EXHIBIT 4.1
BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION, as Depositor,
[NAME OF [MASTER] SERVICER], as [Master] Servicer,
[NAME OF SECURITIES ADMINISTRATOR],
as Securities Administrator
and
[NAME OF TRUSTEE],
as Trustee
------------------------
TRUST AGREEMENT
Dated as of [________], 200__
------------------------
BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 200__-[___]
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.........................................................................................7
Section 1.01. Definitions................................................................................7
Section 1.02. Calculations Respecting Mortgage Loans....................................................38
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES....................................................39
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans......................39
Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation for Trust Fund...............42
Section 2.03. Representations and Warranties of the Depositor...........................................43
Section 2.04. Discovery of Breach.......................................................................45
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans....................................46
Section 2.06. Grant Clause..............................................................................47
ARTICLE III THE CERTIFICATES.................................................................................48
Section 3.01. the Certificates..........................................................................48
Section 3.02. Registration..............................................................................50
Section 3.03. Transfer and Exchange of Certificates.....................................................50
Section 3.04. Cancellation of Certificates..............................................................56
Section 3.05. Replacement of Certificates...............................................................56
Section 3.06. Persons Deemed Owners.....................................................................56
Section 3.07. Temporary Certificates....................................................................56
Section 3.08. Appointment of Paying Agent...............................................................57
Section 3.09. Book-entry Certificates...................................................................57
ARTICLE IV ADMINISTRATION OF THE TRUST FUND..................................................................59
Section 4.01. Collection Account........................................................................59
Section 4.02. Application of Funds in the Collection Account............................................60
Section 4.03. Reports to Certificateholders.............................................................62
Section 4.04. Certificate Account.......................................................................65
Section 4.05. Determination of Libor....................................................................66
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...........................................................68
Section 5.01. Distributions Generally...................................................................68
Section 5.02. Distributions From the Certificate Account................................................68
Section 5.03. Allocation of Realized Losses.............................................................70
Section 5.04. Advances by Master Servicer and the Securities Administrator..............................71
Section 5.05. Compensating Interest Payments............................................................72
ii
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT........................73
Section 6.01. Duties of Trustee and Securities Administrator............................................73
Section 6.02. Certain Matters Affecting the Trustee and the Securities Administrator....................75
Section 6.03. Trustee and Securities Administrator Not Liable for Certificates..........................77
Section 6.04. Trustee and the Securities Administrator May Own Certificates.............................77
Section 6.05. Eligibility Requirements for Trustee and Securities Administrator.........................77
Section 6.06. Resignation and Removal of Trustee and Securities Administrator...........................78
Section 6.07. Successor Trustee and Successor Securities Administrator..................................79
Section 6.08. Merger or Consolidation of Trustee or Securities Administrator............................79
Section 6.09. Appointment of Co-trustee, Separate Trustee or Custodian..................................80
Section 6.10. Authenticating Agents.....................................................................81
Section 6.11. Indemnification of Trustee and Securities Administrator...................................82
Section 6.12. Fees and Expenses of Securities Administrator, Custodian and Trustee......................83
Section 6.13. Collection of Monies......................................................................83
Section 6.14. Events of Default; Trustee to Act; Appointment of Successor...............................83
Section 6.15. Additional Remedies of Trustee Upon Event of Default......................................87
Section 6.16. Waiver of Defaults........................................................................88
Section 6.17. Notification to Holders...................................................................88
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default............88
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default.............89
Section 6.20. Preparation of Tax Returns and Other Reports..............................................89
ARTICLE VII PURCHASE AND TERMINATION OF THE TRUST FUND.......................................................90
Section 7.01. Termination of Trust Fund Upon Repurchase or Liquidation of All Mortgage Loans............90
Section 7.02. Procedure Upon Termination of Trust Fund..................................................91
Section 7.03. Additional Trust Fund Termination Requirements............................................92
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS....................................................................92
Section 8.01. Limitation On Rights of Holders...........................................................92
Section 8.02. Access to List of Holders.................................................................93
Section 8.03. Acts of Holders of Certificates...........................................................94
ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER.............................95
Section 9.01. Duties of the Master Servicer.............................................................95
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance Policy...95
iii
Section 9.03. Master Servicer's Financial Statements and Related Information............................96
Section 9.04. Power to Act; Procedures..................................................................96
Section 9.05. Servicing Agreements Between the Master Servicer and Servicers; Enforcement of
Servicers' Obligations....................................................................98
Section 9.06. Collection of Taxes, Assessments and Similar Items........................................98
Section 9.07. Termination of Servicing Agreements; Successor Servicers..................................99
Section 9.08. Master Servicer Liable for Enforcement....................................................99
Section 9.09. No Contractual Relationship Between Servicers and Trustee or Depositor...................100
Section 9.10. Assumption of Servicing Agreement by Securities Administrator............................100
Section 9.11. "Due-on-sale" Clauses; Assumption Agreements.............................................100
Section 9.12. Release of Mortgage Files................................................................101
Section 9.13. Documents, Records and Funds in Possession of Master Servicer to be Held for Trustee.....102
Section 9.14. Representations and Warranties of the Master Servicer....................................103
Section 9.15. Closing Certificate and Opinion..........................................................105
Section 9.16. Standard Hazard and Flood Insurance Policies.............................................106
Section 9.17. Presentment of Claims and Collection of Proceeds.........................................106
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies...................................106
Section 9.19. Trustee to Retain Possession of Certain Insurance Policies and Documents.................107
Section 9.20. Realization Upon Defaulted Mortgage Loans................................................107
Section 9.21. Compensation to the Master Servicer......................................................108
Section 9.22. Reo Property.............................................................................108
Section 9.23. [Reserved]...............................................................................109
Section 9.24. Reports to the Trustee...................................................................109
Section 9.25. Annual Officer's Certificate as to Compliance............................................110
Section 9.26. Annual Independent Accountants' Servicing Report.........................................110
Section 9.27. Merger or Consolidation..................................................................111
Section 9.28. Resignation of Master Servicer...........................................................111
Section 9.29. Assignment or Delegation of Duties by the Master Servicer................................111
Section 9.30. Limitation On Liability of the Master Servicer and Others................................112
Section 9.31. Indemnification; Third-party Claims......................................................112
ARTICLE X REMIC ADMINISTRATION..............................................................................113
Section 10.01. Remic Administration....................................................................113
Section 10.02. Prohibited Transactions and Activities..................................................115
Section 10.03. Indemnification With Respect to Certain Taxes and Loss of Remic Status..................115
Section 10.04. Reo Property............................................................................116
ARTICLE XI MISCELLANEOUS PROVISIONS.........................................................................117
Section 11.01. Binding Nature of Agreement; Assignment.................................................117
Section 11.02. Entire Agreement........................................................................117
Section 11.03. Amendment...............................................................................117
iv
Section 11.04. Voting Rights...........................................................................118
Section 11.05. Provision of Information................................................................118
Section 11.06. Governing Law...........................................................................119
Section 11.07. Notices.................................................................................119
Section 11.08. Severability of Provisions..............................................................119
Section 11.09. Indulgences; No Waivers.................................................................120
Section 11.10. Headings Not to Affect Interpretation...................................................120
Section 11.11. Benefits of Agreement...................................................................120
Section 11.12. Special Notices to the Rating Agencies..................................................120
Section 11.13. Counterparts............................................................................121
Section 11.14. Transfer of Servicing...................................................................121
Section 11.15. Tax Treatment of Class P Certificates...................................................122
v
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Trustee Initial Certification
Exhibit B-2 Form of Trustee Interim Certification
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreements
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreements
Exhibit L [Reserved]
Exhibit M [Reserved]
Exhibit N-1 Form of Transfer Certificate for Transfer from Restricted Global
Security to Regulation S Global Security pursuant to Section
3.03(h)(B)
Exhibit N-2 Form of Transfer Certificate for Transfer from Regulation S Global
Security to Restricted Global Securities pursuant to Section
3.03(h)(C)
Exhibit O Senior Principal Priorities
MORTGAGE LOAN SCHEDULES
Schedule A All Mortgage Loans (by Mortgage Pool)
vi
This
TRUST AGREEMENT, dated as of [________], 200__ (the "Agreement"), is
by and among BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION, a Delaware
corporation, as depositor (the "Depositor"), [NAME OF MASTER SERVICER], as
master servicer (the "Master Servicer"), [NAME OF SECURITIES ADMINISTRATOR], [a
national banking association], as securities administrator (the "Securities
Administrator"), and [NAME OF TRUSTEE], a [
New York] banking corporation, as
trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from [______] and [_____]
(each, a "Seller") and at the Closing Date is the owner of the Mortgage Loans
and the other property being conveyed by it to the Trustee for inclusion in the
Trust Fund. On the Closing Date, the Depositor will acquire the Certificates
from the Trust Fund, as consideration for its transfer to the Trust Fund of the
Mortgage Loans and the other property constituting the Trust Fund. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Mortgage Loans and the other property
constituting the Trust Fund. All covenants and agreements made by the Depositor,
the Master Servicer, the Securities Administrator and the Trustee herein with
respect to the Mortgage Loans and the other property constituting the Trust Fund
are for the benefit of the Holders from time to time of the Certificates. The
Depositor, the Master Servicer and the Securities Administrator are entering
into this Agreement, and the Trustee is accepting the Trust Fund created hereby,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged.
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that service or master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer or (y) as provided in the applicable Servicing Agreement,
to the extent applicable to the related Servicer.
ACCOUNTANT: A person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
ACCRETION DIRECTED CERTIFICATE: None.
ACCRETION TERMINATION DATE: Not applicable.
ACCRUAL AMOUNT: Not applicable.
7
ACCRUAL CERTIFICATE: None.
ACCRUAL COMPONENT: None.
ACCRUAL PERIOD: With respect to any Distribution Date and any Class of
Certificates (other than any Class of Principal Only Certificates and any LIBOR
Certificates) or Class of Lower Tier Interests, the one-month period beginning
immediately following the end of the preceding Accrual Period (or from the
Cut-off Date, in the case of the first Accrual Period) and ending on the last
day of the month immediately preceding the month in which such Distribution Date
occurs. With respect to any Distribution Date and any LIBOR Certificates, the
period beginning on the Distribution Date in the calendar month preceding the
month in which the related Distribution Date occurs (or on the Closing Date, in
the case of the first Accrual Period) and ending on the day immediately
preceding the related Distribution Date.
ACCRUED CERTIFICATE INTEREST: As to any Class of Certificates (other than
any Class of Principal Only Certificates) and any Distribution Date, the product
of (i) the Certificate Interest Rate for such Class of Certificates divided by
12 and (ii) the Class Principal Amount (or Class Notional Amount) of such Class
of Certificates as of the first day of the related Accrual Period, as reduced by
such Class' share of the interest portion of (i) any Excess Losses for such
Distribution Date and (ii) any Relief Act Reduction for such Distribution Date,
in each case allocable among the interest bearing Certificates PRO RATA based on
the Accrued Certificate Interest otherwise distributable thereto.
Interest shall accrue on the basis of a 360-day year comprising twelve
30-day months.
ACT: As defined in Section 3.03(c).
ADDITIONAL COLLATERAL: None.
ADVANCE: An advance of the aggregate of payments of principal and
interest (net of the applicable Servicing Fee) on one or more Mortgage Loans
that were due on the Due Date in the related Due Period and not received as of
the close of business on the related Determination Date, required to be made by
or on behalf of the Master Servicer and the related Servicer (or by the
Securities Administrator, as successor Master Servicer) pursuant to Section
5.04.
AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGGREGATE PRINCIPAL BALANCE: The aggregate of the Scheduled Principal
Balances for all Mortgage Loans at any date of determination.
AGGREGATE SUBORDINATE PERCENTAGE: With respect to any Distribution Date,
the sum of the Class Principal Amounts of the Subordinate Certificates
immediately prior to such date divided by the sum of the Non-AP Pool Balance for
the immediately preceding Distribution Date.
8
AGGREGATE VOTING INTERESTS: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
AGREEMENT: This
Trust Agreement and all amendments and supplements
hereto.
AP DEFERRED AMOUNT: As to any Distribution Date on or prior to the Credit
Support Depletion Date, the sum of (i) the applicable AP Percentage of the
principal portion of each Realized Loss (other than any Excess Loss) for such
Distribution Date on a Discount Mortgage Loan, and (ii) all such amounts
previously allocated thereto and not distributed to the Class AP Certificates as
an AP Deferred Amount on a preceding Distribution Date.
AP PERCENTAGE: As to any Discount Mortgage Loan, the percentage
equivalent of a fraction, the numerator of which is the Designated Rate minus
the Net Mortgage Rate of such Discount Mortgage Loan and the denominator of
which is the Designated Rate. As to any Non-Discount Mortgage Loan, [__]%.
AP PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the sum of
the following amounts:
(i) the applicable AP Percentage of the principal portion of
each Scheduled Payment (without giving effect to any Debt Service
Reduction occurring prior to the Bankruptcy Coverage Termination Date) on
each Mortgage Loan due during the related Due Period;
(ii) the applicable AP Percentage of each of the following
amounts: (1) each Principal Prepayment collected on a Mortgage Loan
during the applicable Prepayment Period, (2) each other unscheduled
collection, including Insurance Proceeds and Net Liquidation Proceeds
(other than with respect to any Mortgage Loan that was finally liquidated
during the applicable Prepayment Period), representing or allocable to
recoveries of principal of such Mortgage Loan received during the
applicable Prepayment Period and (3) the principal portion of all
proceeds of the purchase of any Mortgage Loan (or, in the case of a
permitted substitution, amounts representing a principal adjustment)
actually received by the Trustee with respect to the applicable
Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan that was finally liquidated during the
related Prepayment Period, the applicable AP Percentage of the related
net Liquidation Proceeds allocable to principal; and
(iv) any amounts described in clauses (i) through (iii) for any
previous Distribution Date that remain unpaid.
APPRAISED VALUE: With respect to any Mortgage Loan, the amount set forth
in an appraisal made in connection with the origination of such Mortgage Loan as
the value of the related Mortgaged Property.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein
9
the related Mortgaged Property is located to reflect the sale of the Mortgage to
the Trustee, which assignment, notice of transfer or equivalent instrument may
be in the form of one or more blanket assignments covering the Mortgage Loans
secured by Mortgaged Properties located in the same jurisdiction, if permitted
by law; provided, however, that the Trustee shall not be responsible for
determining whether any such assignment is in recordable form.
AUTHENTICATING AGENT: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10.
AUTHORIZED OFFICER: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
AVAILABLE DISTRIBUTION AMOUNT: As to any Distribution Date, the sum of
the following amounts:
(i) the total amount of all cash received by the Master
Servicer through the Remittance Date applicable to each Servicer and
deposited with the Securities Administrator by the Master Servicer by the
Master Servicer Remittance Date for such Distribution Date on the
Mortgage Loans (including proceeds of any Insurance Policy and any other
credit support relating to such Mortgage Loans and including recoveries
through liquidation of any REO Property), plus all Advances made by the
Master Servicer or any Servicer (or the Securities Administrator in its
capacity as successor Master Servicer) for such Distribution Date, any
Compensating Interest Payment for such date and any amounts paid by any
Servicer in respect of Prepayment Interest Shortfalls in respect of the
related Mortgage Loans for such date and any proceeds of any purchase of
a Mortgage Loan, but not including:
(A) all amounts distributed pursuant to Section 5.02 on
prior Distribution Dates;
(B) all Scheduled Payments of principal and interest
collected but due on a date subsequent to the related Due Period;
(C) all Principal Prepayments received or identified by
the applicable Servicer after the applicable Prepayment Period
(together with any interest payments received with such
prepayments to the extent that they represent the payment of
interest accrued on the Mortgage Loans for the period subsequent
to the applicable Prepayment Period);
(D) any other unscheduled collection, including Net
Liquidation Proceeds and Insurance Proceeds, received by the
Master Servicer after the applicable Prepayment Period;
(E) all fees and amounts due or reimbursable to the Master
Servicer, the Trustee, the Securities Administrator, a Custodian
or any Servicer pursuant to the terms of this Agreement, a
Custodial Agreement or the applicable Servicing Agreement;
10
(F) any Prepayment Penalty Amounts with respect to
Mortgage Loans for which the Sellers do not hold the servicing
rights;
(G) any Prepayment Interest Excess; and
(H) such portion of each payment in respect of interest
representing Retained Interest; and
(ii) any other payment made by the Master Servicer, any
Servicer, the Sellers, the Depositor, or any other Person with respect to
such Distribution Date (including the Purchase Price with respect to any
Mortgage Loan purchased by the Sellers, the Depositor or any other
Person).
AVERAGE RATE: With respect to each Distribution Date and each Class of
Subordinate Certificates, a per annum rate equal to the excess, if any, of (i)
the weighted average of the Lower Tier Interest Rates (other than with respect
to the Class LT-AP, Class LT-AX, Class LT-PAX and Class LT-R Lower Tier
Interests), expressed as a percentage and weighted on the basis of the class
principal amount of each such Lower Tier Interest, over (ii) the percentage
obtained by dividing (a) the Subordinate Class Expense Share for such Class for
the related Accrual Period by (b) the Class Principal Amount of such Class as of
the beginning of the related Accrual Period.
AX MORTGAGE LOANS: The Non-Discount Mortgage Loans listed on Schedule B-1
hereto.
BALLOON MORTGAGE LOAN: [Not applicable].
BALLOON PAYMENT: [Not applicable].
BANKRUPTCY: With respect to any Person, the making of an assignment for
the benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the United States Bankruptcy Code of 1986,
as amended, or any other similar state laws.
BANKRUPTCY COVERAGE TERMINATION DATE: The Distribution Date on which the
Bankruptcy Loss Limit has been reduced to zero (or less than zero).
BANKRUPTCY LOSS LIMIT: As of the Cut-off Date, $[______], which amount
shall be reduced from time to time by the amount of Bankruptcy Losses allocated
to the Certificates.
BANKRUPTCY LOSSES: With respect to the Mortgage Loans, losses that are
incurred as a result of Deficient Valuations and any reduction, in a bankruptcy
proceeding, of the amount of the Scheduled Payment on a Mortgage Loan other than
as a result of a Deficient Valuation.
BENEFIT PLAN OPINION: An Opinion of Counsel satisfactory to the Trustee
and the Certificate Registrar to the effect that any proposed transfer will not
(i) cause the assets of the
11
Trust Fund to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the
Depositor, the Certificate Registrar, the Securities Administrator, the Master
Servicer, any Servicer or the Trustee.
BLANKET MORTGAGE: The mortgage or mortgages encumbering a Cooperative
Property.
BOOK-ENTRY CERTIFICATES: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of which
shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a condition
whereupon book-entry registration and transfer are no longer permitted and
Definitive Certificates are to be issued to Certificate Owners, such Book-Entry
Certificates shall no longer be "Book-Entry Certificates." As of the Closing
Date, all of the Classes of Certificates listed in the second table of the
Preliminary Statement, other than the Class E, Class P and Class R Certificates,
constitute Book-Entry Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in Colorado, Minnesota, Maryland,
New York,
New
York, or, if other than
New York, the city in which the Corporate Trust Office
of the Trustee is located, or (iii) with respect to any Remittance Date or any
Servicer reporting date, the States specified in the definition of "Business
Day" in the applicable Servicing Agreement, are authorized or obligated by law
or executive order to be closed.
CERTIFICATE: Any one of the certificates signed by the Trustee and
authenticated by the Authenticating Agent in substantially the forms attached
hereto as Exhibit A.
CERTIFICATE ACCOUNT: The account maintained by the Securities
Administrator in accordance with the provisions of Section 4.04.
CERTIFICATE INTEREST RATE: With respect to each Class of Certificates
(other than the Principal Only Certificates), the applicable per annum rate
specified or determined as provided in the Preliminary Statement hereto.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
CERTIFICATE PRINCIPAL AMOUNT: With respect to any Certificate, at the
time of determination, the maximum specified dollar amount of principal to which
the Holder thereof is then entitled hereunder, such amount being equal to the
initial principal amount set forth on the face of such Certificate (plus, in the
case of any Negative Amortization Certificate, any Deferred Interest allocated
thereto on previous Distribution Dates, and plus, in the case of any Accrual
Certificate, its Percentage Interest of any related Accrual Amount for each
previous Distribution Date), less the amount of all principal distributions
previously made with respect to such Certificate, all Realized Losses allocated
to such Certificate, and, in the case of a Subordinate Certificate, any
Subordinate Certificate Writedown Amount allocated to such Certificates. For
purposes of Article V hereof, unless specifically provided to the contrary,
Certificate Principal Amounts shall be determined as of the close of business of
the immediately preceding
12
Distribution Date, after giving effect to all distributions made on such date.
Notional Certificates are issued without Certificate Principal Amounts.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register maintained
and the registrar appointed pursuant to Section 3.02.
CERTIFICATEHOLDER: The meaning provided in the definition of "Holder."
CLASS: All Certificates bearing the same class designation, and, in the
case of each Lower Tier REMIC, all Lower Tier Interests bearing the same
designation.
CLASS B CERTIFICATE: Any Class B_ Certificate.
CLASS E CERTIFICATE: The Class E Certificate executed by the Trustee and
authenticated by the Certificate Registrar, substantially in the form annexed
hereto as Exhibit A, evidencing beneficial ownership of the Class E
Distributable Amount.
CLASS E DISTRIBUTABLE AMOUNT: With respect to each Distribution Date,
interest received on each Employee Mortgage Loan with respect to which the
mortgagor has ceased to be eligible for the Employee Discount Rate, at a per
annum rate equal to [___]%.
CLASS P CERTIFICATE: The Class P Certificate executed by the Trustee and
authenticated by the Certificate Registrar, substantially in the form annexed
hereto as Exhibit A, evidencing beneficial ownership of the Prepayment Penalty
Amounts allocated to the Class P Certificate (as indicated in the Mortgage Loan
Schedule on Schedule A).
CLASS P DISTRIBUTABLE AMOUNT: With respect to each Distribution Date, all
Prepayment Penalty Amounts received during the related Due Period with respect
to Mortgage Loans for which the Sellers hold the servicing rights.
CLASS LT-R INTEREST: The sole residual interest in the Lower Tier REMIC.
CLASS NOTIONAL AMOUNT: With respect to each Class of Notional
Certificates, the applicable class notional amount calculated as provided in the
Preliminary Statement hereto.
CLASS PERCENTAGE: With respect to each Class of Subordinate Certificates,
for each Distribution Date, the percentage obtained by dividing the Class
Principal Amount of such Class immediately prior to such Distribution Date by
the sum of the Class Principal Amounts of all Certificates, immediately prior to
such date.
CLASS PRINCIPAL AMOUNT: With respect to each Class of Certificates other
than any Class of Notional Certificates, the aggregate of the Certificate
Principal Amounts of all Certificates of such Class at the date of
determination. With respect to each Class of Notional Certificates, zero.
CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
13
CLEARING AGENCY PARTICIPANT: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
CLEARSTREAM: Clearstream Banking, societe anonyme, and any successor
thereto.
CLOSING DATE: _____________.
CODE: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
COLLECTION ACCOUNT: A separate account established and maintained by the
Master Servicer pursuant to Section 4.01.
COMPENSATING INTEREST PAYMENT: With respect to any Distribution Date, an
amount equal to the excess of (x) the aggregate of any Prepayment Interest
Shortfalls with respect to such Distribution Date over (y) the aggregate of any
amounts required to be paid by any Servicer in respect of such shortfalls but
not paid; provided that the aggregate Compensating Interest Payment to be paid
by the Master Servicer for any Distribution Date shall not exceed the Master
Servicing Fee that would be payable to the Master Servicer in respect of such
Distribution Date without giving effect to any Compensating Interest Payment.
COMPONENT: Not applicable.
COMPONENT CERTIFICATE: None.
COMPONENT INTEREST RATE: Not applicable.
COMPONENT NOTIONAL AMOUNT: Not applicable.
COMPONENT PRINCIPAL AMOUNT: Not applicable.
COMPONENT WRITEDOWN AMOUNT: Not applicable.
CONTROL: The meaning specified in Section 8-106 of the UCC.
CONVENTIONAL LOAN: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.
CONVERTED MORTGAGE LOAN: None.
CONVERTIBLE MORTGAGE LOAN: None.
COOPERATIVE CORPORATION: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
14
COOPERATIVE LOAN: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
COOPERATIVE LOAN DOCUMENTS: As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3 financing
statements (or copies thereof) or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
COOPERATIVE PROPERTY: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
COOPERATIVE SHARES: Shares issued by a Cooperative Corporation.
COOPERATIVE UNIT: A single-family dwelling located in a Cooperative
Property.
CORPORATE TRUST OFFICE: With respect to the Certificate Registrar and for
purposes of Certificate transfers and surrender, is located at [name of
securities administrator], [address of securities administrator] - BASIC
200[__]-[__]. With respect to the Trustee, is located at [name of trustee],
[address of trustee]-- BASIC 200[__]-[__].
CORRESPONDING CLASS: Not applicable.
CORRESPONDING COMPONENT: With respect to any class of Lower Tier
Interests, the Component so designated in the Preliminary Statement hereto. With
respect to any Component, the class or classes of Lower Tier Interests so
designated in the Preliminary Statement hereto.
CREDIT SCORE: With respect to any Mortgage Loan, a numerical assessment
of default risk with respect to the Mortgagor under such Mortgage Loan,
determined on the basis of a methodology developed by Fair, Xxxxx & Co., Inc.
CREDIT SUPPORT DEPLETION DATE: The Distribution Date on which, giving
effect to all distributions on such date, the aggregate Certificate Principal
Amount of the Subordinate Certificates is reduced to zero.
CREDIT SUPPORT PERCENTAGE: As to any Class of Subordinate Certificates
and any Distribution Date, the sum of the Class Percentages of all Classes of
Certificates that rank lower in priority than such Class.
CUSTODIAL AGREEMENT: Each custodial agreement attached as Exhibit K
hereto, and any custodial agreement subsequently executed by the Trustee
substantially in the form thereof.
15
CUSTODIAN: Each custodian appointed by the Trustee pursuant to a
Custodial Agreement, and any successor thereto.
CUT-OFF DATE: [________], 200__.
CUT-OFF DATE AGGREGATE PRINCIPAL BALANCE: With respect to the Mortgage
Loans in the Trust Fund on the Closing Date, the Aggregate Principal Balance for
all such Mortgage Loans as of the Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction of
the Scheduled Payment that the related Mortgagor is obligated to pay on any Due
Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.
DECEASED HOLDER: Not applicable.
DEFERRED INTEREST: With respect to any Class of Negative Amortization
Certificates and any Distribution Date, the lesser of (x) the applicable
Interest Distribution Amount for such date (without giving effect to any
Deferred Interest) and (y) the aggregate Mortgage Loan Negative Amortization, if
any, for the related Due Period.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under such Mortgage Loan, which valuation
results from a proceeding under Bankruptcy law or any similar proceeding.
DEFINITIVE CERTIFICATE: A Certificate of any Class issued in definitive,
fully registered, certificated form.
DELETED MORTGAGE LOAN: A Mortgage Loan that is repurchased from the Trust
Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
DEPOSITOR: BancCap Asset Securitization Issuance Corporation, a Delaware
corporation having its principal place of business in
New York, or its
successors in interest.
DESIGNATED RATE: [___]% per annum.
DETERMINATION DATE: With respect to each Distribution Date, the day of
the latest Remittance Date immediately preceding such Distribution Date.
DISCOUNT MORTGAGE LOAN: Any Mortgage Loan with a Net Mortgage Rate less
than [___]% per annum.
DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code.
DISTRIBUTION DATE: The 25th day of each month, or, if such 25th day is
not a Business Day, the next succeeding Business Day commencing in [______]
200__.
16
DUE DATE: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period commencing
on the second day of the month immediately preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
ELIGIBLE ACCOUNT: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company or
depository institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category, or (iii) a segregated trust
account or accounts (which shall be a "special deposit account") maintained with
the Trustee, the Securities Administrator or any other federal or state
chartered depository institution or trust company, acting in its fiduciary
capacity, in a manner acceptable to the Trustee and the Rating Agencies.
Eligible Accounts may bear interest.
ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America or any agency or instrumentality of the United States of America
the obligations of which are backed by the full faith and credit of the
United States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any
depository institution or trust company (including U.S. subsidiaries of
foreign depositories and the Trustee, the Securities Administrator or any
agent thereof, acting in its respective commercial capacity) incorporated
or organized under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal or state
banking authorities, so long as at the time of investment or the
contractual commitment providing for such investment the commercial paper
or other short-term debt obligations of such depository institution or
trust company (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt or deposit obligations of such
holding company or deposit institution, as the case may be) have been
rated by each Rating Agency in its highest short-term rating category or
one of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations
or securities guaranteed by GNMA, FNMA or FHLMC with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
17
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any state thereof which have a credit rating from each Rating
Agency, at the time of investment or the contractual commitment providing
for such investment, at least equal to one of the two highest short-term
credit ratings of each Rating Agency; provided, however, that securities
issued by any particular corporation will not be Eligible Investments to
the extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation and held as
part of the Trust Fund to exceed [___]% of the sum of the Aggregate
Principal Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; PROVIDED, FURTHER, that such
securities will not be Eligible Investments if they are published as
being under review with negative implications from either Rating Agency;
(v) commercial paper (including both non interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 180 days after the date of issuance
thereof) rated by each Rating Agency in its highest short-term ratings;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and
(viii) any other demand, money market fund, common trust fund or
time deposit or obligation, or interest-bearing or other security or
investment (including those managed or advised by the Securities
Administrator or an Affiliate thereof), (A) rated in the highest rating
category by each Rating Agency or (B) that would not adversely affect the
then current rating by either Rating Agency of any of the Certificates.
Such investments in this subsection (viii) may include money market
mutual funds or common trust funds, including any other fund for which
the Trustee, the Securities Administrator, the Master Servicer or an
affiliate thereof serves as an investment advisor, administrator,
shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) [name of trustee], the Securities Administrator,
the Master Servicer or an affiliate thereof charges and collects fees and
expenses from such funds for services rendered, (y) [name of trustee],
the Securities Administrator, the Master Servicer or an affiliate thereof
charges and collects fees and expenses for services rendered pursuant to
this Agreement, and (z) services performed for such funds and pursuant to
this Agreement may converge at any time. The Trustee specifically
authorizes [name of trustee], or an affiliate thereof to charge and
collect from the Trustee such fees as are collected from all investors in
such funds for services rendered to such funds (but not to exceed
investment earnings thereon);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations
18
underlying such instrument, or (ii) both principal and interest payments derived
from obligations underlying such instrument and the principal and interest
payments with respect to such instrument provide a yield to maturity of greater
than [___]% of the yield to maturity at par of such underlying obligations,
provided that any such investment will be a "permitted investment" within the
meaning of Section 860G(a)(5) of the Code.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-QUALIFYING UNDERWRITING: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-RESTRICTED CERTIFICATE: Any Class R, Class E, Class P, Class B4,
Class B5 or Class B6 Certificate or any Certificate with a rating below the
lowest applicable rating permitted under the Underwriter's Exemption.
ESCROW ACCOUNT: Any account established and maintained by the applicable
Servicer pursuant to the applicable Servicing Agreement.
EUROCLEAR: JPMorgan Chase Bank, Brussels office, as operator of the
Euroclear System.
EVENT OF DEFAULT: Any one of the conditions or circumstances enumerated
in Section 6.14(a).
EXCESS LOSS: Any Bankruptcy Loss, or portion thereof, in excess of the
then-applicable Bankruptcy Loss Limit, any Fraud Loss, or portion thereof, in
excess of the then-applicable Fraud Loss Limit, and any Special Hazard Loss, or
portion thereof, in excess of the then-applicable Special Hazard Loss Limit.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date in [______].
FINANCIAL ASSET: The meaning specified in Section 8-102(a)(9) of the UCC.
FINANCIAL INTERMEDIARY: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
FITCH: Fitch, Inc. or any successor in interest.
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.
19
FRAUD LOSS: Any Realized Loss on a Liquidated Mortgage Loan sustained by
reason of a default arising from fraud, dishonesty or misrepresentation in
connection with the related Mortgage Loan, as reported by the Servicer to the
Master Servicer.
FRAUD LOSS LIMIT: With respect to any Distribution Date (x) prior to the
first anniversary of the Cut-off Date, $[___], less the aggregate of Fraud
Losses since the Cut-off Date, and (y) from the first to the fourth anniversary
of the Cut-off Date, an amount equal to (1) the lesser of (a) the Fraud Loss
Limit as of the most recent anniversary of the Cut-off Date and (b) [__]% of the
aggregate principal balance of all the Mortgage Loans as of the most recent
anniversary of the Cut-off Date less (2) the aggregate of Fraud Losses since the
most recent anniversary of the Cut-off Date. On or after the fifth anniversary
of the Cut-off Date, the Fraud Loss Limit shall be zero.
GLOBAL SECURITIES: The global certificates representing the Book-Entry
Certificates.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
HOLDER or CERTIFICATEHOLDER: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or any Affiliate
thereof shall be deemed not to be outstanding in determining whether the
requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee shall be protected in relying
upon any such consent, only Certificates which a Responsible Officer of the
Trustee knows to be so owned shall be disregarded. The Trustee may request and
conclusively rely on certifications by the Depositor, the Securities
Administrator, the Master Servicer and any Servicer in determining whether any
Certificates are registered to an Affiliate of the Depositor, the Master
Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
INDEPENDENT: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
INDIVIDUAL REDEMPTION CERTIFICATE: Not applicable.
INITIAL LIBOR RATE: [____]%.
INSURANCE POLICY: Any Primary Mortgage Insurance Policy and any standard
hazard insurance policy, flood insurance policy, earthquake insurance policy or
title insurance policy
20
relating to the Mortgage Loans or the Mortgaged Properties, to be in effect as
of the Closing Date or thereafter during the term of this Agreement.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy, other than amounts (i) to cover expenses incurred by or on behalf of the
applicable Servicer in connection with procuring such proceeds, (ii) to be
applied to restoration or repair of the related Mortgaged Property, (iii)
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or (iv) to be applied toward payment of any Retained Interest.
