage Loan as to which the related Mortgaged Property is located in the
State of California, at such time as the Servicer reasonably expects that it
will have received payment in full, the Servicer shall deliver to the Trustee
two executed copies of a Request for Release in the form of Exhibit F (which
shall include a certification to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Collection Account pursuant to Section 3.10 hereof have been or will be so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. Upon receipt of such certification and request, the Trustee
shall, within five Business Days, release and send the related Mortgage File
to the Servicer by overnight mail, at the expense of the Servicer. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection
under any insurance policy relating to the Mortgage Loans, the Trustee shall,
upon any request made by or on behalf of the Servicer and delivery to the
Trustee of two copies of a Request for Release in the form of Exhibit F,
release the related Mortgage File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings. Such Request for Release shall
obligate the Servicer to return each and every document previously requested
from the Mortgage File to the Trustee, when the need therefor by the Servicer
no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by
law, for purposes of initiating or pursuing legal action or other proceedings
for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered, or caused to be delivered, to
the Trustee an additional Request for Release certifying as to such
liquidation or action or proceedings. Upon the request of the
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Trustee, the Servicer shall provide notice to the Trustee of the name
and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation that are required to be deposited into the Collection Account
have been so deposited, or that such Mortgage Loan has become an REO Property,
any outstanding Requests for Release with respect to such Mortgage Loan shall
be released by the Trustee to the Servicer or its designee.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer or the Sub-Servicer, as the case may
be, copies of, any court pleadings, requests for trustee's sale or other
documents prepared by the Servicer and necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies
or rights provided by the Mortgage Note or Mortgage or otherwise available at
law or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon
completion of the foreclosure or trustee's sale.
(d) Each Request for Release delivered to the Trustee hereunder shall
be signed by a Servicing Officer or shall be delivered in a mutually agreed
upon electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer.
Section 3.18. Servicing Compensation.
As compensation for the activities of the Servicer hereunder, the
Servicer shall be entitled to the Servicing Fee with respect to each Mortgage
Loan payable solely from payments of interest in respect of such Mortgage
Loan; provided, however, that the aggregate Servicing Fee for each Loan Group
shall be reduced with respect to each Distribution Date by an amount equal to
the aggregate of the Prepayment Interest Shortfalls, if any, with respect to
such Loan Group and such Distribution Date, but the aggregate reductions shall
not exceed an amount equal to the aggregate Servicing Fee for both Loan Groups
for such Distribution Date before reduction thereof in respect of such
Prepayment Interest Shortfalls.
Additional servicing compensation in the form of late payment charges,
assumption fees, insufficient funds charges, prepayment premiums or other
ancillary income shall be retained by the Servicer only to the extent such
fees or charges are received by the Servicer. The Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) hereof to withdraw from the
Collection Account and pursuant to Section 3.23(b) hereof to withdraw from any
REO Account, as additional servicing compensation, interest or other income
earned on deposits therein, subject to Section 3.12 and Section 3.24 hereof.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including premiums for the
insurance required by Section 3.14 hereof, to the extent such premiums are not
paid by the related Mortgagors) and shall not be entitled to reimbursement
therefor except as specifically provided herein.
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Section 3.19. Reports to the Trustee; Collection Account Statements.
Not later than 20 days after each Distribution Date, the Servicer
shall forward, upon request, to the Trustee and the Depositor the most current
available bank statement for the Collection Account. Copies of such statement
shall be provided by the Trustee to any Certificateholder and to any Person
identified to the Trustee as a prospective transferee of a Certificate, upon
request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.
Section 3.20. Statement as to Compliance.
The Servicer shall deliver to the Trustee and the Depositor not later
than 90 days following the end of the fiscal year of the Servicer, commencing
with the fiscal year that begins in 2002, an Officers' Certificate stating, as
to each signatory thereof, that (i) a review of the activities of the Servicer
during the preceding year and of performance under this Agreement has been
made under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. Copies of any
such statement shall be provided by the Trustee to any Certificateholder and
to any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided
such statement is delivered by the Servicer to the Trustee.
Section 3.21. Independent Public Accountants' Servicing Report.
Not later than 90 days following the end of each fiscal year of the
Servicer, commencing with the fiscal year that begins in 2002, the Servicer at
its own expense shall cause a nationally recognized firm of Independent
certified public accountants to furnish to the Servicer a report stating that
(i) it has obtained a letter of representation regarding certain matters from
the management of the Servicer which includes an assertion that the Servicer
has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with
respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the
American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted
in accordance with the same standards (rendered within one year of such
report) with respect to those Sub-Servicers. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the expense
of the Servicer provided that such statement is delivered by the Servicer to
the Trustee.
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Section 3.22. Access to Certain Documentation; Filing of Reports by
Servicer.
(a) The Servicer shall provide to the Office of Thrift Supervision,
the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder, access to
the documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and
to any Person identified to the Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the
offices of the Servicer designated by it at the expense of the Person
requesting such access.
(b) Within 15 days after each Distribution Date, the Servicer shall,
on behalf of the Trust and in accordance with industry standards, file with
the Commission, via the Electronic Data Gathering and Retrieval System
(XXXXX), a Form 8-K with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to Xxxxx 00, 0000 (xxx, if
applicable, prior to March 30 of each year thereafter), the Servicer shall, on
behalf of the Trust and in accordance with industry standards, file with the
Commission via XXXXX a Form 10-K with respect to the Trust Fund. In addition,
the Servicer will cause the senior servicing officer in charge of its
servicing functions to execute the certification (the "Form 10-K
Certification") required pursuant to Rule 13a-14 under the Securities Exchange
Act of 1934, as amended, in the form attached hereto as Exhibit O, and to file
the same with the Commission prior to Xxxxx 00, 0000 (xxx, if applicable,
prior to March 30 of each year thereafter). To the extent any information or
exhibits required to be included in the Form 10-K are not available by March
30, the Servicer shall, on behalf of the Trust, file one or more amended Form
10-Ks to include such missing information or exhibits promptly after receipt
thereof by the Servicer. Promptly following the first date legally permissible
under applicable regulations and interpretations of the Commission, the
Servicer shall, on behalf of the Trust and in accordance with industry
standards, file with the Commission via XXXXX a Form 15 Suspension
Notification with respect to the Trust Fund. The Depositor hereby grants to
the Servicer a limited power of attorney to execute and file each such
document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Servicer from the Depositor of
written termination of such power of attorney and (ii) the termination of the
Trust Fund. The Depositor and the Trustee agree to furnish to the Servicer
promptly, from time to time upon request, such further information, reports,
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Servicer reasonably deems appropriate to prepare and
file all necessary reports with the Commission. The Servicer shall have no
responsibility to file any items other than those specified in this section.
Section 3.23. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Servicer, on behalf of the REMIC, shall either sell
any REO Property by the end of the third full taxable year after the taxable
year in which the REMIC acquires ownership of such REO Property for purposes
of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 61 days before the day on which the three-year grace
period would otherwise expire,
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an extension of such three-year period, unless the Servicer shall have
delivered to the Trustee an Opinion of Counsel, addressed to the Trustee and
the Depositor, to the effect that the holding by the REMIC of such REO
Property subsequent to three years after its acquisition will not result in
the imposition on the REMIC of taxes on "prohibited transactions" thereof, as
defined in Section 860F of the Code, or cause any REMIC created hereunder to
fail to qualify as a REMIC under Federal law at any time that any Certificates
are outstanding. The Servicer shall manage, conserve, protect and operate each
REO Property for the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to
fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by the REMIC of any "income
from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions.
(b) The Servicer shall separately account for all funds collected and
received in connection with the operation of any REO Property and shall
establish and maintain, or cause to be established and maintained, with
respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Servicer shall be entitled to retain or withdraw any interest
income paid on funds deposited in the REO Account.
(c) The Servicer shall have full power and authority, subject only to
the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with the
manner in which the Servicer manages and operates similar property owned by
the Servicer or any of its Affiliates, all on such terms and for such period
as the Servicer deems to be in the best interests of Certificateholders. In
connection therewith, the Servicer shall deposit, or cause to be deposited in
the clearing account in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on
a daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, and shall thereafter deposit in the REO Account, in no event
more than two Business Days after the Servicer's receipt thereof, all revenues
received by it with respect to an REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of such
REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Servicer shall advance from
its own funds such amount as is necessary for such purposes if, but only if, the
Servicer would make such advances if the Servicer owned the REO Property and if
in the Servicer's judgment, the payment of such amounts will be recoverable from
the rental or sale of the REO Property.
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Notwithstanding the foregoing, the Servicer shall not:
(i) authorize the Trust Fund to enter into, renew or extend
any New Lease with respect to any REO Property, if the New Lease by
its terms will give rise to any income that does not constitute Rents
from Real Property;
(ii) authorize any amount to be received or accrued under
any New Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize any construction on any REO Property, other than
the completion of a building or other improvement thereon, and then
only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of Section 856(e)(4)(B)
of the Code; or
(iv) authorize any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust
Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the REMIC, in
which case the Servicer may take such actions as are specified in such Opinion
of Counsel.
The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Servicer of any of its
duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of any
such REO Property; and
(iv) the Servicer shall be obligated with respect thereto to the
same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
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The Servicer shall be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations
hereunder for indemnification of the Servicer by such Independent Contractor,
and nothing in this Agreement shall be deemed to limit or modify such
indemnification. The Servicer shall be solely liable for all fees owed by it to
any such Independent Contractor, irrespective of whether the Servicer's
compensation pursuant to Section 3.18 hereof is sufficient to pay such fees;
provided, however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c)
hereof, the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances
made in respect of such REO Property or the related Mortgage Loan. On the
Servicer Remittance Date, the Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.10(d)(ii) hereof, for distribution on the related Distribution Date
in accordance with Section 4.01 hereof, the income from the related REO
Property received during the prior calendar month, net of any withdrawals made
pursuant to Section 3.23(c) hereof or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a)
hereof, each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer shall deem necessary
or advisable, as shall be normal and usual in its Servicing Standard.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) hereof on the Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution
Date in accordance with Section 4.01 hereof. Any REO Disposition shall be for
cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
(g) The Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall
be in form and substance sufficient to meet the reporting requirements imposed
by such Sections 6050H, 6050J and 6050P of the Code.
