EXHIBIT 4.2.4
ASSET BACKED SECURITIES CORPORATION,
DEPOSITOR
[Name of Master Servicer],
MASTER SERVICER
and
[Name of Trustee],
TRUSTEE
STANDARD TERMS AND PROVISIONS
OF
POOLING AND SERVICING AGREEMENT
Dated as of , 199_
CONDUIT MORTGAGE PASS-THROUGH CERTIFICATES
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Page
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Administrative Fee.............................. 1
Agreement....................................... 1
Alternative Credit Support...................... 1
Appraised Value................................. 1
Authenticating Agent............................ 1
Business Day.................................... 2
Buydown Funds................................... 2
Buydown Mortgage Loan........................... 2
Certificate..................................... 2
Certificate Account............................. 2
Certificate Register and Certificate Registrar.. 2
Certificateholder or Holder..................... 2
Class........................................... 3
Code............................................ 3
Corporate Trust Office.......................... 3
Credit Support.................................. 3
Custodial Account............................... 3
Custodial Agreement............................. 3
Custodian....................................... 3
Cut-off Date.................................... 3
Deleted Mortgage Loan........................... 3
Delivery Date................................... 3
Depositor....................................... 4
Determination Date.............................. 4
Distribution Date............................... 4
Due Date........................................ 4
Eligible Account................................ 4
Eligible Investments............................ 4
Event of Default................................ 5
FDIC............................................ 5
FHA............................................. 5
FHA Certificate of Mortgage Insurance........... 5
FHA Loan........................................ 6
FHA Regulations................................. 6
FHLMC........................................... 6
FNMA............................................ 6
FSLIC........................................... 6
Insurance Policy................................ 6
Insurance Proceeds.............................. 6
Insured Expenses................................ 6
L/C Bank........................................ 7
Letter of Credit................................ 7
Liquidating Loan................................ 7
Liquidation Expenses............................ 7
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Liquidation Proceeds............................ 8
Loan-to-Value Ratio............................. 8
Master Servicer................................. 8
Monthly Advance................................. 8
Mortgage........................................ 8
Mortgage File................................... 8
Mortgage Loan Schedule.......................... 8
Mortgage Loans.................................. 9
Mortgage Note................................... 10
Mortgage Rate................................... 10
Mortgaged Property.............................. 10
Mortgagor....................................... 10
Mortgagor Bankruptcy Bond....................... 10
Nonrecoverable Advance.......................... 10
Nonsubserviced Mortgage Loan.................... 10
Officers' Certificate........................... 10
Opinion of Counsel.............................. 10
Pass-Through Rate............................... 11
Paying Agent.................................... 11
Performance Bond................................ 11
Person.......................................... 11
Pool Insurance Policy........................... 11
Pool Insurer.................................... 11
Primary Mortgage Insurance Policy............... 11
Principal Balance............................... 11
Principal Prepayment............................ 11
Purchase Price.................................. 12
Purchase Year................................... 12
Qualified Insurer............................... 12
Rating Agency................................... 12
REMIC........................................... 13
Replacement Mortgage Loan....................... 13
Required Insurance Policy....................... 13
Reserve Fund.................................... 13
Responsible Officer............................. 13
Retained Yield.................................. 13
Series.......................................... 13
Servicer........................................ 14
Servicer Advance................................ 14
Servicer Remittance Date........................ 14
Servicing Account............................... 14
Servicing Fee................................... 14
Servicing Officer............................... 14
Single Certificate.............................. 14
Special Hazard Insurance Policy................. 15
Special Hazard Insurer.......................... 15
Subordinated Certificates....................... 15
Trust Fund...................................... 15
Trust Receipt................................... 15
Trustee......................................... 15
Uninsured Cause................................. 15
VA.............................................. 15
VA Loan......................................... 15
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VA Loan Guaranty Certificate............... 15
VA Regulations............................. 16
Voting Rights.............................. 16
Warranty and Servicing Agreement........... 16
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans............... 16
SECTION 2.02 Acceptance by Trustee...................... 19
SECTION 2.03 Representations, Warranties and
Covenants of the Master Servicer........... 20
SECTION 2.04 Representations, Warranties and
Covenants of the Depositor as to the
Mortgage Loans............................. 25
SECTION 2.05 Representations and Warranties of Servicers 28
SECTION 2.06 Assignment of Rights under Warranty
and Servicing Agreements................... 30
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01 Master Servicer to Act as Master Servicer... 30
SECTION 3.02 Enforcement of the Obligations
of Servicers................................ 32
SECTION 3.03 Successor Servicers......................... 33
SECTION 3.04 Termination of the Rights of Servicers...... 33
SECTION 3.05 Liability of the Master Servicer............ 34
SECTION 3.06 Rights of the Depositor and the Trustee
In Respect of the Master Servicer........... 34
SECTION 3.07 Trustee to Act as Servicer.................. 35
SECTION 3.08 Collection of Mortgage Loan Payments;
Certificate Account......................... 35
SECTION 3.09 Servicing Accounts.......................... 38
SECTION 3.10 Collection of Taxes, Assessments and Similar
Items; Escrow Accounts...................... 39
SECTION 3.11 Access to Certain Documentation and
Information Regarding the Mortgage Loans.... 40
SECTION 3.12 Permitted Withdrawals from the Certificate
Account..................................... 40
SECTION 3.13 Maintenance of the Pool Insurance Policy,
Primary Mortgage Insurance Policies,
FHA Insurance and VA Loan Guarantees;
Collections Thereunder...................... 42
SECTION 3.14 Maintenance of Hazard Insurance, the
Special Hazard Insurance Policy and
Other Insurance............................. 44
SECTION 3.15 Enforcement of Due-on-Sale Clauses;
Assumption Agreements....................... 47
SECTION 3.16 Realization Upon Defaulted Mortgage Loans... 49
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SECTION 3.17 Trustee to Cooperate; Release of Mortgage
Files........................................ 49
SECTION 3.18 Documents, Records and Funds in Possession
of Master Servicer to be Held for the
Depositor and the Trustee.................... 51
SECTION 3.19 Servicing Compensation; Retained Yield....... 52
SECTION 3.20 Reports to the Trustee and the Depositor;
Certificate Account Statements............... 52
SECTION 3.21 Annual Statement as to Compliance............ 52
SECTION 3.22 Annual Independent Public Accountants'
Servicing Report............................. 53
SECTION 3.23 Maintenance of the Mortgagor Bankruptcy Bond;
Collections Thereunder....................... 54
SECTION 3.24 Letter of Credit............................. 54
SECTION 3.25 Reserve Fund................................. 55
SECTION 3.26 Administration of Buydown Funds.............. 56
ARTICLE IV
ADVANCES BY THE MASTER SERVICER; PERFORMANCE BOND
SECTION 4.01 Monthly Advances............................ 57
SECTION 4.02 Advances for Attorneys' Fees................ 58
SECTION 4.03 Advances for Amounts Collected by Servicer
but Not Remitted............................ 58
SECTION 4.04 Nonrecoverable Advances..................... 59
SECTION 4.05 Advances for Additional Interest In
Connection with Principal Prepayments....... 59
SECTION 4.06 Performance Bond............................ 60
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates............................ 61
SECTION 5.02 Registration of Transfer and Exchange of
Certificates................................ 62
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates................................ 63
SECTION 5.04 Persons Deemed Owners....................... 63
SECTION 5.05 Access to List of Certificateholders' Names
and Addresses............................... 64
SECTION 5.06 Maintenance of Office or Agency............. 64
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01 Respective Liabilities of the Depositor
and the Master Servicer..................... 65
SECTION 6.02 Merger or Consolidation of the Depositor
and the Master Servicer..................... 65
SECTION 6.03 Limitation on Liability of the Depositor,
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the Master Servicer and Others............. 66
SECTION 6.04 Master Servicer Not to Resign.............. 67
SECTION 6.05 Errors and Omissions Insurance; Fidelity
Bonds...................................... 67
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.......................... 67
SECTION 7.02 Trustee to Act; Appointment of Successor... 69
SECTION 7.03 Notification to Certificateholders......... 70
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of Trustee.......................... 71
SECTION 8.02 Certain Matters Affecting the Trustee...... 72
SECTION 8.03 Trustee Not Liable for Mortgage Loans...... 73
SECTION 8.04 Trustee May Own Certificates............... 73
SECTION 8.05 Master Servicer to Pay Trustee's Fees and
Expenses................................... 73
SECTION 8.06 Eligibility Requirements for Trustee....... 73
SECTION 8.07 Resignation and Removal of the Trustee..... 74
SECTION 8.08 Successor Trustee.......................... 74
SECTION 8.09 Merger or Consolidation of Trustee......... 75
SECTION 8.10 Appointment of Authenticating Agent........ 75
SECTION 8.11 Appointment of Co-Trustee or Separate
Trustee.................................... 77
SECTION 8.12 Tax Returns................................ 78
SECTION 8.13 Appointment of Custodians.................. 79
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Repurchase by the
Depositor................................. 79
SECTION 9.02 Final Distribution on the Certificates...... 80
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment................................. 80
SECTION 10.02 Recordation of Agreement; Counterparts.... 81
SECTION 10.03 Governing Law............................. 81
SECTION 10.04 Intention of Parties...................... 81
SECTION 10.05 Notices................................... 81
SECTION 10.06 Severability of Provisions................ 82
SECTION 10.07 Assignment................................ 82
SECTION 10.08 Limitation on Rights of Certificateholders 82
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SECTION 10.09 Inspection and Audit Rights............... 83
SECTION 10.10 Certificates Nonassessable and Fully Paid. 84
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THESE STANDARD TERMS AND PROVISIONS OF POOLING AND SERVICING
AGREEMENT, are dated as of ________, 199_, among ASSET BACKED SECURITIES
CORPORATION, as depositor (the "Depositor"), [Name of Master Servicer], as
master servicer (the "Master Servicer") and [Name of Trustee], as trustee (the
"Trustee") and are incorporated by reference in the Reference Agreement (as
hereinafter defined), to the extent set forth therein. Upon execution of the
Reference Agreement, this document, as amended and supplemented by the Reference
Agreement, represents the agreement of the parties with respect to the sale and
servicing of the Mortgage Loans to the Trust named in such Reference Agreement.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee agree, in addition to the matters
set froth in the Reference Agreement, as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Administrative Fee: With respect to any Mortgage Loan, the
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percentage rate per annum of the Principal Balance of each Mortgage Loan that is
payable to the Depositor out of each payment on account of interest of such
Mortgage Loan, exclusive of any Retained Yield, Servicing Fee and servicing
compensation payable to the Servicer of such Mortgage Loan. The Administrative
Fee is reserved for the administration of the Trust Fund, and may be fixed or
variable, as specified in the Reference Agreement.
Agreement: This Standard Terms and Provisions of Pooling and
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Servicing, together with the Reference Agreement with respect to a Series, and
any and all amendments or supplements hereto or thereto.
Alternative Credit Support: Any method of credit support, other than
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the methods of Credit Support specified herein and other than Subordinated
Certificates, as provided for in the applicable Reference Agreement.
Appraised Value: The appraised value of the Mortgaged Property based
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upon the appraisal made for the originator at the time of the origination of the
related Mortgage Loan, or the sales price of the Mortgaged Property at the time
of such origination, whichever is less.
Authenticating Agent: The Authenticating Agent appointed pursuant to
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Section 8.10 hereof and identified in the Reference Agreement, which is
authorized by the Trustee to act on behalf of the Trustee to authenticate the
Certificates. The Authenticating Agent may be the Depositor or any Person
directly or indirectly controlling or controlled by or under common control with
the Depositor.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
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a day on which banking institutions in New York are authorized or obligated by
law or executive order to be closed.
Buydown Funds: Any amount contributed by the seller of a Mortgaged
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Property, the Depositor, the Seller or another source in order to enable the
Mortgagor to reduce the payments required to be made by the Mortgagor from the
Mortgagor's funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified
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amount of interest is paid out of related Buydown Funds in accordance with a
buydown agreement.
Certificate: Any one of the certificates executed by the Depositor
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and authenticated by or on behalf of the Trustee in substantially the form or
forms attached as Exhibits to the Reference Agreement. The Certificates may be
issued in such Classes or Subclasses and with such characteristics as are
specified in the applicable Reference Agreement.
Certificate Account: The non-interest-bearing deposit account or
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accounts created and maintained by the Master Servicer pursuant to Section 3.08,
in the name of the Trustee for the benefit of Certificateholders for deposit of
payments and collections in respect of the Mortgage Loans pursuant to Section
3.08 hereof, which account or accounts must be an Eligible Account or Accounts.
Certificate Register and Certificate Registrar: Respectively, the
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register maintained pursuant to Section 5.02 hereof, and the registrar appointed
and identified in the Reference Agreement.
Certificateholder or Holder: The person in whose name a Certificate
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is registered in the Certificate Register, except that, solely for the purposes
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or the Master Servicer or any affiliate thereof shall
be deemed not to be outstanding and the interest evidenced thereby shall not be
taken into account in determining whether the requisite percentage of
Certificates necessary to effect any such consent has been obtained.
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Class: With respect to a Series of Certificates, all of the
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Certificates of such Series designated in the applicable Reference Agreement as
a class.
Code: The Internal Revenue Code of 1986, including any successor or
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amendatory provisions.
Corporate Trust Office: The principal office of the Trustee in [name
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of state] at which at any particular time its corporate business shall be
administered, which office at the date of the execution of this Agreement is
located at [address].
Credit Support: The Pool Insurance Policy, the Special Hazard
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Insurance Policy, the Letter of Credit, the Mortgagor Bankruptcy Bond, the
Reserve Fund or the Alternative Credit Support specified in the Reference
Agreement.
Custodial Account: If so specified in the Reference Agreement with
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respect to a Series, the non-interest-bearing deposit account or accounts
created and maintained by the Master Servicer pursuant to Section 3.08 in lieu
of the Certificate Account in the name of the Trustee for the benefit of the
Certificateholders, which account or accounts must be an Eligible Account or
Accounts. Amounts in such Custodial Account will be remitted, net of amounts
withdrawn pursuant to Section 3.12, to a Certificate Account maintained by the
Trustee pursuant to such Reference Agreement.
Custodial Agreement: The Custodial Agreement, if any, from time to
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time in effect, among the Master Servicer, the Trustee and the Custodian named
therein (if the Trustee is not the Custodian) in substantially the form set
forth as an Exhibit to the Reference Agreement.
Custodian: The Custodian or Custodians identified in the Reference
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Agreement and named pursuant to one or more Custodial Agreements as may from
time to time be in effect, or its successor in interest. The Custodian may be
the Trustee, or any Person directly or indirectly controlling or controlled by
or under common control with the Trustee, or an independent entity.
Cut-off Date: The first day of the month of the initial issuance of a
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Series of Certificates, as specified in the related Reference Agreement.
Deleted Mortgage Loan: With respect to a Series of Certificates, a
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Mortgage Loan replaced or to be replaced by a Replacement Mortgage Loan.
Delivery Date: The date of settlement of the sale of the Certificates
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to the original purchasers thereof, as specified in the Reference Agreement with
respect to a Series of Certificates.
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Depositor: Asset Backed Securities Corporation, a Delaware
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corporation, or its successor in interest.
Determination Date: The 20th day (or if such 20th day is not a
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Business Day, the Business Day immediately preceding such 20th day) of the month
of the related Distribution Date.
Distribution Date: The 25th day of each calendar month after the
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initial issuance of the Series of Certificates, or if the 25th day is not a
Business Day, the next succeeding Business Day, unless otherwise specified in
the applicable Reference Agreement.
Due Date: Unless otherwise specified in the Reference Agreement, the
--------
first day of the month in which the related Distribution Date occurs.
Eligible Account: An account (i) that is maintained with a depository
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institution or trust company incorporated under the laws of the United States or
of any state thereof and the amounts deposited therein shall be held in the form
of Eligible Investments of (ii) meeting the requirements established for a
Servicing Account.
Eligible Investments: Unless otherwise specified in the Reference
--------------------
Agreement with respect to a Series, at any time, any one or more of the
following obligations, instruments and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving one of the two highest
ratings of the Rating Agency, or such lower ratings as will not result in the
downgrading or withdrawal of the ratings then assigned to the Certificates by
the Rating Agency;
(iii) commercial or finance company paper which is then rated in the
highest commercial or finance company paper rating categories of the Rating
Agency, or such lower category as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by the Rating
Agency;
(iv) certificates of deposit, demand or time deposits, federal funds
or bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long term
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debt obligations of such depository institution or trust company (or in the case
of the principal depository institution in a holding company system, the
commercial paper or long term debt obligations of such holding company) are then
rated in the highest rating category of the Rating Agencies, in the case of
commercial paper, or in the second highest category in the case of long term
debt obligations, or such lower categories as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by the Rating
Agency;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings and loan association and fully insured by the
FDIC or the FSLIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation acceptable to the Rating Agency at the time of the
issuance of or investing in such guaranteed reinvestment agreements;
(vii) repurchase obligations with respect to any security described
in (i) and (ii) above or any other security issued or guaranteed by an agency or
instrumentality of the United States, in either case entered into with a
depository institution or trust company (acting as principal) described in (iv)
above;
(viii) securities bearing interest or sold at a discount issued by
any corporation or sold at a discount issued by any corporation incorporated
under the laws of the Untied States or any state thereof which, at the time of
such investment or contractual commitment providing for such investment are then
rated in one of the two highest categories of the Rating Agency, or in such
lower rating category as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agency; and
(ix) such other investments acceptable to the Rating Agency with
respect to mortgage pass-through certificates rated by the Rating Agency in the
same rating category as the Certificates of the related Series.
Event of Default: As defined in Section 7.01 hereof.
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FDIC: The Federal Deposit Insurance Corporation, or any successor
----
thereto.
FHA: The Federal Housing Authority of the United States Department of
---
Housing and Urban Development or any successor department or agency of the
United States of America.
FHA Certificate of Mortgage Insurance: A Mortgage Insurance
-------------------------------------
Certificate (FHA Form No. 9100-1) evidencing that the FHA has insured the holder
of the related Mortgage Loan against
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loss sustained by reason of a default by the Mortgagor in the payment of
principal and interest thereon, or any other form of certificate hereafter
issued by the FHA evidencing similar coverage.
FHA Loan: A Mortgage Loan covered by a FHA Certificate of Mortgage
--------
Insurance.
FHA Regulations: The regulations promulgated by the FHA from time to
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time establishing the conditions to the issuance of an FHA Certificate of
Mortgage Insurance and the requirements for maintaining the insurance evidenced
by such certificate in effect and for the filing and payment of claims thereon.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
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instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FNMA: The Federal National Mortgage Association, a federally
----
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FSLIC: The Federal Savings and Loan Insurance Corporation, or any
-----
successor thereto.
