EXECUTION
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer
THE MURRAYHILL COMPANY, as Loss Mitigation Advisor,
and
BANK ONE, NATIONAL ASSOCIATION, as Trustee
---------------------------
TRUST AGREEMENT
Dated as of October 1, 2001
---------------------------
AMORTIZING RESIDENTIAL COLLATERAL TRUST
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2001-BC6
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions................................................................................10
Section 1.02. Calculations Respecting Mortgage Loans.....................................................35
Section 1.03. Calculations Respecting Accrued Interest...................................................35
ARTICLE II
DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans.......................35
Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation for Trust Fund................38
Section 2.03. Representations and Warranties of the Depositor............................................40
Section 2.04. Discovery of Breach........................................................................41
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.....................................42
Section 2.06. Grant Clause...............................................................................43
Section 2.07. Purchase of Defaulted Mortgage Loans.......................................................43
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates...........................................................................43
Section 3.02. Registration...............................................................................44
Section 3.03. Transfer and Exchange of Certificates......................................................44
Section 3.04. Cancellation of Certificates...............................................................47
Section 3.05. Replacement of Certificates................................................................47
Section 3.06. Persons Deemed Owners......................................................................48
Section 3.07. Temporary Certificates.....................................................................48
Section 3.08. Appointment of Paying Agent................................................................48
Section 3.09. Book-Entry Certificates....................................................................48
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account.........................................................................50
Section 4.02. Application of Funds in the Collection Account.............................................52
Section 4.03. Reports to Trustee and Certificateholders..................................................54
Section 4.04. Reports to Certificateholders..............................................................54
Section 4.05. Certificate Account........................................................................57
Section 4.06. Determination of LIBOR.....................................................................58
i
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally....................................................................61
Section 5.02. Distributions from the Certificate Account.................................................61
Section 5.03. Allocation of Losses. .....................................................................66
Section 5.04. Advances by Master Servicer, Servicers and Trustee.........................................66
Section 5.05. Compensating Interest Payments.............................................................67
Section 5.06. Basis Risk Reserve Fund....................................................................67
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. ........................................................................68
Section 6.02. Certain Matters Affecting the Trustee. ....................................................71
Section 6.03. Trustee Not Liable for Certificates. ......................................................72
Section 6.04. Trustee May Own Certificates. .............................................................72
Section 6.05. Eligibility Requirements for Trustee. .....................................................72
Section 6.06. Resignation and Removal of Trustee. .......................................................73
Section 6.07. Successor Trustee. ........................................................................74
Section 6.08. Merger or Consolidation of Trustee. .......................................................75
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian. .................................75
Section 6.10. Authenticating Agents. ....................................................................76
Section 6.11. Indemnification of Trustee. ...............................................................77
Section 6.12. Fees and Expenses of Trustee...............................................................78
Section 6.13. Collection of Monies. .....................................................................78
Section 6.14. Trustee To Act; Appointment of Successor...................................................78
Section 6.15. Additional Remedies of Trustee Upon Event of Default.......................................82
Section 6.16. Waiver of Defaults.........................................................................82
Section 6.17. Notification to Holders....................................................................82
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default.............82
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default..............83
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation
of All Mortgage Loans......................................................................84
Section 7.02. Procedure Upon Termination of Trust Fund...................................................85
Section 7.03. Additional Trust Fund Termination Requirements.............................................86
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders............................................................87
Section 8.02. Access to List of Holders..................................................................87
Section 8.03. Acts of Holders of Certificates............................................................88
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ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER
SERVICER; LOSS MITIGATION ADVISOR
Section 9.01. Duties of the Master Servicer..............................................................89
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance
Policy.....................................................................................89
Section 9.03. Master Servicer's Financial Statements and Related Information.............................90
Section 9.04. Power to Act; Procedures...................................................................90
Section 9.05. Enforcement of Servicer's and Master Servicer's Obligations................................92
Section 9.06. Collection of Taxes, Assessments and Similar Items.........................................92
Section 9.07. Termination of Servicing Agreements; Successor Servicers...................................93
Section 9.08. Master Servicer Liable for Enforcement.....................................................93
Section 9.09. No Contractual Relationship Between Any Servicer and Trustee or Depositor..................94
Section 9.10. Assumption of Servicing Agreement by Trustee...............................................94
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements...............................................94
Section 9.12. Release of Mortgage Files..................................................................95
Section 9.13. Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee....................................................................................95
Section 9.14. Representations and Warranties of the Master Servicer......................................97
Section 9.15. Opinion....................................................................................99
Section 9.16. Standard Hazard and Flood Insurance Policies...............................................99
Section 9.17. Presentment of Claims and Collection of Proceeds..........................................100
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies....................................100
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies and Documents..................100
Section 9.20. [Reserved]................................................................................101
Section 9.21. Compensation to the Master Servicer.......................................................101
Section 9.22. REO Property..............................................................................101
Section 9.23. Preparation of Tax Returns and Other Reports..............................................102
Section 9.24. Reports to the Trustee....................................................................103
Section 9.25. Annual Officer's Certificate as to Compliance.............................................103
Section 9.26. Annual Independent Accountants' Servicing Report..........................................104
Section 9.27. Merger or Consolidation...................................................................104
Section 9.28. Resignation of Master Servicer............................................................104
Section 9.29. Assignment or Delegation of Duties by the Master Servicer.................................105
Section 9.30. Limitation on Liability of the Master Servicer and Others.................................105
Section 9.31. Indemnification; Third-Party Claims.......................................................106
Section 9.32. Special Servicing of Delinquent Mortgage Loans............................................106
Section 9.33. Alternative Index.........................................................................106
Section 9.34. Duties of the Loss Mitigation Advisor.....................................................106
Section 9.35. Limitation Upon Liability of the Loss Mitigation Advisor..................................107
iii
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration......................................................................107
Section 10.02. Prohibited Transactions and Activities....................................................109
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status....................109
Section 10.04. REO Property..............................................................................111
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment...................................................112
Section 11.02. Entire Agreement..........................................................................112
Section 11.03. Amendment.................................................................................112
Section 11.04. Voting Rights.............................................................................113
Section 11.05. Provision of Information..................................................................113
Section 11.06. Governing Law.............................................................................114
Section 11.07. Notices...................................................................................114
Section 11.08. Severability of Provisions................................................................114
Section 11.09. Indulgences; No Waivers...................................................................114
Section 11.10. Headings Not To Affect Interpretation.....................................................115
Section 11.11. Benefits of Agreement.....................................................................115
Section 11.12. Special Notices to the Rating Agencies....................................................115
Section 11.13. Conflicts.................................................................................116
Section 11.14. Counterparts..............................................................................116
Section 11.15. Transfer of Servicing.....................................................................116
iv
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 Form of 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 Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Residual Certificate Transfer Affidavit (Transferor)
Exhibit E-1 Servicing Agreement (Option One Mortgage Corporation)
Exhibit E-2 Servicing Agreement (Ocwen Federal Bank F.S.B.)
Exhibit E-3 Servicing Agreement (Aurora Loan Services Inc.)
Exhibit E-4 Servicing Agreement (Countrywide Home Loans, Inc.)
Exhibit E-5 Servicing Agreement (Xxxxx Fargo Home Mortgage, Inc.)
Exhibit E-6 Services Agreement (Fairbanks Capital Corp.)
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 Transmissions
Exhibit K-1 Custodial Agreement (Bankers Trust Company of California, N.A.)
Exhibit K-2 Custodial Agreement (U.S. Bank Trust National Association)
Exhibit K-3 Custodial Agreement (The Chase Manhattan Bank)
Exhibit K-4 Custodial Agreement (LaSalle Bank, N.A.)
Exhibit K-5 Custodial Agreement (Xxxxx Fargo Bank Minnesota, N.A.)
Exhibit L-1 PMI Policy - Mortgage Guaranty Insurance Corporation
Exhibit L-2 PMI Policy - Radian Guaranty Inc.
Exhibit L-3 PMI Policy - PMI Mortgage Insurance Company
Exhibits M Form of Loss Mitigation Advisory Agreement, dated as of October 1, 2001, between The
Murrayhill Company, as Loss Mitigation Advisor, and each Servicer
Exhibit N-1 Form of Transfer Certificate for Transfer from Restricted Global Security to
Regulation S Global Security
Exhibit N-2 Form of Transfer Certificate for Transfer from Regulation S Global Security to
Restricted Global Security
Exhibit O Addition Notice (for Purchase of Subsequent Mortgage Loans)
Exhibit P Interest Rate Cap Agreement
Schedule A Mortgage Loan Schedule
v
This TRUST AGREEMENT, dated as of October 1, 2001 (the "Agreement"), is
by and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), BANK ONE, NATIONAL ASSOCIATION, as Trustee (the
"Trustee"), XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master servicer
(the "Master Servicer") and THE MURRAYHILL COMPANY, a Colorado corporation, as
loss mitigation advisor (the "Loss Mitigation Advisor").
PRELIMINARY STATEMENT
The Depositor has acquired the Initial Mortgage Loans from the Sellers,
and at the Closing Date is the owner of the Initial Mortgage Loans and the other
property being conveyed by it to the Trustee hereunder 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
Initial Mortgage Loans, the Initial Pre-Funding Amount 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
Initial Mortgage Loans, any Subsequent Mortgage Loans and the other property
constituting the Trust Fund. All covenants and agreements made by each Seller in
the related Mortgage Loan Sale Agreement and by the Depositor and the Trustee
herein with respect to the Initial Mortgage Loans or any Subsequent Mortgage
Loans and the other property constituting the Trust Fund are for the benefit of
the Holders from time to time of the Certificates and, to the extent provided
herein, the NIMS Insurer. The Depositor, the Trustee, the Master Servicer and
the Loss Mitigation Advisor 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.
As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as comprising three real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, REMIC 1, REMIC 2 and
REMIC 3, REMIC 3 also being referred to as the "Upper Tier REMIC"). Each
Certificate, other than the Class X Certificate, Class R Certificate, and Class
P Certificate, represents ownership of a regular interest in the Upper Tier
REMIC for purposes of the REMIC Provisions. The Class X Certificate represents
ownership of two regular interests in the Upper Tier REMIC as described in note
6 of the table below for such REMIC. In addition, each Certificate, other than
the Class R, Class A-IO, Class X, and Class P Certificates, represents the right
to receive payments with respect to any Basis Risk Shortfalls and Unpaid Basis
Risk Shortfalls from the Basis Risk Reserve Fund pursuant to Section 5.06. The
Class R Certificate represents ownership of the sole class of residual interest
in each of REMIC 1, REMIC 2 and the Upper Tier REMIC for purposes of the REMIC
Provisions. The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated Lower Tier Interests in REMIC 2, other than the Class LT2-R
Interest, and each such Lower Tier Interest is hereby designated as a regular
interest in REMIC 2 for purposes of the REMIC Provisions. REMIC 2 shall hold as
its assets the several classes of uncertificated Lower Tier Interests in REMIC
1, other than the Class LT1-R Interest, and each such Lower Tier Interest is
hereby designated as a regular interest in REMIC 1. REMIC 1 shall hold as its
assets the property of the Trust Fund other than the Lower Tier Interests in
REMIC 1 and REMIC 2, the Basis Risk Reserve Fund, the right to receive
Prepayment Premiums, the Pre-Funding Account, and the Capitalized Interest
Account. The startup day for each REMIC created hereby for purposes of the REMIC
Provisions is the Closing Date. In addition, for purposes of the REMIC
Provisions, the latest possible maturity date for each regular interest in each
REMIC created hereby is the Latest Possible Maturity Date.
REMIC 1
The following table sets forth (or describes) the class designation,
interest rate, and initial principal amount for each class of REMIC 1 Lower Tier
Interests.
REMIC 1 REMIC 1
Lower Tier Lower Tier Initial Class
Class Designation Interest Rate Principal Amount
----------------- ------------- ----------------
Class LT1-A (1) $573,789,517.44
Class LT1-AI-1 (1) 51,384,135.90
Class LT1-AI-2 (1) 51,384,135.95
Class LT1-AI-3 (1) 102,768,271.79
Class LT1-AI-4 (1) 25,692,067.95
Class LT1-AI-5 (1) 25,692,067.95
Class LT1-AI-6 (1) 8,512,212.76
Class LT1-R (2) (2)
---------------------------
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these REMIC 1 Lower Tier Interests is a per
annum rate equal to the weighted average of the Net Mortgage Rates of the
Mortgage Loans as of the first day of the related Collection Period.
(2) The Class LT1-R Interest is the sole class of residual interest in REMIC 1.
It does not have an interest rate or a principal balance.
On each Distribution Date, the Trustee shall first pay or charge as an
expense of REMIC 1 all expenses of the Trust for such Distribution Date other
than the Loss Mitigation Advisor's Fee.
On each Distribution Date, the Trustee shall distribute the Interest
Remittance Amount to the Lower Tier Interests in REMIC 1 at the rates shown
above, in the following order and priority
(i) First to the Lower Tier Interests having the letters "AI" in
their class designation in ascending order of their numerical
designation, and
(ii) Second, to the Class LT1-A Interest.
On each Distribution Date the Trustee shall distribute the Principal
Remittance Amount in the following order and priority:
(i) First, to the Class LT1-A Interest until its principal balance is
reduced to zero;
(ii) Second, to the Lower Tier Interests having the letters "AI" in
their class designation in ascending order of their numerical
designation until the principal balance or each such Lower Tier
Interest is reduced to zero;
2
On each Distribution Date the Trustee shall allocate Realized Losses in
the same order and priority used to allocate the Principal Remittance Amount
among the Lower Tier Interests in REMIC 1.
REMIC 2
The following table sets forth (or describes) the class designation,
interest rate, and initial principal amount for each class of REMIC 2 Lower Tier
Interests.
Corresponding
REMIC 2 REMIC 2 Class of
Lower Tier Lower Tier Initial Class Certificate(s) or
Class Designation Interest Rate Principal Amount Component
----------------- ------------- ---------------- -----------------
Class LT2-A (1) $378,958,000.00 Class A1
Class LT2-M1 (1) 22,480,500.00 Class M1
Class LT2-M2 (1) 16,057,500.00 Class M2
Class LT2-B (1) 6,423,000.00 Class B
Class LT2-Q (1) 432,483,264.87 N/A
Class LT2-AIO-1 (2) (2) Class A-IO
Class LT2-AIO-2 (3) (3) Class A-IO
Class LT2-AIO-3 (4) (4) Class A-IO
Class LT2-AIO-4 (5) (5) Class A-IO
Class LT2-AIO-5 (6) (6) Class A-IO
Class LT2-AIO-6 (7) (7) Class A-IO
Class LT2-R (8) (8) Class R
---------------------------
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these REMIC 2 Lower Tier Interests is a per
annum rate equal to the weighted average of the interest rates on the REMIC
1 Lower Tier Interests computed after reducing the rate payable on each of
the REMIC 1 Lower Tier Interests having an "AI" in its class designation by
6.00% for each Distribution Date for which interest is payable on its
Corresponding REMIC 2 IO Interest (i.e., the rate will equal the Net Funds
Cap).
(2) The Class LT2-AIO-1 Interest is an interest-only Class and does not have a
principal balance. For each of the first six Distribution Dates the Class
LT2-AIO-1 Interest shall be entitled to interest payable on the Class
LT1-AI-1 Interest at a rate of 6.00% per annum and shall not be entitled to
any payments thereafter.
(3) The Class LT2-AIO-2 Interest is an interest-only Class and does not have a
principal balance. For each of the first 12 Distribution Dates the Class
LT2-AIO-2 Interest shall be entitled to interest payable on the Class
LT1-AI-2 Interest at a rate of 6.00% per annum and shall not be entitled to
any payments thereafter.
(4) The Class LT2-AIO-3 Interest is an interest-only Class and does not have a
principal balance. For each of the first 18 Distribution Dates the Class
LT2-AIO-3 Interest shall be entitled to interest payable on the Class
LT1-AI-3 Interest at a rate of 6.00% per annum and shall not be entitled to
any payments thereafter.
(5) The Class LT2-AIO-4 Interest is an interest-only Class and does not have a
principal balance. For each of the first 24 Distribution Dates the Class
LT2-AIO-4 Interest shall be entitled to interest payable on the Class
LT1-AI-4 Interest at a rate of 6.00% per annum and shall not be entitled to
any payments thereafter.
(6) The Class LT2-AIO-5 Interest is an interest-only Class and does not have a
principal balance. For each of the first 30 Distribution Dates the Class
LT2-AIO-2 Interest shall be entitled to interest payable on the Class
LT1-AI-2 Interest at a rate of 6.00% per annum and shall not be entitled to
any payments thereafter.
3
(7) The Class LT2-AIO-6 Interest is an interest-only Class and does not have a
principal balance. For each of the first 36 Distribution Dates the Class
LT2-AIO-2 Interest shall be entitled to interest payable on the Class
LT1-AI-2 Interest at a rate of 6.00% per annum and shall not be entitled to
any payments thereafter.
(8) The Class LT2-R Interest is the sole class of residual interests in REMIC
2. It does not have an interest rate or a principal balance.
On each Distribution Date interest shall be distributed with respect to
each of the Lower Tier Interests in REMIC 2 based on the above-described
interest rates, provided however, that interest that accrues on the Class LT2-Q
Interest shall be deferred in an amount equal to one-half of the increase, if
any, in the Overcollateralization Amount for such Distribution Date. Any
interest so deferred shall itself bear interest at the interest rate for the
Class LT2-Q Interest. An amount equal to the interest so deferred shall be
distributed as additional principal on the other REMIC 2 Lower Tier Interests
having a principal balance.
On each Distribution Date the principal distributed on the REMIC 1
Lower Tier Interests (together with an amount equal to the interest deferred on
the Class LT2-Q Interest for such Distribution Date) shall be distributed, and
Realized Losses shall be allocated, among the Lower Tier Interests in REMIC 2 in
the following order of priority:
(i) First, to the Class LT2-A Interest until the principal balance of
such Lower Tier Interest equals one-half of the Class Principal
Amount of the Corresponding Class of Certificates immediately
after such Distribution Date;
(ii) Second, to the Class LT2-M1 Interest until its principal balance
equals one-half of the Class Principal Amount of the Class M1
Certificates immediately after such Distribution Date;
(iii) Third, to the Class LT2-M2 Interest until its principal balance
equals one-half of the Class Principal Amount of the Class M2
Certificates immediately after such Distribution Date;
(iv) Fourth, to the Class LT2-B Interest until its principal balance
equals one-half of the Class Principal Amount of the Class B
Certificates immediately after such Distribution Date; and
(v) Finally, to the Class LT-Q Interest, any remaining amounts.
REMIC 3
The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount, and minimum
denomination for each Class of Certificates comprising interests in the Trust
Fund created hereunder. Each Certificate, other than the Class P and Class R
Certificates, represents ownership of regular interests in the Upper Tier REMIC.
4
Certificate Initial Class Minimum
Class Designation Interest Rate Principal Amount Denominations
----------------- ------------- ---------------- -------------
Class A (1) $757,916,000 $25,000
Class A-IO 6.00% (8) $1,000,000
Class M1 (2) $44,961,000 $100,000
Class M2 (3) $32,115,000 $100,000
Class B (4) $12,846,000 100,000
Class P (5) (5) (9)
Class X (6) (6) (9)
Class R (7) (7) (9)
---------------------------
(1) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 0.35% and (ii) the Net Funds Cap
for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class A Certificates will be LIBOR plus 0.70%.
(2) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class M1 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 0.80% and (ii) the Net Funds Cap
for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M1 Certificates will be LIBOR plus 1.20%.
(3) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class M2 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 1.35% and (ii) the Net Funds Cap
for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M2 Certificates will be LIBOR plus 2.025%.
(4) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 2.00% and (ii) the Net Funds Cap
for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B Certificates will be LIBOR plus 3.00%.
(5) The Class P Certificate will be issued without a Certificate Principal
Amount and will not bear interest at a stated rate but shall entitle the
Holder thereof to receive Prepayment Premiums paid with respect to the
Mortgage Loans as provided in Section 5.02(f). The Class P Certificate
shall be an interest in the Trust Fund but shall not be an interest in any
REMIC created under this Agreement.
(6) The Class X Certificate shall have an initial principal balance of
$8,564,264.87, but shall not accrue interest on that balance. In addition
to the right to receive ultimately the initial principal balance of
$8,564,264.87, which right represents a regular interest in the Upper Tier
REMIC, the Class X Certificate also comprises a notional component, which
is also a regular interest in the Upper Tier REMIC. The notional component
has a notional principal balance that at all times will equal the aggregate
of the principal balances of the Class LT2-A, Class LT2-M1, Class LT2-M2,
Class LT2-B, and Class LT2-Q Interests (i.e., the Pool Balance). For each
Distribution Date (and the related Accrual Period), the notional component
shall bear interest at a rate equal to the excess of (a) the difference
between (i) the weighted average of the interest rates on the Class LT2-A,
Class LT2-M1, Class LT2-M2, Class LT2-B, and Class LT2-Q Interests weighted
on the basis of the principal balance of each such Lower Tier Interest
(i.e., the Net Funds Cap), minus (ii) the Advisor's Fee Rate, over (b) the
Adjusted Lower Tier WAC. For any Distribution Date, interest that accrues
on the notional component of the Class X Certificate shall be deferred to
the extent of any increase in the Overcollateralization Amount on such
date. Such deferred interest shall not itself bear interest.
5
(7) The Class R Certificate will be issued without a Certificate Principal
Amount and will not bear interest at a stated rate. The Class R Certificate
represents ownership of the residual interest in the Upper Tier REMIC, as
well as ownership of the Class LT2-R and Class LT1-R Interests.
(8) The Class A-IO Certificates are an interest only Class and for any
Distribution Date the Class A-IO Certificates shall bear interest at the
per annum rate shown above on its Class Notional Balance.
(9) The Class P, Class X and Class R Certificates will each be issued as a
single Certificate evidencing the entire Percentage Interest in such Class.
As of the Cut-off Date, the Initial Mortgage Loans had an aggregate
Scheduled Principal Balance of $730,865,711.87.
In consideration of the mutual agreements herein contained, the
Depositor, each Seller, the Loss Mitigation Advisor, the Master Servicer and the
Trustee hereby agree as follows:
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: As provided in each Servicing Agreement.
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.
Accrual Period: With respect to any Distribution Date and any Class of
LIBOR Certificates and the Class A-IO Certificates, the period beginning on the
Distribution Date in the calendar month immediately preceding the month in which
the related Distribution Date occurs (or, in the case of the first Distribution
Date, beginning on October 25, 2001) and ending on the day immediately preceding
the related Distribution Date.
Act: As defined in Section 3.03(c).
Additional Collateral: None.
Addition Notice: With respect to each sale of Subsequent Mortgage Loans
to the Trust Fund pursuant to Section 2.01(b) of this Agreement, a notice from
the Depositor substantially in the form of Exhibit O hereto delivered to the
Trustee, the Master Servicer, the Custodians, each Rating Agency and the NIMS
Insurer.
6
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the
related Mortgage Note provides for the adjustment of the Mortgage Rate
applicable thereto.
Adjusted Lower Tier WAC: For any Accrual Period, the product of (a)
two, and (b) the weighted average of the interest rates on the LT2-Q, LT2-A,
LT2-M1, LT2-M2, and LT2-B Interests determined for this purpose by first
subjecting the rate payable on the Class LT2-Q Interest to a cap of zero, and
subjecting the rate payable on each of the Class LT2-A, Class LT2-M1, Class
LT2-M2, and Class LT2-B Interests to a cap that corresponds to the Certificate
Interest Rate for the Corresponding Class of Certificates for such Accrual
Period.