Section 3.24. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls.
Not later than the Close of Business on each Servicer Remittance Date,
the Servicer shall remit to the Collection Account an amount ("Compensating
Interest") equal to the lesser of (A) the aggregate of the Prepayment Interest
Shortfalls for the related Distribution Date and (B) the
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aggregate Servicing Fee received in the related Due Period. The Servicer shall
not have the right to reimbursement for any amounts remitted to the Trustee in
respect of Compensating Interest. Such amounts so remitted shall be included
in the Available Funds and distributed therewith on the next Distribution
Date. If on any Servicer Remittance Date the amount deposited into the
Collection Account is the amount calculated in (B), such amount shall be
allocated between the Loan Group Available Funds for the two Loan Groups, pro
rata, based on the aggregate Prepayment Interest Shortfalls experienced by
both Loan Groups during the related Due Period. The Servicer shall not be
obligated to pay Compensating Interest with respect to Relief Act Interest
Shortfalls.
Section 3.25. [Reserved]
Section 3.26. Obligations of the Servicer in Respect of Adjustments.
In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Stated Principal Balances that were made by the Servicer in a
manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Trustee for deposit in the Distribution Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor servicer
in respect of any such liability. Such indemnities shall survive the termination
or discharge of the Servicer or this Agreement. Notwithstanding the foregoing,
this Section 3.26 shall not limit the ability of the Servicer to seek recovery
of any such amounts from the related Mortgagor under the terms of the related
Mortgage Note, as permitted by law.
Section 3.27. Solicitations.
From and after the Closing Date, the Servicer agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Servicer's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan; provided, however, that the Servicer may solicit
any Mortgagor for whom the Servicer has received a request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan, or
the Mortgagor initiates a title search; and provided, further, it is understood
and agreed that promotions undertaken by the Servicer or any of its Affiliates
which (i) concern optional insurance products or other additional products or
(ii) are generally directed to the customers of the Servicer or its Affiliates,
including, without limitation, mass mailings based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section, nor is the Servicer prohibited from
responding to unsolicited requests or inquiries made by a Mortgagor or an agent
of a Mortgagor.
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ARTICLE IV
FLOW OF FUNDS
Section 4.01. Distributions.
(a) On each Distribution Date the Trustee shall withdraw funds on
deposit in the Distribution Account and make the following disbursements and
transfers as described below and to the extent of such funds, based upon
information provided to the Trustee pursuant to Section 4.04(a) hereof.
(i) The Loan Group Available Funds for Loan Group I shall be
distributed on each Distribution Date in the following order of
priority:
(A) to the Holders of the Class A-1, Class A-R and Class X
Certificates, the respective Interest Distributable Amounts for the
Class A-1 Certificates and the Class A-R Certificate and, in the
case of the Class X Certificates, the Class X Interest Distributable
Amount attributable to Loan Group I, pro rata (based on the Interest
Distributable Amounts and Class X Interest Distributable Amount,
respectively); and
(B) from the Principal Distribution Amount for Loan Group I for
such Distribution Date, an amount equal to the related Senior
Principal Distribution Amount for Loan Group I for that date, as
follows:
first, to the Holder of Class A-R Certificate, until the
Class Certificate Principal Balance of such Class is
reduced to zero, and
second, to the Holders of the Class A-1 Certificates,
until the Class Certificate Principal Balance of such
Class is reduced to zero.
(ii) The Loan Group Available Funds for Loan Group II shall be
distributed on each Distribution Date in the following order of
priority:
(A) to the Holders of the Class A-2 and Class X Certificates,
the Interest Distributable Amount for the Class A-2 Certificates
and, in the case of the Class X Certificates, the Class X Interest
Distributable Amount attributable to Loan Group II, pro rata (based
on the Interest Distributable Amounts and Class X Interest
Distributable Amount, respectively); and
(B) from the Principal Distribution Amount for Loan Group II
for such Distribution Date, an amount equal to the related Senior
Principal Distribution Amount for that date, to the Holders of the
Class A-2 Certificates, until the Class Certificate Principal
Balance of such Class is reduced to zero.
(iii) On each Distribution Date, the Available Funds remaining
after giving effect to the distributions specified in subsections
(i) and (ii) above will be distributed in the following order of
priority:
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(A) to interest on and principal of the Class or Classes of
Senior Certificates to the extent of any unpaid interest and
Transfer Payment Received following the occurrence of a Transfer
Condition, to the extent not paid from the related Loan Group
Available Funds;
(B) to the Holders of the Class B-1 Certificates, the related
Interest Distributable Amount for that date;
(C) to the Holders of the Class B-1 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Certificate Principal Balance of
such Class is reduced to zero;
(D) to the Holders of the Class B-2 Certificates, the related
Interest Distributable Amount for that date;
(E) to the Holders of the Class B-2 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Certificate Principal Balance of
such Class is reduced to zero;
(F) to the Holders of the Class B-3 Certificates, the related
Interest Distributable Amount for that date;
(G) to the Holders of the Class B-3 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Certificate Principal Balance of
such Class is reduced to zero;
(H) to the Holders of the Class B-4 Certificates, the related
Interest Distributable Amount for that date;
(I) to the Holders of the Class B-4 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Certificate Principal Balance of
such Class is reduced to zero;
(J) to the Holders of the Class B-5 Certificates, the related
Interest Distributable Amount for that date;
(K) to the Holders of the Class B-5 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Certificate Principal Balance of
such Class is reduced to zero;
(L) to the Holders of the Class B-6 Certificates, the related
Interest Distributable Amount for that date;
(M) to the Holders of the Class B-6 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Certificate Principal Balance of
such Class is reduced to zero; and
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(N) to the Holder of the Class A-R Certificate, any Available
Funds then remaining.
(b) Amounts to be paid to the Holders of a Class of Certificates shall
be payable with respect to all Certificates of that Class, pro rata, based on
the Certificate Balance or Certificate Notional Balance of each Certificate of
that Class.
(c) [Reserved]
(d) On each Distribution Date, the Interest Distributable Amounts for
the Classes of Senior Certificates and Subordinate Certificates on such
Distribution Date shall be reduced by the pro rata share of each such Class
in:
(i) Net Prepayment Interest Shortfalls and Relief Act Reductions
with respect to the Related Loan Group in the case of the Senior
Certificates, and all Net Prepayment Interest Shortfalls and Relief
Act Reductions in the case of the Subordinate Certificates, based on
such Class's Monthly Interest Distributable Amount without taking into
account such Net Prepayment Interest Shortfalls and Relief Act
Reductions;
(ii) after the Special Hazard Coverage Termination Date, with
respect to each Mortgage Loan in a Loan Group that became a Special
Hazard Mortgage Loan during the related Prepayment Period, the excess
of one month's interest at the related Net Loan Rate on the Stated
Principal Balance of such Mortgage Loan as of the first day in such
month over the amount of Liquidation Proceeds applied as interest on
such Mortgage Loan with respect to such Prepayment Period;
(iii) after the Bankruptcy Coverage Termination Date, with
respect to each Mortgage Loan in such Loan Group that became subject
to a Bankruptcy Loss during the related Prepayment Period, the
interest portion of the related Debt Service Reduction or Deficient
Valuation; and
(iv) after the Fraud Coverage Termination Date, with respect to
each Mortgage Loan in such Loan Group that became a Fraud Loan during
the related Prepayment Period, the excess of one month's interest at
the related Net Loan Rate on the Stated Principal Balance of such
Mortgage Loan as of the first day in such month over the amount of
Liquidation Proceeds applied as interest on such Mortgage Loan with
respect to such month.
(e) [Reserved].
(f) Notwithstanding the priority and allocation set forth in Section
4.01(a)(iii) above, if with respect to any Class of Subordinate Certificates
on any Distribution Date the sum of the related Class Subordination
Percentages of such Class and of all other Classes of Subordinate Certificates
which have a higher numerical Class designation than such Class (the
"Applicable Credit Support Percentage") is less than the Original Applicable
Credit Support Percentage for such Class, no distribution of Principal
Prepayments will be made to any such Classes (the "Restricted Classes") and
the amount of such Principal Prepayment otherwise distributable to the
Restricted Classes shall be distributed, pro rata, to any Classes of
Subordinate Certificates having
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a lower numerical Class designation than such Class, based on the Class
Certificate Principal Balances of the respective Classes immediately prior to
such Distribution Date, and shall be distributed in the sequential order
provided in Section 4.01(a)(iii) above.
(g) Distributions on Physical Certificates. The Trustee shall make
distributions in respect of a Distribution Date to each Certificateholder of
record on the related Record Date (other than as provided in Section 10.01
hereof respecting the final distribution), in the case of Certificateholders
of the Physical Certificates, by check or money order mailed to such
Certificateholder at the address appearing in the Certificate Register, or by
wire transfer. Distributions among Certificateholders of a Class shall be made
in proportion to the Percentage Interests evidenced by the Certificates of
that Class held by such Certificateholders.
(h) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which
shall credit the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing
funds to the Certificate Owners that it represents. All such credits and
disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions
of the Certificates. None of the Trustee, the Depositor, the Servicer or the
Seller shall have any responsibility therefor.
Section 4.02. [Intentionally Deleted.]