Insurance Policy: With respect to any Mortgage Loan included in the
----------------
Trust Fund for a Series, any Primary Mortgage Insurance Policy, Pool Insurance
Policy, Special Hazard Insurance Policy, FHA Certificate of Mortgage Insurance,
VA Loan Guaranty Certificate or Mortgagor Bankruptcy Bond, including all riders
and endorsements thereto, as specified in the Reference Agreement with respect
to such Series.
Insurance Proceeds: Amounts paid pursuant to any Primary Mortgage
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Insurance Policy, FHA Certificate of Mortgage Insurance, VA Loan Guaranty
Certificate, or the Pool Insurance Policy, Mortgagor Bankruptcy Bond, if any,
with respect to a Series and amounts paid pursuant to the Special Hazard
Insurance Policy with respect to such Series, when the related property has not
been restored, and amounts paid by any insurer pursuant to any other insurance
policy covering a Mortgage Loan.
Insured Expenses: Expenses covered by the Pool Insurance Policy, any
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Primary Insurance Policy, the Mortgagor Bankruptcy Bond or the Special Hazard
Insurance Policy, any replacement insurance policy or policies for any of the
foregoing insurance policies, or any other insurance policy with respect to the
Mortgage Loans.
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L/C Bank: The issuer, if any, of the Letter of Credit with respect to
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a Series of Certificates, as specified in the related Reference Agreement.
Letter of Credit: If so specified in the Reference Agreement with
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respect to a Series of Certificates, the irrevocable stand-by letter of credit
issued by the L/C Bank in favor of the Trustee for the benefit for the
Certificateholders, terms of which, to the extent not specified herein, shall be
as specified in such Letter of Credit and in the Reference Agreement with
respect to such Series.
Liquidating Loan: A Mortgage Loan (including a mortgage loan formerly
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held in the Trust Fund which has been assigned to the L/C Bank in consideration
of payments under the Letter of Credit) as to which, as of the close of business
on the Business Day next preceding the Due Date, the outstanding principal
balance under the related Mortgage Note has been accelerated (and as to which
any applicable rights of any Person having an interest in the Mortgaged Property
to reinstate the Mortgage Loan shall have expired ) and, with respect to which,
for satisfaction of such liquidated proceeds of the security for such Mortgage
Loan, including (without limitation) (a) from deed in lieu of foreclosure, sale
in foreclosure, trustee's sale or other realization as provided by applicable
law of real property subject to the related Mortgage and any security
agreements, (b) from claims under related private mortgage insurance or hazard
insurance, and/or (c) from claims against any public or governmental authority
on account of a taking or condemnation of any such property.
Liquidation Expenses: Expenses incurred by the Master Servicer (or
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the related Servicer) in connection with the liquidation of any defaulted
Mortgage Loan and not recovered by the Master Servicer (or the related Servicer)
under an FHA Certificate of Mortgage Insurance or VA Loan Guaranty Certificate
for reasons other than the failure of the Master Servicer (or the related
Servicer) to comply with FHA Regulations or VA Regulations, as the case may be,
the Pool Insurance Policy, if any, with respect to a Series or any Primary
Insurance Policy for reasons other than the Master Servicer's failure to comply
with Section 3.13 hereof, or under any Alternative Credit Support, or with
respect to a Series of Certificates as to which credit support is provided by a
Letter of Credit, expenses incurred by the L/C Bank, such expenses including,
without limitation, legal fees and expenses, any unreimbursed amount expended by
the Master Servicer pursuant to Section 3.14 hereof in respect of the related
Mortgage and any related and unreimbursed expenditures for real estate property
taxes or for property restoration or preservation to the extent not previously
reimbursed under any hazard insurance policy or under the Special Hazard
Insurance Policy, if any, with respect to a Series, for reasons other than the
Master Servicer's failure to comply with Section 3.14 hereof.
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Liquidation Proceeds: Amounts (other than Insurance Proceeds,
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payments under the Letter of Credit or the proceeds of any Alternative Credit
Support) received in connection with the liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise, or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
-------------------
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
Master Servicer: [Name of Master Servicer], a [ ] corporation,
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or its successor in interest, or any successor master servicer appointed as
herein provided.
Monthly Advance: The aggregate of (i) the advances made by the Master
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Servicer on any Distribution Date pursuant to Section 4.01 or 4.03 hereof, the
amount of any such advances being equal to the aggregate of payments of
principal and interest on the Mortgage Loans (in the case of Buydown Mortgage
Loans, exclusive of any such payments required by such Buydown Mortgage Loan to
be made out of Buydown Funds) that were due on the Due Date and delinquent as of
the close of business on the Business Day next preceding the related
Distribution Date and as to which the related Servicer, if any, has made no
advance, after adjustment of any delinquent interest payment to interest at the
Pass-Through Rate (after giving effect to the application of any Buydown Funds),
less the aggregate amount of any such delinquent payments that the Master
Servicer has determined would constitute a Nonrecoverable Advance if made and
(ii) any advances made by the Master Servicer on any Distribution Date pursuant
to Section 4.05.
Mortgage: The mortgage, deed of trust or other instrument creating a
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first lien on an estate in fee simple interest in real property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
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pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans transferred to the
----------------------
Trustee as part of the Trust Fund for the Certificates and from time to time
subject to this Agreement, as from time to time amended by the Trustee (or by a
Custodian as the duly appointed agent of the Trustee) to reflect the addition of
Replacement Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant
to the provisions of this Agreement and the Reference Agreement), attached to
the Reference Agreement.
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Such schedule will set forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the street address of the Mortgaged Property;
(iii) the Mortgage Rate:
(iv) the original term;
(v) the original principal balance;
(vi) the first payment date;
(vii) the current monthly payment in effect as of the
Cut-off Date;
(viii) the principal balance as of the Cut-off Date;
(ix) the Loan-to-Value Ratio at origination;
(x) a code indicating whether the residential dwelling at the
time of origination was represented to be a primary residence, a second or
vacation home, or an investment property;
(xi) a code indicating whether the residential dwelling is a
single family dwelling, a two-to-four family dwelling, or a condominium
unit in a high-rise or low-rise development;
(xii) a code indicating the number of units in the residential
dwelling; and
(xiii) the Retained Yield.
Such schedule shall also set forth the total of the amounts described under
(viii) above for all of the Mortgage Loans, together with the aggregate
principal balance as of the Cut-Off Date of the Buy-Down Mortgage Loans, if any,
included in the related Trust Fund, and any additional information required by
the Reference Agreement. Such schedule may be in the form of more than one list
collectively setting forth all of the information required.
Mortgage Loans: Such of the mortgage loans transferred and assigned
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to the Trustee pursuant to the provisions hereof and of the Reference Agreement
as from time to time are held as a part of the Trust Fund, the Mortgage Loans so
held being
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identified in the Mortgage Loan Schedule attached as Schedule I to the Reference
Agreement.
Mortgage Note: The originally executed note or other evidence of
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indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note,
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which may be fixed or variable, as specified in the related Reference Agreement.
Mortgaged Property: The underlying property securing a Mortgage
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Loan.
Mortgagor: The obligor on a Mortgage Note.
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Mortgagor Bankruptcy Bond: If so provided for in the applicable
-------------------------
Reference Agreement, the bankruptcy bond obtained pursuant to Section 3.23.
Nonrecoverable Advance: Any portion of the Monthly Advance previously
----------------------
made or proposed to be made by the Master Servicer (other than that portion of a
Monthly Advance made pursuant to Section 4.05 hereof) that, in the good faith
judgment of the Master Servicer, will not or, in the case of a current
delinquency, would not be, ultimately recoverable by the Master Servicer from
Insurance Proceeds, Liquidation Proceeds, payments under the Letter of Credit,
amounts in the Reserve Fund, or from proceeds of any Alternative Credit Support,
or otherwise. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate of the
Master Servicer delivered to the Trustee and the Depositor, setting forth the
reasons for such determination as specified in Section 4.04 hereof.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that is not subject
----------------------------
to a Servicing Agreement on the date of issuance of a Series of Certificates or
thereafter.
Officers' Certificate: A certificate signed by the Chairman of the
---------------------
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President, and by the Treasurer, the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Depositor or the Master
Servicer, as the case may be, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
------------------
for the Depositor or the Master Servicer, acceptable to the Trustee.
-10-
Pass-Through Rate: As to each Mortgage Loan, the annual rate of
-----------------
interest, which may be fixed or variable, as specified in the related Reference
Agreement, to be distributed to the Certificateholders in the manner specified
in such Reference Agreement. Any regular monthly remittance or accrual of
interest shall be based upon annual interest at such rate on the Principal
Balance of such Mortgage Loan divided by twelve.
Paying Agent: The Paying Agent identified in the Reference Agreement
------------
with respect to a Series, authorized to make distributions on behalf of the
Trustee.
Performance Bond: With respect to a Series of Certificates, the bond,
----------------
guaranty or similar form of insurance coverage obtained by the Master Servicer
pursuant to Section 4.06 hereof providing a guaranty of the performance of the
Master Servicer's obligations under this Agreement.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Pool Insurance Policy: If so specified in the Reference Agreement
---------------------
with respect to a Series of Certificates for which credit support is provided by
a Pool Insurance Policy, the policy of mortgage pool guaranty insurance obtained
pursuant to Section 3.13, a form of which is attached as an Exhibit to such
Reference Agreement, or any replacement insurance policy obtained pursuant to
Section 3.13 hereof.
Pool Insurer: With respect to a Series of Certificates for which
------------
credit support is provided by a Pool Insurance Policy, the insurer specified in
the Reference Agreement with respect to a Series, or any successor thereto or
the named insurer in any replacement policy obtained pursuant to Section 3.13
hereof.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
---------------------------------
guaranty insurance with respect to a Mortgage Loan, or any replacement policy
therefor.
Principal Balance: As of the time of any determination, the principal
-----------------
balance of a Mortgage Loan remaining to be paid by the Mortgagor or from any
Buydown Funds, after deduction of all payments due on or before the Cut-off
Date, reduced by all amounts distributed or advanced to the Certificateholders
or, if so specified in the related Reference Agreement, remitted or advanced to
the Trustee and reported as allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
--------------------
principal on a Mortgage Loan that is received in advance of its scheduled Due
Date and is not accompanied by an
-11-
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment.
Purchase Price: Unless otherwise specified in the Reference
--------------
Agreement, with respect to any Mortgage Loan required to be purchased pursuant
to the applicable provisions of this Agreement, an amount equal to the sum of
(i) the lesser of (a) 100% of the Principal Balance of such Mortgage Loan and
(b) in the event that the Depositor elects to treat the Trust Fund with respect
to the related Series of Certificates as a REMIC under the Code, the adjusted
basis (as defined in the Code) of the Trust Fund in such Mortgage Loan as of the
date of purchase, plus (ii) one month's interest on such Principal Balance at
the Pass-Through Rate (so long as advances on account of interest have been made
on account of such Mortgage Loan, otherwise, accrued and unpaid interest on the
Mortgage Note at the Pass-Through Rate to the first day of the month following
repurchase), plus (iii) if such purchase is being made by a Servicer and
advances on account of interest have been made on account of such Mortgage Loan,
the sum of all advances made with respect to such Mortgage Loan by the Master
Servicer for which the Master Servicer has not been reimbursed.
Purchase Year: With respect to a Series of Certificates to which the
-------------
provisions of Section 2.03(b) are applicable, as specified in the Reference
Agreement with respect to such Series, the fiscal year ending on the date
specified in the Reference Agreement commencing with the year next succeeding
the year of the initial issuance of such Certificates.
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 other state having jurisdiction over such insurer in connection with
the insurance policy issued by such insurer, duly authorized and licensed by the
insurance regulatory authority of the state of its principal place of business
and, to the extent required by applicable law, each such other state, to
transact a mortgage guaranty insurance business in such state and each other
state and to write the insurance provided by the insurance policy issued by it
and approved as an insurer by FHLMC or FNMA and whose claims-paying ability is
acceptable to the Rating Agency.
Rating Agency: Any nationally recognized statistical rating
-------------
organization, or any successor thereto, that rated the Certificates of a Series
at the request of the Depositor at the time of their initial issuance. If such
organization or successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating organization or other comparable
Person designated by the Depositor, notice of which designation shall be given
to the Trustee and Master Servicer.
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REMIC: A real estate mortgage investment conduit, as
-----
defined in the Code.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
-------------------------
Depositor or the related Servicer for a Deleted Mortgage Loan which must, on the
date of such substitution, meet the requirements specified in the related
Reference Agreement. Such substitution must take place within the time period
specified in the Reference Agreement and must satisfy the terms and conditions
for substitution set forth therein.
Required Insurance Policy: With respect to any Mortgage Loan, any
-------------------------
insurance policy that is required to be maintained from time to time under this
Agreement or the related Warranty and Servicing Agreement in respect of such
Mortgage Loan.
Reserve Fund: If provided for in the Reference Agreement with respect
------------
to a Series, the fund established and maintained pursuant to Section 3.25 hereof
and such Reference Agreement.
Responsible Officer: When used with respect to the Trustee, [the
-------------------
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters,] any
Vice President, 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
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
Retained Yield: As set forth in the Reference Agreement, the portion
--------------
of all interest accrued at the applicable Mortgage Rate (which may differ among
Mortgage Loans, as specified in such Reference Agreement) of the outstanding
principal balance of each Mortgage Loan from time to time outstanding that is
retained by the Depositor hereunder, which is payable to the Depositor out of
the interest portion of all payments or collections received on or with respect
to the Mortgage Loan and, as the context requires, any similar amounts payable
to a Servicer under the terms of the related Warranty and Servicing Agreement.
Series: A separate series of Certificates issued pursuant to this
------
Agreement, which Certificates may, as provided in the related Reference
Agreement, be divided into one or more
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Classes or Subclasses with the characteristics specified in such Reference
Agreement.
Servicer: With respect to any Mortgage Loan, any Person who executed
--------
a Warranty and Servicing Agreement applicable to such Mortgage Loan.
Servicer Advance: The meaning specified in Section 3.09
----------------
hereof.
Servicer Remittance Date: The __th day of each month, or if such day
------------------------
is not a Business Day, the Business Day immediately preceding such __th day.
Servicing Account: A custodial demand deposit account or accounts
-----------------
established by the Servicer pursuant to Section 3.09 hereof with (i) a
depository institution the long term unsecured debt obligations of which are
rated by the Rating Agency in one of its two highest rating categories at the
time of any deposit therein, or (ii) the deposits in which are fully insured by
the FDIC, or the FSLIC, or (iii) a depository institution in which such accounts
are insured by the FDIC or the FSLIC (to the limits established by the FDIC or
the FSLIC) the uninsured deposits in which are otherwise several such that, as
evidenced by an Opinion of Counsel, delivered to the Trustee, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first security interest against any collateral (which shall be limited
to Eligible Investments) securing such funds that is similar to claims of any
other depositors or creditors of the depository institution with which such
account is maintained or (iv) any other account or accounts acceptable to the
Rating Agency rating the Certificates of the related Series.
Servicing Fee: With respect to each interest payment on a Mortgage
-------------
Loan, the amount of each interest payment in excess of the Pass-Through Rate,
after deduction of the Administrative Fee, the Retained Yield, and any servicing
compensation payable to the related Servicer (or, in the case of a
Nonsubserviced Loan, to the Master Servicer) pursuant to the related Warranty
and Servicing Agreement, as the case may be.
Servicing Officer: Any officer of the Master Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished to the Trustee by the
Master Servicer pursuant to Section 2.03, as such list may from time to time be
amended.
Single Certificate: A Certificate in the denomination and
------------------
representing the interest in the Trust Fund specified in the Reference
Agreement.
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Special Hazard Insurance Policy: If so specified in the Reference
-------------------------------
Agreement, credit support which is provided by a special hazard insurance
policy, a specimen of which is attached as an Exhibit to the Reference
Agreement, or any replacement policy obtained pursuant to Section 3.14 hereof.
Special Hazard Insurer: With respect to a Series of Certificates for
----------------------
which credit support is provided by a Special Hazard Insurance Policy, the
insurer named in the related Reference Agreement, or any successor thereto, or
the named insurer in any replacement policy obtained pursuant to Section 3.14
hereof.
Subordinated Certificates: Any Certificates of a Series, the rights
-------------------------
of the holders of which to receive distributions on or with respect to the
Mortgage Loans in the Trust Fund for such Series are subordinated to the rights
of the holders of one or more Classes or Subclasses of such Series to receive
such distributions, as set forth in the related Reference Agreement.
Trust Fund: With respect to a Series of Certificates the corpus of
----------
the trust created by this Agreement consisting of the Mortgage Loans and other
property specified in the related Reference Agreement.
Trust Receipt: The meaning specified in Section 3.17 hereof.
-------------
Trustee: [Name of Trustee], a [ ] corporation, not in its
-------
individual capacity, but solely as trustee under this Agreement, and any
successor thereto, as provided herein.
Uninsured Cause: With respect to any Series of Certificates for which
---------------
credit support is provided by a Special Hazard Insurance Policy, any cause of
damage to Mortgaged Property such that the complete restoration of such
Mortgaged Property is not fully reimbursable by the hazard insurance policies or
by the Special Hazard Insurance Policy required to be maintained pursuant to
Section 3.14 hereof.
VA: The Veterans Administration, an agency of the United
--
States of America, or any successor department or agency.
VA Loan: A Mortgage Loan covered by a VA Loan Guaranty
-------
Certificate.
VA Loan Guaranty Certificate: A loan guaranty certificate (VA Form
----------------------------
No. 26-1866a) or any similar certificate or instrument issued by the VA pursuant
to VA Regulations, evidencing that the VA has guaranteed the payment of a
portion of the principal and interest on a VA Loan.
-15-
VA Regulations: The regulations promulgated by the VA from time to
--------------
time establishing the conditions to the issuance of a VA Loan Guaranty
Certificate and the requirements for maintaining the guaranty evidenced by such
certificate in effect for the filing and payment of claims thereon.
Voting Rights: The portion of the aggregate voting rights evidenced
-------------
by the Certificates of a Series that is allocated to any particular Certificate,
as specified in the Reference Agreement.
Warranty and Servicing Agreement: A Master Seller's Warranty and
--------------------------------
Servicing Agreement, providing for the origination, sale and servicing of
Mortgage Loans in such form as has been approved by the Depositor, each
containing representations and warranties in respect of the Mortgage Loans sold
and serviced thereunder.
The meaning of certain defined terms used in this Agreement shall,
when applied to a particular Series of Certificates and certain defined terms
applicable to such Series, be as defined in the Reference Agreement with
respect to such Series.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.