INTEREST DISTRIBUTION AMOUNT: Not applicable.
INTEREST SHORTFALL: With respect to any Class of Certificates (other than
a Principal Only Certificate) and any Distribution Date, any Accrued Certificate
Interest not distributed (or added to principal) with respect to any previous
Distribution Date, other than any Net Prepayment Interest Shortfalls.
INTERVENING ASSIGNMENTS: The original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument.
LATEST POSSIBLE MATURITY DATE: The Distribution Date in [____], 20[___].
__________________________________: Xxxxxx Brothers Bank, FSB.
_________________: _________________, A Division of Xxxxxx Brothers
Holdings Inc., or any successor in interest.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR Rate.
With respect to each subsequent Accrual Period, the per annum rate determined
pursuant to Section 4.05 on the basis of London interbank offered rate
quotations for one month Eurodollar deposits, as such quotations may appear on
the display designated as page "LIBOR" on the Bloomberg Financial Markets
Commodities News (or such other page as may replace such page on that service
for the purpose of displaying London interbank offered quotations of major
banks).
LIBOR CERTIFICATE: Any Class [ ] or Class [ ] Certificate.
LIBOR COMPONENT: None.
LIBOR DETERMINATION DATE: The second London Business Day immediately
preceding the commencement of each Accrual Period with respect to any LIBOR
Certificate other than the first such Accrual Period.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
Master Servicer or the applicable Servicer has determined that all amounts that
it expects to recover on behalf of the Trust Fund from or on account of such
Mortgage Loan have been recovered.
LIQUIDATION EXPENSES: Expenses that are incurred by the Master Servicer
or a Servicer in connection with the liquidation of any defaulted Mortgage Loan
and are not recoverable under the applicable Primary Mortgage Insurance Policy,
including, without limitation, foreclosure and
21
rehabilitation expenses, legal expenses and unreimbursed amounts expended
pursuant to Sections 9.06, 9.16 or 9.22.
LIQUIDATION PROCEEDS: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan, including any amounts remaining in the related Escrow
Account.
LIVING HOLDER: Not applicable.
LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, the ratio of the
principal balance of such Mortgage Loan at origination, or such other date as is
specified, to the Original Value thereof.
LONDON BUSINESS DAY: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and
New York City.
LOWER TIER INTEREST: Any one of the classes of lower tier interests
described in the Preliminary Statement hereto.
LOWER TIER INTEREST RATE: As to each Lower Tier Interest, the applicable
interest rate, if any, as described in the Preliminary Statement hereto.
LOWER TIER REMIC: One of the two separate REMICs as described in the
Preliminary Statement hereto.
MAINTENANCE: With respect to any Cooperative Unit, the rent or fee paid
by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
MASTER SERVICER: [name of master servicer], or any successor in interest,
or if any successor master servicer shall be appointed as herein provided, then
such successor master servicer.
MASTER SERVICER REMITTANCE DATE: With respect to each Distribution Date,
two Business Days following the related Remittance Date.
MASTER SERVICING FEE: As to any Distribution Date, all income and gain
realized from the investment of funds in the Collection Account during the
period from and including the Master Servicer Remittance Date in the calendar
month immediately preceding the month in which such Distribution Date occurs, to
but excluding the Master Servicer Remittance Date relating to such Distribution
Date.
MASTER SERVICING FEE RATE: Not applicable.
MATERIAL DEFECT: As defined in Section 2.02(c) hereof.
22
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
Corporation, or any successor in interest thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS,
as agent for the holder from time to time of the Mortgage Note.
MOODY'S: Xxxxx'x Investors Service, Inc., or any successor in interest.
MORTGAGE: A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a Mortgage Note, together with
improvements thereto.
MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan required to be delivered to the Trustee
or a Custodian pursuant to this Agreement.
MORTGAGE LOAN: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage or a manufactured housing contract
conveyed, transferred, sold, assigned to or deposited with the Trustee pursuant
to Section 2.01 or Section 2.05, including without limitation, each Mortgage
Loan listed on the Mortgage Loan Schedule, as amended from time to time.
MORTGAGE LOAN SALE AGREEMENT: Either of (i) the agreement dated as of
[________], 200__, for the sale of certain of the Mortgage Loans by
_________________[______]to the Depositor or (ii) the agreement dated as of
[________], 200__, for the sale of certain of the Mortgage Loans by
__________________________________[_______] to the Depositor, as the context
requires.
MORTGAGE LOAN SCHEDULE: The schedule attached hereto as Schedule A, which
shall identify each Mortgage Loan and designate, among other data fields, (i)
the Servicer of such Mortgage Loan, (ii) the term and method of calculation of
Prepayment Penalty Amounts, if any, and whether such Prepayment Penalty Amounts
are to be retained by the related Servicer or allocated to the Class P
Certificate, and (iii) if such Mortgage Loan is an Employee Mortgage Loan, as
such schedule may be amended from time to time to reflect the addition of
Mortgage Loans to, or the deletion of Mortgage Loans from, the Trust Fund. The
Depositor shall be responsible for providing the Trustee, the Securities
Administrator and the Master Servicer with all amendments to the Mortgage Loan
Schedule.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
MORTGAGE POOL: The aggregate of the Mortgage Loans identified on the
Mortgage Loan Schedule as being included in the Mortgage Pool.
MORTGAGE RATE: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan.
23
MORTGAGED PROPERTY: Either of (x) the fee simple interest in real
property, together with improvements thereto including any exterior improvements
to be completed within 120 days of disbursement of the related Mortgage Loan
proceeds, or (y) in the case of a Cooperative Loan, the related Cooperative
Shares and Proprietary Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.
MORTGAGOR: The obligor on a Mortgage Note.
NAS PERCENTAGE: With respect to any Distribution Date, the lesser of (i)
[___]% and (ii) the percentage obtained by dividing (x) the sum of the Class
Principal Amounts of the Class A_ Certificate immediately prior to such date by
(y) the Non-AP Pool Balance immediately prior to such date.
NAS PREPAYMENT SHIFT PERCENTAGE: With respect to any Distribution Date
during the five years beginning on the first Distribution Date will be 0%.
Thereafter, for any Distribution Date occurring on or after the fifth
anniversary of the first Distribution Date: for any Distribution Date in the
first year thereafter, [__]%; for any Distribution Date in the second year
thereafter, [__]%; for any Distribution Date in the third year thereafter,
[__]%; for any Distribution Date in the fourth year thereafter, [__]%; and for
any subsequent Distribution Date, [___]%. Notwithstanding the foregoing, (i) on
and after the Credit Support Depletion Date, the Class A7 and class A8
Certificates shall be entitled to their respective pro rata share of all
scheduled and unscheduled payments of principal and (ii) on the date on which
the Class Principal Amounts of all of the Senior Certificates (other than the
Class A_ and Class AP Certificates) have been reduced to zero, the Class A_
Certificates shall be entitled pro rata to any remaining Senior Principal
Distribution Amount and thereafter, the NAS Priority Amount will equal the
Senior Principal Distribution Amount.
NAS PRIORITY AMOUNT: With respect to any Distribution Date prior to the
Credit Support Depletion Date, the lesser of (i) the sum of (x) the product of
the NAS Percentage for such date, the NAS Scheduled Principal Percentage for
such date and the Scheduled Principal Amount for such date and (y) the product
of the NAS Percentage for such date, the NAS Prepayment Shift Percentage for
such date and the Unscheduled Principal Amount for such date and (ii) the sum of
the Class Principal Amounts of the Class A_ Certificates immediately prior to
such date. Notwithstanding the foregoing, on the date on which the Class
Principal Amounts of all of the Senior Certificates (other than the Class A_ and
Class AP Certificates) have been reduced to zero, the Class A_ Certificates
shall be entitled pro rata to any remaining Senior Principal Distribution Amount
and thereafter, the NAS Priority Amount shall equal the Senior Principal
Distribution Amount.
NAS SCHEDULED PRINCIPAL PERCENTAGE: With respect to any Distribution Date
during the five years beginning on the first Distribution Date, [___]%.
Thereafter, with respect to any Distribution Date occurring on or after the
fifth anniversary of the first Distribution Date will be [___]%.
NEGATIVE AMORTIZATION CERTIFICATE: None.
24
NET LIQUIDATION PROCEEDS: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances, Servicing
Advances, Servicing Fees and Retained Interest, if any, received and retained in
connection with the liquidation of such Mortgage Loan.
NET MORTGAGE RATE: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by the sum of the applicable Servicing Fee Rate, and, if
applicable, the premium rate on any lender-provided mortgage insurance. The Net
Mortgage Rate of any Employee Mortgage Loan shall be calculated without regard
to any increase in the Mortgage Rate thereof as a result of the related
Mortgagor ceasing to be an employee of the Underwriter or any of its affiliates.
NET PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
the excess, if any, of any Prepayment Interest Shortfalls with respect to the
Mortgage Loans for such date over the sum of any amounts paid by the Servicers
with respect to such shortfalls and any amount that is required to be paid by
the Master Servicer in respect of such shortfalls pursuant to this Agreement.
NON-AP PERCENTAGE: As to any Discount Mortgage Loan, the percentage
equivalent of the fraction, the numerator of which is the Net Mortgage Rate of
such Discount Mortgage Loan and the denominator of which is the applicable
Designated Rate. As to any Non-Discount Mortgage Loan, [___]%.
NON-AP POOL BALANCE: As to any Distribution Date, the sum of the
applicable Non-AP Percentage of the Scheduled Principal Balance of each Mortgage
Loan.
NON-AP SENIOR CERTIFICATE: Any Senior Certificate other than a Class AP,
Class A_, Class AX or Class PAX Certificate.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NON-DISCOUNT MORTGAGE LOAN: Any Mortgage Loan with a Net Mortgage Rate
equal to or greater than [___]% per annum.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage
Loan.
NON-PERMITTED FOREIGN HOLDER: As defined in Section 3.03(f).
NON-U.S. PERSON: Any person other than a "United States person" within
the meaning of Section 7701(a)(30) of the Code.
NOTIONAL AMOUNT: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.
NOTIONAL CERTIFICATE: Any Class A_, Class AX or Class PAX Certificate.
NOTIONAL COMPONENT: None.
25
OFFERING DOCUMENT: Either of the private placement memorandum dated
____________ relating to the Class B_ Certificates, or the Prospectus.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the Board,
any Vice Chairman, the President, any Vice President or any Assistant Vice
President of a Person, and in each case delivered to the Trustee or the
Securities Administrator, as applicable.
OPINION OF COUNSEL: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee or the Certificate Registrar, as
applicable, and who may be in-house or outside counsel to the Depositor, the
Master Servicer or a Servicer but which must be Independent outside counsel with
respect to any such opinion of counsel concerning the transfer of any Residual
Certificate or concerning certain matters with respect to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the taxation,
or the federal income tax status, of each REMIC. For purpose of Section
2.01(c)(i), the Opinion of Counsel referred to therein may take the form of a
memorandum of law or other acceptable assurance.
ORIGINAL CREDIT SUPPORT PERCENTAGE: With respect to each Class of
Subordinate Certificates, the Credit Support Percentage for such Class of
Certificates on the Closing Date.
ORIGINAL SUBORDINATE AMOUNT: The Subordinate Amount on the Closing Date.
ORIGINAL VALUE: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor at
the time the related Mortgage Loan was originated.
PAX MORTGAGE LOANS: The Non-Discount Mortgage Loans listed on Schedule
B-2 hereto.
PAYING AGENT: Any paying agent appointed pursuant to Section 3.08.
PERCENTAGE INTEREST: With respect to any Certificate and the related
Class, such Certificate's percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by all Certificates of the same
Class as such Certificate. With respect to any Certificate other than a Notional
Certificate, the Percentage Interest evidenced thereby shall equal the initial
Certificate Principal Amount thereof divided by the initial Class Principal
Amount of all Certificates of the same Class. With respect to any Notional
Certificate, the Percentage Interest evidenced thereby shall equal the initial
Class Notional Amount divided by the initial Class Notional Amount of all
Certificates of the same Class.
PERSON: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PLACEMENT AGENT: ______________
PLAN ASSET REGULATIONS: The Department of Labor regulations set forth in
29 C.F.R. 2510.3-101.
26
POOL PMI POLICY: Not applicable.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date and any
Principal Prepayment in full received on the Mortgage Loans from the first day
through the sixteenth day of the month during which such Distribution Date
occurs, all amounts paid in respect of interest at the applicable Net Mortgage
Rate on such Principal Prepayment.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date and
any Principal Prepayment in part or in full) the difference between (i) one full
month's interest at the applicable Mortgage Rate (after giving effect to any
applicable Relief Act Reduction), as reduced by the applicable Servicing Fee
Rate and the Master Servicing Fee Rate (if the Master Servicer is acting as
Servicer) on the outstanding principal balance of such Mortgage Loan immediately
prior to such prepayment and (ii) the amount of interest actually received with
respect to such Mortgage Loan in connection with such Principal Prepayment.
PREPAYMENT PENALTY AMOUNTS: With respect to any Distribution Date, all
premiums or charges paid by the obligors under the related Mortgage Notes due to
Principal Prepayments collected by the Servicers during the immediately
preceding Prepayment Period.
PREPAYMENT PERIOD: With respect to any Distribution Date and any
Principal Prepayment, whether in part or in full (including any liquidation),
the calendar month immediately preceding the month in which such Distribution
Date occurs.
PRIMARY MORTGAGE INSURANCE POLICY: Mortgage guaranty insurance, if any,
on an individual Mortgage Loan, as evidenced by a policy or certificate.
PRINCIPAL AMOUNT SCHEDULES: Not applicable.
PRINCIPAL ONLY CERTIFICATE: Any Class AP Certificate.
PRINCIPAL ONLY COMPONENT: None.
PRINCIPAL PREPAYMENT: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled Due
Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the applicable Servicing
Agreement.
PROCEEDING: Any suit in equity, action at law or other judicial or
administrative proceeding.
PROPRIETARY LEASE: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
PROSPECTUS: The prospectus supplement dated [_______], 200[___], together
with the accompanying prospectus dated _____________________, relating to each
Class of Certificates other than the Class B_, Class E and Class P Certificates.
27
PURCHASE PRICE: With respect to the repurchase of a Mortgage Loan
pursuant to this Agreement, an amount equal to the sum of (a) [___]% of the
unpaid principal balance of such Mortgage Loan, (b) accrued interest thereon at
the Mortgage Rate, from the date as to which interest was last paid to (but not
including) the Due Date immediately preceding the related Distribution Date and
(c) any unreimbursed Servicing Advances with respect to such Mortgage Loan. The
Master Servicer or the applicable Servicer (or the Securities Administrator, if
applicable) shall be reimbursed from the Purchase Price for any Mortgage Loan or
related REO Property for any Advances made with respect to such Mortgage Loan
that are reimbursable to the Master Servicer, such Servicer or the Securities
Administrator under this Agreement or the related Servicing Agreement, as well
as any unreimbursed Servicing Advances and accrued and unpaid Master Servicing
Fees or Servicing Fees, as applicable.
QIB: As defined in Section 3.03(c).
QUALIFIED GIC: A guaranteed investment contract or surety bond providing
for the investment of funds in the Collection Account or the Certificate Account
and insuring a minimum, fixed or floating rate of return on investments of such
funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation whose
long-term debt is rated by each Rating Agency in one of its two highest rating
categories or, if such insurance company has no long-term debt, whose claims
paying ability is rated by each Rating Agency in one of its two highest rating
categories, and whose short-term debt is rated by each Rating Agency in its
highest rating category;
(b) provide that the Trustee may exercise all of the rights under such
contract or surety bond without the necessity of taking any action by any other
Person;
(c) provide that if at any time the then current credit standing of the
obligor under such guaranteed investment contract is such that continued
investment pursuant to such contract of funds would result in a downgrading of
any rating of the Certificates, the Trustee shall terminate such contract
without penalty and be entitled to the return of all funds previously invested
thereunder, together with accrued interest thereon at the interest rate provided
under such contract to the date of delivery of such funds to the Trustee;
(d) provide that the Trustee's interest therein shall be transferable to
any successor trustee hereunder; and
(e) provide that the funds reinvested thereunder and accrued interest
thereon be returnable to the Collection Account or the Certificate Account, as
the case may be, not later than the Business Day prior to any Distribution Date.
QUALIFIED INSURER: An insurance company duly qualified as such under the
laws of the states in which the related Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability is
rated by each Rating Agency in its highest rating category or whose selection as
an insurer will not adversely affect the rating of the Certificates.
28
QUALIFYING SUBSTITUTE MORTGAGE LOAN: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess of the
Scheduled Principal Balance of the related Deleted Mortgage Loan; provided,
however, that, to the extent that the Scheduled Principal Balance of such
Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together with
interest thereon at the applicable Mortgage Rate net of the Master Servicing Fee
and the applicable Servicing Fee from the date as to which interest was last
paid through the end of the Due Period in which such substitution occurs, shall
be paid by the party effecting such substitution to the Securities Administrator
for deposit into the Certificate Account, and shall be treated as a Principal
Prepayment hereunder; (ii) has a Net Mortgage Rate not lower than the Net
Mortgage Rate of the related Deleted Mortgage Loan and will be a Discount
Mortgage Loan if the Deleted Mortgage Loan was a Discount Mortgage Loan or a
Non-Discount Mortgage Loan if the Deleted Mortgage Loan was a Non-Discount
Mortgage Loan; (iii) has a remaining stated term to maturity not longer than,
and not more than one year shorter than, the remaining term to stated maturity
of the related Deleted Mortgage Loan; (iv) (A) has a Loan-to-Value Ratio as of
the date of such substitution of not greater than [___]%; provided, however,
that if the related Deleted Mortgage Loan has a Loan-to-Value Ratio of greater
than [___]%, then the Loan-to-Value Ratio of such substitute Mortgage Loan may
be greater than [___]% but shall not be greater than the Loan-to-Value Ratio of
the Deleted Mortgage Loan and (B) the addition of such substitute Mortgage Loan
does not increase the weighted average Loan-to-Value Ratio of the Mortgage Pool
by more than [___]%; (v) will comply with all of the representations and
warranties relating to Mortgage Loans set forth herein, as of the date as of
which such substitution occurs; (vi) is not a Cooperative Loan unless the
related Deleted Mortgage Loan was a Cooperative Loan; (vii) if applicable, has
the same index as and a margin not less than that of the related Deleted
Mortgage Loan; (viii) has not been delinquent for a period of more than 30 days
more than once in the twelve months immediately preceding such date of
substitution; (ix) is covered by a Primary Mortgage Insurance Policy if the
related Deleted Mortgage Loan is so covered, and the Loan-to-Value Ratio of such
Mortgage Loan is greater than [___]%; and (x) has a Credit Score not greater
than [___] points lower than the Credit Score of the related Deleted Mortgage
Loan; provided, however, that if the Deleted Mortgage Loan does not have a
Credit Score, then such substitute Mortgage Loan shall have a Credit Score equal
to or greater than 700. In the event that either one mortgage loan is
substituted for more than one Deleted Mortgage Loan or more than one mortgage
loan is substituted for one or more Deleted Mortgage Loans, then (a) the
Scheduled Principal Balance referred to in clause (i) above shall be determined
such that the aggregate Scheduled Principal Balance of all such substitute
Mortgage Loans shall not exceed the aggregate Scheduled Principal Balance of all
Deleted Mortgage Loans and (b) each of (1) the rate referred to in clause (ii)
above, (2) the remaining term to stated maturity referred to in clause (iii)
above, (3) the Loan-to-Value Ratio referred to in clause (iv) above and (4) the
Credit Score referred to in clause (x) above shall be determined on a weighted
average basis, provided that the final scheduled maturity date of any Qualifying
Substitute Mortgage Loan shall not exceed the Final Scheduled Distribution Date
of any Class of Certificates. Whenever a Qualifying Substitute Mortgage Loan is
substituted for a Deleted Mortgage Loan pursuant to this Agreement, the party
effecting such substitution shall certify such qualification in writing to the
Trustee.
29
RATING AGENCY: Each of S&P, Xxxxx'x, and Fitch
REALIZED LOSS: (a) With respect to each Liquidated Mortgage Loan, an
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of the
date of liquidation, plus (ii) interest at the applicable Net Mortgage Rate from
the date as to which interest was last paid up to the last day of the month of
such liquidation, minus (iii) Liquidation Proceeds received, net of amounts that
are reimbursable to the Master Servicer or the applicable Servicer with respect
to such Mortgage Loan (other than Advances of principal and interest) including
expenses of liquidation, and (b) with respect to each Mortgage Loan that has
become the subject of a Deficient Valuation, the difference between the unpaid
principal balance of such Mortgage Loan immediately prior to such Deficient
Valuation and the unpaid principal balance of such Mortgage Loan as reduced by
the Deficient Valuation. In determining whether a Realized Loss on a Liquidated
Mortgage Loan is a Realized Loss of interest or principal, Liquidation Proceeds
shall be allocated, first, to payment of expenses related to such Liquidated
Mortgage Loan (including payment of any Retained Interest), then to accrued
unpaid interest and finally to reduce the principal balance of the Mortgage
Loan.
RECOGNITION AGREEMENT: With respect to any Cooperative Loan, an agreement
between the related Cooperative Corporation and the originator of such Mortgage
Loan to establish the rights of such originator in the related Cooperative
Property.
RECORD DATE: With respect to any Distribution Date and each Class of
Certificates other than any LIBOR Certificates, the close of business on the
last Business Day of the month immediately preceding the month in which such
Distribution Date occurs; and with respect to any Distribution Date and any
LIBOR Certificate, the Business Day immediately preceding the related
Distribution Date.
REDEMPTION CERTIFICATE: Not applicable.
REFERENCE BANKS: As defined in Section 4.05.
REGULATION S: Regulation S promulgated under the Act or any successor
provision thereto, in each case as the same may be amended from time to time;
and all references to any rule, section or subsection of, or definition or term
contained in, Regulation S means such rule, section, subsection, definition or
term, as the case may be, or any successor thereto, in each case as the same may
be amended from time to time.
REGULATION S GLOBAL SECURITY: The meaning specified in Section 3.01(c).
REIMBURSEMENT AMOUNT: As defined in Section 5.02(a)(vi).
RELEVANT UCC: The Uniform Commercial Code as in effect in the applicable
jurisdiction.
RELIEF ACT REDUCTION: With respect to any Mortgage Loan as to which there
has been a reduction in the amount of interest collectible thereon as a result
of application of the Solders' and Sailors' Civil Relief Act of 1940, as
amended, or any similar state law, any amount by which interest collectible on
such Mortgage Loan for the Due Date in the related Due Period is less than
30
interest accrued thereon for the applicable one-month period at the Mortgage
Rate without giving effect to such reduction.
REMIC: Each of the Lower Tier REMIC and the Upper Tier REMIC, as
described in the Preliminary Statement hereto.
REMIC PROVISIONS: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 86OG of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMITTANCE DATE: The day in each month on which each Servicer is required
to remit payments to the account maintained by the Master Servicer, as specified
in the related Servicing Agreement, which is the 18th day of each month (or if
such 18th day is not a Business Day, the next succeeding Business Day).
REO PROPERTY: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.
RESERVE INTEREST RATE: As defined in Section 4.05.
RESIDUAL CERTIFICATE: Any Class R Certificate.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary, any
Trust Officer, the Treasurer, or any assistant treasurer, working in its
corporate trust department and having direct responsibility for the
administration of this Agreement.
RESTRICTED CERTIFICATE: Any Class B_, Class E or Class P Certificate and
any Restricted Global Security.
RESTRICTED GLOBAL SECURITY: The meaning specified in Section 3.01(c).
RETAINED INTEREST: Not applicable.
RETAINED INTEREST MORTGAGE LOAN: None.
RETAINED INTEREST HOLDER: Not applicable.
RETAINED INTEREST RATE: With respect to each Retained Interest Mortgage
Loan, the excess of the Mortgage Rate of such Mortgage Loan over the applicable
Trust Rate.
ROUNDING ACCOUNT: Not applicable.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
31
SCHEDULED AMOUNT: Not applicable.
SCHEDULED BALANCES TABLES: Not applicable.
SCHEDULED CERTIFICATE: None.
SCHEDULED COMPONENT: None.
SCHEDULED PAYMENT: Each scheduled payment of principal and interest (or
of interest only, if applicable) to be paid by the Mortgagor on a Mortgage Loan,
as reduced (except where otherwise specified herein) by the amount of any
related Debt Service Reduction (excluding all amounts of principal and interest
that were due on or before the Cut-off Date whenever received) and, in the case
of an REO Property, an amount equivalent to the Scheduled Payment that would
have been due on the related Mortgage Loan if such Mortgage Loan had remained in
existence. In the case of any bi-weekly payment Mortgage Loan, all payments due
on such Mortgage Loan during any Due Period shall be deemed collectively to
constitute the Scheduled Payment due on such Mortgage Loan in such Due Period.
SCHEDULED PRINCIPAL AMOUNT: With respect to any Distribution Date, the
amount described in clause (i) of the definition of Senior Principal
Distribution Amount (without application of the Senior Percentage).
SCHEDULED PRINCIPAL BALANCE: With respect to (i) any Mortgage Loan as of
any Distribution Date, the principal balance of such Mortgage Loan at the close
of business on the Cut-off Date, after giving effect to principal payments due
on or before the Cut-off Date, whether or not received, less an amount equal to
principal payments due after the Cut-off Date and on or before the Due Date in
the related Due Period, whether or not received from the Mortgagor or advanced
by the applicable Servicer or the Master Servicer, and all amounts allocable to
unscheduled principal payments (including Principal Prepayments, Net Liquidation
Proceeds, Insurance Proceeds and condemnation proceeds, in each case to the
extent identified and applied prior to or during the applicable Prepayment
Period) and (ii) any REO Property as of any Distribution Date, the Scheduled
Principal Balance of the related Mortgage Loan on the Due Date immediately
preceding the date of acquisition of such REO Property by or on behalf of the
Trustee (reduced by any amount applied as a reduction of principal on the
Mortgage Loan). With respect to any Mortgage Loan as of the Cut-off Date, as
specified in the Mortgage Loan Schedule.
SECURITIES ADMINISTRATOR: [name of securities administrator], not in its
individual capacity but solely as Securities Administrator, or any successor in
interest, or if any successor Securities Administrator shall be appointed as
herein provided, then such successor Securities Administrator.
SECURITIES ADMINISTRATOR FEE: As to any Distribution Date, all income and
gain realized from the investment of funds in the Certificate Account from the
Master Servicer Remittance Date prior to the Distribution Date to but excluding
such Distribution Date; provided, however, that an amount equal to $[______] per
year shall be substracted from such amounts and paid to the Trustee and,
provided further that if such income and gain for any calendar year is less than
32
$[____], the Securities Administrator shall pay any such shortfall to the
Trustee from its own funds without reimbursement therefor.
SECURITY AGREEMENT: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.
SECURITY ENTITLEMENT: The meaning specified in Section 8-102(a)(17) of
the UCC.
SELLER: Either of (i) _________________ or any successor in interest or
(ii) __________________________________ or any successor in interest, as the
context may require.
SENIOR CERTIFICATE: Any Class [ ].
SENIOR PERCENTAGE: With respect to any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the sum of the Class
Principal Amounts of each Class of Senior Certificates (other than any Notional
Certificate and the Class AP Certificates), immediately prior to such
Distribution Date and the denominator of which is the Non-AP Pool Balance for
the immediately preceding Distribution Date.
SENIOR PREPAYMENT PERCENTAGE: With respect to any Distribution Date
occurring during the five years beginning on the first Distribution Date, __%.
With respect to any Distribution Date occurring on or after the fifth
anniversary of the first Distribution Date, the Senior Percentage plus the
following percentage of the Subordinate Percentage for such Distribution Date:
for any Distribution Date in the first year thereafter, __%; for any
Distribution Date in the second year thereafter, __%; for any Distribution Date
in the third year thereafter, __%; for any Distribution Date in the fourth year
thereafter, __%; and for any subsequent Distribution Date, 0%; provided,
however, that if on any of the foregoing Distribution Dates the Senior
Percentage exceeds the initial Senior Percentage, the Senior Prepayment
Percentage for such Distribution Date shall once again equal ___% for such
Distribution Date.
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage below the level in effect for the most recent prior period set forth
in the paragraph above shall be effective on any Distribution Date if, as of the
first Distribution Date as to which any such decrease applies, (i) the average
outstanding principal balance on such Distribution Date and for the preceding
five Distribution Dates of all Mortgage Loans that were delinquent 60 days or
more (including for this purpose any REO Property or Mortgage Loans in
foreclosure and the Scheduled Payments that would have been due on Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust Fund if the related Mortgage Loan had remained in existence) is
greater than or equal to __% of the applicable Subordinate Amount immediately
prior to such Distribution Date or (ii) cumulative Realized Losses with respect
to the Mortgage Loans exceed (a) with respect to the Distribution Date on the
fifth anniversary of the first Distribution Date, __% of the Original
Subordinate Amount, (b) with respect to the Distribution Date on the sixth
anniversary of the first Distribution Date, __% of the Original
33
Subordinate Amount, (c) with respect to the Distribution Date on the seventh
anniversary of the first Distribution Date, __% of the Original Subordinate
Amount, (d) with respect to the Distribution Date on the eighth anniversary of
the first Distribution Date, __% of the Original Subordinate Amount, and (e)
with respect to the Distribution Date on the ninth anniversary of the first
Distribution Date or thereafter, __% of the Original Subordinate Amount. After
the Class Principal Amount of each Class of Senior Certificates has been reduced
to zero, the Senior Prepayment Percentage shall be __%.
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the sum
of the following amounts:
(i) the product of (1) the Senior Percentage for such date and
(2) the principal portion (multiplied by the applicable Non-AP
Percentage) of each Scheduled Payment (without giving effect to any Debt
Service Reduction occurring prior to the Bankruptcy Coverage Termination
Date), on each Mortgage Loan due during the related Due Period;
(ii) the product of (a) the Senior Prepayment Percentage for
such date and (b) each of the following amounts (multiplied by the
applicable Non-AP Percentage): (1) each Principal Prepayment on the
Mortgage Loans collected during the related Prepayment Period, (2) each
other unscheduled collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any Mortgage Loan that
was finally liquidated during the related Prepayment Period) representing
or allocable to recoveries of principal received during the related
Prepayment Period, and (3) the principal portion of all proceeds of the
purchase of any Mortgage Loan (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Securities Administrator during the related Prepayment
Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan that was finally liquidated during the
related Prepayment Period, the lesser of (a) the related net Liquidation
Proceeds allocable to principal (multiplied by the applicable Non-AP
Percentage) and (b) the product of the Senior Prepayment Percentage for
such date and the Scheduled Principal Balance (multiplied by the
applicable Non-AP Percentage) of such Mortgage Loan at the time of
liquidation; and
(iv) any amounts described in clauses (i) through (iii) for any
previous Distribution Date that remain unpaid.
If on any Distribution Date the Class Principal Amount of each Class of Senior
Certificates (other than any Class AP Certificates) has been reduced to zero,
the Senior Principal Distribution Amount for such date (following such
reduction) and each subsequent Distribution Date shall be zero.
SENIOR PRINCIPAL PRIORITIES: The priorities for distribution of principal
to the Senior Certificates as set forth in Exhibit O.
SERVICER: Any Servicer that has entered into any of the Servicing
Agreements attached as Exhibit E hereto, or any successors in interest.
34
SERVICING ADVANCES: Expenditures incurred by the Servicer in connection
with the liquidation or foreclosure of a Mortgage Loan which are eligible for
reimbursement under the Servicing Agreement.
SERVICING AGREEMENT: Each Servicing Agreement between a Servicer and the
related Seller dated as of [________], 200__, attached hereto in Exhibit E, and
any other servicing agreement entered into between a successor servicer and the
related Seller or the Trustee pursuant to the terms hereof.
SERVICING FEE: The Servicing Fee specified in the applicable Servicing
Agreement.
SERVICING FEE RATE: With respect to any Servicer, as specified in the
applicable Servicing Agreement.
SERVICING OFFICER: Any officer of the Master Servicer involved in or
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished by
the Master Servicer to the Trustee and the Custodian, as such list may from time
to time be amended.
SPECIAL HAZARD LOSS: With respect to the Mortgage Loans, (x) any Realized
Loss arising out of any direct physical loss or damage to a Mortgaged Property
which is caused by or results from any cause, exclusive of any loss covered by a
hazard policy or a flood insurance policy required to be maintained in respect
of such Mortgaged Property and any loss caused by or resulting from (i) normal
wear and tear, (ii) conversion or other dishonest act on the part of the
Trustee, the Master Servicer, any Servicer or any of their agents or employees,
or (iii) errors in design, faulty workmanship or faulty materials, unless the
collapse of the property or a part thereof ensues, or (y) any Realized Loss
arising from or related to the presence or suspected presence of hazardous
wastes, or hazardous substances on a Mortgaged Property unless such loss is
covered by a hazard policy or flood insurance policy required to be maintained
in respect of such Mortgaged Property, in any case, as reported by any Servicer
to the Master Servicer.
SPECIAL HAZARD LOSS LIMIT: As of the Cut-off Date, $[________], which
amount shall be reduced from time to time to an amount equal on any Distribution
Date to the lesser of (a) the greatest of (i) 1% of the aggregate of the
Scheduled Principal Balances of the Mortgage Loans; (ii) twice the Scheduled
Principal Balance of the Mortgage Loan having the highest Scheduled Principal
Balance, and (iii) the aggregate Scheduled Principal Balances of the Mortgage
Loans secured by Mortgaged Properties located in the single California postal
zip code area having the highest aggregate Scheduled Principal Balance of
Mortgage Loans of any such postal zip code area and (b) the Special Hazard Loss
Limit as of the Closing Date less the amount, if any, of Special Hazard Losses
incurred with respect to Mortgage Loans since the Closing Date.
