Execution Copy
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BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Master Servicer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2000
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ASSET-BACKED CERTIFICATES, SERIES 2000-1
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Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms...............................................................................1
Section 1.02. Certain REMIC-Related Defined Terms........................................................31
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans...............................................................33
Section 2.02. Acceptance by Trustee of the Mortgage Loans................................................35
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Seller....................................................................................37
Section 2.04. Representations and Warranties of the Depositor............................................48
Section 2.05. Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases...............................................................................49
Section 2.06. Authentication and Delivery of Certificates................................................50
Section 2.07. Covenants of the Master Servicer...........................................................50
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans..................................................51
Section 3.02. Subservicing; Enforcement of the Obligations of Master Servicer............................52
Section 3.03. Rights of the Depositor, the Trustee in Respect of the Master Servicer.....................52
Section 3.04. Trustee to Act as Master Servicer..........................................................53
Section 3.05. Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account...................................................................................53
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts........................56
Section 3.07. Access to Certain Documentation and Information Regarding the Mortgage
Loans.....................................................................................57
Permitted Withdrawals from the Certificate Account and Distribution Account...................................57
Section 3.09. [Reserved.]................................................................................58
Section 3.10. Maintenance of Hazard Insurance............................................................59
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements..................................60
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans........................61
Section 3.13. Trustee to Cooperate; Release of Mortgage Files............................................64
Section 3.14. Documents, Records and Funds in Possession of Master Servicer to be Held
for the Trustee...........................................................................64
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Section 3.15. Servicing Compensation.....................................................................65
Section 3.16. Access to Certain Documentation............................................................65
Section 3.17. Annual Statement as to Compliance..........................................................66
Section 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements................................................................................66
Section 3.19. Annual Independent Public Accountants' Servicing Statement; Financial
Statements................................................................................66
Section 3.20. Rights of the Certificate Insurer to Exercise Rights of Offered
Certificateholders........................................................................68
Section 3.21. Trust and Accounts Held for Benefit of the Certificate Insurer.............................69
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances...................................................................................70
Section 4.02. Reduction of Servicing Compensation in Connection with Prepayment Interest
Shortfalls................................................................................70
Section 4.03. Reserved...................................................................................71
Section 4.04. Distributions..............................................................................71
Section 4.05. Monthly Statements to Certificateholders...................................................73
Section 4.06. REMIC 1F, REMIC 1V and REMIC 2 Allocations.................................................75
ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates...........................................................................77
Section 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates................77
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..........................................81
Section 5.04. Persons Deemed Owners......................................................................81
Section 5.05. Access to List of Certificateholders' Names and Addresses..................................81
Section 5.06. Book-Entry Certificates....................................................................82
Section 5.07. Notices to Depository......................................................................83
Section 5.08. Definitive Certificates....................................................................83
Section 5.09. Maintenance of Office or Agency............................................................83
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. Respective Liabilities of the Depositor, the Master Servicer and the Seller................85
Section 6.02. Merger or Consolidation of the Depositor, the Master Servicer or the Seller................85
Section 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer and
others....................................................................................85
Section 6.04. Limitation on Resignation of Master Servicer...............................................86
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds.............................................86
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default..........................................................................87
Section 7.02. Trustee to Act; Appointment of Successor...................................................88
Section 7.03. Notification to Certificateholders.........................................................89
Section 7.04. Retention and Termination of Master Servicer...............................................90
ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee..........................................................................91
Section 8.02. Certain Matters Affecting the Trustee......................................................92
Section 8.03. Trustee Not Liable for Mortgage Loans......................................................93
Section 8.04. Trustee May Own Certificates...............................................................93
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses.........................................93
Section 8.06. Eligibility Requirements for Trustee.......................................................94
Section 8.07. Resignation and Removal of Trustee.........................................................94
Section 8.08. Successor Trustee..........................................................................95
Section 8.09. Merger or Consolidation of Trustee.........................................................96
Section 8.10. Appointment of Co-Trustee or Separate Trustee..............................................96
Section 8.11. Tax Matters................................................................................97
Section 8.12. Periodic Filings...........................................................................99
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans..........................100
Section 9.02. Final Distribution on the Certificates....................................................100
Section 9.03. Additional Termination Requirements.......................................................102
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.................................................................................103
Section 10.02. Recordation of Agreement; Counterparts....................................................104
Section 10.03. Governing Law.............................................................................104
Section 10.04. Intention of Parties......................................................................104
Section 10.05. Notices...................................................................................105
Section 10.06. Severability of Provisions................................................................106
Section 10.07. Assignment................................................................................106
Section 10.08. Limitation on Rights of Certificateholders................................................106
Section 10.09. Inspection and Audit Rights...............................................................107
Section 10.10. Certificates Nonassessable and Fully Paid.................................................107
Section 10.11 Third Party Beneficiary; Rating...........................................................108
Section 10.12 Counterparts..............................................................................108
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POOLING AND SERVICING AGREEMENT, dated as of January 1, 2000,
among BEAR XXXXXXX ASSET BACKED SECURITIES, INC., a Delaware corporation, as
depositor (the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation,
as seller (in such capacity, the "Seller") and as master servicer (in such
capacity, the "Master Servicer"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
a national banking association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. As provided herein, the
Trustee shall elect that the Trust Fund be treated for Federal income tax
purposes as a real estate mortgage investment conduit (a "REMIC").
The Trust Fund shall be named, and may be referred to as, the
"Bear Xxxxxxx Asset Backed Securities, Inc. Asset-Backed Certificates 2000-1"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Seller and the Trustee agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms.
In addition to those defined terms defined in Section 1.02,
whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accrual Period: With respect to the Fixed Rate Certificates
and any Distribution Date, the calendar month immediately preceding such
Distribution Date. With respect to the Adjustable Rate Certificates and any
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding such Distribution Date. All
calculations of interest on the Fixed Rate Certificates will be made on the
basis of a 360-day year consisting of twelve 30-day months, and all calculations
of interest on the Adjustable Rate Certificates will be made on the basis of the
actual number of days elapsed in the related Accrual Period and in a 360 day
year.
Adjustable Net Rate: The weighted average Adjusted Net
Mortgage Rate for Adjustable Rate Mortgage Loans. For purposes of the definition
of Adjustable Net Rate, all calculations of interest in respect of a Mortgage
Loan at the Mortgage Rate less the related Servicing Fee Rate will be made on
the basis of the actual number of days in the related Accrual Period and a 360
day year. The Adjustable Net Rate in respect of the first Distribution Date
shall be 10.19%.
Adjustable Rate Available Funds Cap: As of any Distribution
Date with respect to the Adjustable Rate Certificates, a per annum rate equal to
the quotient of (x) the total scheduled interest collected or Advanced on the
Adjustable Rate Mortgage Loans based on the Adjusted Net Mortgage Rates in
effect during the related Due Period for such Distribution Date multiplied by
360 over the actual number of days in the Accrual Period, divided by (y) the
Certificate Principal Balance of the Adjustable Rate Certificates.
Adjustable Rate Certificate Carryover: As of any Distribution
Date, the sum of (A) the excess of (i) the amount of interest the Class AV
Certificates would be entitled to receive on such Distribution Date if the
Pass-Through Rate had been calculated as the sum of One-Month LIBOR and the
Class AV Margin for such Distribution Date, up to the Maximum Rate Cap, over
(ii) the amount of interest payable on the Class AV Certificates at the
Adjustable Rate Available Funds Cap for such Distribution Date and (B) the Class
AV Interest Carryover Amount for all previous Distribution Dates not previously
paid pursuant to Section 4.04(a), together with interest thereon at a rate equal
to the sum of One-Month LIBOR and the applicable Class AV Margin for such
Distribution Date.
Adjustable Rate Certificateholder: A holder of an Adjustable
Rate Certificate.
Adjustable Rate Certificate Principal Balance: The Class AV
Certificate Principal Balance.
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Adjustable Rate Certificates: The Class AV Certificates.
Adjustable Rate Extra Principal Distribution Amount: With
respect to any Distribution Date, the lesser of (i) the excess, if any, of the
Adjustable Rate Specified Overcollateralization Amount for such Distribution
Date over the Adjustable Rate Overcollateralization Amount for such Distribution
Date (after giving effect to distributions of principal on the Adjustable Rate
Certificates other than any Adjustable Rate Extra Principal Distribution Amount)
and (ii) the sum of the Excess Cashflow from the Adjustable Rate Group and the
Excess Cashflow from the Fixed Rate Group for such Distribution Date available
therefor in the priority set forth in Section 4.04(a).
Adjustable Rate Group Balance: As to any Distribution Date,
the sum of the aggregate of the Stated Principal Balances of the Mortgage Loans
in the Adjustable Rate Group at the end of the related Due Period.
Adjustable Rate Interest Funds: With respect to Adjustable
Rate Mortgage Loans and any Master Servicer Advance Date, the sum, without
duplication, of (i) all scheduled interest collected during the related Due
Period, and interest paid during the related Prepayment Period in connection
with any prepayments, with respect to the Adjustable Rate Mortgage Loans less
the related Servicing Fee, (ii) all Advances relating to interest with respect
to the Adjustable Rate Mortgage Loans, (iii) all Compensating Interest with
respect to the Adjustable Rate Mortgage Loans and (iv) Liquidation Proceeds with
respect to the Adjustable Rate Mortgage Loans collected during the related
Prepayment Period (to the extent such Liquidation Proceeds relate to interest)
less all Nonrecoverable Advances relating to interest reimbursed with respect to
the related Due Period.
Adjustable Rate Mortgage Loans: The group of Mortgage Loans
identified in the related Mortgage Loan Schedule as having a Mortgage Rate which
is adjustable from time to time, including any Mortgage Loans delivered in
replacement thereof.
Adjustable Rate Overcollateralization Amount: With respect to
any Distribution Date, the excess, if any, of the Stated Principal Balance of
the Adjustable Rate Mortgage Loans as of the last day of the related Due Period
over the Certificate Principal Balances of all Adjustable Rate Certificates on
such date (after taking into account the payment of principal other than any
Adjustable Rate Extra Principal Distribution Amount, on such Certificates on
such Distribution Date).
Adjustable Rate Principal Distribution Amount: With respect to
each Distribution Date, the sum of (i) the Adjustable Rate Principal Funds for
such Distribution Date and (ii) any Adjustable Rate Extra Principal Distribution
Amount for such Distribution Date.
Adjustable Rate Principal Funds: With respect to any
Distribution Date and the Adjustable Rate Mortgage Loans, the sum, without
duplication, of (i) the scheduled principal collected during the related Due
Period or Advanced on or before the related Master Servicer Advance Date, (ii)
prepayments collected during the related Prepayment Period, (iii) the Stated
Principal Balance of each Adjustable Rate Mortgage Loan that was repurchased by
the Seller or the Master Servicer with respect to the related Prepayment Period,
(iv) the aggregate of all Substitution Adjustment Amounts for the related
Determination Date in connection with the substitution of Adjustable Rate
Mortgage Loans pursuant to Section 2.03(c) and (v) all Liquidation Proceeds
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collected during the related Prepayment Period (to the extent such Liquidation
Proceeds relate to principal) less all Nonrecoverable Advances relating to
principal reimbursed with respect to the related Due Period and amounts
withdrawn from the Certificate Amount pursuant to Section 3.08(iv), (vi) and
(vii).