Advance: An advance of the aggregate of payments of principal and
interest (net of the Master Servicing Fee and the Servicing Fee) on one or more
Mortgage Loans that were due on the Due Date in the related Collection 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 any Servicer (or
by the Trustee) pursuant to Section 5.04.
Advisor's Fee Rate: 0.015% per annum.
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 Expense Rate: With respect to any Mortgage Loan, the sum of
the Master Servicing Fee Rate, the Servicing Fee Rate and, in the case of any
Mortgage Loan covered by a Pool PMI Policy, the applicable Insurance Fee Rate.
Aggregate Overcollateralization Release Amount: With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the amount, if any, by which (i) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the Principal Remittance Amount for such
Distribution Date is applied on such date in reduction of the aggregate of the
Certificate Principal Amounts of the Certificates, exceeds (ii) the Targeted
Overcollateralization Amount for such Distribution Date.
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.
Anniversary Year: The one-year period beginning on the Closing Date and
ending on the first anniversary thereof, and each subsequent one-year period
beginning on the day after the end of the preceding Anniversary Year and ending
on next succeeding anniversary of the Closing Date.
7
Applied Loss Amount: With respect to any Distribution Date, the amount,
if any, by which (x) the aggregate Certificate Principal Amount of the
Certificates after giving effect to all Realized Losses incurred with respect to
the Mortgage Loans during the related Collection Period and distributions of
principal on such Distribution Date, but before giving effect to any application
of the Applied Loss Amount with respect to such date, exceeds (y) the Pool
Balance for such Distribution Date.
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 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.
B Principal Distribution Amount: With respect to any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event has not occurred
with respect to such Distribution Date, the amount, if any, by which (x) the sum
of (i) the aggregate Class Principal Amount of the Class A, Class M1 and Class
M2 Certificates, in each case after giving effect to distributions on such
Distribution Date and (ii) the Class Principal Amount of the Class B
Certificates immediately prior to such Distribution Date exceeds (y) the B
Target Amount.
B Target Amount: With respect to any Distribution Date, an amount equal
to the lesser of (a) the product of (i) 98.00% and (ii) the Pool Balance for
such Distribution Date and (b) the amount, if any, by which (i) the Pool Balance
for such Distribution Date exceeds (ii) 0.50% of the Pool Balance as of the
Cut-off Date.
Balloon Mortgage Loan: Any Mortgage Loan having an original term to
maturity that is shorter than its amortization schedule, and a final Scheduled
Payment that is disproportionately large in comparison to other Scheduled
Payments.
Balloon Payment: The final Scheduled Payment in respect of a Balloon
Mortgage Loan.
Bankruptcy: As 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.
8
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
Basis Risk Payment: With respect to any Distribution Date, an amount
equal to the sum of (i) any Basis Risk Shortfall for such Distribution Date,
(ii) any Unpaid Basis Risk Shortfalls from previous Distribution Dates and (iii)
any Required Reserve Fund Deposit for such Distribution Date. The amount of the
Basis Risk Payment for any Distribution Date cannot exceed the amount of Monthly
Excess Cashflow otherwise distributable in respect to the Class X Certificate.
Basis Risk Reserve Fund: A fund created as part of the Trust Fund
pursuant to Section 5.06 of this Agreement but which is not an asset of any of
the REMICs.
Basis Risk Shortfall: With respect to any Distribution Date and any
Class of LIBOR Certificates, the amount by which the amount of interest
calculated at the Certificate Interest Rate applicable to such Class for such
date, determined without regard to the Net Funds Cap for such date but subject
to a cap equal to the Maximum Interest Rate exceeds the amount of interest
calculated at the Net Funds Cap.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Trustee
to the effect that any proposed transfer will not (i) cause the assets of the
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
or the Trustee.
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, the following Classes of Certificates constitute Book-Entry
Certificates: the Class A, Class A-IO, Class M1, Class M2 and Class B
Certificates.
Bulk PMI Policy: Each of MGIC Master Mortgage Guaranty Policy (No.
12-670-4-2037), the PMI Bulk Primary First Lien Master Policy (No. 21092-0001)
and the Radian Inc. Master Policy ID# 01-889055 and any related endorsements,
commitments and assignments covering the Mortgage Loans with Original
Loan-to-Value Ratios of 60% or more as indicated on the Mortgage Loan Schedule.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in New York, New York or, if other than New York,
the city in which the Corporate Trust Office of the Trustee is located, or the
States of Maryland or Minnesota are closed, or (iii) with respect to any
Remittance Date or any Servicer reporting date, the States specified in the
definition of "Business Day" in each Servicing Agreement, are authorized or
obligated by law or executive order to be closed.
9
Cap Agreement: The Interest Rate Cap Agreement, dated as of October 24,
2001, entered into between the Trustee on behalf of the Trust Fund (for the
benefit of Certificateholders) and the Cap Provider, which agreement provides
for the monthly payment by the Cap Provider to the Trust Fund specified therein,
but subject to the conditions set forth therein, together with the confirmation
and schedules relating thereto, in the form of Exhibit P hereto.
Capitalized Interest Account: The account created and maintained by the
Trustee pursuant to Section 4.06. Such account will not be an asset of any
REMIC.
Capitalized Interest Requirement: As to any Distribution Date to and
including the Distribution Date following the end of the Pre-Funding Period, an
amount equal to the product of the (i) Net Funds Cap divided by 12, multiplied
by (ii) the excess of (a) the Initial Pre-Funding Amount over (b) the aggregate
Scheduled Principal Balance of the Subsequent Mortgage Loans that will have a
scheduled interest payment included in the Interest Remittance Amount for such
Distribution Date.
Cap Provider: Xxxxxx Brothers Financial Products Inc.
Carryforward Interest: With respect to any Distribution Date and each
Class of Certificates, the sum of (i) the amount, if any, by which (x) the sum
of (A) Current Interest for such Class for the immediately preceding
Distribution Date and (B) any unpaid Carryforward Interest for such Class from
previous Distribution Dates exceeds (y) the amount distributed in respect of
interest on such Class on such immediately preceding Distribution Date, and (ii)
interest on such amount for the related Accrual Period at the applicable
Certificate Interest Rate.
Certificate: Any one of the certificates signed and countersigned by
the Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in
accordance with the provisions of Section 4.04.
Certificate Interest Rate: With respect to each Class of Certificates
and any Distribution Date, the applicable per annum rate set forth or described
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 (other
than the Class A-IO, Class P and Class R Certificates), the initial Certificate
Principal Amount thereof on the Closing Date, less the amount of all principal
distributions previously distributed with respect to such Certificate and, in
the case of the Subordinate Certificates, any Applied Loss Amount previously
allocated to such Certificate. The Class A-IO, Class P and Class R Certificates
are issued without Certificate Principal Amounts.
10
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."
Civil Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
Class: All Certificates and, in the case of REMIC 1 and REMIC 2, all
Lower Tier Interests, bearing the same class designation.
Class Notional Amount: With respect to the Class A-IO Certificates and
any Distribution Date, the aggregate Notional Amount thereof (for the purpose of
calculating interest on such Certificates) which will be calculated as follows:
(i) for each Distribution Date falling within the period from
November 2001 through April 2002, the Class Notional Amount will equal
the lesser of (i) $282,612,747.43 and (ii) the Pool Balance as of the
first day of the related Collection Period (or as of the Cut-off Date,
in the case of the first Distribution Date);
(ii) for each Distribution Date falling within the period from
May 2002 through October 2002, the Class Notional Amount will equal the
lesser of (i) $231,228, 611.54 and (ii) the Pool Balance as of the
first day of the related Collection Period;
(iii) for each Distribution Date falling within the period from
November 2002 through April 2003, the Class Notional Amount will equal
the lesser of (i) $179,844,475.64 and (ii) the Pool Balance as of the
first day of the related Collection Period; and
(iv) for each Distribution Date falling within the period from
May 2003 through October 2003, the Class Notional Amount will equal the
lesser of (i) $154,152,407.69 and (ii) the Pool Balance as of the first
day of the related Collection Period;
(v) for any Distribution Date falling within the period from
November 2003 through April 2004, the Class Notional Amount will equal
the lesser of (i) $51,384,135.90 and (ii) the Pool Balance as of the
first day of the related Collection Periods;
(vi) for any Distribution Date falling within the period from May
2004 through October 2004, the Class Notional Amount will equal the
lesser of (i) $25,692,067.95 and (ii) the Pool Balance as of the first
day of the related Collection Period; and
(vii) for any Distribution Date thereafter, the Class Notional
Amount will equal zero.
Class Principal Amount: With respect to each Class of Certificates
other than the Class A-IO, Class P and Class R Certificates, the aggregate of
the Certificate Principal Amounts of all Certificates of such Class at the date
of determination. With respect to the Class A-IO, Class P and Class R
Certificates, zero.
11
Class P Certificate: An interest in the Trust Fund that is not an
interest in any REMIC created under this Agreement and that is entitled to
distributions as provided in Section 5.02(f).
Class R Certificate: The Class R Certificate executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit A and evidencing the ownership of the Class
LT1-R Interest, Class LT2-R Interest and the residual interest in the Upper Tier
REMIC.
Class X Distributable Amount: On any Distribution Date, the amount of
interest that has accrued on the Class X Notional Balance, as described in the
Preliminary Statement, but that has not been distributed prior to such date. In
addition, such amount shall include the initial Overcollateralization Amount of
$8,564,264.87 to the extent such amount has not been distributed on an earlier
Distribution Date as part of the Aggregate Overcollateralization Release Amount.
Class X Notional Balance: With respect to any Distribution Date (and
the related Accrual Period) the aggregate principal balance of the Class LT2-A,
Class LT2-M1, Class LT2-M2 and Class LT2-B Interests in REMIC 2.
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.
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: October 31, 2001.
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.
Collection 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.
Compensating Interest Payment: With respect to any Distribution Date,
an amount equal to the amount, if any, by which (x) the aggregate amount of any
Prepayment Interest Shortfalls required to be paid by the Servicers with respect
to such Distribution Date exceeds (y) the aggregate amount actually paid by the
Servicers in respect of such shortfalls; provided, that such amount, to the
extent payable by the Master Servicer, shall not exceed the aggregate Master
Servicing Fees that would be payable to the Master Servicer in respect of such
Distribution Date without giving effect to any Compensating Interest Payment.
12
Conventional Loan: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Department of Veterans Affairs.
Conventional Loan Documents: None.
Cooperative Shares: None.
Corporate Trust Office: The principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at 1 Bank Xxx Xxxxx,
Xxxx Xxxxx XX0-0000, Xxxxxxx, XX 00000, Attention: Global Corporate Trust
Services, except for purposes of Section 7.02 such term shall mean the office or
agency of the Trustee in the Borough of Manhattan, the City of New York, which
office at the date hereof is located at 00 Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
Corresponding Class: The Class of Certificates that corresponds with a
class of interests in REMIC 2 as described in the Preliminary Statement.
Corresponding REMIC 2 IO: With respect to each Lower Tier Interest in
REMIC 1 having an "AI" in its class designation, the class of Lower Tier
Interest in REMIC 2 having an "AIO" in its class designation that has the same
numeric designation.
Current Interest: With respect to each Class LIBOR Certificates, the
Class A-IO Certificates and any Distribution Date, the aggregate amount of
interest accrued at the applicable Certificate Interest Rate during the related
Accrual Period on the Class Principal Amount (or Class Notional Amount) of such
Class immediately prior to such Distribution Date.
Custodial Account: Any custodial account (other than an Escrow Account)
established and maintained by a Servicer pursuant to a Servicing Agreement.
Custodial Agreement: Each custodial agreement attached as Exhibit K
hereto, and any custodial agreement subsequently executed by the Trustee and
acknowledged by the Master Servicer substantially in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a
Custodial Agreement, and any successor thereto. The initial Custodians are
Bankers Trust Company of California, N.A., LaSalle Bank, N.A., The Chase
Manhattan Bank, U.S. Bank Trust, National Association and Xxxxx Fargo Bank
Minnesota, N.A.
Cut-off Date: October 1, 2001.
Cut-off Date Balance: With respect to the Mortgage Loans in the Trust
Fund on the Closing Date, the Pool Balance as of the Cut-off Date.
13
Deferred Amount: With respect to any Distribution Date and each
Certificate, the aggregate of Applied Loss Amounts previously applied in
reduction of the Certificate Principal Amount thereof, less any amounts
previously reimbursed in respect thereof.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive 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.
Delinquency Rate: With respect to any calendar month, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all Mortgage Loans 60 days Delinquent or more (including
all foreclosures, bankruptcies and REO Properties) as of the close of business
on the last day of such month, and the denominator of which is the Pool Balance
as of the close of business on the last day of such month.
Delinquent: For reporting purposes, a Mortgage Loan is "delinquent"
when any payment contractually due thereon has not been made by the close of
business on the Due Date therefor. Such Mortgage Loan is "30 days Delinquent" if
such payment has not been received by the close of business on the corresponding
day of the month immediately succeeding the month in which such payment was
first due, or, if there is no such corresponding day (e.g., as when a 30-day
month follows a 31-day month in which a payment was due on the 31st day of such
month), then on the last day of such immediately succeeding month. Similarly for
"60 days Delinquent" and the second immediately succeeding month and "90 days
Delinquent" and the third immediately succeeding month.
Deposit Date: With respect to each Distribution Date, the Business Day
immediately preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware
corporation having its principal place of business in New York, or its
successors in interest.
Determination Date: With respect to each Distribution Date, the 18th
day of the month in which such Distribution Date occurs, or, if such 18th day is
not a Business Day, the next succeeding Business Day.
Disqualified Organization: A "disqualified organization" as defined in
Section 860(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 November
2001.
14
Distressed Mortgage Loan: Any Mortgage Loan that at the date of
determination is Delinquent in payment for a period of 90 days or more without
giving effect to any grace period permitted by the related Mortgage Note or for
which the applicable Servicer or the Trustee has accepted a deed in lieu of
foreclosure.
Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.
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 or any other federal or state chartered depository institution or
trust company, acting in its fiduciary capacity, in a manner acceptable to the
Trustee, the NIMS Insurer 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 or any agent of the Trustee, 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;
15
(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
long-term credit rating categories 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 20% of
the sum of the Pool 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 any
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
rating category;
(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, common trust fund or time
deposit or obligation, or interest-bearing or other security or
investment, (A) rated in the highest rating category by each Rating
Agency or (B) that would not adversely affect the then current rating
assigned by each Rating Agency of any of the Certificates or the NIM
Securities. Such investments in this subsection (viii) may include
money market mutual funds or common trust funds, including any fund for
which Bank One, National Association (the "Bank") in its capacity other
than as Trustee, the Trustee, the Master Servicer, the NIMS Insurer or
an affiliate thereof serves as an investment advisor, administrator,
shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Bank, the Trustee, the Master Servicer,
the NIMS Insurer or any affiliate thereof charges and collects fees and
expenses from such funds for services rendered, (y) the Bank, the
Trustee, the Master Servicer, the NIMS Insurer or any 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 the Bank 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 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 120% 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.
16
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 P, Class X and Class R
Certificate and any Certificate with a rating below the lowest applicable rating
permitted under the Underwriter's Exemption.
Errors and Omission Insurance Policy: The errors or omission insurance
policy required to be obtained by each Servicer satisfying the requirements of
the related Servicing Agreement.
Escrow Account: Any account established and maintained by each Servicer
pursuant to the related Servicing Agreement.
Euroclear: Xxxxxx Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14(a).
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.
Fidelity Bond: The fidelity bond required to be obtained by each
Servicer satisfying the requirements of the related Servicing Agreement.
Final Scheduled Distribution Date: With respect to the LIBOR
Certificates, October 25, 2031. With respect to the Class A-IO Certificates,
October 25, 2004.
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
Fixed Rate Mortgage Loans: Any Mortgage Loan as to which the related
Mortgage Note provides for a fixed rate of interest throughout the term of such
Note.
17
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.
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 Master
Servicer, any Servicer, the Cap Provider, the Loss Mitigation Advisor, 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 and the NIMS
insurer may request and conclusively rely on certifications by the Depositor,
the Master Servicer, the applicable Servicer, the Cap Provider or the Loss
Mitigation Advisor in determining whether any Certificates are registered to an
Affiliate of the Depositor, the Master Servicer, any Servicer, the Cap Provider
or the Loss Mitigation Advisor.
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, Underwriters, trustee, partner, director or Person
performing similar functions.
Index: The index specified in the related Mortgage Note for calculation
of the Mortgage Rate thereof.
Initial LIBOR Rate: 2.320%.
Initial Mortgage Loan: A Mortgage Loan that is conveyed to the Trust
Fund pursuant to this Agreement on the Closing Date. The Initial Mortgage Loans
subject to this Agreement are identified on the Mortgage Loan Schedule annexed
hereto as Schedule A and have an aggregate Scheduled Principal Balance as of the
Cut-off Date of $730,865,711.87.
Initial Pre-Funding Amount: The amount deposited by the Depositor on
the Closing Date into the Pre-Funding Account which is $125,536,553 and which
may solely be used by the Trustee during the Pre-Funding Period to purchase
Subsequent Mortgage Loans.
18
Initial Optional Purchase Date: The first Distribution Date following
the date on which the Pool Balance is less than 5.00% of the sum of (i) the
Cut-off Date Balance and (ii) the Initial Pre-Funding Amount.
Insurance Fee Rate: With respect to each Mortgage Loan insured under a
Bulk PMI Policy, the per annum rate specified in the Mortgage Loan Schedule
under the field "Insurance Fee Rate", plus any taxes due and payable with
respect to any such insured Mortgage Loan that is located in the states of
Kentucky and West Virginia; provided, that if the Loss Mitigation Advisor (or an
appropriate successor) ceases to provide its services under the Loss Mitigation
Advisory Agreement, the Insurance Fee Rate specified in the Mortgage Loan
Schedule shall be increased by 0.01%.
Insurance Policy: Any Primary Mortgage Insurance Policy (whether
obtained by the borrower, the lender, the originator or Xxxxxx Capital on behalf
of the Trust), any standard hazard insurance policy, flood insurance policy,
earthquake insurance policy or title insurance policy 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 any
Servicer or Master Servicer in connection with procuring such proceeds, (ii) to
be applied to restoration or repair of the related Mortgaged Property or (iii)
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note.
Interest Remittance Amount: With respect to any Distribution Date, (a)
the sum of (1) all interest collected (other than Payaheads and Prepayment
Premiums) or advanced in respect of Scheduled Payments on the Mortgage Loans
during the related Collection Period by the Servicer, the Master Servicer or the
Trustee, less (w) the PMI Insurance Premiums and any state taxes imposed on such
premiums, (x) the Servicing Fee and the Master Servicing Fee with respect to
such Mortgage Loans and (y) previously unreimbursed Advances due to the Servicer
or the Trustee to the extent allocable to interest and the allocable portion of
previously unreimbursed Servicing Advances, (2) any Prepayment Interest
Shortfalls and any Compensating Interest Payments with respect to the related
Prepayment Period, (3) the portion of any Purchase Price or Substitution Amount
paid with respect to such Mortgage Loans during the related Prepayment Period
allocable to interest, and (4) all Net Liquidation Proceeds, Insurance Proceeds
and any other recoveries collected with respect to the Mortgage Loans during the
related Prepayment Period, to the extent allocable to interest, as reduced by
(b) other costs, expenses or liabilities reimbursable to the Trustee, the Master
Servicer and each Servicer to the extent provided in this Agreement and each
Servicing Agreement; provided, however, that in the case of the Master Servicer,
such reimbursable amounts may not exceed $500,000 during any Anniversary Year.
In the event that the Master Servicer incurs reimbursable amounts in excess of
$500,000, it may seek reimbursement for such amounts in subsequent Anniversary
Years, but in no event shall more than $500,000 be reimbursed to the Master
Servicer per Anniversary Year. Notwithstanding the foregoing, costs and expenses
incurred by the Master Servicer pursuant to Section 9.07(a) in connection with
any transfer of servicing shall be excluded from the $500,000 per Anniversary
Year limit on reimbursable amounts. For each Distribution Date up to and
including the Distribution Date in January 2002, the Interest Remittance Amount
will include amounts distributable from the Capitalized Interest Account in an
amount equal to the Capitalized Interest Requirement for such Distribution Date.
In addition, if on any Distribution Date the Interest Remittance Amount for such
Distribution Date is less than the Optimal Interest Remittance Amount for such
Distribution Date, the Trustee shall withdraw from the Basis Risk Reserve Fund
such amounts, if any, that are on deposit therein, and that are attributable to
payments received under the Cap Agreement, for inclusion as part of the Interest
Remittance Amount for such Distribution Date, but not in excess of the
difference between the Optimal Interest Remittance Amount for such Distribution
Date and the Interest Remittance Amount for such Distribution Date determined
without regard to this sentence.
19
Intervening Assignments: The original intervening assignments of the
Mortgage, notices of transfer or equivalent instrument.
Latest Possible Maturity Date: The Distribution Date occurring in
December 2034.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR
Rate. With respect to each subsequent Accrual Period, a per annum rate
determined on the LIBOR Determination Date in the following manner by the Master
Servicer on the basis of the "Interest Settlement Rate" set by the British
Bankers' Association (the "BBA") for one-month United States dollar deposits, as
such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on
such LIBOR Determination Date.
(a) If on such a LIBOR Determination Date, the BBA's Interest
Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m.
(London time), or if the Telerate Page 3750 is not available on such date, the
Master Servicer will obtain such rate from Reuters' "page LIBOR 01" or
Bloomberg's page "BBAM". If such rate is not published for such LIBOR
Determination Date, LIBOR for such date will be the most recently published
Interest Settlement Rate. In the event that the BBA no longer sets an Interest
Settlement Rate, the Master Servicer will designate an alternative index that
has performed, or that the Master Servicer expects to perform, in a manner
substantially similar to the BBA's Interest Settlement Rate. The Master Servicer
will select a particular index as the alternative index only if it receives an
Opinion of Counsel (a copy of which shall be furnished to the Trustee and the
NIMS Insurer), which opinion shall be an expense reimbursed from the Certificate
Account pursuant to Section 4.04, that the selection of such index will not
cause any of the REMICs to lose their classification as REMICs for federal
income tax purposes.
(b) The establishment of LIBOR by the Master Servicer and the Master
Servicer's subsequent calculation of the Certificate Interest Rate applicable to
the LIBOR Certificates for the relevant Accrual Period, in the absence of
manifest error, will be final and binding.
LIBOR Business Day: Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Certificate: Any Class A, Class M1, Class M2 and Class B
Certificate.
LIBOR Determination Date: The second LIBOR Business Day immediately
preceding the commencement of each Accrual Period for any LIBOR Certificates.
20
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,
if any, including, without limitation, foreclosure and rehabilitation expenses,
legal expenses and unreimbursed amounts, if any, 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, payment in full, discounted
payoff 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.
Loss Mitigation Advisor: The Murrayhill Company, a Colorado
corporation, and its successors and assigns.
Loss Mitigation Advisory Agreement: Each loss mitigation and advisory
agreement, dated as of the Closing Date, entered into by a Servicer and the Loss
Mitigation Advisor in the form of Exhibit M attached hereto.
Loss Mitigation Advisor's Fee: As to any Distribution Date and each
Mortgage Loan, an amount equal to the product of (a) one twelfth, (b) the
Advisor's Fee Rate and (c) the Scheduled Principal Balance of such Mortgage Loan
as of the first day of the related Collection Period.
Lower Tier Interest: As described in the Preliminary Statement.
M1 Principal Distribution Amount: With respect to any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, the amount, if any, by which (x) the sum
of (i) the aggregate Class Principal Amount of the Class A Certificates, in each
case after giving effect to distributions on such Distribution Date and (ii) the
Class Principal Amount of the Class M1 Certificates immediately prior to such
Distribution Date exceeds (y) the M1 Target Amount.
M1 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 87.50% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Pool Balance as of
the Cut-off Date.