SPECIFIED RATING: Not applicable.
STARTUP DAY: The day designated as such pursuant to Section 10.01(b)
hereof.
SUBORDINATE AMOUNT: With respect to any Distribution Date, the excess of
the Non-AP Pool Balance for the immediately preceding Distribution Date over the
sum of the aggregate of
35
the Certificate Principal Amounts of the Non-AP Senior Certificates immediately
prior to the related Distribution Date.
SUBORDINATE CERTIFICATE: Any Class B Certificate.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution Date,
the amount by which (i) the sum of the Class Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
application of Realized Losses in reduction of the Certificate Principal Amounts
of the Certificates on such Distribution Date) exceeds (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans for such Distribution Date.
SUBORDINATE CLASS EXPENSE SHARE: With respect to each Class of
Subordinate Certificates and each Accrual Period, an amount equal to (i) the sum
of (a) the amounts paid to the Securities Administrator from the Trust Fund
during such Accrual Period pursuant to Section 6.12(b) hereof to the extent such
amounts were paid for ordinary or routine expenses and were not taken into
account in computing the Net Mortgage Rate of any Mortgage Loan and (b) the
amounts paid as reasonable compensation of any co-trustee pursuant to Section
6.09(g) hereof to the extent such amounts were paid for ordinary or routine
expenses and were not taken into account in computing the Net Mortgage Rate of
any Mortgage Loan MINUS (ii) amounts taken into account under clause (i) of this
definition in determining the Subordinate Class Expense Share of any Class of
Subordinate Certificates having a higher numeric designation. In no event,
however, shall the Subordinate Class Expense Share for any Class of Subordinate
Certificates and any Accrual Period exceed the product of (i) (a) [___]% divided
by (b) 12 and (ii) the Class Principal Amount of such Class as of the beginning
of the related Accrual Period.
SUBORDINATE CLASS PERCENTAGE: With respect to any Distribution Date and
any Class of Subordinate Certificates, the percentage obtained by dividing the
Class Principal Amount of such Class immediately prior to such Distribution Date
by the aggregate Certificate Principal Amount of all Subordinate Certificates
immediately prior to such Distribution Date.
SUBORDINATE COMPONENT PERCENTAGE: Not applicable.
SUBORDINATE PERCENTAGE: With respect to any Distribution Date, the
difference between 100% and the related Senior Percentage for such Distribution
Date.
SUBORDINATE PREPAYMENT PERCENTAGE: With respect to any Distribution Date,
the difference between 100% and the Senior Prepayment Percentage for such
Distribution Date.
SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the following:
(i) the product of (1) the Subordinate Percentage for such
date and (2) the principal portion (multiplied by the applicable Non-AP
Percentage) of each Scheduled Payment (without giving effect to any Debt
Service Reduction occurring prior to the applicable Bankruptcy Coverage
Termination Date) on each Mortgage Loan due during the related Due
Period;
36
(ii) the product of (a) the Subordinate Prepayment Percentage
for such date and (b) each of the following amounts (multiplied by the
applicable Non-AP Percentage): (1) each Principal Prepayment on the
Mortgage Loans collected during the related Prepayment Period, (2) each
other unscheduled collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any Mortgage Loan that
was finally liquidated during the related Prepayment Period) representing
or allocable to recoveries of principal received during the related
Prepayment Period, and (3) the principal portion of all proceeds of the
purchase of any Mortgage Loan (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Securities Administrator during the related Prepayment
Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan that was finally liquidated during the
related Prepayment Period, the related net Liquidation Proceeds allocable
to principal (multiplied by the applicable Non-AP Percentage) less any
related amount paid pursuant to subsection (iii) of the definition of
Senior Principal Distribution Amount; and
(iv) any amounts described in clauses (i) through (iii) for any
previous Distribution Date that remain unpaid.
TAC CERTIFICATE: None.
TAC PRINCIPAL AMOUNT: Not applicable.
TAX MATTERS PERSON: The "tax matters person" as specified in the REMIC
Provisions.
TERMINATION PRICE: As defined in Section 7.01 hereof.
TITLE INSURANCE POLICY: A title insurance policy maintained with respect
to a Mortgage Loan.
TRANSFER AGREEMENT: As defined in the Mortgage Loan Sale Agreement.
TRANSFEROR: Each seller of Mortgage Loans to _________________________ or
__________________________________________________, as applicable, pursuant to a
Transfer Agreement.
TRUST FUND: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans (other than any Retained Interest), the
assignment of the Depositor's rights under the Mortgage Loan Sale Agreements,
such amounts as shall from time to time be held in the Collection Account, the
Certificate Account, any Escrow Account, the Insurance Policies, any REO
Property and the other items referred to in, and conveyed to the Trustee under,
Section 2.01(a).
TRUST RATE: With respect to each Mortgage Loan, the sum of (i) the
Designated Rate, (ii) the applicable Servicing Fee Rate, (iii) the premium rate
on any lender-provided mortgage insurance and (iv) in the case of any Employee
Mortgage Loan, the Employee Discount Rate, if applicable.
37
TRUSTEE: [name of trustee], not in its individual capacity but solely as
Trustee, or any successor in interest, or if any successor trustee or any
co-trustee shall be appointed as herein provided, then such successor trustee
and such co-trustee, as the case may be.
TRUSTEE FEE: An amount equal to $[___] per year.
UCC: The Uniform Commercial Code as adopted in the State of
New York.
UNDERCOLLATERALIZATION DISTRIBUTION: Not applicable.
UNDERCOLLATERALIZED GROUP: Not applicable.
UNDERWRITER: Xxxxxx Brothers Inc.
UNDERWRITER'S EXEMPTION: Prohibited Transaction Exemption 2000-58, 65
Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
UNSCHEDULED PRINCIPAL AMOUNT: With respect to each Distribution Date, the
amount described in clauses (ii) and (iii) (without application of the Senior
Prepayment Percentage) of the definition of Senior Principal Distribution
Amount.
UPPER TIER REMIC: One of the two separate REMICs as described in the
Preliminary Statement hereto.
VOTING INTERESTS: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement
until the Class Notional Amount of each Class of Notional Certificates has been
reduced to zero, __% of all Voting Interests shall be allocated to the
Certificates other than the Notional Certificates, the Class E Certificates and
the Class P Certificates shall each be allocated __% of all Voting Interests and
_% of all Voting Interests shall be allocated to the Notional Certificates.
After the Class Notional Amount of each Class of Notional Certificate has been
reduced to zero, ___% of all Voting Interests shall be allocated to the
remaining Classes of Certificates. Voting Interests allocated to the Notional
Certificates shall be allocated among the Classes of such Certificates (and
among the Certificates of each such Class) in proportion to their Class Notional
Amounts (or Notional Amounts). Voting Interests shall be allocated among the
other Classes of Certificates (and among the Certificates of each such Class) in
proportion to their Class Principal Amounts (or Certificate Principal Amounts).
Section 1.02. CALCULATIONS RESPECTING MORTGAGE LOANS.
Calculations required to be made pursuant to this Agreement with respect
to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and payments to be made to
the Securities Administrator as supplied to the Securities Administrator by the
Master Servicer. The Securities Administrator shall not be required to
recompute, verify or recalculate the information supplied to it by the Master
Servicer.
38
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. CREATION AND DECLARATION OF TRUST FUND; CONVEYANCE OF
MORTGAGE LOANS.
(a) Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, subject to Sections 2.02, 2.04, 2.05
and 2.06, in trust, all the right, title and interest of the Depositor in and to
the Mortgage Loans. Such conveyance includes, without limitation, the right to
all distributions of principal and interest received on or with respect to the
Mortgage Loans on and after the Cut-off Date (other than (i) any amounts
representing Retained Interest and (ii) payments of principal and interest due
on or before such date) and all such payments due after such date but received
prior to such date and intended by the related Mortgagors to be applied after
such date, together with all of the Depositor's right, title and interest in and
to the Collection Account and all amounts from time to time credited to and the
proceeds of the Collection Account, the Certificate Account and all amounts from
time to time credited to and the proceeds of the Certificate Account, any Escrow
Account established pursuant to Section 9.06 hereof and all amounts from time to
time credited to and the proceeds of any such Escrow Account, any REO Property
and the proceeds thereof, the Depositor's rights under any Insurance Policies
related to the Mortgage Loans, and the Depositor's security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties and any Additional Collateral, and any proceeds of the foregoing, to
have and to hold, in trust; and the Trustee declares that, subject to the review
provided for in Section 2.02, it has received and shall hold the Trust Fund, as
trustee, in trust, for the benefit and use of the Holders of the Certificates
and for the purposes and subject to the terms and conditions set forth in this
Agreement, and, concurrently with such receipt, has caused to be executed,
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Trust Fund, Certificates in the authorized denominations evidencing the
entire ownership of the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
each Mortgage Loan Sale Agreement (other than any right to receive Retained
Interest) including all rights of the related Seller under the related Servicing
Agreements to the extent assigned under such Mortgage Loan Sale Agreement. The
Trustee hereby accepts such assignment, and shall be entitled to exercise all
rights of the Depositor under the related Mortgage Loan Sale Agreement as if,
for such purpose, it were the Depositor. The foregoing sale, transfer,
assignment, set-over, deposit and conveyance does not and is not intended to
result in creation or assumption by the Trustee of any obligation of the
Depositor, any Seller, or any other Person in connection with the Mortgage Loans
or any other agreement or instrument relating thereto except as specifically set
forth herein.
(b) In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, or cause to be delivered to and deposited
with, the Trustee, and/or any custodian acting on the Trustee's behalf, if
applicable, the following documents or instruments with respect to each Mortgage
Loan (each a "Mortgage File") so transferred and assigned:
39
(i) with respect to each Mortgage Loan, the original Mortgage
Note endorsed without recourse in proper form to the order of the
Trustee, as shown in Exhibit B-4, or in blank (in each case, with all
necessary intervening endorsements as applicable);
(ii) the original of any guarantee executed in connection with
the Mortgage Note, assigned to the Trustee;
(iii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original recorded Mortgage with evidence of
recording indicated thereon. If, in connection with any Mortgage Loan,
the Depositor cannot deliver the Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost, the Depositor shall
deliver or cause to be delivered to the Trustee (or its custodian), in
the case of a delay due to recording, a true copy of such Mortgage,
pending delivery of the original thereof, together with an Officer's
Certificate of the Depositor certifying that the copy of such Mortgage
delivered to the Trustee (or its custodian) is a true copy and that the
original of such Mortgage has been forwarded to the public recording
office, or, in the case of a Mortgage that has been lost, a copy thereof
(certified as provided for under the laws of the appropriate
jurisdiction) and a written Opinion of Counsel acceptable to the Trustee
and the Depositor that an original recorded Mortgage is not required to
enforce the Trustee's interest in the Mortgage Loan;
(iv) the original of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loans, or, as to
any assumption, modification or substitution agreement which cannot be
delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, a photocopy of
such assumption, modification or substitution agreement, pending delivery
of the original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such assumption, modification or
substitution agreement delivered to the Trustee (or its custodian) is a
true copy and that the original of such agreement has been forwarded to
the public recording office;
(v) with respect to each Non-MERS Mortgage Loan other than a
Cooperative Loan, the original Assignment of Mortgage for each Mortgage
Loan;
(vi) if applicable, such original intervening assignments of
the Mortgage, notice of transfer or equivalent instrument (each, an
"Intervening Assignment"), as may be necessary to show a complete chain
of assignment from the originator, or, in the case of an Intervening
Assignment that has been lost, a written Opinion of Counsel acceptable to
the Trustee that such original Intervening Assignment is not required to
enforce the Trustee's interest in the Mortgage Loans;
(vii) the original Primary Mortgage Insurance Policy or
certificate, if private mortgage guaranty insurance is required;
40
(viii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original mortgagee title insurance policy or
attorney's opinion of title and abstract of title;
(ix) the original of any security agreement, chattel mortgage
or equivalent executed in connection with the Mortgage or as to any
security agreement, chattel mortgage or their equivalent that cannot be
delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such document has been delivered for
recordation, a photocopy of such document, pending delivery of the
original thereof, together with an Officer's Certificate of the Depositor
certifying that the copy of such security agreement, chattel mortgage or
their equivalent delivered to the Trustee (or its custodian) is a true
copy and that the original of such document has been forwarded to the
public recording office;
(x) with respect to any Cooperative Loan, the Cooperative Loan
Documents;
(xi) in connection with any pledge of Additional Collateral,
the original additional collateral pledge and security agreement executed
in connection therewith, assigned to the Trustee; and
(xii) with respect to any manufactured housing contract, any
related manufactured housing sales contract, installment loan agreement
or participation interest.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
(c) (i) Assignments of Mortgage with respect to each Non-MERS Mortgage
Loan other than a Cooperative Loan shall be recorded; provided, however, that
such Assignments need not be recorded if, in the Opinion of Counsel (which must
be from Independent counsel) (which Opinion of Counsel may be in the form of a
memorandum of law) acceptable to the Trustee and the Rating Agencies, recording
in such states is not required to protect the Trustee's interest in the related
Non-MERS Mortgage Loans. Subject to the preceding sentence, as soon as
practicable after the Closing Date (but in no event more than 3 months
thereafter except to the extent delays are caused by the applicable recording
office), the Trustee, at the expense of the Depositor and with the cooperation
of applicable Servicer, shall cause to be properly recorded by such Servicer in
each public recording office where the related Mortgages are recorded each
Assignment of Mortgage referred to in subsection (b)(v) above with respect to a
Non-MERS Mortgage Loan. With respect to each Cooperative Loan, the Trustee, at
the expense of the Depositor and with the cooperation of applicable Servicer,
shall cause such Servicer to take such actions as are necessary under applicable
law in order to perfect the interest of the Trustee in the related Mortgaged
Property.
(ii) With respect to each MERS Mortgage Loan, the applicable
Servicer, at the expense of the Depositor and with the cooperation of the
Trustee, shall take such actions as are necessary to cause the Trustee to
be clearly identified as the owner of each such Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
41
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee, or to the applicable Custodian on behalf of the
Trustee, under clause (b)(viii) above and is not so delivered, the Depositor
will provide a copy of such Title Insurance Policy to the Trustee, or to the
applicable Custodian on behalf of the Trustee, as promptly as practicable after
the execution and delivery hereof, but in any case within 180 days of the
Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, herewith delivers to the Trustee, or to the applicable
Custodian on behalf of the Trustee, an Officer's Certificate which shall include
a statement to the effect that all amounts received in connection with such
prepayment that are required to be deposited in the applicable Collection
Account pursuant to Section 4.01 have been so deposited. All original documents
that are not delivered to the Trustee or the applicable Custodian on behalf of
the Trustee shall be held by the Master Servicer or the applicable Servicer in
trust for the benefit of the Trustee and the Certificateholders.
Section 2.02. ACCEPTANCE OF TRUST FUND BY TRUSTEE: REVIEW OF
DOCUMENTATION FOR TRUST FUND.
(a) The Trustee, by execution and delivery hereof, acknowledges receipt
by the Custodian on behalf of the Trustee of the Mortgage Files pertaining to
the Mortgage Loans listed on the Mortgage Loan Schedule, subject to review
thereof by the Trustee, or by the applicable Custodian on behalf of the Trustee,
under this Section 2.02. The Trustee, or the applicable Custodian on behalf of
the Trustee, will execute and deliver to the Trustee, the Depositor and the
Master Servicer on the Closing Date an Initial Certification in the form annexed
hereto as Exhibit B-1 (or in the form annexed to the applicable Custodial
Agreement as Exhibit B-1, as applicable).
(b) Within 45 days after the Closing Date, the applicable Custodian will,
on behalf of the Trustee and for the benefit of Holders of the Certificates,
review each Mortgage File to ascertain that all required documents set forth in
Section 2.01 have been received and appear on their face to contain the
requisite signatures by or on behalf of the respective parties thereto, and
shall deliver to the Trustee, the Depositor and the Master Servicer an Interim
Certification in the form annexed hereto as Exhibit B-2 (or in the form annexed
to the applicable Custodial Agreement as Exhibit B-2, as applicable) to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
of the applicable documents specified in Section 2.01(b) are in its possession
and (ii) such documents have been reviewed by it and appear to relate to such
Mortgage Loan. The Trustee, or the applicable Custodian on behalf of the
Trustee, shall make sure that the documents are executed and endorsed, but shall
be under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that the same are valid,
binding, legally effective, properly endorsed, genuine, enforceable or
appropriate for the represented purpose or that they have actually been recorded
or are in recordable form or that they are other than what they purport to be on
their face. Neither the Trustee nor any Custodian shall have any responsibility
for verifying the genuineness or the legal effectiveness of or authority for any
signatures of or on behalf of any party or endorser.
42
(c) If in the course of the review described in paragraph (b) above the
Trustee or the applicable Custodian discovers any document or documents
constituting a part of a Mortgage File that is missing, does not appear regular
on its face (i.e., is mutilated, damaged, defaced, torn or otherwise physically
altered) or appears to be unrelated to the Mortgage Loans identified in the
Mortgage Loan Schedule (each, a "Material Defect"), the Trustee, or the
applicable Custodian on behalf of the Trustee, shall promptly identify the
Mortgage Loan to which such Material Defect relates in the Interim Certificate
delivered to the Depositor or the Master Servicer (and to the Trustee). Within
90 days of its receipt of such notice, the Depositor shall be required to cure
such Material Defect (and, in such event, the Depositor shall provide the
Trustee with an Officer's Certificate confirming that such cure has been
effected). If the Depositor does not so cure such Material Defect, it shall, if
a loss has been incurred with respect to such Mortgage Loan that would, if such
Mortgage Loan were not purchased from the Trust Fund, constitute a Realized
Loss, and such loss is attributable to the failure of the Depositor to cure such
Material Defect, repurchase the related Mortgage Loan from the Trust Fund at the
Purchase Price. A loss shall be deemed to be attributable to the failure of the
Depositor to cure a Material Defect if, as determined by the Depositor, upon
mutual agreement with the Trustee acting in good faith, absent such Material
Defect, such loss would not have been incurred. Within the two-year period
following the Closing Date, the Depositor may, in lieu of repurchasing a
Mortgage Loan pursuant to this Section 2.02, substitute for such Mortgage Loan a
Qualifying Substitute Mortgage Loan subject to the provisions of Section 2.05.
The failure of the Trustee or the applicable Custodian to give the notice
contemplated herein within 45 days after the Closing Date shall not affect or
relieve the Depositor of its obligation to repurchase any Mortgage Loan pursuant
to this Section 2.02 or any other Section of this Agreement requiring the
repurchase of Mortgage Loans from the Trust Fund.
(d) Within 180 days following the Closing Date, the Trustee, or the
applicable Custodian, shall deliver to the Trustee, the Depositor and the Master
Servicer a Final Certification substantially in the form annexed hereto as
Exhibit B-3 (or in the form annexed to the applicable Custodial Agreement as
Exhibit B-3, as applicable) evidencing the completeness of the Mortgage Files in
its possession or control, with any exceptions noted thereto.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, the Securities Administrator or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.
(f) Each of the parties hereto acknowledges that the Custodian shall
perform the applicable review of the Mortgage Loans and deliver the respective
certifications thereof as provided in this Section 2.02.
Section 2.03. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
(a) The Depositor hereby represents and warrants to the Trustee, for the
benefit of Certificateholders, to the Securities Administrator and to the Master
Servicer, as of the Closing Date or such other date as is specified, that:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power
43
and authority to own its property, to carry on its business as presently
conducted, to enter into and perform its obligations under this
Agreement, and to create the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Depositor; neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated,
nor compliance with the provisions hereof, will conflict with or result
in a breach of, or constitute a default under, any of the provisions of
any law, governmental rule, regulation, judgment, decree or order binding
on the Depositor or its properties or the certificate of incorporation or
bylaws of the Depositor;
(iii) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except
such as has been obtained, given, effected or taken prior to the date
hereof;
(iv) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee, the Securities Administrator, and the Master Servicer,
constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms except as such enforceability may
be subject to (A) applicable bankruptcy and insolvency laws and other
similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened or likely to be asserted
against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Agreement or (B) with
respect to any other matter which in the judgment of the Depositor will
be determined adversely to the Depositor and will if determined adversely
to the Depositor materially and adversely affect it or its business,
assets, operations or condition, financial or otherwise, or adversely
affect its ability to perform its obligations under this Agreement; and
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of record
and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens of
current real property taxes and assessments not yet due and payable and,
if the related Mortgaged Property is a condominium unit, any lien for
common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of the date of recording of such Mortgage acceptable to mortgage
lending institutions in the area in which the related Mortgaged Property
is located and specifically referred to in the lender's Title Insurance
Policy or
44
attorney's opinion of title and abstract of title delivered to the
originator of such Mortgage Loan, and (3) such other matters to which
like properties are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage, of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest,
and had full right and authority, subject to no interest or participation
of, or agreement with, any other party, to sell and assign each Mortgage
Loan pursuant to this Agreement.
(b) The representations and warranties of each Transferor with respect to
the related Mortgage Loans in the applicable Transfer Agreement, which have been
assigned to the Trustee hereunder, were made as of the date specified in the
applicable Transfer Agreement (or underlying agreement, if such Transfer
Agreement is in the form of an assignment of a prior agreement). To the extent
that any fact, condition or event with respect to a Mortgage Loan constitutes a
breach of both (i) a representation or warranty of the applicable Transferor
under the applicable Transfer Agreement and (ii) a representation or warranty of
_________________ or __________________________________, as applicable, under
the related Mortgage Loan Sale Agreement, the only right or remedy of the
Trustee or of any Certificateholder shall be the Trustee's right to enforce the
obligations of the applicable Transferor under any applicable representation or
warranty made by it. The Trustee acknowledges that
______________________________ or
________________________________________________, as applicable, shall have no
obligation or liability with respect to any breach of a representation or
warranty made by it with respect to the Mortgage Loans if the fact, condition or
event constituting such breach also constitutes a breach of a representation or
warranty made by the applicable Transferor in the applicable Transfer Agreement,
without regard to whether such Transferor fulfills its contractual obligations
in respect of such representation or warranty. The Trustee further acknowledges
that the Depositor shall have no obligation or liability with respect to any
breach of any representation or warranty with respect to the Mortgage Loans
(except as set forth in Section 2.03(a)(vi)) under any circumstances.
Section 2.04. DISCOVERY OF BREACH.
It is understood and agreed that the representations and warranties (i)
set forth in Section 2.03, (ii) of _________________ or of ___________________
______________________________ set forth in the related Mortgage Loan Sale
Agreement and assigned to the Trustee by the Depositor hereunder and (iii) of
each Transferor, assigned by _________________ or by
__________________________________, as applicable, to the Depositor pursuant to
the related Mortgage Loan Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement. Upon discovery by any of the Depositor,
the Securities Administrator, the Master Servicer or the Trustee of a breach of
any of such representations and warranties that adversely and materially affects
the value of the related Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties. Within 90 days of the discovery
of a breach of any representation or warranty given to the Trustee by the
Depositor, any Transferor,
__________________________________ or _________________ and assigned to the
Trustee, the Depositor, such Transferor, __________________________________ or
45
____________________, as applicable, shall either (a) cure such breach in all
material respects, (b) repurchase such Mortgage Loan or any property acquired in
respect thereof from the Trustee at the Purchase Price or (c) within the two
year period following the Closing Date, substitute a Qualifying Substitute
Mortgage Loan for the affected Mortgage Loan. In the event of discovery of a
breach of any representation and warranty of any Transferor assigned to the
Trustee, the Trustee shall enforce its rights under the applicable Transfer
Agreement and the related Mortgage Loan Sale Agreement for the benefit of
Certificateholders. As provided in each Mortgage Loan Sale Agreement, if any
Transferor substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the related Transfer Agreement which adversely
and materially affects the value of such Mortgage Loan and such substitute
mortgage loan is not a Qualifying Substitute Mortgage Loan, under the terms of
such Mortgage Loan Sale Agreement, either _________________ or _____________
_____________________________, as applicable, will, in exchange for such
Substitute Mortgage Loan, (i) provide the applicable Purchase Price for the
affected Mortgage Loan or (ii) within two years of the Closing Date, substitute
such affected Mortgage Loan with a Qualifying Substitute Mortgage Loan.
Section 2.05. REPURCHASE, PURCHASE OR SUBSTITUTION OF MORTGAGE LOANS.
(a) With respect to any Mortgage Loan repurchased by the Depositor
pursuant to this Agreement, by _________________ or _____________________
_______________________________ pursuant to the related Mortgage Loan Sale
Agreement or by any Transferor pursuant to the applicable Transfer Agreement,
the principal portion of the funds received by the Securities Administrator in
respect of such repurchase of a Mortgage Loan will be considered a Principal
Prepayment and shall be deposited in the Collection Account. The Trustee, upon
receipt by the Securities Administrator of the full amount of the Purchase Price
for a Deleted Mortgage Loan, or upon receipt of the Mortgage File for a
Qualifying Substitute Mortgage Loan substituted for a Deleted Mortgage Loan (and
any applicable Substitution Amount), shall release or cause to be released and
reassigned to the Depositor, _________________,
__________________________________ or the applicable Transferor, as applicable,
the related Mortgage File for the Deleted Mortgage Loan and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be necessary to vest in such
party or its designee or assignee title to any Deleted Mortgage Loan released
pursuant hereto, free and clear of all security interests, liens and other
encumbrances created by this Agreement, which instruments shall be prepared by
the Trustee (or the Trustee's applicable custodian), and the Trustee shall have
no further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan. Each Seller indemnifies and holds the Trust Fund, the
Trustee, the Depositor and each Certificateholder harmless against any and all
taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the Trust
Fund, the Trustee, the Depositor and any Certificateholder may sustain in
connection with any actions of the related Seller relating to a repurchase of a
Mortgage Loan other than in compliance with the terms of this Section 2.05 and
the related Mortgage Loan Sale Agreement, to the extent that any such action
causes (i) any federal or state tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(2) of the Code, or (ii) any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificate is outstanding.
46
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee (or its custodian) pursuant to the terms of this
Article II in exchange for a Deleted Mortgage Loan: (i) the Depositor, the
applicable Transferor,
__________________________________ or _________________, as applicable, must
deliver to the Trustee (or its custodian) the Mortgage File for the Qualifying
Substitute Mortgage Loan containing the documents set forth in Section 2.01(b)
along with a written certification certifying as to the delivery of such
Mortgage File and containing the granting language set forth in Section 2.01(a);
and (ii) the Depositor will be deemed to have made, with respect to such
Qualified Substitute Mortgage Loan, each of the representations and warranties
made by it with respect to the related Deleted Mortgage Loan. As soon as
practicable after the delivery of any Qualifying Substitute Mortgage Loan
hereunder, the Trustee, at the expense of the Depositor and at the direction and
with the cooperation of the applicable Servicer, shall (i) with respect to a
Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage Loan, cause the
Assignment of Mortgage to be recorded by such Servicer if required pursuant to
Section 2.01(c)(i), or (ii) with respect to a Qualifying Substitute Mortgage
Loan that is a MERS Mortgage Loan, cause to be taken such actions as are
necessary to cause the Trustee to be clearly identified as the owner of each
such Mortgage Loan on the records of MERS if required pursuant to Section
2.01(c)(ii).
(c) Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Qualifying Substitute Mortgage
Loan for a Deleted Mortgage Loan shall be made unless the Trustee has received
an Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a prohibited transaction or prohibited
contribution pursuant to the REMIC Provisions.
Section 2.06. GRANT CLAUSE.
(a) It is intended that the conveyance of the Depositor's right, title
and interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (1) the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement; (2) the Depositor hereby grants to the Trustee for the
benefit of the Holders of the Certificates a first priority security interest in
all of the Depositor's right, title and interest in, to and under, whether now
owned or hereafter acquired, the Trust Fund and all proceeds of any and all
property constituting the Trust Fund to secure payment of the Certificates; and
(3) this Agreement shall constitute a security agreement under applicable law.
If such conveyance is deemed to be in respect of a loan and the Trust created by
this Agreement terminates prior to the satisfaction of the claims of any Person
holding any Certificate, the security interest created hereby shall continue in
full force and effect and the Trustee shall be deemed to be the collateral agent
for the benefit of such Person, and all proceeds shall be distributed as herein
provided.
(b) The Depositor shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a
47
security interest in the Mortgage Loans and the other property described above,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement. The Depositor will, at its own expense, make all
initial filings on or about the Closing Date and shall forward a copy of such
filing or filings to the Trustee. Without limiting the generality of the
foregoing, the Depositor shall prepare and forward for filing, or shall cause to
be forwarded for filing, at the expense of the Depositor, all filings necessary
to maintain the effectiveness of any original filings necessary under the
relevant UCC to perfect the Trustee's security interest in or lien on the
Mortgage Loans, including without limitation (x) continuation statements, and
(y) such other statements as may be occasioned by (1) any change of name of the
Sellers, the Depositor or the Trustee, (2) any change of location of the
jurisdiction of organization of the Sellers or the Depositor, (3) any transfer
of any interest of the Sellers or the Depositor in any Mortgage Loan or (4) any
change under the relevant UCC or other applicable laws. Neither the Sellers nor
the Depositor shall organize under the law of any jurisdiction other than the
State under which each is organized as of the Closing Date (whether changing its
jurisdiction of organization or organizing under an additional jurisdiction)
without giving 30 days prior written notice of such action to its immediate and
intermediate transferee, including the Trustee. Before effecting such change,
the Sellers or the Depositor proposing to change its jurisdiction of
organization shall prepare and file in the appropriate filing office any
financing statements or other statements necessary to continue the perfection of
the interests of its immediate and mediate transferees, including the Trustee,
in the Mortgage Loans. In connection with the transactions contemplated by this
Agreement, each of the Sellers and the Depositor authorizes its immediate or
mediate transferee to file in any filing office any initial financing
statements, any amendments to financing statements, any continuation statements,
or any other statements or filings described in this paragraph (b).
ARTICLE III
THE CERTIFICATES
Section 3.01. THE CERTIFICATES.
(a) The Certificates shall be issuable in registered form only and shall
be securities governed by Article 8 of the
New York Uniform Commercial Code. The
Book-Entry Certificates will be evidenced by one or more certificates,
beneficial ownership of which will be held in the dollar denominations in
Certificate Principal Amount or Notional Principal Amount, as applicable, or in
the Percentage Interests, specified herein. Each Class of Book-Entry
Certificates shall be issued in the minimum denominations in Certificate
Principal Amount (or Notional Amount) or Percentage Interest specified in the
Preliminary Statement hereto and in integral multiples of $[___] or [___]% (in
the case of Certificates issued in Percentage Interests) in excess thereof. Each
Class of Non-Book Entry Certificates other than the Residual Certificate shall
be issued in definitive, fully registered form in the minimum denominations in
Certificate Principal Amount (or Notional Amount) specified in the Preliminary
Statement hereto and in integral multiples of $[___] in excess thereof. The
Residual Certificate shall be issued as a single Certificate and maintained in
definitive, fully registered form in a minimum denomination equal to [___]% of
the Percentage Interest of such Class. The Certificates may be issued in the
form of typewritten certificates. One Certificate of each Class of Certificates
other than any
48
Class of Residual Certificates may be issued in any denomination in excess of
the minimum denomination.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Each Certificate shall, on
original issue, be authenticated by the Trustee upon the order of the Depositor
upon receipt by the Trustee of the Mortgage Files described in Section 2.01. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification 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. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Depositor to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent shall authenticate and deliver such
Certificates as in this Agreement provided and not otherwise.
(c) The Class B_, Class E or Class P Certificates offered and sold in
reliance on the exemption from registration under Rule 144A shall be issued
initially in the form of one or more permanent global Certificates in
definitive, fully registered form without interest coupons with the applicable
legends set forth in Exhibit A added to the forms of such Certificates (each, a
"Restricted Global Security"), which, in the case of the Class B_ Certificates,
shall be deposited on behalf of the subscribers for such Certificates
represented thereby with the Securities Administrator, as custodian for DTC and
registered in the name of a nominee of DTC, duly executed and authenticated by
the Trustee as hereinafter provided. The aggregate principal amounts of the
Restricted Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee or DTC or its nominee, as the
case may be, as hereinafter provided.
The Class B_, Class E or Class P Certificates sold in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of one or more permanent global Certificates in definitive, fully registered
form without interest coupons with the applicable legends set forth in Exhibit A
hereto added to the forms of such Certificates (each, a "Regulation S Global
Security"), which, in the case of the Class B_Certificates, shall be deposited
on behalf of the subscribers for such Certificates represented thereby with the
Securities Administrator, as custodian for DTC and registered in the name of a
nominee of DTC, duly executed and authenticated by the Trustee as hereinafter
provided. The aggregate principal amounts of the Regulation S Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Securities Administrator or DTC or its nominee, as the case may
be, as hereinafter provided.
The Class B_, Class E or Class P Certificates sold to an "accredited
investor" under Rule 501(a)(1), (2), (3) or (7) under the Act shall be issued
initially in the form of one or more Definitive Certificates.
49
Section 3.02. REGISTRATION.
The Securities Administrator is hereby appointed, and hereby accepts its
appointment as, Certificate Registrar in respect of the Certificates and shall
maintain books for the registration and for the transfer of Certificates (the
"Certificate Register"). A registration book shall be maintained for the
Certificates collectively. The Certificate Registrar may resign or be discharged
or removed and a new successor may be appointed in accordance with the
procedures and requirements set forth in Sections 6.06 and 6.07 hereof with
respect to the resignation, discharge or removal of the Securities Administrator
and the appointment of a successor Securities Administrator. The Certificate
Registrar may appoint, by a written instrument delivered to the Holders and the
Master Servicer, any bank or trust company to act as co-registrar under such
conditions as the Certificate Registrar may prescribe; provided, however, that
the Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
Notwithstanding any appointment of a Certificate Registrar by the
Trustee, the Trustee shall remain obligated and liable to the Certificateholders
in accordance with the provisions of this Agreement, to the extent of the
obligations of the Certificate Registrar hereunder, without diminution of such
obligation or liability by virtue of such appointment.