Adjusted Net Mortgage Rate: As to any Mortgage Loan, the
Mortgage Rate thereon minus the Expense Fee Rate.
Adjustment Date: As to each Adjustable Rate Mortgage Loan,
each date on which the related Mortgage Rate is subject to adjustment, as
provided in the related Mortgage Note.
Advance: The aggregate of the advances required to be made by
the Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such advances being equal to the aggregate of payments
of principal and interest (net of the Servicing Fees) on the Mortgage Loans that
were due during the related Due Period and not received as of the close of
business on the related Determination Date less the aggregate amount of any such
delinquent payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance were an advance to be made with respect thereto. For
purposes of this definition, an REO Property shall continue to be a Mortgage
Loan with an amortization schedule and periodic adjustments to the Mortgage Rate
thereon, if applicable, in accordance with the Mortgage Note until it becomes a
Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Period and (ii) Principal Prepayments and Liquidation
Proceeds received in respect of such Mortgage Loans after the last day of the
related Prepayment Period.
Appraised Value: With respect to any Mortgage Loan originated
in connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
Available Funds Shortfall: With respect to any Loan Group and
any Distribution Date, the excess, if any, of (x) the aggregate of the amounts
required to be distributed pursuant to clauses (1) through (4) of Section
4.04(a) over (y) the Interest Funds and Principal Funds for such Loan Group and
Distribution Date.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository
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or on the books of a person maintaining an account with the Depository
(directly, as a "Depository Participant", or indirectly, as an indirect
participant in accordance with the rules of the Depository and as described in
Section 5.06). As of the Closing Date, each Class of Regular Certificates
constitutes a Class of Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the City of New York, New York or
the city in which the Corporate Trust Office of the Trustee is located are
authorized or obligated by law or executive order to be closed.
Certificate: Any one of the certificates of any Class executed
and authenticated by the Trustee in substantially the forms attached hereto as
exhibits.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Trustee on behalf of the
Certificateholders and the Certificate Insurer and designated "Bankers Trust
Company of California, N.A. in trust for registered holders of Bear Xxxxxxx
Asset Backed Securities, Inc., Asset-Backed Certificates, Series 2000-1 and
Financial Security Assurance Inc.". Funds in the Certificate Account shall be
held in trust for the Certificateholders and the Certificate Insurer for the
uses and purposes set forth in this Agreement.
Certificate Group: Either of the Fixed Rate Certificates or
the Adjustable Rate Certificates.
Certificate Insurance Policy: The Certificate Insurance Policy
(No. 50896-N) dated January 27, 2000, issued by the Certificate Insurer for the
benefit of the Holders of the Offered Certificates, pursuant to which the
Certificate Insurer guarantees payment of Guaranteed Distributions. A copy of
the Certificate Insurance Policy is attached hereto as Exhibit D.
Certificate Insurer: Financial Security Assurance Inc., a
stock insurance company organized and created under the laws of the State of New
York, and any successors thereto.
Certificate Insurer Default: One of the following events shall have occurred and
be continuing:
(i) the Certificate Insurer fails to make a payment
required under the Certificate Insurance Policy in accordance
with its terms;
(ii) the Certificate Insurer (A) files any petition
or commences any case or proceeding under any provision or
chapter of the United States Bankruptcy Code or any other
similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization, (B)
makes a general assignment for the benefit of its creditors,
or (C) has an order for relief entered against it under the
United States Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and
nonappealable; or
(iii) a court of competent jurisdiction, the New York
Department of Insurance or other competent regulatory
authority enters a final and nonappealable
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order, judgment or decree (1) appointing a custodian, trustee,
agent or receiver for the Certificate Insurer or for all or
any material portion of its property or (2) authorizing the
taking of possession by a Custodian, trustee, agent or
receiver of the Certificate Insurer (or the taking of
possession of all or any material portion of the property of
the Certificate Insurer).
Certificate Insurer Parties: The Certificate Insurer or its
respective agents, representatives, directors, officers or employees.
Certificate Insurer Premium: With respect to the Fixed Rate
Group Certificates, the premium due to the Certificate Insurer on each
Distribution Date, which amount shall be equal to 1/12 of the product of the
applicable Insurer Premium Rate and the Fixed Rate Group Certificate Principal
Balance immediately prior to such Distribution Date. With respect to the
Adjustable Rate Group Certificates, the premium due to the Certificate Insurer
on each Distribution Date, which amount shall be equal to 1/12 of the product of
the applicable Insurer Premium Rate and the Adjustable Rate Group Certificate
Principal Balance immediately prior to such Distribution Date.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of
any Distribution Date, the Initial Certificate Principal Balance of such
Certificate less the amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04(a). References herein to the Certificate
Principal Balance of a Class of Certificates or a Certificate Group shall mean
the Certificate Principal Balances of all Certificates in such Class or all
Certificates in such Certificate Group, as the case may be.
Certificate Register: The register maintained pursuant to
Section 5.02 hereof.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co., as
nominee for the Depository, in the case of any Book-Entry Certificates, except
that solely for the purpose of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof that
requires the consent of the Holders of Certificates of a particular Class as a
condition to the taking of any action hereunder. The Trustee is entitled to rely
conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as
set forth in Section 5.01 hereof.
Class AF Certificate: Any Certificate designated as a "Class
AF Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
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Class AF Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AF Certificates.
Class AF Current Interest: As of any Distribution Date, the
interest accrued on the Class AF Certificate Principal Balance during the
related Accrual Period at the Class AF Pass-Through Rate plus any Preference
Amount previously distributed with respect to interest for such Class that has
been recovered as a voidable preference by a trustee in bankruptcy.
Class AF Interest Carry Forward Amount: As of any Distribution
Date, the sum of (i) the excess of (a) the Class AF Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed to
the Class AF Certificates with respect to interest and (ii) interest thereon (to
the extent permitted by applicable law) at the Class AF Pass-Through Rate for
the related Accrual Period.
Class AF Pass-Through Rate: On any Distribution Date on or
prior to the Optional Termination Date, the lesser of (i) 7.52% per annum and
(ii) the Fixed Net Rate Cap, and on any Distribution Date after the Optional
Termination Date, the lesser of (i) 8.02% per annum and (ii) the Fixed Net Rate
Cap.
Class AV Certificate: Any Certificate designated as a "Class
AV Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class AV Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class AV Certificates.
Class AV Current Interest: As of any Distribution Date, the
interest accrued on the Class AV Certificate Principal Balance during the
related Accrual Period at the Class AV Pass-Through Rate plus any Preference
Amount previously distributed with respect to interest for such Class that has
been recovered as a voidable preference by a trustee in bankruptcy.
Class AV Interest Carry Forward Amount: As of any Distribution
Date, the sum of (i) the excess of (a) the Class AV Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed to
the Class AV Certificates with respect to interest (excluding any Adjustable
Rate Certificate Carryover) and (ii) interest thereon (to the extent permitted
by applicable law) at the Class AV Pass-Through Rate for the related Accrual
Period.
Class AV Margin: As of any Distribution Date on or prior to
the Optional Termination Date, 0.30% per annum and, as of any Distribution Date
after the Optional Termination Date, 0.60% per annum.
Class AV Pass-Through Rate: For the first Distribution Date,
6.12% per annum. As of any Distribution Date thereafter, the least of (i)
One-Month LIBOR plus the Class AV Margin, (ii) the Maximum Rate Cap and (iii)
the Adjustable Rate Available Funds Cap for such Distribution Date.
Class BF-IO Distributable Amount: With respect to any
Distribution Date, the principal balances of the Class TF1 and Class MF
Interests multiplied by the excess of (1)
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the weighted average Adjusted Net Mortgage Rate of the Fixed Rate Mortgage
Loans over (2) 100 times the Fixed Rate Marker Rate.
Class BV-IO Distributable Amount: With respect to any
Distribution Date, the sum of the principal balances of the Class TV1 and Class
MV Interests, multiplied by the excess of (1) the weighted average Adjusted Net
Mortgage Rate of the Adjustable Rate Mortgage Loans over (2) 100 times the
Adjustable Rate Marker Rate.
Class IO Certificate: Any Certificate designated as a "Class
IO Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class IO Remittance Amount: On any Distribution Date, the sum
of the Class BF-IO Distributable Amount for such Distribution Date and the Class
BV-IO Distributable Amount for such Distribution Date.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein, and composed of
equal portions of the Class PF Interest and Class PV Interest.
Class P Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class P Certificates.
Class P Deposit: $100.00, to be deposited into the
Distribution Account.
Class R Certificate: Any one of the Class R Certificates
executed and authenticated by the Trustee in substantially the form set forth in
Exhibit B hereto, comprising the Class R-1F, Class R-1V and Class R-2 Interests.
A holder of the Class R Certificates can cause the Trustee to separately issue
residual interests, in which case they will each be subject to the limitations
of the Class R Certificates.
Closing Date: January 27, 2000.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) the original principal
balance of the related Mortgage Loan and (y) the outstanding principal balance
at the date of origination of the Mortgage Loan of any senior mortgage loan, or
in the case of an open-ended senior mortgage loan (if any), the maximum
available line of credit with respect to such mortgage loan, regardless of any
lesser amount actually outstanding at the date of origination of the Mortgage
Loan, and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Compensating Interest: With respect to any Loan Group, an
amount not to exceed the monthly Servicing Fee, to be applied to the interest
portion of the Prepayment Interest Shortfall on the Mortgage Loans in such Loan
Group pursuant to Section 4.02 hereof.
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Corporate Trust Office: The designated office of the Trustee
in the State of California where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000 (Attention: Bear Xxxxxxx Asset Backed
Securities, Inc., Series 2000-1), telephone: (000) 000-0000, facsimile: (714)
247-6009.
Current Interest: Either the Class AF Current Interest or the
Class AV Current Interest, as applicable.
Cut-off Date: January 1, 2000.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the Cut-off Date
after application of all Principal Prepayments received prior to the Cut-off
Date and scheduled payments of principal due on or before the Cut-off Date,
whether or not received, but without giving effect to any installments of
principal received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
Deficiency Amount: As to any Distribution Date and for the
Offered Certificates, the excess, if any, of (A) the sum of (i) the Current
Interest plus any Interest Carry Forward Amount for each Class of Offered
Certificates, less (x) any shortfalls in interest collections attributable
either to the application of the Soldiers and Sailors Civil Relief Act of 1940
or to Prepayment Interest Shortfalls and (y) any Preference Amount and (ii) the
Guaranteed Principal Amount over (B) Interest Funds and Principal Funds for both
Mortgage Loan Groups (after payment of the Trustee Fee and the Certificate
Insurer Premium).