M2 Principal Distribution Amount: With respect to any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, the amount, if any, by which (x) the sum
of (i) the aggregate Class Principal Amount of the Class A and Class M1
Certificates, in each case after giving effect to distributions on such
Distribution Date and (ii) the Class Principal Amount of the Class M2
Certificates immediately prior to such Distribution Date exceeds (y) the M2
Target Amount.
21
M2 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 95.00% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Pool Balance as of
the Cut-off Date.
Master Servicer: Xxxxx Fargo Bank Minnesota, National Association, or
any successor in interest, or if any successor master servicer shall be
appointed as herein provided, then such successor master servicer.
Master Servicing Fee: As to any Distribution Date and each Mortgage
Loan, an amount equal to the product of one-twelfth of the Master Servicing Fee
Rate and the sum of (i) the aggregate Scheduled Principal Balances of the
Mortgage Loans as of the first day of the related Collection Period and (ii) the
Pre-Funding Amount as of the first day of the related Collection Period.
Master Servicing Fee Rate: 0.0035% per annum.
Material Defect: As defined in Section 2.02(c) hereof.
Maximum Interest Rate: The Maximum Interest Rate with respect to any
Distribution Date will be an annual rate equal to the amount, if any, by which
(1) the weighted average of the maximum lifetime Mortgage Rates, as specified in
the related Mortgage Notes for the Mortgage Loans, exceed (2)(A) in the case of
the first 36 Distribution Dates only, the sum of (x) the Aggregate Expense Rate
and (y) the product of (x) 6.00% and (y) a fraction, the numerator of which is
the Class Notional Amount of the Class A-IO Certificates and the denominator of
which is the Pool Balance for that Distribution Date and (II) thereafter, zero.
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 nominee for the holder from time to time of the Mortgage Note.
MGIC: Mortgage Guaranty Insurance Corporation.
Monthly Excess Cashflow: With respect to any Distribution Date, the sum
of (x) Monthly Excess Interest and (y) the Aggregate Overcollateralization
Release Amount for such date.
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
pursuant to this Agreement.
22
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage 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: Each mortgage loan sale and assignment
agreement, dated as of October 1, 2001, for the sale of the Mortgage Loans by a
Seller to the Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time to reflect the addition of Mortgage Loans (including the addition
of any Subsequent Mortgage Loans) to, or the deletion of Mortgage Loans from,
the Trust Fund. Such schedule shall, among other things (i) designate the
applicable Seller of such Mortgage Loan to the Depositor; (ii) designate the
Servicer servicing such Mortgage Loan and the applicable Servicing Fee Rate;
(iii) designate the Custodian with respect to the Mortgage File related to such
Mortgage Loan; and (iv) where applicable, indicate whether such Mortgage Loan is
covered by a Bulk PMI Policy and the applicable PMI Insurer and the Insurance
Fee Rate.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan, as determined under the related Mortgage
Note as reduced by the applications of the Civil Relief Act.
Mortgaged Property: 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.
Mortgagor: The obligor on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date, (A) the
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the amount, if any, by which (a) the Interest Remittance Amount
for such Distribution Date (as reduced by the Loss Mitigation Advisor's Fee)
exceeds (b) the Current Interest payable with respect to the Certificates for
such date and (ii) twelve, and the denominator of which is the Pool Balance for
such Distribution Date, multiplied by (B) a fraction, the numerator of which is
thirty and the denominator of which is the greater of thirty and the actual
number of days in the immediately preceding calendar month.
Net Funds Cap: With respect to any Distribution Date, an annual rate
equal to (a) a fraction, expressed as a percentage, the numerator of which is
the product of (i) the Optimal Interest Remittance Amount for such Distribution
Date and (2) 12, and the denominator of which is the Pool Balance for the
immediately preceding Distribution Date multiplied by (b) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Accrual Period related to such Distribution Date.
23
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of (i) unreimbursed expenses and (ii) any
unreimbursed Advances, 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 Aggregate Expense Rate for such Mortgage Loan.
Net Prepayment Interest Shortfall: With respect to any Remittance Date,
the excess, if any, of any Prepayment Interest Shortfalls with respect to the
Mortgage Loans for such date over any amounts paid with respect to such
shortfalls by the Servicers and the Master Servicer pursuant to the Servicing
Agreements or this Agreement.
NIMS Agreement: Any agreement pursuant to which the NIM Securities are
issued.
NIMS Insurer: Any insurer that is guaranteeing certain payments under
the NIM Securities.
NIM Securities: Any net interest margin securities issued by an owner
trust, the principal assets of such trust including the Class P and Class X
Certificates and the payments received thereon, which principal assets back such
securities.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
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 individual, corporation, partnership or other
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; or (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. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
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-IO Certificate.
Offering Document: The Prospectus.
24
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.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee and the NIMS Insurer, and who may be
in-house or outside counsel to the Depositor, the Master Servicer or the Trustee
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.
Optimal Interest Remittance Amount: With respect to each Distribution
Date, an amount equal to the difference between (i) the product of (a) the
quotient of (I) the weighted average of the Net Mortgage Rates on the Mortgage
Loans as of the first day of the related Collection Period, divided by (II) 12,
multiplied by (b) the Pool Balance for the immediately preceding Distribution
Date, minus (ii) in the case of the first 36 Distribution Dates only, the
product of (c) 0.50%, and (d) the Class Notional Amount of the Class A-IO
Certificates immediately before such Distribution Date, and thereafter, zero.
Original Capitalized Interest Amount: $1,634,276.
Original 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 of the related Mortgage
Property.
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.
Overcollateralization Amount: With respect to any Distribution Date,
the amount, if any, by which (x) the Pool Balance for such Distribution Date
exceeds (y) the aggregate Certificate Principal Amount of the Class A, Class M1,
Class M2 and Class B Certificates after giving effect to distributions on such
Distribution Date.
Overcollateralization Deficiency: With respect to any Distribution
Date, the amount, if any, by which (x) the Targeted Overcollateralization Amount
for such Distribution Date exceeds (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after giving effect to the
reduction on such Distribution Date of the Certificate Principal Amounts of the
Certificates resulting from the distribution of the Principal Remittance Amount
on such Distribution Date, but prior to allocation of any Applied Loss Amount on
such Distribution Date.
Payahead: With respect to any Mortgage Loan and any Due Date therefor,
any Scheduled Payment received by the applicable Servicer during any Collection
Period in addition to the Scheduled Payment due on such Due Date, intended by
the related Mortgagor to be applied on a subsequent Due Date or Due Dates.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
25
Percentage Interest: With respect to any Certificate, its 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 the Class A-IO, Class P, Class X and Class
R Certificates, 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 the
Class P, Class X and Class R Certificates, the Percentage Interest evidenced
thereby shall be as specified on the face thereof, or otherwise, be equal to
100%. With respect to any Class A-IO Certificate, the Percentage Interest
evidenced thereby shall equal the initial Notional Amount of such Class A-IO
Certificate as set forth on the face thereof divided by the initial Class
Notional Amount of the Class A-IO Certificates.
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.
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3-101.
PMICO: PMI Mortgage Insurance Co. and its successors and assigns.
PMI Insurance Premium: With respect to each Distribution Date and each
Mortgage Loan covered by a Bulk PMI Policy, the product of (a) one-twelfth of
the applicable Insurance Fee Rate and (b) the Scheduled Principal Balance of
such Mortgage Loan as of the first day of the related Collection Period.
PMI Insurers: Each of MGIC, Radian and PMICO.
Pool Balance: As of any date of determination, the sum of (i) aggregate
of the Scheduled Principal Balance of all the Mortgage Loans and (ii) during the
Pre-Funding Period, any amount of the Pre-Funding Amount which has not been
previously applied towards the purchase of Subsequent Mortgage Loans.
Pre-Funding Account: The account established and maintained by the
Trustee pursuant to Section 4.05 hereof. The Pre-Funding Account shall not be
considered as part of any REMIC.
Pre-Funding Amount: As of any date of determination, the balance of
funds on deposit in the Pre-Funding Account, exclusive of investment earnings
thereon.
Pre-Funding Period: The period beginning on the Closing Date and ending
on January 1, 2002.
Prepayment Interest Excess Amount: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the difference between (i) the amount
of interest actually received with respect to such Mortgage Loan at the time of
such Principal Prepayment and (ii) one full month's interest at the applicable
Mortgage Rate (giving effect to any applicable Relief Act Reduction) (and in the
case of Principal Prepayments in full, as reduced by the Servicing Fee Rate for
Principal Prepayments in full only) on the outstanding principal balance of such
Mortgage Loan immediately prior to such prepayment.
26
Prepayment Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the excess, if any, of (i) one full
month's interest at the applicable Mortgage Rate (as reduced by the Servicing
Fee Rate and the Master Servicing Fee Rate in the case of Principal Prepayments
in full), on the outstanding principal balance of such Mortgage Loan immediately
prior to such prepayment over (ii) the amount of interest actually received with
respect to such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Period: With respect to each Remittance Date, the one-month
period beginning on the Cut-off Date, in the case of the first Distribution
Date, and on the second day of the calendar month immediately preceding the
month in which the related Distribution Date occurs, in the case of each
subsequent Remittance Date, and ending on the first day of the month in which
such Remittance Date occurs.
Prepayment Premiums: Any prepayment fees and penalties to be paid by
the Mortgagor on a Mortgage Loan.
Primary Mortgage Insurance Policy: Any mortgage guaranty insurance, if
any, on an individual Mortgage Loan, including any Bulk PMI Policy, as evidenced
by a policy or certificate, whether such policy is obtained by the originator,
the lender, the borrower or the Seller on behalf of the Trust.
Prime Rate: The prime rate of the United States money center commercial
banks as published in The Wall Street Journal, Northeast Edition.
Principal Distribution Amount: With respect to any Distribution Date,
an amount equal to the Principal Remittance Amount for such date minus the
Aggregate Overcollateralization Release Amount, if any, for such Distribution
Date.
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 Servicing Agreement.
Principal Remittance Amount: With respect to any Distribution Date, (a)
the sum of (i) all principal collected (other than Payaheads) or advanced in
respect of Scheduled Payments on the Mortgage Loans during the related
Collection Period whether by a Servicer, the Master Servicer or the Trustee
(less unreimbursed Advances due to the Master Servicer, any Servicer or the
Trustee with respect to the related Mortgage Loans, to the extent allocable to
principal), (ii) all Principal Prepayments in full or in part received during
the related Prepayment Period, (iii) the outstanding principal balance of each
Mortgage Loan that was purchased from the Trust Fund or, in the case of
Distressed Mortgage Loans, purchased by the NIMS Insurer, during the related
Prepayment Period, (iv) the portion of any Substitution Amount paid with respect
to any Deleted Mortgage Loan during the related Prepayment Period allocable to
principal, and (v) all Net Liquidation Proceeds, Insurance Proceeds and other
recoveries collected with respect to such Mortgage Loans during the related
Prepayment Period, to the extent allocable to principal, as reduced by (b) to
the extent the Interest Remittance Amount is less than amounts reimbursable to
the Master Servicer pursuant to Section 4.02(v), any amounts reimbursable during
the related Anniversary Year to the Master Servicer therefrom and not reimbursed
from the Interest Remittance Amount, or otherwise. In addition, if on any
Distribution Date the Trust Fund has sustained Realized Losses on one or more
Mortgage Loans during the related Collection Period, then the Trustee shall
withdraw an amount from the Basis Risk Reserve Fund to the extent of amounts
that are on deposit therein that are attributable to payments received under the
Cap Agreement and that are not required to be withdrawn and included in the
Interest Remittance Amount. The amount so withdrawn, which shall not exceed the
amount of Realized Losses sustained during the related Collection Period, shall
be included in the Principal Remittance Amount for such Distribution Date.
27
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: None.
Prospectus: The prospectus supplement dated October 30, 2001, together
with the accompanying prospectus dated July 27, 2001, relating to the Class A,
Class A-IO, Class M1, Class M2 and Class B Certificates.
Purchase Price: With respect to the purchase of a Mortgage Loan or
related REO Property pursuant to this Agreement, an amount equal to the sum of
(a) 100% of the unpaid principal balance of such Mortgage Loan, (b) accrued
interest thereon at the applicable Mortgage Rate, from the date as to which
interest was last paid to (but not including) the Due Date in the Collection
Period immediately preceding the related Distribution Date; (c) the fair market
value of all other property being purchased. The Master Servicer, each Servicer
(or the Trustee, if applicable) shall be reimbursed from the Purchase Price for
any Mortgage Loan or related REO Property for any Advances made or other amounts
advanced with respect to such Mortgage Loan that are reimbursable to the Master
Servicer or such Servicer under this Agreement or the Servicing Agreement (or to
the Trustee hereunder), together with any accrued and unpaid compensation due to
the Master Servicer, any Servicer or the Trustee hereunder or thereunder.
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:
(i) 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;
(ii) 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;
28
(iii) 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 or the NIM
Securities, 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;
(iv) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder; and
(v) 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.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement,
a Mortgage Loan that, on the date of such substitution, (i) has an outstanding
Scheduled Principal Balance (or in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate Scheduled Principal
Balance), after application of all Scheduled Payments due during or prior to the
month of substitution, not in excess of, and not more than 5% less than, the
outstanding Scheduled Principal Balance of the Deleted Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) has a
Mortgage Rate not less than the Mortgage Rate on the Deleted Mortgage Loan,
(iii) if applicable, has a maximum Mortgage Rate not less than the maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) has a minimum Mortgage Rate not
less than the minimum Mortgage Rate of the Deleted Mortgage Loan, (v) has a
gross margin equal to or greater than the gross margin of the Deleted Mortgage
Loan, (vi) has a next adjustment date not later than the next adjustment date on
the Deleted Mortgage Loan, (vii) has the same Due Date as the Deleted Mortgage
Loan, (viii) has a remaining term to maturity not greater than (and not more
than one year less than) that of the Deleted Mortgage Loan, (ix) is current as
of the date of substitution, (x) has a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (xi) has been underwritten by any Transferor or
in accordance with the same underwriting criteria and guidelines as the Deleted
Mortgage Loan, (xii) has a risk grading determined by the Seller at least equal
to the risk grading assigned on the Deleted Mortgage Loan, (xiii) is secured by
the same property type as the Deleted Mortgage Loan, (xiv) conforms to each
representation and warranty applicable to the Deleted Mortgage Loan made in the
related Mortgage Loan Sale and Assignment Agreement, (xv) has the same or higher
lien position as the Deleted Mortgage Loan, (xvi) is covered by a PMI Policy if
the Deleted Mortgage Loan was so covered and (xvii) contains provisions covering
the payment of Prepayment Premium by the Mortgager for early prepayment of the
Mortgage Loan at least as favorable as the Deleted Mortgage Loan. In the event
that one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate Scheduled Principal Balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the risk gradings described in clause (xii) hereof shall be satisfied as
to each such mortgage loan, the terms described in clause (viii) hereof shall be
determined on the basis of weighted average remaining term to maturity, the
Loan-to-Value Ratios described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xiv) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
29
Radian: Radian Guaranty Inc. and its successors and assigns.
Rating Agency: Each of Fitch, Xxxxx'x and S&P.
Realized Loss: 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, minus (ii) Liquidation Proceeds received, to the extent
allocable to principal, net of amounts that are reimbursable therefrom to the
Master Servicer or any Servicer with respect to such Mortgage Loan (other than
Advances of principal) including expenses of liquidation. In determining whether
a Realized Loss is a Realized Loss of principal, Liquidation Proceeds shall be
allocated, first, to payment of expenses related to such Liquidated Mortgage
Loan, then to accrued unpaid interest and finally to reduce the principal
balance of the Mortgage Loan.
Recognition Agreement: None.
Record Date: With respect to the LIBOR Certificates and the Class A-IO
Certificates and any Distribution Date, the close of business on the Business
Day immediately preceding such Distribution Date. With respect to the Class P,
Class X and Class R Certificates and any Distribution Date, the last Business
Day of the month immediately preceding the month in which the Distribution Date
occurs (or, in the case of the first Distribution Date, the Closing Date).
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).
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
pursuant to Section 10.01(a) hereof.
REMIC 1: As described in the Preliminary Statement.
REMIC 2: As described in the Preliminary Statement.
REMIC 3: As described in the Preliminary Statement.
30
REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G 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 calendar month on which the Servicer
is required to remit payments to the Collection Account, as specified in the
related Servicing Agreement, which is the 18th day of each calendar 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.
Required Reserve Fund Amount: With respect to any Distribution Date on
which the Net Excess Spread is less than 0.25%, the amount, if any by which (a)
the product of 1.00% and the Pool Balance for such date exceeds (b) the amount
on deposit in the Basis Risk Reserve Fund immediately prior to such date. With
respect to any Distribution Date on which the Net Excess Spread is equal to or
greater than 0.25%, the amount, if any, by which (i) $1000 exceeds (ii) the
amount on deposit in the Basis Risk Reserve Fund immediately prior to such date.
Residual Certificate: The Class R Certificate.
Responsible Officer: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary, or
any officer, working in its Corporate Trust Office and having responsibility for
the administration of this Agreement, and any other officer to whom a matter
arising under this Agreement may be referred.
Restricted Certificate: Any Class P, Class X or Class R Certificate.
Restricted Global Security: As defined in Section 3.01(c).
Rolling Three Month Delinquency Rate: With respect to any Distribution
Date, the fraction, expressed as a percentage, equal to the average of the
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding calendar months.
S&P: Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
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.
31
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 or Subsequent Cut-off Date, as applicable,
after giving effect to principal payments due on or before the Cut-off Date or
Subsequent Cut-off Date, as applicable, whether or not received, less an amount
equal to principal payments due after the Cut-off Date or Subsequent Cut-off
Date, as applicable, and on or before the Due Date in the related Collection
Period, whether or not received from the Mortgagor or advanced by any Servicer
or the Master Servicer, and all amounts allocable to unscheduled principal
payments (including Principal Prepayments, Liquidation Proceeds, Insurance
Proceeds and condemnation proceeds, in each case to the extent identified and
applied prior to or during the related 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 and the Cut-off Date or Subsequent Cut-off Date, as
applicable, , as specified in the Mortgage Loan Schedule.
Security Agreement: None.
Seller: Each of Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc. and Xxxxxx Brothers Bank, FSB or any successor in interest to either of
them.
Senior Certificate: Any Class A or Class A-IO Certificate.
Senior Enhancement Percentage: With respect to any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is the sum of
the aggregate Class Principal Amounts of the Class M1, Class M2 and Class B
Certificates and the Overcollateralization Amount (which amount, for purposes of
this definition only, shall not be less than zero and assuming for purposes of
this definition that the Principal Distribution Amount has been distributed on
such Distribution Date and no Trigger Event has occurred) and the denominator of
which is the Pool Balance for such Distribution Date, in each case after giving
effect to distributions or such Distribution Date.
Senior Principal Distribution Amount: For any Distribution Date (a)
prior to the Stepdown Date or if a Trigger Event is in effect with respect to
such Distribution Date, an amount equal to 100% of the Principal Distribution
Amount and (b) on or after the Stepdown Date and as long as a Trigger Event is
not in effect with respect to such Distribution Date, the amount, if any, by
which (x) the Class Principal Amount of the Class A Certificates immediately
prior to such Distribution Date exceeds (y) the Senior Target Amount.
Senior Target Amount: With respect to each Distribution Date, an amount
equal to the lesser of (a) the product of (i) 89.50% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.25% of the Cut-off Date
Balance.
Servicers: Option One Mortgage Corporation, Ocwen Federal Bank FSB,
Aurora Loan Services Inc., Countrywide Home Loans, Inc., Xxxxx Fargo Home
Mortgage, Inc. and Fairbanks Capital Corp., or any successors in interest.
32
Servicing Agreement: Each Servicing Agreement or Reconstituted
Servicing Agreement, dated as of October 1, 2001, between the related Seller and
one of the above-named Servicers (and the Master Servicer, in the case of the
Servicing Agreement with Option One Mortgage Corporation, Aurora Loan Services
Inc. and Fairbanks Capital Corp.) attached hereto as part of Exhibit E and any
other servicing agreement entered into between a successor servicer and the
Seller pursuant to the terms of this Agreement.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the Servicing Fee Rate and (b)
the outstanding principal balance of such Mortgage Loan as of the first day of
the related Collection Period.
Servicing Fee Rate: With respect to each Distribution Date, 0.50% per
annum.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stepdown Date: The later to occur of (x) the Distribution Date in
November 2004 and (y) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose after giving effect to
payments or other recoveries in respect of the Mortgage Loans during the related
Collection Period but before giving effect to distributions on the Certificates
on such Distribution Date) is greater than to equal to 23.00%.
Subordinate Certificate: Any Class M1, Class M2, Class B or Class X
Certificate.
Subsequent Cut-off Date: The date specified as the cut-off date with
respect to a Subsequent Mortgage Loan in the Transfer Supplement.
Subsequent Mortgage Loan: A Mortgage Loan that is conveyed as of
Transfer Date to the Trust Fund by the Depositor pursuant to a Transfer
Supplement to the related Mortgage Loan Sale Agreement, which Mortgage Loan
shall be identified in such Transfer Supplement and added by the Depositor to
the Mortgage Loan Schedule.
Substitution Amount: The amount, if any, by which the Scheduled
Principal Balance of a Deleted Mortgage Loan exceeds the Scheduled Principal
Balance of the related Qualifying Substitute Mortgage Loan, or aggregate
Scheduled Principal Balance, if applicable, plus unpaid interest thereon, and
any related unpaid Advances or Servicing Advances or unpaid Servicing Fees.
Target Amount: With respect to any Distribution Date, an amount equal
to the Pool Balance as of such Distribution Date minus the Targeted
Overcollateralization Amount for such Distribution Date.
Targeted Overcollateralization Amount: With respect to any Distribution
Date (x) prior to the Stepdown Date, 1.00% of the Pool Balance as of the Cut-off
Date and (y) on or after the Stepdown Date and provided a Trigger Event is not
in effect, the greater of (1) 0.50% of the Pool Balance as of the Cut-off Date
and (2) the lesser (i) 1.00% of the Pool Balance as of the Cut-off Date and (ii)
2.00% of the Pool Balance after giving effect to distributions on such
Distribution Date (z) on or after the Stepdown Date and provided a Trigger Event
is in effect, the Targeted Overcollateralization Amount for the immediately
preceding Distribution Date.
33
Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions.
Telerate Page 3750: The display currently so designated as "Page 3750"
on the Bridge Telerate Service (or such other page selected by the Master
Servicer as may replace Page 3750 on that service for the purpose of displaying
daily comparable rates on prices).
Termination Price: As defined in Section 7.01.
Title Insurance Policy: A title insurance policy maintained with
respect to a Mortgage Loan.
Total Distribution Amount: With respect to any Distribution Date, the
sum of (i) the Interest Remittance Amount for such date; (ii) the Principal
Remittance Amount for such date; and (3) the Prepayment Premiums.
Transfer Agreements: As defined in the Mortgage Loan Sale Agreement.
Transfer Date: Any date during the Pre-Funding Period on which
Subsequent Mortgage Loans are conveyed by the Depositor to the Trust Fund
pursuant to Section 2.01(b), as specified in the applicable Transfer Supplement.
Transfer Price: With respect to any Subsequent Mortgage Loan, the price
specified in the Transfer Supplement which shall be no less than the outstanding
principal balance of the Mortgage Loan as increased by any amount of principal
and interest received on such Mortgage Loans from and after the Subsequent
Cut-off Date specified in the Transfer Supplement.
Transferor: Each seller of Mortgage Loans to a Seller pursuant to the
Transfer Agreements.
Trigger Event: A Trigger Event will have occurred with respect to any
Distribution Date if the Rolling Three Month Delinquency Rate as of the last day
of the immediately preceding Collection Period equals or exceeds 130% of the
Senior Enhancement Percentage for such Distribution Date.
Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans, the assignment of the Depositor's rights under
the Transfer Agreements, the Mortgage Loan Sale Agreement and each Servicing
Agreement, the Cap Agreement and all amounts received from the Cap Provider
thereunder, such amounts as shall from time to time be held in the Collection
Account, Certificate Account, the Pre-Funding Account, the Capitalized Interest
Account, any Custodial Account and any Escrow Account, the Basis Risk Reserve
Fund, the Insurance Policies, any REO Property and the other items referred to
in, and conveyed to the Trustee under, Section 2.01(a).
Trustee: Bank One, National Association, 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.
34
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
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.
Uniform Commercial Code: The Uniform Commercial Code as in effect in
any applicable jurisdiction from time to time.
Unpaid Basis Risk Shortfall: With respect to any Distribution Date and
any Certificate, the aggregate of all Basis Risk Shortfalls with respect to such
Certificate remaining unpaid from previous Distribution Dates, plus interest
accrued thereon at the applicable Certificate Interest Rate (calculated without
giving effect to the Net Funds Cap but limited to a rate no greater than the
Maximum Interest Rate.
Upper Tier REMIC: REMIC 3.
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,
97% of all Voting Interests shall be allocated to the Class A, Class M1, Class
M2, Class B and Class R Certificates. Voting Interests shall be allocated among
such Certificates (other than the Class R Certificates) based on the product of
(i) 97% and (ii) the fraction, expressed as a percentage, the numerator of which
is the aggregate Class Principal Amounts for each Class then outstanding and the
denominator is the Pool Balance then outstanding. The remainder of such
percentage of Voting Interests shall be allocated to the Class R Certificates.
At all times during the term of this Agreement, 1% of all Voting Interests shall
be allocated to each of the Class A-IO, Class P and Class X Certificates, while
they remain outstanding. Voting Interests shall be allocated among the other
Classes of Certificates (and among the Certificates within each such Class) in
proportion to their Class Principal Amounts (or Certificate Principal Amounts)
or Percentage Interests.
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 Trustee as supplied to the
Trustee by the Master Servicer. The Trustee shall not be required to recompute,
verify or recalculate the information supplied to it by the Master Servicer, any
Servicer or the Loss Mitigation Advisor.
Section 1.03. Calculations Respecting Accrued Interest. Accrued
interest, if any, on any LIBOR Certificate shall be calculated based upon a
360-day year and the actual number of days in each Accrual Period. Accrued
interest, if any, on any Class A-IO Certificate shall be calculated based upon a
360-day year consisting of twelve 30-day months.
Section 1.04. Rights of the NIMS Insurer: Each of the rights of the
NIMS Insurer set forth in this Agreement shall exist only so long as the NIM
Securities are issued and remain outstanding or the NIMS Insurer is owed amounts
in respect of its guarantee of payment on such NIM Securities.
35
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Initial Mortgage Loans. 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 Initial Mortgage Loans. Such
conveyance includes, without limitation, the right to all payments of principal
and interest received on or with respect to the Initial Mortgage Loans on and
after the Cut-off Date (other than 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, the
Pre-Funding Account, and all amounts from time to time credited to the proceeds
of the Pre-Funding Account, the Capitalized Interest Account and all amounts
from time to time credited to the proceeds of the Capitalized Interest Account,
any Custodial Accounts, any Escrow Account established pursuant to Section 9.06
and any Basis Risk Reserve Fund established pursuant to Section 5.06 and all
amounts from time to time credited to and the proceeds of each such account, any
REO Property and the proceeds thereof, the Depositor's rights under any
Insurance Policies related to the Mortgage Loans, 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
the Mortgage Loan Sale Agreements, including all rights of the related Seller
under each Servicing Agreement and the Transfer Agreements, but only to the
extent assigned under the related Mortgage Loan Sale Agreement. The Trustee
hereby accepts such assignment, and shall be entitled to exercise all the rights
of the Depositor under the Mortgage Loan Sale Agreements 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 the
creation or assumption by the Trustee of any obligation of the Depositor, the
Sellers or any other Person in connection with the Initial Mortgage Loans or any
other agreement or instrument relating thereto.
36
(b) On each Transfer Date occurring during the Pre-Funding Period,
provided that each condition set forth in this Section 2.01(b) is satisfied, the
Depositor shall convey to the Trust Fund, and the Trustee shall purchase
pursuant to this Section 2.01(b), all Subsequent Mortgage Loans which satisfy
the criteria set forth in this Section 2.01(b) then offered for sale by the
Depositor; provided, however, that the related aggregate Transfer Price shall
not exceed the Pre-Funding Amount.
Subject to the conditions set forth in this Section 2.01(b), in
consideration of the Trustee's delivery on the related Transfer Date to the
Depositor or its designee, or upon the order of the Depositor, of the Transfer
Price for the related Subsequent Mortgage Loans from amounts on deposit in the
Pre-Funding Account, the Depositor shall, on each Transfer Date, sell, transfer,
assign, set over and otherwise convey to the Trustee on behalf of the Trust
Fund, without recourse, but subject to the other terms and provisions of this
Agreement, all of the right, title and interest of the Depositor in and to each
Subsequent Mortgage Loan (including all interest and principal thereon received
after the related Subsequent Cut-off Date specified in the Transfer Supplement)
identified in the Addition Notice delivered by the Depositor on such Transfer
Date and all items in the related Mortgage File. In connection therewith, the
Depositor shall amend the Mortgage Loan Schedule to reflect the inclusion of the
applicable Subsequent Mortgage Loan as part of the assets of the Trust Fund. The
Depositor shall promptly deliver to the Trustee and the Master Servicer a copy
of the Mortgage Loan Schedule as so amended.
The Depositor shall on any Transfer Date transfer to the Trust Fund the
applicable Subsequent Mortgage Loans and the other property and rights related
thereto described in the immediately preceding paragraph, as applicable, and the
Trust Fund shall purchase such Subsequent Mortgage Loans, property and rights
only upon the satisfaction of each of the following conditions on or prior to
the related Transfer Date:
(i) immediately prior to such Transfer Date, the Pre-Funding
Amount shall equal or exceed the aggregate Transfer Price;
(ii) the Depositor shall have delivered to the Trustee with a
copy to the Master Servicer, a copy of a duly executed Transfer
Supplement with respect to the Subsequent Mortgage Loans entered into
between the Depositor and related Seller, in the form of Exhibit B to
the Mortgage Loan Sale Agreement;
(iii) at least ten (10) Business Days prior to the related
Transfer Date, the Depositor shall have delivered to the Trustee, the
Master Servicer, each Rating Agency, the applicable Custodian and the
NIMS Insurer an Addition Notice in the form of Exhibit O hereto
identifying the Subsequent Mortgage Loans offered for sale to the Trust
Fund;
(iv) each Subsequent Mortgage Loan to be transferred shall
have a Scheduled Principal Balance as of the applicable Subsequent
Cut-off Date not in excess of $551,650;
37
(v) the remaining term to maturity of each Subsequent Mortgage
Loan may not exceed 30 years;
(vi) each Subsequent Mortgage Loan will be either (x) a first
lien Mortgage Loan or (y) a junior lien Mortgage Loan which is less
than 59 days delinquent in payment as of the applicable Subsequent
Cut-off Date;
(vii) after giving effect to the proposed transfer of
Subsequent Mortgage Loans, the Overcollateralization Amount on such
Transfer Date equals or exceeds the Targeted Overcollateralization
Amount for such date;
(viii) no Subsequent Mortgage Loan shall have been selected in
a manner adverse to Certificateholders;
(ix) the Depositor shall have delivered to the Trustee and the
NIMS Issuer a letter from each Rating Agency stating that the addition
of the Subsequent Mortgage Loans will not result in the reduction,
qualification or withdrawal of the then current ratings of the
Certificates;
(x) no Subsequent Mortgage Loan shall have a Loan-to-Value
Ratio greater than 100.00%;
(xi) each Subsequent Mortgage Loan shall be underwritten
substantially in accordance with the applicable originator's
underwriting guidelines;
(xii) the Depositor shall have delivered to the Trustee, the
Master Servicer, each Rating Agency and the NIMS Insurer such
additional information reasonably requested by any of them with respect
to the Subsequent Mortgage Loans to be sold to the Trust or the
Transfer Date;
(xiii) the Depositor shall have delivered to the Trustee a
letter from an independent accountant stating whether or not the
characteristics of the Subsequent Mortgage Loans conform to the
characteristics of the Mortgage Loans required in this Section 2.01(b);
(xiv) as of each Transfer Date, neither the Depositor nor the
related Seller shall be insolvent, nor will either of them be made
insolvent by such transfer;
(xv) the Pre-Funding Period shall not have ended;
(xvi) after giving effect to the acquisition of all of the
Subsequent Mortgage Loans, the Mortgage Loans shall have a weighted
average Mortgage Rate of not less than 9.776% per annum; and shall have
a weighted average combined Loan-to-Value Ratio at origination not in
excess of 100%;
(xvii) the applicable Servicer shall have deposited in the
Collection Account within two Business Days following the Transfer Date
all collections in respect to the Subsequent Mortgage Loans received
after the related Subsequent Cut-off Date.
38
(xviii) the Depositor shall have delivered to the Master
Servicer, the Trustee and the NIMS Insurer an Officer's Certificate
confirming the satisfaction of each condition precedent specified in
this paragraph and opinions of counsel with respect to corporate,
bankruptcy, ERISA and tax matters relating to the transfer of
Subsequent Mortgage Loans in the forms substantially similar to those
delivered on the Closing Date.
In connection with such transfer and assignment of the Initial Mortgage
Loan, the Depositor does (and, upon the transfer and assignment of any
Subsequent Mortgage Loans, shall) hereby deliver to, and deposit with, or cause
to be delivered to and deposited with, the Trustee, and/or the applicable
Custodian acting on the Trustee's behalf, the following documents or instruments
with respect to each Mortgage Loan (each a "Mortgage File") so transferred and
assigned:
(i) with respect to each Mortgage Loan, the original Mortgage
Note endorsed without recourse in proper form to the order of the
Trustee, or in blank (in each case, with all necessary intervening
endorsements, as applicable) or with respect to any lost Mortgage Note,
a lost note affidavit stating that the original Mortgage Note was lost,
misplaced or destroyed, together with a copy of the related Mortgage
Note;
(ii) the original of any guarantee executed in connection with
the Mortgage Note, assigned to the Trustee;
(iii) with respect to any Mortgage Loan, the original recorded
Mortgage with evidence of recording indicated thereon and the original
recorded power of attorney, with evidence of recording thereon. If, in
connection with any Mortgage Loan, the Depositor cannot deliver the
Mortgage or power of attorney with evidence of recording thereon on or
prior to the Closing Date (or, in the case of a Subsequent Mortgage
Loan, on or prior to the applicable Transfer Date) because of a delay
caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage or power of attorney
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 or power of attorney, pending
delivery of the original thereof, together with an Officer's
Certificate of the Depositor certifying that the copy of such Mortgage
or power of attorney delivered to the Trustee (or the applicable
Custodian) is a true copy and that the original of such Mortgage or
power of attorney has been forwarded to the public recording office,
or, in the case of a Mortgage or power of attorney 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, the NIMS Insurer and the Depositor that an original
recorded Mortgage or power of attorney 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 (or, in the case of a
Subsequent Mortgage Loan, on or prior to the applicable Transfer 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 the applicable Custodian) is a true copy
and that the original of such agreement has been forwarded to the
public recording office;
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(v) with respect to each Non-MERS Mortgage Loan, an original
Assignment of Mortgage, in form and substance acceptable for recording.
The Mortgage shall be assigned either (A) in blank, without recourse or
(B) to "Bank One, National Association, as Trustee of the Amortizing
Residential Collateral Trust, 2001-BC6", without recourse;
(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 and the NIMS Insurer that such original Intervening
Assignment is not required to enforce the Trustee's interest in the
Mortgage Loans;
(vii) with respect to any Mortgage Loan, the original
mortgagee title insurance policy or attorney's opinion of title and
abstract of title;
(viii) the original of any security agreement, chattel
mortgage or equivalent instrument executed in connection with the
Mortgage or as to any security agreement, chattel mortgage or their
equivalent instrument 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
instrument 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; and
(ix) 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 shall be recorded; provided, however, that such Assignments need not be
recorded if, on or prior to the Closing Date (or in the case of Subsequent
Mortgage Loans, on or prior to the applicable Transfer Date), the Depositor
delivers, at its own expense, an Opinion of Counsel (which must be Independent
counsel) acceptable to the Trustee, the NIMS Insurer and the Rating Agencies, to
the effect that 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 three 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 the applicable Servicer, shall cause to be
properly recorded by each 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 each Non-MERS Mortgage Loan.
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(ii) With respect to each MERS Mortgage Loan, the Trustee, at the
expense of the Depositor and at the direction and with the cooperation of the
applicable Servicer, shall 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 for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee or the applicable Custodian on behalf of the Trustee
under clause (b)(vii) 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 (or in the case of Subsequent
Mortgage Loans, after the Subsequent Cut-off Date and prior to the Transfer
Date), the Depositor, in lieu of delivering the above documents, herewith
delivers to the NIMS Insurer and 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 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 it or by the applicable Custodian on its behalf of the
Mortgage Files pertaining to the Initial 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
Depositor, the Master Servicer and the NIMS Insurer 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 (or in the case of Subsequent
Mortgage Loans, within 45 days after the applicable Transfer Date), the Trustee
or the applicable Custodian on behalf of the Trustee, will, 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 Depositor, the Master Servicer and the
NIMS Insurer 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 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 determine whether such 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 applicable 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.
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(c) If in the course of the review described in paragraph (a) 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, discovering such Material Defect
shall promptly identify the Mortgage Loan to which such Material Defect relates
in the Interim Certification delivered to the Depositor, the NIMS Insurer and
the Master Servicer. Within 90 days of its receipt of such notice, the
Transferor, or, if the Transferor does not do so, 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 applicable Transferor or the Depositor, as applicable,
does not so cure such Material Defect, the Transferor, or, if the Transferor
does not do so, the Depositor, 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 and the
NIMS Insurer each 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 (or in the case of Subsequent Mortgage
Loans, 45 days after the applicable Transfer 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 (or in the case of
Subsequent Mortgage Loans, within 180 days after the applicable Transfer Date),
the Trustee, or the applicable Custodian, shall deliver to the Depositor, the
Master Servicer and the NIMS Insurer a Final Certification substantially in the
form attached 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.
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(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, any Custodian 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 applicable
Custodian shall perform the applicable review of the Mortgage Loans and
respective certifications thereof as provided in this Section 2.02 and the
Custodial Agreement.
(g) Upon execution of this Agreement, the Depositor hereby delivers to
the Trustee and the Trustee acknowledges a receipt of the Mortgage Loan Sale
Agreement, each Servicing Agreement and each Bulk PMI Policy.
Section 2.03. Representations and Warranties of the Depositor. (a) The
Depositor hereby represents and warrants to the Trustee, for the benefit of
Certificateholders and to the Master Servicer and the NIMS Insurer as of the
Closing Date (or in the case of Subsequent Mortgage Loans, as of the applicable
Transfer 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 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 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;
43
(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 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
the related Seller under its Mortgage Loan Sale Agreement, the only right or
remedy of the Trustee, any Certificateholder, or the NIMS Insurer hereunder
shall be their rights to enforce the obligations of the applicable Transferor
under any applicable representation or warranty made by it. The Trustee
acknowledges that neither Seller shall have any obligation or liability with
respect to any breach of a representation or warranty made by it with respect to
the Mortgage Loans sold by it 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.
44
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 each
Seller set forth in the related Mortgage Loan Sale Agreement and assigned to the
Depositor by the Seller under the Mortgage Loan Sale Agreement and to the
Trustee by the Depositor hereunder and (iii) of each Transferor and of each
Servicer assigned by a Seller 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 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 and the NIMS Insurer. Within 90 days of the discovery of a breach of any
representation or warranty given to the Trustee by the Depositor or given by any
Transferor or the related Seller and assigned to the Trustee, the Depositor,
such Transferor or the related Seller, 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,
with respect to Mortgage Loans as to which there is a breach of a representation
or warranty set forth in Section 1.04(b)(v) of the Mortgage Loan Sale Agreement,
at the purchase price therefor paid by the related Seller under the Mortgage
Loan Sale Agreement) 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 and the NIMS Insurer. As
provided in the Mortgage Loan Sale Agreements, if any Transferor substitutes a
mortgage loan for a Deleted Mortgage Loan pursuant to the related Transfer
Agreement and such substitute mortgage loan is not a Qualifying Substitute
Mortgage Loan, then pursuant to the terms of each Mortgage Loan Sale Agreement
the related Seller will, in exchange for such substitute mortgage loan, (i) pay
to the Trust Fund the applicable Purchase Price for the affected Mortgage Loan
or (ii) within two years of the Closing Date, substitute a Qualifying Substitute
Mortgage Loan. Each Seller indemnifies and holds the Trust Fund, the Master
Servicer, the Trustee, the Depositor, the NIMS Insurer and each
Certificateholder harmless against any and all taxes, claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgements, and any
other costs, fees and expenses that the Trust Fund, the Trustee, the Master
Servicer, the Depositor, the NIMS Insurer and any Certificateholder may sustain
in connection with any actions of such 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(a)(1) of the Code or on "contributions after the startup date"
under Section 860(d)(1) of the Code, or (ii) the REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding.
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 either Seller pursuant to the related Mortgage Loan Sale
Agreement or by the Transferor pursuant to the applicable Transfer Agreement,
the principal portion of the funds received by the Trustee in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and the
Purchase Price shall be deposited in the Collection Account or a Custodial
Account, as applicable. The Trustee, upon receipt 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 reassign to the Depositor, the related Seller or the 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 related Servicer and the Trustee shall have no further
responsibility with respect to the Mortgage File relating to such Deleted
Mortgage Loan.
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(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
Transferor or the related Seller, as applicable, must deliver to the Trustee (or
a 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 Qualifying 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 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 the applicable
Servicer if required pursuant to Section 2.01(c), 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).
(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 and the NIMS
Insurer have 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.
46
(b) The Trustee 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 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 Trustee 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 related Seller, the Depositor or the Trustee, (2) any change of
location of the place of business or the chief executive office of the related
Seller or the Depositor, (3) any transfer of any interest of the related Seller
or the Depositor in any Mortgage Loan or (4) any change under the relevant UCC
or other applicable laws.
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 will be issued in the minimum denominations in
Certificate Principal Amount (or Notional Amount) specified in the Preliminary
Statement hereto and in integral multiples of $1 in excess thereof. The Class P
Certificate, the Class X Certificate and the Class R Certificate shall each be
issued as a single Certificate and maintained in definitive, fully registered
form in a denomination equal to 100% of the Percentage Interest of such Class.
The Certificates may be issued in the form of typewritten certificates.
(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.
47
(c) The Class P, Class X or Class R Certificates offered and sold in
reliance on the exemption from registration under Rule 144A under the Act 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 shall be deposited on behalf of the
subscribers for such Certificates represented thereby with the Trustee, as
custodian for The Depository Trust Company ("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 P, Class X or Class R 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 shall be deposited on behalf of the subscribers for such
Certificates represented thereby with the Trustee, 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 Trustee or DTC or its nominee, as the
case may be, as hereinafter provided.
Section 3.02. Registration. The Trustee 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"). The Trustee may appoint a bank or
trust company to act as Certificate Registrar. 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 Trustee
and the appointment of a successor Trustee. The Certificate Registrar may
appoint, by a written instrument delivered to the Holders, the NIMS Insurer 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.
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.
48
(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 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.
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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 0000 Xxx) of the Depositor or the Placement Agent or (y)
being made to a "qualified institutional buyer" (a "QIB") as defined in
Rule 144A under the Securities Act of 1933, as amended (the "Act") by a
transferor that has provided the Trustee 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, or to any Person all of the equity owners in which are such
accredited investors, by a transferor who furnishes to the Trustee 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 Trustee and the
Master Servicer have received (A) a certificate substantially in the form of
Exhibit H hereto from such transferee or (B) an Opinion of Counsel satisfactory
to the Trustee, the Master Servicer, the NIMS Insurer 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 Trustee, the Master Servicer or the Depositor
to any obligation in addition to those undertaken in the Agreement; provided,
however, that the Trustee 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, the NIMS Insurer and the Master Servicer 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 Trustee, the Master Servicer, the NIMS Insurer or the Depositor.
Notwithstanding the foregoing, no opinion or certificate shall be required for
the initial issuance of the ERISA-Restricted Certificates. The Trustee shall
have no 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 to or on behalf of an 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 Trustee and the Master Servicer of an Opinion of Counsel
satisfactory to the Trustee and the Master Servicer 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 Trustee and the
Master Servicer an Opinion of Counsel meeting the requirements of clause (B) of
the first sentence of this paragraph (d). The Trustee shall be under no
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 by the Trustee 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 Trustee 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.
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(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 a 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 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 and the Trustee with an effective Internal Revenue
Service Form 4224 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 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 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
NIMS Insurer 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 a 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. The Trustee shall not 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 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, or an 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.
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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 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 restored to all rights
as Holder thereof retroactive to the date of such registration of transfer of
such Residual Certificate. The Trustee shall be under no 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 or Certificate Owner of a Restricted Certificate,
ERISA-Restricted Certificate or Residual Certificate, or an interest therein, by
such Holder's or Owner'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 P, Class X or Class R
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 any of the Class P, Class X
or Class R 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 Trustee, as
Certificate Registrar, of (I) instructions from DTC directing the
Trustee, as 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 Trustee, as 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, 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.
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(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 Trustee, as Certificate Registrar, of (I) instructions
from DTC directing the Trustee, as 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 under the Act and in accordance with any
applicable securities laws of any State of the United States or any
other jurisdiction, then the Trustee, as 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 Trustee, as 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.
53
(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 Trustee.
(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).
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 Trustee or the Certificate Registrar.
Section 3.05. Replacement of Certificates. If (i) any Certificate is
mutilated and is surrendered to the Trustee or any Authenticating Agent or (ii)
the Trustee 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 or the Authenticating Agent and the NIMS Insurer 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 bona fide
purchaser, the Trustee shall execute and the Trustee 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 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 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 Master
Servicer, the Trustee, the Certificate Registrar, the NIMS Insurer 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 Master
Servicer, the Trustee, the Certificate Registrar, the NIMS Insurer nor any agent
of any of them shall be affected by notice to the contrary.
54
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 temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee 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, subject to the
consent of the NIMS Insurer, 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 Trustee, the
Trustee 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.
Section 3.09. Book-Entry Certificates. (a) 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. 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;
(ii) the Depositor, the Master Servicer, the Paying Agent, the
Registrar, the NIMS Insurer 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;
55
(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 Trustee
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 Trustee 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
Trustee 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 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 Trustee
shall notify the NIMS Insurer and shall notify or cause the Certificate
Registrar to 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 Trustee 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 Depositor nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates 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 Trustee, to the extent applicable, with respect to such
Definitive Certificates and the Trustee shall recognize the holders of the
Definitive Certificates as Certificateholders hereunder.
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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 "Collection Account, Xxxxx Fargo Bank
Minnesota, National Association, as Master Servicer, in trust for the benefit of
the Holders of Amortizing Residential Collateral Trust Mortgage Pass-Through
Certificates, Series 2001-BC6". 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 15 days
and transfer all funds and investment property on deposit in such existing
Collection Account into such new Collection Account.