Section 3.03. TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Trustee shall execute, and the
Trustee or any Authenticating Agent shall authenticate and deliver to the
transferee, one or more new Certificates of the same Class and evidencing, in
the aggregate, the same aggregate Certificate Principal Amount as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations, representing
in the aggregate the same Certificate Principal Amount as the Certificate
surrendered, upon surrender of the Certificate to be exchanged at the office of
the Certificate Registrar duly endorsed or accompanied by a written instrument
of transfer duly executed by such Holder or his duly authorized attorney in such
form as is satisfactory to the Certificate Registrar. Certificates delivered
upon any such exchange will evidence the same obligations, and will be entitled
to the same rights and privileges, as the Certificates surrendered. No service
charge shall be made to a Certificateholder for any exchange of Certificates,
but the Certificate Registrar may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
exchange of Certificates. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, and the Trustee or the Authenticating Agent
shall
50
authenticate, date and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate or a Regulation S Global
Security, whether upon original issuance or subsequent transfer, each Holder of
such a Certificate acknowledges the restrictions on the transfer of such
Certificate set forth thereon and agrees that it will transfer such a
Certificate only as provided herein. In addition, each Holder of a Regulation S
Global Security shall be deemed to have represented and warranted to the
Trustee, the Certificate Registrar and any of their respective successors that:
(i) such Person is not a U.S. person within the meaning of Regulation S and was,
at the time the buy order was originated, outside the United States and (ii)
such Person understands that such Certificates have not been registered under
the Securities Act of 1933, as amended (the "Act"), and that (x) until the
expiration of the 40-day distribution compliance period (within the meaning of
Regulation S), no offer, sale, pledge or other transfer of such Certificates or
any interest therein shall be made in the United States or to or for the account
or benefit of a U.S. person (each as defined in Regulation S), (y) if in the
future it decides to offer, resell, pledge or otherwise transfer such
Certificates, such Certificates may be offered, resold, pledged or otherwise
transferred only (A) to a person which the seller reasonably believes is a
"qualified institutional buyer" (a "QIB") as defined in Rule 144A under the Act,
that is purchasing such Certificates for its own account or for the account of a
qualified institutional buyer to which notice is given that the transfer is
being made in reliance on Rule 144A or (B) in an offshore transaction (as
defined in Regulation S) in compliance with the provisions of Regulation S, in
each case in compliance with the requirements of this Agreement; and it will
notify such transferee of the transfer restrictions specified in this Section.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor
or the Placement Agent, an affiliate (as defined in Rule 405 under the
Act) of the Depositor or the Placement Agent or (y) being made to a QIB
by a transferor that has provided the Certificate Registrar with a
certificate in the form of Exhibit F hereto; and
(ii) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the Act
by a transferor who furnishes to the Certificate Registrar a letter of
the transferee substantially in the form of Exhibit G hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person unless the Certificate
Registrar has received (A) a certificate substantially in the form of Exhibit H
(or Exhibit D-1 in the case of the Class R Certificate) hereto from such
transferee or (B) an Opinion of Counsel satisfactory to the Trustee, the
Certificate Registrar and the Depositor to the effect that the purchase and
holding of such a Certificate will not constitute or result in the assets of the
Trust Fund being deemed to be "plan assets" subject to the prohibited
transactions provisions of ERISA or Section 4975 of the Code and will not
subject the Certificate Registrar, the Trustee, the Depositor, the Master
Servicer, any
51
Servicer or the Securities Administrator to any obligation in addition to those
undertaken in the Agreement; provided, however, that the Certificate Registrar
will not require such certificate or opinion in the event that, as a result of a
change of law or otherwise, counsel satisfactory to the Trustee and the
Certificate Registrar has rendered an opinion to the effect that the purchase
and holding of an ERISA-Restricted Certificate by a Plan or a Person that is
purchasing or holding such a Certificate with the assets of a Plan will not
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code. Each Transferee of an ERISA-Restricted Certificate that is a
Book-Entry Certificate shall be deemed to have made the representations set
forth in Exhibit H. The preparation and delivery of the certificate and opinions
referred to above shall not be an expense of the Trust Fund, the Certificate
Registrar, the Trustee or the Depositor. Notwithstanding the foregoing, no
opinion or certificate shall be required for the initial issuance of the
ERISA-Restricted Certificates. Neither the Certificate Registrar nor the Trustee
shall have any obligation to monitor transfers of Book-Entry Certificates that
are ERISA-Restricted Certificates and shall have no liability for transfers of
such Certificates in violation of the transfer restrictions.
Notwithstanding anything to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate in the form of a Definitive Certificate to or
on behalf of an employee benefit plan subject to Section 406 ERISA or a plan
subject to Section 4975 of the Code without the delivery to the Certificate
Registrar and the Trustee of an Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect; provided that the restriction
set forth in this sentence shall not be applicable if there has been delivered
to the Certificate Registrar and the Trustee an Opinion of Counsel meeting the
requirements of clause (B) of the first sentence of the first paragraph of this
Section 3.03(d). Neither the Trustee nor the Certificate Registrar shall be
under any liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
3.03(d) or for making any payments due on such Certificate to the Holder thereof
or taking any other action with respect to such Holder under the provisions of
this Agreement so long as the transfer was registered in accordance with the
foregoing requirements. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any such payments so
recovered by the Securities Administrator shall be paid and delivered by the
Trustee to the last preceding Holder of such Certificate that is not such a plan
or Person acting on behalf of a plan.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified
52
Organization or (ii) an individual, corporation or partnership or other person
unless such person is (A) not a Non-U.S. Person or (B) is a Non-U.S. Person that
holds a Residual Certificate in connection with the conduct of a trade or
business within the United States and has furnished the transferor, the
Certificate Registrar and the Trustee with an effective Internal Revenue Service
Form W-8ECI or successor form at the time and in the manner required by the Code
(any such person who is not covered by clause (A) or (B) above is referred to
herein as a "Non-permitted Foreign Holder").
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Certificate Registrar and the Trustee an affidavit in
substantially the form attached hereto as Exhibit D-1 representing and
warranting, among other things, that such transferee is neither a Disqualified
Organization, an agent or nominee acting on behalf of a Disqualified
Organization, nor a Non-permitted Foreign Holder (any such transferee, a
"Permitted Transferee") and the proposed transferor shall deliver to the Trustee
an affidavit in substantially the form attached hereto as Exhibit D-2. In
addition, the Certificate Registrar or the Trustee may (but shall have no
obligation to) require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Depositor, the Certificate Registrar and the Trustee satisfactory in form and
substance to the Depositor, that such proposed transferee or, if the proposed
transferee is an agent or nominee, the proposed beneficial owner, is not a
Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder. Notwithstanding the registration in the Certificate Register of any
transfer, sale, or other disposition of a Residual Certificate to a Disqualified
Organization, an agent or nominee thereof, or Non-permitted Foreign Holder, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization, agent or nominee thereof, or Non-permitted
Foreign Holder shall not be deemed to be a Certificateholder for any purpose
hereunder, including, but not limited to, the receipt of distributions on such
Residual Certificate. Neither the Trustee nor the Certificate Registrar shall be
under any liability to any person for any registration or transfer of a Residual
Certificate to a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder or for the maturity of any payments due on such
Residual Certificate to the Holder thereof or for taking any other action with
respect to such Holder under the provisions of the Agreement, so long as the
transfer was effected in accordance with this Section 3.03(f), unless the
Certificate Registrar or the Trustee shall have actual knowledge at the time of
such transfer or the time of such payment or other action that the transferee is
a Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder. The Trustee shall be entitled to recover from any Holder of a Residual
Certificate that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate at
and after either such times (and all costs and expenses, including but not
limited to attorneys' fees, incurred in connection therewith). Any payment (not
including any such costs and expenses) so recovered by the Trustee shall be paid
and delivered to the last preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Certificate Registrar or the Trustee
that the registration of transfer of such Residual Certificate was not in fact
permitted by this Section 3.03(f), the last preceding Permitted Transferee shall
be
53
restored to all rights as Holder thereof retroactive to the date of such
registration of transfer of such Residual Certificate. Neither the Certificate
Registrar nor the Trustee shall be under any liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not permitted
by this Section 3.03(f), for making any payment due on such Certificate to the
registered Holder thereof or for taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer was
registered upon receipt of the affidavit described in the preceding paragraph of
this Section 3.03(f).
(g) Each Holder of a Residual Certificate, by such Holder's acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this section.
(h) Notwithstanding any provision to the contrary herein, so long as a
Global Security representing either of the Class B4, Class B5 or Class B6
Certificates remains outstanding and is held by or on behalf of DTC, transfers
of a Global Security representing any such Certificates, in whole or in part,
shall only be made in accordance with Section 3.01 and this Section 3.03(h).
(A) Subject to clauses (B) and (C) of this Section
3.03(h), transfers of a Global Security representing either of the
Class B4, Class B5 or Class B6 Certificates shall be limited to
transfers of such Global Security, in whole or in part, to
nominees of DTC or to a successor of DTC or such successor's
nominee.
(B) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL
SECURITY. If a holder of a beneficial interest in a Restricted
Global Security deposited with or on behalf of DTC wishes at any
time to exchange its interest in such Restricted Global Security
for an interest in a Regulation S Global Security, or to transfer
its interest in such Restricted Global Security to a Person who
wishes to take delivery thereof in the form of an interest in a
Regulation S Global Security, such holder, provided such holder is
not a U.S. person, may, subject to the rules and procedures of
DTC, exchange or cause the exchange of such interest for an
equivalent beneficial interest in the Regulation S Global
Security. Upon receipt by the Certificate Registrar, of (I)
instructions from DTC directing the Certificate Registrar, to be
credited a beneficial interest in a Regulation S Global Security
in an amount equal to the beneficial interest in such Restricted
Global Security to be exchanged but not less than the minimum
denomination applicable to such holder's Certificates held through
a Regulation S Global Security, (II) a written order given in
accordance with DTC's procedures containing information regarding
the participant account of DTC and, in the case of a transfer
pursuant to and in accordance with Regulation S, the Euroclear or
Clearstream account to be credited with such increase and (III) a
certificate in the form of Exhibit N-1 hereto given by the holder
of such beneficial interest stating that the exchange or transfer
of such interest has been made in compliance with the transfer
restrictions applicable to the Global Securities, including that
the holder is not a U.S. person, and pursuant to and in accordance
with Regulation S, the Certificate Registrar, shall reduce the
principal amount of the Restricted Global Security and increase
the principal amount of the Regulation S Global Security by the
aggregate principal amount of the beneficial interest in the
Restricted Global Security to be exchanged, and shall instruct
Euroclear or Clearstream, as applicable,
54
concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such
instructions a beneficial interest in the Regulation S Global
Security equal to the reduction in the principal amount of the
Restricted Global Security.
(C) REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL
SECURITY. If a holder of a beneficial interest in a Regulation S
Global Security deposited with or on behalf of DTC wishes at any
time to transfer its interest in such Regulation S Global Security
to a Person who wishes to take delivery thereof in the form of an
interest in a Restricted Global Security, such holder may, subject
to the rules and procedures DTC, exchange or cause the exchange of
such interest for an equivalent beneficial interest in a
Restricted Global Security. Upon receipt by the Certificate
Registrar, of (I) instructions from DTC directing the Certificate
Registrar, to cause to be credited a beneficial interest in a
Restricted Global Security in an amount equal to the beneficial
interest in such Regulation S Global Security to be exchanged but
not less than the minimum denomination applicable to such holder's
Certificates held through a Restricted Global Security, to be
exchanged, such instructions to contain information regarding the
participant account with DTC to be credited with such increase,
and (II) a certificate in the form of Exhibit N-2 hereto given by
the holder of such beneficial interest and stating, among other
things, that the Person transferring such interest in such
Regulation S Global Security reasonably believes that the Person
acquiring such interest in a Restricted Global Security is a QIB,
is obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and in accordance with any applicable
securities laws of any State of the United States or any other
jurisdiction, then the Certificate Registrar, will reduce the
principal amount of the Regulation S Global Security and increase
the principal amount of the Restricted Global Security by the
aggregate principal amount of the beneficial interest in the
Regulation S Global Security to be transferred and the Certificate
Registrar, shall instruct DTC, concurrently with such reduction,
to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
Restricted Global Security equal to the reduction in the principal
amount of the Regulation S Global Security.
(D) OTHER EXCHANGES. In the event that a Global Security
is exchanged for Certificates in definitive registered form
without interest coupons, pursuant to Section 3.09(c) hereof, such
Certificates may be exchanged for one another only in accordance
with such procedures as are substantially consistent with the
provisions above (including certification requirements intended to
insure that such transfers comply with Rule 144A, comply with Rule
501(a)(1), (2), (3) or (7) or are to non-U.S. persons in
compliance with Regulation S under the Act, as the case may be),
and as may be from time to time adopted by the Certificate
Registrar.
(E) RESTRICTIONS ON U.S. TRANSFERS. Transfers of interests
in the Regulation S Global Security to U.S. persons (as defined in
Regulation S) shall be limited to transfers made pursuant to the
provisions of Section 3.03(h)(C).
55
Section 3.04. CANCELLATION OF CERTIFICATES.
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Certificate Registrar.
Section 3.05. REPLACEMENT OF CERTIFICATES.
If (i) any Certificate is mutilated and is surrendered to the Certificate
Registrar or any Authenticating Agent or (ii) the Trustee, the Certificate
Registrar or any Authenticating Agent receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and there is delivered to the
Trustee, the Certificate Registrar or the Authenticating Agent such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Depositor and any Authenticating Agent that such
destroyed, lost or stolen Certificate has been acquired by a protected
purchaser, the Trustee shall execute and the Trustee, the Certificate Registrar
or any Authenticating Agent 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 Certificate Principal Amount. Upon the issuance of
any new Certificate under this Section 3.05, the Trustee, the Certificate
Registrar and Authenticating Agent 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,
the Certificate Registrar or the Authenticating Agent) connected therewith. Any
replacement Certificate issued pursuant to this Section 3.05 shall constitute
complete and indefeasible evidence of ownership in the applicable Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 3.06. PERSONS DEEMED OWNERS.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Securities Administrator, the Master Servicer,
the Trustee, the Certificate Registrar and any agent of any of them may treat
the Person in whose name any Certificate is registered upon the books of the
Certificate Registrar as the owner of such Certificate for the purpose of
receiving distributions pursuant to Sections 5.01 and 5.02 and for all other
purposes whatsoever, and neither the Depositor, the Securities Administrator,
the Master Servicer, the Trustee, the Certificate Registrar nor any agent of any
of them shall be affected by notice to the contrary.
Section 3.07. TEMPORARY CERTIFICATES.
(a) Pending the preparation of definitive Certificates, upon the order of
the Depositor, the Trustee shall execute and shall authenticate and deliver
temporary Certificates that are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Certificates in lieu of which they are issued and with
such variations as the authorized officers executing such Certificates may
determine, as evidenced by their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the
56
temporary Certificates shall be exchangeable for definitive Certificates upon
surrender of the temporary Certificates at the office or agency of the
Certificate Registrar without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee shall
execute and authenticate and deliver in exchange therefor a like aggregate
Certificate Principal Amount of definitive Certificates of the same Class in the
authorized denominations. Until so exchanged, the temporary Certificates shall
in all respects be entitled to the same benefits under this Agreement as
definitive Certificates of the same Class.
Section 3.08. APPOINTMENT OF PAYING AGENT.
The Trustee may appoint a Paying Agent (which may be the Trustee) for the
purpose of making distributions to Certificateholders hereunder. The Trustee
shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to the Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee. If the Paying Agent is not the Securities Administrator, the Securities
Administrator shall cause to be remitted to the Paying Agent on or before the
Business Day prior to each Distribution Date, by wire transfer in immediately
available funds, the funds to be distributed on such Distribution Date. Any
Paying Agent shall be either a bank or trust company or otherwise authorized
under law to exercise corporate trust powers. The Trustee hereby appoints the
Securities Administrator as initial Paying Agent. The Securities Administrator
hereby accepts such appointment and agrees that it shall hold all sums held by
it for the payment to Certificateholders in an Eligible Account in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to the Certificateholders.
Notwithstanding any appointment of a Paying Agent by the Trustee, the
Trustee shall remain obligated and liable to the Certificateholders in
accordance with the provisions of this Agreement, to the extent of the
obligations of the Paying Agent hereunder, without diminution of such obligation
or liability by virtue of such appointment.
Section 3.09. BOOK-ENTRY CERTIFICATES.
(a) (i) Each Class of Book-Entry Certificates, upon original
issuance, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, or its custodian, the initial Clearing Agency, by, or on behalf
of, the Depositor. The Book-Entry Certificates shall initially be registered on
the Certificate Register in the name of the nominee of the Clearing Agency, and
no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Book-Entry Certificates, except as provided
in Section 3.09(c). Unless Definitive Certificates have been issued to
Certificate Owners of Book-Entry Certificates pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full force
and effect;
57
(ii) the Depositor, the Securities Administrator, the Master
Servicer, the Paying Agent, the Certificate Registrar and the Trustee may
deal with the Clearing Agency for all purposes (including the making of
distributions on the Book-Entry Certificates) as the authorized
representatives of the Certificate Owners and the Clearing Agency shall
be responsible for crediting the amount of such distributions to the
accounts of such Persons entitled thereto, in accordance with the
Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal of and interest on the Book-Entry
Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the
Certificate Registrar shall give all such notices and communications specified
herein to be given to Holders of the Book-Entry Certificates to the Clearing
Agency.
(c) If (i) (A) the Depositor advises the Certificate Registrar in writing
that the Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Certificate Registrar or the Depositor is unable to locate a qualified
successor, (ii) the Depositor, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default, Certificate Owners
representing beneficial interests aggregating not less than 50% of the Class
Principal Amount of a Class of Book-Entry Certificates identified as such to the
Trustee by an Officer's Certificate from the Clearing Agency advise the Trustee,
the Certificate Registrar and the Clearing Agency through the Clearing Agency
Participants in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of the Certificate Owners of
a Class of Book-Entry Certificates, the Certificate Registrar shall notify the
Clearing Agency to effect notification to all Certificate Owners, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall issue the Definitive Certificates.
Neither the Certificate Registrar nor the Trustee shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Certificate Registrar, to the extent applicable, with respect
58
to such Definitive Certificates and the Trustee and the Certificate Registrar
shall recognize the holders of the Definitive Certificates as Certificateholders
hereunder.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. COLLECTION ACCOUNT.
(a) On the Closing Date, the [Master] Servicer shall open and shall
thereafter maintain a segregated account held in trust (the "Collection
Account"), entitled "[name of master servicer], as Master Servicer, in trust for
the benefit of the Holders of BancCap Asset Securitization Issuance Corporation
Mortgage Pass-Through Certificates, Series 200__-[___]." The Collection Account
shall relate solely to the Certificates issued by the Trust Fund hereunder, and
funds in such Collection Account shall not be commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an existing
Collection Account ceases to be an Eligible Account, the Master Servicer shall
establish a new Collection Account that is an Eligible Account within 30 days
and transfer all funds on deposit in such existing Collection Account into such
new Collection Account.
(c) The [Master] Servicer shall give to the Trustee and the Securities
Administrator prior written notice of the name and address of the depository
institution at which the Collection Account is maintained and the account number
of such Collection Account. On each [Master] Servicer Remittance Date, the
entire amount on deposit in the Collection Account (subject to permitted
withdrawals set forth in Section 4.02), excluding such amounts not included in
the Available Distribution Amount for such Distribution Date pursuant to clauses
A through H of paragraph (i) of the definition thereof, shall be remitted to the
Securities Administrator for deposit into the Certificate Account by wire
transfer in immediately available funds. The Master Servicer, at its option, may
choose to make daily remittances from the Collection Account to the Securities
Administrator for deposit into the Certificate Account.
(d) The [Master] Servicer shall deposit or cause to be deposited into the
Collection Account, no later than the Business Day following the Closing Date,
any amounts representing Scheduled Payments on the Mortgage Loans due after the
Cut-off Date and received by the Master Servicer on or before the Closing Date.
Thereafter, the [Master] Servicer shall deposit or cause to be deposited in the
Collection Account on the applicable Remittance Date the following amounts
received or payments made by it (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, late collections and any Prepayment Penalty Amounts with
respect to those Mortgage Loans for which the Sellers own the servicing
rights, as indicated in the Mortgage Loan Schedule, on the Mortgage
Loans;
(ii) all payments on account of interest on the Mortgage Loans
(other than payments due prior to the Cut-off Date), net of the
applicable Servicing Fee and Master Servicing Fee with respect to each
such Mortgage Loan, but only to the extent of the
59
amount permitted to be withdrawn or withheld from the Collection Account
in accordance with Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with respect to
a Mortgage Loan not otherwise specified in this paragraph (d), including
all Net Liquidation Proceeds with respect to the Mortgage Loans and REO
Property, and all amounts received in connection with the operation of
any REO Property, net of any unpaid Servicing Fees and Master Servicing
Fees with respect to such Mortgage Loans, but only to the extent of the
amount permitted to be withdrawn or withheld from the Collection Account
in accordance with Sections 5.04 and 9.21; provided that if the
applicable Servicer is also the Retained Interest Holder with respect to
any Mortgage Loan, payments on account of interest on the Mortgage Loans
as to which such Servicer is the Retained Interest Holder may also be
made net of the related Retained Interest with respect to each such
Mortgage Loan.
(iv) all Insurance Proceeds;
(v) all Advances made by the [Master] Servicer or any Servicer
pursuant to Section 5.04 or the applicable Servicing Agreement; and
(vi) all proceeds of any Mortgage Loan purchased by any Person.
(e) Funds in the Collection Account may be invested in Eligible
Investments (selected by and at the written direction of the [Master] Servicer)
which shall mature not later than the earlier of (a) the [Master] Servicer
Remittance Date or (b) the day on which the funds in such Collection Account are
required to be remitted to the Securities Administrator for deposit into the
Certificate Account, and any such Eligible Investment 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 on order from time to
time, subject to Section 5.05, and shall not be part of the Trust Fund. The
amount of any losses incurred in respect of any such investments shall be
deposited in such Collection Account by the [Master] Servicer out of its own
funds, without any right of reimbursement therefor, immediately as realized. The
foregoing requirements for deposit in the Collection Account are exclusive, it
being understood and agreed that, without limiting the generality of the
foregoing, payments of interest on funds in the Collection Account and payments
in the nature of late payment charges or assumption fees and Prepayment Penalty
Amounts with respect to those Mortgage Loans for which the Sellers do not own
the servicing rights (as indicated in the Mortgage Loan Schedule), need not be
deposited by the [Master] Servicer in the Collection Account and may be retained
by the [Master] Servicer or the applicable Servicer as additional servicing
compensation. If the [Master] Servicer deposits in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from such Collection Account.
Section 4.02. APPLICATION OF FUNDS IN THE COLLECTION ACCOUNT.
The [Master] Servicer may, from time to time, make, or cause to be made,
withdrawals from the Collection Account for the following purposes:
60
(i) to reimburse itself or any Servicer for Advances made by
it or by such Servicer pursuant to Section 5.04 or the applicable
Servicing Agreement; the [Master] Servicer's right to reimburse itself
pursuant to this subclause (i) is limited to amounts received on or in
respect of particular Mortgage Loans (including, for this purpose,
Liquidation Proceeds and amounts representing Insurance Proceeds with
respect to the property subject to the related Mortgage) which represent
late recoveries (net of the applicable Servicing Fee and the Master
Servicing Fee) of payments of principal or interest respecting which any
such Advance was made, it being understood, in the case of any such
reimbursement, that the Master Servicer's or Servicer's right thereto
shall be prior to the rights of the Certificateholders;
(ii) to reimburse itself or any Servicer for any Servicing
Advances made by it or by such Servicer that it determines in good faith
will not be recoverable from amounts representing late recoveries of
payments of principal or interest respecting the particular Mortgage Loan
as to which such Servicing Advance was made or from Liquidation Proceeds
or Insurance Proceeds with respect to such Mortgage Loan, it being
understood, in the case of any such reimbursement, that such Master
Servicer's or Servicer's right thereto shall be prior to the rights of
the Certificateholders;
(iii) to reimburse itself or any Servicer from Liquidation
Proceeds for Liquidation Expenses and for amounts expended by it pursuant
to Sections 9.20 and 9.22(a) or the applicable Servicing Agreement in
good faith in connection with the restoration of damaged property and, to
the extent that Liquidation Proceeds after such reimbursement exceed the
unpaid principal balance of the related Mortgage Loan, together with
accrued and unpaid interest thereon at the applicable Mortgage Rate less
the applicable Servicing Fee and the Master Servicing Fee for such
Mortgage Loan to the Due Date next succeeding the date of its receipt of
such Liquidation Proceeds, to pay to itself out of such excess the amount
of any unpaid assumption fees, late payment charges or other Mortgagor
charges on the related Mortgage Loan and to retain any excess remaining
thereafter as additional servicing compensation, it being understood, in
the case of any such reimbursement or payment, that such Master
Servicer's or Servicer's right thereto shall be prior to the rights of
the Certificateholders;
(iv) to reimburse itself or any Servicer for expenses incurred
by and recoverable by or reimbursable to it or such Servicer pursuant to
Section 9.04, 9.05, 9.06, 9.16 or 9.22(a) or pursuant to the applicable
Servicing Agreement, and to reimburse itself for any expenses
reimbursable to it pursuant to Section 10.01(c);
(v) to pay to the applicable Person, with respect to each
Mortgage Loan or REO Property acquired in respect thereof that has been
repurchased by such Person pursuant to this Agreement, all amounts
received thereon and not distributed on the date on which the related
repurchase was effected;
(vi) subject to Section 5.05, to pay to itself income earned on
the investment of funds deposited in the Collection Account;
61
(vii) to make payments to the Securities Administrator for
deposit into the Certificate Account in the amounts and in the manner
provided for in Section 4.04;
(viii) to make distributions of any Retained Interest to the
Retained Interest Holder on each Distribution Date (other than any
Retained Interest not deposited into the Collection Account in accordance
with Section 4.01(d)(iii));
(ix) to make payment to itself, the Trustee, Securities
Administrator and others pursuant to any provision of this Agreement;
(x) to withdraw funds deposited in error in the Collection
Account;
(xi) to clear and terminate any Collection Account pursuant to
Section 7.02;
(xii) to reimburse a successor Master Servicer (solely in its
capacity as successor Master Servicer), for any fee or advance occasioned
by a termination of the Master Servicer, and the assumption of such
duties by the Securities Administrator or a successor Master Servicer
appointed by the Trustee pursuant to Section 6.14, in each case to the
extent not reimbursed by the terminated Master Servicer, it being
understood, in the case of any such reimbursement or payment, that the
right of the Master Servicer or the Securities Administrator thereto
shall be prior to the rights of the Certificateholders; and
(xiii) to reimburse any Servicer for such amounts as are due
thereto under the applicable Servicing Agreement and have not been
retained by or paid to such Servicer to the extent provided in such
Servicing Agreement.
If provided in the related Servicing Agreement, each Servicer shall be
entitled to retain as additional servicing compensation any Prepayment Interest
Excess (to the extent not offset by Prepayment Interest Shortfalls).
In connection with withdrawals pursuant to subclauses (i), (iii), (iv)
and (vi) above, the Master Servicer's or Servicer's entitlement thereto is
limited to collections or other recoveries on the related Mortgage Loan. The
Master Servicer shall therefore keep and maintain a separate accounting for each
Mortgage Loan it master services for the purpose of justifying any withdrawal
from the Collection Account it maintains pursuant to such subclause (i), (iii),
(iv) and (vi) above.
Section 4.03. REPORTS TO CERTIFICATEHOLDERS.
(a) On each Distribution Date, the Securities Administrator shall have
prepared (based solely on information provided by the Master Servicer) and shall
make available to each Certificateholder and the Trustee a written report
setting forth the following information (on the basis of Mortgage Loan level
information obtained from the Servicers and the Master Servicer):
(i) the aggregate amount of the distribution to be made on
such Distribution Date to the Holders of each Class of Certificates,
other than any Class of Notional Certificates, and in respect to each
Component, to the extent applicable, allocable to
62
principal on the Mortgage Loans, including Liquidation Proceeds and
Insurance Proceeds, stating separately the amount attributable to
scheduled principal payments and unscheduled payments in the nature of
principal;
(ii) the aggregate amount of the distribution to be made on
such Distribution Date to the Holders of each Class of Certificates,
other than any Class of Principal Only Certificates, allocable to
interest, including any Accrual Amount added to the Class Principal
Amount of any Class of Accrual Certificates;
(iii) the amount, if any, of any distribution to the Holders of
a Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to be
made by or on behalf of the [Master] Servicer or any Servicer (or the
Securities Administrator) with respect to such Distribution Date, (B) the
aggregate amount of such Advances actually made, and (C) the amount, if
any, by which (A) above exceeds (B) above;
(v) the Aggregate Principal Balance of the Mortgage Loans and
the Non-AP Pool Balance for such Distribution Date, after giving effect
to payments allocated to principal reported under clause (i) above;
(vi) the Class Principal Amount (or Class Notional Amount) of
each Class of Certificates, to the extent applicable, as of such
Distribution Date after giving effect to payments allocated to principal
reported under clause (i) above (and to the addition of any Accrual
Amount in the case of any Class of Accrual Certificates), separately
identifying any reduction of any of the foregoing Certificate Principal
Amounts due to Realized Losses;
(vii) any Realized Losses realized with respect to the Mortgage
Loans (x) in the applicable Prepayment Period and (y) in the aggregate
since the Cut-off Date, stating separately the amount of Special Hazard
Losses, Fraud Losses and Bankruptcy Losses and the aggregate amount of
such Realized Losses, and the remaining Special Hazard Loss Amount, Fraud
Loss Amount and Bankruptcy Loss Amount;
(viii) the amount of the Master Servicing Fees, Servicing Fees
and Securities Administrator Fee paid during the Due Period to which such
distribution relates;
(ix) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Securities Administrator by the Master
Servicer, (a) remaining outstanding (b) delinquent one month, (c)
delinquent two months, (d) delinquent three or more months, and (e) as to
which foreclosure proceedings have been commenced as of the close of
business on the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs;
(x) the deemed principal balance of each REO Property as of
the close of business on the last Business Day of the calendar month
immediately preceding the month in which such Distribution Date occurs;
63
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the principal balance of
such Mortgage Loan and the number of such Mortgage Loans as of the close
of business on the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs;
(xii) with respect to substitution of Mortgage Loans in the
preceding calendar month, the Scheduled Principal Balance of each Deleted
Mortgage Loan, and of each Qualifying Substitute Mortgage Loan;
(xiii) the aggregate outstanding Interest Shortfalls and Net
Prepayment Interest Shortfalls, if any, for each Class of Certificates,
after giving effect to the distribution made on such Distribution Date;
(xiv) the Certificate Interest Rate applicable to such
Distribution Date with respect to each Class of Certificates;
(xv) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Certificateholders would have received if there were sufficient available
amounts in the Certificate Account and the amounts actually distributed);
(xvi) the amount of any Prepayment Penalty Amounts allocated to
the Class P Certificates for that Distribution Date; and
(xvii) any other "loan level" information for any Mortgage Loans
that are delinquent three or more months and any REO Property held by the
Trustee that is reported by the Master Servicer to the Trustee.
In the case of information furnished pursuant to subclauses (i), (ii)
and (vii) above, the amounts shall be expressed as a dollar amount per $[___]of
original principal amount of Certificates.
The Securities Administrator will make such report and additional loan
level information (and, at its option, any additional files containing the same
information in an alternative format) available each month to the Trustee,
Certificateholders and the Rating Agencies via the Securities Administrator's
internet website. The Securities Administrator's internet website shall
initially be located at "www._____.com". Assistance in using the website can be
obtained by calling the Securities Administrator's customer service desk at
________________. Such parties that are unable to use the website are entitled
to have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes.
The foregoing information and reports shall be prepared and determined by
the Securities Administrator based solely on Mortgage Loan data provided to the
Securities Administrator by
64
the [Master] Servicer (in a format agreed to by the Securities Administrator and
the Master Servicer) no later than 12:00 p.m.(noon) Eastern Standard Time four
Business Days prior to the Distribution Date. In preparing or furnishing the
Mortgage Loan data to the Securities Administrator, the [Master] Servicer shall
be entitled to rely conclusively on the accuracy of the information or data
regarding the Mortgage Loans and the related REO Property that has been provided
to the Master Servicer by each Servicer, and the Master Servicer shall not be
obligated to verify, recompute, reconcile or recalculate any such information or
data. The Securities Administrator shall be entitled to conclusively rely on the
Mortgage Loan data provided by the Master Servicer and shall have no liability
for any errors in such Mortgage Loan data.
On each Distribution Date, the Securities Administrator shall also
provide or make available to the Depositor a copy of the above-described written
report, to the following address: ____________, ________________________________
Attention: ______________, or to such other address as the Depositor may
designate.
(b) Upon the reasonable advance written request of any Certificateholder
that is a savings and loan, bank, insurance company, which request, if received
by the Trustee or the Certificate Registrar, will be promptly forwarded to the
[Master] Servicer, the [Master] Servicer shall provide, or cause to be provided,
(or, to the extent that such information or documentation is not required to be
provided by a Servicer under the applicable Servicing Agreement, shall use
reasonable efforts to obtain such information and documentation from such
Servicer, and provide) to such Certificateholder such reports and access to
information and documentation regarding the Mortgage Loans as such
Certificateholder may reasonably deem necessary to comply with applicable
regulations of the Office of Thrift Supervision or its successor or other
regulatory authorities with respect to investment in the Certificates; provided,
however, that the [Master] Servicer shall be entitled to be reimbursed by such
Certificateholder for such [Master] Servicer's actual expenses incurred in
providing such reports and access.