Section 4.03. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Servicer shall
determine the total amount of Realized Losses, including Excess Losses, with
respect to each Loan Group and the related Distribution Date.
(b) Realized Losses, Bankruptcy Losses, Fraud Losses and Special
Hazard Losses with respect to each Loan Group and any Distribution Date shall
be allocated as follows:
(i) Realized Losses, Bankruptcy Losses, Fraud Losses and
Special Hazard Losses (other than Excess Losses) with respect to
each Loan Group shall be allocated:
first, to the Subordinate Certificates in reverse
order of their respective numerical Class
designations (beginning with the Class of
Subordinate Certificates with the highest numerical
Class designation), until the Class Certificate
Principal Balance of each such Class is reduced to
zero;
second, (A) with respect to Loan Group I, to the
Class A-1 and Class A-R Certificates, pro rata, in
accordance with their respective Class Certificate
Principal Balances, until the Class Certificate
Principal Balance of each such Class is
reduced to zero;
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(B) with respect to Loan Group II, to the
Class A-2 Certificates until the Class Certificate
Principal Balance thereof is reduced to zero; and
(ii) any Excess Losses on the Mortgage Loans in a Loan Group
shall be allocated, pro rata, to the related Class or Classes of the
Senior Certificates (other than the Class X Certificates) and the
Classes of the Subordinate Certificates then outstanding (on the
basis of their respective Apportioned Principal Balances
attributable to the related Loan Group), as follows:
(A) the product of such Excess Losses multiplied by a
fraction the numerator of which is the aggregate Class
Certificate Principal Balance of the Class or Classes of Senior
Certificates in the related Senior Certificate Group
immediately prior to such Distribution Date and the denominator
of which is the related Loan Group Balance, as of the first day
of the month preceding the month which such Distribution Date
occurs, to the Class or Classes of Senior Certificates in the
related Senior Certificate Group (other than the Class X
Certificates), pro rata, on the basis of their respective Class
Certificate Principal Balances immediately prior to such
Distribution Date, and
(B) the remaining amount of such Excess Losses to the
Classes of Subordinate Certificates, pro rata, on the basis of
their respective Apportioned Principal Balances related to that
Loan Group immediately prior to such Distribution Date;
provided, however, that on any Distribution Date occurring on and after the
Senior Credit Support Depletion Date, any Excess Losses will be allocated among
the related Class or Classes of Senior Certificates (other than the Class X
Certificates), pro rata, based on their respective Class Certificate Principal
Balances immediately prior to such Distribution Date.
(c) The Class Certificate Principal Balance of the Class of
Subordinate Certificates then outstanding with the highest numerical Class
designation shall be reduced on each Distribution Date by the amount, if any,
by which the aggregate of the Class Certificate Principal Balances of all
outstanding Classes of Certificates (after giving effect to the distribution
of principal and the allocation of Realized Losses, Bankruptcy Losses, Fraud
Losses and Special Hazard Losses and Excess Losses on such Distribution Date)
exceeds the aggregate of the Stated Principal Balances of all the Mortgage
Loans for the following Distribution Date.
(d) Any Realized Loss, Bankruptcy Loss, Fraud Loss, Special Hazard
Loss or Excess Loss allocated to a Class of Certificates or any reduction in
the Class Certificate Principal Balance of a Class of Certificates pursuant to
Section 4.03(b) or (c) shall be allocated among the Certificates of such
Class, pro rata, in proportion to their respective Certificate Balances.
(e) Any allocation of Realized Losses to a Certificate or any
reduction in the Certificate Balance of a Certificate pursuant to Section
4.03(b) or (c) shall be accomplished by reducing the Certificate Balance
thereof immediately following the distributions made on the related
Distribution Date in accordance with the definition of "Certificate Balance."
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Section 4.04. Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Servicer, the Trustee shall make available to each
Holder of the Regular Certificates, the Servicer and the Rating Agencies, a
statement (the "Distribution Date Statement") as to the distributions made on
such Distribution Date:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to principal;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to
interest;
(iii) the Senior Percentage, Senior Prepayment Percentage,
Subordinate Percentage and Subordinate Prepayment Percentage with
respect to each Loan Group for such Distribution Date;
(iv) the aggregate amount of servicing compensation received by
the Servicer during the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
(v) the aggregate amount of Advances for the related Due Period
and the amount of unreimbursed Advances;
(vi) [reserved];
(vii) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, each as of
the related Determination Date;
(viii) the Loan Group Balance for each Loan Group at the Close of
Business on the last Business Day of the related Due Period;
(ix) Net WAC with respect to each Loan Group;
(x) the number, weighted average remaining term to maturity and
weighted average Mortgage Rate of the Mortgage Loans in each Loan
Group as of the related Due Date;
(xi) separately stated for each Loan Group, the number and
aggregate unpaid principal balance of Mortgage Loans (a) 30 to 59 days
Delinquent, (b) 60 to 89 days Delinquent, (c) 90 or more days
Delinquent, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy, in each case as of the Close of
Business on the last day of the calendar month preceding such
Distribution Date;
(xii) separately for each Loan Group, the book value of any REO
Property as of the Close of Business on the last Business Day of the
calendar month preceding the
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Distribution Date, and, cumulatively, the total number and cumulative
principal balance of all REO Properties in each Loan Group as of the
Close of Business of the last day of the preceding Due Period;
(xiii) the aggregate amount of Principal Prepayments with respect
to each Loan Group made during the related Prepayment Period;
(xiv) [reserved];
(xv) separately for each Loan Group, the aggregate amount of
Realized Losses incurred during the related Due Period and the
cumulative amount of Realized Losses;
(xvi) the Class Certificate Principal Balance of each Class of
Certificates (other than the Class X Certificates) after giving effect
to any distributions made thereon on such Distribution Date, and the
Class Certificate Notional Balance of the Class X Certificates as of
such Distribution Date;
(xvii) the Interest Distributable Amount in respect of each Class
of the Certificates, for such Distribution Date and the respective
portions thereof, if any, remaining unpaid following the distributions
made in respect of such Certificates on such Distribution Date;
(xviii) the aggregate amount of any Prepayment Interest
Shortfalls and the Unpaid Interest Shortfall Amount for such
Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.24 hereof, in each case by Loan Group;
(xix) the Loan Group Available Funds with respect to each Loan
Group;
(xx) the Pass-Through Rate for each Class of Certificates for
such Distribution Date; and
(xxi) the aggregate Principal Balance of Mortgage Loans purchased
by the Servicer or the Seller during the related Due Period with
respect to each Loan Group, and indicating the Section of this
Agreement requiring or allowing the purchase of each such Mortgage
Loan.
The Trustee will make the Distribution Date Statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders and the other parties to this
Agreement via the Trustee's internet website and will forward the Distribution
Date Statement to each Rating Agency. The Trustee's internet website shall
initially be located at "xxx.xxxxxxx.xxx". Assistance in using the website or
the fax-on-demand service can be obtained by calling the Trustee's customer
service desk at (000) 000-0000. Parties that are unable to use the above
distribution option are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and requesting same. The Trustee
shall have the right to change the way Distribution Date Statements are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Trustee shall provide timely and
adequate notification to all the above parties regarding any such changes. The
Trustee's obligations pursuant to this Section 4.04 are
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limited to the extent of its receipt of all necessary information from the
Servicer. The Trustee may fully rely upon and shall have no liability with
respect to information provided by the Servicer.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon written request, furnish to each Person who at
any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for
such calendar year or applicable portion thereof during which such Person was
a Certificateholder. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On or before January 31 of each year, the Servicer, on behalf of
the Trust, shall provide the Trustee with written notice listing all
Distribution Date Statements with respect to Distribution Dates occurring in
the prior calendar year that were included in a Form 8-K filing pursuant to
Section 3.22(b), provided, that if no Form 10-K is required to be filed for
such prior calendar year, no written notice shall be required. No later than
March 15 of each year in which such written notice is provided by the Servicer
to the Trustee, the Trustee shall sign a certification (in the form attached
hereto as Exhibit P), for the benefit of the Person(s) signing the Form 10-K
Certification, regarding certain aspects Form 10-K Certification.
Section 4.05. Remittance Reports; Advances.
(a) No later than the sixth day of each calendar month (or if such day
is not a Business Day, the next succeeding Business Day), the Servicer shall
deliver to the Trustee, by telecopy or electronic mail (or by such other means
as the Servicer and the Trustee may agree from time to time), a remittance
report (the "Remittance Report") with respect to the related Distribution
Date, which Remittance Report shall include such information with respect to
the Mortgage Loans as the Trustee may reasonably require to perform the
calculations necessary to make the distributions contemplated by Section 4.01
hereof and to prepare the Distribution Date Statements contemplated by Section
4.04 hereof; provided, however, that with respect to the initial Distribution
Date, the Servicer shall deliver the related Remittance Report to the Trustee
no later than December 10, 2002. The Trustee shall not be responsible to
recompute, recalculate or verify any information provided to it by the
Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.05(d) below, the sum of
(i) the aggregate amount of Monthly Payments (net of the related Servicing
Fee) due during the related Due Period in respect of the Mortgage Loans, which
Monthly Payments were Delinquent on a contractual basis as of the Close of
Business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related Due
Period and as to which
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REO Property an REO Disposition did not occur during the related Due
Period, an amount equal to the excess, if any, of the REO Imputed Interest on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 hereof for distribution on such Distribution Date.
On or before the Close of Business New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to
the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.05, used by the
Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be
made by the Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution and so used shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Collection Account on or before any future Servicer Remittance Date to the
extent that the Available Funds for the related Distribution Date (determined
without regard to Advances to be made on the Servicer Remittance Date) shall
be less than the total amount that would be distributed to the Classes of
Certificateholders pursuant to Section 4.01 on such Distribution Date if such
amounts held for future distributions had not been so used to make Advances.