(c) The Master Servicer shall give to the Trustee and the NIMS Insurer
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. The Master Servicer shall take such actions as are necessary
to cause the depository institution holding the Collection Account to hold such
account in the name of the Master Servicer under this Agreement. On each Deposit
Date, the entire amount on deposit in the Collection Account (subject to
permitted withdrawals set forth in Section 4.02), other than amounts not
included in the Total Distribution Amount for such Distribution Date shall be
remitted to the Trustee 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 Trustee 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 received with respect to the Mortgage Loans representing Scheduled
Payments on the Mortgage Loan due after the Cut-off Date (or in the case of
Subsequent Mortgage Loans, after the applicable Subsequent Cut-off Date) and
unscheduled payments received on or after the Cut-off Date (or in the case of
Subsequent Mortgage Loans, after the applicable Subsequent Cut-off Date) and on
or before the Closing Date (or in the case of Subsequent Mortgage Loans, before
the applicable Transfer Date). Thereafter, the Master Servicer shall deposit or
cause to be deposited in the Collection Account on the earlier of the applicable
Remittance Date and one Business Day following receipt thereof, 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 (or the
Subsequent Cut-off Date, in the case of Subsequent Mortgage Loans)):
(i) all payments on account of principal, including Principal
Prepayments and Late Collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans, including Prepayment Premiums, net of the Servicing Fee, the
Master Servicing Fee and the PMI Insurance Premiums, if any, with
respect to each such Mortgage Loan, 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;
57
(iii) any unscheduled payment or other recovery with respect
to a Mortgage Loan not otherwise specified in this paragraph (d),
including all 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 (x) 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) and (y)
any amounts reimbursable to a Servicer with respect to such Mortgage
Loan under the applicable Servicing Agreement and retained by such
Servicer;
(iv) all Insurance Proceeds;
(v) all Advances made by the Master Servicer or any Servicer
pursuant to Section 5.04 or applicable Servicing Agreement;
(vi) all amounts paid by any Servicer with respect to
Prepayment Interest Shortfalls and any Compensating Interest Payment
made by the Master Servicer; and
(vii) the Purchase Price of any Mortgage Loan repurchased by
the Depositor, the related Seller, the Master Servicer or any other
Person and any Substitution Amount related to any Qualifying Substitute
Mortgage Loan and any purchase price paid by the NIMS Insurer for the
purchase of any Distressed Mortgage Loan under Section 7.04..
(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 one Business Day prior to the Deposit Date.
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 Eligible
Investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time, 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, assumption fees and other incidental fees
and charges relating to the Mortgage Loans (other than Prepayment Premiums) 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. In the event the Depositor
does not provide written direction to the Master Servicer pursuant to this
Section, all funds on deposit in the Collection Account shall be invested in a
money market fund as described in paragraph (viii) of the definition of
"Eligible Investment" set forth in Article I.
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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:
(i) to reimburse itself or any Servicer for Advances or
Servicing Advances made by it or by such Servicer pursuant to Section
5.04 or the applicable Servicing Agreement; such right to reimbursement
pursuant to this subclause (i) is limited to amounts received on or in
respect of a particular Mortgage Loan (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, following a final
liquidation of a Mortgage Loan (except as otherwise provided in the
related Servicing Agreement) for any previously unreimbursed Advances
made by it or by such Servicer (A) 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 Advance was made or from Liquidation Proceeds or
Insurance Proceeds with respect to such Mortgage Loan and/or (B) to the
extent that such unreimbursed Advances exceed the related Liquidation
Proceeds or Insurance Proceeds, it being understood, in the case of
each 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 Section 9.22(c) 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 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) in the event it has elected not to pay itself the Master
Servicing Fee out of any Mortgagor payment on account of interest or
other recovery with respect to a particular Mortgage Loan prior to the
deposit of such Mortgagor payment or recovery in the Collection
Account, to pay to itself the Master Servicing Fee for each
Distribution Date and any unpaid Master Servicing Fees for prior
Distribution Dates, as reduced pursuant to Section 5.05, from any
Mortgagor payment as to interest or such other recovery with respect to
that Mortgage Loan, as is permitted by this Agreement;
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(v) to reimburse itself or any Servicer for expenses incurred
by and recoverable by or reimbursable to it or any Servicer pursuant to
Sections 9.04, 9.05(b), 9.07(a), 9.30 or 11.15, or to reimburse itself
for any expenses reimbursable to it pursuant to Section 10.01(c);
provided, however, that any amounts in excess of the annual cap
described in clause (b) of the definition of "Interest Remittance
Amount" in any Anniversary Year, other than costs and expenses incurred
by the Master Servicer pursuant to Section 9.07(a), in connection with
any transfer of servicing, shall be included in the amount remitted by
the Master Servicer to the Trustee pursuant to clause (viii) below and
the Master Servicer's reimbursement for such excess amounts shall be
made pursuant to Section 5.02(b) hereof;
(vi) to pay to the Depositor, the Seller or any Transferor or
the NIMS Insurer, as applicable, with respect to each Mortgage Loan or
REO Property acquired in respect thereof that has been purchased
pursuant to this Agreement, all amounts received thereon and not
distributed on the date on which the related repurchase was effected,
and to pay to the applicable Person any Advances and Servicing Advances
to the extent specified in the definition of Purchase Price;
(vii) subject to Section 5.05, to pay to itself income earned
on the investment of funds deposited in the Collection Account;
(viii) on each Deposit Date, to make payment to the Trustee
for deposit into the Certificate Account in the amounts and in the
manner provided for in Section 4.04 the Total Distribution Amount for
the related Distribution Date (to the extent collected by the Servicers
or the Master Servicer);
(ix) to make payment to itself, the Trustee, 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 the 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 Trustee 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 Trustee 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.
In connection with withdrawals pursuant to subclauses (i), (iii), (iv)
and (vi) above, the Master Servicer's, any Servicer's or such other Person'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).
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Section 4.03. Reports to Trustee and Certificateholders. (a) On the
Deposit Date related to each Distribution Date, the Master Servicer shall
furnish a report to the Trustee by electronic medium as agreed to by the Master
Servicer and the Trustee.
(b) On each Distribution Date, the Master Servicer shall provide to
each Certificateholder or shall make available via the Master Servicer's
internet website, a report setting forth the following information, which
information the Master Servicer will determine (on the basis of information
obtained from the Servicers) and provide to the Trustee pursuant to subsection
(a) above:
(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, to the extent
applicable, allocable to 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
allocable to interest and the calculation thereof;
(iii) the amount, if any, of any distribution to the Holders
of the Class P Certificate, the Class X Certificate and the Residual
Certificate;
(iv) (A) the aggregate amount of any Advances required to be
made by or on behalf of the Servicers (or the Master Servicer) 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 total number of Mortgage Loans in the Mortgage Pool,
the aggregate Scheduled Principal Balance of all the Mortgage Loans as
of the close of business on the last day of the related Collection
Period, 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, separately identifying any
reduction of any of the foregoing Certificate Principal Amounts due to
Applied Loss Amounts;
(vii) the amount of all Prepayment Premiums distributed to the
Class P Certificates;
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(viii) the amount of any Realized Losses incurred with respect
to the Mortgage Loans (x) in the applicable Prepayment Period and (y)
in the aggregate since the Cut-off Date;
(ix) the amount of the Master Servicing Fees, Servicing Fees,
Loss Mitigation Advisor's Fees and PMI Insurance Premiums paid during
the Collection Period to which such distribution relates;
(x) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Trustee by the Master Servicer, (a)
remaining outstanding (b) Delinquent 30 to 59 days on a contractual
basis, (c) Delinquent 60 to 89 days on a contractual basis, (d)
Delinquent 90 or more days on a contractual basis, (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, (f) in bankruptcy and
(g) that are REO Properties;
(xi) the aggregate Scheduled Principal Balance of any Mortgage
Loans with respect to which the related Mortgage Property became a 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;
(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 Carryforward Interest, Net
Prepayment Interest Shortfalls, Net Prepayment Interest Excess, Basis
Risk Shortfalls and Unpaid Basis Risk 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) the Interest Remittance Amount and the Principal
Remittance Amount applicable to such Distribution Date.
(xvi) 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);
(xvii) the amount of any Overcollateralization Deficiency
Amount after giving effect to the distributions made in such
Distribution Date;
(xviii) the aggregate amount of the insurance claim payments
received with respect to the Bulk PMI Policies during the related
Collection Period; and
(xix) the level of LIBOR and the Interest Rate of the LIBOR
Certificates.
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(xx) Based upon information provided by the Depositor and the
Trustee, the aggregate principal balance of any Subsequent Mortgage
Loans acquired by the Trust Fund in the preceding Due Period and the
amount of funds remaining in the Pre-Funding Account (after taking into
account such acquisition); and the amount of funds in Capitalized
Interest Account (after giving effect to the distribution on such
Distribution Date); and
(xxi) the amount of any payments made to the Trust Fund by the
Cap Provider under the Cap Agreement.
In the case of information furnished pursuant to subclauses (i), (ii)
and (viii) above, the amounts shall (except in the case of the report delivered
to the holder of the Class X Certificate) be expressed as a dollar amount per
$1,000 of original principal amount of Certificates.
The Master Servicer may also make such reports available each month via
the Master Servicer's website. The Master Servicer's website can be accessed at
xxxx://xxx.xxxxxxx.xxx. Assistance in using the website can be obtained by
calling the Master Servicer's customer service desk at (000) 000-0000. 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 Trustee at (000) 000-0000 and
indicating such. In preparing or furnishing the foregoing information to the
Trustee and the NIMS Insurer, 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 the Servicers, and the Master Servicer shall not be obligated to verify,
recompute, reconcile or recalculate any such information or data.
(c) Upon the reasonable advance written request of the NIMS Insurer and
any Certificateholder that is a savings and loan, bank or insurance company,
which request, if received by the Trustee, shall 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 the NIMS Insurer and such Certificateholder such
reports and access to information and documentation regarding the Mortgage Loans
as the NIMS Insurer or 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 the NIM Securities or
an investment in the Certificates; provided, however, that the Master Servicer
shall be entitled to be reimbursed by such Certificateholder for the Master
Servicer actual expenses incurred in providing such reports and access.
(d) Within 90 days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Trustee shall
make available to the NIMS Insurer and 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 the NIMS
Insurer and the Certificateholders pursuant to Section 4.03(a) on an annual
basis as may be required to enable the NIMS Insurer and such Holders to prepare
their federal income tax returns; provided, however that this Section 4.03(d)
shall not be applicable where relevant reports or summaries are required
elsewhere in this Agreement. 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 Master Servicer shall provide the
Trustee with such information as is necessary for the Trustee to prepare such
reports and the Trustee shall provide the NIMS Insurer with the required tax
information applicable to the NIMS Insurer.
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(e) The Master Servicer shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of the Trust Fund, an application for an
employer identification number on IRS Form SS-4 or by any other acceptable
method. The Master Servicer shall also file a Form 8811 as required. The Master
Servicer, upon receipt from the IRS of the Notice of Taxpayer Identification
Number Assigned, shall upon request promptly forward a copy of such notice to
the Trustee and the Depositor. The Trustee shall furnish any other information
that is required by the Code and regulations thereunder to be made available to
Certificateholders. The Master Servicer shall provide the Trustee with such
information as is necessary for the Trustee to prepare such reports.
Section 4.04. Certificate Account. (a) The Trustee shall establish and
maintain in its name, as trustee, a trust account (the "Certificate Account")
entitled "Certificate Account, Bank One, National Association, as Trustee, in
trust for the benefit of the Holders of Amortizing Residential Collateral Trust
Mortgage Pass-Through Certificates, Series 2001-BC6" 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 Eligible Account,
the Trustee shall establish a new Certificate Account that is an Eligible
Account within 20 Business Days and transfer all funds and investment property
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 Trustee held under this Agreement.
(b) The Trustee shall deposit or 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 Trustee, all such amounts. In addition, on the
Distribution Date, the Trustee shall withdraw from the Basis Risk Reserve Fund,
the portion of the payment, if any, received by the Trustee from the Cap
Provider under the Cap Agreements, to the extent it is to be included in the
Interest Remittance Amount and/or Principal Remittance Amount for this
Distribution Date. The Trustee 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 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;
(iii) to make distributions to Certificateholders pursuant to
Article V; and
(iv) to clear and terminate the Certificate Account pursuant
to Section 7.02.
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The Trustee may invest, or cause to be invested, funds held in the
Certificate Account at the direction of the Depositor, which funds, if invested,
shall be invested in Eligible Investments (which may be obligations of the
Trustee). All such investments must be payable on demand or mature no later than
one Business Day prior to 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 to the Trustee
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
Trustee for deposit in the Certificate Account out of its own funds, without any
right of reimbursement therefor, immediately as realized. In the event the
Depositor does not provide written direction to the Trustee pursuant to this
Section, all funds on deposit in the Certificate Account shall be invested in a
money market or common trust fund as described in paragraph (viii) of the
definition of "Eligible Investment" set forth in Article I.
Section 4.05 The Pre-Funding Account. (a) The Trustee shall establish
and maintain in its name, as trustee, a trust account (the "Pre-Funding
Account") entitled "Pre-Funding Account, Bank One, National Association, as
Trustee, in trust for the benefit of the Holders of Amortizing Residential
Collateral Trust Mortgage Pass-Through Certificates, Series 2001-BC6". The
Pre-Funding Account shall be an Eligible Account and if it ceases to be an
Eligible Account, the Trustee shall establish a new Pre-Funding Account that is
also an Eligible Account within five Business Days and transfer all funds and
investment property on deposit in the Existing Pre-Funding Account into such new
Pre-Funding Account. On the Closing Date, the Depositor shall cause to be
deposited into the Pre-Funding Account, the Initial Pre-Funding Account. On any
subsequent Transfer Date, provided the conditions set forth in Section 2.01(b)
have been fully satisfied, the Trustee shall cause to be withdrawn from the
Pre-Funding Account an amount equal to Transfer Price of any Subsequent Mortgage
Loans as of any applicable Transfer Date sold to the Trust Fund and to pay such
Transfer Price to the Depositor. In no event shall the Trustee withdraw from the
Pre-Funding Account an amount in excess of the Initial Pre-Funding Account or
withdraw funds from the Pre-Funding Account during the Pre-Funding Period for
any other purpose.
(b) Funds in the Pre-Funding Account may be invested by this Trustee in
Eligible Investments at the direction of the Depositor. All income and gain on
such investments shall be for the benefit of the Depositor and shall be subject
to withdrawal on order by the Depositor from time to time. The amount of any
losses incurred in respect of any such investments shall be paid by the
Depositor by a deposit in the Pre-Funding Account out of its own funds, without
any right of reimbursement therefor, immediately as realized. In the event the
Depositor does not provide written direction to the Trustee pursuant to this
Section, all funds on deposit in the Pre-Funding Account shall be invested in a
money market or common trust fund as described in paragraph (viii) of the
definition of "Eligible Investment" set forth in Article I.
(c) On the Business Day immediately following the end of the
Pre-Funding Period, the Trustee shall transfer any amounts on deposit in the
Pre-Funding Account to the Certificate Account for distribution on the
Distribution Date occurring in January 2002 as principal to the Holders of the
Certificates in accordance with Article V.
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The Pre-Funding Account shall be an asset of the Trust Fund but not be
an asset of any REMIC created pursuant to this Agreement.
Section 4.06 The Capitalized Interest Account. The Trustee shall
establish and maintain in its name, as trustee, a trust account (the
"Capitalized Interest Account") entitled "Capitalized Interest Account, Bank
One, National Association, as Trustee, in trust for the benefit of the Holders
of Amortizing Residential Collateral Trust Mortgage Pass-Through Certificates,
Series 2001-BC6". The Capitalized Interest Account shall be an Eligible Account.
On the Closing Date, the Depositor shall deposit in the Capitalized Interest
Account the Original Capitalized Interest Amount. On the Business Day preceding
any Distribution Date occurring during the Pre-Funding Period the Trustee shall
withdraw from the Capitalized Interest Account an amount equal to the
Capitalized Interest Requirement for deposit into the Certificate Amount for
distribution to Certificateholders in accordance with Article V on such
Distribution Date. Amounts on deposit in the Capitalized Interest Account may be
invested by the Trustee in Eligible Investments at the direction of the
Depositor. All investment income and other gain on such investments shall be for
the benefit of the Depositor and shall be subject to withdrawal on order from
time to time. The amount of any losses incurred in respect of any such
investments shall be paid by the Depositor by a deposit into the Capitalized
Interest Account of its own funds, immediately as realized. In the event the
Depositor does not provide written direction to the Trustee pursuant to this
Section, all funds on deposit in the Capitalized Interest Account shall be
invested in a money market or common trust fund as described in paragraph (viii)
of the definition of "Eligible Investment" set forth in Article I. At the end of
the Pre-Funding Period, all amounts, if any, on deposit in the Capitalized
Interest Account shall be distributed to the Depositor and the Capitalized
Interest Account shall be terminated.
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 (which shall initially be the Trustee) or, upon written
request made to the Trustee at least five Business Days prior to the related
Record Date by any Certificateholder owning an aggregate initial Certificate
Principal Amount of at least $2,500,000, or in the case of the Class A-IO
Certificates, a Percentage Interest in the Class Notional Amount of not less
than 10%, or in the case of a Class X or Class P Certificate, a Percentage
Interest of 100%, 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; provided, further, that the foregoing provisions shall not apply to any
Class of Certificates as long as such Certificate remains a Book-Entry
Certificate in which case all payments made shall be made through the Clearing
Agency and its Clearing Agency Participants. 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 Certificates 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. 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.
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(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 Class Principal Amounts or initial Class Notional
Amounts (or Percentage Interests).
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 Total Distribution Amount and
shall allocate such amount to the interests issued in respect of REMIC 1, REMIC
2 and REMIC 3 and shall distribute such amount as specified in this Section.
(b) On each Distribution Date, the Trustee shall distribute the
Interest Remittance Amount for such date in the following order of priority
based on the report of the Master Servicer:
(i) concurrently, to the Class A Certificates and the Class A-IO
Certificates, Current Interest for each such Class and such
Distribution Date and any Carryforward Interest for such Class
and such Distribution Date;
(ii) to the Class M1 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;
(iii) to the Class M2 Certificates, Current Interest and any
Carryforward Interests for such Class and such Distribution Date;
(iv) to the Class B Certificates, Current Interest and any
Carryforward Interests for such Class and such Distribution Date;
(v) to the Loss Mitigation Advisor, the Loss Mitigation Advisor's Fee
for such Distribution Date;
(vi) to the Master Servicer, any amounts reimbursable pursuant to
Section 4.02(v) and not previously reimbursed to the Master
Servicer; and
(vii) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in subsection (e) of this Section,
any Interest Remittance Amount remaining after application
pursuant to clauses (i) through (vi) above.
(c) On each Distribution Date, the Trustee shall distribute the
Principal Distribution Amount for such date as follows:
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(i) On each Distribution Date (a) prior to the Stepdown Date
or (b) with respect to which a Trigger Event is in effect, until the
aggregate Certificate Principal Amount of the Class A, Class M1, Class
M2 an Class B Certificates equals the Target Amount for such
Distribution Date, the Trustee will distribute the Principal
Distribution Amount in the following order of priority:
(A) to the Class A Certificates, until the Class
Principal Amount of such Class has been reduced to zero;
(B) to the Class M1 Certificates, until the Class
Principal Amount of such Class has been reduced to zero;
(C) to the Class M2 Certificates, until the Class
Principal Amount of such Class has been reduced to zero;
(D) to the Class B Certificates, until the Class
Principal Amount of such Class has been reduced to zero; and
(E) for application as part of Monthly Excess
Cashflow for such Distribution Date, as provided in subsection
(d) of this Section, any Principal Distribution Amount
remaining after application pursuant to clauses (A) through
(D) above.
Any Principal Distribution Amount remaining on any Distribution Date
after the Target Amount is achieved will be applied as part of Monthly Excess
Cashflow for such Distribution Date as provided in subsection (e) of this
Section.
(ii) On each Distribution Date (a) on or after the Stepdown
Date and (b) with respect to which a Trigger Event is not in effect,
the Principal Distribution Amount for such date will be distributed in
the following order of priority:
(1) so long as the Class M1, Class M2 or Class B
Certificates are outstanding, to the Class A Certificates, an
amount equal to the lesser of (x) the Principal Distribution
Amount for such Distribution Date and (y) the Senior Principal
Distribution Amount for such Distribution Date until the Class
Principal Amount of such Class has been reduced to zero;
otherwise to the Class A Certificates, the Principal
Distribution Amount for such Distribution Date until the Class
Principal Amount of such Class has been reduced to zero;
(2) to the Class M1 Certificates, an amount equal to
the lesser of (x) the excess of (a) the Principal Distribution
Amount for such Distribution Date over (b) the amount
distributed to the Class A Certificates on such date pursuant
to clause (1) above, and (y) the M1 Principal Distribution
Amount for such date, until the Class Principal Amount of such
Class has been reduced to zero;
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(3) to the Class M2 Certificates, an amount equal to
the lesser of (x) the excess of (a) the Principal Distribution
Amount for such Distribution Date over (b) the amount
distributed to the Class A and Class M1 Certificates on such
date pursuant to clauses (1) and (2) above, and (y) the M2
Principal Distribution Amount for such date, until the Class
Principal Amount of such Class has been reduced to zero;
(4) to the Class B Certificates, an amount equal to
the lesser of (x) the excess of (a) the Principal Distribution
Amount for such Distribution Date over (b) the amount
distributed to the Class A, Class M1 and Class M2 Certificates
on such date pursuant to clauses (1) through (3) above,
respectively, and (y) the B Principal Distribution Amount for
such date, until the Class Principal Amount of such Class has
been reduced to zero; and
(5) for application as part of Monthly Excess
Cashflow for such Distribution Date, as provided in subsection
(d) of this Section, any Principal Distribution Amount
remaining after application pursuant to clauses (1) through
(4) above.
Notwithstanding the foregoing, on any Distribution Date on which the
Class Principal Amount of each Class of Certificates having a higher
priority of distribution has been reduced to zero, any remaining
Principal Distribution Amount will be distributed to the remaining
Certificates in the order of priority set forth above until the Class
Principal Amount of each such Class has been reduced to zero.
(d) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow for such date in the following order of priority:
(i) for each Distribution Date occurring (a) before the
Stepdown Date or (b) on or after the Stepdown Date but for which a
Trigger Event is in effect, then until the aggregate Certificate
Principal Amount of the LIBOR Certificates equals the Pool Balance for
such Distribution Date minus the Targeted Overcollateralization Amount
for such Distribution Date, in the following order of priority,
(A) to the Class A Certificates until the Class
Principal Amount of such Class has been reduced to zero;
(B) to the Class M1 Certificates, until the Class
Principal Amount of such Class has been reduced to zero;
(C) to the Class M2 Certificates, until the Class
Principal Amount of such Class has been reduced to zero; and
(D) to the Class B Certificates, until the Class
Principal Amount of such Class has been reduced to zero;
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(ii) for each Distribution Date occurring on or after the
Stepdown Date and for which a Trigger Event is not in effect, in the
following order of priority,
(A) to the Class A Certificates until the aggregate
Class Principal Amount of the Senior Certificates equals the
Senior Target Amount;
(B) to the Class M1 Certificates, until the Class
Principal Amount for such Class equals the M1 Target Amount;
(C) to the Class M2 Certificates, until the Class
Principal Amount for such Class equals the M2 Target Amount;
and
(D) to the Class B Certificates, until the Class
Principal Amount for such Class equals the B Target Amount;
(iii) to the Basis Risk Reserve Fund, an amount equal to the
Basis Risk Payment for such Distribution Date, and then from the Basis
Risk Reserve Fund (after giving effect to any withdrawals from the
Basis Risk Reserve Fund for such Distribution Date required for
inclusion in the Interest Remittance Amount and/or the Principal
Remittance Amount for such Distribution Date), in the following order
of priority,
(A) to the Class A Certificates, any applicable Basis
Risk Shortfall and Unpaid Basis Risk Shortfall for such Class
and for such Distribution Date;
(B) to the Class M1 Certificates, any applicable
Basis Risk Shortfall and Unpaid Basis Risk Shortfall for such
Class and for Distribution Date;
(C) to the Class M2 Certificates, any applicable
Basis Risk Shortfall and Unpaid Basis Risk Shortfall for such
Class and for Distribution Date; and
(D) to the Class B Certificates, any applicable Basis
Risk Shortfall and Unpaid Basis Risk Shortfall for Class and
for such Distribution Date;
(iv) to the Class M1 Certificates, any Deferred Amount for
such Class and such Distribution Date;
(v) to the Class M2 Certificates, any Deferred Amount for such
Class and such Distribution Date;
(vi) to the Class B Certificates, any Deferred Amount for such
Class and such Distribution Date;
(vii) to the Class X Certificate, the Class X Distributable
Amount for such Distribution Date, together with any amounts withdrawn
from the Basis Risk Reserve Fund for distribution to such Class X
Certificate pursuant to Section 5.06(c) and (d) on such Distribution
Date; and
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(viii) to the Class R Certificate, any amount remaining on
such date after application pursuant to clauses (i) through (viii)
above.