----------------------------
The Depositor, concurrently with the execution and delivery of a
Reference Agreement, shall, in the manner specified below and in such Reference
Agreement sell, transfer, assign, set over and otherwise convey to the Trustee,
without recourse, all the right, title and interest of the Depositor in and to
the Mortgage Loans listed on the Mortgage Loan Schedule attached to such
Reference Agreement, including all interest and principal received or receivable
by the Depositor on or with respect to the Mortgage Loans after the Cut-off
Date, but not including payments of principal and interest due and payable on
the Mortgage Loans on or before the Cut-off Date and other than with respect to
any Retained Yield specified in the Reference Agreement together with all its
right, title and interest in and to the proceeds of any related Insurance
Policies under which the Trustee is not named as loss payee and any other
insurance policies with respect to the Mortgage Loans.
In connection with any such transfer and assignment, the Depositor
shall deliver to, and deposit with, the Trustee, or to any Custodian appointed
by the Trustee pursuant to this
-16-
Agreement as the agent of the Trustee, the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the Mortgage Note, endorsed without recourse by the Depositor
to order of the Trustee, as trustee for the benefit of the
Certificateholders of the related Series, signed in the name of the
Depositor by an Authorized Officer, with all intervening endorsements
showing a complete chain of title from the originator thereof to the
Depositor; and if the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed on
behalf of the Mortgagor by another person, the original power of attorney
or other instrument that authorized and empowered such person to sign, or,
a copy of the original power of attorney or other instrument certified by
the public recording office in those instances where the public recording
office retains the original;
(ii) the original Mortgage, as recorded, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in those instances where the public recording
office retains the original;
(iii) an assignment (which may be included in a blanket
assignment) of the Mortgage in recordable form to the Trustee, as trustee
for the benefit of the Certificateholders of the related Series;
(iv) any Insurance Policies;
(v) the original policy of title insurance or, if such policy has
not been delivered to the Depositor prior to the Delivery Date, an original
binder of title insurance;
(vi) the original assignment or assignments of the Mortgage,
together with originals of all intervening assignments, with evidence of
recording thereon;
(vii) the original copy of all assumption and modification
agreements, if any, with respect to such Mortgage Loan;
(viii) the original commitment or certificate of Primary
Mortgage Insurance Policy, if any;
(ix) the Letter of Credit, if any; and
(x) any Alternative Credit Support.
-17-
In the event that, in connection with any Mortgage Loan, the Depositor
cannot deliver the original recorded Mortgage or an original recorded assignment
of the Mortgage with evidence of recording thereon concurrently with the
execution and delivery of the Reference Agreement solely because of a delay
caused by the public recording office where such Mortgage has been delivered for
recordation, the Depositor shall deliver, or cause the related Servicer to
deliver, to the Trustee (or to a Custodian on behalf of the Trustee), an
Officers' Certificate or a certificate of the related Servicer, with a photocopy
of such Mortgage or assignment of the Mortgage attached thereto, stating that
such Mortgage or assignment of the Mortgage has been delivered to the
appropriate public recording official for recordation. The Depositor shall
promptly deliver, or cause the related Servicer to deliver, to the Trustee (or
to a Custodian on behalf of the Trustee) such Mortgage or assignment of the
Mortgage with evidence of recording indicated thereon upon receipt thereof from
the public recording official or from the related Servicer. From time to time
the Servicers or the Master Servicer may forward to the Trustee (or to a
Custodian on behalf of the Trustee) additional original documents evidencing an
assumption or modification of a Mortgage Loan.
The Trustee (or a Custodian on behalf of the Trustee) shall cause to
be recorded in the appropriate public office for real property records each
assignment referred to in this Section 2.01. If any assignment is returned
unrecorded to the Trustee (or to such Custodian) because of any defect therein,
the Trustee shall promptly notify the Master Servicer and the Depositor. The
Master Servicer shall promptly notify the related Servicer of such defect and
request that such Servicer cure or correct such defect and cause such assignment
to be recorded in accordance with this paragraph or, if such Servicer does not
cure or correct such defect or in the event such defect cannot be so cured, that
such Servicer either (a) substitute a Replacement Mortgage Loan or Loans for the
related Mortgage Loan, which substitution must occur within the time period
specified in the Reference Agreement and which shall be subject to the
conditions set forth in Section 2.04 and terms and conditions with respect to
substitution in the Reference Agreement; or (b) repurchase such Mortgage Loan at
the Purchase Price therefor, in the manner provided in Section 2.02 hereof.
In the case of Mortgage Loans that have been prepaid in full after the
Cut-off Date and prior to the date of execution and delivery of the Reference
Agreement, the Depositor, in lieu of delivering the above documents to the
Trustee, will deposit in the Certificate Account the amount with respect to such
payment that is required to be deposited in the Certificate Account pursuant to
Section 3.08 hereof.
-18-
All original documents relating to the Mortgage Loans that are not
delivered to the Trustee or the respective Custodian, if any , are and shall be
held in trust for the benefit of the Trustee on behalf of the
Certificateholders.
SECTION 2.02 Acceptance by Trustee.
---------------------
The Trustee (or the respective Custodian as the duly appointed agent
of the Trustee) will hold the documents referred to in Section 2.01 above and
the other documents constituting a part of the Mortgage Files delivered to it
(or to such Custodian) with respect to a Series in trust for the use and benefit
of all present and future Certificateholders of such Series. Upon request by
any Holder of a Certificate of such Series, the Trustee will provide an initial
certification acknowledging receipt of the proper number of Mortgage Files and
that they appear regular on their face on and as of the date of this Agreement.
The Trustee shall, for the benefit of the Holders of the Certificates of such
Series, review, or cause a Custodian on its behalf to review, each Mortgage File
within 60 days after the execution and delivery of the related Reference
Agreement, to ascertain that all required documents have been executed, received
and recorded, if applicable, and that such documents relate to the Mortgage
Loans identified in the Mortgage Loan Schedule attached to such Reference
Agreement. If, in the course of such review, the Trustee (or any such
Custodian) finds any document or documents constituting a part of a Mortgage
File to be defective in any material respect, the Trustee shall promptly so
notify the Master Servicer and the Depositor. The Master Servicer shall
promptly notify the related Servicer of such defect and request that such
Servicer correct or cure such defect within 60 days from the date the Master
Servicer was notified of such defect and, if such Servicer does not correct or
cure such defect within such period, that such Servicer, if and to the extent
that such Servicer is obligated to do so under the related Warranty and
Servicing Agreement, either (a) substitute for the related Mortgage Loan a
Replacement Mortgage Loan or Loans, which substitution shall be accomplished
within the time period specified in the Reference Agreement, in the manner and
subject to the conditions set forth in this Section and in the Reference
Agreement; or (b) purchase such Mortgage Loan from the Trustee within 90 days
from the date the Master Servicer was notified of such defect at the Purchase
Price of such Mortgage Loan. The Purchase Price for any such Mortgage Loan
shall be deposited by such Servicer in the Certificate Account maintained by the
Master Servicer pursuant to Section 3.08 hereof and, upon receipt by the Trustee
of written notification of such deposit signed by a Servicing Officer, the
Trustee shall release, or shall cause the related Custodian to release, the
related Mortgage File to such Servicer, and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in such Servicer or its designee title to any Mortgage Loan
released pursuant hereto. It is understood and
-19-
agreed that the obligation of the Servicer to substitute for or to purchase any
Mortgage Loan as to which a material defect in a constituent document exists
shall constitute the sole remedy respecting such defect available to the Trustee
on behalf of the Certificateholders, except as set forth below.
If so specified in the Reference Agreement, in the event that a
Servicer fails to repurchase any Mortgage Loan that it is required to purchase
pursuant to this Section 2.02, the Master Servicer shall purchase such Mortgage
Loan at the Purchase Price and in the manner set forth above, within five
Business Days of the Master Servicer's receipt of written demand therefor from
the Trustee. Upon receipt by the Trustee of written notification of the deposit
of the Purchase Price pursuant to Section 3.08 hereof, signed by a Servicing
Officer, the Trustee shall release, or shall cause the Custodian to release, the
related Mortgage File to the Master Servicer and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the Master Servicer or its designee title to any
Mortgage Loan purchased pursuant hereto. Notwithstanding anything contained
herein or in such Reference Agreement to the contrary, the Master Servicer shall
not be entitled to substitute a Replacement Mortgage Loan or Loans in
satisfaction of such repurchase obligation.
The Trustee shall retain (or cause a Custodian to retain) possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions set forth herein. The Master Servicer shall promptly deliver to
the Trustee, upon the execution or receipt thereof, the originals of any Special
Hazard Insurance Policy, any Pool Insurance Policy, any Mortgagor Bankruptcy
Bond, any Performance Bond, any Alternative Credit Support and any certificates
of renewal thereof, and such other documents or instruments that constitute part
of the Mortgage File that come into the possession of the Master Servicer from
time to time.
SECTION 2.03 Representations, Warranties and Covenants of the Master Servicer.
----------------------------------------------------------------
(a) The Master Servicer hereby represents, warrants and covenants to
the Depositor and the Trustee that, as of the date of the Reference Agreement:
(i) the Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of [ ] and is
duly authorized and qualified to transact any and all business contemplated
by this Agreement and is, or will be, in compliance with the laws of any
state in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is, or
will be, in
-20-
compliance with the laws of any such State, to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;
(ii) the Master Servicer has the full corporate power and
authority to service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the Depositor and the
Trustee, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its
terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(iii) neither the execution and delivery of this Agreement by
the Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer hereunder, the consummation of any other of the transactions
herein contemplated, nor the fulfillment of or compliance with the terms
hereof, will (A) result in a material breach of any term or provision of
the certificate of incorporation or by-laws of the Master Servicer or (B)
conflict with, result in a material breach, violation or acceleration of,
or result in a default under, the terms of any other agreement or
instrument to which the Master Servicer is a party or by which it may be
bound, or any statute, order or regulation applicable to the Master
Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Master Servicer; and the
Master Servicer is not a party to, bound by, or in breach or violation of
any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects, or may in the future materially
and adversely affect, (x) the ability of the Master Servicer to perform its
obligations under this Agreement or (y) the business, operations, financial
condition, properties or assets of the Master Servicer;
(iv) the Master Servicer is, and will remain, subject to
supervision and examination by any state or federal authority as may be
applicable and will remain in
-21-
good standing and qualified to do business where so required by applicable
law and is, and will remain, an approved servicer of conventional mortgage
loans for FNMA or FHLMC;
(v) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that, if
determined adversely to the Master Servicer, would adversely affect the
execution, delivery or enforceability of this Agreement or the ability of
the Master Servicer to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms hereof or that
would have a material adverse effect on the financial condition of the
Master Servicer;
(vi) the Master Servicer will at all times comply in the
performance of its obligations under this Agreement with FHA Regulations
and VA Regulations, as applicable, and with all reasonable rules and
requirements of the insurer under each Required Insurance Policy;
(vii) no information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any affiliate of
the Depositor or the Trustee by the Master Servicer will contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the information, certificate, statement or report not misleading;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby;
(ix) in the performance of its servicing obligations hereunder,
the Master Servicer will not, by act or omission, materially impair the
value of any Mortgage Loan; and
(x) the Master Servicer has examined each existing, and will
examine each new Warranty and Servicing Agreement, and is, or will be,
familiar with the terms thereof. The terms of each existing Warranty and
Servicing Agreement and each Servicer thereunder are acceptable to the
Master Servicer and any new Warranty and Servicing Agreements or Servicers
will comply with the provisions of Section 3.02 hereof.
(b) With the provisos and limitations as to remedies set forth in this
Section 2.03(b), if so specified in the Reference agreement, the Master Servicer
hereby represents and warrants to the Depositor and the Trustee with respect to
-22-
each Mortgage Loan that no action has been taken or failed to be taken, no event
has occurred and no state of facts exists or has existed on or prior to the
Delivery Date pursuant to the Reference Agreement (whether or not known to the
Master Servicer on or prior to such date) that has resulted, or that will
result, in an exclusion from, denial of, or defense to coverage under a Primary
Mortgage Insurance Policy for any Mortgage Loan, the Pool Insurance Policy, the
Special Hazard Insurance Policy or the Mortgagor Bankruptcy Bond (including,
without limitation, any exclusions, denials or defenses that would limit or
reduce the availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured, whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Master Servicer,
a Servicer of such Mortgage Loan, the related Mortgagor or any party involved in
the application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason of such
insurer's financial inability to pay or by reason of a determination that the
loss suffered was a loss not insured by the terms and provisions of such
insurance policy), and covenants that within 90 days of its discovery or its
receipt of notice of breach of this representation and warranty as provided in
Section 2.03(c) hereof, the Master Servicer shall cure such breach in all
material respects or, subject to the limitations set forth in the next following
paragraph, shall purchase the Mortgage Loan from the Trustee; provided, however,
-------- -------
that: (1) any such purchase by the Master Servicer shall be at the Purchase
Price and be accomplished in the manner set forth in Section 2.03(d) hereof; (2)
no such purchase shall be required so long as the Master Servicer either (i) is
diligently pursuing remedies against the appropriate insurer or insurers or
against the Servicer of the related Mortgage Loan or is contesting in good faith
the denial of liability by the appropriate insurer or insurers and either (A)
the related Mortgage Loan is not in default with regard to payments due
thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable Primary Mortgage
Insurance Policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by the Master Servicer or the
Servicer of the related Mortgage Loan, or (ii) pays to the appropriate payee the
amount in respect of such Mortgage Loan that the insurer under any applicable
Primary Mortgage Insurance Policy, the Pool Insurer under the Pool Insurance
Policy, the Special Hazard Insurer under the Special Hazard Insurance Policy and
the issuer of the Mortgagor Bankruptcy Bond would, in the aggregate, be liable
to pay, absent a denial of liability by any of them; (3) any payment made by the
Master Servicer pursuant to clause (ii) above shall be counted as an amount paid
by the Master Servicer to purchase Mortgage Loans in determining the limitations
stated in the next paragraph of this Section 2.03(b);
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and (4) the obligations of the Master Servicer to purchase any Mortgage Loan as
to which such a breach has occurred and is continuing shall be subject to the
limitations set forth in the next paragraph and shall constitute the sole remedy
against the Master Servicer in respect of such breach available to
Certificateholders or the Trustee on behalf of Certificateholders.
[In respect of Mortgage Loans that the Master Servicer becomes
obligated to purchase solely because of a breach of the representation and
warranty set forth in this Section 2.03(b), the Master Servicer's obligation to
purchase shall be limited to (X) in the first Purchase Year, the purchase of
Mortgage Loans having an aggregate Net Purchase Price (as defined below) not
exceeding an amount equal to [3%] of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date specified in the Reference Agreement, (Y)
in the second Purchase Year, the purchase of Mortgage Loans having an aggregate
Net Purchase Price not exceeding an amount equal to the lesser of (i) [2%] of
the aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date and
(ii) the excess of the maximum amount set forth in clause (X) above over the
aggregate Net Purchase Price of the Mortgage Loans that the Master Servicer has
become obligated to purchase during the first Purchase Year and has purchased
and (Z) in the third through fifth Purchase Years, inclusive and on a cumulative
basis, the purchase of Mortgage Loans having an aggregate Net Purchase Price not
exceeding an amount equal to the lesser of (i) [1%] of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date and (ii) the excess of the
maximum amount set forth in clause (Y) above over the aggregate Net Purchase
Price of the Mortgage Loans that the Master Servicer has become obligated to
purchase during the second Purchase Year and has purchased. After the fifth
Purchase Year, the Master Servicer shall not be obligated to purchase any
Mortgage Loans solely because of a breach of the representation and warranty set
forth in this Section 2.03(b). The Net Purchase Price of such a Mortgage Loan
shall be the Purchase Price less the amount of Liquidation Proceeds, if any,
realized by the Master Servicer from any source (including, without limitation,
any insurer or the related Servicer) in the disposition of such Mortgage Loan
net of related Liquidation Expenses incurred by the Master Servicer. For the
purpose of determining the Purchase Year in which the Master Servicer is or is
not, as the case may be, obligated to purchase a Mortgage Loan in accordance
with this paragraph and for the purpose of determining the aggregate Net
Purchase Price of Mortgage Loans to be purchased in a Purchase Year or Purchase
Years, as the case may be, in accordance with this paragraph (the purchase of a
particular Mortgage Loan being at the Purchase Price and being accomplished in
the manner set forth in Section 2.03(d) hereof), the date of a purchase and the
date on which Liquidation Proceeds are realized by the Master Servicer in the
disposition of a Mortgage Loan shall be deemed to
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be the date on which the Master Servicer received notice of or discovered the
related breach of the representation or warranty set forth in this Section
2.03(b).]
(c) Upon discovery by the Depositor, the Master Servicer or the
Trustee of a breach of the representation and warranty set forth in Section
2.03(a) or 2.03(b) hereof that materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties.
(d) The Purchase Price for any Mortgage Loan purchased by the Master
Servicer pursuant to Section 2.03(a) or 2.03(b) hereof shall be deposited by the
Master Servicer in the Certificate Account pursuant to Section 3.08 hereof, and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release (or shall cause the applicable
Custodian to release) the related Mortgage File to the Master Servicer and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest title in the Master Servicer or
its designee, as the case may be, in any Mortgage Loan released pursuant hereto.
Notwithstanding anything contained herein or in the Reference Agreement to the
contrary, the Master Servicer shall not be entitled to substitute a Replacement
Mortgage Loan or Loans in satisfaction of such repurchase obligation.
(e) The representations and warranties set forth in Section 2.03(a) or
2.03(b) hereof shall survive delivery of the respective Mortgage Files to the
Trustee, or to a Custodian, as the duly appointed agent of the Trustee.
SECTION 2.04 Representations, Warranties and Covenants of the Depositor as to
----------------------------------------------------------------
the Mortgage Loans.
------------------
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date of the Reference Agreement, unless
otherwise specified in such Reference Agreement, that:
(i) as of the Cut-off Date specified in the Reference Agreement,
no Mortgage Loan is more than 30 days delinquent in payment of principal
and interest;
(ii) the information set forth in the Mortgage Loan Schedule
attached to the Reference Agreement is true and correct in all material
respects at the date or dates in respect of which such information is
furnished;
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(iii) as of the date of the initial issuance of the Certificates
pursuant to the Reference Agreement, if such Mortgage Loan is secured by a
Mortgaged Property that is a vacation or second home, such Mortgage Loan is
the subject of a Primary Mortgage Insurance Policy that insures at least
25% of the principal balance thereof; if such Mortgage Loan had a Loan-to-
Value Ratio at origination in excess of 80%, such Mortgage Loan is the
subject of a Primary Mortgage Insurance Policy that insures that portion of
the principal balance thereof that exceeds the amount equal to 75% of the
Appraised Value of the related Mortgaged Property; and such Mortgage Loan
does not have an initial Loan-to-Value Ratio in excess of 95%;
(iv) the Mortgaged Property consists of a single parcel of real
property with a detached single-family residence erected thereon, or a two-
to-four-family dwelling or an individual condominium unit that conforms
with applicable FNMA requirements regarding such dwellings; and the
residence or dwelling is not a mobile home or a manufactured dwelling;
(v) No Buydown Mortgage Loan involves Buydown Funds in excess of
20% of its Principal Balance at the Cut-off Date specified in the Reference
Agreement, and Buydown Mortgage Loans, if included in the Trust Fund, in
the aggregate do not represent in excess of 5% of the aggregate Principal
Balance of the Mortgage Loans at the Cut-off Date; and
(vi) as of the date of the initial issuance of the Certificates
pursuant to the Reference Agreement, the Depositor has good title to each
Mortgage Loan and each such Mortgage Loan is free of offsets, defenses or
counterclaims;
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee or to a Custodian, as the duly appointed agent of the
Trustee.