The Trustee will promptly provide notice to the Servicer by telecopy in the
event that the amount remitted by the Servicer to the Trustee on such date is
less than the Advances required to be made by the Servicer for the related
Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below
and, with respect to any Mortgage Loan, shall continue until the Mortgage Loan
is paid in full or until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if
such Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance or Servicing Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate of the Servicer delivered to the Depositor and the Trustee.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Class A-1 and Class A-2 Certificates shall be substantially in the
form annexed hereto as Exhibit A, the Class X Certificates shall be
substantially in the form annexed hereto as Exhibit B, the Class A-R
Certificate shall be substantially in the form annexed hereto as Exhibit
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C and each of the Subordinate Certificates shall be substantially in
the form annexed hereto as Exhibit D. Each of the Certificates shall, on
original issue, be executed, authenticated and delivered by the Trustee to or
upon the order of the Depositor concurrently with the sale and assignment to
the Trustee of the Trust Fund. Each Class of Regular Certificates shall be
initially evidenced by one or more Certificates representing a Percentage
Interest with (x) a minimum dollar denomination of $25,000 and integral dollar
multiples of $1 in excess thereof in the case of the Regular Certificates
other than the Private Certificates and (y) a minimum dollar denomination of
$100,000 and integral dollar multiples of $1,000 in excess thereof in the case
of the Private Certificates, except that one Certificate of each such Class of
Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Class Certificate Principal Balance or Class Certificate Notional Balance of
such Class on the Closing Date. The Class A-R Certificate is issuable only in
a Percentage Interest of 100%.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Senior Certificates
(other than the Class A-R Certificate) and the Class B-1, Class B-2 and Class
B-3 Certificates shall be Book-Entry Certificates. The Class A-R Certificate and
the Class B-4, Class B-5 and Class B-6 Certificates shall be Physical
Certificates.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for
the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall initially serve as
Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Private Certificate
or Class A-R Certificate, upon satisfaction of the conditions set forth below,
the Trustee on behalf of the Trust shall execute, authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon
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surrender of the Certificates to be exchanged at any such office or
agency. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute on behalf of the Trust and authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly
executed by, the Holder thereof or his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee or the Certificate
Registrar except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall for all purposes deal with
the Depository as representative of the Certificate Owners of the Certificates
for purposes of exercising the rights of Holders under this Agreement, and
requests and directions for and votes of such representative shall not be
deemed to be inconsistent if they are made with respect to different
Certificate Owners; (vi) the Trustee and the Certificate Registrar may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and
Persons shown on the books of such indirect participating firms as direct or
indirect Certificate Owners; and (vii) the direct participants of the
Depository shall have no rights under this Agreement under or with respect to
any of the Certificates held on their behalf by the Depository, and the
Depository may be treated by the Trustee, the Certificate Registrar and their
respective agents, employees, officers and directors as the absolute owner of
the Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement, the terms of this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole
option, with the consent of the Trustee, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Servicer
Event of Termination, the Certificate Owners of each Book-Entry Certificate
representing Percentage Interests of such Classes aggregating not less than
51% advises the Trustee and Depository through the Financial Intermediaries
and the Depository Participants in writing that the continuation of a
book-entry
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system through the Depository to the exclusion of definitive, fully
registered certificates (the "Definitive Certificates") to Certificate Owners
is no longer in the best interests of the Certificate Owners. Upon surrender
to the Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall, at the Depositor's expense, in the case of (ii) above, or
the Seller's expense, in the case of (i) and (iii) above, execute on behalf of
the Trust and authenticate the Definitive Certificates. Neither the Depositor
nor the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Certificate Registrar, the Servicer, any Paying Agent and the Depositor shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d) No transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the 1933 Act, and any applicable state securities
laws or is made in accordance with the 1933 Act and laws. In the event of any
such transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Trustee, in substantially
the form attached hereto as Exhibit I under the 1933 Act, the Trustee and the
Depositor shall require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to
the Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall not be an expense of the Trustee or the Depositor or (ii) the
Trustee shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit J) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit I) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Trustee certifying to the Depositor and the Trustee the
facts surrounding such transfer, which investment letter shall not be an
expense of the Trustee or the Depositor. Each Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify
the Trustee, the Seller, the Servicer and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No transfer of an ERISA-Restricted Certificate that is also a Physical
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate, acceptable to and in
form and substance satisfactory to the Trustee and the Depositor (such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto), to
the effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA or a plan or arrangement subject to Section
4975 of the Code, nor a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer (each such person, a "Plan") or (ii) if the purchaser is an insurance
company and the ERISA-Restricted Certificate is not a Class A-R Certificate, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general
account" (as such term is defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60") and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in
the case of any ERISA-Restricted Certificate that is also a Physical
Certificate presented for registration in the name of an
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employee benefit plan subject to ERISA or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee which Opinion of
Counsel shall not be an expense of either the Trustee or the Trust, addressed
to the Trustee, to the effect that the purchase and holding of such
ERISA-Restricted Certificate that is also a Physical Certificate will not
result in the assets of the Trust being deemed to be "plan assets" and subject
to the prohibited transaction provisions of ERISA and the Code and will not
subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. Notwithstanding anything
else to the contrary herein, any purported transfer of an ERISA-Restricted
Certificate that is also a Physical Certificate to or on behalf of an employee
benefit plan subject to ERISA or to the Code without the delivery to the
Trustee of an Opinion of Counsel satisfactory to the Trustee as described
above shall be void and of no effect.
In the case of an ERISA-Restricted Certificate that is also a
Book-Entry Certificate, for purposes of clauses (i) or (ii) of the first
sentence of the preceding paragraph, such representations shall be deemed to
have been made to the Trustee by the transferee's acceptance of such
ERISA-Restricted Certificate that is also a Book-Entry Certificate (or the
acceptance by a Certificate Owner of the beneficial interest in such
Certificate).
No Plan may acquire or hold the Class A-1 Certificate before the
Auction Distribution Date unless such acquisition or holding is eligible for
the exemptive relief available under Department of Labor Prohibited
Transaction Class Exemption 84-14 (for transactions by independent "qualified
professional asset managers"), 91-38 (for transactions by bank collective
investment funds), 90-1 (for transactions by insurance company pooled separate
accounts), 95-60 (for transactions by insurance company general accounts) or
96-23 (for transactions effected by "in-house asset managers"). Each
beneficial owner of a Class A-1 Certificate, or any interest therein, shall be
deemed to have represented, by virtue of its acquisition or holding of that
certificate, or interest therein, that either (i) it is not a Plan or (ii) the
acquisition and holding of the certificate are eligible for the exemptive
relief available under one of the five Prohibited Transaction Class Exemptions
described immediately above.
To the extent permitted under applicable law (including, but not
limited to, ERISA), neither the Trustee nor the Certificate Registrar shall
have any liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate or Class A-1 Certificate that is in fact not
permitted by this Section 5.02(d) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee or the Certificate Registrar in accordance with the
foregoing requirements. In addition, neither the Trustee nor the Certificate
Registrar shall be required to monitor, determine or inquire as to compliance
with the transfer restrictions in this Section 5.02(d)with respect to any
Certificates in the form of Book-Entry Certificates, and neither the Trustee
nor the Certificate Registrar shall have any liability for transfers of
Book-Entry Certificates or any interests therein made in violation of the
restrictions on transfer described in the Prospectus Supplement and this
Agreement.
(e) Each Person who has or who acquires any Ownership Interest in the
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have
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agreed to be bound by the following provisions and to have irrevocably
appointed the Depositor or its designee as its attorney-in-fact to negotiate
the terms of any mandatory sale under clause (v) below and to execute all
instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in the Class A-R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest in
the Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in the Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of the Class A-R Certificate
unless, in addition to the certificates required to be delivered under
subsection (b) above, the Trustee shall have been furnished with an
affidavit ("Transfer Affidavit") of the initial owner or proposed
transferee in the form attached hereto as Exhibit L.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class A-R Certificate, the Trustee shall as a condition
to registration of the transfer, require delivery to it, in form and
substance satisfactory to it, of each of the following:
A. a Transferor Certificate in the form of Exhibit K
hereto from the proposed transferee to the effect that such
transferee is a Permitted Transferee and that it is not
acquiring an Ownership Interest in the Class A-R Certificate
that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted
Transferee; and
B. a covenant of the proposed transferee to the effect
that the proposed transferee agrees to be bound by and to abide
by the transfer restrictions applicable to the Class A-R
Certificate.
(iv) Any attempted or purported Transfer of any Ownership
Interest in the Class A-R Certificate in violation of the provisions
of this Section shall be absolutely null and void and shall vest no
rights in the purported transferee. If any purported transferee shall,
in violation of the provisions of this Section, become a Holder of the
Class A-R Certificate, then the prior Holder of the Class A-R
Certificate that is a Permitted Transferee shall, upon discovery that
the registration of Transfer of the Class A-R Certificate was not in
fact permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of the
Class A-R Certificate. Neither the Trustee nor the Certificate
Registrar shall have any liability to any Person for any registration
of Transfer of the Class A-R Certificate that is in fact not permitted
by this Section or for making any distributions due on the Class A-R
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long
as the Trustee received the documents specified in clause (iii). The
Trustee shall be entitled to recover from any Holder of the Class A-R
Certificate that was in fact not a Permitted Transferee at the time
such distributions were made all distributions made on the Class A-R
Certificate. Any such distributions so
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recovered by the Trustee shall be distributed and delivered by the
Trustee to the last Holder of the Class A-R Certificate that is a
Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in the Class A-R Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right
but not the obligation, without notice to the Holder of the Class A-R
Certificate or any other Person having an Ownership Interest therein,
to notify the Depositor to arrange for the sale of the Class A-R
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of the Class A-R
Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of the Class A-R
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
liable to any Person having an Ownership Interest in the Class A-R
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in the Class A-R Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee and the Servicer, in form and substance satisfactory to the Trustee, (i)
written notification from the Rating Agencies that the removal of the
restrictions on Transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause either REMIC hereunder to
fail to qualify as a REMIC.