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under such Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
Delinquency Percentage: As to any Distribution Date and either
Loan Group, the percentage obtained by dividing (i) the aggregate of the Stated
Principal Balances of all Mortgage Loans in such Loan Group that were then 90 or
more days contractually delinquent as of the end of the related Prepayment
Period, were in bankruptcy or were REO Properties or were in foreclosure during
such Prepayment Period, by (ii) the aggregate of the Stated Principal Balances
of the Mortgage Loans in such Loan Group as of the last day of such Prepayment
Period.
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Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A 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 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," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Principal Balance of this
Certificate".
Depositor: Bear Xxxxxxx Asset Backed Securities, Inc., a
Delaware corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company ("DTC"), the nominee of which is Cede & Co., or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
O.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date, the
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name of the
Trustee for the benefit of the Certificateholders and designated "Bankers Trust
Company of California, N.A., in trust for registered holders of Bear Xxxxxxx
Asset Backed Securities, Inc., Asset-Backed Certificates, Series 2000-1 and
Financial Security Assurance Inc." Funds in the Distribution Account shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Distribution Account Deposit Date: As to any Distribution
Date, 1:00 p.m. Pacific time on the third Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a Business
Day, the next succeeding Business Day, commencing in February 2000.
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Due Date: As to any Mortgage Loan, the date in each month on
which the related Scheduled Payment is due, as set forth in the related Mortgage
Note.
Due Period: With respect to any Distribution Date, the period
from the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs through the first day of the calendar month in
which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Xxxxx'x is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to the Certificate Insurer, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificate: Each of the Class R
Certificates.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: For a Loan Group and with respect to any
Distribution Date, the excess, if any, of the Interest Funds and Principal Funds
for such Loan Group and Distribution Date after application of the payments in
clauses (1) through (4) of Section 4.04(a) on the Offered Certificates in the
related Certificate Group on such Distribution Date.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (ii)
interest at the Net Mortgage Rate from the Due Date as to which interest was
last paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the first day of the month in which such Liquidation Proceeds
are required to be distributed on the Stated Principal Balance of such
Liquidated Loan outstanding during each Due Period as to which such interest was
not paid or advanced.
Expense Fee Rate: 1.2575% per annum.
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Extra Principal Distribution Amount: Either the Adjustable
Rate Extra Principal Distribution Amount or the Fixed Rate Extra Principal
Distribution Amount, as applicable.
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.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
5/25 Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 60 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Fixed Net Rate: The weighted average Adjusted Net Mortgage
Rate for Fixed Rate Mortgage Loans. The Fixed Net Rate in respect of the first
Distribution Date shall be 10.16%.
Fixed Net Rate Cap: As of any Distribution Date with respect
to the Fixed Rate Certificates, a per annum rate equal to the weighted average
Adjusted Net Mortgage Rate on the Fixed Rate Mortgage Loans for such
Distribution Date.
Fixed Rate Certificateholder: A holder of a Fixed Rate
Certificate.
Fixed Rate Certificate Principal Balance: The Class AF
Certificate Principal Balance.
Fixed Rate Certificates: The Class AF Certificates.
Fixed Rate Extra Principal Distribution Amount: With respect
to any Distribution Date, the lesser of (i) the excess, if any, of the Fixed
Rate Specified Overcollateralization Amount for such Distribution Date over the
Fixed Rate Overcollateralization Amount for such Distribution Date (after giving
effect to distributions of principal on the Fixed Rate Certificates other than
any Fixed Rate Extra Principal Distribution Amount) and (ii) the sum of the
Excess Cashflow from the Fixed Rate Group and the Excess Cashflow from the
Adjustable Rate Group for such Distribution Date available therefor in the
priority set forth in Section 4.04(a).
Fixed Rate Group Balance: As to any Distribution Date, the sum
of the aggregate of the Stated Principal Balances of the Mortgage Loans in the
Fixed Rate Group at the end of the related Due Period.
Fixed Rate Interest Funds: With respect to Fixed Rate Mortgage
Loans and any Master Servicer Advance Date, the sum, without duplication, of (i)
all scheduled interest collected during the related Due Period, and interest
paid during the related Prepayment Period in connection with any prepayments,
with respect to the Fixed Rate Mortgage Loans less the Servicing Fee, (ii) all
Advances relating to interest with respect to the Fixed Rate Mortgage Loans,
(iii) all Compensating Interest with respect to the Fixed Rate Mortgage Loans
and (iv) Liquidation Proceeds with respect to the Fixed Rate Mortgage Loans
collected during the related Prepayment Period (to the extent such
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Liquidation Proceeds relate to interest) less all Nonrecoverable Advances
relating to interest reimbursed with respect to the related Due Period.
Fixed Rate Mortgage Loans: The group of Mortgage Loans
identified in the related Mortgage Loan Schedule as having a Mortgage Rate which
is fixed for the life of the related Mortgage, including any Mortgage Loans
delivered in replacement thereof.
Fixed Rate Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of the Stated Principal Balance of the
Fixed Rate Mortgage Loans as of the last day of the related Due Period over the
Certificate Principal Balances of all Fixed Rate Certificates on such date
(after taking into account the payment of principal other than any Fixed Rate
Extra Principal Distribution Amount, on such Certificates on such Distribution
Date).
Fixed Rate Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Fixed Rate Principal Funds for such
Distribution Date and (ii) any Fixed Rate Extra Principal Distribution Amount
for such Distribution Date.
Fixed Rate Principal Funds: With respect to any Distribution
Date and the Fixed Rate Mortgage Loans, the sum, without duplication, of (i) the
scheduled principal collected during the related Due Period or Advanced on or
before the related Master Servicer Advance Date, (ii) prepayments collected
during the related Prepayment Period, (iii) the Stated Principal Balance of each
Fixed Rate Mortgage Loan that was repurchased by the Seller or the Master
Servicer with respect to the related Prepayment Period, (iv) the aggregate of
all Substitution Adjustment Amounts for the related Determination Date in
connection with the substitution of Fixed Rate Mortgage Loans pursuant to
Section 2.03(c) and (v) all Liquidation Proceeds collected during the related
Prepayment Period (to the extent such Liquidation Proceeds relate to principal)
less all Nonrecoverable Advances relating to principal reimbursed with respect
to the related Due Period and amounts withdrawn from the Certificate Account
pursuant to Section 3.08(iv), (vi) and (viii).
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.
Gross Margin: The percentage set forth in the related Mortgage
Note for the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
Guaranteed Distributions: As defined in the Certificate
Insurance Policy.
Guaranteed Principal Amount: The sum of (a) as to any
Distribution Date, the amount, if any, by which the aggregate Certificate
Principal Balance of the Class AF and Class AV Certificates exceeds the
aggregate Stated Principal Balance of the Mortgage Loans at the end of the
related Due Period (after giving effect to all distributions of principal on the
Class AF and Class AV Certificates on such Distribution Date) and (b) on the
Distribution Date in March, 2030 (after giving effect to all other distributions
of principal on the Class AF and Class AV Certificates), an amount equal to the
aggregate Certificate Principal Balance of the Class AF and Class AV
Certificates.
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Index: As to any Adjustable Rate Mortgage Loan on any
Adjustment Date related thereto, the index for the adjustment of the Mortgage
Rate set forth as such in the related Mortgage Note, such index in general being
the average of the London interbank offered rates for six-month U.S. dollar
deposits in the London market, as set forth in The Wall Street Journal, or, if
the Index ceases to be published in The Wall Street Journal or becomes
unavailable for any reason, then the Index shall be a new index selected by the
Trustee, as holder of the Mortgage Note, based on comparable information as most
recently announced as of a date 45 days prior to such Adjustment Date. The
Master Servicer hereby agrees that should the Index become unavailable, the
Master Servicer, on behalf of the Trustee, will select a new index that is based
upon comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the Mortgage Loans due
after the Cut-off Date and received by the Master Servicer before the Closing
Date and not applied in computing the Cut-off Date Principal Balance thereof and
(ii) interest on the Mortgage Loans due after the Cut-off Date and received by
the Master Servicer before the Closing Date.
Initial Certificate Principal Balance: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate in effect prior to the Initial Adjustment Date.
Insurance Agreement: The Insurance and Indemnity Agreement,
dated as of January 1, 2000, among the Certificate Insurer, the Master Servicer
and the Depositor, a copy of which is attached hereto as Exhibit E.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, other than the Certificate Insurance
Policy, but including all riders and endorsements thereto in effect with respect
to such Mortgage Loan, and including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and are
not applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
Insured Payment: As of any Distribution Date, (i) any
Deficiency Amount and (ii) any Preference Amount.
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Insurer Premium Rate: With respect to any Distribution Date,
the percentage for the computation of the premium (including any premium
supplement) as set forth in the Premium Letter.
Interest Carry Forward Amount: Either the Class AF Interest
Carry Forward Amount or the Class AF Interest Carry Forward Amount, as
applicable.
Interest Determination Date: With respect to the Adjustable
Rate Certificates for the first Accrual Period, January 14, 2000. With respect
to the Adjustable Rate Certificates and any Accrual Period thereafter, the
second LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Funds: Either the Adjustable Rate Interest Funds or
the Fixed Rate Interest Funds, as applicable.
Interest Rate Cap Agreement: The interest rate cap contract
referred to in the last paragraph of Section 8.11 and all related provisions of
this Agreement.
Latest Possible Maturity Date: For purposes of the Treasury
Regulations under Code section 860A through 860G, the latest possible maturity
date of each regular interest issued by the REMIC shall be the Distribution Date
following the third anniversary of the scheduled maturity date of the Mortgage
Loan in the Trust Fund having the latest scheduled maturity date as of the
Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees and Servicing
Advances.
Loan Group: Either of the Fixed Rate Mortgage Loans or the
Adjustable Rate Mortgage Loans.
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Loss Percentage: As to any Distribution Date and either Loan
Group, the percentage equivalent of the fraction obtained by dividing (i) the
principal amount of cumulative Realized
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Losses on all Mortgage Loans in such Loan Group from the Cut-off Date through
the end of the related Prepayment Period by (ii) the aggregate of the original
Cut-off Date Principal Balances of the Mortgage Loans in such Loan Group.
Master Servicer Advance Date: As to any Distribution Date,
1:00 p.m. Pacific time on the third Business Day immediately preceding such
Distribution Date.
Master Servicer: EMC Mortgage Corporation, a Delaware
corporation, and its successors and assigns, in its capacity as master servicer
hereunder.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.
Maximum Rate Cap: 14.0% per annum.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest, or creating a
second lien on or second priority ownership interest, as applicable, in an
estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loans: Such of the Fixed Rate Mortgage Loans and
Adjustable Rate Mortgage Loans transferred and assigned to the Trustee pursuant
to the provisions hereof as from time to time are held as a part of the Trust
Fund (including any REO Property), the mortgage loans so held being identified
in the Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition
of title of the related Mortgaged Property. Any mortgage loan that was intended
by the parties hereto to be transferred to the Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not so transferred for any reason
including, without limitation, a breach of the representation contained in
Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan hereunder until
the Purchase Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Repurchase Price: The price, calculated as set
forth in Section 9.01, to be paid in connection with the repurchase of the
Mortgage Loans pursuant to Section 9.01.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, attached hereto as Exhibit
F-1, setting forth the following information with respect to each Mortgage Loan:
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(i) the loan number;
(ii) [Reserved];
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the
Cut-off Date;
(x) the Loan-to-Value Ratio or Combined Loan-to-
Value Ratio, as applicable, at origination;
(xi) a code indicating whether the residential
dwelling at the time of origination was
represented to be owner-occupied;
(xii) a code indicating whether the residential
dwelling is either (a) a detached single
family dwelling (b) a condominium unit or
(c) a two- to four-unit residential
property;
(xiii) with respect to each Adjustable Rate
Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off
Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans.