Upon discovery by the Depositor, the Master Servicer or the Trustee
(or upon notice thereof from any Certificateholder) of a breach or breaches of
any of the representations and warranties set forth in this Section 2.04 that
materially and adversely affects, in the reasonable judgment of the Trustee, the
interests of the Certificateholders in the related Mortgage Loan, the party
discovering such breach or breaches shall give prompt written notice to the
other parties. The Master Servicer shall promptly notify the related Servicer
of such breach and request that such Servicer correct or cure such breach within
60 days from the date the Master Servicer was notified of such breach and, if
such Servicer does not correct or cure such breach within such period, or if
such breach cannot be so cured, that such
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Servicer, if and to the extent that such Servicer is obligated to do so under
the related Warranty and Servicing Agreement, either (a) remove such Mortgage
Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute in its place
a Replacement Mortgage Loan or Loans, which substitution shall be accomplished
within the time period specified in the Reference Agreement, in the manner and
subject to the conditions set forth in this Section and in the Reference
Agreement; or (b) repurchase the affected Mortgage Loan or Mortgage Loans from
the Trustee. Any such purchase by such Servicer shall be at the Purchase Price
and be accomplished in the manner set forth in the following paragraph, subject
to the terms and conditions set forth in the Reference Agreement with respect to
such substitution.
Subject to the terms and conditions set forth in the Reference
Agreement with respect to such substitution, as to any Replacement Mortgage Loan
or Loans, the related Servicer shall deliver to the Trustee (or to a Custodian,
as the duly appointed agent of the Trustee) for such Replacement Mortgage Loan
or Loans, the Mortgage Note, the Mortgage, the related assignment of the
Mortgage, and such other documents and agreements as are required by Section
2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Monthly payments due with respect to
Replacement Mortgage Loans in the month of substitution shall not be part of the
related Trust Fund and will be retained by the Master Servicer and remitted by
the Master Servicer to the related Servicer on the next succeeding Distribution
Date. For the month of substitution, distributions to Certificateholders will
include the monthly payment due on such Deleted Mortgage Loan for such month and
thereafter such Servicer shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Trustee (or the related Custodian,
as the duly appointed agent of the Trustee) shall amend the Mortgage Loan
Schedule to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Replacement Mortgage Loan or Loans. Upon such substitution,
the Replacement Mortgage Loan or Loans shall be subject to the terms of this
Agreement and the related Warranty and Servicing Agreement in all respects, the
Servicer shall be deemed to have made the representations and warranties with
respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in this
Section as to the Depositor and Section 2.03 as to the Master Servicer. Upon
any such substitution, the Trustee shall release, or shall cause the applicable
Custodian to release, the Mortgage File relating to such Deleted Mortgage Loan
to the related Servicer and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest title in such Servicer or its designee, as the case may be, to any Deleted
Mortgage Loan substituted for pursuant to this Section 2.04.
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Subject to the terms and conditions set forth in the Reference
Agreement with respect to such substitution, for any month in which a Servicer
substitutes one or more Replacement Mortgage Loans for one or more Deleted
Mortgage Loans, the Master Servicer will determine the amount (if any) by which
the aggregate principal balance of all such Replacement Mortgage Loans as of the
date of substitution is less than the aggregate Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the monthly payments due in the month of substitution). The amount of such
shortage shall be deposited into the Certificate Account by such Servicer in the
month of substitution pursuant to Section 3.08, without any reimbursement
therefor.
In the event that a Servicer shall have repurchased a Mortgage Loan,
upon receipt by the Trustee of written notification of the deposit of the
Purchase Price pursuant to Section 3.08, signed by a Servicing Officer, the
Trustee shall release, or shall cause the Custodian to release, the related
Mortgage File to such Servicer and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest title in such Servicer or its designee, as the case may be,
to any Mortgage Loan purchased pursuant to this Section 2.04. In the event that
the related Servicer does not repurchase or substitute for a Mortgage Loan as to
which a breach has occurred and is continuing, the Depositor shall either
repurchase such Mortgage Loan or substitute a Replacement Mortgage Loan, in the
manner specified in this Section 2.04. It is understood and agreed that the
obligation of the related Servicer or the Depositor to repurchase any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy with respect to such breach available to Certificateholders or the
Trustee on behalf of Certificateholders, except as provided in Section 2.03(b).
SECTION 2.05 Representations and Warranties of Servicers.
-------------------------------------------
(a) Upon the discovery by the Depositor, the Master Servicer or the
Trustee of a breach or breaches of any of the representations and warranties
made in a Warranty and Servicing agreement in respect of any Mortgage Loan,
which breach or breaches, individually or in the aggregate, materially and
adversely affect, in the reasonable judgment of the Trustee, the interests of
the Certificateholders, the party discovering such breach shall give prompt
written notice to the other parties. The Master Servicer shall promptly notify
the related Servicer of such breach and request that such Servicer cure such
breach within 90 days from the date the Master Servicer discovers, or was
notified of, such breach, and if such Servicer does not cure such breach in all
material respects, that such Servicer, if and to the extent that such Servicer
is obligated to do so under the related Warranty and Servicing Agreement, either
(a) substitute a
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Replacement Mortgage Loan or Loans for the related Mortgage Loan, which
substitution must occur within the time period specified in the Reference
Agreement and shall be subject to the conditions set forth in Section 2.04 and
the terms and conditions with respect to such substitution set forth in the
Reference Agreement, or (b) purchase such Mortgage Loan from the Trustee at the
Purchase Price and in the manner set forth in Section 2.02 hereof. Upon receipt
by the Trustee of written notification of the deposit of the Purchase Price
pursuant to Section 3.08 by the Servicer signed by a Servicing Officer, the
Trustee shall release or shall cause the Custodian to release the related
Mortgage File to such Servicer and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest title to any Mortgage Loan purchased pursuant to this Section 2.05(a) in
such Servicer or its respective designees. Except as set forth in 2.03(b)
hereof, it is understood and agreed that the obligation of such Servicer to
substitute for or to purchase any Mortgage Loan as to which such breach (or
breaches) has occurred and is continuing shall constitute the sole remedy with
respect to such breach or breaches available to the Trustee on behalf of the
Certificateholders.
(b) In the case of a Mortgage Loan that the Master Servicer becomes
obligated to purchase pursuant to Section 2.03(b) hereof and a Servicer becomes
obligated to purchase pursuant to Section 2.05(a) hereof, the Master Servicer
shall, so long as all advances are being made in respect of such Mortgage Loan
pursuant to Section 3.09, Section 4.01 or Section 4.03 hereof, first require the
Servicer to substitute for or to purchase such Mortgage Loan pursuant to Section
2.05(a) hereof, second, if such Servicer has defaulted in its obligation to
substitute for or to purchase such Mortgage Loan (but without relieving it of
its obligation to make such purchase), present claims under the relevant
Required Insurance Policies to the extent the Master Servicer believes any such
Required Insurance Policy may cover the loss in respect of such Mortgage Loan,
and, third, if any loss in respect of such Mortgage Loan is not fully covered by
the Required Insurance Policies, subject to the limitations set forth in Section
2.03(b) hereof, purchase such Mortgage Loan in accordance with Sections 2.03(b)
and 2.03(d) hereof. If all advances are not being made in respect of such
Mortgage Loan pursuant to Section 3.09, Section 4.01 or Section 4.03 hereof, the
Servicer or Seller does not substitute for or purchase such Mortgage Loan
pursuant to Section 2.05(a) hereof within seven days after such request and any
claims presented under any Required Insurance Policies in accordance with the
next preceding sentence are not paid in full within 14 days after such request,
the Master Servicer shall, subject to the limitations set forth in Section
2.03(b) hereof, purchase such Mortgage Loan in accordance with Sections 2.03(b)
and 2.03(d) hereof.
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SECTION 2.06 Assignment of Rights under Warranty and Servicing Agreements.
------------------------------------------------------------
The Depositor hereby assigns to the Trustee all its right, title and
interest in respect of each Warranty and Servicing Agreement applicable to a
Mortgage Loan identified in the Mortgage Loan Schedule attached to the Reference
Agreement insofar as such Warranty and Servicing Agreement relates to the
representations and warranties made by the related Servicer in respect of such
Mortgage Loan and any remedies provided thereunder for any breach of such
representations and warranties, as well as insofar as the provisions of such
Warranty and Servicing Agreement relate to the administration and servicing of
the Mortgage Loans serviced thereunder, which right, title and interest may be
enforced by the Master Servicer on behalf of the Depositor, the Trustee and the
Certificateholders. The Master Servicer shall enforce the provisions of the
Warranty and Servicing Agreements relating to the administration and servicing
of the Mortgage Loans serviced thereunder in accordance with the provisions of
Article III.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Master Servicer to Act as Master Servicer.
-----------------------------------------
For and on behalf of the Trustee and the Certificateholders, the
Master Servicer shall service and administer the Mortgage Loans in accordance
with prudent mortgage loan servicing standards and procedures generally accepted
in the mortgage banking industry and generally in accordance with FNMA
guidelines, except as otherwise expressly provided in this Agreement. Each FHA
Loan and VA Loan at any time subject to this Agreement shall be serviced and
administered by the Master Servicer in accordance with applicable FHA and VA
Regulations, respectively. In connection with such servicing and
administration, the Master Servicer, subject to the immediately preceding
sentence, shall have full power and authority, acting alone and/or through
Servicers as provided in Section 3.02 hereof, to do or cause to be done any and
all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement and applicable FHA and VA Regulations),
(iii) to collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to
effectuate foreclosure or other
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conversion of the ownership of the Mortgaged Property securing any Mortgage
Loan; provided that the Master Servicer shall take no action that is
inconsistent with or prejudices the interests of the Trustee or the
Certificateholders under this Agreement. Without limiting the generality of the
foregoing, the Master Servicer, in its own name or in the name of the Depositor
and the Trustee, is hereby authorized and empowered by the Depositor and the
Trustee, when the Master Servicer believes it appropriate in its best judgment,
to execute and deliver , on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, 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 with respect to
the Mortgaged Properties. The Depositor and the Trustee shall furnish the
Master Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to service and administer the Mortgage
Loans.
In accordance with the standards of the preceding paragraph, the
Master Servicer, with respect to any Nonsubserviced Mortgage Loan and otherwise,
to the extent the related Servicer does not do so, 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 Property, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 3.08 hereof, and further as Liquidation Expenses as provided
in Section 3.16 hereof and may be withdrawn from the Certificate Account
pursuant to Section 3.12 hereof. All costs incurred by the Master Servicer or
by the related Servicers in effecting the timely payment of taxes and
assessments on the Mortgaged Properties shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Principal Balance under the related Mortgage Loans, notwithstanding that the
terms of such Mortgage Loans so permit.
In the event that the Depositor elects to treat the related Trust Fund
as a REMIC (as defined in the Code) in the Reference Agreement, the Master
Servicer shall (unless otherwise specified in such Reference Agreement) act as
agent on behalf of the Trust Fund and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, a federal tax return using
a calendar year as the taxable year for the Trust Fund when and as required by
the applicable provisions of the Code; (b) make an election, on behalf of the
Trust Fund, to be treated as a REMIC on the federal tax return of the Trust Fund
for its first taxable year, in accordance with the applicable provisions of the
Code; (c) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders all information reports as and when required to be provided
to them in accordance with the applicable provisions of the Code; (d) conduct
the affairs of the Trust Fund so as to maintain the status thereof as a REMIC
under the applicable provisions of the Code; (e) not knowingly or
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intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of the Trust Fund; and (f) pay the amount of any
federal income tax, including prohibited transaction penalty taxes, imposed on
the Trust Fund when and as the same shall be due and payable.
SECTION 3.02 Enforcement of the Obligations of Servicers.
-------------------------------------------
(a) For purposes of this Agreement, the Master Servicer shall be
deemed to have received the payments on the Mortgage Loans referred to in
Sections 3.08, 3.09 and 3.10 hereof when the related Servicer has received such
payments and shall remain obligated to deposit such payments in accordance with
Section 3.08, 3.09 and 3.10 hereof, regardless of whether such payments are
remitted by the Servicer to the Master Servicer, subject to the provisions of
Section 4.03. The Master Servicer and the Servicer may enter into amendments to
the Warranty and Servicing Agreements; provided, however, that any such
amendments shall be otherwise consistent with and shall not violate the
provisions of this Agreement; and provided further, that the substance of any
such material amendment or material change shall be transmitted promptly to the
Trustee.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Depositor, the Trustee and the
Certificateholders, shall supervise, administer, monitor and oversee the
servicing of the Mortgage Loans that are not serviced by it directly, and shall
enforce the obligations of each Servicer under the related Warranty and
Servicing Agreement, including, without limitation, the obligation of the
Servicer to make advances in respect of delinquent payments as required by a
Warranty and Servicing Agreement, to purchase a Mortgage Loan on account of
defective documentation, as described in Section 2.02 hereof, or on account of a
breach of a representation or warranty, as described in Section 2.05(a) hereof.
Such enforcement, shall include, without limitation, the legal prosecution of
claims, termination of Warranty and Servicing Agreements, as appropriate, and
the pursuit of other appropriate remedies, and shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgement, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, but shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement only to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans or (ii) from a
specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed.
(c) During the term of the Reference Agreement, the Master Servicer
shall consult fully with each of the Servicers as may be necessary from time to
time to perform and
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carry out the Master Servicer's obligations hereunder and receive, review and
evaluate all reports, information and other data that are provided to the Master
Servicer by each Servicer and otherwise exercise reasonable efforts to cause
each Servicer to perform and observe the covenants, obligations and conditions
to be performed or observed by it under its Warranty and Servicing Agreement.
If any Servicer materially breaches or fails to perform or observe any material
obligations or conditions of its Warranty and Servicing Agreement, the Master
servicer shall promptly deliver to the Depositor and to the Trustee an Officers'
Certificate certifying that such Servicer is in default and describing the
events and circumstances giving rise to the default and what action (if any) has
been, or is to be, taken by the Servicer to cure the default and setting forth
the action to be taken by the Master Servicer.
SECTION 3.03 Successor Servicers.
-------------------
Upon the request of a Servicer, the Master Servicer or the related
Servicer shall be entitled to terminate or assign the rights of the Servicer
under the related Warranty and Servicing Agreement in accordance with the terms
and conditions of such Warranty and Servicing Agreement. The Master Servicer
will not unreasonably withhold its consent to the transfer of the servicing
obligations; provided, however, that in the event of termination or assignment
of the rights of the Servicer under any Warranty and Servicing Agreement by the
Master Servicer or the Servicer, the Master Servicer shall act in accordance
with Section 3.04; and provided, further that no assignment of the Servicer's
rights and obligations under a Warranty and Servicing Agreement may be effected
without the consent of the Trustee. No such termination shall effect the right
of a Servicer to receive any retained yield provided for in the Warranty and
Servicing Agreement.
SECTION 3.04 Termination of the Rights of Servicers.
--------------------------------------
If the Master Servicer terminates the rights of a Servicer under any
Warranty and Servicing Agreement, the Master Servicer shall assume the
obligations of the related Servicer under the terminated Warranty and Servicing
Agreement, or at the Master Servicer's election, enter into a substitute
servicing agreement with another mortgage loan service company acceptable to the
Trustee and the Master Servicer under which such mortgage loan service company
shall assume, satisfy, perform and carry out all liabilities, duties,
responsibilities and obligations that are to be, or otherwise were to have been,
satisfied, performed and carried out by the terminated Servicer, regardless of
whether such liabilities, duties, responsibilities or obligations shall have
accrued before or after the termination of the rights of such Servicer,
including but not limited to, the Servicer's obligations to purchase certain
Mortgage Loans and any other liabilities or obligations of the Servicer arising
from the
-33-
breach of any representations and warranties contained in the related Warranty
and Servicing Agreement; provided, however that any such substitute servicing
shall satisfy the requirements of Section 3.02. If the Master Servicer does not
elect to enter into a substitute servicing agreement with a successor servicer,
the Master Servicer shall nevertheless assume, satisfy, perform and carry out
all liabilities, duties, responsibilities and obligations which otherwise were
to have been satisfied, performed and carried out by the Servicer under such
terminated Warranty and Servicing Agreement until a substitute Servicer has been
appointed and designated and a substitute servicing agreement has been entered
into by the Master Servicer and such substitute servicer.
SECTION 3.05 Liability of the Master Servicer.
--------------------------------
Notwithstanding the provisions of any Warranty and Servicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Master Servicer or a Servicer or reference to actions
taken through a Servicer or otherwise, the Master Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders of
the related Series for the servicing and administering of the Mortgage Loans
included in the Trust Fund for such Series in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue of
such Warranty and Servicing Agreements or agreements or arrangements or by
virtue of indemnification from the Servicer and to the same extent and under the
same terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to
enter into any agreement with the Depositor or a Servicer for indemnification of
the Master Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.
SECTION 3.06 Rights of the Depositor and the Trustee in Respect of the Master
----------------------------------------------------------------
Servicer.
--------
The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer in respect of its rights and obligations
hereunder and access to officers of the Master Servicer responsible for such
obligations. The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer hereunder or exercise the rights of the Master Servicer hereunder;
provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or
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liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
SECTION 3.07 Trustee to Act as Servicer.
--------------------------
In the event that the Master Servicer shall for any reason no longer
be the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer under each Warranty and Servicing Agreement
that may have been assigned to the Trustee pursuant to Section 2.06 hereof or
any substitute servicing agreement that may have been entered into by the Master
Servicer pursuant to Section 3.04 hereof. The Trustee, its designee or any
successor master servicer shall be deemed to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer under each
Warranty and Servicing Agreement or substitute servicing agreement, except that
the Master Servicer shall not thereby be relieved of any liability or
obligations under the Warranty and Servicing Agreement or substitute servicing
agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each Warranty and Servicing Agreement or substitute
servicing agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Warranty and
Servicing Agreement or substitute servicing agreement to the assuming party.
SECTION 3.08 Collection of Mortgage Loan Payments; Certificate Account.