(c) Within 90 days, or such shorter period as may be required by statute
or regulation, after the end of each calendar year, the Securities Administrator
shall have prepared and shall make available to each Person who at any time
during the calendar year was a Certificateholder of record, and make available
to Certificate Owners (identified as such by the Clearing Agency) in accordance
with applicable regulations, a report summarizing the items provided to
Certificateholders pursuant to Section 4.03(a) on an annual basis as may be
required to enable such Holders to prepare their federal income tax returns.
Such information shall include the amount of original issue discount accrued on
each Class of Certificates and information regarding the expenses of the Trust
Fund. The Securities Administrator shall be deemed to have satisfied this
requirement if it forwards such information in any other format permitted by the
Code. The [Master] Servicer shall provide the Securities Administrator with such
information as is necessary for the Securities Administrator to prepare such
reports.
Section 4.04. CERTIFICATE ACCOUNT.
(a) The Securities Administrator shall establish and maintain in its
name, as trustee, a trust account (the "Certificate Account"), to be held in
trust for the benefit of the Certificateholders until disbursed pursuant to the
terms of this Agreement. The Certificate Account shall be an Eligible Account.
If the existing Certificate Account ceases to be an
65
Eligible Account, the Securities Administrator shall establish a new Certificate
Account that is an Eligible Account within 20 Business Days and transfer all
funds on deposit in such existing Certificate Account into such new Certificate
Account. The Certificate Account shall relate solely to the Certificates issued
hereunder and funds in the Certificate Account shall be held separate and apart
from and shall not be commingled with any other monies including, without
limitation, other monies of the Securities Administrator held under this
Agreement.
(b) The Securities Administrator shall cause to be deposited into the
Certificate Account on the day on which, or, if such day is not a Business Day,
the Business Day immediately following the day on which, any monies are remitted
by the Master Servicer to the Securities Administrator all such amounts. The
Securities Administrator shall make withdrawals from the Certificate Account
only for the following purposes:
(i) to withdraw amounts deposited in the Certificate Account
in error;
(ii) to pay itself any investment income earned with respect to
funds in the Certificate Account invested in Eligible Investments as set
forth in subsection (c) below, and to make payments prior to making
distributions pursuant to Section 5.02 for any expenses or other
indemnification owing to itself, the Trustee and others pursuant to any
provision of this Agreement;
(iii) to make payments of the Master Servicing Fee (to the
extent not already withheld or withdrawn from the Collection Account by
the Master Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders pursuant
to Article V; and
(v) to clear and terminate the Certificate Account pursuant to
Section 7.02.
(c) The Securities Administrator may invest, or cause to be invested,
funds held in the Certificate Account, which funds, if invested, shall be
invested in Eligible Investments (which may be obligations of the Securities
Administrator described in paragraph (viii) of the definition thereof). All such
investments must be payable on demand or mature no later than the next
Distribution Date, and shall not be sold or disposed of prior to their maturity.
All such Eligible Investments will 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 compensation for the Securities Administrator and shall be
subject to its withdrawal on order from time to time. The amount of any losses
incurred in respect of any such investments shall be paid by the Securities
Administrator for deposit in the Certificate Account out of its own funds,
without any right of reimbursement therefor, immediately as realized. Funds held
in the Certificate Account that are not invested shall be held in cash.
Section 4.05. DETERMINATION OF LIBOR.
(a) If the outstanding Certificates include any LIBOR Certificates or
consist of any LIBOR Components, then on each LIBOR Determination Date the
Securities Administrator shall determine LIBOR on the basis of the offered LIBOR
quotations of the Reference Banks as of 11:00 a.m. London time on such LIBOR
Determination Date as follows:
66
(i) If on any LIBOR Determination Date two or more of the
Reference Banks provide such offered quotations, LIBOR for the next
Accrual Period will be the arithmetic mean of such offered quotations
(rounding such arithmetic mean if necessary to the nearest five decimal
places;
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Accrual Period will be whichever is the higher of (x) LIBOR as determined
on the previous LIBOR Determination Date or (y) the Reserve Interest
Rate. The "Reserve Interest Rate" will be either (A) the rate per annum
which the Securities Administrator determines to be the arithmetic mean
(rounding such arithmetic mean if necessary to the nearest five decimal
places) of the one-month Eurodollar lending rates that
New York City
banks selected by the Depositor are quoting, on the relevant LIBOR
Determination Date, to the principal London offices of at least two
leading banks in the London interbank market or (B) in the event that the
Securities Administrator can determine no such arithmetic mean, the
lowest one-month Eurodollar lending rate that the
New York City banks
selected by the Depositor are quoting on such LIBOR Determination Date to
leading European banks; and
(iii) If on any LIBOR Determination Date the Securities
Administrator is required but is unable to determine the Reserve Interest
Rate in the manner provided in paragraph (ii) above, LIBOR for the next
Accrual Period will be LIBOR as determined on the previous LIBOR
Determination Date or, in the case of the first LIBOR Determination Date,
the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Securities Administrator and the
Securities Administrator's subsequent calculation of the Certificate Interest
Rate or Component Interest Rate (or Rates) applicable to the LIBOR Certificates
and LIBOR Components for the relevant Accrual Period, in the absence of manifest
error, will be final and binding. In all cases, the Securities Administrator may
conclusively rely on quotations of LIBOR for the Reference Banks as such
quotations appear on the display designated "LIBOR" on the Bloomberg Financial
Markets Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, England, (ii) whose
quotations appear on the "Bloomberg Screen LIBOR Index Page" (as described in
the definition of LIBOR) on the applicable LIBOR Determination Date and (iii)
which have been designated as such by the Depositor and are able and willing to
provide such quotations to the Depositor on each LIBOR Determination Date. The
Reference Banks initially shall be: Barclay's plc, Bank of Tokyo, National
Westminster Bank and Trust Company and Bankers Trust Company. If any of the
initial Reference Banks should be removed from the Bloomberg Screen LIBOR Index
Page or in any other way fail to meet the qualifications of a Reference Bank,
the Depositor shall use its best efforts to designate alternate Reference Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date
67
LIBOR would, without giving effect to this paragraph (d), be determined pursuant
to such clause (a)(iii), then the Depositor shall select an alternative interest
rate index over which the Depositor has no control that is used for determining
Eurodollar lending rates and is calculated and published (or otherwise made
available) by an independent third party, and such alternative interest rate
index shall constitute LIBOR for all purposes hereof.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. DISTRIBUTIONS GENERALLY.
(a) Subject to Section 7.01 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee or the Paying Agent shall
make distributions in accordance with this Article V. Such distributions shall
be made by check mailed to each Certificateholder's address as it appears on the
Certificate Register of the Certificate Registrar or, upon written request made
to the Paying Agent at least three Business Days prior to the related
Distribution Date to any Certificateholder by wire transfer in immediately
available funds to an account specified in the request and at the expense of
such Certificateholder; provided, however, that the final distribution in
respect of any Certificate shall be made only upon presentation and surrender of
such Certificate at the Corporate Trust Office of the Certificate Registrar.
Wire transfers will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution.
Notwithstanding such final payment of principal of any of the Certificates, each
Residual Certificate will remain outstanding until the termination of each REMIC
and the payment in full of all other amounts due with respect to the Residual
Certificate and at such time such final payment in retirement of any Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office of the Certificate Registrar. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Certificate Principal Amounts (or initial Notional
Amounts), except for amounts redeemed in respect of the Redemption Certificate
pursuant to Sections 5.06(a) and (d).
Section 5.02. DISTRIBUTIONS FROM THE CERTIFICATE ACCOUNT.
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall withdraw from the Certificate Account the Available
Distribution Amount (other than the Class E Distributable Amount), and shall
distribute such amount to the Holders of record of each Class of Certificates in
the following order of priority based on the report of the Securities
Administrator:
(i) to each Class of Senior Certificates (other than any
Principal Only Certificates), the Accrued Certificate Interest
thereon for such Distribution Date,
68
as reduced, in each case, by such Class's allocable share of any
Net Prepayment Interest Shortfalls for such Distribution Date;
provided, however, that any shortfall in available amounts shall
be allocated among the Classes of Senior Certificates in
proportion to the amount of Accrued Certificate Interest (as so
reduced) that would otherwise be distributable thereon;
(ii) to each Class of Senior Certificates (other than any
Principal Only Certificates), any Interest Shortfall for such
Distribution Date; PROVIDED, HOWEVER, that any shortfall in
available amounts shall be allocated among the Classes of Senior
Certificates in proportion to the amount of such interest (as so
reduced) that would otherwise be distributable thereon;
(iii) to the Senior Certificates, other than any Notional
Certificates, as set forth in the Senior Principal Priorities
attached as Exhibit O hereto, without regard to references to the
word "approximately";
(iv) to the Class AP Certificates, to the extent of the
remaining Available Distribution Amount, the AP Deferred Amount
for such Class and Distribution Date, until the Class and
Principal Amount thereof has been reduced to zero; provided,
however, that (A) distributions pursuant to this priority shall
not exceed the Subordinate Principal Distribution Amount for such
date; and (B) such amounts will not reduce the Class Principal
Amount of such Class; and
(v) to the Subordinate Certificates, in the following
order of priority:
(A) to the Class B_ Certificates, the Accrued Certificate
Interest thereon for such Distribution Date, as reduced by such
Class's allocable share of any Net Prepayment Interest Shortfalls
for such Distribution Date;
(B) to the Class B_ Certificates, any Interest Shortfall
for such Class on such Distribution Date; and
(C) to the Class B_ Certificates, in reduction of the
Class Principal Amount thereof, such Class's Subordinate Class
Percentage of the Subordinate Principal Distribution Amount for
such Distribution Date, except as provided in Section 5.02(c),
until the Class Principal Amount thereof has been reduced to zero.
(b) Net Prepayment Interest Shortfalls shall be allocated among the
Certificates (other than any Principal Only Certificates) PRO RATA based on the
Accrued Certificate Interest otherwise distributable thereon.
(c) (i) If on any Distribution Date the Credit Support Percentage for the
Class B_ Certificates is less than the Original Credit Support Percentage for
such Class, then, notwithstanding anything to the contrary in Section 5.02(a),
no distribution of amounts described in clauses (ii) and (iii) of the definition
of Subordinate Principal Distribution Amount will be
69
made in respect of the Class B_ Certificates on such Distribution Date. Any
amount not distributed in respect of any Class on any Distribution Date pursuant
to the immediately preceding paragraph will be allocated among the remaining
Classes of Subordinate Certificates in proportion to their respective
Certificate Principal Amounts.
(d) [Reserved]
(e) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall distribute to the Holder of the Class R Certificate any
amounts remaining in the Upper Tier REMIC for such Distribution Date after
application of all amounts described in paragraph (a) of this Section 5.02. Any
distributions pursuant to this paragraph (e) shall not reduce the Class
Principal Amount of the Class R Certificate.
(f) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall distribute to the Holders of the Class P Certificate the
Class P Distributable Amount for such date and the Class E Distributable Amount
for such date shall be distributed to the holder of the Class E Certificates.
Section 5.03. ALLOCATION OF REALIZED LOSSES.
(a) On any Distribution Date, (x) the applicable AP Percentage of the
principal portion of each Realized Loss (other than any Excess Loss) in respect
of a Mortgage Loan will be allocated to the Class AP Certificates until the
Class Principal Amount thereof has been reduced to zero; and (y) the applicable
Non-AP Percentage of the principal portion of each Realized Loss (other than any
Excess Loss) in respect of a Mortgage Loan shall be allocated in the following
order of priority:
FIRST, to the Class B_ Certificates, until the Class
Principal Amount thereof has been reduced to zero;
SECOND, to the Classes of Non-AP Senior Certificates, PRO
RATA, in accordance with their Class Principal Amounts; PROVIDED,
HOWEVER, that any Realized Loss that would otherwise be allocated
to the Class A_ Certificates will be allocated to the Class A_
Certificates until the Class Principal Amount of the Class A_
Certificates has been reduced to zero; and PROVIDED FURTHER, that
any such loss allocated to any Class of Accrual Certificates shall
be allocated (subject to Section 5.03(c)) on the basis of the
lesser of (x) the Class Principal Amount thereof immediately prior
to the applicable Distribution Date and (y) the Class Principal
Amount thereof on the Closing Date (as reduced by any Realized
Losses previously allocated thereto).
(b) With respect to any Distribution Date, the applicable Non-AP
Percentage of the principal portion of any Excess Loss in respect of a Mortgage
Loan shall be allocated, PRO RATA, to the Non-AP Senior Certificates and the
Subordinate Certificates on the basis of their respective Class Principal
Amounts; provided, that any such loss allocated to any Class of Accrual
Certificates shall be allocated (subject to Section 5.03(c)) on the basis of the
lesser of (x) the Class Principal Amount thereof immediately prior to the
applicable Distribution Date and (y) the Class Principal Amount thereof on the
Closing Date (as reduced by any Realized Losses
70
previously allocated thereto). The applicable AP Percentage of the principal
portion of an Excess Loss shall be allocated to the Class AP Certificates until
the Class Principal Amount thereof has been reduced to zero.
(c) Any Realized Losses allocated to a Class of Certificates pursuant to
Section 5.03(a) or (b) shall be allocated among the Certificates of such Class
in proportion to their respective Certificate Principal Amounts. Any allocation
of Realized Losses pursuant to this paragraph (c) shall be accomplished by
reducing the Certificate Principal Amount of the related Certificates on the
related Distribution Date in accordance with Section 5.03(d).
(d) Realized Losses allocated in accordance with this Section 5.03 shall
be allocated on the Distribution Date in the month following the month in which
such loss was incurred and, in the case of the principal portion thereof, after
giving effect to distributions made on such Distribution Date, except that the
aggregate amount of Realized Losses to be allocated to the Principal Only
Certificates on such Distribution Date will be taken into account in determining
distributions in respect of any related AP Deferred Amount for such date.
(e) On each Distribution Date, the Subordinate Certificate Writedown
Amount for such date shall effect a corresponding reduction in the Certificate
Principal Amount of the lowest ranking Class of outstanding Subordinate
Certificates, which reduction shall occur on such Distribution Date after giving
effect to distributions made on such Distribution Date.
(f) In the event that there is a recovery of an amount in respect of
principal of a Mortgage Loan, which amount had previously been allocated as a
Realized Loss to one or more Classes of Certificates, each outstanding Class to
which any portion of such Realized Loss had previously been allocated shall be
entitled to receive, on the Distribution Date in the month following the month
in which such recovery is received, its PRO RATA share (based on the Class
Principal Amount thereof) of such recovery, up to the amount of the portion of
such Realized Loss previously allocated to such Class. In the event that the
total amount of such recovery exceeds the amount of Realized Loss allocated to
the outstanding Classes in accordance with the preceding provisions, each
outstanding Class of Certificates shall be entitled to receive its PRO RATA
share of the amount of such excess, up to the amount of any unrecovered Realized
Loss previously allocated to such Class. Any such recovery allocated to a Class
of Certificates shall not further reduce the Certificate Principal Amount of
such Certificate. Any such amounts not otherwise allocated to any Class of
Certificates pursuant to this subsection shall be treated as Principal
Prepayments for purposes of this Agreement.
Section 5.04. ADVANCES BY [MASTER] SERVICER AND THE SECURITIES
ADMINISTRATOR.
(a) Advances shall be made in respect of each [Master] Servicer
Remittance Date as provided herein. If, on any Determination Date, the [Master]
Servicer determines that any Scheduled Payments due during the related Due
Period (other than Balloon Payments) have not been received, the [Master]
Servicer shall, or cause the applicable Servicer to, advance such amount, less
an amount, if any, to be set forth in an Officer's Certificate to be delivered
to the Securities Administrator on such Determination Date, which if advanced
the [Master] Servicer or the applicable Servicer has determined would not be
recoverable from amounts received with respect to such Mortgage Loan, including
late payments, Liquidation Proceeds, Insurance
71
Proceeds or otherwise. If the [Master] Servicer determines that an Advance is
required, it shall on the [Master] Servicer Remittance Date immediately
following such Determination Date either (i) remit to the Securities
Administrator from its own funds (or funds advanced by the applicable Servicer)
for deposit in the Certificate Account immediately available funds in an amount
equal to such Advance, (ii) cause to be made an appropriate entry in the records
of the Collection Account that funds in such account being held for future
distribution or withdrawal have been, as permitted by this Section 5.04, used by
the [Master] Servicer to make such Advance, and remit such immediately available
funds to the Securities Administrator for deposit in the Certificate Account or
(iii) make Advances in the form of any combination of clauses (i) and (ii)
aggregating the amount of such Advance. Any funds being held in the Collection
Account for future distribution to Certificateholders and so used shall be
replaced by the [Master] Servicer from its own funds by remittance to the
Securities Administrator for deposit in the Certificate Account on or before any
future [Master] Servicer Remittance Date to the extent that funds in the
Certificate Account on such [Master] Servicer Remittance Date shall be less than
payments to Certificateholders required to be made on the related Distribution
Date. The [Master] Servicer and each Servicer shall be entitled to be reimbursed
from the Collection Account for all Advances made by it as provided in Section
4.02.
(b) In the event that the [Master] Servicer fails for any reason to make
an Advance required to be made pursuant to this Section 5.04, the Securities
Administrator, as successor [Master] Servicer pursuant to Section 6.14, shall,
on or before the related Distribution Date, deposit in the Certificate Account
an amount equal to the excess of (a) Advances required to be made by the
[Master] Servicer that would have been deposited in such Certificate Account
over (b) the amount of any Advance made by the [Master] Servicer and Servicers
with respect to such Distribution Date; provided, however, that the Securities
Administrator shall be required to make such Advance only if it is not
prohibited by law from doing so and it has determined that such Advance would be
recoverable from amounts to be received with respect to such Mortgage Loan,
including late payments, Liquidation Proceeds, Insurance Proceeds, or otherwise.
The Securities Administrator shall be entitled to be reimbursed from the
Certificate Account for Advances made by it pursuant to this Section 5.04 as if
it were the [Master] Servicer.
Section 5.05. COMPENSATING INTEREST PAYMENTS.
The amount of the Master Servicing Fee payable to the Master Servicer in
respect of any Distribution Date shall be reduced by the amount of any
Compensating Interest Payment for such Distribution Date, but only to the extent
such Compensating Interest Payment is not actually made by a Servicer on the
applicable Remittance Date. Such amount shall not be treated as an Advance and
shall not be reimbursable to the Master Servicer.
72
ARTICLE VI
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR;
EVENTS OF DEFAULT
Section 6.01. DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
(a) The Trustee, except during the continuance of an Event of Default (of
which a Responsible Officer of the Trustee shall have actual knowledge), and the
Securities Administrator (including in its capacities as Certificate Registrar,
Paying Agent and Authenticating Agent) undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. The parties
hereto hereby acknowledge and agree that all references in this Article VI to
the Securities Administrator shall be deemed to include the Securities
Administrator when acting in its capacities as Certificate Registrar, Paying
Agent and Authenticating Agent. Any permissive right of the Trustee or the
Securities Administrator provided for in this Agreement shall not be construed
as a duty of the Trustee or the Securities Administrator. If an Event of Default
(of which a Responsible Officer of the Trustee or the Securities Administrator
shall have actual knowledge) has occurred and has not otherwise been cured or
waived, the Trustee or the Securities Administrator 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 Person would exercise or use under the
circumstances in the conduct of such Person's own affairs unless the Trustee or
the Securities Administrator is acting as Master Servicer, in which case it
shall use the same degree of care and skill as the Master Servicer hereunder.
(b) Each of the Trustee and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Trustee or the Securities Administrator
which are specifically required to be furnished pursuant to any provision of
this Agreement, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer, to the Trustee or the
Securities Administrator, as applicable, pursuant to this Agreement, and neither
the Trustee nor the Securities Administrator shall be required to recalculate or
verify any numerical information furnished to the Trustee or the Securities
Administrator pursuant to this Agreement.
(c) Neither the Trustee nor the Securities Administrator shall have any
liability arising out of or in connection with this Agreement, except for its
negligence or willful misconduct. No provision of this Agreement shall be
construed to relieve the Trustee or the Securities Administrator from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct; provided, however, that:
(i) Neither the Trustee nor the Securities Administrator shall
be personally liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the consent or
direction of Holders of Certificates as provided in Section 6.19 hereof;
73
(ii) For all purposes under this Agreement, the Trustee shall
not be deemed to have notice of any Event of Default (other than
resulting from a failure by the Master Servicer (i) to remit funds (or to
make Advances) or (ii) to furnish information to the Trustee when
required to do so) unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office,
and such notice references the Holders of the Certificates and this
Agreement;
(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of Default
(other than resulting from a failure by the Master Servicer to furnish
information to the Securities Administrator when required to do so)
unless a Responsible Officer of the Securities Administrator has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Securities Administrator at the address
provided in Section 11.07, and such notice references the Holders of the
Certificates and this Agreement; and
(iv) No provision of this Agreement shall require the Trustee
or the Securities Administrator to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities
Administrator to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer under this Agreement
except, with respect to the Securities Administrator, during such time,
if any, as the Securities Administrator shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall use its best efforts to remit to the Master Servicer upon
receipt any such complaint, claim, demand, notice or other document (i) which is
delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real property
to which such document relates is a Mortgaged Property.
(e) Neither the Trustee nor the Securities Administrator shall 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
of any Class holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than [___]% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or the
Securities Administrator, as applicable, or exercising any trust or power
conferred upon the Trustee or the Securities Administrator, as applicable, under
this Agreement.
(f) The Trustee shall not be held liable by reason of any insufficiency
in any account (including without limitation the Collection Account) held by or
on behalf of the Trustee
74
resulting from any investment loss on any Eligible Investment included therein
(except to the extent that the Trustee is the obligor and has defaulted
thereon).
(g) Except as otherwise provided herein, neither the Securities
Administrator nor the Trustee shall have any duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any re-recording, re-filing or re-depositing of any thereof,
(B) to see to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Collection Account or the Certificate
Account, or (D) to confirm or verify the contents of any reports or certificates
of the Master Servicer delivered to the Trustee or the Securities Administrator
pursuant to this Agreement believed by the Trustee or the Securities
Administrator , as applicable, to be genuine and to have been signed or
presented by the proper party or parties.
(h) Neither the Securities Administrator nor the Trustee shall be liable
in its individual capacity for an error of judgment made in good faith by a
Responsible Officer or other officers of the Trustee or the Securities
Administrator, as applicable, unless it shall be proved that the Trustee or the
Securities Administrator, as applicable, was negligent in ascertaining the
pertinent facts.
(i) Notwithstanding anything in this Agreement to the contrary, neither
the Securities Administrator nor the Trustee shall be liable for special,
indirect or consequential losses or damages of any kind whatsoever (including,
but not limited to, lost profits), even if the Trustee or the Securities
Administrator, as applicable, has been advised of the likelihood of such loss or
damage and regardless of the form of action.
(j) Neither the Securities Administrator nor the Trustee shall be
responsible for the acts or omissions of the other, it being understood that
this Agreement shall not be construed to render them agents of one another.
Section 6.02. CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be protected in acting or refraining from
acting upon any resolution, Officer's Certificate, certificate of
auditors, Opinion of Counsel or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
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) Each of the Trustee and the Securities Administrator may
consult with counsel and any advice of its counsel or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
75
(iii) Neither the Trustee nor the Securities Administrator shall
be personally liable for any action taken, suffered or omitted by it in
good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, neither the Trustee nor the Securities Administrator shall 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
(provided the same appears regular on its face), unless requested in
writing to do so by Holders of at least a majority in Class Principal
Amount (or Class Notional Amount) of each Class of Certificates;
provided, however, that, if the payment within a reasonable time to the
Trustee or the Securities Administrator, as applicable, of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Securities
Administrator, as applicable, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
or the Securities Administrator, as applicable, may require reasonable
indemnity against such expense or liability or payment of such estimated
expenses as a condition to proceeding. The reasonable expense thereof
shall be paid by the Holders requesting such investigation;
(v) Each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians, or
attorneys, which agents, custodians or attorneys shall have any and all
of the rights, powers, duties and obligations of the Trustee and the
Securities Administrator conferred on them by such appointment provided
that each of the Trustee and the Securities Administrator shall continue
to be responsible for its duties and obligations hereunder to the extent
provided herein, and provided further that neither the Trustee nor the
Securities Administrator shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with due
care by the Trustee or the Securities Administrator, as applicable;
(vi) Neither the Trustee nor the Securities Administrator shall
be under any obligation to exercise any of the trusts or powers vested in
it by this Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto, in each case at the request, order or
direction of any of the Certificateholders pursuant to the provisions of
this Agreement, unless such Certificateholders shall have offered to the
Trustee or the Securities Administrator, as applicable, reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby;
(vii) The right of the Trustee and the Securities Administrator
to perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or
willful misconduct in the performance of such act; and
76
(viii) Neither the Trustee nor the Securities Administrator shall
be required to give any bond or surety in respect of the execution of the
Trust Fund created hereby or the powers granted hereunder.
Section 6.03. TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES.
The Trustee and the Securities Administrator make no representations as
to the validity or sufficiency of this Agreement or of the Certificates (other
than the certificate of authentication on the Certificates) or of any Mortgage
Loan, or related document save that each of the Trustee and the Securities
Administrator represents that, assuming due execution and delivery by the other
parties hereto, this Agreement has been duly authorized, executed and delivered
by it and constitutes its valid and binding obligation, enforceable against it
in accordance with its terms except that such enforceability may be subject to
(A) applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally, and (B) general principles
of equity regardless of whether such enforcement is considered in a proceeding
in equity or at law. The Trustee and the Securities Administrator shall not be
accountable for the use or application by the Depositor of funds paid to the
Depositor in consideration of the assignment of the Mortgage Loans to the Trust
Fund by the Depositor or for the use or application of any funds deposited into
the Collection Account, the Certificate Account, any Escrow Account or any other
fund or account maintained with respect to the Certificates. The Trustee and the
Securities Administrator shall not be responsible for the legality or validity
of this Agreement or the validity, priority, perfection or sufficiency of the
security for the Certificates issued or intended to be issued hereunder. Except
as otherwise provided herein, the Trustee and the Securities Administrator shall
have no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement.
Section 6.04. TRUSTEE AND THE SECURITIES ADMINISTRATOR MAY OWN
CERTIFICATES.
The Trustee, the Securities Administrator and any Affiliate or agent of
the Trustee or Securities Administrator in its individual or any other capacity
may become the owner or pledgee of Certificates and may transact banking and
trust with the other parties hereto with the same rights it would have if it
were not Trustee, Securities Administrator or such agent.
Section 6.05. ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR.
Each of the Trustee and the Securities Administrator hereunder shall at
all times be (i) an institution insured by the FDIC and (ii) a corporation or
national banking association, organized and doing business under the laws of any
State or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of not less than
$__________ and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time either the Trustee or the
77
Securities Administrator shall cease to be eligible in accordance with
provisions of this Section, the Trustee or the Securities Administrator, as
applicable, shall resign immediately in the manner and with the effect specified
in Section 6.06.
Section 6.06. RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.
(a) Each of the Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Trustee or the Securities Administrator, as applicable, the
Depositor and the Master Servicer. Upon receiving such notice of resignation,
the Depositor will promptly appoint a successor trustee or successor Securities
Administrator, as applicable, by written instrument, one copy of which
instrument shall be delivered to the resigning Trustee or resigning Securities
Administrator, as applicable, and one copy to the successor trustee or successor
securities administrator, as applicable, one copy to the Master Servicer. If no
successor trustee or successor Securities Administrator, as applicable, shall
have been so appointed and shall have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee or resigning
Securities Administrator, as applicable, may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) either the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 6.05 and
shall fail to resign after written request therefor by the Depositor, (ii) the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of either of their property shall be appointed, or
any public officer shall take charge or control of the Trustee or the Securities
Administrator or of either of their property or affairs for the purpose of
rehabilitation, conservation or liquidation, (iii) a tax is imposed or
threatened with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund held by the Trustee is located, or (iv) the continued use of the
Trustee or the Securities Administrator would result in a downgrading of the
rating by the Rating Agencies of any Class of Certificates with a rating, then
the Depositor shall remove the Trustee or the Securities Administrator, as
applicable, and appoint a successor trustee or successor Securities
Administrator, as applicable, by written instrument, one copy of which
instrument shall be delivered to the Trustee or Securities Administrator, as
applicable, so removed, one copy to the successor trustee or the successor
Securities Administrator, as applicable, and one copy to the Master Servicer.
(c) The Holders of more than [___]% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee, the Securities Administrator and the
Depositor remove the Trustee or the Securities Administrator by such written
instrument, signed by such Holders or their attorney-in-fact duly authorized,
one copy of which instrument shall be delivered to the Depositor, one copy to
the Trustee or Securities Administrator, as applicable, so removed, and one copy
to the Master Servicer; the Depositor shall thereupon use its best efforts to
appoint a mutually acceptable successor trustee or successor securities
administrator, as applicable, in accordance with this Section.
78
(d) Any resignation or removal of the Trustee or Securities Administrator
and appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor trustee or the successor securities
administrator, as applicable, as provided in Section 6.07.
Section 6.07. SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR.
(a) Any successor trustee or successor securities administrator appointed
as provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer and to its predecessor trustee or predecessor
securities administrator, as applicable, an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee or predecessor securities administrator, as applicable,
shall become effective and such successor trustee or successor securities
administrator, as applicable, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee or
securities administrator, as applicable, herein. The predecessor trustee or
predecessor securities administrator, as applicable, shall deliver to the
successor trustee (or assign to the Trustee its interest under each Custodial
Agreement, to the extent permitted thereunder) or securities administrator, as
applicable, all Mortgage Files and documents and statements related to each
Mortgage Files held by it hereunder, and shall duly assign, transfer, deliver
and pay over to the successor trustee the entire Trust Fund, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the record or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged from
all duties and responsibilities under this Agreement. In addition, the Master
Servicer and the predecessor trustee or predecessor securities administrator, as
applicable, shall execute and deliver such other instruments and do such other
things as may reasonably be required to more fully and certainly vest and
confirm in the successor trustee or securities administrator, as applicable all
such rights, powers, duties and obligations.
(b) No successor trustee or securities administrator, as applicable,
shall accept appointment as provided in this Section unless at the time of such
appointment such successor trustee or securities administrator, as applicable,
shall be eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee or successor
securities administrator, as applicable, as provided in this Section, the Master
Servicer shall mail notice of the succession of such trustee or securities
administrator, as applicable, hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to the Rating Agencies. The
expenses of such mailing shall be borne by the Master Servicer.
Section 6.08. MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.
Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons
79
succeeding to the business of the Trustee or the Securities Administrator, shall
be the successor to the Trustee or the Securities Administrator 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 that such Person shall be eligible under the provisions of Section
6.05.
Section 6.09. APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE OR CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of the
Class Principal Amount (or Class Notional Amount) of each Class of Certificates
shall each have the power from time to time to appoint one or more Persons to
act either as co-trustees jointly with the Trustee, or as separate trustees, or
as custodians, for the purpose of holding title to, foreclosing or otherwise
taking action with respect to any Mortgage Loan outside the state where the
Trustee has its principal place of business where such separate trustee or
co-trustee is necessary or advisable (or the Trustee has been advised by the
Master Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a property securing a Mortgage
Loan is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a property securing
a Mortgage Loan is located or in any state in which any portion of the Trust
Fund is located. The separate Trustees, co-trustees, or custodians so appointed
shall be trustees or custodians for the benefit of all the Certificateholders
and shall have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee. The
obligation of the Trustee to make Advances pursuant to Section 5.04 and 6.14
hereof shall not be affected or assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon
the Trustee in respect of the receipt, custody and payment of moneys
shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee,
co-trustee, or custodian jointly, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations,
including the holding of title to the Trust Fund or any portion thereof
in any such jurisdiction, shall be exercised and performed by such
separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally
liable by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee or the Certificateholders evidencing more than
50% of the Aggregate Voting Interests of the Certificates may at any time
accept the resignation of
80
or remove any separate trustee, co-trustee or custodian, so appointed by
it or them, if such resignation or removal does not violate the other
terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee, co-trustee or custodian shall refer to this Agreement and the
conditions of this Article VI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. The Trustee shall not
be responsible for any action or inaction of any separate trustee, co-trustee or
custodian. If any separate trustee, co-trustee or custodian 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.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to Certificateholders of the appointment shall be
required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the extent
necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee (or the Securities Administrator, on behalf of the
Trustee) shall pay the reasonable compensation of the co-trustees to the extent,
and in accordance with the standards specified in Section 6.12 hereof and shall
be entitled to be reimbursed from the Trust Fund for such expense.
Section 6.10. AUTHENTICATING AGENTS.
(a) The Trustee may appoint one or more Authenticating Agents which shall
be authorized to act on behalf of the Trustee in authenticating Certificates.
Wherever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication 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 must be a
corporation organized and doing business under the laws of the United States of
America or of any state, having a combined capital and surplus of at least
$__________, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities. The Trustee hereby
appoints the Securities Administrator to act as initial Authenticating Agent,
and the Securities Administrator hereby accepts such appointment.
81
Notwithstanding any appointment of an Authenticating Agent by the
Trustee, the Trustee shall remain obligated and liable to the Certificateholders
in accordance with the provisions of this Agreement, to the extent of the
obligations of the Authenticating Agent hereunder, without diminution of such
obligation or liability by virtue of such appointment.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and, if paid by the Trustee
(or the Securities Administrator, on behalf of the Trustee), it shall be a
reimbursable expense from the Trust Fund. The Securities Administrator shall not
be additionally compensated for its duties as Authenticating Agent.
Section 6.11. INDEMNIFICATION OF TRUSTEE AND SECURITIES ADMINISTRATOR.