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Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified
in the Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from time to time.
Mortgaged Property: The underlying property securing a
Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Prepayment Interest Shortfall: As to any Distribution Date
and Certificate Group, the excess, if any, of the Prepayment Interest Shortfall
for such Distribution Date and related Loan Group over the Compensating Interest
for such Loan Group and any Remaining Compensating Interest.
Non-Book-Entry Certificate: Any Certificate other than a
Book-Entry Certificate.
Nonrecoverable Advance: Any portion of a Servicing Advance or
an Advance previously made or proposed to be made by the Master Servicer that,
in the good faith judgment of the Master Servicer, will not or, in the case of a
proposed advance, would not, be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Claim: The notice required to be furnished by the
Trustee to the Certificate Insurer in the event an Insured Payment is required
to be paid under the Certificate Insurance Policy with respect to any
Distribution Date, in the form set forth as an exhibit to the Certificate
Insurance Policy.
OC Release Amount: For any Distribution Date and Certificate
Group, the lesser of (a) the Principal Funds for such Distribution Date and such
Certificate Group and (b) the excess, if any, of the related
Overcollateralization Amount over the related Specified Overcollateralization
Amount.
Offered Certificates: The Class AF and Class AV Certificates.
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Vice
President (however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries of the
Depositor or the Master Servicer (or any other officer customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with a particular
subject) or (ii), if provided for in this Agreement, signed by a Servicing
Officer, as the
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case may be, and delivered to the Depositor, the Seller and the Trustee, as the
case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 5.82% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Optional Termination: The termination of the Trust Fund
created hereunder pursuant to the purchase of the related Mortgage Loans
pursuant to the last sentence of Section 9.01 hereof.
Optional Termination Date: The Distribution Date on which the
Stated Principal Balance of the Mortgage Loans in the Mortgage Pool is equal to
or less than 10% of the Stated Principal Balance of the Mortgage Loans in the
Mortgage Pool as of the Cut-off Date.
Original Mortgage Loan: The mortgage loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Value: The value of the property underlying a
Mortgage Loan based, in the case of the purchase of the underlying Mortgaged
Property, on the lower of an appraisal satisfactory to the Master Servicer or
the sales price of such property or, in the case of a refinancing, on an
appraisal satisfactory to the Master Servicer.
Originator: IMC Mortgage Company, a Florida Corporation.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the
Trustee or delivered to the Trustee for cancellation; and
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(ii) Certificates in exchange for which or in lieu
of which other Certificates have been executed and delivered
by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a Liquidated
Loan, prior to the end of the related Prepayment Period.
Overcollateralization Amount: Either the Adjustable Rate
Overcollateralization Amount or the Fixed Rate Overcollateralization Amount, as
applicable.
Ownership Interest: As to any Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
Pass-Through Rate: With respect to the Class AF Certificates,
the Class AF Pass-Through Rate; with respect to the Class AV Certificates, the
Class AV Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the
undivided beneficial ownership interest in the related
Certificate Group evidenced by such Class which shall be equal
to the Certificate Principal Balance of such Class divided by
the Certificate Principal Balance of all Classes in such
Certificate Group; and
(ii) any Certificate, the Percentage Interest
evidenced thereby of the related Class shall equal the
Percentage Interest set forth on the face thereof or the
percentage obtained by dividing the Denomination of such
Certificate by the aggregate of the Denominations of all
Certificates of such Class.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan
and the related Mortgage Note, the provision therein that limits permissible
increases and decreases in the Mortgage Rate on any Adjustment Date to not more
than one and one-half percentage points, except that the Initial Adjustment
Dates for certain of the 2/28 Mortgage Loans, 3/27 Mortgage Loans and 5/25
Mortgage Loans are subject to a provision that limits permissible increases and
decreases in the Mortgage Rates as provided in the related Mortgage Notes.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations
guaranteed by any state of the United States or the District
of Columbia receiving the highest long-term debt rating of
each Rating Agency, or such lower rating as will not result in
the downgrading or withdrawal of the ratings then assigned to
the Certificates by each Rating Agency;
(iii) [Reserved];
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(iv) commercial or finance company paper which is
then receiving the highest commercial or finance company paper
rating of each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency;
(v) certificates of deposit, demand or time
deposits, or bankers' acceptances issued by any depository
institution or trust company incorporated under the laws of
the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long
term unsecured debt obligations of such depository institution
or trust company (or in the case of the principal depository
institution in a holding company system, the commercial paper
or long-term unsecured debt obligations of such holding
company, but only if Xxxxx'x is not a Rating Agency) are then
rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency;
(vi) demand or time deposits or certificates of
deposit issued by any bank or trust company or savings
institution to the extent that such deposits are fully insured
by the FDIC;
(vii) guaranteed reinvestment agreements issued by
any bank, insurance company or other corporation containing,
at the time of the issuance of such agreements, such terms and
conditions as will not result in the downgrading or withdrawal
of the rating then assigned to the Certificates by any such
Rating Agency;
(viii) repurchase obligations with respect to any
security described in clauses (i) and (ii) above, in either
case entered into with a depository institution or trust
company (acting as principal) described in clause (v) above;
(ix) securities (other than stripped bonds,
stripped coupons or instruments sold at a purchase price in
excess of 115% of the face amount thereof) bearing interest or
sold at a discount issued by any corporation incorporated
under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two
highest long term ratings of each Rating Agency (except if the
Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of Moody's for any such securities),
or such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
any Rating Agency, as evidenced by a signed writing delivered
by each Rating Agency;
(x) interests in any money market fund which at
the date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund has
the highest applicable long term rating by each Rating Agency
or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by
each Rating Agency;
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(xi) short term investment funds sponsored by any
trust company or national banking association incorporated
under the laws of the United States or any state thereof which
on the date of acquisition has been rated by each Rating
Agency in their respective highest applicable rating category
or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by
each Rating Agency; and
(xii) such other investments having a specified
stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the 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, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by the REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of the REMIC under the Code or result in imposition of a tax on the
REMIC. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Class R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in Section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trustor unless such Person has
furnished the transferor and the Trustee with a duly completed Internal Revenue
Service Form 4224, and (vii) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the Transfer of an Ownership Interest in a Class
R Certificate to such Person may cause
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the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are Outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Policy Payments Account: The segregated account, which shall
be an Eligible Account, established and maintained pursuant to Section 3.19(a)
and entitled "Bankers Trust Company of California, N.A., as Trustee for Bear
Xxxxxxx Asset Backed Securities, Inc., Asset-Backed Certificates, Series 2000-1,
Policy Payments Account".
Preference Amount: Any avoided payment required to be paid
pursuant to Section 3 of Endorsement No. 1 to the Certificate Insurance Policy.
Premium Letter: The letter agreement dated January 27, 2000,
among the Depositor, the Master Servicer and the Certificate Insurer, setting
forth the premium payable with respect to the Certificate Insurance Policy.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates in a
Certificate Group.
Prepayment Charge: Any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage
Loan pursuant to the terms of the related Mortgage Note.
Prepayment Interest Shortfall: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in full, or that became a
Liquidated Loan during the related Prepayment Period, (other than a Principal
Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if any, by which (i)
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such Mortgage Loan immediately prior to such prepayment (or
liquidation) or in the case of a partial Principal Prepayment on the amount of
such prepayment (or liquidation proceeds) exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment or such
liquidation proceeds.
Prepayment Period: As to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
Principal Distribution Amount: Either the Adjustable Rate
Principal Distribution Amount or the Fixed Rate Principal Distribution Amount,
as applicable.
Principal Funds: Either the Adjustable Rate Principal Funds or
the Fixed Rate Principal Funds, as applicable.
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Principal Prepayment: Any Mortgagor payment or other recovery
of (or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.
Principal Remittance Amount: For any Distribution Date and a
Certificate Group, the Principal Funds for such Distribution Date and such
Certificate Group minus the related OC Release Amount.
Prospectus Supplement: The Prospectus Supplement dated January
21, 2000 relating to the public offering of the Fixed Rate Certificates and the
Adjustable Rate Certificates offered thereby.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required
to be repurchased by the Seller or purchased by (1) the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) the Depositor
pursuant to Section 2.04 hereof or (y) that the Master Servicer has a right to
purchase pursuant to Section 3.12 hereof, an amount equal to the sum of (i) 100%
of the unpaid principal balance of the Mortgage Loan as of the date of such
purchase, (ii) accrued interest thereon at the applicable Mortgage Rate (or, if
such purchase or repurchase, as the case may be, is effected by the Seller (and
the Seller is the Master Servicer) or by the Master Servicer, at the Net
Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Seller (and the Seller is the Master Servicer) or by the Master Servicer,
the date through which interest was last advanced and not reimbursed by the
Master Servicer) to (b) the first day of the month in which the Purchase Price
is to be distributed to Certificateholders and (iii) any related unreimbursed
Servicing Advances.
Rating Agency: Moody's and S&P. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of such Liquidated Loan as of the date of such liquidation, minus (ii)
the Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and (ii)
if the principal amount due under the related Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance
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of the Mortgage Loan as reduced by the Deficient Valuation plus any reduction in
the interest component of the Scheduled Payments. With respect to each Mortgage
Loan that has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the related Scheduled Payment
was reduced.
Record Date: With respect to the Fixed Rate Certificates and
to any Distribution Date, the close of business on the last Business Day of the
month preceding the month in which the applicable Distribution Date occurs .
With respect to any Distribution Date and the Adjustable Rate Certificates that
are (x) Book-Entry Certificates, the Business Day preceding such Distribution
Date and (y) Definitive Certificates, the last Business Day of the month
preceding the month in which the applicable Distribution Date occurs.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding balance of the Adjustable Rate Certificates on such Interest
Determination Date, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the Trustee, as of 11:00 a.m., New York City time, on such
date for loans in U.S. dollars to leading European banks for a period of one
month in amounts approximately equal to the outstanding balance of the
Adjustable Rate Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Bankers Trust and NatWest,
N.A., provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any one of the Fixed Rate Certificates
and the Adjustable Rate Certificates.
Relief Act: The Soldiers and Sailors Relief Act of 1940.
Relief Act Shortfall: Interest shortfall caused by application
of the Relief Act.
Remaining Compensating Interest: As to any Certificate Group,
the excess, if any, of the amount available for Compensating Interest as
provided in Section 4.02 over the Prepayment Interest Shortfall for the related
Loan Group.
Remittance Report: As defined in Section 4.04(n).