---------------------------------------------------------
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of the Pool Insurance Policy, the Mortgagor Bankruptcy
Bond, the Special Hazard Insurance Policy, any FHA Certificate of Mortgage Loan
Insurance or VA Loan Guaranty Certificate (and applicable FHA and VA Regulations
relating thereto), the Letter of Credit or any Alternative Credit Support,
follow such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held in its own portfolio and serviced by
the Master Servicer. Consistent with the foregoing, the Master Servicer may in
its discretion (i) waive any late payment charge or any prepayment charge or
penalty interest in connection with the prepayment of a Mortgage Loan and (ii)
only upon determining that the coverage of such Mortgage Loan by the Pool
Insurance Policy, the Mortgagor Bankruptcy Bond, the Special Hazard Insurance
Policy, any related Primary Mortgage Insurance Policy,
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FHA Certificate of Mortgage Loan Insurance or VA Loan Guaranty Certificate,
Letter of Credit or Alternative Credit Support, will not be affected, extend the
due dates for payments due on a Mortgage Note for a period not greater than 125
days. In the event of any such arrangement, the Master Servicer shall make
timely advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements.
The Master Servicer shall establish and maintain, in the name of the
Trustee on behalf of the Certificateholders, the Certificate Account, in which
the Master Servicer shall deposit on a daily basis, or as and when received from
the Servicers except as otherwise specifically provided herein, the following
payments and collections received or made by it subsequent to the Cut-off Date
(other than in respect of principal of and interest on the Mortgage Loans due on
or before the Cut-off Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of any portion
thereof retained by the related Servicer, if any, as servicing compensation
and any retained yield payable to the Servicer) on the Mortgage Loans;
(iii) all Insurance Proceeds and Liquidation Proceeds, other
than proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures;
(iv) all amounts required to be deposited therein from the
Reserve Fund pursuant to Section 3.25 and the Reference Agreement;
(v) all payments received by the Trustee under the Letter of
Credit and any payments under any Alternative Credit Support;
(vi) all Monthly Advances made by the Master Servicer pursuant to
Sections 4.01, 4.03 or 4.05 hereof and all Servicer Advances, as described
in Section 3.09 hereof;
(vii) any amount required to be deposited by the Master Servicer
pursuant to the second succeeding paragraph of this Section 3.08 in
connection with any losses on Eligible Investments;
(viii) any amounts required to be deposited by the Master
Servicer pursuant to Sections 3.13, 3.14 and 3.23 hereof;
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(ix) all proceeds of any Mortgage Loans or property acquired in
respect of the Mortgage Loans purchased pursuant to Sections 2.02, 2.04,
2.05, 3.15 or 9.01 hereof and all amounts required to be deposited in
connection with the substitution of Replacement Mortgage Loans pursuant to
Sections 2.02, 2.04 or 2.05 hereof;
(x) any Buydown Funds required to be deposited by the Master
Servicer in the Certificate Account pursuant to Section 3.26 hereof.
The foregoing requirements for deposit by the Master Servicer in the Certificate
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of prepayment
or late payment charges or assumption fees need not be deposited by the Master
Servicer in the Certificate Account. In the event that the Master Servicer
shall deposit in the Certificate Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Certificate Account,
any provision herein to the contrary notwithstanding. Such withdrawal may be
accomplished by delivering an Officers' Certificate to the Trustee which
describes the amounts deposited in error in the Certificate Account. If the
facts set forth on the face of such Officers' Certificate indicate that amounts
deposited were not required to be deposited under the terms of this Section
3.08, the Trustee shall, in writing, authorize the Master Servicer to withdraw
such amount from the Certificate Account. All funds deposited by the Master
Servicer in the Certificate Account shall be held by the Master Servicer in
trust for the Certificateholders until disbursed in accordance with the
Reference Agreement or withdrawn in accordance with Section 3.12.
The Master Servicer may cause the institution maintaining the
Certificate Account to invest the funds in the Certificate Account in Eligible
Investments, which shall mature not later than the Business Day next preceding
the Distribution Date next following the date of such investment (except that if
such Eligible Investment is an obligation of the institution that maintains the
Certificate Account, then such Eligible Investment shall mature not later than
such Distribution Date) and shall not be sold or disposed of prior to its
maturity. All such Eligible Investments shall be made in the name of the
Trustee (in its capacity as such) or its nominee. All income and gain realized
from any such investment shall be for the benefit of the Master Servicer and
shall be subject to its withdrawal or order from time to time. The amount of
any losses incurred in respect of any such investments shall be deposited in the
Certificate Account by the Master Servicer out of its own funds immediately as
realized.
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The Master Servicer shall give notice to the Trustee and the Depositor
of the location of the Certificate Account, and of any change thereof, prior to
the use thereof.
If so specified in the Reference Agreement with respect to a Series,
amounts to be deposited in the Certificate Account pursuant to this Section 3.08
shall instead be deposited by the Master Servicer in a Custodial Account and
remitted, net of amounts withdrawn pursuant to Section 3.12 hereof, by wire
transfer of immediately available funds to the Certificate Account established
by the Trustee pursuant to the Reference Agreement on the date specified in such
Reference Agreement.
SECTION 3.09 Servicing Accounts.
------------------
In those cases where a Servicer is servicing a Mortgage Loan pursuant
to a Warranty and Servicing Agreement, the Servicer will, pursuant to the
Warranty and Servicing Agreement, be required to establish and maintain one or
more Servicing Accounts. The Servicer will be required thereby to deposit into
the Servicing Account on a daily basis all proceeds of Mortgage Loans received
by the Servicer, subject to withdrawal to the extent permitted by such Warranty
and Servicing Agreement. All amounts held in the Servicing Accounts shall be
held in trust for the Trustee for the benefit of the Certificateholders. On the
Servicer Remittance Date, the Servicer will, pursuant to the related Warranty
and Servicing Agreement, be required to remit to the Master Servicer for deposit
in the Certificate Account an amount equal to the sum of (i) all amounts
received by the Servicer with respect to the Mortgage Loans serviced by it as of
the Servicer Remittance Date, except (a) any monthly payment prepaid for a Due
Date subsequent to the month in which the Servicer Remittance Date occurs, (b)
any amounts received by such Servicer with respect to such Mortgage Loans that
constitute a late recovery with respect to an advance previously made by such
Servicer with respect to such Mortgage Loans, and (c) any Retained Yield payable
to such Servicer under the terms of such Warranty and Servicing Agreement; (ii)
all partial Principal Prepayments received in the calendar month prior to the
month of the Servicer Remittance Date or applied as of the Due Date in the month
of the Servicer Remittance Date; (iii) all Principal Prepayments in full
received in the calendar month prior to the month of the Servicer Remittance
Date, in each case together with a full month's interest thereon at the Mortgage
Rate (net of the related servicing compensation and any Retained Yield payable
to such Servicer under the terms of such Warranty and Servicing Agreement)
whether or not received from the Mortgagor; (iv) all Insurance Proceeds and
Liquidation Proceeds (net of Liquidation Expenses) received in the calendar
month prior to the month of the Servicer Remittance Date; and (v) with respect
to each Mortgage Loan for which the monthly payment due on the immediately
preceding Due Date was delinquent as of the Servicer Remittance Date, an amount
equal to such payment net of the
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servicing compensation and any Retained Yield payable to such Servicer (a
"Servicer Advance"). The Servicer may deduct from each remittance, as provided
above, an amount equal to the servicing fee to which it is then entitled
pursuant to the Warranty and Servicing Agreement, to the extent not previously
paid to or retained by it. Any installments as to which the Servicer has not
made an advance will be subject to the Master Servicer's obligation to advance
set forth herein.
SECTION 3.10 Collection of Taxes, Assessments and Similar Items; Escrow
----------------------------------------------------------
Accounts.
--------
In addition to the Certificate Account, the Master Servicer shall,
and, pursuant to the Warranty and Servicing Agreements, the Servicers will be
required to, establish and maintain one or more custodial accounts (each, an
"Escrow Account") and deposit and retain therein all collections from the
Mortgagors (or advances by Servicers or the Master Servicer) for the payment of
taxes, assessments, hazard insurance premiums, Primary Mortgage Insurance Policy
premiums, if applicable, or comparable items for the account of the Mortgagors.
Escrow Accounts shall be Eligible Accounts.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, Primary Mortgage Insurance Policy, or FHA Certificate of Mortgage Loan
Insurance, if applicable, or comparable items, to reimburse the Master Servicer
or Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments), 3.13 hereof (with
respect to the Primary Insurance Policy) and 3.14 hereof (with respect to hazard
insurance), to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required, to Mortgagors on balances in the Escrow
Account or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 9.01 hereof. As part of its servicing
duties, the Master Servicer shall, and the Servicers will, pursuant to the
Warranty and Servicing Agreements, be required to, pay to the Mortgagors
interest on funds in the Escrow Account to the extent required by law.
The Master Servicer shall, with respect to each Nonsubserviced
Mortgage Loan and with respect to each Mortgage Loan serviced under a Warranty
and Servicing Agreement, to the extent the related Servicer does not do so,
advance the payments referred to in the preceding paragraph that are not timely
paid by the Mortgagors; provided, however, that the Master Servicer shall be
required to so advance only to the extent that such advances, in the good faith
judgment of the Master Servicer, will be recoverable by the Master Servicer out
of Insurance Proceeds,
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Liquidation Proceeds or otherwise; and provided, further, that such payments
shall be advanced when the tax, premium or other cost for which such payment is
intended is due.
SECTION 3.11 Access to Certain Documentation and Information Regarding the
-------------------------------------------------------------
Mortgage Loans.
--------------
In order to permit Certificateholders to comply with Sections 171 and
1276 of the Code, the Master Servicer shall, upon request of any
Certificateholder, furnish such Certificateholder with a statement setting forth
the number and principal balance of Mortgage Loans that were originated before
[July 18, 1984] and before [September 27, 1985.]
The Master Servicer shall provide the Depositor and the Trustee access
to all records and documentation regarding the Mortgage Loans and all accounts,
insurance policies and other matters relating to this Agreement, such access
being afforded without charge, but only upon reasonable request and during
normal business hours at the offices of the Master Servicer designated by it.
SECTION 3.12 Permitted Withdrawals from the Certificate Account.
--------------------------------------------------
The Master Servicer may, from time to time, make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to itself as servicing compensation that portion of
any payment as to interest that equals the Servicing Fee with respect to
such Mortgage Loan for the period with respect to which such interest
payment was made, and, as additional servicing compensation, earnings on
the amounts in the Certificate Account credited to the Certificate Account,
and to pay any Retained Yield and the Administrative Fee to the Depositor
(for disbursement in accordance with Section 3.19 hereof);
(ii) to reimburse itself for advances made pursuant to Sections
3.09, 3.10, 4.01, 4.02 and 4.03 hereof, such right of reimbursement
pursuant to this subclause (ii) being limited to amounts received on
particular Mortgage Loans (including, for this purpose, Insurance Proceeds,
Liquidation Proceeds, amounts representing proceeds of other insurance
policies, if any) covering the related Mortgaged Property, which represent
(a) late recoveries of payments of principal and/or interest in respect of
which any such advance was made in the case of advances pursuant to
Sections 3.09, 4.01, 4.02 and 4.03 hereof, and (b) late recoveries of the
payments for which such advances were made in the case of advances pursuant
to Section 3.10 hereof;
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(iii) to reimburse itself for any Nonrecoverable Advances;
(iv) to reimburse itself from Insurance Proceeds and Liquidation
Proceeds for amounts expended by it pursuant to Section 3.16 hereof in good
faith in connection with the restoration of property damaged by an
Uninsured Cause;
(v) to reimburse itself from Insurance Proceeds for Insured
Expenses and to pay any unpaid servicing compensation to itself, any
Retained Yield and any Administrative Fee to the Depositor from Insurance
Proceeds, such payment of servicing compensation, Retained Yield and
Administrative Fee to be made in accordance with Section 3.19 hereof and
being limited to the amount, if any, by which the aggregate of Liquidation
Proceeds and Insurance Proceeds received in connection with the liquidation
of a defaulted Mortgage Loan is, after the deduction of Insured Expenses,
servicing compensation payable to the Servicer of such Mortgage Loan, if
any, and any amounts deducted pursuant to subclause (iv) above, in excess
of the Principal Balance of such Mortgage Loan, together with accrued and
unpaid interest thereon at the Pass-Through Rate;
(vi) to reimburse itself from Liquidation Proceeds for
Liquidation Expenses and, to the extent that Liquidation Proceeds after
such reimbursement, and any other reimbursement pursuant to subclause (iv)
above are in excess of the Principal Balance of the related Mortgage Loan
together with accrued and unpaid interest thereon at the Pass-Through Rate,
to pay out of such excess the amount of any unpaid servicing compensation
with respect to the related Mortgage Loan to itself and any Retained Yield
and the Administrative Fee to the Depositor (for disbursement in accordance
with Section 3.19 hereof);
(vii) to pay to itself, a Servicer or the Depositor, as the case
may be, with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 2.02, 2.04, 2.05, 3.15
or 9.01 hereof, all amounts received thereon and not taken into account in
determining the related Principal Balance of such repurchased Mortgage
Loan;
(viii) to reimburse itself or the Depositor for expenses
incurred by and reimbursable to it or the Depositor pursuant to Section
6.03 hereof;
(ix) to make deposits into the Reserve Fund, as required by the
Reference Agreement;
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(x) to make payments to the Certificateholders, or remittances to
the Trustee in the amounts, and in the manner, specified in the Reference
Agreement;
(xi) to pay to itself any interest earned on or investment income
with respect to funds in the Certificate Account (all such interest or
income to be withdrawn monthly on such Distribution Date); and
(xii) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi).
SECTION 3.13 Maintenance of the Pool Insurance Policy, Primary Mortgage
----------------------------------------------------------
Insurance Policies, FHA Insurance and VA Loan Guarantees;
---------------------------------------------------------
Collections Thereunder.
----------------------
If so specified in the Reference Agreement, the Master Servicer shall
exercise its reasonable best efforts to maintain the Pool Insurance Policy in
full force and effect throughout the term of this Agreement, unless coverage
thereunder has been exhausted through payment of claims. The Master Servicer
shall pay the premiums for the Pool Insurance Policy on a timely basis. In the
event that the Pool Insurer shall cease to be a Qualified Insurer because it
shall not be qualified to transact a mortgage guaranty insurance business under
the laws of the state of its principal place of business or any other state that
has jurisdiction over the Pool Insurer in connection with the Pool Insurance
Policy or if the Pool Insurance Policy is cancelled or terminated for any reason
(other than the exhaustion of the total coverage), the Master Servicer shall
exercise its reasonable best efforts to obtain from another Qualified Insurer a
replacement policy comparable to the Pool Insurance Policy with a total coverage
that is equal to the then existing coverage of the Pool Insurance Policy;
provided, however, that if the cost of any such replacement policy shall be
greater than the cost of the Pool Insurance Policy, the amount of coverage of
such replacement policy shall, unless the Depositor consents to coverage at a
higher level, be reduced to a level such that the premium rate therefor shall
not exceed the premium rate on such Pool Insurance Policy. In the event the
Pool Insurer shall cease to be a Qualified Insurer because it is approved as an
insurer by neither FHLMC nor FNMA, the Master Servicer agrees to review, not
less often than monthly, the financial condition of the Pool Insurer. If the
Master Servicer determines that recoveries are so jeopardized, it shall exercise
its reasonable best efforts to obtain, from another Qualified Insurer, a
replacement pool insurance policy, subject to the cost limitation set forth
above.
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Prior to obtaining any replacement pool insurance policy, the Master Servicer
shall notify the Depositor of the replacement pool insurance policy the Master
Servicer intends to obtain and, if the Depositor so directs, obtain a
replacement pool insurance policy approved by the Depositor.
The Master Servicer shall not take, or permit any Servicer to take,
any action that would result in loss of coverage under any applicable Primary
Mortgage Insurance Policy, FHA Certificate of Mortgage Loan Insurance or VA Loan
Guaranty Certificate of any loss which, but for the actions of the Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its reasonable best efforts to keep in full force and effect each such
Primary Mortgage Insurance Policy, FHA Certificate of Mortgage Loan Insurance or
VA Loan Guaranty Certificate applicable to a Nonsubserviced Mortgage Loan, and
shall use its reasonable best efforts to cause each Servicer to keep in full
force and effect, each Primary Mortgage Insurance Policy applicable to a
Mortgage Loan being serviced by it, until, in the case of a Primary Mortgage
Insurance Policy, (i) the principal balance of the related Mortgage Loan is
reduced to 80% or less of the Appraised Value, in the case of a Mortgage Loan
having a Loan-to-Value Ratio at origination in excess of 80%, and (ii) the
principal balance of the related Mortgage Loan is reduced to 75% or less of its
Appraised Value, and, in the case of an FHA Certificate of Mortgage Loan
Insurance or VA Loan Guaranty Certificate, until the related Mortgage Loan is
fully paid. The Master Servicer agrees to pay, with respect to each
Nonsubserviced Mortgage Loan, and otherwise, to the extent the related Servicer
does not do so, the premiums for each Primary Mortgage Insurance Policy or FHA
Certificate of Mortgage Loan Insurance on a timely basis and shall use its
reasonable best efforts to cause itself or the Servicer to be named as loss
payee. In the event that the insurer under any Primary Mortgage Insurance
Policy shall cease to be qualified to transact a mortgage guaranty insurance
business under the laws of the state of its organization or any other state that
has jurisdiction over such insurer (or if such insurer's claims-paying ability
shall cease to be acceptable to the Rating Agency) or such Primary Mortgage
Insurance Policy is cancelled or terminated for any reason, the Master Servicer
shall exercise its reasonable best efforts to obtain, or to cause the related
Servicer to obtain, from another Qualified Insurer, a replacement policy
comparable to such Primary Mortgage Insurance Policy with a total coverage that
is equal to the then existing coverage of such Primary Mortgage Insurance
Policy. The Master Servicer shall not cancel or refuse to renew any such
Primary Mortgage Insurance Policy with respect to a Nonsubserviced Mortgage
Loan, or consent to the cancellation or refusal to renew any such Primary
Mortgage Insurance Policy applicable to any other Mortgage Loan, which is in
effect at the date of the initial issuance of the Certificates pursuant to the
Reference Agreement and is required to be kept in force hereunder unless the
replacement Primary Mortgage Insurance
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Policy for such cancelled or non-renewed policy is maintained with an insurer
whose claims-paying ability is acceptable to the Rating Agency. In connection
with any assumption and modification agreement entered into by the Master
Servicer or a Servicer pursuant to Section 3.15, the Master Servicer shall
promptly notify the insurer under the related Primary Mortgage Insurance Policy.
If such Primary Mortgage Insurance Policy is terminated as a result of such
assumption, the Master Servicer shall obtain a replacement Primary Mortgage
Insurance Policy as provided above.