(f) No service charge shall be made for any registration of transfer
or exchange of Certificates of any Class, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of
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notice to the Trustee or the Certificate Registrar that such Certificate has
been acquired by a bona fide purchaser, the Trustee shall execute on behalf of
the Trust, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Trustee or the Certificate Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and the Certificate Registrar) in connection
therewith. Any duplicate Certificate issued pursuant to this Section, shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate Registrar, any
Paying Agent and any agent of the Servicer, the Depositor, the Certificate
Registrar, any Paying Agent or the Trustee shall treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
hereof and for all other purposes whatsoever, and none of the Servicer, the
Trust, the Trustee, the Certificate Registrar, the Paying Agent or any agent of
any of them shall be affected by notice to the contrary.
Section 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 hereof and shall report
the amounts of such distributions to the Trustee. The duties of the Paying
Agent may include the obligation (i) to withdraw funds from the Collection
Account pursuant to Section 3.11(a) hereof and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities. The Paying Agent
shall initially be the Trustee. The Trustee may appoint a successor to act as
Paying Agent, which appointment shall be reasonably satisfactory to the
Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold
all sums, if any, held by it for payment to the Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders and shall agree that it shall comply
with all requirements of the Code regarding the withholding of payments in
respect of federal income taxes due from Certificate Owners and otherwise
comply with the provisions of this Agreement applicable to it.
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ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Seller, the Servicer and the Depositor.
The Seller and the Servicer shall be liable in accordance herewith only
to the extent of the obligations specifically imposed upon and undertaken by the
Seller or the Servicer, as the case may be, herein. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Depositor herein.
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the Depositor.
Any entity into which the Seller, the Servicer or the Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Seller, the Servicer or the Depositor shall be a
party, or any corporation succeeding to the business of the Seller, the
Servicer or the Depositor, shall be the successor of the Seller, the Servicer
or the Depositor, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however,
that the successor Servicer shall satisfy all the requirements of Section 7.02
hereof with respect to the qualifications of a successor Servicer.
Section 6.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Trust or the
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or negligence in the
performance of duties of the Servicer or by reason of its failure to perform its
obligations and duties hereunder. The preceding sentence shall not limit the
obligations of the Servicer pursuant to Section 6.05 hereof. The Servicer and
any director or officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer and any
director or officer or employee or agent of the Servicer shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates
(subject to a limit of $100,000 per annum and $1 million in the aggregate until
the termination of the Trust), other than any loss, liability or expense related
to any specific Mortgage Loan or Mortgage Loans (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this Agreement)
and any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of its failure to perform its obligations and duties hereunder. The
Servicer may undertake any such action which it may deem necessary or desirable
in respect of this Agreement, and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. The Servicer's right to
indemnity or reimbursement pursuant to
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this Section shall be expenses of the Trust Fund and the Servicer shall be
entitled to be reimbursed therefor out of the Collection Account, and shall
survive any resignation or termination of the Servicer pursuant to Section
6.04 or 7.01 hereof with respect to any losses, expenses, costs or liabilities
arising prior to such resignation or termination (or arising from events that
occurred prior to such resignation or termination). This paragraph shall apply
to the Servicer solely in its capacity as Servicer hereunder and in no other
capacities.
Section 6.04. Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02 hereof, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities
carried on by it or its subsidiaries or Affiliates, the other activities of
the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor Servicer to the Trustee in writing and such
proposed successor Servicer is acceptable to the Trustee, (b) each Rating
Agency shall have delivered a letter to the Trustee prior to the appointment
of the successor Servicer stating that the proposed appointment of such
successor Servicer as Servicer hereunder will not result in the reduction or
withdrawal of the then current rating of the Regular Certificates; provided,
however, that no such resignation by the Servicer shall become effective until
such successor servicer or, in the case of clause (i) above, the Trustee shall
have assumed the Servicer's responsibilities and obligations hereunder or, in
the case of clause (ii) above, the Trustee shall have designated a successor
servicer in accordance with Section 7.02 hereof. Any such resignation shall
not relieve the Servicer of responsibility for any of the obligations
specified in Sections 7.01 and 7.02 hereof as obligations that survive the
resignation or termination of the Servicer. Any such determination permitting
the resignation of the Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
Section 6.05. Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01 hereof. Such delegation shall
not relieve the Servicer of its liabilities and responsibilities with respect
to such duties and shall not constitute a resignation within the meaning of
Section 6.04 hereof.
Section 6.06. Auction Administration Agreement; Swap Agreement.
Concurrently with the execution and delivery hereof, the Depositor
hereby directs the Auction Administrator to execute and deliver the Auction
Administration Agreement and the Swap Agreement in the forms presented by GCD.
Neither the Auction Administrator nor the Trustee shall have any duty to
determine the adequacy of the Auction Administration Agreement or the Swap
Agreement.
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Each Holder of a Class A-1 Certificate is deemed, by acceptance of
such Certificate, (i) to authorize the Auction Administrator to execute and
deliver the Auction Administration Agreement and the Swap Agreement as their
intermediary agent and (ii) to acknowledge and accept and agree to be bound by
the provisions of the Auction Administration Agreement and the Swap Agreement.
None of the Auction Administration Agreement, Swap Agreement or any
accounts created thereunder shall be an asset of any REMIC established hereby.
ARTICLE VII
DEFAULT
Section 7.01. Servicer Events of Termination.
(a) If any one of the following events (each, a "Servicer Event of
Termination") shall occur and be continuing:
(i) the failure by the Servicer to make any Advance or to deposit
in the Collection Account or Distribution Account any deposit required
to be made under the terms of this Agreement; or
(ii) the failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or
the failure by the Servicer duly to observe or perform, in any
material respect, any other covenants, obligations or agreements of
the Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 30 days, after the date (A) on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or to the
Servicer and the Trustee by Holders of Regular Certificates evidencing
at least 25% of the Voting Rights or (B) actual knowledge of such
failure by a Servicing Officer of the Servicer; or
(iii) the entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 days; or
(iv) the Servicer shall voluntarily go into liquidation, consent
to the appointment of a conservator or receiver or liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its
property; or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and
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liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
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 or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations;
(b) then, and in each and every such case, so long as a Servicer Event
of Termination shall not have been remedied within the applicable grace period
in the case of (ii), (iii) and (iv) above, the Trustee may, and at the
direction of the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51%, by notice then given in
writing to the Servicer (and to the Trustee if given by Holders of
Certificates) shall, terminate all of the rights and obligations of the
Servicer as servicer under this Agreement. Any such notice to the Servicer
shall also be given to the Rating Agencies, the Depositor and the Seller. On
or after the receipt by the Servicer (and by the Trustee if such notice is
given by the Holders) of such written notice, all authority and power of the
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; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement of each
Mortgage Loan and related documents or otherwise. The Servicer agrees to
cooperate with the Trustee in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee of all documents and records requested
by it to enable it to assume the Servicer's functions under this Agreement
within ten Business Days subsequent to such notice, the transfer within one
Business Day subsequent to such notice to the Trustee for the administration
by it of all cash amounts that shall at the time be held by the Servicer and
to be deposited by it in the Collection Account, the Distribution Account, any
REO Account or any Servicing Account or that have been deposited by the
Servicer in such accounts or thereafter received by the Servicer with respect
to the Mortgage Loans or any REO Property received by the Servicer.
In connection with the termination of the Servicer, the Trustee will
be entitled to be reimbursed by the Trust Fund (in the event that the Servicer
does not timely reimburse the Trustee) for all of the reasonable costs
associated with the termination of the Servicer, appointment of any successor
Servicer and the transfer of servicing to a successor Servicer, including
without limitation all reasonable costs and expenses associated with the
completion, correction or manipulation of servicing data as may be required to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee or the successor Servicer to service the Mortgage Loans
properly and effectively.
Section 7.02. Trustee to Act; Appointment of Successor.
(a) Within not more than 90 days from the date the Servicer (and the
Trustee, if notice is sent by the Holders) receives a notice of termination
pursuant to Section 7.01, the Trustee (or any successor Servicer appointed by
the Trustee in accordance with this Section
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7.02) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof arising on and after its succession. As compensation
therefor, the Trustee shall be entitled to such compensation as the Servicer
would have been entitled to hereunder if no such notice of termination had
been given. Notwithstanding the above, (i) if the Trustee is unwilling to act
as successor Servicer or (ii) if the Trustee is legally unable so to act, the
Trustee shall appoint or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution, bank or other
mortgage loan or home equity loan servicer having a net worth of not less than
$15,000,000 as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder; provided, however, that the appointment of any such successor
Servicer shall not result in the qualification, reduction or withdrawal of the
ratings that are in effect on the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on
Mortgage Loans in an amount equal to the compensation which the Servicer would
otherwise have received pursuant to Section 3.18 hereof. The appointment of a
successor Servicer shall not affect any liability of the predecessor Servicer
which may have arisen under this Agreement prior to its termination as
Servicer, including without limitation any liability to pay any deductible
under an insurance policy pursuant to Section 3.14 hereof or to indemnify the
Trustee pursuant to Section 8.05 hereof), nor shall any successor Servicer be
liable for any acts or omissions of the predecessor Servicer or for any breach
by such Servicer of any of its representations or warranties contained herein
or in any related document or agreement. The terminated Servicer shall bear
all costs of any servicing transfer hereunder, including but not limited to
costs of the Trustee reasonably allocable to specific employees and overhead,
legal fees and expenses, accounting and financial consulting fees and
expenses, and costs of amending this Agreement, if necessary.