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REO Property: A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan, which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit N, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not less than 90% of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) with respect to any Fixed Rate Mortgage Loan, have a
Mortgage Rate not less than or no more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan and, with respect to any Adjustable
Rate Mortgage Loan: (a) have a Maximum Mortgage Rate no more than 1% per annum
higher or 1% per annum lower than the Maximum Mortgage Rate of the Deleted
Mortgage Loan; (b) have a Minimum Mortgage Rate no more than 1% per annum higher
or 1% per annum lower than the Minimum Mortgage Rate of the Deleted Mortgage
Loan; (c) have the same Index and Periodic Rate Cap as that of the Deleted
Mortgage Loan and a Gross Margin not more than 1% per annum higher or 1% per
annum lower than that of the Deleted Mortgage Loan; and (d) not permit
conversion of the related Mortgage Rate to a fixed Mortgage Rate; (iii) have the
same or higher credit quality characteristics than that of the Deleted Mortgage
Loan; (iv) be accruing interest at a rate not more than 1% per annum higher or
1% per annum lower than that of the Deleted Mortgage Loan; (v) have a
Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable, no higher
than that of the Deleted Mortgage Loan; (vi) have a remaining term to maturity
no greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a fixed
rate to a variable rate or visa versa; (viii) provide for a prepayment charge on
terms substantially similar to those of the prepayment charge, if any, of the
Deleted Mortgage Loan; (ix) have the same lien priority as the Deleted Mortgage
Loan; (x) constitute the same occupancy type as the Deleted Mortgage Loan; (xi)
comply with each representation and warranty set forth in Section 2.03 hereof;
and (xii) be otherwise acceptable to the Certificate Insurer.
Request for Release: The Request for Release submitted by the
Master Servicer to the Trustee, substantially in the form of Exhibits M and N,
as appropriate.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Rolling Delinquency Percentage: With respect to any
Distribution Date and either Loan Group, the average of the Delinquency
Percentages for the related Loan Group as of the three (or one or two, in the
case of the first and second Distribution Dates) preceding Distribution Dates.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
Securities Act: The Securities Act of 1933, as amended.
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Seller: EMC Mortgage Corporation, a Delaware corporation, and
its successors and assigns, in its capacity as seller of the Mortgage Loans to
the Depositor.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable legal fees) incurred in
the performance by the Master Servicer of its servicing obligations hereunder,
including, but not limited to, the cost of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of any
REO Property (including, without limitation, realtors' commissions) and (iv)
compliance with the obligations under Section 3.10 (including advances made
because of the existence of any deductible clause on any forced place
insurance).
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.
S&P: Standard & Poor's Rating Service, a division of The
XxXxxx-Xxxx Companies, Inc.
Six Month Annualized Loss Percentage: With respect to any
Distribution Date and either Loan Group, a fraction, expressed as a percentage,
the numerator of which is product of (x) the aggregate of all Realized Losses in
respect of the Mortgage Loans in such Loan Group for the six months ending on
the last day of the preceding Prepayment Period and (y) 2, and the denominator
of which is the aggregate Stated Principal Balance of the Mortgage Loans in such
Loan Group as of the first day of the sixth preceding Prepayment Period.
Specified Overcollateralization Amount: With respect to each
Certificate Group and any Distribution Date, an amount equal to either (i) in
the case of the Adjustable Rate Group, 5.00% of the initial Adjustable Rate
Group Balance or (ii) in the case of the Fixed Rate Group, 6.00% of the initial
Fixed Rate Group Balance, as applicable; subject, however, to the following: (i)
if the Step Up Trigger has occurred with respect to either Certificate Group,
the Specified Overcollateralization Amount with respect to such Certificate
Group for such Distribution Date will be unlimited; (ii) if the Step Up Spread
Squeeze Test is met or has occurred on any of the prior five Distribution Dates,
the Specified Overcollateralization Amount with respect to the Adjustable Rate
Certificates for such Distribution Date will be an amount equal to the sum of
(A) the related Specified Overcollateralization Amount for such Distribution
Date determined as though the Step Up Spread Squeeze Test were not met plus (B)
the Spread Squeeze Overcollateralization Increase Amount for such Distribution
Date; or (iii) if neither the Step Up Trigger has occurred nor the Step Up
Spread Squeeze Test is met for such Certificate Group but the Step Down Trigger
has occurred for such
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Certificate Group, the Specified Overcollateralization Amount with respect to
such Certificate Group for such Distribution Date will be an amount equal to the
greater of (A) the greater of (1) 0.50% of (i) in the case of the Fixed Rate
Group, the initial Fixed Rate Group Balance or (ii) in the case of the
Adjustable Rate Group, the initial Adjustable Rate Group Balance, as applicable,
and (2) the aggregate Stated Principal Balance, as of such Distribution Date, of
the three largest outstanding Mortgage Loans in the related Loan Group and (B)
the lesser of (x) (i) in the case of the Fixed Rate Group, 6.00% of the initial
Fixed Rate Group Balance or (ii) in the case of the Adjustable Rate Group, 5.00%
of the initial Adjustable Rate Group Balance, as applicable, and (y) the Stepped
Down Required Overcollateralized Percentage of the aggregate Stated Principal
Balance of the Mortgage Loans in respect of the related Loan Group as of such
Distribution Date.
The Certificate Insurer may, in its sole discretion, at the request of
the Seller, modify the Specified Overcollateralization Amount above for the
purpose of reducing or eliminating, in whole or in part, the application of any
Step Up Trigger or Step Down Trigger, and the Trustee and the Rating Agencies
shall be notified in writing of such modification at least 5 Business Days prior
to the related Distribution Date.
Specified Overcollateralization Amount Deficiency: As to any
Certificate Group and any Distribution Date, the excess, if any, of (i) the
related Specified Overcollateralization Amount for such Distribution Date over
(ii) the related Overcollateralization Amount for such Distribution Date
calculated, for this purpose only, after giving effect to the distribution of
the related Principal Remittance Amount on such Distribution Date but prior to
any distributions of related Extra Principal Distribution Amount on such
Distribution Date.
Spread Squeeze Condition: The Spread Squeeze Condition will be
applied with respect to Distribution Dates on or after July 25, 2000, and will
be met with respect to a Distribution Date if the Spread Squeeze Percentage for
such Distribution Date is less than 3.00% for any such Distribution Date.
Spread Squeeze Overcollateralization Increase Amount: For any
Distribution Date on or after July 25, 2000, an amount determined as follows:
(a) if the Spread Squeeze Condition is met for such
Distribution Date, the Spread Squeeze Overcollateralization Increase
Amount for such Distribution Date shall be equal to the product
obtained by multiplying (i) three, (ii) the excess, if any, of 3.00%
over the Spread Squeeze Percentage for such Distribution Date and (iii)
the aggregate Stated Principal Balance of the Adjustable Rate Mortgage
Loans as of the Cut-off Date; or
(b) if the Spread Squeeze Condition is not met for such
Distribution Date but has occurred on any of the preceding five
Distribution Dates, the Spread Squeeze Overcollateralization Increase
Amount for such Distribution Date shall be equal to (A) the Spread
Squeeze Overcollateralization Increase Amount for the most recent
Distribution Date for which the Spread Squeeze Condition was met minus
(B) the product obtained by multiplying (i) one-sixth of the amount
determined under clause (A) above and (ii) the number of consecutive
Distribution Dates through and including the current Distribution Date
for which the Spread Squeeze Condition was not met.
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Spread Squeeze Percentage: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
product of 12 and the Excess Cashflow in respect of the Adjustable Rate Mortgage
Loans for such Distribution Date, and the denominator of which is the aggregate
Stated Principal Balance of the Adjustable Rate Mortgage Loans as of such
Distribution Date.
Startup Day: The Startup Day for each REMIC formed hereunder
shall be the Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property and any Distribution Date, the Cut-off Date Principal
Balance thereof minus the sum of (a) the principal portion of the Scheduled
Payments (x) due with respect to such Mortgage Loan during each Due Period
ending prior to such Distribution Date and (y) that were received by the Master
Servicer as of the close of business on the Determination Date related to such
Distribution Date or with respect to which Advances were made prior to such
Distribution Date and (b) all Principal Prepayments with respect to such
Mortgage Loan received prior to or during the related Prepayment Period, and all
Liquidation Proceeds to the extent applied by the Master Servicer as recoveries
of principal in accordance with Section 3.12 with respect to such Mortgage Loan,
that were received by the Master Servicer as of the close of business on the
last day of the Prepayment Period related to such Distribution Date. The Stated
Principal Balance of any Mortgage Loan that becomes a Liquidated Loan will be
zero immediately following the Prepayment Period in which such Mortgage Loan
becomes a Liquidated Loan. References herein to the Stated Principal Balance of
a Loan Group at any time shall mean the aggregate Stated Principal Balance of
all Mortgage Loans in such Loan Group at such time.
Step Down Cumulative Loss Test: The Step Down Cumulative Loss
Test will be met with respect to a Distribution Date and a Certificate Group as
follows: (i) for the 31st through the 42nd Distribution Dates, if the Loss
Percentage for the related Loan Group for such Distribution Date is 1.50% or
less; (ii) for the 43rd through the 54th Distribution Dates, if the Loss
Percentage for the related Loan Group for such Distribution Date is 2.00% or
less; (iii) for the 55th through the 66th Distribution Dates, if the Loss
Percentage for the related Loan Group for such Distribution Date is 2.50% or
less; and (iv) for any Distribution Date after the 66th Distribution Date, if
the Loss Percentage for the related Loan Group for such Distribution Date is
3.00% or less.
Step Down Rolling Delinquency Test: The Step Down Rolling
Delinquency Test will be met with respect to a Distribution Date and a
Certificate Group if the Rolling Delinquency Percentage for the related Loan
Group for such Distribution Date is 10.00% or less.
Step Down Rolling Loss Test: The Step Down Rolling Loss Test
will be met with respect to a Distribution Date and a Certificate Group if the
Six Month Annualized Loss Percentage for the related Loan Group for such
Distribution Date is less than 1.00%.
Step Down Trigger: With respect to either Certificate Group
and any Distribution Date after the 30th Distribution Date, the Step Down
Trigger will have occurred if each of the Step Down Cumulative Loss Test, the
Step Down Rolling Delinquency Test and the Step Down Rolling Loss Test is met
for such Certificate Group. In no event will the Step Down Trigger be deemed to
have occurred on or before the 30th Distribution Date.
-28-
Stepped Down Required Overcollateralized Percentage: For any
Distribution Date and either Certificate Group for which the Step Down Trigger
has occurred, a percentage equal to (i) the percentage equivalent of a fraction,
the numerator of which is (i) in the case of the Fixed Rate Group, 6.00% of the
initial Fixed Rate Group Balance or (ii) in the case of the Adjustable Rate
Group, 5.00% of the initial Adjustable Rate Group Balance, as applicable, and
the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group as of such Distribution Date, minus
(ii) the percentage equivalent of a fraction, the numerator of which is the
product of (A) the respective percentage calculated under clause (i) above minus
12.00% with respect to Fixed Rate Certificates or 11.00% with respect to the
Adjustable Rate Certificates, multiplied by (B) the number of consecutive
Distribution Dates through and including the Distribution Date for which the
Stepped Down Required Overcollateralized Percentage for such Certificate Group
is being calculated, up to a maximum of six, for which the Step Down Trigger has
occurred, and the denominator of which is six.