In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself, the
Depositor, the Trustee and the Certificateholders, claims to the Pool Insurer
under the Pool Insurance Policy, to the insurer under any Primary Mortgage
Insurance Policies, to FHA and the VA, as applicable, and, in this regard, to
permit recovery under the Pool Insurance Policy, any Primary Mortgage Insurance
Policies and any FHA Certificate of Mortgage Loan Insurance or any VA Loan
Guaranty Certificate with respect to defaulted Mortgage Loans. Pursuant to
Section 3.08 hereof, any amounts collected by the Master Servicer under the Pool
Insurance Policy, any Primary Mortgage Insurance Policy, any FHA Certificate of
Mortgage Loan Insurance or any VA Loan Guaranty Certificate shall be deposited
in the Certificate Account, subject to withdrawal pursuant to Section 3.12
hereof. If the Master Servicer is required to receive FHA debentures as the
method of payment on an FHA insurance claim, the Master Servicer shall deposit
cash into the Certificate Account in an amount equal to the face value of such
FHA debentures, whereupon such FHA debentures will become the property of the
Master Servicer. In those cases in which a Mortgage Loan is serviced by a
Servicer, the Servicer, on behalf of itself, the Master Servicer, the Depositor,
the Trustee and the Certificateholders, will, pursuant to the related Warranty
and Servicing Agreement, be required to present claims to the insurer under the
Primary Mortgage Insurance Policy and to FHA and the VA, as applicable, and
deposit all collections thereunder (including, in the case of the payment of an
FHA insurance claim in FHA debentures, cash in an amount equal to the face value
of such FHA debentures) in the related Servicing Account for deposit in the
Certificate Account.
SECTION 3.14 Maintenance of Hazard Insurance, the Special Hazard Insurance
-------------------------------------------------------------
Policy and Other Insurance.
--------------------------
The Master Servicer shall, with respect to Nonsubserviced Mortgage
Loans and, with respect to any other Mortgage Loan, to the extent that the
related Servicer does not do so, cause to be maintained for each Mortgage Loan,
hazard insurance with extended coverage in an amount that is at least equal to
the maximum insurable value of improvements securing such Mortgage Loan or its
Principal Balance, whichever is less. Each such policy of standard hazard
insurance shall contain, or
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have an accompanying endorsement that contains, a standard mortgagee clause
complying in form and substance to applicable FNMA guidelines or FHA or VA
Regulations, as the case may be. The Master Servicer shall also, with respect
to Nonsubserviced Mortgage Loans and, with respect to any other Mortgage Loan,
to the extent that the related Servicer does not do so, cause to be maintained
on property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the maximum insurable value of the improvements that are a part
of such property and in compliance with the requirements of the Special Hazard
Insurance Policy, liability insurance and, to the extent described below, flood
insurance. Pursuant to Section 3.08 hereof, any amounts collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Certificate
Account, subject to withdrawal pursuant to Section 3.12 hereof. Any cost
incurred by the Master Servicer or the related Servicer in maintaining any such
insurance shall not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trustee, 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 Master Servicer or the
related Servicer out of late payments by the related Mortgagor or out of
Insurance Proceeds or Liquidation Proceeds to the extent permitted by the
applicable Warranty and Servicing Agreement and by Section 3.12 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. If the
Mortgaged Property is located at the time of origination of the Mortgage Loan in
a federally designated special flood hazard area, the Master Servicer shall
cause flood insurance to be maintained with respect to a Nonsubserviced Mortgage
Loan and, with respect to any other Mortgage Loan, shall cause such flood
insurance to be maintained, in the event the related Servicer shall fail to do
so. 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, if the area in which such Mortgaged Property
is located is participating in such program.
In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section 3.14, it being understood and agreed that
such
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policy may contain a deductible clause, in which case the Master Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this Section 3.14, and
there shall have been a loss that would have been covered by such policy,
deposit in the Certificate Account the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Depositor, the Trustee and
the Certificateholders, claims under any such blanket policy.
As long as the Pool Insurance Policy is in effect, the Master Servicer
covenants and agrees to exercise its reasonable best efforts to maintain the
Special Hazard Insurance Policy in full force and effect, unless coverage
thereunder has been exhausted through payment of claims, and to pay the premium
for the Special Hazard Insurance Policy on a timely basis. In the event that
the Special Hazard Insurance Policy shall be cancelled or terminated for any
reason (other than the exhaustion of total policy coverage), the Master Servicer
shall exercise its reasonable best efforts to obtain from another insurer, the
claims-paying ability of which shall be acceptable to the Rating Agency, a
replacement policy comparable to the Special Hazard Insurance Policy with a
total coverage that is equal to the then existing coverage of the Special Hazard
Insurance Policy; provided, however, that if the cost of any replacement policy
shall be greater than the cost of the Special Hazard Insurance Policy, the
amount of coverage of such replacement policy shall, unless the Depositor
consents to coverage at a higher level, be reduced to a level such that the cost
of such replacement policy shall not exceed the cost of the Special Hazard
Insurance Policy. Prior to obtaining any replacement Special Hazard Insurance
Policy, the Master Servicer shall notify the Depositor of the replacement
Special Hazard Insurance Policy the Master Servicer intends to obtain and, if
the Depositor so directs, obtain a replacement Special Hazard Insurance Policy
approved by the Depositor. In connection with its activities as administrator
and servicer of the Mortgage Loans, the Master Servicer agrees to present, on
behalf of itself, the Depositor, the Trustee and the Certificateholders, claims
to the Special Hazard Insurer under the Special Hazard Insurance Policy and, in
this regard, to take such reasonable action as shall be necessary to permit
recovery under the Special Hazard Insurance Policy with respect to defaulted
Mortgage Loans. Pursuant to Section 3.08 hereof, any amounts collected by the
Master Servicer under the Special Hazard Insurance Policy that are in the nature
of Insurance Proceeds shall be deposited in the Certificate Account, subject to
withdrawal pursuant to Section 3.12 hereof. Any other amounts collected by the
Master Servicer under the Special Hazard Insurance Policy shall be applied by it
towards the restoration
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of the related property to a condition requisite to the presentation of claims
on the related Mortgage Loan to the Pool Insurer under the Pool Insurance
Policy.
SECTION 3.15 Enforcement of Due-on-Sale Clauses; Assumption Agreements.
---------------------------------------------------------
(a) When any property subject to a Mortgage has been conveyed by the
Mortgagor, the Master Servicer shall, with respect to Nonsubserviced Mortgage
Loans and, with respect to any other Mortgage Loans, to the extent the related
Servicer does not do so, to the extent that it has knowledge of such conveyance,
enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent permitted under applicable law and governmental regulations, but only
to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. In the event that the Master
Servicer or the related Servicer is prohibited by law from enforcing any such
due-on-sale clause, or if coverage under any Required Insurance Policy would be
adversely affected, the Master Servicer is authorized subject to Section
3.15(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.15(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies 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 Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be in
default under this Section 3.15(a) by reason of any transfer or assumption which
the Master Servicer is restricted by law from preventing for any reason
whatsoever.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.15(a) hereof and to such other
limitations or conditions specified in the related Warranty and Servicing
Agreement, if any, in any case in which a Mortgaged Property has been conveyed
to a Person by a Mortgagor, and such Person is to enter into an assumption
agreement or modification agreement or supplement to the Mortgage Note or
Mortgage that requires the signature of the Trustee, or if an instrument of
release signed by the Trustee is required releasing the Mortgagor from liability
on the Mortgage Loan, the Master Servicer shall deliver or cause to be delivered
to the Trustee for signature the assumption agreement with the Person to whom
the Mortgaged Property is to be conveyed and such
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modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
The Master Servicer shall also deliver or cause to be delivered to the Trustee
with the foregoing documents a letter explaining the nature of such documents
and the reason or reasons why the Trustee's signature is required. With such
letter, the Master Servicer shall deliver to the Trustee a certificate of a
Servicing Officer certifying that: (i) a Servicing Officer has examined and
approved such documents as to form and substance, (ii) the Trustee's execution
and delivery thereof will not conflict with or violate any terms of this
Agreement or cause the unpaid balance and interest on the Mortgage Loan to be
uncollectible in whole or in part, (iii) any required consents of insurers under
any Required Insurance Policies have been obtained and (iv) subsequent to the
closing of the transaction involving the assumption or transfer (A) the Mortgage
Loan will continue to be secured by a first mortgage lien pursuant to the terms
of the Mortgage, (B) such transaction will not adversely affect the coverage
under any Required Insurance Policies, (C) the Mortgage Loan will fully amortize
over the remaining term thereof, (D) the interest rate on the Mortgage Loan will
not be altered nor will the term of the Mortgage Loan be increased and (E) if
the seller/transferor of the Mortgaged Property is to be released from liability
on the Mortgage Loan, such release will not (based on the Master Servicer's good
faith determination) adversely affect the collectibility of the Mortgage Loan.
Upon receipt of such certificate, the Trustee shall execute any necessary
instruments for such assumption or substitution of liability. Upon the closing
of the transactions contemplated by such documents, the Master Servicer shall
cause the originals of the assumption agreement, the release (if any), or the
modification or supplement to the Mortgage Note or Mortgage to be delivered to
the Trustee (or the related Custodian, as the duly appointed agent of the
Trustee) and deposited with the Mortgage File for such Mortgage Loan. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as additional
servicing compensation.
In the event that the Master Servicer, in connection with any such
assumption or modification agreement or supplement to the Mortgage Note, is
unable to deliver the certificate of the Servicing Officer set forth above, the
Master Servicer shall purchase, or cause the related Servicer to purchase the
related Mortgage Loan in the manner, and at the Purchase Price, set forth in
Section 2.03 hereof.
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SECTION 3.16 Realization Upon Defaulted Mortgage Loans.
-----------------------------------------
The Master Servicer shall 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 3.06 hereof, or
shall cause the related Servicer to do so, as provided in the related Warranty
and Servicing Agreement. In connection with such foreclosure or other
conversion, the Master Servicer shall, consistent with Section 3.13 hereof,
follow such practices and procedures as it shall deem necessary or advisable, as
shall be normal and usual in its general mortgage servicing activities and as
are in accordance with applicable FNMA guidelines, FHA or VA Regulations, as
applicable, and the requirements of the insurers under any other Required
Insurance Policy; provided, however, that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan to the Certificateholders after reimbursement to itself of such
expenses and (ii) that such expenses will be recoverable to it either through
Liquidation Proceeds with respect to which it shall have priority for purposes
of withdrawals from the Certificate Account pursuant to Section 3.12 hereof) or
through Insurance Proceeds (with respect to which it shall have similar
priority). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, as contemplated in Section 3.12 hereof.
Notwithstanding the foregoing, the Master Servicer shall not be entitled to
recover legal expenses incurred in connection with foreclosure proceedings where
the Mortgage Loan is reinstated and such foreclosure proceedings are terminated
prior to completion, other than from sums received from the Mortgagor with
respect to such expenses. The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to instructions from the Trustee not to
foreclose upon such Mortgage Loan, upon a determination by the Trustee that the
proceeds of such foreclosure would not exceed the costs and expenses of bringing
such a proceeding.
SECTION 3.17 Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Certificate Account pursuant
to Section 3.08 hereof have
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been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request, the
Trustee shall promptly release (or shall cause the related Custodian to release)
the related Mortgage File to the Master Servicer, and the Depositor and the
Trustee shall execute and deliver to the Master Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage, together with the Mortgage
Note with written evidence of cancellation thereon. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Certificate Account or the related Servicing Account. From
time to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under the Pool Insurance
Policy, the Mortgagor Bankruptcy Bond, the Special Hazard Insurance Policy, any
Primary Mortgage Insurance Policy or any policy of flood insurance, any fidelity
bond or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien or the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee shall, upon request of the
Master Servicer and the delivery to the Trustee of a receipt signed by a
Servicing Officer substantially in the form of Exhibit B hereto (the "Trust
Receipt"), release (or cause the related Custodian to release) the Mortgage File
to the Master Servicer, or to the related Servicer if the Master Servicer so
requests. Subject to the further limitations set forth below, the Master
Servicer shall cause the Mortgage File or documents so released to be returned
to the Trustee, or the Custodian, as the case may be, when the need therefor by
the Master Servicer or Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in the Certificate Account, in
which case the Trustee shall, upon the Trustee's receipt of a certification
(which certification shall include a statement to such effect), deliver the
Trust Receipt to the Master Servicer. If a Servicer or the Master Servicer at
any time seeks to initiate a foreclosure proceeding in respect of any Mortgaged
Property as authorized by the related Warranty and Servicing Agreement, or this
Agreement, as the case may be, the Master Servicer shall deliver or cause to be
delivered to the Depositor and the Trustee, for signature, as appropriate, any
court pleadings, requests for Trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Together with such documents or pleadings, the Master Servicer shall deliver to
the Depositor and the Trustee a certificate of a Servicing Officer requesting
that such pleadings or documents to be executed by the Trustee and a Servicing
Officer shall certify as to the reason such documents
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or pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate the insurance coverage under any Required Insurance
Policy or invalidate or otherwise affect the lien of the Mortgage except for the
termination of such lien upon completion of the foreclosure. Notwithstanding
the foregoing, the Master Servicer shall cause possession of any Mortgage File
or of the documents therein that shall have been released by the Trustee, or the
Custodian, as the case may be, to be returned to Trustee or Custodian within 21
calendar days after possession thereof shall have been released by the Trustee
or Custodian unless (i) the Mortgage Loan has been liquidated and the Insurance
Proceeds or Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Certificate Account, and the Master Servicer shall have
delivered to the Trustee a certificate of a Servicing Officer certifying to such
effect or (ii) the Mortgage File or document shall have 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 and the Master Servicer shall have
delivered to the Trustee a certificate of a Servicing Officer certifying as to
the name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
SECTION 3.18 Documents, Records and Funds in Possession of Master Servicer to
----------------------------------------------------------------
be Held for the Depositor and the Trustee.
-----------------------------------------
Notwithstanding any other provisions of this Agreement, the Master Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments coming into the possession of the Master Servicer from time to time
and shall account fully to the Trustee for any funds received by the Master
Servicer or which otherwise are collected by the Master Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage
Files and funds collected or held by, or under the control of, the Master
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, including but not limited to, any funds on deposit in the Certificate
Account, shall be held by the Master Servicer for and on behalf of the
Depositor, the Trustee and the Certificateholders and shall be and remain the
sole and exclusive property of the Trustee, subject to the applicable provisions
of this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account or any Servicing or Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of setoff against any
Mortgage File or any funds collected on, or in
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connection with, a Mortgage Loan, except, however, that the Master Servicer
shall be entitled to set-off against and deduct from any such funds any amounts
that are properly due and payable to the Master Servicer under this Agreement.
SECTION 3.19 Servicing Compensation; Retained Yield.
--------------------------------------
As compensation for its activities hereunder, the Master Servicer
shall be entitled to withdraw from the Certificate Account the amounts specified
in subclauses (i), (v) and (vi) of Section 3.12 hereof as payable to it. The
Depositor (or at its direction, its designee) shall be entitled to receive the
Retained Yield and the Administrative Fee specified in such subclauses in the
Reference Agreement.
Additional servicing compensation in the form of prepayment charges,
assumption fees, late payment charges or otherwise shall be retained by the
Master Servicer or the related Servicer, as the case may be, to the extent not
required to be deposited in the Certificate Account pursuant to Section 3.08
hereof or in the Servicing Account pursuant to the related Servicing Agreement.
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of
premiums for Primary Mortgage Insurance Policies, FNMA Certificates of Mortgage
Loan Insurance or VA Loan Guaranty Certificates, if any, to the extent such
premiums are not required to be paid by the related Mortgagors or the related
Servicer, payment of any premiums for hazard insurance, as required by Section
3.14 hereof, payment of the premiums for the Pool Insurance Policy, as required
by Section 3.13 hereof, payment of the premiums for the Mortgagor Bankruptcy
Bond, as required by Section 3.23 hereof and maintenance of the other forms of
insurance coverage required by Section 3.14 hereof) and shall not be entitled to
reimbursement therefor except as specifically provided in Sections 3.12, 3.16
and 4.04 hereof.
SECTION 3.20 Reports to the Trustee and the Depositor; Certificate Account
-------------------------------------------------------------
Statements.
----------
On each Distribution Date, the Master Servicer shall forward to the
Trustee and the Depositor a statement, certified by a Servicing Officer, setting
forth the status of the Certificate Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate of deposits in or withdrawals from the Certificate Account for each
category of deposit specified in Section 3.08 hereof and each category of
withdrawal specified in Section 3.12 hereof.
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SECTION 3.21 Annual Statement as to Compliance.
---------------------------------
The Master Servicer shall deliver to the Depositor and the Trustee on
or before April 30 of each year, commencing on April 30 not less than nine
months after the Delivery Date specified in the Reference Agreement, an
Officers' Certificate stating, as to each signer thereof, that (i) a review of
the activities of the Master Servicer during the preceding calendar year and of
the performance of the Master Servicer under this Agreement has been made under
such officer's supervision, (ii) to the best of such officer's knowledge, based
on such review, the Master Servicer has fulfilled all 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, (iii) a Servicing Officer is
conducting an examination of the activities of each Servicer during the
immediately preceding year and its performance under the related Warranty and
Servicing Agreement, and (iv) to the best of such Servicing Officer's knowledge,
based on such examination, each Servicer has performed and fulfilled its duties,
responsibilities and obligations under the related Warranty and Servicing
Agreement in all material respects throughout such year, or if there has been a
default in the performance or fulfillment of any such duties, responsibilities
or obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof.
SECTION 3.22 Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
On or before April 30 of each year, commencing on April 30 not less
than nine months after the Delivery Date specified in the Reference Agreement,
the Master Servicer, at its expense, shall cause a firm of independent public
accountants that is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Depositor and the Trustee to the
effect that such firm has examined certain documents and records relating to the
servicing of the Mortgage Loans and that, on the basis of an examination
conducted substantially in compliance with the Uniform Single Audit Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FHLMC, such
servicing has been conducted in compliance with such agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Audit Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC requires it to report. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
Mortgage Loans by Servicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Audit Program for
Mortgage Bankers or the Audit
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Program for Mortgages serviced for FHLMC (rendered within one year of such
statement) of independent public accountants With respect to the related
Servicer.
SECTION 3.23 Maintenance of the Mortgagor Bankruptcy Bond; Collections
---------------------------------------------------------
Thereunder.
----------
If so specified in the Reference Agreement, the Master Servicer shall
exercise its reasonable best efforts to maintain and keep the Mortgagor
Bankruptcy Bond in full force and effect throughout the term of this Agreement,
unless coverage has been exhausted through payment of claims, and to pay the
premiums for the Mortgagor Bankruptcy Bond on a timely basis. At the request of
the Depositor, coverage under the Mortgagor Bankruptcy Bond shall be cancelled
or reduced by the Master Servicer to the extent permitted by the Rating Agency,
provided the outstanding rating of the Certificates by the Rating Agency at the
time of such cancellation or reduction is not reduced.
In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself, the
Depositor, the Trustee and the Certificateholders, claims to the issuer of the
Mortgagor Bankruptcy Bond and, in this regard, to take such reasonable action as
shall be necessary to permit recovery under the Mortgagor Bankruptcy Bond.