(b) The Trustee shall be entitled to reimbursement by the Servicer (or
by the Trust Fund pursuant to Section 8.05 if the Servicer is unable to
fulfill its obligations hereunder) for all costs associated in the transfer of
servicing from the predecessor Servicer, including, without limitation, any
costs and expenses associated with the complete transfer of all servicing data
and the completion, connection or manipulation of such servicing data as may
be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee to service the Mortgage
Loans properly and effectively.
(c) The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(d) Any successor, including the Trustee, to the Servicer as Servicer
shall during the term of its service as Servicer continue to service and
administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.14 hereof.
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Section 7.03. Waiver of Servicer Events of Termination.
The Majority Certificateholders may, on behalf of all
Certificateholders, by notice in writing to the Servicer and the Trustee,
waive any events permitting removal of the Servicer as servicer pursuant to
this Article VII, provided, however, that the Majority Certificateholders may
not waive an event that results in a failure to make any required distribution
on a Certificate without the consent of the Holder of such Certificate. Upon
any waiver of a Servicer Event of Termination, such event shall cease to exist
and any Servicer Event of Termination arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Trustee to the Rating Agencies.
Section 7.04. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor the Servicer
pursuant to this Article VII or Section 6.04 hereof, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute
a Servicer Event of Termination for five Business Days after a Responsible
Officer of the Trustee becomes aware of the occurrence of such an event, the
Trustee shall transmit by mail to all Certificateholders notice of such
occurrence unless such Servicer Event of Termination shall have been waived or
cured.
Section 7.05. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination and after the curing or waiver of all Servicer Events of
Termination which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. If a
Servicer Event of Termination has occurred (which has not been cured or
waived) of which a Responsible Officer has knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his 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
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to be furnished pursuant to any provision of this Agreement, shall
examine them to determine whether they conform to the requirements of this
Agreement; provided, however, that the Trustee will not be responsible for the
accuracy or content of any such resolutions, certificates, statements,
opinions, reports, documents or other instruments. If any such instrument is
found not to conform to the requirements of this Agreement in a material
manner the Trustee shall take such action as it deems appropriate to have the
instrument corrected.
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 a Servicer Event of Termination,
and after the curing of all such Servicer Events of Termination
which may have occurred, the duties and obligations of the Trustee
shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Trustee and, in the absence
of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the consent or at the direction of Holders
of Certificates as provided herein relating to the time, method and
place of conducting any remedy pursuant to this Agreement, or
exercising or omitting to exercise any trust or power conferred upon
the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
Servicer Event of Termination unless a Responsible Officer of the
Trustee at the Corporate Trust Office obtains actual knowledge of
such failure or the Trustee receives written notice of such Servicer
Event of Termination from the Servicer or the Majority
Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
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Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01 hereof:
(i) the Trustee may request and rely upon, 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 reasonably believed
by it to be genuine and to have been signed or presented by the proper
party or parties, and the manner of obtaining consents and of
evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe;
(ii) the Trustee may consult with counsel and any written advice
of its counsel or 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 advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; the right of the Trustee to
perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and the Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance of
any such act;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination
and after the curing or waiver of all Servicer Events of Termination
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or documents, unless
requested in writing to do so by the Majority Certificateholder;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee,
shall be reimbursed by the Servicer upon demand (or if the Servicer
fails to reimburse the Trustee, by the Trust Fund). Nothing in this
clause (v) shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Mortgagors;
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(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Servicer until such time as the Trustee may be
required to act as Servicer pursuant to Section 7.02 hereof and
thereupon only for the acts or omissions of the Trustee as successor
Servicer;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
Section 8.02A. No Solicitations.
From and after the Closing Date, the Trustee agrees that it will not
take any action, to personally, by telephone or mail, solicit the Mortgagor
under any Mortgage Loan for any purpose; provided, however, that it is
understood and agreed that promotions undertaken by the Trustee which are
directed to the customers of the Trustee or the public generally, including,
without limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements, shall not constitute
solicitations under this section, nor is the Trustee prohibited from responding
to unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor. In addition, the Trustee agrees that it will not provide to any third
party, including any Affiliate of the Trustee, any information, including but
not limited to the names of any Mortgagors or the addresses of any Mortgaged
Properties, related to any Mortgagor or Mortgage Loan, except as otherwise
contemplated by this Agreement.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for
the use or application by the Servicer, or for the use or application of any
funds paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence
and enforceability of any hazard insurance thereon (other than if the Trustee
shall assume the duties of the
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Servicer pursuant to Section 7.02 hereof); the validity of the assignment of
any Mortgage Loan to the Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 7.02); the compliance by the Depositor, the
Seller or the Servicer with any warranty or representation made under this
Agreement or in any related document or the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies
by or at the direction of the Servicer or any loss resulting therefrom, it
being understood that the Trustee shall remain responsible for any Trust
property that it may hold in its individual capacity; the acts or omissions of
the Servicer (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 7.02 and then only for the acts or omissions of
the Trustee as successor Servicer), any Sub-Servicer or any Mortgagor; any
action of the Servicer (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02), or any Sub-Servicer taken in the name
of the Trustee; the failure of the Servicer or any Sub-Servicer to act or
perform any duties required of it as agent of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Servicer (other than if
the Trustee shall assume the duties of the Servicer pursuant to Section 7.02
and then only for the actions of the Trustee as successor Servicer); provided,
however, that the foregoing shall not relieve the Trustee of its obligation to
perform its duties under this Agreement, including, without limitation, the
Trustee's duty to review the Mortgage Files, if so required pursuant to
Section 2.01 hereof. The Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact any banking and trust
business with the Seller, the Servicer, the Depositor or their Affiliates with
the same rights as it would have if it were not Trustee.
Section 8.05. Trustee's Fees and Expenses; Indemnification of Trustee
and Auction Administrator.
The Trustee, as compensation for all services rendered by the Trustee in
the exercise and performance of any of the powers and duties hereunder, shall be
entitled to withdraw from the Distribution Account on each Distribution Date an
amount equal to the Trustee Fee for such Distribution Date. The Trust Fund shall
pay or reimburse the Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including but not limited to Section
7.01 and Section 8.02(v) hereof and including the reasonable compensation and
the expenses and disbursements of its counsel and of all persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith or which is the responsibility of
Certificateholders or the Trustee hereunder.
In addition, the Trust Fund shall indemnify the Trustee and the Auction
Administrator and their officers, directors, employees and agents from, and hold
them harmless against, any and all losses, liabilities, damages, claims or
expenses incurred in connection with any legal action relating to this
Agreement, the Trust Fund or the Certificates, in the case of the Trustee, or
the Auction Administration Agreement, the Swap Agreement or Class A-1
Certificates, in the case of the Auction Administrator, other than any loss,
liability or expense incurred by reason of
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willful misfeasance, bad faith or negligence of the Trustee or Auction
Administrator in the performance of their respective duties hereunder or
thereunder or by reason of the Trustee's or Auction Administrator's reckless
disregard of obligations and duties hereunder or thereunder. This section
shall survive termination of this Agreement or the resignation or removal of
the Trustee hereunder, or Auction Administrator under the Auction
Administration Agreement.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any
state thereof, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and a minimum
long-term debt rating of BBB by S&P and Xxxxx'x and a short-term rating of at
least P-1 by Xxxxx'x and in one of S&P's two highest short-term rating
categories, and subject to supervision or examination by federal or state
authority. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 8.06, the combined
capital and surplus of such entity shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
The principal office of the Trustee (other than the initial Trustee) shall be
in a state with respect to which an Opinion of Counsel has been delivered to
such Trustee at the time such Trustee is appointed Trustee to the effect that
the Trust will not be a taxable entity under the laws of such state. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof.
Section 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Seller,
the Servicer and the Rating Agencies. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and having accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof or if at any time the Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor or the Servicer may remove the Trustee. If the Depositor or the
Servicer removes the Trustee under the authority of the immediately preceding
sentence, the Servicer shall promptly appoint a successor Trustee, with the
consent of the Depositor, which consent shall not be unreasonably withheld, 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.
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The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Servicer, the Depositor and
the Trustee; the Servicer, with the consent of the Depositor, which consent
shall not be unreasonably withheld, shall thereupon use its best efforts to
appoint a successor trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee
as provided in Section 8.08 hereof.
Section 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, the Seller, the
Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee. The Depositor, the Seller,
the Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 hereof and the
appointment of such successor Trustee shall not result in a downgrading of the
Senior Certificates by either Rating Agency, as evidenced by a letter from
each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment
of a successor Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to each Rating Agency.
Section 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
entity succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such entity shall be eligible under the
provisions of Section 8.06 and 8.08 hereof, without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located,
the Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons, with the
consent of the Depositor, which consent shall not be unreasonably withheld,
approved
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by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. Any such co-trustee or separate trustee
shall be subject to the written approval of the Servicer. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by
it of a request so to do, or in the case a Servicer Event of Termination shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 hereof, and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.08 hereof.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Servicer Event of
Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Depositor and the Servicer.
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Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11. Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the
Certificates is made and intended not as a personal undertaking or agreement
by the Trustee but is made and intended for the purpose of binding only the
Trust.
Section 8.12. Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee for the benefit
of all Holders of such Certificates, subject to the provisions of this
Agreement. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel, be for the ratable benefit or the
Certificateholders in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable notice during normal business hours
at its Corporate Trust Office or other office designated by the Trustee,
access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing
such duties. Upon request, the Trustee shall furnish the Depositor, the
Servicer and any requesting Certificateholder with its most recent audited
financial statements. The Trustee shall cooperate fully with the Seller, the
Servicer, the Depositor and such Certificateholder and shall, subject to the
first sentence of this Section 8.12(b), make available to the Seller, the
Servicer, the Depositor and such Certificateholder for review and copying such
books, documents or records as may be requested with respect to the Trustee's
duties hereunder. The Seller, the Depositor, the Servicer and the
Certificateholders shall not have any responsibility or liability for any
action or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.