Step Up Cumulative Loss Test: The Step Up Cumulative Loss Test
will be met with respect to a Distribution Date as follows: (i) for the 1st
through the 12th Distribution Dates, if the Loss Percentage for the related Loan
Group for such Distribution Date is more than 0.75%; (ii) for the 13th through
the 24th Distribution Dates, if the Loss Percentage for the related Loan Group
for such Distribution Date is more than 1.50%; (iii) for the 25th through the
36th Distribution Dates, if the Loss Percentage for the related Loan Group for
such Distribution Date is more than 2.25%; (iv) for the 37th through the 48th
Distribution Dates, if the Loss Percentage for the related Loan Group for such
Distribution Date is more than 3.25%; and (v) for the 49th Distribution Date and
any Distribution Date thereafter, if the Loss Percentage for the related Loan
Group for such Distribution Date is more than 3.75%.
Step Up Rolling Delinquency Test: The Step Up Rolling
Delinquency Test will be met with respect to a Distribution Date and a
Certificate Group if the Rolling Delinquency Percentage for the related Loan
Group for such Distribution Date is more than 12.00%.
Step Up Rolling Loss Test: The Step Up Rolling Loss Test will
be met with respect to a Distribution Date and a Certificate Group, if the Six
Month Annualized Loss Percentage for the related Loan Group is equal to or more
than 1.30%.
Step Up Spread Squeeze Test: The Step Up Spread Squeeze Test
will be met with respect to a Distribution Date if the Spread Squeeze Condition
is met for such Distribution Date or was met for any of the five preceding
Distribution Dates.
Step Up Trigger: For any Distribution Date, the Step Up
Trigger will have occurred for a Certificate Group if any one of the Step Up
Cumulative Loss Test, the Step Up Rolling Delinquency Test or the Step Up
Rolling Loss Test is met with respect to such Certificate Group.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(c).
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(c).
-00-
Xxxxxxxxxxxx Xxxxxx: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(c), the excess of (x) the principal balance
of the Mortgage Loan that is substituted for, over (y) the principal balance of
the related substitute Mortgage Loan, each balance being determined as of the
date of substitution.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d).
Initially, this person shall be the Trustee.
Tax Matters Person Class R Certificate: A Class R Certificate
designated as the Tax Matters Person Class R Certificate and evidencing 0.001%
Percentage Interest of the Class R Certificates.
3/27 Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal due with
respect thereto after the Cut-off Date to the extent not applied in computing
the Cut-off Date Principal Balance thereof, exclusive of interest not required
to be deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii)
the Certificate Account, the Distribution Account, the Policy Payments Account
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loan; and (v)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.
Trustee: Bankers Trust Company of California, N.A., a national
banking association, not in its individual capacity, but solely in its capacity
as trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee as may from time to time be
serving as successor trustee hereunder.
Trustee Fee: As to any Distribution Date and Loan Group, an
amount equal to the product of 1/12th of the Trustee Fee Rate and the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
first day of the related Due Period.
Trustee Fee Rate: 0.0075% per annum.
2/28 Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Fixed Rate Certificates and Adjustable Rate
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Certificates, and 5% to the Class R Certificates, with the allocation among the
Fixed Rate Certificates and Adjustable Rate Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes. Voting Rights will be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests.
Section 1.02. Certain REMIC-Related Defined Terms.
In addition to those defined terms defined in Section 1.01,
whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Adjustable Rate Marker: The Class TV1 Interest.
Adjustable Rate Marker Rate: The weighted average of the
interest rates on the Adjustable Rate Marker and the Class MV Interests holding
the interest rate on the Class MV Interest to 0% and the interest rate on the
Adjustable Rate Marker to a cap and floor equal to the interest rate on its
corresponding class.
Class R-1F Interest: The uncertificated residual interest in
REMIC 1F.
Class R-1V Interest: The uncertificated residual interest in
REMIC 1V.
Class R-2 Interest: The uncertificated residual interest in
REMIC 2.
Class XX0 Xxxxxxxx: A regular interest in REMIC 1F that is
held as an asset of REMIC 2, that bears interest at a per annum rate equal to
the Fixed Rate Net Rate, and that has an initial principal balance and such
other terms as are described in Section 4.06.
Class TV1 Interest: A regular interest in REMIC 1V that is
held as an asset of REMIC 2, that bears interest at a per annum rate equal to
the Adjustable Net Rate, and that has an initial principal balance and such
other terms as are described in Section 4.06.
Class MF Interest: A regular interest in REMIC 1F that is held
as an asset of REMIC 2, that has an initial principal balance equal to the
Stated Principal Balance of the Fixed Rate Mortgage Loans as of the Cut-off Date
in excess of the initial principal balance of the Fixed Rate Marker, that bears
interest at a per annum rate equal to the Fixed Rate Net Rate, and has such
other terms as are described in Section 4.06.
Class MV Interest: A regular interest in REMIC 1V that is held
as an asset of REMIC 2, that has an initial principal balance equal to the
Stated Principal Balance of the Adjustable Rate Mortgage Loans as of the Cut-Off
Date in excess of the initial principal balance of the Adjustable Rate Marker,
that bears interest at a per annum rate equal to the Adjustable Rate Net Rate,
and has such other terms as are described in Section 4.06.
Class PF Interest: A regular interest in REMIC 1F that is held
as an asset of REMIC 2, that has an initial principal balance equal to $50, that
bears interest at 0%, and has such other terms as are described in Section 4.06.
The Class PF Interest is entitled to the prepayment penalties attributable to
the Fixed Rate Mortgage Loans.
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Class PV Interest: A regular interest in REMIC 1V that is held
as an asset of REMIC 2, that has an initial principal balance equal to $50, that
bears interest at 0%, and has such other terms as are described in Section 4.06.
The Class PV Interest is entitled to the prepayment penalties attributable to
the Adjustable Rate Mortgage Loans.
Class BF-IO Remainder Amount: An amount equal to the interest
on the Adjustable Rate Mortgage Loans that was applied pursuant to Section
4.04(f).
Class BV-IO Remainder Amount: An amount equal to the interest
on the Fixed Rate Mortgage Loans that was applied pursuant to Section 4.04(g).
Fixed Rate Markers: The Class XX0 Xxxxxxxx.
Fixed Rate Marker Rate: The weighted average of the interest
rates on the Fixed Rate Markers and the Class MF Interests holding the interest
rate on the Class MF Interest to 0% and the interest rate on the Fixed Rate
Marker to a cap and floor equal to the interest rate on its corresponding class.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC 1F: The segregated pool of assets consisting of the
Fixed Rate Mortgage Loans and all products and proceeds thereof, and $50 of the
Class P Deposit.
REMIC 1V: The segregate pool of assets consisting of the
Adjustable Rate Mortgage Loans and all products and proceeds thereof, and $50 of
the Class P Deposit.
REMIC 2: The segregated pool of assets consisting of the REMIC
1F Regular Interests and the REMIC 1V Regular Interests (other than the Class PF
and Class PV Interests).
REMIC 1F Regular Interests: The Class TF1, Class MF and Class
PF Interests.
REMIC 1V Regular Interests: The Class TV1, Class PV and Class
MV Interests.
REMIC 2 Regular Interests: The Regular Certificates.
REMIC Provisions: 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 proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Upper Tier REMIC: REMIC 2.
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ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Seller in and to the Mortgage Loans, and the Class P Deposit, including all
interest and principal received and receivable by the Seller on or with respect
to the Mortgage Loans after the Cut-off Date, other than interest and principal
due on or before the Cut-off Date, or deposited into the Certificate Account by
the Seller as an Initial Certificate Account Deposit as provided in this
Agreement. The Seller confirms that, concurrently with such transfer and
assignment, it has deposited into the Certificate Account the Initial
Certificate Account Deposit.
The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders and the Certificate Insurer,
without recourse, all the right, title and interest of the Depositor in and to
the Trust Fund. In addition, the Depositor hereby deposits with the Trustee the
Certificate Insurance Policy.
In connection with any such transfer and assignment, the Depositor has
delivered to, and deposited with, the Trustee (except as provided in clause (vi)
below) for the benefit of the Certificateholders, the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following form:
"Pay to the order of ____________________ without recourse" or "Pay to the
order of Bankers Trust Company of California, N.A., as trustee under the
Pooling and Servicing Agreement dated as of January 1, 2000, Bear Xxxxxxx
Asset Backed Securities, Inc. Asset-Backed Certificates 2000-1, without
recourse", with all intervening endorsements that show a complete chain of
endorsement from the originator to the Seller; provided, however, that with
respect to not more than 10 Mortgage Loans, the Seller may deliver a lost
note affidavit and indemnity;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage to "Bankers Trust
Company of California, N.A., as Trustee for the benefit of the
Certificateholders of Bear Xxxxxxx Asset Backed Securities, Inc.
Asset-Backed Certificates 2000-1;" (each such assignment, when duly and
validly completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
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(iv) all interim recorded assignments of the Mortgage showing a
complete chain of title from the originator thereof to the Seller;
(v) any Assumption or Modification or similar agreement; and
(vi) the original or duplicate original lender's title policy marked-up
commitment, in which event the related original lender's title policy shall
be delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan the Seller
cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii) or (iv)
concurrently with the execution and delivery hereof, the Seller shall deliver or
cause to be delivered to the Trustee a true copy of such Mortgage and of each
such undelivered interim assignment of the Mortgage each certified by the
Seller, the applicable title company, escrow agent or attorney, or the
originator of such Mortgage, as the case may be, to be a true and complete copy
of the original Mortgage or assignment of Mortgage submitted for recording. The
copies of the assignments referred to in clause (iii) delivered on the Closing
Date may be imaged versions showing "/s/" in the signature block. The Seller
shall promptly deliver or cause to be delivered to the Trustee such original
Mortgage and such assignment or assignments with evidence of recording indicated
thereon upon receipt thereof from the public recording official, or a copy
thereof, certified, if appropriate, by the relevant recording office, but in no
event shall any such delivery be made later than 540 days following the Closing
Date; provided that in the event that by such date the Seller is unable to
deliver or cause to be delivered each Mortgage and each interim assignment by
reason of the fact that any such documents have not been returned by the
appropriate recording office, or, in the case of each interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Seller shall deliver or cause to be delivered such documents to the
Trustee as promptly as possible upon receipt thereof. If the public recording
office in which a Mortgage or interim assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall satisfy the Seller's obligations in
this Section 2.01. If any document submitted for recording pursuant to this
Agreement is (a) lost prior to recording or rejected by the applicable recording
office, the Seller shall immediately prepare or cause to be prepared a
substitute and submit it for recording, and shall deliver copies and originals
thereof in accordance with the foregoing or (b) lost after recording, the Seller
shall deliver to the Trustee a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original recorded
document. The Seller shall promptly forward or cause to be forwarded to the
Trustee (a) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (b) any other documents
required to be delivered by the Depositor or the Master Servicer to the Trustee
within the time periods specified in this Section 2.01.