The Trustee and the Securities Administrator and their respective
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense incurred in connection
with any legal proceeding or incurred without negligence or willful misconduct
on their part, arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder or in connection with the
performance of their duties hereunder, including any applicable fees and
expenses payable pursuant to Section 6.12 and the costs and expenses of
defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee or the
Securities Administrator, as applicable, shall have given the Depositor,
the Master Servicer and the Holders written notice thereof promptly after
the Trustee or the Securities Administrator, as applicable, shall have
knowledge thereof; provided that failure to so notify shall not relieve
the Trust Fund of the obligation to indemnify the Trustee or the
Securities Administrator;
82
(ii) while maintaining control over its own defense, the
Trustee or the Securities Administrator, as applicable, shall cooperate
and consult fully with the Depositor in preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section
6.11, the Trust Fund shall not be liable for settlement of any such claim
by the Trustee or the Securities Administrator, as applicable, entered
into without the prior consent of the Depositor, which consent shall not
be unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee or the Securities
Administrator, as applicable, and shall be construed to include, but not be
limited to any loss, liability or expense under any environmental law.
Section 6.12. FEES AND EXPENSES OF SECURITIES ADMINISTRATOR, CUSTODIAN
AND TRUSTEE.
The Securities Administrator shall be entitled to (a) the Securities
Administrator Fee, and is authorized to pay itself the amount of income or gain
earned from the investment of funds in the Certificate Account and (b) payment
of reimbursement from the Trust Fund for all expenses, disbursements and
advances incurred or made by the Securities Administrator (including fees and
expenses of its counsel and all persons not regularly in its employment and any
amounts described in Section 10.01 to which the Securities Administrator is
entitled as provided therein), except for expenses, disbursements and advances
incurred by the Securities Administrator in the routine administration of its
duties hereunder and any such expenses disbursements or advances arising from
its negligence, bad faith or willful misconduct. The Trustee shall be entitled
to the Trustee Fee. The Custodian shall be compensated as separately agreed with
the Depositor.
Section 6.13. COLLECTION OF MONIES.
Except as otherwise expressly provided in this Agreement, the Trustee may
demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement. The Securities Administrator shall hold all such money and property
received by it as part of the Trust Fund and shall distribute it as provided in
this Agreement. If the Securities Administrator shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Securities Administrator shall request the Master Servicer to make
such distribution as promptly as practicable or legally permitted. If the
Securities Administrator shall subsequently receive any such amount, it may
withdraw such request.
Section 6.14. EVENTS OF DEFAULT; TRUSTEE TO ACT; APPOINTMENT OF
SUCCESSOR.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default":
(i) Any failure by the [Master] Servicer to furnish the
Securities Administrator the Mortgage Loan data sufficient to prepare the
reports described in Section 4.03(a) which continues unremedied for a
period of one Business Day after the date upon which written notice of
such failure shall have been given to such [Master]
83
Servicer by the Trustee or the Securities Administrator or to such
[Master] Servicer, the Securities Administrator and the Trustee by the
Holders of not less than 25% of the Class Principal Amount (or Class
Notional Amount) of each Class of Certificates affected thereby; or
(ii) Any failure on the part of the [Master] Servicer duly to
observe or perform in any material respect any other of the covenants or
agreements on the part of such [Master] Servicer contained in this
Agreement (other than its obligation to remit funds to the Securities
Administrator) which continues unremedied for a period of 30 days (or 15
days, in the case of a failure to maintain any Insurance Policy required
to be maintained pursuant to this Agreement) after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to such [Master] Servicer by the Trustee or the
Securities Administrator, or to such [Master] Servicer, the Securities
Administrator and the Trustee by the Holders of not less than 25% of the
Class Principal Amount (or Class Notional Amount) of each Class of
Certificates affected thereby; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction 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 any Rating
Agency reduces or withdraws or threatens to reduce or withdraw the rating
of the Certificates because of the financial condition or loan servicing
capability of such [Master] Servicer; or
(iv) The [Master] Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to such [Master] Servicer or of or
relating to all or substantially all of its property; or
(v) The [Master] Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The [Master] Servicer shall be dissolved, or shall dispose
of all or substantially all of its assets, or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the criteria
for a successor servicer as specified in Section 9.27 hereof; or
(vii) If a representation or warranty set forth in Section 9.14
hereof shall prove to be incorrect as of the time made in any respect
that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of which
such representation or warranty was incorrect shall not have been
eliminated or cured within 60 days after the date on which written notice
of such incorrect representation or warranty shall have been given to the
[Master] Servicer by the Trustee or the Securities
84
Administrator, or to the [Master] Servicer, the Securities Administrator
and the Trustee by the Holders of not less than 25% of the Aggregate
Certificate Principal Amount of each Class of Certificates; or
(viii) A sale or pledge of the any of the rights of the [Master]
Servicer hereunder or an assignment of this Agreement by the [Master]
Servicer or a delegation of the rights or duties of the [Master] Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Trustee and
Certificateholders holding more than 50% of the Class Principal Amount
(or Class Notional Amount) of each Class of Certificates; or
(ix) Any Servicer at any time is not either an _____________-
approved Seller/Servicer, and the Master Servicer has not terminated the
rights and obligations of such Servicer under the applicable Servicing
Agreement and replaced such Servicer with an _____________-approved
servicer within 30 days of the absence of such approval; or
(x) Any failure of the [Master] Servicer to remit to the
Securities Administrator any payment required to be made to the
Securities Administrator for the benefit of Certificateholders under the
terms of this Agreement, including any Advance, on any [Master] Servicer
Remittance Date.
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the [Master] Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates, terminate all of the
rights and obligations of the [Master] Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. If an Event of Default described in
clause (x) of this Section 6.14 shall occur, then, in each and every case,
subject to applicable law, the Trustee, by notice in writing to the [Master]
Servicer, shall promptly terminate all of the rights and obligations of the
[Master] Servicer hereunder 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 of the [Master] Servicer, and only in its
capacity as Master Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Securities
Administrator and upon receipt of written notice by the Securities Administrator
from the Trustee pursuant to and under the terms of this Agreement; and the
Securities Administrator is hereby authorized and empowered to execute and
deliver, on behalf of the defaulting [Master] Servicer as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents or otherwise. The
defaulting [Master] Servicer agrees to cooperate with the Trustee and the
Securities Administrator in effecting the termination of the defaulting [Master]
Servicer's responsibilities and rights hereunder as [Master] Servicer including,
without limitation, notifying Servicers of the assignment of the master
servicing function and providing the Securities Administrator or its designee
all documents and records in electronic or other form reasonably requested by it
to enable the Securities Administrator or its designee to assume the
85
defaulting [Master] Servicer's functions hereunder and the transfer to the
Securities Administrator for administration by it of all amounts which shall at
the time be or should have been deposited by the defaulting [Master] Servicer in
the Collection Account maintained by such defaulting [Master] Servicer and any
other account or fund maintained with respect to the Certificates or thereafter
received with respect to the Mortgage Loans. The [Master] Servicer being
terminated shall bear all costs of a master servicing transfer, including but
not limited to those of the Trustee or Securities Administration reasonably
allocable to specific employees and overhead, legal fees and expenses,
accounting and financial consulting fees and expenses, and costs of amending the
Agreement, if necessary.
Notwithstanding the termination of its activities as [Master] Servicer,
each terminated [Master] Servicer shall continue to be entitled to reimbursement
to the extent provided in Section 4.02(i), (ii), (iii), (iv), (v), (vi), (vii),
(ix) and (xi) to the extent such reimbursement relates to the period prior to
such [Master] Servicer's termination.
If any Event of Default shall occur, the Trustee, upon becoming aware of
the occurrence thereof through the proper execution of its duties under this
Agreement, shall promptly notify the Securities Administrator and the Rating
Agencies of the nature and extent of such Event of Default. The Trustee (or the
Securities Administrator on its behalf) shall immediately give written notice to
the [Master] Servicer upon such [Master] Servicer's failure to remit funds on
the [Master] Servicer Remittance Date.
(b) On and after the time the [Master] Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee receives
the resignation of the [Master] Servicer evidenced by an Opinion of Counsel
pursuant to Section 9.28 and within a period of time not to exceed 90 days after
the Securities Administrator receives written notice from the Trustee pursuant
to Section 6.14(a) or Section 9.28, the Securities Administrator, unless another
master servicer shall have been appointed, shall be the successor in all
respects to the [Master] Servicer in its capacity as such under this Agreement
and the transactions set forth or provided for herein and shall have all the
rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the [Master]
Servicer hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the [Master] Servicer's or the Trustee's failure to provide information required
by this Agreement shall not be considered a default by the Securities
Administrator hereunder. In addition, the Securities Administrator shall have no
responsibility for any act or omission of the [Master] Servicer prior to the
issuance of any notice of termination and within a period of time not to exceed
90 days after the Securities Administrator receives written notice from the
Trustee pursuant to Section 6.14(a) or Section 9.28, as applicable. The
Securities Administrator shall have no liability relating to the representations
and warranties of the [Master] Servicer set forth in Section 9.14. In the
Securities Administrator's capacity as such successor, the Securities
Administrator shall have the same limitations on liability herein granted to the
[Master] Servicer. As compensation therefor, the Securities Administrator shall
be entitled to receive all compensation payable to the [Master] Servicer under
this Agreement, including the [Master] Servicing Fee.
(c) Notwithstanding the above, the Securities Administrator may, if it
shall be unwilling to continue to so act, or shall, if it is unable to so act,
request the Trustee to appoint, petition a
86
court of competent jurisdiction to appoint, or appoint on its own behalf any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less than
$__________ and meeting such other standards for a successor master servicer as
are set forth in this Agreement, as the successor to such [Master] Servicer in
the assumption of all of the responsibilities, duties or liabilities of a master
servicer, like the [Master] Servicer. Any entity designated by the Trustee or
the Securities Administrator as a successor master servicer may be an Affiliate
of the Trustee or the Securities Administrator; provided, however, that, unless
such Affiliate meets the net worth requirements and other standards set forth
herein for a successor master servicer, the Trustee or the Securities
Administrator, in its individual capacity shall agree, at the time of such
designation, to be and remain liable to the Trust Fund for such Affiliate's
actions and omissions in performing its duties hereunder. In connection with
such appointment and assumption, the Trustee or the Securities Administrator 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 to the [Master] Servicer
hereunder. The Trustee, the Securities Administrator and such successor shall
take such actions, consistent with this Agreement, as shall be necessary to
effectuate any such succession and may make other arrangements with respect to
the servicing to be conducted hereunder which are not inconsistent herewith. The
[Master] Servicer shall cooperate with the Trustee, the Securities Administrator
and any successor master servicer in effecting the termination of the [Master]
Servicer's responsibilities and rights hereunder including, without limitation,
notifying Mortgagors of the assignment of the master servicing functions and
providing the Trustee, the Securities Administrator and successor master
servicer, as applicable, all documents and records in electronic or other form
reasonably requested by it to enable it to assume the [Master] Servicer's
functions hereunder and the transfer to the Trustee, the Securities
Administrator or such successor master servicer, as applicable, all amounts
which shall at the time be or should have been deposited by the [Master]
Servicer in the Collection Account and any other account or fund maintained with
respect to the Certificates or thereafter be received with respect to the
Mortgage Loans. Neither the Trustee, the Securities Administrator nor any other
successor master servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (i) the failure of the [Master] Servicer to
deliver, or any delay in delivering, cash, documents or records to it, (ii) the
failure of the [Master] Servicer to cooperate as required by this Agreement,
(iii) the failure of the [Master] Servicer to deliver the Mortgage Loan data to
the Securities Administrator as required by this Agreement or (iv) restrictions
imposed by any regulatory authority having jurisdiction over the [Master]
Servicer. Neither the Securities Administrator nor any other successor master
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
caused by (i) the failure of the Trustee to deliver, or any delay in delivering
cash, documents or records to it, or (ii) the failure of Trustee to cooperate as
required by this Agreement.
Section 6.15. ADDITIONAL REMEDIES OF TRUSTEE UPON EVENT OF DEFAULT.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as trustee
of an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
87
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 6.16. WAIVER OF DEFAULTS.
35% or more of the Aggregate Voting Interests of Certificateholders may
waive any default or Event of Default by the [Master] Servicer in the
performance of its obligations hereunder, except that a default in the making of
any required deposit to the Certificate Account that would result in a failure
of the Trustee to make any required payment of principal of or interest on the
Certificates may only be waived with the consent of 100% of the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
Section 6.17. NOTIFICATION TO HOLDERS.
Upon termination of the [Master] Servicer or appointment of a successor
to the Master Servicer, in each case as provided herein, the Trustee shall
promptly mail notice thereof by first class mail to the Securities Administrator
and the Certificateholders at their respective addresses appearing on the
Certificate Register. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to the Trustee, give written notice
thereof to the Securities Administrator and Certificateholders, unless such
Event of Default shall have been cured or waived prior to the issuance of such
notice and within such 45-day period.
Section 6.18. DIRECTIONS BY CERTIFICATEHOLDERS AND DUTIES OF
TRUSTEE DURING EVENT OF DEFAULT.
Subject to the provisions of Section 8.01 hereof, during the continuance
of any Event of Default, Holders of Certificates evidencing not less than 25% of
the Class Principal Amount (or Class Notional Amount) of each Class of
Certificates may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement; provided, however, that the
Trustee shall be under no obligation to pursue any such remedy, or to exercise
any of the trusts or powers vested in it by this Agreement (including, without
limitation, (i) the conducting or defending of any administrative action or
litigation hereunder or in relation hereto and (ii) the terminating of the
[Master] Servicer or any successor master servicer from its rights and duties as
master servicer hereunder) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses and
liabilities which may be incurred therein or thereby; and, provided further,
that, subject to the provisions of Section 8.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee, in accordance with
an Opinion of Counsel, determines that the
88
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith determines that the action or proceeding so directed would involve it
in personal liability or be unjustly prejudicial to the non-assenting
Certificateholders.
Section 6.19. ACTION UPON CERTAIN FAILURES OF THE [MASTER] SERVICER AND
UPON EVENT OF DEFAULT.
In the event that the Trustee shall have actual knowledge of any action
or inaction of the Master Servicer that would become an Event of Default upon
the [Master] Servicer's failure to remedy the same after notice, the Trustee
shall give notice thereof to the [Master] Servicer. For all purposes of this
Agreement, in the absence of actual knowledge by a Responsible Officer of the
Trustee, the Trustee shall not be deemed to have knowledge of any failure of the
Master Servicer or any other Event of Default unless notified in writing by the
Depositor, the Securities Administrator, the Master Servicer or a
Certificateholder.
Section 6.20. PREPARATION OF TAX RETURNS AND OTHER REPORTS.
(a) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, and the
Securities Administrator shall file, federal and any applicable state tax
returns. The Securities Administrator shall forward copies to the Depositor of
all such returns and Form 1099 supplemental tax information and such other
information within the control of the Securities Administrator as the Depositor
may reasonably request in writing, and shall distribute to each
Certificateholder such forms and furnish such information within the control of
the Securities Administrator as are required by the Code and the REMIC
Provisions to be furnished to them, and will prepare and distribute to
Certificateholders Form 1099 (supplemental tax information) (or otherwise
furnish information within the control of the Securities Administrator and the
Trustee) to the extent required by applicable law. The Master Servicer will
indemnify the Securities Administrator and the Trustee for any liability of or
assessment against the Securities Administrator or the Trustee, as applicable,
resulting from any error in any of such tax or information returns directly
resulting from errors in the information provided by such Master Servicer.
(b) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each of the Lower Tier REMIC and the Upper
Tier REMIC, an application on IRS Form SS-4. The Securities Administrator, upon
receipt from the IRS of the Notice of Taxpayer Identification Number Assigned
for each REMIC, shall promptly forward copies of such notices to the Master
Servicer, the Trustee and the Depositor. The Securities Administrator will file
an IRS Form 8811.
(c) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter, within 15 days after each Distribution
Date, the Securities Administrator shall, in accordance with industry standards,
file with the Securities and Exchange Commission (the "Commission") via the
Electronic Data Gathering and Retrieval System (XXXXX), a Form 8-K with a copy
of the statement to the Certificateholders for such Distribution Date as an
exhibit thereto. Prior to _______, ___, the Securities Administrator shall, in
accordance with industry standards, file a Form 15 Suspension Notification with
respect to the Trust Fund, if applicable.
89
Prior to _________, ___, the Securities Administrator shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust Fund. The
Depositor hereby grants to the Securities Administrator a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports, and financial statements within its
control related to this Agreement and the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this section.
ARTICLE VII
PURCHASE AND TERMINATION
OF THE TRUST FUND
Section 7.01. TERMINATION OF TRUST FUND UPON REPURCHASE OR LIQUIDATION
OF ALL MORTGAGE LOANS.
(a) The respective obligations and responsibilities of the Trustee, the
Securities Administrator and the [Master] Servicer created hereby (other than
the obligation of the Trustee to make payments to Certificateholders as set
forth in Section 7.02, the obligation of the [Master] Servicer to make a final
remittance to the Securities Administrator for deposit into the Certificate
Account pursuant to Section 4.01, and the obligations of the [Master] Servicer
to the Securities Administrator and the Trustee pursuant to Sections 9.10 and
9.14), shall terminate on the earlier of (i) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the sale of the property held by the
Trust Fund in accordance with Section 7.01(b); provided, however, that in no
event shall the Trust Fund created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof. Any termination of the Trust Fund shall be carried
out in such a manner so that the termination of each REMIC included therein
shall qualify as a "qualified liquidation" under the REMIC Provisions.
(b) On any Distribution Date occurring after the date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans is less than % OF
THE CUT-OFF DATE AGGREGATE PRINCIPAL BALANCE, THE [_________] may, upon written
direction to the Trustee with a copy to the Securities Administrator, cause (i)
the Trustee to sell (or arrange for the sale of) the assets of the Trust Fund
and (ii) the Trust Fund to adopt a plan of complete liquidation pursuant to
Section 7.03(a)(i) hereof to sell all of its property. The property of the Trust
Fund shall be sold at a price (the "Termination Price") equal to (a) [the sum of
(i) ___% of the unpaid principal balance of each Mortgage Loan on the day of
such purchase plus interest accrued thereon at the applicable Mortgage Rate with
respect to any Mortgage Loan to the Due Date in the Due Period immediately
preceding the related Distribution Date to the date of such repurchase, (ii) the
fair market value of any REO Property and any other property held by any REMIC,
such fair market value to be determined by an appraiser or appraisers appointed
by the Master Servicer with the
90
consent of the Trustee and (iii) any unreimbursed Servicing Advances with
respect to each Mortgage Loan or (b) the price agreed upon between the Trustee
and the [____________], which shall not be less than the aggregate outstanding
principal balance of the Class __ Certificates and any accrued interest owing
thereon on the final distribution date.]
Section 7.02. PROCEDURE UPON TERMINATION OF TRUST FUND.
(a) Notice of any termination pursuant to the provisions of Section 7.01,
specifying the Distribution Date upon which the final distribution shall be
made, shall be given promptly by the Securities Administrator at the direction
of the Trustee by first class mail to Certificateholders mailed (x) no later
than five Business Days after the Trustee has received notice from the Master
Servicer of its intent to exercise its right to cause the termination of the
Trust Fund pursuant to Section 7.01(b) or (y) upon the final payment or other
liquidation of the last Mortgage Loan or REO Property in the Trust Fund. Such
notice shall specify (A) the Distribution Date upon which final distribution on
the Certificates of all amounts required to be distributed to Certificateholders
pursuant to Section 5.02 will be made upon presentation and surrender of the
Certificates at the Corporate Trust Office of the Certificate Registrar, and (B)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distribution being made only upon presentation and surrender of the
Certificates at the office or agency of the Certificate Registrar, therein
specified. The Trustee shall give such notice to the Master Servicer and the
Certificate Registrar at the time such notice is given to Holders of the
Certificates. Upon any such termination, the duties of the Certificate Registrar
with respect to the Certificates shall terminate and the Trustee shall request
the Master Servicer to terminate the Collection Account, the Securities
Administrator to terminate the Certificate Account and any other account or fund
maintained with respect to the Certificates, subject to the Securities
Administrator's obligation hereunder to hold all amounts payable to
Certificateholders in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, Securities Administrator at the direction of
the Trustee 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 one year after the second
notice any Certificates shall not have been surrendered for cancellation, the
Securities Administrator at the direction of the Trustee may take appropriate
steps to contact the remaining Certificateholders concerning surrender of such
Certificates, and the cost thereof shall be paid out of the amounts
distributable to such Holders. If within two years after the second notice any
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, subject to applicable state law relating to escheatment,
hold all amounts distributable to such Holders for the benefit of such Holders.
No interest shall accrue on any amount held by the Securities Administrator and
not distributed to a Certificateholder due to such Certificateholder's failure
to surrender its Certificate(s) for payment of the final distribution thereon in
accordance with this Section.
(c) Any reasonable expenses incurred by the Trustee and the Securities
Administrator in connection with any termination or liquidation of the Trust
Fund shall be reimbursed from proceeds received from the liquidation of the
Trust Fund.
91
Section 7.03. ADDITIONAL TRUST FUND TERMINATION REQUIREMENTS.
(a) Any termination of the Trust Fund shall be effected in accordance
with the following additional requirements, unless the Trustee seeks (at the
request of the Master Servicer), and subsequently receives, an Opinion of
Counsel (at the expense of the Master Servicer), addressed to the Trustee to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 7.03 will not (i) result in the imposition of taxes on any REMIC
under the REMIC Provisions or (ii) cause any REMIC established hereunder to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Trustee shall or cause to be sold all of the assets of
the Trust Fund for cash and, within 90 days of such sale, shall
distribute the proceeds of such sale to the Certificateholders in
complete liquidation of the Trust Fund, the Lower Tier REMIC and the
Upper Tier REMIC; and
(ii) The Trustee shall attach a statement to the final Federal
income tax return for each of the Lower Tier REMIC and the Upper Tier
REMIC stating that pursuant to Treasury Regulation ss. 1.860F-1, the
first day of the 90-day liquidation period for each such REMIC was the
date on which the Trustee sold the assets of the Trust Fund.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby (i) authorizes the Trustee to take the action described in paragraph (a)
above and (ii) agrees to take such other action as may be necessary to
facilitate liquidation of each REMIC created under this Agreement, which
authorization shall be binding upon all successor Residual Certificateholders.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. LIMITATION ON RIGHTS OF HOLDERS.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the [Master] Servicer
or the operation and management of the Trust Fund, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of
92
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates evidencing not less than 25% of the Class Principal Amount (or
Class Notional Amount) of Certificates of each Class shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty 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 and no direction inconsistent
with such written request has been given such Trustee during such sixty-day
period by such Certificateholders; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 8.02. ACCESS TO LIST OF HOLDERS.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter referred
to as "Applicants") apply in writing to the Trustee, and such application states
that the Applicants desire to communicate with other Holders with respect to
their rights under this Agreement or under the Certificates and is accompanied
by a copy of the communication which such Applicants propose to transmit, then
the Trustee shall, within five Business Days after the receipt of such
application, afford such Applicants reasonable access during the normal business
hours of the Trustee to the most recent list of Certificateholders held by the
Trustee or shall, as an alternative, send, at the Applicants' expense, the
written communication proffered by the Applicants to all Certificateholders at
their addresses as they appear in the Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Securities Administrator, the [Master] Servicer, the Certificate Registrar and
the Trustee that neither the Depositor, the Securities Administrator, the
[Master] Servicer, the Certificate Registrar nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
93
Section 8.03. ACTS OF HOLDERS OF CERTIFICATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders or Certificate Owner, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee, the
Securities Administrator, and, where expressly required herein, to the [Master]
Servicer. Such instrument or instruments (as the action embodies therein and
evidenced thereby) are herein sometimes referred to as an "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agents shall be sufficient for
any purpose of this Agreement and conclusive in favor of the Trustee, the
Securities Administrator, and Master Servicer, if made in the manner provided in
this Section. Each of the Trustee, the Securities Administrator, and the Master
Servicer shall promptly notify the others of receipt of any such instrument by
it, and shall promptly forward a copy of such instrument to the others.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Securities Administrator, the
Master Servicer, nor the Depositor shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Master Servicer in reliance thereon, whether or not notation of such action
is made upon such Certificate.
94
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE [MASTER] SERVICER
Section 9.01. DUTIES OF THE [MASTER] SERVICER.
The Certificateholders, by their purchase and acceptance of the
Certificates, appoint [name of master servicer], as [Master] Servicer. For and
on behalf of the Depositor, the Trustee and the Certificateholders, the [Master]
Servicer shall master service the Mortgage Loans in accordance with the
provisions of this Agreement and the provisions of the applicable Servicing
Agreement.
Section 9.02. [MASTER] SERVICER FIDELITY BOND AND [MASTER] R SERVICER
ERRORS AND OMISSIONS INSURANCE POLICY.
(a) The [Master] Servicer, at its expense, shall maintain in effect a
Fidelity Bond and an Errors and Omissions Insurance Policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such [Master] Servicer's behalf, and covering errors and omissions in the
performance of the [Master] Servicer's obligations hereunder. The Errors and
Omissions Insurance Policy and the Fidelity Bond shall be in such form and
amount that would meet the requirements of FNMA or FHLMC if it were the
purchaser of the Mortgage Loans. The [Master] Servicer shall (i) require each
Servicer to maintain an Errors and Omissions Insurance Policy and a Fidelity
Bond in accordance with the provisions of the applicable Servicing Agreement,
(ii) cause each Servicer to provide to the [Master] Servicer certificates
evidencing that such policy and bond is in effect and to furnish to the [Master]
Servicer any notice of cancellation, non-renewal or modification of the policy
or bond received by it, as and to the extent provided in the applicable
Servicing Agreement, and (iii) furnish copies of the certificates and notices
referred to in clause (ii) to the Trustee upon its request. The Fidelity Bond
and Errors and Omissions Insurance Policy may be obtained and maintained in
blanket form.
(b) The [Master] Servicer shall promptly report to the Trustee any
material changes that may occur in the [Master] Servicer Fidelity Bond or the
[Master] Servicer Errors and Omissions Insurance Policy and shall furnish to the
Trustee, on request, certificates evidencing that such bond and insurance policy
are in full force and effect. The [Master] Servicer shall promptly report to the
Trustee all cases of embezzlement or fraud, if such events involve funds
relating to the Mortgage Loans. The total losses, regardless of whether claims
are filed with the applicable insurer or surety, shall be disclosed in such
reports together with the amount of such losses covered by insurance. If a bond
or insurance claim report is filed with any of such bonding companies or
insurers, the [Master] Servicer shall promptly furnish a copy of such report to
the Trustee. Any amounts relating to the Mortgage Loans collected by the
[Master] Servicer under any such bond or policy shall be promptly remitted by
the [Master] Servicer to the Trustee for deposit into the Certificate Account.
Any amounts relating to the Mortgage Loans collected by any Servicer under any
such bond or policy shall be remitted to the [Master] Servicer to the extent
provided in the applicable Servicing Agreement.
95
Section 9.03. [MASTER] SERVICER'S FINANCIAL STATEMENTS AND RELATED
INFORMATION.
For each year this Agreement is in effect, the [Master] Servicer shall
submit to the Trustee, the Securities Administrator, each Rating Agency and the
Depositor a copy of its annual unaudited financial statements on or prior to
[ ] of each year. Such financial statements shall include a balance sheet,
income statement, statement of retained earnings, statement of additional
paid-in capital, statement of changes in financial position and all related
notes and schedules and shall be in comparative form, certified by a nationally
recognized firm of Independent Accountants to the effect that such statements
were examined and prepared in accordance with generally accepted accounting
principles applied on a basis consistent with that of the preceding year.
Section 9.04. POWER TO ACT; PROCEDURES.
(a) The [Master] Servicer shall master service the Mortgage Loans and
shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article X hereof, and each Servicer shall have full power and
authority (to the extent provided in the applicable Servicing Agreement) to do
any and all things that it may deem necessary or desirable in connection with
the servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (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, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and applicable Servicing Agreement, as applicable; provided that
the [Master] Servicer shall not take, or knowingly permit any Servicer to take,
any action that is inconsistent with or prejudices the interests of the Trust
Fund or the Certificateholders in any Mortgage Loan or the rights and interests
of the Depositor, the Trustee and the Certificateholders under this Agreement.
The [Master] Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of any Servicer, when the [Master] Servicer or a Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan
with MERS, or cause the removal from the registration of any Mortgage Loan on
the MERS system, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. The [Master] Servicer shall represent and protect the
interests of the Trust Fund in the same manner as it protects its own interests
in mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan and shall not make or knowingly permit any Servicer to
make any modification, waiver or amendment of any term of any Mortgage Loan that
would cause the Trust Fund to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the [Master] Servicer in its
own name or in the name of a Servicer, and each Servicer, to the extent such
authority is delegated to such Servicer by the [Master] Servicer under the
applicable Servicing Agreement, is hereby authorized and empowered by the
Trustee when the [Master] Servicer or applicable Servicer, as the case may be,
believes it appropriate in its best judgment
96
and in accordance with Accepted Servicing Practices and the applicable Servicing
Agreement, to execute and deliver, on behalf of itself and the
Certificateholders, the Trustee 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 Trustee shall execute, upon request,
any powers of attorney furnished to it by the [Master] Servicer empowering the
[Master] Servicer or any Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the applicable Servicing Agreement and
this Agreement, and the Trustee shall execute and deliver such other documents,
as the [Master] Servicer may request, necessary or appropriate to enable the
[Master] Servicer to master service and administer the Mortgage Loans and carry
out its duties hereunder, in each case in accordance with Accepted Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the [Master] Servicer or any Servicer). If the [Master] Servicer
or the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, then
upon request of the Trustee, the [Master] Servicer shall join with the Trustee
in the appointment of a co-trustee pursuant to Section 6.09 hereof. In the
performance of its duties hereunder, the [Master] Servicer shall be an
independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
(b) In master servicing and administering the Mortgage Loans, the
[Master] Servicer shall employ procedures, and shall cause each Servicer to
employ procedures (including, but not limited to, collection procedures),
consistent with the applicable Servicing Agreement. Consistent with the
foregoing, the [Master] Servicer may, and may permit any Servicer to, in its
discretion (i) waive any late payment charge or any prepayment charge or penalty
interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater than
120 days; provided, however, that the maturity of any Mortgage Loan shall not be
extended past the date on which the final payment is due on the latest maturing
Mortgage Loan as of the Cut-off Date. In the event of any extension described in
clause (ii) above, the [Master] Servicer shall make or cause to be made Advances
on the related Mortgage Loan in accordance with the provisions of Section 5.04
on the basis of the amortization schedule of such Mortgage Loan without
modification thereof by reason of such extension. Notwithstanding anything to
the contrary in this Agreement, the [Master] Servicer shall not, unless default
by the related Mortgagor is, in the reasonable judgment of the [Master] Servicer
or the related Servicer, imminent, make or knowingly permit such Servicer to
make any modification, waiver or amendment of any material term of any Mortgage
Loan (including but not limited to the interest rate, the principal balance, the
amortization schedule, or any other term affecting the amount or timing of
payments on the Mortgage Loan or the collateral therefor) unless the [Master]
Servicer or the related Servicer shall have provided or caused to be provided to
the Trustee an Opinion of Counsel (at the expense of the party seeking the
modification) in writing to the effect that such modification, waiver or
amendment would not be treated as giving rise to a new debt instrument for
federal income tax purposes and would not adversely affect the status of the
REMIC.
97
Section 9.05. SERVICING AGREEMENTS BETWEEN THE [MASTER] SERVICER AND
SERVICERS; ENFORCEMENT OF SERVICERS' OBLIGATIONS.
(a) Each Servicing Agreement requires the applicable Servicer to service
the Mortgage Loans in accordance with the provisions thereof. References in this
Agreement to actions taken or to be taken by the [Master] Servicer include such
actions taken or to be taken by a Servicer pursuant to a Servicing Agreement.
Any fees, costs and expenses and other amounts payable to such Servicers shall
be deducted from amounts remitted to the [Master] Servicer by the applicable
Servicer and shall not be an obligation of the Trust, the Trustee or the
[Master] Servicer.
(b) The [Master] Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall use its reasonable best efforts to
enforce the obligations of each Servicer under the related Servicing Agreement
and shall, upon its obtaining actual knowledge of the failure of a Servicer to
perform its obligations in accordance with the related Servicing Agreement, to
the extent that the non-performance of any such obligations would have a
material adverse effect on a Mortgage Loan, the Trust Fund or
Certificateholders, terminate the rights and obligations of such Servicer
thereunder to the extent and in the manner permitted by the related Servicing
Agreement and either act as servicer of the related Mortgage Loans or enter into
a Servicing Agreement with a successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the [Master] Servicer, in
its good faith business judgment, 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, and shall be reimbursed therefor initially 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, and then, to the
extent that such amounts are insufficient to reimburse the [Master] Servicer for
the costs of such enforcement, (iii) from the Collection Account.
Section 9.06. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS.
(a) To the extent provided in the applicable Servicing Agreement, the
[Master] Servicer shall cause each Servicer to establish and maintain one or
more custodial accounts at a depository institution (which may be a depository
institution with which the [Master] Servicer or any Servicer establishes
accounts in the ordinary course of its servicing activities), the accounts of
which are insured to the maximum extent permitted by the FDIC (each, an "Escrow
Account") and shall deposit therein any collections of amounts received with
respect to amounts due for taxes, assessments, water rates, Standard Hazard
Insurance Policy premiums or any comparable items for the account of the
Mortgagors. Withdrawals from any Escrow Account may be made (to the extent
amounts have been escrowed for such purpose) only in accordance with the
applicable Servicing Agreement. Each Servicer shall be entitled to all
investment income not required to be paid to Mortgagors on any Escrow Account
maintained by such Servicer. The [Master] Servicer shall make (or cause to be
made) to the extent provided in the applicable Servicing Agreement advances to
the extent necessary in order to effect timely payment of taxes,
98
water rates, assessments, Standard Hazard Insurance Policy premiums or
comparable items in connection with the related Mortgage Loan (to the extent
that the Mortgagor is required, but fails, to pay such items), provided that it
has determined that the funds so advanced are recoverable from escrow payments,
reimbursement pursuant to Section 4.02(v) or otherwise.