Section 8.13. Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee
may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution
of any power
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granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and
subject to the foregoing, shall deem most effectual to protect and enforce any
of the rights of the Trustee and the Certificateholders.
Section 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16. Appointment of Custodians.
The Trustee may, with the consent of the Servicer, appoint one or more
custodians to hold all or a portion of the Mortgage Files as agent for the
Trustee, by entering into a Custodial Agreement. The custodian may at any time
be terminated by the Servicer and a substitute custodian appointed therefor
with the consent of the Trustee, which consent shall not be unreasonably
withheld. 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 having
an interest in any Mortgage File held by such custodian. Each custodian shall
be a depository institution or trust company subject to supervision by federal
or state authority, shall have combined capital and surplus of at least
$15,000,000 and shall be qualified to do business in the jurisdiction in which
it holds any Mortgage File. The Servicer shall pay from its own funds, without
any right to reimbursement, the fees, costs and expenses of each custodian
(including the costs of custodian's counsel).
Section 8.17. Assumption of Auction Administration Agreement and Swap
Agreement.
In the event the Auction Administrator shall for any reason no longer
be the Auction Administrator, the Trustee shall thereupon assume all of the
rights and obligations of such Auction Administrator under the Auction
Administration Agreement and the Swap Agreement or shall appoint a successor,
to the appointment of which the Trustee has received GCD's prior written
consent (which consent shall not be unreasonably withheld). The Trustee, its
designee or any successor auction administrator appointed by the Trustee
hereunder shall be deemed to have assumed all of the Auction Administrator's
interest in the Auction Administration Agreement and the Swap Agreement to the
same extent as if such Auction Administration Agreement and Swap Agreement had
been assigned to the assuming party.
The Auction Administrator that has been terminated shall, upon request
of the Trustee, deliver to the assuming party all documents and records
relating to the Auction Administration Agreement and the Swap Agreement and
otherwise use its best efforts to effect the orderly and
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efficient transfer of the Auction Administration Agreement and the Swap
Agreement to the assuming party.
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01. REMIC Administration.
(a) As set forth in the Preliminary Statement to this Agreement, two
REMIC elections shall be made by the Trustee on Form 1066 or other appropriate
federal tax or information return and, if applicable, under Applicable State
or Local Tax Laws for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and the sole
class of residual interests in each REMIC shall be as designated in the
Preliminary Statement. The Servicer shall not permit the creation of, nor
shall the Trustee create, any "interests" (within the meaning of Section 860G
of the Code) in any REMIC created hereunder other than the interests specified
in the immediately preceding sentence. Following the Closing Date, the Trustee
shall apply to the IRS for an employer identification number for each REMIC
created hereunder by means of a Form SS-4 or other acceptable method.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC created hereunder within the meaning of section 860G(a)(9) of the Code.
(c) Except as provided in subsection (d) of this Section 9.01, the
Trustee shall pay any and all tax related expenses (not including taxes) of
each REMIC created hereunder, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Trustee in fulfilling its
duties hereunder (including its duties as tax return preparer). The Trustee
shall be entitled to reimbursement of expenses referred to in clause (i) above
from the Collection Account.
(d) The Trustee shall prepare, and the Trustee shall sign (or cause to
be signed) and file, all of the federal and state tax and information returns
of each REMIC created hereunder. The expenses of preparing and filing such
returns shall be borne by the Trustee.
(e) The Holder of the Class A-R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as
defined in the REMIC Provisions (the "Tax Matters Person") with respect to
each REMIC created hereunder and shall act as Tax Matters Person for each such
REMIC. By its acceptance hereof, the Tax Matters Person hereby appoints the
Trustee as its agent to perform all of the duties of the Tax Matters Person
with respect to each REMIC created hereunder and the Trustee hereby accepts
such appointment. The
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Trustee, as agent for the Tax Matters Person, shall perform on behalf
of each REMIC created hereunder all reporting and other tax compliance duties
that are the responsibility of each such REMIC under the Code, the REMIC
Provisions or other compliance guidance issued by the Internal Revenue Service
or any state or local taxing authority. Among its other duties, if required by
the Code, the REMIC Provisions or other such guidance, the Trustee, as agent
for the Tax Matters Person, shall provide (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the Transfer of the Class A-R Certificate to any
disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee (to the extent that the affairs of the REMICs are
within its control and the scope of its specific responsibilities under the
Agreement), the Servicer and the Holders of Certificates shall take any action
or cause any REMIC created hereunder to take any action necessary to create or
maintain the status of each REMIC created hereunder as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain such
status. Neither the Trustee, the Servicer nor the Holder of the Class A-R
Certificate shall take any action, cause any REMIC created hereunder to take
any action or fail to take (or fail to cause to be taken) any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could
(i) endanger the status of any REMIC created hereunder as a REMIC or (ii)
result in the imposition of a tax upon any REMIC created hereunder (including
but not limited to the tax on prohibited transactions as defined in Code
Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (any such event, an "Adverse REMIC Event") unless
the Trustee and the Servicer have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition
of such a tax. In addition, prior to taking any action with respect to any
REMIC created hereunder or the assets therein, or causing any such REMIC to
take any action which is not expressly permitted under the terms of this
Agreement, any Holder of the Class A-R Certificate will consult with the
Trustee and the Servicer, or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur
with respect to any such REMIC, and no such Person shall take any such action
or cause any REMIC created hereunder to take any such action as to which the
Trustee or the Servicer has advised it in writing that an Adverse REMIC Event
could occur. Should the Trustee choose to consult tax counsel as permitted
under Section 8.02(a)(ii) in advising any Holder of the Class A-R Certificate
that a proposed action may result in an Adverse REMIC Event, fees and expenses
related to such consultation with tax counsel shall be paid from the
Collection Account.
(g) Each Holder of the Class A-R Certificate shall pay when due any
and all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by
the Class A-R Certificateholder, the Trustee shall pay any remaining REMIC
taxes out of current or future amounts otherwise distributable to the Holder
of the Class A-R Certificate or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to holders of regular interests in each such REMIC, as the
case may be.
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(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
Section 9.02. Prohibited Transactions and Activities.
Neither the Depositor, the Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC created
hereunder pursuant to Article X of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for any REMIC
created hereunder, nor sell or dispose of any investments in the Distribution
Account for gain, nor accept any contributions to any REMIC created hereunder
after the Closing Date, unless it has received an Opinion of Counsel (at the
expense of the party causing such sale, disposition, or substitution) that
such disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of any REMIC created hereunder as a REMIC or of the
interests therein other than the Class A-R Certificate as the "residual
interest" therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this
Agreement) or (d) cause any REMIC created hereunder to be subject to a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 9.03. Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
In the event that any REMIC created hereunder fails to qualify as a
REMIC, lose its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Holder of the
Class A-R Certificate against any and all losses, claims, damages, liabilities
or expenses ("Losses") resulting from such negligence; provided, however, that
the Servicer shall not be liable for any such Losses attributable to the action
or inaction of the Trustee, the Depositor or the Holder of Class A-R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Trustee or the Holder of the Class A-R
Certificate on which the Servicer has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Holder of the Class A-R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Servicer have any liability (1) for
any action or omission that is taken in accordance with and in compliance with
the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Servicer of its duties and obligations set forth
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herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
Section 9.04. REO Property.
(a) Notwithstanding any other provision of this Agreement, the
Servicer, acting on behalf of the Trustee hereunder, shall not, and shall not
permit any Subservicer to, rent, lease, or otherwise earn income on behalf of
any REMIC created hereunder with respect to any REO Property which might cause
such REO Property to fail to qualify as "foreclosure" property within the
meaning of section 860G(a)(8) of the Code or result in the receipt by such
REMIC of any "income from non-permitted assets" within the meaning of section
860F(a)(2) of the Code or any "net income from foreclosure property" which is
subject to tax under the REMIC Provisions unless the Servicer has obtained an
Opinion of Counsel (a copy of which shall be delivered to the Trustee) to the
effect that, under the REMIC Provisions, such action would not adversely
affect the status of any REMIC created hereunder as a REMIC and any income
generated for such REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property within three years of its acquisition by the Trust
Fund unless the Servicer on behalf of the Trust Fund has received a grant of
extension (a copy of which shall be provided to the Trustee) from the Internal
Revenue Service to the effect that, under the REMIC Provisions and any
relevant proposed legislation and under applicable state law, the REMIC may
hold REO Property for a longer period without adversely affecting such REMIC
status of any REMIC created hereunder or causing the imposition of a federal
or state tax upon such REMIC. If the Servicer has received such an extension,
then the Servicer shall continue to attempt to sell the REO Property for its
fair market value for such period longer than three years as such extension
permits (the "Extended Period"). If the Servicer has not received such an
extension and the Servicer is unable to sell the REO Property within 33 months
after its acquisition by the Trust Fund or if the Servicer has received such
an extension, and the Servicer is unable to sell the REO Property within the
period ending three months before the close of the Extended Period, the
Servicer shall before the end of the three year period or the Extended Period,
as applicable, (i) purchase such REO Property at a price equal to the REO
Property's fair market value or (ii) auction the REO Property to the highest
bidder (which may be the Servicer) in an auction reasonably designed to
produce a fair price prior to the expiration of the three-year period or the
Extended Period, as the case may be.
ARTICLE X
TERMINATION
Section 10.01. Termination.