Within 60 days of the Closing Date, the Seller, at its own expense,
shall prepare and send for recording the assignments of Mortgage in favor of the
Trustee in the appropriate real property or other records; provided, however,
with respect to each Mortgage Loan as to which the related Mortgaged Property
and Mortgage File are located in (a) the State of California or (b) any other
jurisdiction under the laws of which the recordation of the assignment specified
in clause (iii) above is not necessary to protect the Trustee's and the
Certificateholders, interest in the related Mortgage Loan, as evidenced by an
Opinion of Counsel, delivered by the Seller to the Trustee and a copy to
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the Rating Agencies and the Certificate Insurer, in lieu of recording the
assignment specified in clause (iii) above, the Seller may deliver an unrecorded
assignment in blank, in form otherwise suitable for recording to the Trustee;
provided that if the related Mortgage has not been returned from the applicable
public recording office, such assignment, or any copy thereof, of the Mortgage
may exclude the information to be provided by the recording office. As to any
Mortgage Loan, the procedures of the preceding sentence shall be applicable only
so long as the related Mortgage File is maintained in the possession of the
Trustee in the State or jurisdiction described in such sentence. In the event
that (i) the Seller, the Depositor, the Certificate Insurer or the Master
Servicer gives written notice to the Trustee that recording is required to
protect the right, title and interest of the Trustee on behalf of the
Certificateholders and the Certificate Insurer in and to any Mortgage Loan, (ii)
a court recharacterizes the sale of the Mortgage Loans as a financing, or (iii)
as a result of any change in or amendment to the laws of the State or
jurisdiction described in the first sentence of this paragraph or any applicable
political subdivision thereof, or any change in official position regarding
application or interpretation of such laws, including a holding by a court of
competent jurisdiction, such recording is so required, the Trustee shall
complete the assignment in the manner specified in clause (iii) of the second
paragraph of this Section 2.01 and the Seller shall submit or cause to be
submitted for recording as specified above or, should the Seller fail to perform
such obligations, the Trustee shall cause the Master Servicer, at the Seller's
expense, to cause each such previously unrecorded assignment to be submitted for
recording as specified above. In the event a Mortgage File is released to the
Master Servicer as a result of the Master Servicer's having completed a Request
for Release in the form of Exhibit M, the Trustee shall complete the assignment
of the related Mortgage in the manner specified in clause (iii) of the second
paragraph of this Section 2.01.
So long as the Trustee maintains an office in the State of California,
the Trustee shall maintain possession of and not remove or attempt to remove
from the State of California any of the Mortgage Files as to which the related
Mortgaged Property is located in such State. In the event that the Seller fails
to record an assignment of a Mortgage Loan as herein provided within 90 days of
notice of an event set forth in clause (i), (ii) or (iii) of the above
paragraph, the Trustee shall prepare and, if required hereunder, file such
assignments for recordation in the appropriate real property or other records
office. The Seller hereby appoints the Trustee (and any successor servicer
hereunder) as its attorney-in-fact with full power and authority acting in its
stead for the purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date and the Cut-off Date, the Seller shall
deposit or cause to be deposited in the Certificate Account the amount required
to be deposited therein with respect to such payment pursuant to Section 3.05
hereof.
Section 2.02. Acceptance by Trustee of the Mortgage Loans.
The Trustee acknowledges receipt, subject to the limitations contained
in and any exceptions noted in the Initial Certification in the form annexed
hereto as Exhibit G-1 and in the list of exceptions attached thereto, of the
documents referred to in clauses (i) and (iii) of Section 2.01 above, the
Certificate Insurance Policy, and all other assets included in the Trust Fund
and declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders and the Certificate
Insurer.
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The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer, the Certificate Insurer and the Seller an
Initial Certification in the form annexed hereto as Exhibit G-1 to the effect
that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically identified in
such certification as not covered by such certification), the documents
described in Section 2.01(i) and (iii) with respect to such Mortgage Loan are in
its possession, and based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and relate to
such Mortgage Loan. The Trustee agrees to execute and deliver within 30 days
after the Closing Date to the Depositor, the Master Servicer, the Certificate
Insurer and the Seller an Interim Certification in the form annexed hereto as
Exhibit G-2 to the effect that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), all documents required to be delivered to it pursuant to this
Agreement with respect to such Mortgage Loan are in its possession (except those
described in Section 2.01(v)) and based on its review and examination and only
as to the foregoing documents, (i) such documents appear regular on their face
and relate to such Mortgage Loan, and (ii) the information set forth in items
(i), (iv), (v), (vi) and (viii) of the definition of the "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. The
Trustee shall be under no duty or obligation to inspect, review or examine such
documents, instruments, certificates or other papers to determine that the same
are genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer, the Certificate Insurer and the
Seller (and to any Certificateholder that so requests) a Final Certification in
the form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
In connection with the Trustee's completion and delivery of such Final
Certification, the Trustee shall review each Mortgage File to determine that it
contains the documents listed in Section 2.01(i)-(vi).
If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) of Section 2.01, the Trustee shall
include such exceptions in such Final Certification (and Trustee shall state in
such Final Certification whether any Mortgage File does not then include the
original or duplicate original lender's title policy and all riders thereto). If
the public recording office in which a Mortgage or assignment thereof is
recorded retains the original of such Mortgage or assignment, a copy of the
original Mortgage or assignment so retained, with evidence of recording thereon,
certified to be true and complete by such recording office, shall be deemed to
satisfy the requirements of clause (ii), (iii) or (iv) above, as applicable. The
Seller shall promptly correct or cure such defect referred to above within 90
days from the date it was so notified of such defect and, if the Seller does not
correct or cure such defect within such period, the Seller shall either (a) if
the time to cure such defect expires prior to the end of the second anniversary
of the Closing Date, substitute for the related Mortgage Loan a Replacement
Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03, or (b) purchase such
Mortgage Loan from the Trustee within 90 days from the date the Seller was
notified of such defect in writing at the Purchase Price of such Mortgage Loan;
provided that any such substitution pursuant to (a) above or repurchase pursuant
to (b) above shall not be effected prior to the delivery to
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the Trustee and the Certificate Insurer of the Opinion of Counsel required by
Section 2.05 hereof and any substitution pursuant to (a) above shall not be
effected prior to the additional delivery to the Trustee of a Request for
Release substantially in the form of Exhibit N. No substitution will be made in
any calendar month after the Determination Date for such month. The Purchase
Price for any such Mortgage Loan shall be deposited by the Seller in the
Certificate Account and, upon receipt of such deposit and certification with
respect thereto in the form of Exhibit N hereto, the Trustee shall release the
related Mortgage File to the Seller and shall execute and deliver at the
Seller's request such instruments of transfer or assignment as the Seller has
prepared, in each case without recourse, as shall be necessary to vest in the
Seller, or a designee, the Trustee's interest in any Mortgage Loan released
pursuant hereto.
The Trustee shall retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions set forth herein. The
Seller shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File that come into the possession of the Seller from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.01(i)-(vi) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Depositor, the Certificate
Insurer, and any Certificateholder against the Seller.
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Seller.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Certificate Insurer and the Trustee as follows, as of the date
hereof and as of the Closing Date:
(i) The Master Servicer is duly organized as a Delaware corporation and
is validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Master Servicer has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Agreement
and has duly authorized by all necessary corporate action on the part of
the Master Servicer the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution
and delivery hereof by the other parties hereto, constitutes a legal, valid
and binding obligation of the Master Servicer, enforceable against the
Master Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally
and (b) the remedy of specific performance and injunctive and other forms
of equitable relief
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may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer under
this Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Master Servicer or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Master Servicer is a
party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Master Servicer; and the Master Servicer is
not in breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation may
materially impair the Master Servicer's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Master Servicer is an approved servicer of conventional
mortgage loans for FNMA or FHLMC and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211
of the National Housing Act.
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened, against the Master Servicer that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Master Servicer has obtained the same.
(b) The Seller hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the date hereof and as of
the Closing Date:
(i) The Seller is duly organized as a Delaware corporation and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Seller in
any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such state, to
the extent necessary to ensure its ability to enforce each Mortgage Loan,
to sell the Mortgage Loans in accordance with the terms of this Agreement
and to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
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(ii) The Seller has the full corporate power and authority to sell each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by the Seller, the
sale of the Mortgage Loans by the Seller under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Seller and will not (A) result in
a material breach of any term or provision of the charter or by-laws of the
Seller or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Seller is
a party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller; and the Seller is not in breach or violation
of any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Seller's ability to
perform or meet any of its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional mortgage loans
for FNMA or FHLMC and is a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to sections 203 and 211 of the National
Housing Act.
(v) No litigation is pending or, to the best of the Seller's knowledge,
threatened, against the Seller that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or the ability
of the Seller to sell the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Seller has obtained the same.
(vii) With respect to each Mortgage Loan, as of the Cut-off Date
(unless otherwise expressly provided):
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(A) The information set forth in the Mortgage Loan Schedule on the
Closing Date and in each Mortgage File is complete, true and correct.
(B) Except for approximately 7.25% of the Adjustable Rate Mortgage
Loans (by Stated Principal Balance as of the Cut-off Date) and approximately
4.40% of the Fixed Rate Mortgage Loans (by Stated Principal Balance as of the
Cut-off Date), all payments required to be made prior to the Cut-off Date have
been made and no Mortgage Loan is delinquent thirty (30) or more days; and the
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required under the Mortgage Loan.
(C) There are no delinquent taxes, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, including assessments
payable in future installments, or other outstanding charges affecting the
related Mortgaged Property.
(D) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which are in the Mortgage File and have been or will be recorded, if
necessary to protect the interests of the Trustee, and which have been or will
be delivered to the Trustee, all in accordance with this Agreement. The
substance of any such waiver, alteration or modification has been approved by
the title insurer, to the extent required by the related policy. No Mortgagor
has been released, in whole or in part, except in connection with an assumption
agreement approved by the title insurer, to the extent required by the policy,
and which assumption agreement is part of the Mortgage File.
(E) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(F) All buildings upon, or comprising part of, the Mortgaged Property
are insured by an insurer acceptable to FNMA and FHLMC against loss by fire,
hazards of extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, and such insurer is licensed to do
business in the state where the Mortgaged Property is located. All such
insurance policies contain a standard mortgagee clause naming the Originator,
its successors and assigns as mortgagee and Seller has received no notice that
all premiums thereon have not been paid. If upon origination of the Mortgage
Loan, the Mortgaged Property was, or was subsequently deemed to be, in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available),
which require under applicable law that a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
(or any successor thereto) be obtained, such flood insurance policy is in effect
which policy is with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the Stated Principal Balance of the
related Mortgage Loan (together, in the case of a Mortgage Loan that is not a
first priority lien, with the outstanding principal balance of any liens that
are prior to the related Mortgage Loan lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis, or (C) the maximum
amount of insurance that is available under the Flood Disaster Protection Act of
1973. The
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Mortgage obligates the Mortgagor thereunder to maintain all such insurance at
Mortgagor's cost and expense and, on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's
cost and expense and to obtain reimbursement therefor from the Mortgagor. Each
Mortgage Loan has in place a fully-paid life of loan flood certification from a
FNMA- or FHLMC-approved vendor, assigned in care of the Master Servicer or its
designee, which provides for notification to the Master Servicer or its
designee, of changes in designated flood areas which would affect such Mortgage
Loan.