(e) On each Distribution Date, an amount equal to the aggregate of all
Prepayment Premiums collected during the preceding Prepayment Period shall be
distributed to the Class P Certificate.
Section 5.03. Allocation of Losses. On each Distribution Date, the
Class Principal Amounts of the Class M1, Class M2 and Class B Certificates will
be reduced by the amount of any Applied Loss Amount for such date, in the
following order of priority:
(i) to the Class B Certificates, until the Class Principal
Amount thereof has been reduced to zero;
(ii) to the Class M2 Certificates, until the Class Principal
Amount thereof has been reduced to zero; and
(iii) to the Class M1 Certificates, until the Class Principal
Amount thereof has been reduced to zero.
Section 5.04. Advances by Master Servicer, Servicers and Trustee. (a)
Subject to Section 9.07, Advances shall be made in respect of each Deposit Date
as provided herein. If, on any Determination Date, any Servicer determines that
any Scheduled Payments due during the related Collection Period (other than
Balloon Payments) have not been received, such Servicer shall advance such
amount to the extent provided in the applicable Servicing Agreement. If any
Servicer fails to remit Advances required to be made under the applicable
Servicing Agreement, the Master Servicer shall itself (in its capacity as
successor Servicer) make, or shall cause the successor Servicer to make, such
Advance on the Deposit Date immediately following such Determination Date. The
Master Servicer shall: (i) remit Advances to the Trustee from funds advanced by
the applicable Servicer (or from its own funds to the extent it is successor
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 Trustee 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 Trustee for deposit in
the Certificate Account on or before any future Deposit Date to the extent that
funds in the Certificate Account on such Deposit 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. Notwithstanding anything to the contrary herein, in the event the Master
Servicer determines in its reasonable judgment that an Advance is
non-recoverable, the Master Servicer shall be under no obligation to make such
Advance.
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(b) In the event that the Master Servicer or Servicer fails for any
reason to make an Advance required to be made pursuant to this Section 5.04 on
or before the Deposit Date, the Trustee, 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 or the Servicer that would have been deposited
in such Certificate Account over (b) the amount of any Advance made by the
Master Servicer or any Servicer with respect to such Distribution Date;
provided, however, that the Trustee 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 Trustee 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
aggregate Master Servicing Fees payable to the Master Servicer in respect of any
Distribution Date shall be reduced (but not below zero) by the amount of any
Compensating Interest Payment for such Distribution Date, but only to the extent
that Prepayment Interest Shortfalls relating to such Distribution Date are
required to be paid but not actually paid by the Servicers on the applicable
Remittance Date. Such amount shall not be treated as an Advance and shall not be
reimbursable to the Master Servicer.
Section 5.06. Basis Risk Reserve Fund. (a) On the Closing Date, the
Trustee shall establish and maintain in its name, in trust for the benefit of
the holders of the LIBOR Certificates, a Basis Risk Reserve Fund, into which the
Seller shall deposit $1,000. In addition, the Trustee shall hold the Cap
Agreement as an asset in the Basis Risk Reserve Fund and any payments received
under the Cap Agreement shall be credited to the Basis Risk Reserve Fund. The
Basis Risk Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Trustee
held pursuant to this Agreement.
(b) On each Distribution Date the Trustee shall, to the extent of
payments received under the Cap Agreement for such Distribution Date, withdraw
amounts from the Basis Risk Reserve Fund and deposit such amounts into the
Certificate Account to the extent required under the definitions of Interest
Remittance Amount and Principal Remittance Amount. In addition, the Trustee
shall withdraw amounts from the Basis Risk Reserve Fund to make distributions
pursuant to Section 5.02(d)(iii).
(c) Funds in the Basis Risk Reserve Fund shall be invested in Eligible
Investments. Any earnings on such amounts shall be distributed to the Class X
Certificateholder pursuant to Section 5.02(e)(xi). The Class X Certificate shall
evidence ownership of the Basis Risk Reserve Fund for federal income tax
purposes and Xxxxxx Capital on behalf of the Holder thereof shall direct the
Trustee, in writing, as to investment of amounts on deposit therein. Xxxxxx
Capital shall be liable for any losses incurred on such investments. In the
absence of written instructions from the Class X Certificateholder as to
investment of funds on deposit in the Basis Risk Reserve Fund, such funds shall
be invested in the Bank One Group Institutional Prime Money Market Fund. Any
amounts on deposit in the Basis Risk Reserve Fund in excess of the Required
Reserve Fund Deposit on any Distribution Date shall be distributed to the Class
X Certificateholder on the following Distribution Date. For all Federal income
tax purposes, amounts transferred by REMIC 3 to the Basis Risk Reserve Fund
shall be treated as amounts distributed by REMIC 3 to the Class X
Certificateholder.
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(d) Upon termination of the Trust Fund, any amounts remaining in the
Basis Risk Reserve Fund shall be distributed to the Class X Certificateholder
pursuant to Section 5.02(e)(xi).
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. (a) The Trustee, except during the
continuance of an Event of Default, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee provided for in this Agreement shall not be construed as a
duty of the Trustee. If an Event of Default has occurred and has not otherwise
been cured or waived, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs, unless the Trustee is acting as
Master Servicer, in which case it shall use the same degree of care and skill as
the Master Servicer hereunder.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, any Servicer or the Loss Mitigation Advisor to
the Trustee pursuant to this Agreement, and shall not be required to recalculate
or verify any numerical information furnished to the Trustee pursuant to this
Agreement. Subject to the immediately preceding sentence, if any such
resolution, certificate, statement, opinion, report, document, order or other
instrument is found not to conform to the form required by this Agreement in a
material manner the Trustee shall take such action as it deems appropriate to
cause the instrument to be corrected, and if the instrument is not corrected to
the Trustee's satisfaction, the Trustee will provide notice thereof to the
Certificateholders and the NIMS Insurer and will, at the expense of the Trust
Fund, which expense shall be reasonable given the scope and nature of the
required action, take such further action as directed by the Certificateholders
and the NIMS Insurer.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful misconduct.
Notwithstanding anything in this Agreement to the contrary, the Trustee shall
not be liable for special, indirect or consequential losses or damages of any
kind whatsoever (including, but not limited to, lost profits). No provision of
this Agreement shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
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(i) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Holders of Certificates as provided
in Section 6.18 hereof;
(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) No provision of this Agreement shall require the Trustee
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
(iv) The Trustee shall not be responsible for any act or
omission of the Master Servicer, the Depositor, the Sellers or any
Custodian.
(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 promptly 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) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the NIMS Insurer or the Certificateholders of any Class
holding Certificates which evidence, as to such Class, Percentage Interests
aggregating not less than 25% as to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement.
(f) The Trustee shall not be required to perform services under this
Agreement, or to expend or risk its own funds or otherwise incur financial
liability for the performance of any of its duties hereunder or the exercise of
any of its rights or powers if there is reasonable ground for believing that the
timely payment of its fees and expenses or the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer or any Servicer under this
Agreement or any Servicing Agreement except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Master Servicer in accordance with the terms of this
Agreement.
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(g) Subject to Section 4.04, the Trustee shall not be held liable by
reason of any insufficiency in any account (including without limitation the
Collection Amount) held by or on behalf of the Trustee 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).
(h) Except as otherwise provided herein, the Trustee shall have no 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 rerecording, refiling or
redepositing 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, any Servicer or
the Loss Mitigation Advisor delivered to the Trustee pursuant to this Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties.
Section 6.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 6.01:
(i) The Trustee may request, and may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors 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) The Trustee 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;
(iii) The Trustee shall not 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, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document (provided the same
appears regular on its face), unless requested in writing to do so by
the NIMS Insurer or the Holders of at least a majority in Class
Principal Amount (or Percentage Interest) of each Class of
Certificates; provided, however, that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such expense or liability or
payment of such estimated expenses from the NIMS Insurer or the
Certificateholders, as applicable, as a condition to proceeding. The
reasonable expense thereof shall be paid by the party requesting such
investigation and if not reimbursed by the requesting party shall be
reimbursed to the Trustee by the Trust Fund;
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(v) The Trustee 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 conferred on them by such appointment,
provided that the Trustee shall continue to be responsible for its
duties and obligations hereunder to the extent provided herein, and
provided further that the Trustee 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;
(vi) The Trustee shall be under no 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 or the NIMS Insurer pursuant to the provisions of
this Agreement, unless such Certificateholders or the NIMS Insurer
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby;
(vii) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act; and
(viii) The Trustee shall not 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 Not Liable for Certificates. The Trustee makes 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 the Trustee 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 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 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.
The Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.
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Section 6.04. Trustee May Own Certificates. The Trustee and any
Affiliate or agent of the Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates and may transact banking and trust
business with the other parties hereto and their Affiliates with the same rights
it would have if it were not Trustee or such agent.
Section 6.05. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC, (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 $50,000,000 and subject to supervision or examination by
federal or state authority and (iii) not an Affiliate of the Master Servicer or
any Servicer. 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 the Trustee shall cease to be eligible in accordance with provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 6.06.
Section 6.06. Resignation and Removal of Trustee. (a) The Trustee may
at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Depositor, the NIMS Insurer and the Master
Servicer. Upon receiving such notice of resignation, the Depositor will promptly
appoint a successor trustee acceptable to the NIMS Insurer by written
instrument, one copy of which instrument shall be delivered to the resigning
Trustee, one copy to the successor trustee and one copy to each of the Master
Servicer and the NIMS Insurer. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) the Trustee 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 or the NIMS Insurer, (ii) the Trustee
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (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 would result in a downgrading of the rating by any
Rating Agency of any Class of Certificates with a rating or the NIM Securities,
then the Depositor, the Master Servicer or the NIMS Insurer shall remove the
Trustee and the Depositor shall appoint a successor trustee acceptable to the
NIMS Insurer and the Master Servicer by written instrument, one copy of which
instrument shall be delivered to the Trustee so removed, one copy each to the
successor trustee and one copy to the Master Servicer and the NIMS Insurer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Percentage Interest) of each Class of Certificates (or the NIMS Insurer in the
event of failure of the Trustee to perform its obligations hereunder) may at any
time upon 30 days' written notice to the Trustee and to the Depositor remove the
Trustee by such written instrument, signed by such Holders or their
attorney-in-fact duly authorized (or by the NIMS Insurer), one copy of which
instrument shall be delivered to the Depositor, one copy to the Trustee, one
copy each to the Master Servicer and the NIMS Insurer; the Depositor shall
thereupon appoint a successor trustee in accordance with this Section mutually
acceptable to the Depositor, the Master Servicer and the NIMS Insurer.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 6.07.
Section 6.07. Successor Trustee. (a) Any successor trustee appointed as
provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer, the NIMS Insurer and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee (or
assign to the Trustee its interest under each Custodial Agreement, to the extent
permitted thereunder) all Mortgage Files and documents and statements related to
each Mortgage File 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 records 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 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
all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the predecessor trustee shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to any Rating Agency. The expenses of such
mailing shall be borne by the predecessor trustee.
Section 6.09. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Persons succeeding to the business of the Trustee,
shall be the successor to the Trustee 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.
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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 Percentage Interest) of every Class of Certificates shall
have the power from time to time to appoint one or more Persons, approved by the
Trustee and the NIMS Insurer, 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 with the
consent of the NIMS Insurer may at any time accept the resignation of
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 and a copy given
to the Master Servicer and the NIMS Insurer.
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(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. 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 shall pay the reasonable compensation of the
co-trustees (which compensation shall not reduce any compensation payable to the
Trustee under such Section).
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 $15,000,000, authorized
under such laws to do a trust business and subject to supervision or examination
by federal or state authorities and acceptable to the NIMS Insurer.
(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.
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(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee, the NIMS Insurer
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, the NIMS Insurer 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 the NIMS Insurer 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, it shall be a reimbursable expense pursuant to Section 6.12.
Section 6.11. Indemnification of Trustee. The Trustee and its
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense 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,
including 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 shall have
given the Depositor, the Master Servicer, the NIMS Insurer and the
Holders written notice thereof promptly after the Trustee shall have
knowledge thereof;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Depositor, the
Master Servicer and the NIMS Insurer 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 entered into without the prior consent of the
Depositor, the Master Servicer and the NIMS Insurer, 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 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 Trustee. The Trustee will receive
compensation and reimbursement or payment of its expenses hereunder and under
each Custodial Agreement as provided herein and therein.
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 Trustee 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 Trustee shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Trustee shall request the Master Servicer to make such
distribution as promptly as practicable or legally permitted. If the Trustee
shall subsequently receive any such amount, it may withdraw such request.
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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 on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in this
Agreement which continues unremedied for a period of 30 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of more than
50% of the Aggregate Voting Interests of the Certificates or by the
NIMS Insurer; or
(ii) 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 or the NIM Securities because
of the financial condition or loan servicing capability of such Master
Servicer; or
(iii) 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 the Master Servicer or of or
relating to all or substantially all of its property; or
(iv) 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
(v) 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
(vi) 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 30 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 to the Master Servicer
and the Trustee by the Holders of more than 50% of the Aggregate Voting
Interests of the Certificates or by the NIMS Insurer; or
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(vii) A sale or pledge of 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, the
NIMS Insurer and Certificateholders holding more than 50% of the
Aggregate Voting Interests of the Certificates; or
(viii) Any Servicer at any time is not either an FNMA- or FHLMC-
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 FNMA- or
FHLMC-approved servicer within 45 days of the absence of such approval;
or
(ix) After receipt of notice from the Trustee or the NIMS
Insurer, any failure of the Master Servicer to remit to the Trustee any
payment required to be made to the Trustee for the benefit of
Certificateholders under the terms of this Agreement, including any
Advance, on any Deposit Date.
If an Event of Default described in clauses (i) through (viii) 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 Aggregate Voting Interests of
the Certificates affected thereby or the NIMS Insurer, 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 (ix) 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 and the NIMS Insurer, 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 Trustee pursuant
to and under the terms of this Agreement; and the Trustee 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 in effecting the termination of the defaulting Master
Servicer's responsibilities and rights hereunder as Master Servicer including,
without limitation, notifying the Servicers of the assignment of the master
servicing function and providing the Trustee or its designee all documents and
records in electronic or other form reasonably requested by it to enable the
Trustee or its designee to assume the defaulting Master Servicer's functions
hereunder and the transfer to the Trustee 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 its costs of a master servicing
transfer and the reasonable out-of-pocket fees and expenses of the Trustee
associated with such master servicing transfer.
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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) and (ix) 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, shall promptly notify the NIMS Insurer and each
Rating Agency of the nature and extent of such Event of Default. The Trustee
shall immediately give written notice to the Master Servicer upon the Master
Servicer's failure to remit funds on the Deposit 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, the Trustee, 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 failure to provide information
required by this Agreement shall not be considered a default by the Trustee
hereunder. In addition, the Trustee shall have no responsibility for any act or
omission of the Master Servicer prior to the issuance of any notice of
termination and shall have no liability relating to the representations and
warranties of the Master Servicer set forth in Section 9.14. In the Trustee's
capacity as such successor, the Trustee shall have the same limitations on
liability herein granted to the Master Servicer. As compensation therefor, the
Trustee 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 Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than $15,000,000
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 as a
successor master servicer must be approved by the NIMS Insurer. Such successor
Master Servicer may be an Affiliate of the Trustee; provided, however, that,
unless such Affiliate meets the net worth requirements and other standards set
forth herein for a successor master servicer, the Trustee, 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 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 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 and any successor master servicer in effecting
the termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying Servicers of the assignment of the
master servicing functions and providing the Trustee 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 or such successor master
servicer, as applicable, all amounts or investment property 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 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 Trustee as required by this Agreement or
(iv) restrictions imposed by any regulatory authority having jurisdiction over
the Master Servicer.
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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 interests,
and enforce the rights and remedies, of the NIMS Insurer and 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. More than 50% of the Aggregate Voting
Interests of Certificateholders may, with the consent of the NIMS Insurer, 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, with
the consent of the NIMS Insurer. 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 Certificateholders at their respective addresses appearing on the
Certificate Register and the NIMS Insurer. The Trustee shall also, within 45
days after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to Certificateholders and the NIMS Insurer, unless such
Event of Default shall have been cured or waived prior to the issuance of such
notice and within such 45-day period.
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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 Percentage
Interest) of each Class of Certificates affected thereby may, with the consent
of the NIMS Insurer, 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 or the NIMS Insurer, unless such Certificateholders or the
NIMS Insurer 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 acceptable to the NIMS
Insurer, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability for which it is
not indemnified to its satisfaction 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 and the NIMS Insurer.
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund
Upon Purchase or Liquidation of All Mortgage Loans. (a) The respective
obligations and responsibilities of the Trustee 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 Trustee for deposit into the
Certificate Account pursuant to Section 4.01 and the obligations of the Master
Servicer to the Trustee pursuant to Sections 9.10 and 9.14) shall terminate on
the earliest 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, (ii)
the sale of the property held by the Trust Fund in accordance with Section
7.01(b) and (iii) the Latest Possible Maturity Date; 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.
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(b) On any Distribution Date occurring on or after the Initial Optional
Purchase Date, the Master Servicer, with the prior written consent of the NIMS
Insurer and the Seller which consent shall not be unreasonably withheld, has the
option to cause the Trust Fund to adopt a plan of complete liquidation pursuant
to Section 7.03(a)(i) hereof to sell all of its property. Upon exercise of such
option, the property of the Trust Fund shall be sold to the Master Servicer at a
price (the "Termination Price") equal to the sum of (i) 100% 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 Collection Period immediately preceding the
related Distribution Date to the date of such repurchase and (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 mutually agreed
upon by the Master Servicer, the NIMS Insurer and the Trustee. The Master
Servicer, each Servicer (or the Trustee, if applicable) shall be reimbursed from
the Termination Price for any Mortgage Loan or related REO Property for any
Advances made or other amounts advanced with respect to the Mortgage Loans that
are reimbursable to the Master Servicer or the Trustee under this Agreement or
the related Servicing Agreement (or to the Trustee hereunder), together with any
accrued and unpaid compensation due to the Master Servicer hereunder or the
Servicers thereunder.
If the Master Servicer fails to exercise its option on the Initial
Optional Purchase Date, the NIMS Insurer, so long as either the NIM Securities
remain outstanding and are covered by the NIMS Insurer's guaranty or if the NIMS
Insurer is owed amounts in respect of its guaranty of the NIM Securities, may
exercise such option and if the NIMS Insurer fails to exercise such option,
Aurora Loan Services Inc., an affiliate of the Seller, with the prior consent of
the Seller, will have the right to exercise such option.
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 Trustee by first class mail to Certificateholders mailed
upon (x) the sale of all of the property of the Trust Fund by the Trustee
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, 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 Trustee therein specified. The Trustee shall give such
notice to the Master Servicer, the NIMS Insurer 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 terminate or request the
Master Servicer to terminate, the Collection Account it maintains, the
Certificate Account and any other account or fund maintained with respect to the
Certificates, subject to the Trustee's obligation hereunder to hold all amounts
payable to Certificateholders in trust without interest pending such payment.
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(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, 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 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 Trustee 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
Trustee 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 in connection with
any termination or liquidation of the Trust Fund shall be reimbursed from
proceeds received from the liquidation of the Trust Fund.
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 party
exercising the option to purchase all of the Mortgage Loans pursuant to Section
7.01(b)), and subsequently receives, an Opinion of Counsel (at the expense of
such requesting party), addressed to the Trustee and the NIMS Insurer 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) Within 89 days prior to the time of the making of the final
payment on the Certificates, upon notification by the Master Servicer,
the NIMS Insurer or an affiliate of Seller that it intends to exercise
its option to cause the termination of the Trust Fund, the Trustee
shall adopt a plan of complete liquidation of the Trust Fund on behalf
of each REMIC, meeting the requirements of a qualified liquidation
under the REMIC Provisions;
(ii) Any sale of the assets of the Trust Fund pursuant to Section
7.02 shall be a sale for cash and shall occur at or after the time of
adoption of such a plan of complete liquidation and prior to the time
of making of the final payment on the Certificates;
(iii) On the date specified for final payment of the
Certificates, the Trustee shall make final distributions of principal
and interest on the Certificates in accordance with Section 5.02 and,
after payment of, or provision for any outstanding expenses, distribute
or credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand after such final payment
(other than cash retained to meet claims), and the Trust Fund (and each
REMIC) shall terminate at that time; and
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(iv) In no event may the final payment on the Certificates or the
final distribution or credit to the Holders of the Residual
Certificates be made after the 89th day from the date on which the plan
of complete liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby agrees to accept the plan of complete liquidation adopted by the Trustee
under this Section and to take such other action in connection therewith as may
be reasonably requested by the Master Servicer or any Servicer.
Section 7.04. Optional Repurchase Right of Seller. The NIMS Insurer may
repurchase any Distressed Mortgage Loan for a purchase price equal to the
outstanding principal balance of such Mortgage Loan, plus accrued interest
thereon to the date of repurchase plus any unreimbursed Advances, Servicing
Advances, Servicing Fees or Master Servicing Fees allocable to such Distressed
Mortgage Loan. Any such repurchase shall be accomplished by the NIM Insurer's
remittance of the purchase price for the Distressed Mortgage Loan to the Master
Servicer for deposit into the Collection Account.
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 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 (or Percentage Interest) of
Certificates of each Class affected thereby shall, with the prior written
consent of the NIMS Insurer, 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 or the NIMS Insurer; it being understood and intended, and
being expressly covenanted by each Certificateholder with every other
Certificateholder, the NIMS Insurer 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 the rights of the
NIMS Insurer, or to obtain or seek to obtain priority over or preference to any
other such Holder or the NIMS Insurer, or to enforce any right under this
Agreement, except in the manner herein provided and for the benefit of all
Certificateholders and the NIM Insurer. For the protection and enforcement of
the provisions of this Section, each and every Certificateholder, the NIM
Insurer and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
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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 and the NIMS Insurer, within fifteen days after
receipt by the Certificate Registrar of a request by the Trustee or the NIMS
Insurer 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 the NIMS Insurer or 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
Master Servicer, the NIMS Insurer, the Certificate Registrar and the Trustee
that neither the Depositor, the Master Servicer, the NIMS Insurer, 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.
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 and, where expressly required herein, to the Master
Servicer or the NIMS Insurer. 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 NIMS Insurer and the Master Servicer, if made in the manner
provided in this Section. Each of the Trustee 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 and the NIMS Insurer.