Pursuant to Section 3.08 hereof, any amounts collected by the Master Servicer
under the Mortgagor Bankruptcy Bond shall be deposited in the Certificate
Account, subject to withdrawal pursuant to Section 3.12 hereof.
SECTION 3.24 Letter of Credit.
----------------
If so specified in the Reference Agreement, the Depositor shall
obtain, in favor of the Trustee on behalf of the Certificateholders, an
irrevocable, stand-by Letter of Credit, the terms and provisions of which are as
set forth in the Reference Agreement. In the event that the L/C Bank shall be
required to make any payments under the Letter of Credit, the Master Servicer
shall notify the Trustee, no later than the Determination Date next preceding
the related Distribution Date, such notice specifying the amount of such
required payment. Not later than the close of business on the Business Day
preceding the Distribution Date, the Trustee shall draw upon the Letter of
Credit in the amount of such required payment to the extent of the amount
available thereunder and deposit in the Certificate Account, in immediately
available fluids, the amount drawn under the Letter of Credit.
If at any time the L/C Bank makes a payment covering the amount of the
outstanding principal balance of a Liquidating Loan, the Trustee shall release
(or shall cause the related Custodian to release) the related Mortgage File to
the L/C Bank or its designee and shall execute and deliver such instruments of
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transfer or assignment, in each case without recourse, as shall be necessary to
vest in the L/C Bank or its designee all right, title and interest in such
Mortgage Loan, and the L/C Bank or its designee will thereupon acquire such
Liquidating Loan, together with related security interests and documents, free
of any further obligation to the Trustee or the Certificateholders of such
Series with respect thereto except as may be provided in such Letter of Credit
and in the Reference Agreement.
The Depositor shall have the power to substitute for any Letter of
Credit another irrevocable standby letter of credit, provided that no such
substitution shall be made unless the substitute letter of credit contains
provisions that are in all material respects the same as, or more favorable to
the Certificateholders than, the original Letter of Credit and provided further
that such substitution will not result in a reduction of the then outstanding
rating of the Certificates, or the withdrawal of such rating, by the Rating
Agency rating such Certificates, as evidenced by written confirmation to that
effect by such Rating Agency.
Any replacement of the Letter of Credit pursuant to this Section 3.24
shall be accompanied by a written Opinion of Counsel to the issuer of such
substitute letter of credit, addressed to the Master Servicer and the Trustee,
to the effect that such substitute letter of credit constitutes a legal, valid
and binding obligation of the issuer thereof, enforceable in accordance with its
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium and other similar laws from time to time in effect
relating to creditors' rights generally) and concerning such other matters as
the Master Servicer and the Trustee shall reasonably request.
SECTION 3.25 Reserve Fund.
------------
If so specified in the Reference Agreement, the Master Servicer shall
establish and maintain with the Trustee, in the manner specified in the
Reference Agreement, a separate investment account (the "Reserve Fund"). The
Reserve Fund will not be included in the Trust Fund. All amounts shall be
deposited into, withdrawn and distributed from the Reserve Fund in accordance
with the provisions of the Reference Agreement.
The Master Servicer, on behalf of the Holders of the Subordinated
Certificates, will cause a valid and perfected first priority security interest
under the Uniform Commercial Code as in effect in the [ ] from
time to time to be maintained in the Reserve Fund, the amounts deposited therein
and the investments thereof (other than any income from the investment of funds
in the Reserve Fund) in order to secure the
-55-
full and timely performance with respect to the subordination of the
Subordinated Certificates for the benefit of the Holders of the Subordinated
Certificates pursuant to the provisions of the Reference Agreement.
Amounts held in the Reserve Fund from time to time shall continue to
be the property of the Holders of the Subordinated Certificates until withdrawn
from the Reserve Fund in accordance with the provisions of the Reference
Agreement. Amounts held in the Reserve Fund shall be invested by the Trustee at
the direction of the Master Servicer for the benefit of the Holders of the
Subordinated Certificates in one or more Eligible Investments in the manner set
forth in the related Reference Agreement.
SECTION 3.26 Administration of Buydown Funds.
-------------------------------
With respect to each Buydown Mortgage Loan included in the Trust Fund,
the related Servicer shall deposit Buydown Funds in an account that satisfies
the requirements for a Servicing Account (the "Buydown Account"). On each
Servicer Remittance Date, such Servicer will, as to each Buydown Mortgage Loan
serviced by it, withdraw from the Buydown Account in an amount equal to an
aggregate amount of payments that, when added, as required by such buydown plan,
to the amount required to be paid by the related mortgagor on each Due Date in
accordance with such buydown plan, is equal to the full monthly payment due on
such Due Date and deposit that amount in the Certificate Account for
distribution in accordance with the provisions of Section 3.08 and Section 3.12.
If the Mortgagor on a Buydown Mortgage Loan prepays such loan in its
entirety during the period (the "Buydown Period") when Buydown Funds are
required to be applied to such Buydown Mortgage Loan, the Servicer shall
withdraw from the Buydown Account and remit to the Master Servicer for deposit
in the Certificate Account the Buydown Funds remaining in the Buydown Account
for distribution in accordance with the provisions of Section 3.08 and Section
3.12. If the Mortgagor on a Buydown Mortgage Loan defaults on such loan during
the Buydown Period and the property securing such Buydown Mortgage Loan is sold
in the liquidation thereof (either by the Master Servicer, the Pool Insurer or
the insurer under any related Primary Mortgage Insurance Policy), the Servicer
shall withdraw from the Buydown Account and remit to the Master Servicer or
deposit in the Certificate Account or, if so instructed by the Master Servicer
pay to (i) the Pool Insurer if the Mortgaged Property has been transferred to
the Pool Insurer pursuant to the Pool Insurance Policy and 100% of the related
claim under the Pool Insurance Policy is paid or (ii) the insurer under any
related Primary Mortgage Insurance Policy if the Mortgaged Property is
transferred to such insurer and such insurer pays all of the loss incurred in
respect of such default, the Buydown Funds for such
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Buydown Mortgage Loan still held in the Buydown Account. Any amount remitted
pursuant to the preceding sentence will reduce the amount owed on the Mortgage
Loan for purposes of calculating Liquidation Proceeds.
ARTICLE IV
ADVANCES BY THE MASTER SERVICER; PERFORMANCE BOND
SECTION 4.01 Monthly Advances.
----------------
Subject to the conditions of this Article IV, the Master Servicer, as
required below, shall make a Monthly Advance to the Certificate Account, in the
amount, if any, of the aggregate scheduled installments of principal and
interest, after adjustment of such interest payment to the Pass-Through Rate for
such Mortgage Loan on the Mortgage Loans that were due on the Due Date but which
were not received or advanced by the Servicers (including the Master Servicer,
in its capacity as Servicer of Nonsubserviced Mortgage Loans) and remitted to
the Certificate Account on or prior to the Servicer Remittance Date. Each
Monthly Advance shall be remitted to the Certificate Account no later than the
close of business on the Business Day immediately preceding the related
Distribution Date in immediately available funds. The Master Servicer shall be
obligated to make such Monthly Advance only to the extent that such advance, in
the good faith judgment of the Master Servicer, is reimbursable from Insurance
Proceeds, Liquidation Proceeds, payments under the Letter of Credit or under any
Alternative Credit Support, or otherwise. On the Determination Date immediately
preceding the related Distribution Date, the Master Servicer shall determine
whether and to what extent any Servicers have failed to make any advances of
principal or any interest in respect of scheduled installments of principal and
interest that were due on the Due Date and whether such deficiencies, if
advanced by the Master Servicer, would be reimbursable from Insurance Proceeds,
Liquidation Proceeds or otherwise. If the Master Servicer shall have determined
that it is not obligated to make the entire Monthly Advance because all or a
lesser portion of such Monthly Advance would not be reimbursable from Insurance
Proceeds, Liquidation Proceeds or otherwise, the Master Servicer shall promptly
deliver to the Trustee an Officer's Certificate setting forth the reasons for
the Master Servicer's determination.
In lieu of making all or a portion of such Monthly Advance, the Master
Servicer may cause to be made an appropriate entry in its records relating to
the Certificate Account that funds in such account being held for future
distribution or withdrawal have been used by the Master Servicer in discharge of
its obligation to make any such Monthly Advance. Any funds being held in the
Certificate Account for future distribution to the Certificateholders shall be
replaced by the Master Servicer by
-57-
deposit, in the manner set forth above, in the Certificate Account no later than
the close of business on the Business Day immediately preceding the related
Distribution Date, to the extent that funds in the Certificate Account on such
Distribution Date are less than the amounts required to be distributed to the
Certificateholders on such Distribution Date. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Monthly Advances
made pursuant to this Section as provided in Section 3.12.
SECTION 4.02 Advances for Attorneys' Fees.
----------------------------
The Master Servicer shall, with respect to any Nonsubserviced Mortgage
Loan, and otherwise, to the extent not made by the related Servicer, make
advances from time to time for attorneys' fees and court costs incurred, or
which reasonably can be expected to be incurred, for the foreclosure of any
Mortgage Loan or for any transaction in which the Trustee is expected to receive
a deed-in-lieu of foreclosure, unless the Master Servicer has made a good faith
determination that such advances are not recoverable from Insurance Proceeds or
Liquidation Proceeds relating to the Mortgage Loan, payments under the Letter of
Credit or under any Alternative Credit Support or otherwise. If the Master
Servicer shall make a good faith determination that such advances are not so
reimbursable, the Master Servicer shall promptly deliver to the Trustee an
Officers' Certificate setting forth the reasons for such determination. The
Master Servicer shall be entitled to reimbursement for any such advance as
provided in Section 3.12 hereof.
SECTION 4.03 Advances for Amounts Collected by Servicer but Not Remitted.
-----------------------------------------------------------
In the event that any Servicer fails to remit to the Certificate
Account on the Servicer Remittance Date the full amount of the funds in the
custody or under the control of the Servicer that the Servicer is required to
remit under the terms of the related Warranty and Servicing Agreement, then the
Master Servicer, upon and subject to the terms of this Article IV, shall advance
and remit to the Certificate Account, no later than the close of business on the
Business Day immediately preceding the related Distribution Date, in the manner
specified in Section 4.01 hereof, an amount equal to the portion of the required
remittance that was not so remitted. The Master Servicer shall be obligated to
make such advance only to the extent that such advance in the good faith
judgment of the Master Servicer is reimbursable from Insurance Proceeds,
Liquidation Proceeds, or otherwise. If the Master Servicer at any time makes a
determination that such advance is not or would not be so reimbursable, the
Master Servicer shall promptly deliver to the Trustee an Officer's Certificate
setting forth the reasons for such determination. The Master Servicer shall be
entitled to reimbursement for any such advance as provided in Section 3.12.
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SECTION 4.04 Nonrecoverable Advances.
-----------------------
Any Monthly Advance or other advance previously made by the Master
Servicer under Sections 4.01, 4.02 and 4.03 of this Agreement that the Master
Servicer shall ultimately determine in its good faith judgment to be not
recoverable from Insurance Proceeds, Liquidation Proceeds, payments under the
Letter of Credit or under any Alternative Credit Support, or otherwise, shall be
a Nonrecoverable Advance. The determination by the Master Servicer that it has
made a Nonrecoverable Advance shall be evidenced by an Officer's Certificate of
the Master Servicer promptly delivered to the Trustee setting forth the reasons
for such determination. Following the Trustee's receipt of the Officer's
Certificate, the Master Servicer shall be entitled to reimbursement for such
Nonrecoverable Advance as provided in Section 3.12 hereof.
SECTION 4.05 Advances for Additional Interest in Connection with Principal
-------------------------------------------------------------
Prepayments.
-----------
In the event that any Mortgage Loan is the subject of a full or
partial Principal Prepayment and such full or partial Principal Prepayment does
not include interest on the Principal Balance through and including the last day
of the month during which such Principal Prepayment is made, the Master Servicer
shall, with respect to each Nonsubserviced Mortgage Loan, and otherwise to the
extent that such interest shall not have been paid by the Servicer and deposited
in the Certificate Account on or before the Servicer Remittance Date next
succeeding the date of such full or partial Principal Prepayment, advance and
deposit into the Certificate Account, on or before the close of business on the
Business Day immediately preceding the related Distribution Date, an amount
equal to such additional interest, adjusted to the Pass-Through Rate. Such
advance shall be made regardless of whether the Mortgage Note or Mortgage
requires the payment of such interest or whether such amount is recoverable from
Liquidation Proceeds, Insurance Proceeds, payments under the Letter of Credit or
under any Alternative Credit Support, or otherwise or whether the Master
Servicer shall have determined that such advance, if made, would be a
Nonrecoverable Advance; and in case of such advance, the Master Servicer shall
not be entitled to any recovery or reimbursement from the Depositor, the Trustee
or the Certificateholders, but may seek and obtain recovery from the Servicer
that failed to make the advance, through legal action or otherwise, to the
extent provided in the related Warranty and Servicing Agreement.
Notwithstanding anything to the contrary contained herein, the Master Servicer
shall have no entitlement hereunder to any retained yield payable to such
Servicer with respect to any Mortgage Loan serviced by it hereunder.
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SECTION 4.06 Performance Bond.
----------------
The performance of the obligations of the Master Servicer under this
Agreement are guaranteed by the Performance Bond. In the event the
creditworthiness of the obligor under the Performance Bond is impaired such that
the Rating Agency advises the Depositor or the Trustee that the outstanding
rating of the Certificates would be lowered by the Rating Agency, the Master
Servicer shall secure as soon as practicable (and, in any event, within 30 days)
a substitute guaranty or similar form of insurance coverage in an amount equal
to ____% of the outstanding Principal Balance of the Mortgage Loans and issued
by an entity the creditworthiness of which is determined by the Rating Agency to
be sufficient to maintain the outstanding rating of the Certificates. Upon
delivery of such substitute guaranty or similar form of insurance coverage, all
obligations under the Performance Bond shall be discharged. Unless the Rating
Agency confirms within such 30-day period that, after giving effect to such
substitution, it will not lower the outstanding rating of the Certificates, the
Master Servicer shall deposit cash with the Trustee in a separate account (the
"Guaranty Fund") in an amount equal to ___% of the then outstanding Principal
Balance of the Mortgage Loans. The amount so deposited shall be held by the
Trustee as security for the Certificates and shall be invested by the Trustee in
Eligible Investments. Upon such deposit, any obligations under the Performance
Bond or any substitute guaranty or similar form of insurance coverage shall be
discharged. In the event that the Master Servicer fails to make any Monthly
Advance required by the terms of this Agreement, the Trustee shall withdraw the
amount of such Monthly Advance from the Guaranty Fund and deposit the amount so
withdrawn in the Certificate Account. Any such withdrawal shall not result in
any waiver of the Trustee's rights hereunder with respect to any Event of
Default resulting from the Master Servicer's failure to make any such required
payment. Earnings from the investment of any amounts deposited with the Trustee
pursuant to this Section 4.06 shall be for the account of the Master Servicer.
The amount of any losses incurred in respect of any such investments shall be
deposited by the Master Servicer into the Guaranty Fund immediately, as
realized.
The obligations of the Master Servicer under Section 2.03(b) hereof
are further guaranteed by the Performance Bond. In the event that the
outstanding credit rating of the commercial paper obligations of the obligor
under the Performance Bond is reduced by the Rating Agency with the result that
the outstanding rating of the Certificates would be reduced by the Rating
Agency, the Master Servicer shall secure as soon as practicable a substitute
guaranty or similar form of insurance coverage, which shall be (a) in amount
equal to the amount of the Master Servicer's outstanding obligations under
Section 2.03(b) hereof and (b) issued by an entity that has an outstanding
commercial paper rating sufficient to maintain the outstanding rating of the
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Certificates. If a substitute guaranty or other form of insurance coverage has
not been issued to the Trustee within thirty days after the Rating Agency
notifies the Depositor or the Trustee of its intent to lower the rating of the
Certificates, the Master Servicer shall deposit and maintain with the Trustee
cash in an amount equal to the amount of its outstanding obligations under
Section 2.03(b) hereof. The amount so deposited shall be held by the Trustee in
a separate account as security for the Certificates (the "Repurchase Fund") and
shall be invested by the Trustee at the direction of the Master Servicer in
Eligible Investments. In the event that the Master Servicer fails to make any
payment required to be made pursuant to Section 2.03(b), the Trustee shall
withdraw the amount of such required payment from the Repurchase Fund and
deposit the amount so withdrawn in the Certificate Account. Any such withdrawal
shall not result in a waiver of the Trustee's rights with respect to any Event
of Default resulting from the Master Servicer's failure to make any such
required payment. The Master Servicer may withdraw any amounts on deposit with
the Trustee in excess of its outstanding obligations under Section 2.03(b)
hereof and shall deposit cash in the amount necessary to satisfy any deficiency
in the Repurchase Fund upon receipt of the Trustee's demand therefor. Earnings
from the investment of any amounts so deposited with the Trustee shall be for
the account of the Master Servicer. The amount of any losses incurred in
respect of any such investment shall be deposited by the Master Servicer into
the Repurchase Fund immediately, as realized.
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.
----------------
The Certificates shall be substantially in the forms set forth in the
Reference Agreement. A Single Certificate shall evidence the interest in the
Trust Fund specified in the Reference Agreement. The Certificates may be issued
in one or more Classes and such Classes may be divided into one or more
Subclasses as provided in the Reference Agreement. One or more of such Classes
or Subclasses may be subordinated to any other one or more of such Classes or
Subclasses as provided in the Reference Agreement. One or more of such Classes
or Subclasses may receive unequal amounts of the principal and/or interest
payments made from the Mortgage Loans as specified in the Reference Agreement.
The timing of payments to any one or more of such Classes or Subclasses may be
made on a sequential or pro rata basis as provided in the Reference Agreement.
The Certificates shall be executed by manual or facsimile signature on behalf of
the Depositor by its President or one of its Executive Vice Presidents, Senior
Vice Presidents or First Vice Presidents under its seal imprinted thereon and
attested by the
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manual or facsimile signature of its Secretary or one of its Assistant
Secretaries. 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 Depositor shall bind the Depositor, 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 there
appears on such Certificate a certificate of authentication substantially in the
form set forth in Section 8.10 executed by the Trustee by manual signature, and
such certificate of 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.
SECTION 5.02 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06 hereof, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Certificate
Registrar named in the Reference Agreement shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in like aggregate interest in the
Trust Fund and of the same Class.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same aggregate interest in the Trust Fund and of
the same Class, upon surrender of the Certificates to be exchanged at any such
office or agency. Whenever any Certificates are so surrendered for exchange,
the Depositor shall execute and the Trustee shall 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 be accompanied by a written instrument of transfer in
form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
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All Certificates surrendered for registration of transfer and exchange
shall be cancelled and subsequently destroyed by the Trustee or, at its
direction, by the Certificate Registrar.