(b) Costs incurred by the [Master] Servicer or by Servicers in effecting
the timely payment of taxes and assessments on the properties subject to the
Mortgage Loans may be added to the amount owing under the related Mortgage Note
where the terms of the Mortgage Note so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders. Such costs, to
the extent that they are unanticipated, extraordinary costs, and not ordinary or
routine costs shall be recoverable by the [Master] Servicer pursuant to Section
4.02(v).
Section 9.07. TERMINATION OF SERVICING AGREEMENTS; SUCCESSOR SERVICERS.
(a) The [Master] Servicer and the Administrator each shall be entitled to
terminate the rights and obligations of any Servicer under the applicable
Servicing Agreement in accordance with the terms and conditions of such
Servicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Servicing Agreement
by the [Master] Servicer or the related Servicer, the [Master] Servicer shall
either act as Servicer of the related Mortgage Loans, or enter into a Servicing
Agreement with a successor Servicer.
(b) If the [Master] Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces. The [Master] Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
[Master] Servicer, as applicable, may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
Section 9.08. [MASTER] SERVICER LIABLE FOR ENFORCEMENT.
Notwithstanding any Servicing Agreement, the [Master] Servicer shall
remain obligated and liable to the Trustee and the Certificateholders in
accordance with the provisions of this Agreement, to the extent of its
obligations hereunder, without diminution of such obligation or liability by
virtue of such Servicing Agreements or arrangements. The [Master] Servicer shall
use commercially reasonable efforts to ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall use
commercially reasonable efforts to enforce the provisions of each Servicing
Agreement for the benefit of the Certificateholders. The [Master] Servicer shall
be entitled to enter into any agreement with the Servicers for indemnification
of the [Master] Servicer and nothing contained in this Agreement shall be deemed
to limit or modify such indemnification. Except as expressly set forth herein,
the [Master] Servicer shall have no liability for the acts or omissions of any
Servicer in the performance by such Servicer of its obligations under the
related Servicing Agreement.
99
Section 9.09. NO CONTRACTUAL RELATIONSHIP BETWEEN SERVICERS AND TRUSTEE
OR DEPOSITOR.
Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer in
its capacity as such and not as an originator shall be deemed to be between such
Servicer, the related Seller and the [Master] Servicer, and except to the extent
expressly provided therein the Trustee, the Securities Administrator and the
Depositor shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to such Servicer except as set
forth in Section 9.10 hereof.
Section 9.10. ASSUMPTION OF SERVICING AGREEMENT BY SECURITIES
ADMINISTRATOR.
(a) In the event the [Master] Servicer shall for any reason no longer be
the [Master] Servicer (including by reason of any Event of Default under this
Agreement), after a period not to exceed ninety days after the Securities
Administrator receives written notice from the Trustee pursuant to Section 6.14
(a) or Section 9.28, as applicable, the Securities Administrator shall thereupon
assume all of the rights and obligations of such [Master] Servicer hereunder and
enforce the rights under each Servicing Agreement entered into with respect to
the Mortgage Loans. The Securities Administrator, its designee or any successor
master servicer appointed by the Trustee shall be deemed to have assumed all of
the [Master] Servicer's interest herein and therein to the same extent as if
such Servicing Agreement had been assigned to the assuming party, except that
the [Master] Servicer shall not thereby be relieved of any liability or
obligations of the [Master] Servicer under such Servicing Agreement accruing
prior to its replacement as [Master] Servicer, and shall be liable to the
Securities Administrator, and hereby agrees to indemnify and hold harmless the
Securities Administrator from and against all costs, damages, expenses and
liabilities (including reasonable attorneys' fees) incurred by the Securities
Administrator as a result of such liability or obligations of the [Master]
Servicer and in connection with the Securities Administrator's assumption (but
not its performance, except to the extent that costs or liability of the
Securities Administrator are created or increased as a result of negligent or
wrongful acts or omissions of the [Master] Servicer prior to its replacement as
[Master] Servicer) of the [Master] Servicer's obligations, duties or
responsibilities thereunder; provided that the [Master] Servicer shall not
indemnify or hold harmless the Securities Administrator against negligent or
willful misconduct of the Securities Administrator.
(b) The [Master] Servicer that has been terminated shall, upon request of
the Securities Administrator or the Trustee but at the expense of such [Master]
Servicer, deliver to the assuming party all documents and records relating to
each Servicing Agreement and the related Mortgage Loans and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of each Servicing Agreement to the assuming
party.
Section 9.11. "DUE-ON-SALE" CLAUSES; ASSUMPTION AGREEMENTS.
(a) To the extent provided in the applicable Servicing Agreement, to the
extent Mortgage Loans contain enforceable due-on-sale clauses, and to the extent
that the [Master] Servicer has knowledge of the conveyance of a Mortgaged
Property, the [Master] Servicer shall use its reasonable best efforts to cause
the Servicers to enforce such clauses in accordance with the
100
applicable Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
(b) The [Master] Servicer or the related Servicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for the granting of an
easement thereon in favor of another Person or any alteration or demolition of
the related Mortgaged Property if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be materially adversely affected
thereby. Any fee collected by the [Master] Servicer or the related Servicer for
processing such a request will be retained by the [Master] Servicer or such
Servicer as additional servicing compensation.
Section 9.12. RELEASE OF MORTGAGE FILES.
(a) Upon (i) becoming aware of the payment in full of any Mortgage Loan
or, (ii) the receipt by the [Master] Servicer of a notification that payment in
full has been or will be escrowed in a manner customary for such purposes, or
the [Master] Servicer will, or will cause the applicable Servicer to, promptly
notify the Trustee (or the applicable Custodian) 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 that are required to be
deposited in the Collection Account maintained by the [Master] Servicer pursuant
to Section 4.01 have been or will be so deposited) of a Servicing Officer and
shall request the Trustee or the applicable Custodian, to deliver to the
applicable Servicer the related Mortgage File. In lieu of sending a hard copy
certification of a Servicing Officer, the [Master] Servicer may, or may cause
the Servicer to, deliver the request for release in a mutually agreeable
electronic format. To the extent that such a request, on its face, originates
from a Servicing Officer, no signature shall be required. Upon receipt of such
certification and request, the Trustee or the applicable Custodian, shall
promptly release the related Mortgage File to the applicable Servicer and
neither the Trustee nor the Custodian shall have any further responsibility with
regard to such Mortgage File. The [Master] Servicer is authorized, and each
Servicer, to the extent such authority is delegated to such Servicer by the
[Master] Servicer under the applicable Servicing Agreement, is authorized, to
give, as agent for the Trustee, as the mortgagee under the Mortgage that secured
the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of, or other legal proceedings relating to, any Mortgage Loan and in accordance
with Accepted Servicing Practices and the applicable Servicing Agreement, the
Trustee shall execute such pleadings, request for trustee's sale or other
documents as shall be prepared and furnished to the Trustee by the [Master]
Servicer, or by a Servicer (in form reasonably acceptable to the Trustee) and as
are necessary to the prosecution of any such proceedings. The Trustee or the
Custodian, shall, upon
101
request of the [Master] Servicer, or of a Servicer, and delivery to the Trustee
or the applicable Custodian, of a trust receipt signed by a Servicing Officer
substantially in the form annexed hereto as Exhibit C or in the form annexed to
the applicable Custodial Agreement as Exhibit C, release the related Mortgage
File held in its possession or control to the [Master] Servicer (or the
applicable Servicer). Such trust receipt shall obligate the [Master] Servicer or
applicable Servicer to return the Mortgage File to the Trustee or Custodian, as
applicable, when the need therefor by the [Master] Servicer or applicable
Servicer no longer exists unless (i) the Mortgage Loan shall be liquidated, in
which case, upon receipt of a certificate of a Servicing Officer similar to that
herein above specified, the trust receipt shall be released by the Trustee or
the Custodian, as applicable, to the [Master] Servicer (or the applicable
Servicer) or (ii) the Mortgage File has been delivered directly or through a
Servicer to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the [Master] Servicer has delivered directly or through a
Servicer to the Trustee a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery.
Section 9.13. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF [MASTER]
SERVICER TO BE HELD FOR TRUSTEE.
(a) The [Master] Servicer shall transmit, or cause the applicable
Servicer to transmit, to the Trustee such documents and instruments coming into
the possession of the [Master] Servicer or such Servicer from time to time as
are required by the terms hereof to be delivered to the Trustee. Any funds
received by the [Master] Servicer or by a Servicer in respect of any Mortgage
Loan or which otherwise are collected by the [Master] Servicer or by a Servicer
as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan
shall be held for the benefit of the Trustee and the Certificateholders subject
to the [Master] Servicer's right to retain or withdraw from the Collection
Account the Master Servicing Fee and other amounts provided in this Agreement,
and to the right of each Servicer to retain its Servicing Fee and other amounts
as provided in the applicable Servicing Agreement. The [Master] Servicer shall,
and shall (to the extent provided in the applicable Servicing Agreement) cause
each Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Trustee, its agents and accountants at any time upon
reasonable request and during normal business hours, and to Certificateholders
that are savings and loan associations, banks or insurance companies, the Office
of Thrift Supervision, the FDIC and the supervisory agents and examiners of such
Office and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of the
Office of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and during
normal business hours at the offices of the [Master] Servicer designated by it.
In fulfilling such a request the [Master] Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the [Master] Servicer, or any Servicer, in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the [Master]
Servicer, or by such Servicer, for and on behalf of the
102
Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the [Master] Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the [Master] Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement and
shall be authorized to remit such funds to the Securities Administrator in
accordance with this Agreement.
(c) The [Master] Servicer hereby acknowledges that concurrently with the
execution of this Agreement, the Trustee shall own or, to the extent that a
court of competent jurisdiction shall deem the conveyance of the Mortgage Loans
from either Seller to the Depositor not to constitute a sale, the Trustee shall
have a security interest in either Mortgage Loans and in all Mortgage Files
representing such Mortgage Loans and in all funds now or hereafter held by, or
under the control of, a Servicer or the [Master] Servicer that are collected by
such Servicer or the [Master] Servicer in connection with such Mortgage Loans,
whether as scheduled installments of principal and interest or as full or
partial prepayments of principal or interest or as Liquidation Proceeds or
Insurance Proceeds or otherwise, and in all proceeds of the foregoing and
proceeds of proceeds (but excluding any fee or other amounts to which such
Servicer is entitled under the applicable Servicing Agreement, or the [Master]
Servicer or the Depositor is entitled to hereunder); and the [Master] Servicer
agrees that so long as the Mortgage Loans are assigned to and held by the
Trustee, all documents or instruments constituting part of the Mortgage Files,
and such funds relating to the Mortgage Loans which come into the possession or
custody of, or which are subject to the control of, the [Master] Servicer or any
Servicer shall be held by the [Master] Servicer or such Servicer for and on
behalf of the Trustee as the Trustee's agent and bailee for purposes of
perfecting the Trustee's security interest therein as provided by the applicable
Uniform Commercial Code or other laws.
(d) The [Master] Servicer agrees that it shall not, and shall not
authorize any Servicer to, create, incur or subject any Mortgage Loans, or any
funds that are deposited in any custodial account, Escrow Account or the
Collection 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, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on, or
in connection with, a Mortgage Loan.
Section 9.14. REPRESENTATIONS AND WARRANTIES OF THE [MASTER] SERVICER.
(a) The [Master] Servicer hereby represents and warrants to the
Depositor, the Securities Administrator and the Trustee, for the benefit of the
Certificateholders. as of the Closing Date that:
(i) it is validly existing and in good standing under the
jurisdiction of its formation, and as [Master] Servicer has full power
and authority to transact any and all business contemplated by this
Agreement and to execute, deliver and comply with its obligations under
the terms of this Agreement, the execution, delivery and performance of
which have been duly authorized by all necessary corporate action on the
part of the [Master] Servicer;
103
(ii) the execution and delivery of this Agreement by the
[Master] Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the [Master] Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative decree or
order to which it is subject or (C) constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material contract, agreement or
other instrument to which the [Master] Servicer is a party or by which it
is bound or to which any of its assets are subject, which violation,
default or breach would materially and adversely affect the [Master]
Servicer's ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the [Master] Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the [Master] Servicer is not in default with respect to
any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency to the extent that any
such default would materially and adversely affect its performance
hereunder;
(v) the [Master] Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or any
other corporate restriction or any judgment, order, writ, injunction,
decree, law or regulation that may materially and adversely affect its
ability as [Master] Servicer to perform its obligations under this
Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the [Master] Servicer
of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the [Master]
Servicer's knowledge, threatened against the [Master] Servicer which
would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
(vii) the [Master] Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is an FNMA- and FHLMC approved seller/servicer;
(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 by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the [Master]
Servicer; and
104
(x) the [Master] Servicer has obtained an Errors and Omissions
Insurance Policy and a Fidelity Bond in accordance with Section 9.02,
each of which is in full force and effect, and each of which provides at
least such coverage as is required hereunder.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 9.14 shall survive the execution and delivery of this
Agreement. The [Master] Servicer shall indemnify the Depositor, the Securities
Administrator and the Trustee and hold them harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the [Master]
Servicer's representations and warranties contained in Section 9.14(a).
Notwithstanding anything in this Agreement to the contrary, the [Master]
Servicer shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits). It
is understood and agreed that the enforcement of the obligation of the [Master]
Servicer set forth in this Section to indemnify the Depositor, the Trustee and
the Securities Administrator as provided in this Section constitutes the sole
remedy (other than as set forth in Section 6.14) of the Depositor, the
Securities Administrator and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the [Master] Servicer as [Master] Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the [Master] Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the [Master]
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
(c) It is understood and agreed that the representations and warranties
of the Depositor set forth in Sections 2.03(a) through (f) shall survive the
execution and delivery of this Agreement. The Depositor shall indemnify the
[Master] Servicer and hold it harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Depositor's representations
and warranties contained in Sections 2.03(a) through (f) hereof. It is
understood and agreed that the enforcement of the obligation of the Depositor
set forth in this Section to indemnify the [Master] Servicer as provided in this
Section constitutes the sole remedy of the [Master] Servicer respecting a breach
by the Depositor of the representations and warranties in Sections 2.03(a)
through (f) hereof.
Any cause of action against the Depositor relating to or arising out of
the breach of the representations and warranties made in Sections 2.03(a)
through (f) hereof shall accrue upon discovery of such breach by either the
Depositor or the [Master] Servicer or notice thereof by any one of such parties
to the other parties.
Section 9.15. CLOSING CERTIFICATE AND OPINION.
On or before the Closing Date, the [Master] Servicer shall cause to be
delivered to the Depositor and Xxxxxx Brothers Inc. an Opinion of Counsel, dated
the Closing Date, in form and substance reasonably satisfactory to the Depositor
and Xxxxxx Brothers Inc., as to the due
105
authorization, execution and delivery of this Agreement by the [Master] Servicer
and the enforceability thereof.
Section 9.16. STANDARD HAZARD AND FLOOD INSURANCE POLICIES.
For each Mortgage Loan (other than a Cooperative Loan), the [Master]
Servicer shall maintain, or cause to be maintained by each Servicer, standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. It is understood and agreed that such insurance shall
be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
Pursuant to Section 4.01, any amounts collected by the [Master] Servicer,
or by any Servicer, under any insurance policies maintained pursuant to this
Section 9.16 (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or released to the Mortgagor in
accordance with the [Master] Servicer's or the Servicer's normal servicing
procedures and Accepted Servicing Practices) shall be deposited into the
Collection Account, subject to withdrawal pursuant to Section 4.02. Any cost
incurred by the [Master] Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the [Master] Servicer or such
Servicer pursuant to Section 4.02(v).
Section 9.17. PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The [Master] Servicer shall, or shall cause each Servicer (to the extent
provided in the applicable Servicing Agreement) to, prepare and present on
behalf of the Trustee and the Certificateholders all claims under the Insurance
Policies with respect to the Mortgage Loans, and take such actions (including
the negotiation, settlement, compromise or enforcement of the insured's claim)
as shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the [Master] Servicer (or disbursed to a Servicer and remitted to
the [Master] Servicer) in respect of such policies or bonds shall be promptly
deposited in the Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the [Master]
Servicer's or the Servicer's normal servicing procedures need not be so
deposited (or remitted).
Section 9.18. MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The [Master] Servicer shall not take, or knowingly permit any
Servicer (consistent with the applicable Servicing Agreement) to take, any
action that would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of
106
such [Master] Servicer or Servicer, would have been covered thereunder. To the
extent that coverage is available, the [Master] Servicer shall use its best
reasonable efforts to keep in force and effect, or to cause each Servicer to
keep in force and effect (to the extent that the Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable to
each Mortgage Loan in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable. The [Master] Servicer shall not, and
shall not permit any Servicer to, cancel or refuse to renew any such Primary
Mortgage Insurance Policy that is in effect at the date of the initial issuance
of the Certificates and is required to be kept in force hereunder except as
required by applicable law or in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The [Master] Servicer agrees to present, or to cause each Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the [Master] Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS.
The Trustee (or its custodian, if any, as directed by the Trustee), shall
retain possession and custody of the originals of the Primary Mortgage Insurance
Policies or certificate of insurance if applicable and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the [Master] Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The [Master] Servicer shall promptly deliver or
cause to be delivered to the Trustee (or its custodian, if any, as directed by
the Trustee), upon the execution or receipt thereof the originals of the Primary
Mortgage Insurance Policies and any certificates of renewal thereof, and such
other documents or instruments that constitute portions of the Mortgage File
that come into the possession of the [Master] Servicer from time to time.
Section 9.20. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The [Master] Servicer shall use its reasonable best efforts to, or to
cause each Servicer to, foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged 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, all in
accordance with the applicable Servicing Agreement. Alternatively, the [Master]
Servicer may take, or authorize any Servicer to take, other actions in respect
of a defaulted Mortgage Loan, which may include (i) accepting a short sale (a
payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate a sale of the Mortgaged Property by
the Mortgagor) or permitting a short refinancing (a payoff of the Mortgage Loan
for an amount less than the total amount contractually owed in order to
facilitate refinancing
107
transactions by the Mortgagor not involving a sale of the Mortgaged Property),
(ii) arranging for a repayment plan or (iii) agreeing to a modification in
accordance with Section 9.04. In connection with such foreclosure or other
conversion or action, the [Master] Servicer shall, consistent with Section 9.18,
follow such practices and procedures as it shall reasonably determine to be in
the best interests of the Trust Fund and the Certificateholders and which shall
be consistent with its customary practices in performing its general mortgage
servicing activities; provided that the [Master] Servicer shall not be liable in
any respect hereunder if the [Master] Servicer is acting in connection with any
such foreclosure or other conversion or action in a manner that is consistent
with the provisions of this Agreement. Neither the [Master] Servicer, nor any
Servicer, shall be required to expend its own funds or incur other reimbursable
charges in connection with any foreclosure, or attempted foreclosure which is
not completed, or toward the correction of any default on a related senior
mortgage loan, or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to the Certificateholders after
reimbursement to itself for such expenses or charges and (ii) that such expenses
and charges will be recoverable to it through Liquidation Proceeds or Insurance
Proceeds (as provided in Section 4.02).
Section 9.21. COMPENSATION TO THE [MASTER] SERVICER.
The [Master] Servicer shall be entitled to withdraw from the Collection
Account, subject to Section 5.05, the Master Servicing Fee to the extent
permitted by Section 4.02(vi). Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (not
including any Prepayment Penalty Amounts with respect to those Mortgage Loans
for which the Sellers own the servicing rights) shall be retained by the
[Master] Servicer (or the applicable Servicer) and shall not be deposited in the
Collection Account. If the [Master] Servicer does not retain or withdraw the
Master Servicing Fee from the Collection Account as provided herein, the
[Master] Servicer shall be entitled to direct the Securities Administrator to
pay the Master Servicing Fee to such [Master] Servicer by withdrawal from the
Certificate Account. The [Master] Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not be
entitled to reimbursement therefor except as provided in this Agreement.
Pursuant to Section 4.01(e), all income and gain realized from any investment of
funds in the Collection Account shall be for the benefit of the [Master]
Servicer as additional compensation. The provisions of this Section 9.21 are
subject to the provisions of Section 6.14(b).
Section 9.22. REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any Mortgage Loan, the deed or certificate of sale shall be issued to
the Trustee, or to its nominee, on behalf of the Certificateholders. The
[Master] Servicer shall use its reasonable best efforts to sell, or, to the
extent provided in the applicable Servicing Agreement, cause the applicable
Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable, but in all events within the time period, and subject
to the conditions set forth in Article X hereof. Pursuant to its efforts to sell
such REO Property, the [Master] Servicer shall protect and conserve, or cause
the applicable Servicer to protect and conserve, such REO Property in the
108
manner and to such extent required by the applicable Servicing Agreement,
subject to Article X hereof.
(b) The [Master] Servicer shall deposit or cause to be deposited all
funds collected and received by it, or recovered from any Servicer, in
connection with the operation of any REO Property in the Collection Account.
(c) The [Master] Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances as well as any unpaid Master Servicing Fees or
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that any such unreimbursed Advances
as well as any unpaid Master Servicing Fees or Servicing Fees may be reimbursed
or paid, as the case may be, prior to final disposition, out of any net rental
income or other net amounts derived from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the [Master] Servicer and the applicable
Servicer as provided above, shall be deposited in the Collection Account on or
prior to the Determination Date in the month following receipt thereof (and the
[Master] Servicer shall provide prompt written notice to the Securities
Administrator upon such deposit) and be remitted by wire transfer in immediately
available funds to the Securities Administrator for deposit into the Certificate
Account on the next succeeding [Master] Servicer Remittance Date.
Section 9.23. [Reserved]
Section 9.24. REPORTS TO THE TRUSTEE.
(a) Not later than 30 days after each Distribution Date, the [Master]
Servicer shall forward to the Trustee a statement, deemed to have been certified
by a Servicing Officer, setting forth the status of the Collection Account
maintained by the [Master] Servicer as of the close of business on the related
Distribution Date, indicating that all distributions required by this Agreement
to be made by the [Master] Servicer have been made (or if any required
distribution has not been made by the [Master] Servicer, specifying the nature
and status thereof) and showing, for the period covered by such statement, the
aggregate of deposits into and withdrawals from the Collection Account
maintained by the [Master] Servicer. Copies of such statement shall be provided
by the [Master] Servicer to the Depositor, Attention: Contract Finance, and,
upon request, any Certificateholders (or by the Trustee at the [Master]
Servicer's expense if the [Master] Servicer shall fail to provide such copies
(unless (i) the [Master] Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the [Master] Servicer's
failure to provide such statement)).
(b) Not later than two Business Days following each Distribution Date,
the [Master] Servicer shall deliver to the Person designated by the Depositor,
in a format consistent with other electronic loan level reporting supplied by
the [Master] Servicer in connection with similar transactions, "loan level"
information with respect to the Mortgage Loans as of the related Determination
Date, to the extent that such information has been provided to the [Master]
Servicer by the Servicers or by the Depositor.
109
Section 9.25. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
(a) The [Master] Servicer shall deliver to the Trustee and the Rating
Agencies on or before [______] of each year, commencing on [_____], 200_, an
Officer's Certificate, certifying that with respect to the period ending on the
immediately preceding [ ]; (i) such Servicing Officer has reviewed the
activities of such [Master] Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement; (ii) to the best of
such Servicing Officer's knowledge, based on such review, such [Master] Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that any Servicer
has failed to perform any of its duties, responsibilities and obligations under
its Servicing Agreement in all material respects throughout such year, or, if
there has been a material 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, and (iv) the [Master]
Servicer has received from each Servicer such Servicer's annual certificate of
compliance and a copy of such Servicer's annual audit report, in each case to
the extent required under the applicable Servicing Agreement, or, if any such
certificate or report has not been received by the [Master] Servicer, the
[Master] Servicer is using its best reasonable efforts to obtain such
certificate or report.
(b) Copies of such statements shall be provided to any Certificateholder
upon request, by the [Master] Servicer or by the Trustee at the [Master]
Servicer's expense if the [Master] Servicer failed to provide such copies
(unless (i) the [Master] Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the [Master] Servicer's
failure to provide such statement).
Section 9.26. ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT.
If the [Master] Servicer has, during the course of any fiscal year,
directly serviced any of the Mortgage Loans, then the [Master] Servicer at its
expense shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Depositor on or before [___] __ of each year, commencing on [___], 200__, to the
effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the [Master] Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and
trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
FHLMC or the Uniform Single Attestation Program for Mortgage Bankers, such firm
is of the opinion that the [Master] Servicer's activities have been conducted in
compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by FHLMC
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the [Master] Servicer, or by the Trustee at
the expense of the [Master] Servicer if the [Master]
110
Servicer shall fail to provide such copies. If such report discloses exceptions
that are material, the [Master] Servicer shall advise the Trustee whether such
exceptions have been or are susceptible of cure, and will take prompt action to
do so.
Section 9.27. MERGER OR CONSOLIDATION.
Any Person into which the [Master] Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion, other change
in form or consolidation to which the [Master] Servicer shall be a party, or any
Person succeeding to the business of the [Master] Servicer, shall be the
successor to the [Master] Servicer hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that the successor or
resulting Person to the [Master] Servicer shall be a Person that shall be
qualified and approved to service mortgage loans for FNMA or FHLMC and shall
have a net worth of not less than $[___].
Section 9.28. RESIGNATION OF [MASTER] SERVICER.
Except as otherwise provided in Sections 9.27 and 9.29 hereof, the
[Master] Servicer shall not resign from the obligations and duties hereby
imposed on it unless it, the Trustee or the Securities Administrator determines
that the [Master] Servicer's duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the [Master] Servicer shall be evidenced by an
Opinion of Counsel that shall be Independent to such effect delivered to the
Trustee and the Securities Administrator. In the event such determination of
ineligibility of the [Master] Servicer to continue in the capacity of [Master]
Servicer is made by the [Master] Servicer or the Trustee, no such resignation
shall become effective until a period of time not to exceed ninety days after
the Securities Administrator receives written notice thereof from the Trustee
and until the Securities Administrator shall have assumed, or a successor master
servicer shall have been appointed by the Trustee and until such successor shall
have assumed, the [Master] Servicer's responsibilities and obligations under
this Agreement. Notice of such resignation shall be given promptly by the
[Master] Servicer to the Depositor.
Section 9.29. ASSIGNMENT OR DELEGATION OF DUTIES BY THE [MASTER]
SERVICER.
Except as expressly provided herein, the [Master] Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the [Master] Servicer hereunder; provided, however, that the
[Master] Servicer shall have the right without the prior written consent of the
Trustee, the Securities Administrator, the Depositor or the Rating Agencies to
delegate or assign to or subcontract with or authorize or appoint an Affiliate
of the [Master] Servicer to perform and carry out any duties, covenants or
obligations to be performed and carried out by the [Master] Servicer hereunder.
In no case, however, shall any such delegation, subcontracting or assignment to
an Affiliate of the [Master] Servicer relieve the [Master] Servicer of any
liability hereunder. Notice of such permitted assignment shall be given promptly
by the [Master] Servicer to the Depositor, the Trustee and the Securities
Administrator. If, pursuant to any
111
provision hereof, the duties of the [Master] Servicer are transferred to a
successor master servicer, the entire amount of the Master Servicing Fees and
other compensation payable to the [Master] Servicer pursuant hereto, including
amounts payable to or permitted to be retained or withdrawn by the [Master]
Servicer pursuant to Section 9.21 hereof, shall thereafter be payable to such
successor master servicer.
Section 9.30. LIMITATION ON LIABILITY OF THE [MASTER] SERVICER AND
OTHERS.
Neither the [Master] Servicer nor any of the directors, officers,
employees or agents of the [Master] Servicer shall be under any liability to the
Trustee or the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
[Master] Servicer or any such person against any liability that would otherwise
be imposed by reason of willful misfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement. The [Master] Servicer and any director,
officer, employee or agent of the [Master] Servicer shall be entitled to
indemnification by the Trust Fund and will be held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of his or its duties hereunder or by reason of reckless disregard of
his or its obligations and duties hereunder. The [Master] Servicer and any
director, officer, employee or agent of the [Master] Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The [Master] Servicer shall
be under no obligation to appear in, prosecute or defend any legal action that
is not incidental to its duties to master service the Mortgage Loans in
accordance with this Agreement and that in its opinion may involve it in any
expenses or liability; provided, however, that the [Master] Servicer may in its
sole discretion undertake any such action that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust Fund and the [Master]
Servicer shall be entitled to be reimbursed therefor out of the Collection
Account it maintains as provided by Section 4.02.
Section 9.31. INDEMNIFICATION; THIRD-PARTY CLAIMS.
The [Master] Servicer agrees to indemnify the Depositor, the Securities
Administrator and the Trustee, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the Depositor,
the Securities Administrator and the Trustee may sustain as a result of the
failure of the [Master] Servicer to perform its duties and master service the
Mortgage Loans in compliance with the terms of this Agreement. The Depositor,
the Securities Administrator and the Trustee shall immediately notify the
[Master] Servicer if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans entitling the Depositor, the Securities
Administrator or the Trustee to indemnification hereunder, whereupon the
[Master] Servicer shall assume the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim.
112
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC ADMINISTRATION.
(a) As set forth in the Preliminary Statement hereto, the Trustee shall
elect REMIC status in accordance with the REMIC Provisions with respect to each
of the Lower Tier REMIC and the Upper Tier REMIC. The Trustee shall make such
elections on Forms 1066 or other appropriate federal tax or information return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of such elections, each of the Lower
Tier Interests, other than the Class LT-R Interest, is hereby designated as a
regular interest in the Lower Tier REMIC, and each Certificate, other than the
Class R, Class E and Class P Certificates, is hereby designated as a regular
interest in the Upper Tier REMIC. The Class LT-R Interest is hereby designated
as the sole residual interest in the Lower Tier REMIC. The Class R Certificate
evidences ownership of the Class LT-R Interest and is also hereby designated as
the sole residual interest in the Upper Tier REMIC.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 86OG(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.86OG-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall pay any and all tax related
expenses (not including taxes) of each REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to such REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Securities Administrator in fulfilling
its duties hereunder (including its duties as tax return preparer). The
Securities Administrator shall be entitled to reimbursement of expenses to the
extent provided in clause (i) above from the Certificate Account, provided,
however, the Securities Administrator shall not be entitled to reimbursement for
expenses incurred in connection with the preparation of tax returns and other
reports as required by Section 6.20 and this Section 10.01.
(d) The Securities Administrator shall prepare and file, and the Trustee
shall sign, all of each REMIC's federal and state tax and information returns as
such REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Securities Administrator. If any Disqualified
Organization acquires any Ownership Interest in a Residual Certificate, then the
Securities Administrator will upon request provide to the Internal Revenue
Service, and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, such information as required in Section 860D(a)(6)(B) of the code needed
to compute the tax imposed under Section 860E(e) of the Code on transfers of
residual interests to disqualified organizations. The Securities Administrator
shall be entitled to additional compensation from such person for the cost of
providing such information.
113
(e) The Securities Administrator shall perform on behalf of each REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, if required by the Code, the REMIC Provisions, or other
such guidance, the Securities Administrator shall provide (i) to the Treasury or
other governmental authority such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
disqualified person or organization and (ii) to the Trustee such information as
is necessary for the Trustee to provide to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions.
The Securities Administrator shall be entitled to receive reasonable
compensation from the Trust for the performance of its duties under this
subsection (e); provided, however, that such compensation shall not exceed
$[ ] per year.
(f) The Trustee, the Securities Administrator, the [Master] Servicer and
the Holders of Certificates shall take any action or cause the REMIC to take any
action necessary to create or maintain the status of such REMIC as a REMIC under
the REMIC Provisions and shall assist each other as necessary to create or
maintain such status. Neither the Trustee, the Securities Administrator, the
[Master] Servicer nor the Holder of any Residual Certificate shall take any
action, cause the REMIC to take any action or fail to take (or fail to cause to
be taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of such REMIC as a REMIC or (ii)
result in the imposition of a tax upon such REMIC (including but not limited to
the tax on prohibited transactions as defined in Code Section 860F(a)(2) and the
tax on prohibited contributions set forth on Section 860G(d) of the Code)
(either such event, an "Adverse REMIC Event") unless the Trustee, the Securities
Administrator and the [Master] Servicer have received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to the REMIC or
the assets therein, or causing such REMIC to take any action, which is not
expressly permitted under the terms of this Agreement any Holder of a Residual
Certificate will consult with the Trustee, the Securities Administrator, and the
[Master] Servicer, or their respective designees, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
such REMIC, and no such Person shall take any such action or cause such REMIC to
take any such action as to which the Trustee, the Securities Administrator or
the [Master] Servicer has advised it in writing that an Adverse REMIC Event
could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental authorities.
To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Paying Agent shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in such REMIC or, if no such amounts are available, out of other
amounts held in the Collection Account, and shall reduce amounts otherwise
payable to holders of regular interests in such REMIC, as the case may be.
(h) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and on
an accrual basis.
114
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement with respect to eligible
substitute mortgage loans.
(j) Neither the Securities Administrator nor the [Master] Servicer shall
enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
(k) Upon the request of any Rating Agency, the Trustee or the Securities
Administrator shall deliver to such Rating Agency an Officer's Certificate
stating the Trustee's compliance with the provisions of this Section 10.01
applicable to it.
Section 10.02. PROHIBITED TRANSACTIONS AND ACTIVITIES.
Neither the Depositor, the [Master] Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of each REMIC pursuant to Article VII of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a
repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in the
Certificate Account for gain, nor accept any contributions to the REMIC after
the Closing Date, unless it has received an Opinion of Counsel (at the expense
of the party causing such sale, disposition, or substitution) that such
disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of such REMIC as a REMIC or of the Certificates other than
the Residual Certificates and the Class E and Class P Certificates as the
regular interests therein, (b) affect the distribution of interest or principal
on the Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause such REMIC to be subject to a tax on prohibited transactions or
prohibited contributions pursuant to the REMIC Provisions.
Section 10.03. INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS.