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(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 NIMS Insurer, 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, the
NIMS Insurer or the Master Servicer in reliance thereon, whether or not notation
of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER; LOSS MITIGATION ADVISOR
Section 9.01. Duties of the Master Servicer. The Certificateholders, by
their purchase and acceptance of the Certificates, appoint Xxxxx Fargo Bank
Minnesota, National Association, 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 each Servicing Agreement. Notwithstanding
anything in this Agreement, any Servicing Agreement or any Loss Mitigation
Advisory Agreement to the contrary, the Master Servicer shall have no duty or
obligation to enforce any Loss Mitigation Advisory Agreement or to supervise,
monitor or oversee the activities of any Servicer under its Loss Mitigation
Advisory Agreement with respect to any action taken or not taken by a Servicer
at the direction of the Seller or pursuant to a recommendation of the Loss
Mitigation Advisor.
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Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors
and Omissions Insurance Policy. (a) The Master Servicer, at its expense, shall
maintain in effect a Master Servicer Fidelity Bond and a Master Servicer 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 Master Servicer Errors and
Omissions Insurance Policy and the Master Servicer Fidelity Bond shall be in
such form and amount that would be consistent with coverage customarily
maintained by master servicers of mortgage loans similar to the Mortgage Loans
and shall by its terms not be cancelable without thirty days' prior written
notice to the Trustee and the NIMS Insurer, the Master Servicer shall provide
the Trustee and the NIMS Insurer, upon request, with a copy of such policy and
fidelity bond. The Master Servicer shall (i) require each Servicer to maintain
an Errors and Omissions Insurance Policy and a Servicer 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 such policies and of the certificates and
notices referred to in clause (ii) to the Trustee and NIMS Insurer upon request.
(b) The Master Servicer shall promptly report to the Trustee and the
NIMS Insurer 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 and the NIMS Insurer, 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 and the NIMS Insurer 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 and the
NIMS Insurer. 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 the applicable Servicer under any
such bond or policy shall be remitted to the Master Servicer to the extent
provided in the applicable Servicing Agreement.
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 NIMS Insurer each Rating Agency and the
Depositor a copy of its annual unaudited financial statements on or prior to May
31 of each year, beginning May 31, 2002. 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.
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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 the 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, the
Certificateholders and the NIMS Insurer under this Agreement. 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 any part of 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 under the applicable Servicing Agreement, is hereby authorized and
empowered by the Trustee when the Master Servicer or such Servicer, as the case
may be, believes it appropriate in its best judgment 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 furnish the Master Servicer, upon request, with any powers of attorney
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 and with the consent of the NIMS Insurer, 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.
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(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 (but not any Prepayment Premium) 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 such Servicer (if
required by the applicable Servicing Agreement) to make 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 knowingly permit 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,
any Prepayment Premium, or any other term affecting the amount or timing of
payments on the Mortgage Loan or the collateral therefor), unless: (1) such
Mortgage Loan is in default or default by the related Mortgagor is, in the
reasonable judgment of the Master Servicer or the applicable Servicer, imminent,
or (2) the Master Servicer shall have provided or (if required by the applicable
Servicing Agreement) caused to be provided to the Trustee and the NIMS Insurer
an Opinion of Counsel (which opinion shall, if provided by the Master Servicer,
be an expense reimbursed from the Collection Account pursuant to Section
4.02(v)) in writing to the effect that such modification, waiver or amendment
would not cause an Adverse REMIC Event, and, if required by the related
Servicing Agreement, the Servicer shall have obtained the written consent of the
Trustee and the NIMS Insurer and shall have provided a copy of such consent to
the Master Servicer.
Section 9.05. Enforcement of Servicer's and Master Servicer's
Obligations. (a) Each Servicing Agreement requires the applicable Servicer,
respectively, 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 actions taken or to be taken by a Servicer on behalf of
the Master Servicer. Any fees and other amounts payable to a Servicer shall be
deducted from amounts remitted to the Master Servicer by such Servicer and shall
not be an obligation of the Trust Fund or the Master Servicer.
(b) The Master Servicer, for the benefit of the Trustee, the NIMS
Insurer and the Certificateholders, shall enforce the obligations of each
Servicer under the related Servicing Agreement, and shall, in the event that a
Servicer fails to perform its obligations in accordance therewith, terminate the
rights and obligations of such Servicer thereunder and either act as servicer of
the related Mortgage Loans or cause the other parties hereto to enter into a
Servicing Agreement (and such parties hereby agree to execute and deliver any
such successor 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 (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, (ii) from a specific recovery of costs,
expenses or attorneys' fees against the party against whom such enforcement is
directed, and then, (iii) to the extent that such amounts are insufficient to
reimburse the Master Servicer for the costs of such enforcement, from the
Collection Account.
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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 to deposit therein any collections of amounts received with respect to
amounts due for taxes, assessments, water rates, standard hazard insurance
policy premiums, Payaheads, if applicable, 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, 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 or the applicable
Servicer has determined that the funds so advanced are recoverable from escrow
payments, reimbursement pursuant to Section 4.02 or otherwise.
(b) Costs incurred by the Master Servicer or by any Servicer 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 as a Servicing Advance by the Master
Servicer pursuant to Section 4.02.
Section 9.07. Termination of Servicing Agreements; Successor Servicers.
(a) The Master Servicer 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, the Master
Servicer shall provide for the servicing of the Mortgage Loans by a successor
Servicer to be appointed as provided in the applicable Servicing Agreement.
The parties acknowledge that notwithstanding the preceding sentence,
there may be a transition period, not to exceed 90 days, in order to effect the
transfer of servicing to a successor Servicer. The Master Servicer shall be
entitled to be reimbursed from each Servicer (or by the Trust Fund, if the
Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing from the predecessor servicer,
including without limitation, any costs or expenses associated with the complete
transfer or all servicing data and the completion, correction or manipulation of
such servicing data, as may be required by the Master Servicer to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer to service the Mortgage Loans properly and effectively.
(b) If the Master Servicer acts as a successor 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 the related Servicing Agreement, 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.
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(c) If the Master Servicer acts as a successor Servicer, it will have
no obligation to make an Advance if it determines in its reasonable judgment
that such Advance is non-recoverable. To the extent that the Master Servicer is
unable to find a successor Servicer that is willing to service the Mortgage
Loans for the Servicing Fee because of the obligation of the Servicer to make
Advances regardless of whether such Advance is recoverable, the applicable
Servicing Agreement may be amended to provide that the successor Servicer shall
have no obligation to make an Advance if it determines in its reasonable
judgment that such Advance is non-recoverable and provides an Officer's
Certificate to such effect to the Master Servicer, the Trustee and the NIM
Insurer.
Section 9.08. Master Servicer Liable for Enforcement. Notwithstanding
any Servicing Agreement, the Master Servicer shall remain obligated and liable
to the Trustee, the NIMS Insurer 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. The Master Servicer shall ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall enforce
the provisions of each Servicing Agreement for the benefit of the
Certificateholders and the NIMS Insurer. The Master Servicer shall be entitled
to enter into any agreement with any Servicer for indemnification of the Master
Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
Section 9.09. No Contractual Relationship Between Any Servicer and
Trustee or Depositor. Any Servicing Agreement that may be entered into and any
other transactions or services relating to the Mortgage Loans involving any
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 the
Trustee, the NIMS Insurer and the Depositor shall not be deemed parties thereto
and shall have no obligations, duties or liabilities with respect to such
Servicer except as set forth in Section 9.10 hereof, but shall have rights
thereunder as third party beneficiaries.
Section 9.10. Assumption of Servicing Agreement by Trustee. (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), the Trustee
shall thereupon assume all of the rights and obligations of such Master Servicer
hereunder and under each Servicing Agreement entered into with respect to the
Mortgage Loans. The Trustee, 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 Trustee and the NIMS Insurer, and
hereby agrees to indemnify and hold harmless the Trustee and the NIMS Insurer
from and against all costs, damages, expenses and liabilities (including
reasonable attorneys' fees) incurred by the Trustee or the NIMS Insurer as a
result of such liability or obligations of the Master Servicer and in connection
with the Trustee's assumption (but not its performance, except to the extent
that costs or liability of the Trustee 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.
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(b) The Master Servicer that has been terminated shall, upon request of
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. To the
extent provided in the applicable Servicing Agreement, to the extent Mortgage
Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause
the related Servicer to enforce such clauses in accordance with the 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.
Section 9.12. Release of Mortgage Files. (a) Upon (i) becoming aware of
the payment in full of any Mortgage Loan, (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 (iii) in the case of a Mortgage Loan as
to which the related Mortgaged Property is located in California, receipt by the
Master Servicer of notification from the Servicer that the Servicer reasonably
expects that payment in full will be received promptly, the Master Servicer
will, or will cause the related 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 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 (on the form attached hereto
as Exhibit C or on the form attached to the related Custodial Agreement) the
Trustee or the applicable Custodian, to deliver to the applicable Servicer the
related Mortgage File; provided, however, that in the case of a Mortgage Loan as
to which the related Mortgaged Property is located in California, the related
Mortgage File shall be released upon notification from the Servicer or the
Master Servicer that such party reasonably expects that payment in full will be
received promptly. Upon receipt of such certification and request, the Trustee
or the applicable Custodian (with the consent, and at the direction of the
Trustee), shall promptly release the related Mortgage File to the applicable
Servicer and the Trustee shall have no further responsibility with regard to
such Mortgage File. Upon any such payment in full, the Master Servicer is
authorized, and each Servicer, to the extent such authority is provided for
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.
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(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with Accepted Servicing
Practices and the applicable Servicing Agreement, the Trustee shall execute such
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
applicable Custodian, shall, upon 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 of 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 Servicer to return the Mortgage File to the Trustee or
the applicable Custodian, as applicable, when the need therefor by the Master
Servicer or Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released by
the Trustee or the applicable Custodian, as applicable, to the Master Servicer
(or the applicable Servicer).
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 or of the applicable
Servicing Agreement to be delivered to the Trustee or the applicable Custodian.
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 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 related 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, the NIMS Insurer,
their respective 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 any Servicer, for and on behalf of the 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.
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(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 the Seller to the Depositor not to constitute a sale, the Trustee shall
have a security interest in the Mortgage Loans and in all Mortgage Files
representing such Mortgage Loans and in all funds and investment property now or
hereafter held by, or under the control of, a Servicer or the Master Servicer
that are collected by any Servicer or the Master Servicer in connection with the
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 a 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 or any Custodian, 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 applicable 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
NIMS Insurer 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 laws of
the United States of America as a national banking association, 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;
(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;
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(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 a FNMA- or 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;
(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; and
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(xi) the information about the Master Servicer under the heading
"The Master Servicer" in the Offering Documents relating to the Master
Servicer does not include an untrue statement of a material fact and
does not omit to state a material fact, with respect to the statements
made, necessary in order to make the statements in light of the
circumstances under which they were made not misleading.
(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 Trustee and
the NIMS Insurer 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). 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 NIMS
Insurer as provided in this Section constitutes the sole remedy (other than as
set forth in Section 6.14) of the Depositor, the Trustee and the NIMS Insurer,
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, the Trustee or the NIMS Insurer 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)(i) through (vi) shall survive the
execution and delivery of this Agreement. The Depositor shall indemnify each of
the Master Servicer and the NIMS Insurer and hold each 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)(i)
through (vi) 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 and the NIMS Insurer as provided in this Section constitutes the sole
remedy hereunder of the Master Servicer and the NIMS Insurer respecting a breach
by the Depositor of the representations and warranties in Sections 2.03(a)(i)
through (vi) 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)(i)
through (vi) hereof shall accrue upon discovery of such breach by either the
Depositor, the NIMS Insurer or the Master Servicer or notice thereof by any one
of such parties to the other parties.
Section 9.15. Opinion. On or before the Closing Date, the Master
Servicer shall cause to be delivered to the Depositor, the Sellers, the Trustee
and the NIMS Insurer one or more Opinions of Counsel, dated the Closing Date, in
form and substance reasonably satisfactory to the Depositor and Xxxxxx Brothers
Inc., as to the due authorization, execution and delivery of this Agreement by
the Master Servicer and the enforceability thereof.
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Section 9.16. Standard Hazard and Flood Insurance Policies. For each
Mortgage 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 or any Servicing Agreement (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 applicable Servicing Agreement)
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.
Section 9.17. Presentment of Claims and Collection of Proceeds. The
Master Servicer 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 or the Custodial Account upon receipt, except that any
amounts realized that are to be applied to the repair or restoration of the
related Mortgaged Property as a condition requisite to the presentation of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall remit on behalf of each Servicer to each PMI
Insurer the applicable PMI Insurance Premiums. 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 noncoverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of such Master Servicer or such Servicer, would have been covered
thereunder. 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 knowingly
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 in accordance
with the provisions of this Agreement and the related Servicing Agreement, as
applicable.
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(b) The Master Servicer agrees, to the extent provided in each
Servicing Agreement, 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 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 the applicable Custodian) 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 each Servicer to deliver to the Trustee (or the applicable
Custodian), 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 or any Servicer from time
to time.
Section 9.20. [Reserved]
Section 9.21. Compensation to the Master Servicer. The Master Servicer
shall (i) be entitled, at its election, either (a) to pay itself the Master
Servicing Fee, as reduced pursuant to Section 5.05, in respect of the Mortgage
Loans out of any Mortgagor payment on account of interest prior to the deposit
of such payment in the Collection Account it maintains or (b) to withdraw from
the Collection Account, subject to Section 5.05, the Master Servicing Fee to the
extent permitted by Section 4.02. The Master Servicer shall also be entitled, at
its election, either (a) to pay itself the Master Servicing Fee in respect of
each delinquent Mortgage Loan master serviced by it out of Liquidation Proceeds
in respect of such Mortgage Loan or other recoveries with respect thereto to the
extent permitted in Section 4.02 or (b) to withdraw from the Collection Account
it maintains the Master Servicing Fee in respect of each Liquidated Mortgage
Loan to the extent of such Liquidation Proceeds or other recoveries, to the
extent permitted by Section 4.02. Servicing compensation in the form of
assumption fees, if any, late payment charges, as collected, if any, or
otherwise (but not including any Prepayment Premium) 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 Trustee to pay the Master Servicing Fee
to such Master Servicer by withdrawal from the Certificate Account to the extent
that payments have been received with respect to the applicable Mortgage Loan.
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. The provisions of
this Section 9.21 are subject to the provisions of Section 6.14(b).
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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 cause the applicable Servicer, to the extent provided in the
applicable Servicing Agreement 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 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 each Servicer, upon the final disposition
of any REO Property, shall be entitled to reimbursement for any related
unreimbursed Advances and other 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 Net 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 Trustee upon such deposit)
and be remitted by wire transfer in immediately available funds to the Trustee
for deposit into the Certificate Account on the next succeeding Deposit Date.
Section 9.23. Preparation of Tax Returns and Other Reports. (a) The
Master Servicer shall prepare in accordance with the provisions of Article X 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 Trustee shall file, federal tax returns and appropriate
state income tax returns and such other returns as may be required by applicable
law relating to the Trust Fund, and the Trustee shall forward copies to the
Depositor and the NIMS Insurer of all such returns and Form 1099 information and
such other information within the control of the Trustee as the Depositor or the
NIMS Insurer may reasonably request in writing, and shall forward to each
Certificateholder such forms and furnish such information within the control of
the Trustee as are required by the Code and the REMIC Provisions to be furnished
to them, and the Master Servicer will prepare, to the extent that they are
familiar with applicable state requirements, and the Trustee will file, annual
reports (other than tax returns), if any, as directed by the Master Servicer,
and will file copies of this Agreement with the appropriate state authorities as
may be required by applicable law, and will prepare and disseminate to
Certificateholders Form 1099 (or otherwise furnish information within the
control of the Trustee) to the extent required by applicable law. The Master
Servicer will indemnify the NIMS Insurer and the Trustee on behalf of the
Certificateholders for any liability of or assessment against the Trust Fund
resulting from any error in any of such tax or information returns resulting
from errors in the information provided by such Master Servicer (other than any
such information that is delivered solely from information provided by a
Servicer).
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(b) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Within 15 days after each Distribution Date, the
Master Servicer shall, in accordance with industry standards, file with the
Securities and Exchange Commission (the "SEC") 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
January 30, 2002, the Master Servicer shall, in accordance with industry
standards, file a Form 15 Suspension Notification with respect to the Trust
Fund, if applicable. Prior to March 31, 2002, the Master Servicer shall file a
Form 10-K, in substance conforming to industry standards, with respect to the
Trust Fund. The Depositor hereby grants to the Master Servicer a limited power
of attorney to execute and file each such document on behalf of the Depositor.
Such power of attorney shall continue until either the earlier of (i) receipt by
the Master Servicer 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 Master Servicer from time to time upon request such
further information, reports, and financial statements within the Depositor's
control related to this Agreement and the Mortgage Loans as the Master Servicer
reasonably deems appropriate to prepare and file all necessary reports with the
SEC. The Master Servicer shall have no responsibility to file any items other
than those specified in this Section 9.23(b). Promptly after filing a Form 15 or
other applicable form with the SEC in connection with such termination, the
Master Servicer shall deliver to the Depositor a copy of such form together with
copies of confirmations of receipt by the SEC of each report filed therewith on
behalf of the Trust Fund.
Section 9.24. Reports to the Trustee. (a) Not later than 30 days after
each Distribution Date, the Master Servicer shall, upon request, 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,
upon request, to the Depositor, Attention: Contract Finance, the NIMS Insurer
and any Certificateholders (or by the Trustee at the Master Servicer's expense
if the Master Servicer shall fail to provide such copies to the
Certificateholders (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 one 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.
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Section 9.25. Annual Officer's Certificate as to Compliance. (a) The
Master Servicer shall deliver to the Trustee and the NIMS Insurer on or before
May 31 of each year, commencing on May 31, 2002, an Officer's Certificate,
certifying that with respect to the period ending on the immediately preceding
December 31: (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 an 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 (or any of its Affiliates) has, during the course of any fiscal
year, directly serviced, as a successor Servicer, 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 NIMS Insurer and the Depositor on or before May 31 of each year,
commencing on May 31, 2002 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 Servicer
shall fail to provide such copies. If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee and the NIMS Insurer
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.
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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 $15,000,000.
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 or the Trustee
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 NIMS Insurer. No such resignation shall become
effective until the Trustee shall have assumed, or a successor master servicer
acceptable to the NIMS Insurer 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 and the Depositor to the Trustee and the NIMS
Insurer.
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 NIMS Insurer or the Depositor 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 NIMS Insurer. If, pursuant to any 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.
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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 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.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer. In particular, the Master Servicer shall not be liable for any
course of action taken by the Servicers with respect to loss mitigation of
defaulted Mortgage Loans at the direction of the Loss Mitigation Advisor or the
Seller pursuant to any Loss Mitigation Advisory Agreement.
Section 9.31. Indemnification; Third-Party Claims. The Master Servicer
agrees to indemnify the Depositor, the Trustee and the NIMS Insurer, 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 Trustee or the NIMS Insurer 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 Trustee and the NIMS 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 Trustee or the NIMS Insurer 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.
Section 9.32. Special Servicing of Delinquent Mortgage Loans. If
permitted under the terms of the applicable Servicing Agreement, the related
Seller may appoint, pursuant to the terms of the applicable Servicing Agreement
and with the written consent of the Depositor, the Master Servicer, the Trustee
and the NIMS Insurer, a Special Servicer to special service any Distressed
Mortgage Loans. Any applicable Termination Fee related to the termination of the
related Servicer and the appointment of any Special Servicer shall be paid by
the related Seller. Any fees paid to any such Special Servicer shall not exceed
the Servicing Fee Rate.
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Section 9.33. Alternative Index. In the event that the Index for any
Mortgage Loan, as specified in the related Mortgage Note, becomes unavailable
for any reason, the Master Servicer shall select an alternative index, which in
all cases shall be an index that constitutes a qualified rate on a regular
interest under the REMIC Provisions, in accordance with the terms of such
Mortgage Note or, if such Mortgage Note does not make provision for the
selection of an alternative index in such event, the Master Servicer shall,
subject to applicable law, select an alternative index based on information
comparable to that used in connection with the original Index and, in either
case, such alternative index shall thereafter be the Index for such Mortgage
Loan.
Section 9.34. Duties of the Loss Mitigation Advisor. The
Certificateholders, by their purchase and acceptance of the Certificates,
appoint The Murrayhill Company as Loss Mitigation Advisor. For and on behalf of
the Depositor, the Master Servicer, the Trustee, the PMI Insurer and the
Certificateholders, the Loss Mitigation Advisor will provide reports and
recommendations concerning Mortgage Loans that are past due, as to which there
has been commencement of foreclosure, as to which there has been forbearance in
exercise of remedies which are in default, as to which any obligor is the
subject of bankruptcy, receivership, or an arrangement of creditors, or which
have become REO Properties. Such reports and recommendations will be based upon
information provided pursuant to Loss Mitigation Advisory Agreements to the Loss
Mitigation Advisor by the Servicers. The Loss Mitigation Advisor shall look
solely to the Servicers for all information and data (including loss and
delinquency information and data) and loan level information and data relating
to the servicing of the Mortgage Loans and neither the Master Servicer nor the
Trustee shall have any obligation to provide any such information to the Loss
Mitigation Advisor.
Section 9.35. Limitation Upon Liability of the Loss Mitigation Advisor.
Neither the Loss Mitigation Advisor, nor any of the directors, officers,
employees or agents of the Loss Mitigation Advisor, shall be under any liability
to the Trustee, the Certificateholders or the Depositor for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, in reliance upon information provided by Servicers under the Loss
Mitigation Advisory Agreements or for errors in judgment; provided, however,
that this provision shall not protect the Loss Mitigation Advisor or any such
person against liability that would otherwise be imposed by reason of willful
malfeasance, bad faith or gross negligence in its performance of its duties or
by reason of reckless disregard for its obligations and duties under this
Agreement or the Loss Mitigation Advisory Agreements. The Loss Mitigation
Advisor and any director, officer, employee or agent of the Loss Mitigation
Advisor 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,
and may rely in good faith upon the accuracy of information furnished by the
Servicers pursuant to the Loss Mitigation Advisory Agreements in the performance
of its duties thereunder and hereunder.
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ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration. (a) REMIC elections as set forth
in the Preliminary Statement shall be made 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. The regular interests
and residual interest in each REMIC shall be as designated in the Preliminary
Statement.
(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 Master Servicer shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Master Servicer 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 Master Servicer
in fulfilling its duties hereunder (including its duties as tax return
preparer). The Master Servicer shall be entitled to reimbursement of expenses to
the extent provided in clause (i) above from the Collection Account.
(d) The Master Servicer shall prepare, and the Trustee shall sign and
file, as instructed by the Master Servicer, all of each REMIC's federal and
appropriate state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be borne
by the Master Servicer.
(e) The Master Servicer or its designee 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 Master Servicer 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 pursuant to Treasury Regulation 1.860E(2)(a)(5) and any
person designated in Section 860(e)(3) of the Code 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 Master Servicer 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
$5,000 per year.
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(f) The Trustee, the Master Servicer and the Holders of Certificates
shall take any action or cause any REMIC to take any action necessary to create
or maintain the status of any 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 Master Servicer nor the Holder of any Residual Certificate
shall knowingly take any action, cause any 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 any
REMIC as a REMIC or (ii) result in the imposition of a tax upon any 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 NIMS Insurer 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 any REMIC or the assets therein, or causing any 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 Master
Servicer, the NIMS Insurer or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any REMIC, and no such Person shall take any such action or cause any
REMIC to take any such action as to which the Trustee, the Master Servicer or
the NIMS Insurer 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 taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in any 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 any such REMIC, as the case may be.
(h) The Master Servicer shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and on
an accrual basis.
(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 Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 2002, the
Master Servicer shall deliver to the Trustee and the NIMS Insurer an Officer's
Certificate stating, without regard to any actions taken by any party other than
the Master Servicer, the Master Servicer's compliance with provisions of this
Section 10.01.