Unless otherwise specified in the Reference Agreement, the Certificate
Registrar will provide the Master Servicer not later than the 15th Business Day
next preceding the Distribution Date the names and addresses of the
Certificateholders as of the Record Date and the interest of each of them in the
Trust Fund.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) 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 (b) there is delivered to
the Master Servicer, the Certificate Registrar and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Certificate Registrar or the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
interest in the Trust Fund. In connection with the issuance of any new
Certificate under this Section 5.03, 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) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
---------------------
Prior to due presentation of a Certificate for registration of
transfer, the Master Servicer,the Trustee, the Certificate Registrar and any
agent of the Master Servicer, the Trustee or the Certificate Registrar may treat
the person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in the
Reference Agreement and for all other purposes whatsoever, and neither the
Master Servicer, the Trustee, the Certificate Registrar nor any agent of the
Master Servicer, the Trustee or the Certificate Registrar shall be affected by
any notice to the contrary.
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SECTION 5.05 Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
If the Trustee is not the Certificate Registrar and at any time
requests the Certificate Registrar in writing to provide a list of the names and
addresses of Certificateholders, the Certificate Registrar will furnish to the
Trustee, within 15 days after receipt of a request, such list as of the most
recent Record Date, in such form as the Trustee may reasonably require. If
three or more Certificateholders (a) request such information in writing from
the Trustee, (b) state that such Certificateholders desire to communicate with
other Certificateholders with respect to their rights under this Agreement or
under the Certificates and (c) provide a copy of the communication which such
Certificateholders propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such request, afford such Certificateholders
access during normal business hours to the most recent list held by the Trustee,
if any. If such list is as of a date more than 90 days prior to the date of
receipt of such Certificateholders' request, the Trustee shall promptly request
from the Certificate Registrar a current list and shall afford such
Certificateholders access to such list promptly upon its receipt by the Trustee.
Every Certificateholder, by receiving and holding a Certificate, agrees that
neither the Certificate Registrar nor the Trustee shall be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
SECTION 5.06 Maintenance of Office or Agency.
-------------------------------
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustee in respect of the Certificates and this Agreement may be
served. The Trustee initially appoints the Certificate Registrar designated in
the Reference Agreement for transfer and exchange of Certificates and designates
the office described in the Reference Agreement as its office for purposes of
receipt of such notices and demands. The Trustee will give prompt written
notice to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01 Respective Liabilities of the Depositor and the Master Servicer.
---------------------------------------------------------------
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor and the Master Servicer.
----------------------------------------------------------------
The Depositor and the Master Servicer will each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
State of [Delaware], and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any person into which the Depositor or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder,without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, FNMA or FHLMC.
Notwithstanding anything else in this Section 6.02 or in Section 6.04
hereof to the contrary, the Master Servicer may assign its rights and delegate
its duties and obligations under this Agreement in connection with a sale or
transfer of a substantial portion of its mortgage servicing portfolio; provided
that such purchaser or transferee accepting such assignment or delegation shall
be a Person qualified to service mortgage loans on behalf of FNMA or FHLMC, is
reasonably satisfactory to the Trustee and the Depositor, is willing to service
the Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Master Servicer under this Agreement and a guaranty of the
performance of such Person's obligations under this Agreement,
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and provided further that the Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale or transfer will not be
impaired as a result of such assignment, sale or transfer. In the case of any
such assignment and delegation, the Master Servicer shall be released from its
obligations under this Agreement, except that the Master Servicer shall remain
liable for all liabilities and obligations incurred by it as Master Servicer
hereunder prior to the satisfaction of the conditions to such assignment and
delegation set forth in the preceding sentence.
SECTION 6.03 Limitation on Liability of the Depositor, the Master Servicer and
-----------------------------------------------------------------
Others.
------
Neither the Depositor, the Master Servicer nor any of the directors,
officers, employees or agents of the Depositor or the Master Servicer shall be
under any liability to the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgement; provided, however, that this provision
shall not protect the Depositor, the Master Servicer or any such person against
any breach of representations or warranties made by it herein or protect the
Depositor, the Master Servicer or any such person from any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Master Servicer and any director,
officer, employee or agent of the Depositor or the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person in respect of any matters arising hereunder. The
Depositor, the Master Servicer and any director, officer, employee or agent of
the Depositor or the Master Servicer shall be indemnified by the Trust Fund and
held harmless against any loss, liability or expense incurred in connection with
any legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to their respective duties hereunder and which in its
opinion may involve it in any expense or liability; provided, however, that
either the Depositor or the Master Servicer may in its discretion undertake any
such action that 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 Trustee
and the Certificateholder hereunder. In such event, the legal expenses and
costs of such action and any liability
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resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Depositor and the Master Servicer shall be entitled to be reimbursed
therefor out of the Certificate Account as provided by Section 3.12 hereof.
SECTION 6.04 Master Servicer Not to Resign.
-----------------------------
The Master Servicer shall not resign from the obligations and duties
imposed upon it hereunder except upon determination that such obligations and
duties hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation by the Master Servicer shall become effective until the Trustee
or a successor servicer shall have assumed the Master Servicer's
responsibilities and obligations in accordance with Section 7.02 hereof.
SECTION 6.05 Errors and Omissions Insurance; Fidelity Bonds.
----------------------------------------------
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or polices and bond shall, together,
comply with the requirements from time to time of FNMA or FHLMC for persons
performing servicing for mortgage loans purchased by FNMA or FHLMC. In the
event that any such policy or bond ceases to be in effect, the Master Servicer
shall obtain a comparable replacement policy or bond from an insurer or issuer
meeting the requirements set forth above as of the date of such replacement.
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
-----------------
"Event of Default" wherever used herein, means any one of the
following events (whatever reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(i) any failure by the Master Servicer to remit to the
Certificateholders or to the Trustee any payment (other than a payment
required to be made under Article IV hereof) required to be made under the
terms of this Agreement, which failure shall continue unremedied for a
period of 5 days after the date upon which written notice of
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such failure shall have been given to the Master Servicer by the Trustee or
the Depositor or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates; or
(ii) any failure by the Master Servicer to observe or preform in
any material respect any other of the covenants or agreement on the part of
the Master Servicer in this Agreement contained and such failure shall
continue unremedied for a period of 60 days (except that such number of
days shall be 15 in the case of a failure to pay a premium for any Required
Insurance Policy) after the date on which written notice of such failure
shall have been given to the Master Servicer by the Trustee or the
Depositor, or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates; or
(iii) if a representation or warranty set forth in Section
2.03(a) hereof shall prove to be incorrect as of the time made in any
respect that materially and adversely affects the interest of the
Certificateholders, and the circumstances or condition in respect of which
such representation or warranty was incorrect shall not have been
eliminated or cured within 30 days after the date on which written notice
thereof shall have been given to the Master Servicer by the Trustee or the
Depositor; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
(v) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or substantially
all of the property of the Master Servicer; or
(vi) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
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(vii) any Rating Agency shall lower, or threaten to lower, the
outstanding rating of the Certificates because the existing or prospective
financial condition or mortgage loan servicing capability of the Master
Servicer is insufficient to maintain such outstanding rating.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, either the
Trustee, the Holders of Certificates evidencing not less than twenty-five
percent (25%) of the Voting Rights evidenced by the Certificates, or the
Depositor, with the prior written approval of the Trustee, by notice in writing
to the Master Servicer, may terminate all of the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof. On or after the receipt by the Master Servicer of such
written notice, all authority and power for the Master Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee or, if the Depositor so notifies the Trustee and the
Master Servicer, to the Depositor or its designee, pursuant to and under this
Section and, without limitation, the Trustee, the Depositor and any such
designee of the Depositor are hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer pursuant to Section 2.03 to pay damages as a result of a
Default under this Article VII, to make payment under any Credit Support, or to
pay amounts owed pursuant to Article VIII. the Master Servicer agrees to
cooperate with the Trustee, the Depositor and any such designee of the Depositor
in effecting the termination of the Master Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee or
the Depositor or its designee, as the case may be, for administration by it of
all cash amounts which shall at the time be credited to the Certificate Account
or thereafter be received with respect to the Mortgage Loans.
SECTION 7.02 Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall be the successor
in all respects to the Master Servicer in its capacity as master servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof (except that if
the Trustee is acting as
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successor to the Master Servicer and is prohibited by law from obligating itself
to make advances regarding delinquent Mortgage Loans, then the Trustee shall not
be obligated to make advances pursuant to Section 3.01 and Article IV hereof).
As compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans that the Master Servicer would have been entitled to charge
to the Certificate Account if the Master Servicer had continued to act
hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall,if it is unable to so
act (exclusive of the obligations with respect to advances set forth in Article
IV hereof), appoint, or petition a court of competent jurisdiction to appoint,
any established mortgage loan servicing institution having a net worth of not
less than that required by the Rating Agency as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Pending appointment of
a successor to the Master Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Any successor to the Master Servicer as servicer shall during term of
its service as servicer maintain in force the policy or policies that the Master
Servicer is required to maintain pursuant to Section 6.05.
SECTION 7.03 Notification to Certificateholders.
----------------------------------
(a) Upon any termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent investor would exercise or use under the circumstances in the conduct of
such investor's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that 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 personally 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 or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders holding Certificates
aggregating not
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less than 25% of the interest in the Trust Fund evidenced by each Class of
Certificates relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Agreement.
SECTION 8.02 Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 8.01:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it in good
faith to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of
Certificates aggregating not less than 25% of the interest in the Trust
Fund evidenced by each Class of Certificates; and
(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys.
SECTION 8.03 Trustee Not Liable for Mortgage Loans.
-------------------------------------
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Agreement or of any Mortgage Loan or
related document. The Trustee shall not be accountable for
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the use or application by the Depositor or the Master Servicer of any funds paid
to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Certificate Account by the Depositor or the
Master Servicer.
SECTION 8.04 Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
--------------------------------------------------
The Master Servicer covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Master Servicer will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, bad faith or willful misconduct.
SECTION 8.06 Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If such corporation 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 corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07 hereof.
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SECTION 8.07 Resignation and Removal of the Trustee.
--------------------------------------
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
by mailing notice of resignation by first class mail, postage prepaid, to the
Certificateholders at their addresses appearing on the Certificate Register, the
Certificate Registrar (if other than the Trustee) and any co-registrar, not less
than 60 days before the date specified in such notice when, subject to Section
8.08, such resignation is to take effect, and (2) appointing a successor trustee
in accordance with Section 8.08 and meeting the qualifications set forth in
Section 8.06.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy of the successor trustee. The Trustee may also
be removed at any time by the Holders of Certificates evidencing not less than
50% of the Voting Rights evidenced by the Certificates.
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
become effective upon 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 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 the like effect as if originally named as trustee
herein. The Depositor, the Master Servicer and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
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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.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Master Servicer shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Master Servicer fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09 Merger or Consolidation of Trustee.
----------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
the provisions of Section 8.06, hereof, without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
SECTION 8.10 Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Certificates remain outstanding, the
Trustee may appoint an Authenticating Agent or Agents which shall be authorized
to act on behalf of the Trustee to authenticate Certificates, and Certificates
so authenticated shall be entitled to the benefits of this Agreement and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Whenever reference is made in this Agreement to the authentication
and delivery of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Depositor and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $15,000,000, authorized under such laws to do trust
business and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 8.10, the combined
capital and
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surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section 8.10, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 8.10.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 8.10, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Depositor. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Depositor. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 8.10, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Depositor and shall mail
written notice of such appointment by first-class mail, postage prepaid to all
Certificateholders as their names and addresses appear in the Certificate
Register. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 8.10.
Any reasonable compensation paid to an Authenticating Agent for its
services under this Section 8.10 shall be a reimbursable expense pursuant to
Section 8.05 if paid by the Trustee.
If an appointment is made pursuant to this Section 8.10, the
Certificates may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
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"This is one of the Certificates referred to in the within-mentioned
Agreement.
______________________________
As Trustee
By: ______________________________
Authenticating Agent
By: ______________________________
Authorized Officer
SECTION 8.11 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 Fund or property securing any Mortgage Note may at any
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 8.11, such powers,
duties, obligations, rights and trusts as the Master Servicer and the Trustee
may consider necessary or desirable. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be
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incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed 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 an act or omission of any other trustee hereunder; and
(iii) The Master Servicer and the Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or co-
trustee.
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
Master Servicer and the Depositor.
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 8.12 Tax Returns.
-----------
The Trustee, upon request, will furnish the Master Servicer with all
such information as may be reasonably required in connection with the
preparation by the Master Servicer of all tax returns of the Trust Fund, and the
Trustee shall, upon request, execute such returns.
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SECTION 8.13 Appointment of Custodians.
-------------------------
The Trustee may, with the consent of the Depositor and the Master
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.
Subject to Article VIII, the Trustee agrees to comply with the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian shall be a depository institution subject to
supervision by federal or state authority, shall have combined capital and
surplus of at least $10,000,000 and shall be qualified to do business in the
jurisdiction in which it holds any Mortgage File. Each Custodial Agreement may
be amended only as provided in Section 10.01 or as provided in the Reference
Agreement.
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Repurchase by the Depositor.
--------------------------------------------
The obligations and responsibilities of the Depositor and the Trustee
created hereby and the Trust Fund created hereby shall terminate upon the
earlier of (a) the repurchase by the Depositor of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund at
a price equal to the price specified in the Reference Agreement, and
unreimbursed Monthly Advances or (b) the later of (i) the maturity or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all property acquired upon
foreclosure or by deed in lieu of foreclosure of any Mortgage Loan and (ii) the
distribution to Certificateholders of all amounts in the Certificate Account
required to be distributed to them pursuant to this Agreement; provided,
--------
however, that in no event shall the trust created hereby continue beyond the
-------
expiration of 21 years from the death of the last survivor of the descendants of
Xx. Xxxxxx X. Xxxxxxx, former Ambassador of the United States to Great Britain,
living on the date of execution of this Agreement. The right of the Depositor
to repurchase all Mortgage Loans pursuant to clause (a) above shall be
conditioned upon the unpaid Principal Balances of such Mortgage Loans, at the
time of any such repurchase, aggregating less than an amount equal to the
percentage of the aggregate unpaid Principal Balance of the Mortgage Loans
constituting the Trust Fund on the Cut-off Date set forth in the Reference
Agreement.
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SECTION 9.02 Final Distribution on the Certificates.
--------------------------------------
Notice of any termination, specifying the Distribution Date upon which
the Certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer by
letter to Certificateholders mailed not earlier than the date specified in the
Reference Agreement. Any such notice shall specify (a) the Distribution Date
upon which final distribution of the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of such final distribution and (c) if applicable, 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 therein
specified. If applicable, the Master Servicer will give such notice to the
Certificate Registrar and the Custodian at the time such notice is given to
Certificateholders. In the event such notice is given, the Master Servicer
shall deposit in the Certificate Account on the applicable Distribution Date an
amount equal to the final distribution in respect of the Certificates. Upon
certification to the Trustee by a Servicing Officer following such final
deposit, the Trustee shall promptly release or shall cause the applicable
Custodian to release to the Master Servicer in accordance with the reason for
the final distribution, the Mortgage Files for the Mortgage Loans.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Master Servicer shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Master Servicer may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain
subject hereto.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment.
---------
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein, or to make such other provisions with respect to matters or
questions arising
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under this Agreement as shall not be inconsistent with any other provisions
herein; provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder. This Agreement may also be amended with the consent of
Certificateholders in the manner set forth in the Reference Agreement.
SECTION 10.02 Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense or
direction by the Trustee, but only upon direction of the Trustee accompanied by
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 10.03 Governing Law.
-------------
This Agreement shall be construed in accordance with and governed by
the substantive laws of the [State of New York] applicable to agreements made
and to be performed in the [State of New York] and the obligations, rights and
remedies of the parties hereto and the Certificateholders shall be determined in
accordance with such laws.
SECTION 10.04 Intention of Parties.
--------------------
The execution and delivery of this Agreement shall constitute an
acknowledgement by the Depositor and the Trustee on behalf of the
Certificateholders that they intend hereby to establish (for federal income tax
purposes) a trust rather than an association taxable as a corporation. The
powers granted and obligations undertaken in this Agreement shall be construed
so as to further such intent.
SECTION 10.05 Notices.
-------
All demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, to (a) in the case of the Depositor, Asset
Backed Securities Corporation, Xxxx Xxxxxx Xxxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
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New York 10055, Attention: [ ], (b) in the case of the Master Servicer,
[name and address of Master Servicer], Attention: [ ], or such other
address as may be hereafter furnished to the Depositor and the Trustee by the
Master Servicer in writing, (c) in the case of the Trustee, [name and address of
Trustee], Attention: [ ], or such other address as may
hereafter be furnished to the Depositor and the Master Servicer in writing by
the Trustee.
SECTION 10.06 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07 Assignment.
----------
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.02 and 6.04, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
SECTION 10.08 Limitation on Rights of Certificateholders.
------------------------------------------
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein or in the Reference Agreement) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth or contained in the terms of the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of any association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties of this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions 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 an
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Event of Default and of the continuance thereof, as herein before provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also 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 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to effect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section 10.08, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 10.09 Inspection and Audit Rights.
---------------------------
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor or the Trustee during the Master
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Master Servicer relating to the Mortgage Loans,
to make copies and extracts therefrom, to cause such books to be audited by
independent certified public accountants selected by the Depositor or the
Trustee and to discuss its affairs, finances and accounts relating the Mortgage
Loans with its officers, employees and independent public accountants (and by
this provision the Master Servicer hereby authorizes said accountants to discuss
with such representative such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested. Any expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the Depositor or the Trustee, provided that if
an audit is made during the existence of an Event of Default, the expense
incident to such audit shall be borne by the Master Servicer.
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SECTION 10.10 Certificates Nonassessable and Fully Paid.
-----------------------------------------
It is the intention of the Trustee that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
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IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto to their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the day and year first above written.
ASSET BACKED SECURITIES CORPORATION, as Depositor
By:
--------------------------------
Title
[Seal]
Attest:
----------------------
Secretary
[
], as Master Servicer
By:
--------------------------------
Title
[Seal]
Attest:
----------------------
Assistant Secretary
[ ], as Trustee
By:
--------------------------------
Title
[Seal]
Attest:
----------------------
Assistant Secretary
-00-
Xxxxx xx Xxx Xxxx
ss.:
County of New York
On this _____ day of _________________ before me, a notary public in and for
said State, appeared ___________________, known to be to be an
____________________ of Asset Backed Securities Corporation, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set by hand and affixed by official seal the
day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
State of
ss.:
County of
On this _____ day of _________________ before me, a notary public in and for
said State, appeared ___________________, known to be to be an
____________________ of [ ], the 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 by hand and affixed by official seal the
day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
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State of
ss.:
County of
On this _____ day of _________________ before me, a notary public in and for
said State, appeared ___________________, known to be to be an
____________________ of [
], one of the corporations that executed the within instrument, and also known
to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set by hand and affixed by official seal the
day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
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