In the event that a REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Trustee or the Securities Administrator, as
applicable, of its duties and obligations set forth herein, the Trustee or the
Securities Administrator, as applicable, shall indemnify the Holder of the
Residual Certificate against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that
neither the Trustee nor the Securities Administrator, as applicable, shall be
liable for any such Losses attributable to the action or inaction of the
[Master] Servicer, the Depositor, or the Holder of such Residual Certificate, as
applicable, or for any such Losses resulting from misinformation provided by the
Holder of such Residual Certificate on which the Trustee or the Securities
Administrator, as applicable, has relied. The foregoing shall not be deemed to
limit or restrict the rights and remedies of the Holder of such Residual
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Trustee or the Securities
Administrator, as applicable, have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this
115
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Trustee or the Securities Administrator of, as applicable, its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates). In addition, neither the Trustee nor the Securities Administrator
shall have any liability for the actions or failure to act of the other.
Section 10.04. REO PROPERTY.
(a) Notwithstanding any other provision of this Agreement, the [Master]
Servicer, acting on behalf of the Trustee hereunder, shall not (except to the
extent provided in the applicable Servicing Agreement) permit any Servicer to,
rent, lease, or otherwise earn income on behalf of any REMIC with respect to any
REO Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of section 860G(a)(8) of the Code or
result in the receipt by any REMIC of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the [Master] Servicer has advised, or has caused the applicable Servicer to
advise, the Trustee in writing to the effect that, under the REMIC Provisions,
such action would not adversely affect the status of the REMIC as a REMIC and
any income generated for such REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The [Master] Servicer shall make, or shall cause the applicable
Servicer to make, reasonable efforts to sell any REO Property for its fair
market value. In any event, however, the [Master] Servicer shall, or shall cause
the applicable Servicer to, dispose of any REO Property within three years from
the end of the calendar year of its acquisition by the Trust Fund unless the
Trustee has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions, the REMIC may hold REO Property for
a longer period without adversely affecting the REMIC status of such REMIC or
causing the imposition of a Federal tax upon such REMIC. If the Trustee has
received such an extension, then (a) the Trustee shall provide a copy of such
extension to the [Master] Servicer and the Securities Administrator and (b) the
Trustee, or the [Master] Servicer, acting on its behalf hereunder, shall, or
shall cause the applicable Servicer to, continue to attempt to sell the REO
Property for its fair market value for such period longer than three years as
such extension permits (the "Extended Period"). If the Trustee has not received
such an extension and the Trustee, or the [Master] Servicer acting on behalf of
the Trustee hereunder, or the applicable Servicer is unable to sell the REO
Property within 33 months after its acquisition by the Trust Fund or if the
Trustee has received such an extension, and the Trustee, or the [Master]
Servicer acting on behalf of the Trustee hereunder, is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the [Master] Servicer shall, or shall cause the applicable Servicer to,
before the end of the three year period or the Extended Period, as applicable,
(i) purchase such REO Property at a price equal to the REO Property's fair
market value or (ii) auction the REO Property to the highest bidder (which may
be the [Master] Servicer) in an auction reasonably designed to produce a fair
price prior to the expiration of the three-year period or the Extended Period,
as the case may be.
116
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. BINDING NATURE OF AGREEMENT; ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02. ENTIRE AGREEMENT.
This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.
Section 11.03. AMENDMENT.
(a) This Agreement may be amended from time to time by the Depositor, the
[Master] Servicer, the Securities Administrator and the Trustee, without notice
to or the consent of any of the Holders, (i) to cure any ambiguity, (ii) to
cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the Trust
Fund or this Agreement in any Offering Document; or to correct or supplement any
provision herein which may be inconsistent with any other provisions herein,
(iii) to make any other provisions with respect to matters or questions arising
under this Agreement or (iv) to add, delete, or amend any provisions to the
extent necessary or desirable to comply with any requirements imposed by the
Code and the REMIC Provisions. No such amendment effected pursuant to the
preceding sentence shall, as evidenced by an Opinion of Counsel, adversely
affect the status of any REMIC created pursuant to this Agreement, nor shall
such amendment effected pursuant to clause (iii) of such sentence adversely
affect in any material respect the interests of any Holder. Prior to entering
into any amendment without the consent of Holders pursuant to this paragraph,
the Trustee may require an Opinion of Counsel (at the expense of the party
requesting such amendment) to the effect that such amendment is permitted under
this paragraph. Any such amendment shall be deemed not to adversely affect in
any material respect any Holder if the Trustee is furnished written confirmation
from each Rating Agency that such amendment will not cause such Rating Agency to
reduce, qualify or withdraw the then current rating assigned to the Certificates
(and any Opinion of Counsel delivered to the Trustee in connection with any such
amendment may rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor, the Securities Administrator, the [Master] Servicer and the Trustee
with the consent of the Holders of not less than 66 2/3% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner
117
the rights of the Holders; provided, however, that no such amendment shall be
made unless the Trustee receives an Opinion of Counsel, at the expense of the
party requesting the change, that such change will not adversely affect the
status of the REMIC as a REMIC or cause a tax to be imposed on such REMIC; and
provided further, that no such amendment may (i) reduce in any manner the amount
of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate, without the consent of the Holder
of such Certificate or (ii) reduce the aforesaid percentages of Class Principal
Amount (or Percentage Interest) of Certificates of each Class, the Holders of
which are required to consent to any such amendment without the consent of the
Holders of 100% of the Class Principal Amount (or Class Notional Amount) of each
Class of Certificates affected thereby. For purposes of this paragraph,
references to "Holder" or "Holders" shall be deemed to include, in the case of
any Class of Book-Entry Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish written notification of the substance of such
amendment to each Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing Agreement,
the Trustee shall not consent to any amendment of any Servicing Agreement except
pursuant to the standards provided in this Section with respect to amendment of
this Agreement.
Section 11.04. VOTING RIGHTS.
Except to the extent that the consent of all affected Certificateholders
is required pursuant to this Agreement, with respect to any provision of this
Agreement requiring the consent of Certificateholders representing specified
percentages of aggregate outstanding Certificate Principal Amount (or Notional
Amount), Certificates owned by the Depositor, the [Master] Servicer, the
Securities Administrator, the Trustee or any Servicer or Affiliates thereof are
not to be counted so long as such Certificates are owned by the Depositor, the
[Master] Servicer, the Securities Administrator, the Trustee or any Servicer or
Affiliates thereof.
Section 11.05. PROVISION OF INFORMATION.
(a) For so long as any of the Certificates of any Series or Class are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act, each
of the Depositor and the Trustee agree to cooperate with each other to provide
to any Certificateholders and to any prospective purchaser of Certificates
designated by such Certificateholder, upon the request of such Certificateholder
or prospective purchaser, any information required to be provided to such holder
or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee or
the Securities Administrator, in providing such information shall be reimbursed
by the Depositor.
118
(b) The Securities Administrator will provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, (i) a copy (excluding exhibits) of any report
on Form 8-K or Form 10-K filed with the Securities and Exchange Commission
pursuant to Section 6.20(c) and (ii) a copy of any other document incorporated
by reference in the Prospectus. Any reasonable out-of-pocket expenses incurred
by the Securities Administrator in providing copies of such documents shall be
reimbursed by the Depositor.
(c) On each Distribution Date, the Securities Administrator shall deliver
or cause to be delivered by first class mail or make available on its website to
the Depositor, Attention: Contract Finance, a copy of the report delivered to
Certificateholders pursuant to Section 4.03.
Section 11.06. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 11.07. NOTICES.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to such party at the
relevant address, facsimile number or electronic mail address set forth below
(or at such other address, facsimile number or electronic mail address as such
party may designate from time to time by written notice in accordance with this
Section 11.07): (a) in the case of the Depositor, BancCap Asset Securitization
Issuance Corporation, __________________, Attention: __________, (b) in the case
of the Trustee, _________________________, Attention: ___________ -- BASIC
2002-_, (c) in the case of the [Master] Servicer, [name of master servicer],
________________________; Attention: Master Servicing, (d) in the case of the
Securities Administrator, ________________, _______________________, Attention:
BASIC 2002-_, telecopy number _____________, and (e) in the case of the
Certificate Registrar, its Corporate Trust Office, or as to each party such
other address as may hereafter be furnished by such party to the other parties
in writing. Any notice required or permitted to be mailed to a Holder shall be
given by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice.
Section 11.08. 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.
119
Section 11.09. INDULGENCES; NO WAIVERS.
Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
Section 11.10. HEADINGS NOT TO AFFECT INTERPRETATION.
The headings contained in this Agreement are for convenience of reference
only, and they shall not be used in the interpretation hereof.
Section 11.11. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except to
the extent specified in Sections 11.14 and 11.15.
Section 11.12. SPECIAL NOTICES TO THE RATING AGENCIES.
(a) The Depositor shall give prompt notice to the Rating Agencies of the
occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) any Assignment by the [Master] Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the [Master] Servicer
pursuant to Section 6.14 and any resignation of the [Master] Servicer
hereunder;
(v) the appointment of any successor to any [Master] Servicer
pursuant to Section 6.14; and
(vi) the making of a final payment pursuant to Section 7.02.
(b) All notices to the Rating Agencies provided for this Section shall be
in writing and sent by first class mail, telecopy or overnight courier, as
follows:
If to S&P, to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx, 00xx Xxxxx
000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgage Surveillance
If to Moody's, to:
Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Residential Mortgage Surveillance
(c) The Securities Administrator shall provide or make available to the
Rating Agencies reports prepared pursuant to Section 4.03. In addition, the
Securities Administrator shall, at the expense of the Trust Fund, make available
to each Rating Agency such information as such Rating Agency may reasonably
request regarding the Certificates or the Trust Fund, to the extent that such
information is reasonably available to the Securities Administrator.
Section 11.13. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same instrument.
Section 11.14. TRANSFER OF SERVICING.
Each Seller agrees that it shall provide written notice to the Trustee,
the Securities Administrator and the [Master] Servicer thirty days prior to any
transfer or assignment by such Seller of its rights under any Servicing
Agreement or of the servicing thereunder or delegation of its rights or duties
thereunder or any portion thereof to any Person other than the initial Servicer
under such Servicing Agreement; provided, that (i) neither Seller shall be
required to provide prior notice of any transfer of servicing that occurs within
three months following the Closing Date to an entity that is a Servicer on the
Closing Date or (ii) neither _________________ nor _______________________
______________________________ shall be required to provide notice of any
transfer of servicing rights by either of them to the other. In addition, the
ability of each Seller to transfer or assign its rights and delegate its duties
under any Servicing Agreement (other than a transfer of servicing rights between
_________________ and __________________________________) or to transfer the
servicing thereunder to a successor servicer shall be subject to the following
conditions:
(i) Such successor servicer must be qualified to service loans
for _________________;
(ii) Such successor servicer must satisfy the seller/servicer
eligibility standards in the applicable Servicing Agreement, exclusive of
any experience in mortgage loan origination, and must be reasonably
acceptable to the [Master] Servicer, whose approval shall not be
unreasonably withheld;
(iii) Such successor servicer must execute and deliver to the
Trustee and the [Master] Servicer an agreement, in form and substance
reasonably satisfactory to the Trustee, the Securities Administrator and
the [Master] Servicer, that contains an
121
assumption by such successor servicer of the due and punctual performance
and observance of each covenant and condition to be performed and
observed by the applicable Servicer under the applicable Servicing
Agreement or, in the case of a transfer of servicing to a party that is
already a Servicer pursuant to this Agreement, an agreement to add the
related Mortgage Loans to the Servicing Agreement already in effect with
such Servicer;
(iv) If the successor servicer is not a Servicer of Mortgage
Loans at the time of transfer, there must be delivered to the Trustee a
letter from each Rating Agency to the effect that such transfer of
servicing will not result in a qualification, withdrawal or downgrade of
the then-current rating of any of the Certificates;
(v) The related Seller shall, at its cost and expense, take
such steps, or cause the terminated Servicer to take such steps, as may
be necessary or appropriate to effectuate and evidence the transfer of
the servicing of the Mortgage Loans to such successor servicer,
including, but not limited to, the following: (A) to the extent required
by the terms of the Mortgage Loans and by applicable federal and state
laws and regulations, the related Seller shall cause the prior Servicer
to timely mail to each obligor under a Mortgage Loan any required notices
or disclosures describing the transfer of servicing of the Mortgage Loans
to the successor servicer; (B) prior to the effective date of such
transfer of servicing, the related Seller shall cause the prior Servicer
to transmit to any related insurer notification of such transfer of
servicing; (C) on or prior to the effective date of such transfer of
servicing, the related Seller shall cause the prior Servicer to deliver
to the successor servicer all Mortgage Loan Documents and any related
records or materials; (D) on or prior to the effective date of such
transfer of servicing, the related Seller shall cause the prior Servicer
to transfer to the successor servicer, or, if such transfer occurs after
a Remittance Date but before the next succeeding [Master] Servicer
Remittance Date, to the [Master] Servicer, all funds held by the
applicable Servicer in respect of the Mortgage Loans; (E) on or prior to
the effective date of such transfer of servicing, the related Seller
shall cause the prior Servicer to, after the effective date of the
transfer of servicing to the successor servicer, continue to forward to
such successor servicer, within one Business Day of receipt, the amount
of any payments or other recoveries received by the prior Servicer, and
to notify the successor servicer of the source and proper application of
each such payment or recovery; and (F) the related Seller shall cause the
prior Servicer to, after the effective date of transfer of servicing to
the successor servicer, continue to cooperate with the successor servicer
to facilitate such transfer in such manner and to such extent as the
successor servicer may reasonably request.
Section 11.15. TAX TREATMENT OF CLASS E AND CLASS P CERTIFICATES.
It is the intent of the parties hereto that the segregated pool of assets
consisting of any collections of Prepayment Penalty Amounts payable to Class P
Certificates and the segregated pool of assets consisting of any collection in
respect of the Class E Distributable Amount payable to the Class E Certificates
each constitute, for federal income tax purposes, a grantor trust as described
in Subpart E of Part I of Subchapter J of the Code and Treasury Regulation
ss.301.7701-4(c)(2). The Securities Administrator shall prepare and file, and
the Trustee shall
122
sign, all of the tax returns in respect of each such grantor trust. The expenses
of preparing and filing such returns shall be borne by the Securities
Administrator without any right of reimbursement therefor. The Securities
Administrator shall comply with each such requirement by filing Form 1041.
123
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
BANCCAP ASSET SECURITIZATION
ISSUANCE CORPORATION, as Depositor
By:
-------------------------------------
Name:
Title:
[NAME OF SECURITIES ADMINISTRATOR],
as Securities Administrator
By:
-------------------------------------
Name:
Title:
[NAME OF TRUSTEE],
as Trustee
By:
-------------------------------------
Name:
Title:
[NAME OF [MASTER] SERVICER],
as [Master] Servicer
By:
-------------------------------------
Name:
Title:
Solely for purposes of Section 11.14,
accepted and agreed to by:
________________, ________________
By:
-------------------------------
Name:
--------------------------
Title: Authorized Signatory
Solely for purposes of Section 11.14
accepted and agreed to by:
----------------------------------
By:
-------------------------------
Name:
--------------------------
Title:
--------------------------
EXHIBIT A
FORMS OF CERTIFICATES
X-0
XXXXXXX X-0
FORM OF INITIAL CERTIFICATION
________________
[Date]
[Name of trustee]
[Address of Trustee]
Attention: [ ] - BASIC 200[]-[ ]
BancCap Asset Securitization Issuance Corporation
000 Xxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
[Name of Master Servicer]
[Address of Master Servicer]
RE:
TRUST AGREEMENT, DATED AS OF [________], 200__, (THE "
TRUST
AGREEMENT"), BETWEEN BANCCAP ASSET SECURITIZATION ISSUANCE
CORPORATION, AS DEPOSITOR, [NAME OF SECURITIES ADMINISTRATOR],
AS SECURITIES ADMINISTRATOR, [NAME OF MASTER SERVICER], AS],
[MASTER] SERVICER AND [NAME OF TRUSTEE], AS TRUSTEE, WITH
RESPECT TO BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
200__-[____]
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the
Trust Agreement, subject to
review of the contents thereof, the undersigned, as Custodian on behalf of the
Trustee, hereby certifies that it has received the documents listed in Section
2.01(b) of the
Trust Agreement for each Mortgage File pertaining to each
Mortgage Loan listed on Schedule A, to the
Trust Agreement, subject to any
exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the
Trust
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Trust Agreement and the Trust Agreement sections cross-referenced
therein.
[[Custodian]], on behalf of
[NAME OF TRUSTEE],
as Trustee
By:
-------------------------------------
Name:
Title:
B-1
EXHIBIT B-2
FORM OF INTERIM CERTIFICATION
__________________
[Date]
[Name of trustee]
[Address of Trustee]
Attention: [ ] - BASIC 200[]-[ ]
BancCap Asset Securitization Issuance Corporation
000 Xxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
[Name of Master Servicer]
[Address of Master Servicer]
RE: TRUST AGREEMENT, DATED AS OF [________], 200__, (THE "TRUST
AGREEMENT"), BETWEEN BANCCAP ASSET SECURITIZATION ISSUANCE
CORPORATION, AS DEPOSITOR, [NAME OF SECURITIES ADMINISTRATOR],
AS SECURITIES ADMINISTRATOR, [NAME OF MASTER SERVICER], AS
[MASTER] SERVICER AND [NAME OF TRUSTEE], AS TRUSTEE, WITH
RESPECT TO BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
200__-[____]
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it (or its custodian) has
received the applicable documents listed in Section 2.01(b) of the Trust
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on the
attachment hereto, it has reviewed the documents listed above and has determined
that each such document appears regular on its face and appears to relate to the
Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement including, but not limited
to, Section 2.02(b).
[[Custodian]], on behalf of
[NAME OF TRUSTEE],
as Trustee
By:
-------------------------------------
Name:
Title:
B-2
EXHIBIT B-3
FORM OF FINAL CERTIFICATION
__________________
[Date]
[Name of trustee]
[Address of Trustee]
Attention: [ ] - BASIC 200[]-[ ]
BancCap Asset Securitization Issuance Corporation
000 Xxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
[Name of Master Servicer]
[Address of Master Servicer]
Re: TRUST AGREEMENT, DATED AS OF [________], 200__, (THE "TRUST
AGREEMENT"), BETWEEN BANCCAP ASSET SECURITIZATION ISSUANCE
CORPORATION, AS DEPOSITOR, [NAME OF SECURITIES ADMINISTRATOR],
AS SECURITIES ADMINISTRATOR, [NAME OF MASTER SERVICER], AS
[MASTER] SERVICER AND [NAME OF TRUSTEE], AS TRUSTEE, WITH
RESPECT TO BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 200___-[____]
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has received the
applicable documents listed in Section 2.02(b) of the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on the
attachment hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement.
[[Custodian]], on behalf of
[NAME OF TRUSTEE],
as Trustee
By:
-------------------------------------
Name:
Title:
B-3
EXHIBIT B-4
FORM OF ENDORSEMENT
Pay to the order of [NAME OF TRUSTEE], as trustee (the "Trustee") under
the Trust Agreement dated as of [________], 200__, among BancCap Asset
Securitization Issuance Corporation, as Depositor, the Trustee, the Securities
Administrator and the [Master] Servicer relating to BancCap Asset Securitization
Issuance Corporation Mortgage Pass-Through Certificates, Series 200____-[___],
without recourse.
----------------------------------------
[current signatory on note]
By:
-------------------------------------
Name:
Title:
B-4
EXHIBIT C
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
__________________
[Date]
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of [________], 200__ among
BancCap Asset Securitization Issuance Corporation, as Depositor, [name of master
servicer], as [Master] Servicer, [name of securities administrator], as
Securities Administrator, and you, as Trustee (the "Trust Agreement"), the
undersigned [Master] Servicer hereby requests a release of the Mortgage File
held by you as Trustee with respect to the following described Mortgage Loan for
the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The [Master] Servicer hereby
certifies that all amounts received in connection with the loan have been or
will be credited to the Collection Account or the Certificate Account (whichever
is applicable) pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The [Master] Servicer hereby certifies
that a Qualifying Substitute Mortgage Loan has been assigned and delivered to
you along with the related Mortgage File pursuant to the Trust Agreement.)
4. Mortgage Loan repurchased. (The [Master] Servicer hereby certifies
that the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Trust Agreement.)
5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Trust Agreement and
will be returned to you within ten (10) days of our receipt of the Mortgage
File, except if the Mortgage Loan has
C-1
been paid in full, or repurchased or substituted for a Qualifying Substitute
Mortgage Loan (in which case the Mortgage File will be retained by us
permanently).
Capitalized terms used herein shall have the meanings ascribed to them in
the Trust Agreement.
----------------------------------------
[Name of [Master] Servicer]
By:
-------------------------------------
Name:
Title: Servicing Officer
C-2
EXHIBIT D-1
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn,
deposes and says:
1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the "Purchaser"),
a _______________________ [description of type of entity] duly organized and
existing under the laws of the [State of __________] [United States], on behalf
of which he [she] makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is
______________.
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code") and will not be a "disqualified organization" as of
__________________ [date of transfer], and that the Purchaser is not acquiring a
Residual Certificate (as defined in the Agreement) for the account of, or as
agent (including a broker, nominee, or other middleman) for, any person or
entity from which it has not received an affidavit substantially in the form of
this affidavit.
4. That the Purchaser either (x) is not, and on __________________
[date of transfer] will not be, an employee benefit plan subject to Section 406
or Section 407 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code, the trustee of any such plan or
a person acting on behalf of any such plan or investing the assets of any such
plan to acquire a Residual Certificate; (y) is an insurance company that is
purchasing the Certificate with funds contained in an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60 and the purchase and holding of the Certificate are covered under
Section I and III of PTCE 95-60; or (z) herewith delivers to the Trustee, the
Certificate Registrar and the Depositor an opinion of counsel (a "Benefit Plan
Opinion") satisfactory to the Trustee, the Certificate Registrar and the
Depositor, and upon which the Trustee, the Certificate Registrar and the
Depositor shall be entitled to rely, to the effect that the purchase or holding
of such Residual Certificate by the Investor will not result in the assets of
the Trust Fund being deemed to be plan assets and subject to the prohibited
transaction provisions of ERISA or the Code and will not subject the Trustee,
the Securities Administrator, the [Master] Servicer, any Servicer or the
Depositor to any obligation in addition to those undertaken by such entities in
the Trust Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Depositor.
5. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among BancCap Asset Securitization Issuance
Corporation,
D-1-1
[name of trustee], as Trustee, [name of securities administrator], as Securities
Administrator, and [name of master servicer], as [Master] Servicer, dated as of
[________], 200__, no transfer of a Residual Certificate shall be permitted to
be made to any person unless the Depositor and the Trustee have received a
certificate from such transferee containing the representations in paragraphs 3,
4 and 5 hereof.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (such
entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to such Residual Certificate, and that the Purchaser has
provided financial statements or other financial information requested by the
transferor in connection with the transfer of the Residual Certificate in order
to permit the transferor to assess the financial capability of the Purchaser to
pay such taxes.
8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge that the
requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof are
not satisfied or that the Purchaser has reason to believe does not satisfy the
requirements set forth in paragraph 7 hereof, and (ii) without obtaining from
the prospective Purchaser an affidavit substantially in this form and providing
to the Trustee a written statement substantially in the form of Exhibit G to the
Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any cash flows
generated by the interest and that it intends to pay taxes associated with
holding such Residual Certificate as they become due.
10. That the Purchaser (i) is a U.S. Person or (ii) is a Non-U.S.
Person that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Trustee with an effective Internal Revenue Service Form W-8 ECI (Certificate
of Foreign Person's Claim for exception From Withholding on Income Effectively
Connected with the Conduct of a Trade or Business in the United States) or
successor form at the time and in the manner required by the Code. "Non-U.S.
Person" means any person other than (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate whose income
is includible in gross income for United States income tax purposes regardless
of its source; (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust; (vi) and, to the extent provided in Treasury regulations, certain trusts
in existence prior to August 20, 1996 that are treated as United States persons
prior to such date and elect to continue to be treated as United States persons.
D-1-2
11. That the Purchaser agrees to such amendments of the Trust
Agreement as may be required to further effectuate the restrictions on transfer
of any Residual Certificate to such a "disqualified organization," an agent
thereof, a Book-Entry Nominee, or a person that does not satisfy the
requirements of paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Securities
Administrator as its agent to act as "tax matters person" of the Trust Fund
pursuant to the Trust Agreement.
D-1-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________, 20__.
----------------------------------------
[name of Purchaser]
By:
-------------------------------------
Name:
Title:
Personally appeared before me the above-named [name of
officer] ________________, known or proved to me to be the same person who
executed the foregoing instrument and to be the [title of officer]
_________________ of the Purchaser, and acknowledged to me that he [she]
executed the same as his [her] free act and deed and the free act and deed of
the Purchaser.
Subscribed and sworn before me this _____ day of __________,
20__.
NOTARY PUBLIC
------------------------------
COUNTY OF_____________________
STATE OF_______________________
My commission expires the _____ day of __________, 20__.
X-0-0
XXXXXXX X-0
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
_______________
Date
Re: BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 200__-[___]
_______________________ (the "Transferor") has reviewed the
attached affidavit of _____________________________ (the "Transferee"), and has
no actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the assessment
or collection of any federal, state or local taxes legally required to be paid
with respect to a Residual Certificate. In addition, the Transferor has
conducted a reasonable investigation at the time of the transfer and found that
the Transferee had historically paid its debts as they came due and found no
significant evidence to indicate that the Transferee will not continue to pay
its debts as they become due.
Very truly yours,
----------------------------------------
Name:
Title:
D-2-1
EXHIBIT E
SERVICING AGREEMENTS
E-1
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: BANCCAP ASSET SECURITIZATION ISSUANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 200__-[___]
Reference is hereby made to the Trust Agreement dated as of
[________], 200__ (the "Trust Agreement") among BancCap Asset Securitization
Issuance Corporation, as Depositor, [name of trustee], as Trustee, [name of
securities administrator], as Securities Administrator, and [name of master
servicer], as [Master] Servicer. Capitalized terms used but not defined herein
shall have the meanings given to them in the Trust Agreement.
This letter relates to $_________ initial Certificate Principal
Amount of Class ______ Certificates which are held in the form of Definitive
Certificates registered in the name of __________________ (the "Transferor").
The Transferor has requested a transfer of such Definitive Certificates for
Definitive Certificates of such Class registered in the name of [insert name of
transferee].
In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Trust Agreement and the Certificates and (ii) Rule 144A under the Securities Act
to a purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer", which purchaser
is aware that the sale to it is being made in reliance upon Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.
This certificate and the statements contained herein are made for
the benefit of the Trustee and the Certificate Registrar and the benefit of the
Placement Agent and the Depositor.
----------------------------------------
[Name of Transferor]
By:
-------------------------------------
Name:
Title:
Dated: __________________, ________
F-1
EXHIBIT G
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
_______________
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Mortgage Pass-Through Certificates, Series 200__-[___] (the "Privately
Offered Certificates") of BancCap Asset Securitization Issuance Corporation (the
"Depositor") which are held in the form of Definitive Certificates, we confirm
that:
(1) We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should
sell any Privately Offered Certificates within two years of the later of
the date of original issuance of the Privately Offered Certificates or
the last day on which such Privately Offered Certificates are owned by
the Depositor or any affiliate of the Depositor (which includes the
Placement Agent) we will do so only (A) to the Depositor, (B) to
"qualified institutional buyers" (within the meaning of Rule 144A under
the Securities Act) in accordance with Rule 144A under the Securities Act
("QIBs"), (C) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act, or (D) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Trustee and the Certificate Registrar under the Trust
Agreement dated as of [________], 200__ among the Depositor, [name of
trustee], as Trustee (the "Trustee"), [name of securities administrator],
as Securities Administrator, and [name of master servicer], as [Master]
Servicer, a signed letter in the form of this letter; and we further
agree, in the capacities stated above, to provide to any person
purchasing any of the Privately Offered Certificates from us a notice
advising such purchaser that resales of the Privately Offered
Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Trustee, the Certificate Registrar
and the Depositor a certification from such transferee in the form hereof
to confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
of the Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing effect.
G-1
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or for
one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that in
accordance with ERISA, the Code and the Exemption, no Plan and no person
acting on behalf of such a Plan may acquire such Certificate except in
accordance with Section 3.03(d) of the Trust Agreement.
Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement.
G-2
The Trustee, the Certificate Registrar and the Depositor are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
----------------------------------------
[Purchaser]
By:
-------------------------------------
Name
Title:
G-3
EXHIBIT H
[FORM OF ERISA TRANSFER AFFIDAVIT]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of (the "Investor"), a
[corporation duly organized] and existing under the laws of __________, on
behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of transfer]
will not be, an employee benefit plan subject to Section 406 or Section 407 of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), the
trustee of any such plan or a person acting on behalf of any such plan or
investing the assets of any such plan; (y) if the Certificate has been the
subject of an ERISA-Qualifying Underwriting, is an insurance company that is
purchasing the Certificate with funds contained in an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60 and the purchase and holding of the Certificate are covered under
Section I and III of PTCE 95-60; or (z) herewith delivers to the Trustee, the
Certificate Registrar and to the Depositor an opinion of counsel (a "Benefit
Plan Opinion") satisfactory to the Trustee, the Certificate Registrar and the
Depositor, and upon which the Trustee and the Depositor shall be entitled to
rely, to the effect that the purchase or holding of such Certificate by the
Investor will not result in the assets of the Trust Fund being deemed to be plan
assets and subject to the prohibited transaction provisions of ERISA or the Code
and will not subject the Trustee, the Securities Administrator, the [Master]
Servicer, any Servicer or the Depositor to any obligation in addition to those
undertaken by such entities in the Trust Agreement, which opinion of counsel
shall not be an expense of the Trustee, the Certificate Registrar or the
Depositor.
3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among BancCap Asset Securitization Issuance
Corporation, as Depositor, [name of trustee], as Trustee, [name of securities
administrator], as Securities Administrator, and [name of master servicer], as
[Master] Servicer, dated as of [________], 200__, no transfer of the
ERISA-Restricted Certificates shall be permitted to be made to any person unless
the Depositor and Trustee have received a certificate from such transferee in
the form hereof.
H-1
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 20__.
----------------------------------------
[Investor]
By:
-------------------------------------
Name
Title:
ATTEST:
------------------------------
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named ___________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the _________________ of the Investor, and acknowledged
that he executed the same as his free act and deed and the free act and deed of
the Investor.
Subscribed and sworn before me this _____ day of ___________
20___.
----------------------------------------
NOTARY PUBLIC
My commission expires the
____ day of __________, 20__.
H-2
EXHIBIT I
MONTHLY REMITTANCE ADVICE
I-1
EXHIBIT J
MONTHLY ELECTRONIC DATA TRANSMISSION
J-1
EXHIBIT K
CUSTODIAL AGREEMENTS
K-1
EXHIBIT L
[RESERVED]
L-1
EXHIBIT M
[RESERVED]
M-1
EXHIBIT N-1
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM RESTRICTED GLOBAL SECURITY
TO REGULATION S GLOBAL SECURITY
(Transfers pursuant to Section 3.03(h)(B)
of the agreement)
-----------------------------------------
Re: BancCap Asset Securitization Issuance Corporation Mortgage
Loan Trust Mortgage Pass-Through Certificates,
Series 200__-[___]
Reference is hereby made to the Trust Agreement (the "Agreement") among
BancCap Asset Securitization Issuance Corporation, as Depositor, [name of master
servicer], as [Master] Servicer, [name of securities administrator], as
Securities Administrator, and [name of trustee], as Trustee, dated as of
[________], 200__. Capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement.
This letter relates to U.S. $____________ aggregate principal amount of
Securities which are held in the form of a Restricted Global Security with DTC
in the name of [name of transferor] ___________________________ (the
"Transferor") to effect the transfer of the Securities in exchange for an
equivalent beneficial interest in a Regulation S Global Security.
In connection with such request, the Transferor does hereby certify that
such transfer has been effected in accordance with the transfer restrictions set
forth in the Agreement and the Securities and in accordance with Rule 904 of
Regulation S, and that:
a. the offer of the Securities was not made to a person in the
United States;
b. at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting
on its behalf reasonably believed that the transferee was outside
the United States;
c. no directed selling efforts have been made in contravention of
the requirements of Rule 903 or 904 of Regulation S, as
applicable;
d. the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of
1933, as amended; and
e. the transferee is not a U.S. person (as defined in Regulation
S).
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
N-1
----------------------------------------
[Name of Transferor]
By:
-------------------------------------
Name
Title:
Date:_________________, ____
N-1-2
EXHIBIT N-2
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL SECURITY
TO RESTRICTED GLOBAL SECURITY
(Transfers pursuant to Section 3.03(h)(C)
of the agreement)
-----------------------------------------
Re: BancCap Asset Securitization Issuance Corporation Mortgage
Pass-Through Certificates, Series 200__-[___]
Reference is hereby made to the Trust Agreement (the "Agreement") among
BancCap Asset Securitization Issuance Corporation, as Depositor, [name of master
servicer], as [Master] Servicer, [name of securities administrator], as
Securities Administrator, and [name of trustee], as Trustee, dated as of
[________], 200__. Capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement.
This letter relates to U.S. $__________ aggregate principal amount of
Securities which are held in the form of a Regulations S Global Security in the
name of [name of transferor] ___________________________ (the "Transferor") to
effect the transfer of the Securities in exchange for an equivalent beneficial
interest in a Restricted Global Security.
In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Agreement and the
Securities and (ii) Rule 144A under the United States Securities Act of 1933, as
amended, to a transferee that the Transferor reasonably believes is purchasing
the Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion, the transferee and any such
account is a qualified institutional buyer within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
----------------------------------------
[Name of Transferor]
By:
-------------------------------------
Name
Title:
Date:_________________, ____
N-2-1
EXHIBIT O
SENIOR PRINCIPAL PRIORITIES
O-1
SCHEDULE A
ALL MORTGAGE LOANS