(l) The Trustee shall treat the Basis Risk Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation Section 1.860G-2(h) that
is owned by the Holder of the Class X Certificate and that is not an asset of
any REMIC. The Trustee shall treat the rights of the Class A, Class M1, Class M2
and Class B Certificateholders to receive payments from any Basis Risk Reserve
Fund in the event of a Basis Risk Shortfall as rights in an interest rate cap
contract written by the Class X Certificateholder in favor of the Class A, Class
M1, Class M2 and Class B Certificateholders. Thus, each Class A, Class M1, Class
M2 and Class B Certificate shall be treated as representing not only ownership
of regular interests in REMIC 3, but also ownership of an interest in an
interest rate cap contract. For tax purposes the interest rate cap contract will
be deemed to have a value of $42,392.
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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 any REMIC after the Closing
Date, unless it and the NIMS Insurer have received an Opinion of Counsel (at the
expense of the party causing such sale, disposition, or substitution) that such
disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of any such REMIC as a REMIC or of the interests therein
other than the Residual Certificate 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 any such REMIC to be
subject to any tax including 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. (a) In the event that any 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 Master Servicer of its duties
and obligations set forth herein, the Master Servicer shall indemnify the NIMS
Insurer, the Holder of the related Residual Certificate or the Trust Fund, as
applicable, against any and all losses, claims, damages, liabilities or expenses
("Losses") resulting from such negligence; provided, however, that the Master
Servicer shall not be liable for any such Losses attributable to the action or
inaction of the Depositor, the Class X Certificateholder or the Holder of such
Residual Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Master Servicer 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 Master Servicer have any liability (1) for any
action or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement or any Servicing Agreement, (2) for any Losses other than arising out
of a negligent performance by the Master Servicer 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).
(b) In the event that the REMIC incurs a state or local tax as a result
of a determination that the REMIC is domiciled in the States of California or
Florida for state tax purposes by virtue of the location of any Servicer, the
Seller agrees to pay on behalf of the Trust Fund when due any and all state and
local taxes imposed as a result of such determination. In the event that the
REMIC incurs a state or local tax as a result of a determination that the REMIC
is domiciled in the State of Minnesota for state tax purposes by virtue of the
location of the Master Servicer, the Seller agrees to pay on behalf of the Trust
Fund when due any and all state and local taxes imposed as a result of such
determination.
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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,
knowingly 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 and the NIMS Insurer in writing
to the effect that, under the REMIC Provisions, such action would not adversely
affect the status of any REMIC as a REMIC and any income generated for any REMIC
by the REO Property would not result in the imposition of a tax upon such REMIC.
(b) The Master Servicer shall cause the applicable Servicer (to the
extent provided in its Servicing Agreement) 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 the extent provided
in its Servicing Agreement) to, dispose of any REO Property within three years
of its acquisition by the Trust Fund unless the Trustee has received a grant of
extension from the Internal Revenue Service (a copy of which shall be provided
to the NIMS Insurer by the Trustee) to the effect that, under the REMIC
Provisions and any relevant proposed legislation and under applicable state law,
the REMIC may hold REO Property for a longer period without adversely affecting
the REMIC status of such REMIC or causing the imposition of a Federal or state
tax upon such REMIC. If the Trustee has received such an extension, then 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 applicable Servicer, acting on behalf of the
Trustee hereunder, 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 applicable Servicer is unable to sell the REO Property
within the period ending three months before the close of the Extended Period,
the Master Servicer shall cause the applicable Servicer, before the end of the
three year period or the Extended Period, as applicable, to (i) purchase such
REO Property at a price equal to the REO Property's fair market value (as
approved by the NIMS Insurer) or (ii) auction the REO Property to the highest
bidder (provided such bid has been approved by the NIMS Insurer) (which may be
the applicable 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.
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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 and the Trustee, with the consent
of the NIMS Insurer, but without the consent of the Loss Mitigation Advisor
except to the extent that the rights or obligations of the Loss Mitigation
Advisor hereunder are directly affected thereby, and 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 or with the
provisions of any Servicing Agreement, (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 and the NIMS Insurer shall be provided
with an Opinion of Counsel (at the expense of the party requesting such
amendment) to the effect that such amendment is permitted under this Section.
Any such amendment shall be deemed not to adversely affect in any material
respect any Holder, if the Trustee receives written confirmation from each
Rating Agency that such amendment will not cause such Rating Agency to reduce
the then current rating assigned to the Certificates or the NIM Securities.
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee, with the consent of the NIMS
Insurer, but without the consent of the Loss Mitigation Advisor except to the
extent that the rights or obligations of the Loss Mitigation Advisor hereunder
are directly affected thereby and 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 the rights of the Holders; provided,
however, that no such amendment shall be made unless the Trustee and the NIMS
Insurer receives an Opinion of Counsel, at the expense of the party requesting
the change, that such change will not adversely affect the status of any 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 Class Notional 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 (or Percentage Interest) 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.
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(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder, the Depositor, the NIMS Insurer 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 Class Notional Amount (or Percentage Interest),
Certificates owned by the Depositor, the Master Servicer, the Trustee, any
Servicer, MGIC, the Loss Mitigation Advisor or Affiliates thereof are not to be
counted so long as such Certificates are owned by the Depositor, the Master
Servicer, the Trustee, any Servicer, MGIC, the Loss Mitigation Advisor or any
Affiliate 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, the Master
Servicer and the Trustee agree to cooperate with each other to provide to any
Certificateholders, any NIM Security holder and to any prospective purchaser of
Certificates or NIM Securities designated by such holder, upon the request of
such holder 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 Master Servicer in providing such information shall be reimbursed
by the Depositor.
(b) The Master Servicer shall 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 9.23(b) and (ii) a copy of any other document incorporated
by reference in the Prospectus. Any reasonable out-of-pocket expenses incurred
by the Master Servicer in providing copies of such documents shall be reimbursed
by the Depositor.
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(c) On each Distribution Date, the Trustee shall deliver or cause to be
delivered by first class mail 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
received by (a) in the case of the Depositor, Structured Asset Securities
Corporation, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000,
Attention: Mortgage Finance ARC 2001-BC6, (b) in the case of the Sellers, Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings Inc., 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, Attention: Mortgage Finance ARC 2001-BC6
and Xxxxxx Brothers Bank, FSB c/o Ernst & Young LLP, 00 Xxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, (c) in the case of the Loss Mitigation Advisor, The
Murrayhill Company, 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000,
Attention: Xxx X. Xxxxxxx, (d) in the case of the Trustee, the Corporate Trust
Office, (e) in the case of the Master Servicer, Xxxxx Fargo Bank Minnesota,
National Association, 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000;
Attention: ARC 2001-BC6, (f) in the case of the NIMS Insurer, Radian Insurance
Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: General
Counsel or as to each party such other address as may hereafter be furnished by
such party to the other parties in writing. All demands, notices and
communications to a party 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 above 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.
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.
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.
116
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. The NIMS Insurer shall be deemed
a third-party beneficiary of this Agreement to the same extent as if it were a
party hereto, and shall have the right to enforce the provisions of this
Agreement. Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder, the Holders of the Certificates and the NIM Insurer, any
benefit or any legal or equitable right, power, remedy or claim under this
Agreement, except to the extent specified in Section 11.15.
Section 11.12. Special Notices to the Rating Agencies and the NIM
Insurer. (a) The Depositor shall give prompt notice to the Rating Agencies and
the NIM Insurer 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;
(vi) the making of a final payment pursuant to
Section 7.02; and
(vii) any termination of the rights and obligations of any
Servicer under the applicable Servicing Agreement.
(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 Moody's, to:
Xxxxx'x Investors Services, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
117
If to S&P, to:
Standard & Poor's Rating Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Residential Mortgages
If to Fitch, to:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) The Trustee shall provide or make available to the Rating Agencies
reports prepared pursuant to Section 4.03.
Section 11.13. Conflicts. To the extent that the terms of this
Agreement conflict with the terms of any Servicing Agreement, the related
Servicing Agreement shall govern.
Section 11.14. 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 11.15. Transfer of Servicing. Each Seller agrees that it shall
provide written notice to the Master Servicer, the NIMS Insurer and the Trustee
thirty days prior to any proposed transfer or assignment by such Seller of its
rights under the Servicing Agreement or of the servicing thereunder or
delegation of its rights or duties thereunder or any portion thereof to any
other Person other than the initial Servicer under such Servicing Agreement;
provided that each Seller shall not be required to provide prior notice of (i)
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 (i) any assignment
of any Servicing rights from one Seller to the other Seller. In addition, the
ability of each Seller to transfer or assign its rights and delegate its duties
under the Servicing Agreement or to transfer the servicing thereunder to a
successor servicer shall be subject to the following conditions:
(i) satisfaction of the conditions to such transfer as set
forth in the Servicing Agreement including, without limitation, receipt
of written consent of the NIMS Insurer and the Master Servicer to such
transfer;
(ii) Such successor servicer must be qualified to service
loans for FNMA or FHLMC, and must be a member in good standing of MERS;
(iii) Such successor servicer must satisfy the seller/servicer
eligibility standards in the Servicing Agreement, exclusive of any
experience in mortgage loan origination;
118
(iv) Such successor servicer must execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to
the Trustee and the NIMS Insurer, that contains an 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;
(v) If the successor servicer is not a Servicer of Mortgage
Loans at the time of the transfer, there must be delivered to the
Trustee and the NIMS Insurer 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 or the NIM Securities; and
(vi) The applicable 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 applicable 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
applicable 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
applicable 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 applicable 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 Deposit Date, to the
Trustee, all funds held by the prior Servicer in respect of the
Mortgage Loans; (E) on or prior to the effective date of such transfer
of servicing, the applicable 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 applicable 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. Notwithstanding the foregoing, the prior
Servicer shall be obligated to perform the items listed above to the
extent provided in the Servicing Agreement.
119
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Loss Mitigation Advisor have caused their names to be signed hereto by their
respective officers hereunto duly authorized as of the day and year first above
written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master Servicer
By:/s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title: Assistant Vice President
THE MURRAYHILL COMPANY,
as Loss Mitigation Advisor
By:/s/ Xxxxxxxx Xxx Xxxxx
-------------------------------------
Name: Xxxxxxxx Xxx Xxxxx
Title: President
EXHIBIT A
FORMS OF CERTIFICATES
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION
----------------------
Date
Bank One, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, XX 00000
Structured Asset Securities Corporation
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Radian Insurance, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of October
1, 2001 between Structured Asset Securities Corporation, as
Depositor, Bank One, National Association, as Trustee, Xxxxx
Fargo Bank Minnesota, National Association, as Master
Servicer, and The Murrayhill Company, as Loss Mitigation
Advisor with respect to Amortizing Residential Collateral
Mortgage Pass-Through Certificates, Series 2001-BC6
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, 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]
By:_____________________________________
Name:
Title:
B-1
EXHIBIT B-2
FORM OF INTERIM CERTIFICATION
----------------------------
Date
Bank One, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, XX 00000
Structured Asset Securities Corporation
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Radian Insurance, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of October
1, 2001 between Structured Asset Securities Corporation, as
Depositor, Bank One, National Association, as Trustee, Xxxxx
Fargo Bank Minnesota, National Association, as Master
Servicer, and The Murrayhill Company, as Loss Mitigation
Advisor with respect to Amortizing Residential Collateral
Mortgage Pass-Through Certificates, Series 2001-BC6
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Custodian, 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 Schedule I 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
Schedule I hereto, it has reviewed the documents identified 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]
By:_____________________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF FINAL CERTIFICATION
-----------------------
Date
Bank One, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, XX 00000
Structured Asset Securities Corporation
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Radian Insurance, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of October
1, 2001 between Structured Asset Securities Corporation, as
Depositor, Bank One, National Association, as Trustee, Xxxxx
Fargo Bank Minnesota, National Association, as Master
Servicer, and The Murrayhill Company, as Loss Mitigation
Advisor with respect to Amortizing Residential Collateral
Mortgage Pass-Through Certificates, Series 2001-BC6
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 Schedule I 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
Schedule I 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]
By:_____________________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF ENDORSEMENT
Pay to the order of Bank One, National Association, as trustee (the
"Trustee") under the Trust Agreement dated as of October 1, 2001 by and among
Structured Asset Securities Corporation, as Depositor, the Trustee, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer, and The Murrayhill
Company, as Loss Mitigation Advisor relating to Amortizing Residential
Collateral Mortgage Pass-Through Certificates, Series 2001-BC6, without
recourse.
__________________________________
[current signatory on note]
By:_______________________________
Name:
Title:
B-4-1
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 October 1, 2001 between
Structured Asset Securities Corporation, as Depositor, you, as Trustee, Xxxxx
Fargo Bank Minnesota, National Association, as Master Servicer, and The
Murrayhill Company, as Loss Mitigation Advisor, (the "Trust Agreement"), the
undersigned 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 Servicer hereby certifies that all
amounts received in connection with the loan have been or will be credited to
the Certificate Account pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The 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 Servicer hereby certifies that the
Purchase Price has been credited to the Certificate Account pursuant to the
Trust Agreement.)
5. California Mortgage Loan expected to be paid in full
6. Other. (Describe)
C-1
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 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) and except if the Mortgage
Loan is being foreclosed (in which case the Mortgage File will be returned when
no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them
in the Trust Agreement.
_____________________________________
[Name of 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. For these
purposes, a "disqualified organization" means the United
States, any state or political subdivision thereof, any
foreign government, any international organization, any agency
or instrumentality of any of the foregoing (other than an
instrumentality if all of its activities are subject to tax
and a majority of its board of directors is not selected by
such governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to
persons in rural areas as described in Code Section
1381(a)(2)(C), any "electing large partnership" within the
meaning of Section 775 of the Code, or any organization (other
than a farmers' cooperative described in Code Section 521)
that is exempt from federal income tax unless such
organization is subject to the tax on unrelated business
income imposed by Code Section 511.
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 and
shall deliver to the Depositor an opinion of counsel (a
"Benefit Plan Opinion") satisfactory to the Trustee 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 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 Master
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.
D-1-1
5. That the Purchaser hereby acknowledges that under the terms of
the Trust Agreement (the "Agreement") between Structured Asset
Securities Corporation, as Depositor, Bank One, National
Association, as Trustee, Xxxxx Fargo Bank Minnesota, National
Association, as Master Servicer, and The Murrayhill Company,
as Loss Mitigation Advisor, dated as of October 1, 2001, no
transfer of the Residual Certificates shall be permitted to be
made to any person unless the Depositor and Trustee have
received a certificate from such transferee containing the
representations in paragraphs 3 and 4 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.
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 D-2 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 not a Non-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-8ECI
(Certificate of Foreign Person's Claim for Exemption 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 or (iii) is
a Non-U.S. Person that has delivered to both the transferor
and the Trustee an opinion of a nationally recognized tax
counsel to the effect that the transfer of such Residual
Certificate to it is in accordance with the requirements of
the Code and the regulations promulgated thereunder and that
such transfer of a Residual Certificate will not be
disregarded for federal income tax purposes. "Non-U.S. Person"
means an individual, corporation, partnership or other person
other than (i) a citizen or resident of the United States;
(ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any
state thereof, including for this purpose, the District of
Columbia; (iii) an estate that is subject to U.S. federal
income tax regardless of the source of its income; (iv) a
trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and
one or more United States trustees have authority to control
all substantial decisions of the trust; and, (v) to the extent
provided in Treasury regulations, certain trusts in existence
on 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 Trustee
as its agent to act as "tax matters person" of the Trust Fund
pursuant to the Trust Agreement.
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__.
D-1-3
NOTARY PUBLIC
______________________________
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________, 20__.
X-0-0
XXXXXXX X-0
RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
----------------------------
Date
Re: Amortizing Residential Collateral
Mortgage Pass-Through Certificates, Series 2001-BC6
_______________________ (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-1
SERVICING AGREEMENT (OPTION ONE MORTGAGE CORPORATION)
E-1-1
EXHIBIT E-2
SERVICING AGREEMENT (OCWEN FEDERAL BANK F.S.B.)
E-2-1
EXHIBIT E-3
SERVICING AGREEMENT (AURORA LOAN SERVICES INC.)
E-3-1
EXHIBIT E-4
SERVICING AGREEMENT (COUNTRYWIDE HOME LOANS, INC.)
E-4-1
EXHIBIT E-5
SERVICING AGREEMENT (XXXXX FARGO HOME MORTGAGE, INC.)
E-5-1
EXHIBIT E-6
SERVICING AGREEMENT (FAIRBANKS CAPITAL CORP.)
E-6-1
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Amortizing Residential Collateral
Mortgage Pass-Through Certificates
Series 2001-BC6
----------------------------------------------------
Reference is hereby made to the Trust Agreement dated as of October 1,
2001 (the "Trust Agreement") between Structured Asset Securities Corporation, as
Depositor Bank One, National Association, as Trustee, Xxxxx Fargo Bank
Minnesota, National Association, as Master Servicer, and The Murrayhill Company,
as Loss Mitigation Advisor. Capitalized terms used but not defined herein shall
have the meanings given to them in the Trust Agreement.
This letter relates to $__________ initial Certificate Balance 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 your
benefit 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 Amortizing Residential Collateral Trust Mortgage Pass-Through
Certificates, Series 2001-BC6(the "Privately Offered Certificates") of the
Structured Asset Securities Corporation (the "Depositor"), 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 under the Trust Agreement
dated as of October 2001 between the Depositor Bank One, National
Association, as Trustee (the "Trustee"), Xxxxx Fargo Bank Minnesota,
National Association, as Master Servicer, and The Murrayhill Company,
as Loss Mitigation Advisor, 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 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
You 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 and shall deliver to
the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Trustee 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 Master 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.
3. The Investor hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") between Structured Asset Securities
Corporation, as Depositor, Bank One, National Association, as Trustee,
Xxxxx Fargo Bank Minnesota, National Association, as Master Servicer, and
The Murrayhill Company, as Loss Mitigation Advisor, dated as of October 1,
2001, 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-1
CUSTODIAL AGREEMENT (BANKERS TRUST COMPANY OF CALIFORNIA, N.A.)
K-1-1
EXHIBIT K-2
CUSTODIAL AGREEMENT (U.S. BANK TRUST NATIONAL ASSOCIATION)
K-2-1
EXHIBIT K-3
CUSTODIAL AGREEMENT (THE CHASE MANHATTAN BANK)
K-2-1
EXHIBIT K-4
CUSTODIAL AGREEMENT (LASALLE BANK, N.A.)
K-2-1
EXHIBIT K-5
CUSTODIAL AGREEMENT (XXXXX FARGO BANK MINNESOTA, N.A.)
K-2-1
EXHIBIT L-1
PMI POLICY -- MORTGAGE GUARANTY INSURANCE CORPORATION
X-0-0
XXXXXXX X-0
PMI POLICY-- RADIAN GUARANTY INC.
X-0-0
XXXXXXX X-0
PMI POLICY-- PMI MORTGAGE INSURANCE CO.
L-3-1
EXHIBIT M
FORMS OF LOSS MITIGATION ADVISORY AGREEMENT BETWEEN THE
MURRAYHILL COMPANY, AS LOSS MITIGATION ADVISOR, AND EACH SERVICER
M-1
EXHIBIT N-1
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM RESTRICTED GLOBAL SECURITY
TO REGULATION S GLOBAL SECURITY
(Transfers pursuant toss.3.03(h)(B)
of the Agreement)
---------------------------------------------------------
Re: Amortizing Residential Collateral Mortgage
Pass-Through Certificates, Series 2001-BC6
Reference is hereby made to the Trust Agreement (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Xxxxx Fargo Bank
Minnesota, N.A., as Master Servicer, The Murrayhill Company, as Loss Mitigation
Advisor, and Bank One, National Association, as Trustee, dated as of October 1,
2001. 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).
N-1-1
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.
[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 toss.3.03(h)(C)
of the Agreement)
---------------------------------------------------------------------
Re: Amortizing Residential Collateral Mortgage
Pass-Through Certificates, Series 2001-BC6
Reference is hereby made to the Trust Agreement (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Xxxxx Fargo Bank
Minnesota, N.A., as Master Servicer, The Murrayhill Company, as Loss Mitigation
Advisor, and Bank One, National Association, as Trustee, dated as of October 1,
2001. 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
FORM OF ADDITION NOTICE
Pursuant to Section 2.01(b) of the Trust Agreement dated as of October
1, 2001, by and among Structured Asset Securities Corporation, as Depositor,
Bank One, National Association, as Trustee, Xxxxx Fargo Bank Minnesota, N.A., as
Master Servicer, and The Xxxxxx Xxxx Company, as Loss Mitigator, the Depositor
hereby provides notice to the Trustee, the Master Servicer, the Custodian, the
Rating Agencies and the NIMS Insurer that the Subsequent Receivables identified
on Schedule I attached hereto will be sold [[ ]] (the "Transfer Date") to the
Trust Fund pursuant to a Transfer Supplement.
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Trust Agreement.
By: Structured Asset Securities Corporation,
By:
----------------------------------
Name:
Title:
O-1
SCHEDULE I TO
ADDITION NOTICE
Provide the following information with respect to each Subsequent Mortgage Loan:
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of residential dwelling, if any, constituting the
Mortgaged Property;
(vi) the lien position of such Mortgage Loan;
(vii) whether such Mortgage Loan is a Balloon Loan;
(viii) whether such Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan;
(ix) the original term to maturity (from origination or, if
such Mortgage Loan has been modified, from modification);
(x) the stated remaining months to maturity from the
applicable Subsequent Cut-off Date based on the amortization schedule;
(xii) the Loan-to-Value Ratio or, in the case of Junior Lien
Mortgage Loans, the Combined Loan-to-Value Ratio, at origination;
(xii) the current Loan-to-Value Ratio or, in the case of
Junior Lien Mortgage Loans, the current Combined Loan-to-Value Ratio;
(xiii) the Mortgage Rate as of the applicable Subsequent
Cut-off Date;
(xiv) the date on which the first Monthly Payment was due on
the Mortgage Loan;
(xv) the Due Date currently in effect;
(xvi) the stated maturity date;
(xvii) the amount of the Monthly Payment due on the first Due
Date on or after the applicable Subsequent Cut-off Date;
(xviii) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Principal Balance;
(xix) the original principal amount of the Subsequent
Subsequent Mortgage Loan;
(xx) the outstanding Scheduled Principal Balance of the
Subsequent Mortgage Loan as of the close of business on the applicable
Subsequent Cut-off Date;
O-2
(xxi) in the case of each Adjustable Rate Mortgage Loan, the
gross margin;
(xxii) a code indicating the purpose of the Subsequent
Mortgage Loan (i.e., purchase financing, rate/term refinancing,
cash-out refinancing);
(xxiii) in the case of each Adjustable Rate Mortgage Loan, the
maximum mortgage rate;
(xxiv) in the case of each Adjustable Rate Mortgage Loan, the
minimum mortgage rate;
(xxv) the Mortgage Rate at origination;
(xxvi) in the case of each Adjustable Rate Mortgage Loan, the
periodic rate cap;
(xxvii) in the case of each Adjustable Rate Mortgage Loan, the
Index;
(xxviii) in the case of each Adjustable Rate Mortgage Loan,
the first adjustment date immediately following the applicable
Subsequent Cut-off Date;
(xxix) in the case of each Adjustable Rate Mortgage Loan, the
rounding code (nearest 0.125%);
(xxx) a code indicating the Servicer and the related Servicing
Fee Rate;
(xxxi) a code indicating whether such Subsequent Mortgage Loan
is insured by a Bulk PMI Policy;
(xxxii) a code indicating the Seller;
(xxxii) whether such Subsequent Mortgage Loan provides for
negative amortization; and
(xxxiii) if such Subsequent Mortgage Loan is a Retained
Interest Mortgage Loan, the Retained Interest Rate.
O-3
EXHIBIT P
INTEREST RATE CAP AGREEMENT
P-1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
P-1