(a) The respective obligations and responsibilities of the Seller, the
Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Servicer to send certain
notices as hereinafter set forth) shall terminate upon notice to the Trustee
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upon the earliest of (i) the Distribution Date on which the Class Certificate
Principal Balance of each Class of Certificates has been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan, (iii) the
optional purchase by the Servicer of the Mortgage Loans as described below and
(iv) the Latest Possible Maturity Date. Notwithstanding the foregoing, in no
event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof.
The Servicer may, at its option, terminate this Agreement on any date on
which the aggregate of the Principal Balances of the Mortgage Loans on such date
is 5% or less of the aggregate of the Cut-off Date Principal Balance of the
Mortgage Loans, by purchasing, on the related Distribution Date, all of the
outstanding Mortgage Loans and REO Properties at a price equal to the sum of (i)
the lesser of (x) the estimated fair market value of the Mortgage Loans and any
REO Property and (y) the outstanding Principal Balances of the Mortgage Loans
(including each Mortgage Loan related to an REO Property) and (ii) the sum of
accrued and unpaid interest thereon at the weighted average of the Net Loan
Rates through the end of the Due Period preceding the final Distribution Date,
plus unreimbursed Servicing Advances and any unpaid Servicing Fees allocable to
such Mortgage Loans and REO Properties, plus all amounts, if any, then due and
owing to the Trustee under this Agreement (the "Termination Price"); provided,
however, that such purchase shall occur only if the Termination Price is
sufficient to pay in full the Certificate Balance of each outstanding
Certificate plus accrued and unpaid interest on each Certificate at the
applicable Pass-Through Rate through the end of the related Accrual Period, plus
unreimbursed Servicing Advances and any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties, plus all amounts, if any, then due and owing
to the Trustee under this Agreement.
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase. Amounts so deposited in the
Distribution Account shall be applied to the Classes of Certificates in the same
order and priority as set forth in Section 4.01 hereof with respect to monthly
distributions such that the Class Certificate Principal Balance of the most
senior Class of outstanding Certificates are reduced to zero prior to any
payments being made to more subordinate Classes of Certificates.
(b) Notice of any termination pursuant to the second paragraph of
Section 10.01(a), specifying the Distribution Date (which shall be a date that
would otherwise be a Distribution Date) upon which the Certificateholders may
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Trustee upon the
Trustee receiving notice of such date from the Servicer, by letter to the
Certificateholders mailed not earlier than the 5th day and not later than the
15th day of the month immediately preceding the month of such final
distribution specifying (1) the Distribution Date upon which final
distribution of the Certificates will be made upon presentation and surrender
of such Certificates at the office or agency of the Trustee therein
designated, (2) the amount of any such final distribution and (3) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified.
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(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 hereof for such
Distribution Date.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate account for the
benefit of such Certificateholders, and the Servicer (if the Servicer has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any
other case) shall give a second written notice to the remaining
Certificateholders, to surrender their Certificates for cancellation and
receive the final distribution with respect thereto. If within nine months
after the second notice all the Certificates shall not have been surrendered
for cancellation, the Class A-R Certificateholder shall be entitled to all
unclaimed funds and other assets which remain subject hereto, and the Trustee
upon transfer of such funds shall be discharged of any responsibility for such
funds, and the Certificateholders shall look to the Class A-R
Certificateholder for payment.
Section 10.02. Additional Termination Requirements.
(a) In the event that the Servicer exercises its purchase option as
provided in Section 10.01, the Trust shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section will not (i) result in
the imposition of taxes on "prohibited transactions" of the Trust as defined
in Section 860F of the Code or (ii) cause the REMIC constituting the Trust
Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) within 90 days prior to the final Distribution Date, the
Trustee shall adopt and sign a plan of complete liquidation of the
REMIC meeting the requirements of a "Qualified Liquidation" under
Section 860F of the Code and any regulations thereunder;
(ii) at or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the Trust to the
Servicer for cash pursuant to the terms of the plan of complete
liquidation; and
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited to the Holders of each Class of the
Certificates, the related Class Certificate Principal Balance of the
Class, plus one month's interest thereon at the applicable
Pass-Through Rate, and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a
plan of complete liquidation (and the Certificateholders hereby appoint the
Trustee as their attorney in fact to sign such plan) as
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appropriate and (ii) to take such other action in connection therewith
as may be reasonably required to carry out such plan of complete liquidation
all in accordance with the terms hereof.
ARTICLE XI
[RESERVED]
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment.
This Agreement may be amended from time to time by Seller, the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement, which shall not be
inconsistent with the provisions of this Agreement; provided, however, that
any such action listed in clause (i) through (iii) above shall be deemed not
to adversely affect in any material respect the interests of any
Certificateholder, if evidenced by (i) written notice to the Depositor, the
Seller, the Servicer and the Trustee from the Rating Agencies that such action
will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency
or (ii) an Opinion of Counsel delivered to the Servicer and the Trustee.
In addition, this Agreement may be amended from time to time for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders of any Class of Certificates by the Seller, the
Depositor, the Servicer and the Trustee with the consent of the Holders of
Certificates of each Class affected thereby evidencing a majority Percentage
Interest in such Class; provided, however, that no such amendment or waiver
shall (x) reduce in any manner the amount of, or delay the timing of, payments
on the Certificates which are required to be made on any Certificate without
the consent of the Holder of such Certificate, (y) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in
a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by and at the expense of
the Person seeking such Amendment (unless such Person is the Trustee, in which
case the Trustee shall be entitled to be reimbursed for such expenses by the
Trust pursuant to Section 8.05 hereof), to the effect that such amendment will
not result in the imposition of a tax on any REMIC created hereunder pursuant
to the REMIC Provisions or cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that
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any Certificates are outstanding and that the amendment is being made in
accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Seller or the Servicer (but in no event at the expense of the
Trustee), otherwise at the expense of the Trust, a copy of such amendment and
the Opinion of Counsel referred to in the immediately preceding paragraph to
the Servicer and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders under
this Section 12.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any amendment
pursuant to this 12.01 Section that affects its rights, duties and immunities
under this Agreement or otherwise.
Section 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Servicer at the
expense of the Trust, but only upon direction of Certificateholders accompanied
by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as herein before provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 12.03, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to
any claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of
or relating hereto brought in any such courts, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in any inconvenient forum and further irrevocably waives the right to
object, with respect to such claim, suit, action or proceeding brought in any
such court, that such court does not have jurisdiction over such party,
provided that service of process has been made by any lawful means.
Section 12.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service or
facsimile to (a) in the case of the Seller or the Servicer, to First Republic
Bank, 000 Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx
(telecopy number (000) 000-0000) with a copy to the General Counsel (telecopy
number (000) 000-0000) or such other address or telecopy number as may
hereafter be furnished to the Depositor, the Trustee and the Servicer in
writing by the Seller or the Servicer, (b) in the case of the Trustee, to
Xxxxx Fargo Bank Minnesota, National Association, X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000 or for overnight delivery, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Services - Mortgage Loan
Pass-Through Certificates, Series
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2002-FRB2 (telecopy number (000) 000-0000), with a copy to the Corporate Trust
Office or such other address or telecopy number as may hereafter be furnished
to the Depositor, the Seller and the Servicer in writing by the Trustee, (c)
in the case of the Depositor, Greenwich Capital Acceptance, Inc., 000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: General Counsel
(telecopy number (000) 000-0000), or such other address or telecopy number as
may be furnished to the Seller, the Servicer and the Trustee in writing by the
Depositor. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified
mail. Any notice so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have duly been given when mailed, whether or not
the Certificateholder receives such notice. A copy of any notice required to
be telecopied hereunder shall also be mailed to the appropriate party in the
manner set forth above.
Section 12.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 12.08. Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be obligated to use its
best reasonable efforts promptly to provide notice to the Rating Agencies with
respect to each of the following of which a Responsible Officer of the Trustee
or the Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that
has not been cured or waived;
(iii) the resignation or termination of the Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
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(b) The Servicer shall promptly furnish to each Rating Agency copies
of the following:
(i) each annual statement as to compliance described in Section
3.20 hereof;
(ii) each annual independent public accountants' servicing
report described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 12.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Standard
& Poor's Ratings Services, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and to
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Section 12.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
Section 12.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 12.11. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by agent duly appointed in writing, and such action shall become effective
when such instrument or instruments are delivered to the Trustee, the Seller
and the Servicer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act"
of the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and conclusive in favor
of the Trustee and the Trust, if made in the manner provided in this Section
12.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution
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thereof. Whenever such execution is by a signer acting in a capacity
other than his or her individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every
future Holder of such Certificate and the Holder of every Certificate issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Trust in reliance thereon, whether or not notation of such
action is made upon such Certificate.
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IN WITNESS WHEREOF, the Depositor, the Seller and the 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.
GREENWICH CAPITAL ACCEPTANCE, INC.,
as Depositor
By:______________________________________
Name:
Title:
FIRST REPUBLIC BANK,
as Seller and Servicer
By:______________________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:______________________________________
Name:
Title:
120
STATE OF )
) ss.:
COUNTY OF )
On the __day of November 2002, before me, a notary public in and for
said State, personally appeared ______________ known to me to be a
______________ of Greenwich Capital Acceptance, Inc., a Delaware corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________
Notary Public
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STATE OF )
) ss.:
COUNTY OF )
On the __ day of November 2002, before me, a notary public in and for
said State, personally appeared ______________ known to me to be a
_______________________ of First Republic Bank, a Nevada state-chartered bank
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said bank, and acknowledged to me that such bank
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_______________________________
Notary Public
122
STATE OF )
) ss.:
COUNTY OF )
On the __ day of November 2002, before me, a notary public in and for
said State, personally appeared _______________, known to me to be
____________________ of Xxxxx Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said association, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
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