(G) Any and all requirements of any federal, state or local law
including, usury, truth in lending, real estate settlement procedures including,
the Real Estate Settlement Procedures Act of 1974, as amended, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects.
(H) The Mortgage has not been satisfied, canceled, subordinated, or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission.
(I) The Mortgage is a valid, existing and enforceable first or second
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property, if any, subject only to (1) the lien of current real property taxes
and assessments not yet due and payable, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record as
of the date of recording being acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property, (3) in the case of a
Mortgage that is not a first priority lien, the first lien on the Mortgaged
Property identified in the related Mortgage File, and (4) other matters to which
like properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage. The Seller has
full right to sell and assign the Mortgage to the Depositor.
(J) The Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or reorganization or general principles of equity.
(K) All parties to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan transaction and to execute and deliver
the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties.
(L) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage.
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(M) Immediately prior to the conveyance of the Mortgage Loans by the
Seller to the Depositor hereunder, the Seller was the sole owner and holder of
the Mortgage Loans and the related servicing rights and the related Originator
or the Seller was the custodian of the related escrow account, if applicable;
the Mortgage Loan had neither been assigned nor pledged, and the Seller had good
and marketable title thereto, and had full right to transfer and sell the
Mortgage Loan and the related servicing rights to the Depositor free and clear
of any encumbrance, equity, 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 the Mortgage Loan and the
related servicing rights to the Depositor pursuant to the terms of this
Agreement. Immediately following the conveyance of the Mortgage Loans by the
Seller to the Depositor and the Depositor to the Trustee, the Trustee (for the
benefit of Certificateholders and the Certificate Insurer, will be the sole
owner and holder of the Mortgage Loans and the related servicing rights free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest.
(N) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (1) in compliance with any and
all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) organized under the laws of such state,
qualified to do business in such state, a federal savings and loan association
or national bank having principal offices in such state or not deemed to be
doing business in such state under applicable law.
(O) The Mortgage Loan is covered by an ALTA lender's title insurance
policy or equivalent form acceptable to the Department of Housing and Urban
Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (I)(1) and (2) above) the Seller (as assignee), its
successors and assigns as to the first priority lien of the Mortgage, if
applicable, in the original principal amount of the Mortgage Loan and against
any loss by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage Note and/or Mortgage providing for
adjustment in the Mortgage Rate and monthly payment. Additionally, such lender's
title insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller (as assignee) is the sole insured of such lender's title insurance
policy, and such lender's title insurance policy is in full force and effect. No
claims have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.
(P) Except as provided in clause (B), immediately prior to the Cut-off
Date, there was no default, breach, violation or event of acceleration existing
under the Mortgage or the Mortgage Note and there was no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration, and the
Seller has not waived any default, breach, violation or event of acceleration.
(Q) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property which are
or may be liens prior to or equal with, the lien of the related Mortgage.
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(R) All improvements which were considered in any appraisal which was
used in determining the Appraised Value of the related Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property.
(S) The Mortgage Loan was originated in compliance with all state and
federal licensing and consumer loan laws and regulations.
(T) The origination, servicing and collection practices with respect to
each Mortgage Note and Mortgage including, the establishment, maintenance and
servicing of the escrow accounts and escrow payments, if any, since origination,
have been conducted in all respects in accordance with the terms of Mortgage
Note and in compliance with all applicable laws and regulations and, unless
otherwise required by law or FNMA/FHLMC standard, in accordance with the proper,
prudent and customary practices in the mortgage origination and servicing
business. With respect to the escrow accounts and escrow payments, if any, all
such payments are in the possession or under the control of the Seller and there
exists no deficiencies in connection therewith for which customary arrangements
for repayment thereof have not been made. No escrow deposits or escrow payments
or other charges or payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note. All Mortgage Rate adjustments have been
made in strict compliance with state and federal law and the terms of the
related Mortgage Note. Any interest required to be paid pursuant to state and
local law has been properly paid and credited.
(U) The Mortgaged Property is free of material damage and waste and
there is no proceeding pending for the total or partial condemnation thereof.
(V) The Mortgage contains customary and enforceable provisions to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940.
(W) The Mortgage Note is not and has not been secured by any collateral
except the lien of the applicable Mortgage.
(X) The Mortgage File contains an appraisal of the Mortgaged Property
signed prior to the approval of the Mortgage Loan application by an appraiser
who meets the minimum requisite qualifications of FNMA and FHLMC for appraisers,
duly appointed by the Originator, who had no interest, direct or indirect, in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan; the appraisal is in a form acceptable to FNMA and FHLMC, with such riders
as are acceptable to FNMA and FHLMC.
(Y) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Certificateholders
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to the trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor.
(Z) No Mortgage Loan contains a permanent or temporary "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature.
(AA) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of the Mortgage Loan. The Seller has
maintained or caused to be maintained all such statements in the Mortgage File.
(BB) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property.
(CC) To the best of Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law and all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities.
(DD) The assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located.
(EE) Any future advances made to the Mortgagor prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first or second
lien priority, as applicable, by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to FNMA and FHLMC. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan.
(FF) [Reserved].
(GG) The Mortgaged Property consists of a single parcel of real
property with a detached single family residence erected thereon, or an
individual condominium unit, or a 2-4 family dwelling or an individual unit in a
planned unit development as defined by FNMA, none of which is a mobile home, or
if a manufactured dwelling such manufactured dwelling conforms with FNMA and
FHLMC requirements regarding such dwellings, is permanently affixed to the
Mortgaged Property, and is legally classified as real estate.
(HH) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.
(II) With respect to the Adjustable Rate Mortgage Loans, on each
Adjustment Date, the Mortgage Rate shall be adjusted to equal the Index plus the
Gross Margin (rounded up or down to the nearest 0.125%), subject to the Periodic
Rate Cap and the Maximum Mortgage Rate as
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set forth in the respective Mortgage Note. No Mortgage Loans in any Mortgage
Loan Group are subject to Negative Amortization. None of the Mortgage Loans
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable rate mortgage loan to a fixed rate mortgage loan. The principal and
interest due on each Mortgage Loan is calculated pursuant to the standard
amortization method (30/360 day interest accrual).
(JJ) Each Mortgage Loan at the time of origination was underwritten in
accordance with the guidelines as set forth in the Prospectus Supplement, and to
the extent not inconsistent therewith, generally accepted sub-prime credit
underwriting guidelines.
(KK) No error, omission, misrepresentation, fraud or similar occurrence
with respect to a Mortgage Loan has taken place on the part of the Seller, the
Originator, any appraiser of the Mortgage Loan or related Mortgaged Property,
the borrower or any other party involved in the origination of such Mortgage
Loan.
(LL) The Seller has caused and will cause to be performed any and all
acts required to be performed to preserve the rights and remedies of the Trustee
in any insurance policies applicable to each Mortgage Loan, including any
necessary notifications of insurers, assignments of policies or interests
therein, and establishment of co-insured, joint loss payee and mortgagee rights
in favor of the Trustee.
(MM) With respect to each Mortgage Loan secured by a second lien on the
Mortgaged Property, either (A) no consent for such Mortgage Loan was required by
the holder of the related first lien prior to the making of such Mortgage Loan
or (B) such consent has been obtained and is contained in the related Mortgage
File.
(NN) With respect to each Adjustable Rate Mortgage Loan, all of the
terms of the Mortgage pertaining to interest rate adjustments, payment
adjustments and adjustments of the outstanding principal balance are
enforceable; such adjustments will not affect the priority of the Mortgage Lien
and all of the adjustments have been properly calculated, recorded, reported and
applied in accordance with the Mortgage and applicable law.
(OO) All insurance policies, other than any primary mortgage insurance
policies purchased by the Seller or Servicer or any of its affiliates, are the
valid and binding obligation of the insurer and contain a standard mortgagee
clause naming the originator, its successors and assigns, as mortgagee. Such
insurance policies require prior notice to the insured of termination or
cancellation and no such notice has been received, each Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and
expense and upon the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor.
(PP) None of the Mortgage Loans is subject to a plan of bankruptcy and
no Mortgagor has sought protection or relief under any state or federal
bankruptcy or insolvency law during the term of the related Mortgage.
(c) Except as otherwise provided in Section 2.03(e), upon discovery by
any of the parties hereto of a breach of a representation or warranty set forth
in Section 2.03(a) or (b) that materially and adversely affects the value of any
Mortgage Loan or the interests of the
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Certificateholders or the Certificate Insurer in any Mortgage Loan, the party
discovering such breach shall give prompt notice thereof to the other parties.
Each of the Master Servicer and the Seller (each, a "Representing Party") hereby
covenants with respect to the representations and warranties set forth in
Sections 2.03(a) and (b), respectively, that within 90 days of the earlier of
the discovery by such Representing Party or receipt of written notice by such
Representing Party from any party of a breach of any representation or warranty
set forth herein made that materially and adversely affects the value of any
Mortgage Loan or the interests of the Certificateholders or the Certificate
Insurer in any Mortgage Loan, it shall cure such breach in all material respects
and, if such breach is not so cured, shall, (i) if such 90-day period expires
prior to the second anniversary of the Closing Date, remove such Mortgage Loan
(a "Deleted Mortgage Loan") from the Trust Fund and substitute in its place a
Replacement Mortgage Loan, in the manner and subject to the conditions set forth
in this Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans
from the Trustee at the Purchase Price in the manner set forth below; provided
that any such substitution pursuant to (i) above or repurchase pursuant to (ii)
above shall not be effected prior to the delivery to the Trustee and the
Certificate Insurer of the Opinion of Counsel required by Section 2.05 hereof
and any such substitution pursuant to (i) above shall not be effected prior to
the additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit N. Any Representing Party liable for a breach under this
Section 2.03 shall promptly reimburse the Master Servicer and the Trustee for
any expenses reasonably incurred by the Master Servicer or the Trustee in
respect of enforcing the remedies for such breach. To enable the Master Servicer
to amend the Mortgage Loan Schedule, any Representing Party liable for a breach
under this Section 2.03 shall, unless it cures such breach in a timely fashion
pursuant to this Section 2.03, promptly notify the Master Servicer whether such
Representing Party intends either to repurchase, or to substitute for, the
Mortgage Loan affected by such breach. With respect to the representations and
warranties described in this Section that are made to the best of the
Representing Party's knowledge, if it is discovered by any of the Depositor, the
Master Servicer, the Seller, the Certificate Insurer or the Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan or the
interests of the Certificateholders or the Certificate Insurer in any Mortgage
Loan, notwithstanding the Representing Party's lack of knowledge with respect to
the substance of such representation or warranty, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders and the Certificate Insurer the related
Mortgage Note, Mortgage and assignment of the Mortgage, and such other documents
and agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. No substitution will be
made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
Seller delivering such Replacement Loan on such Distribution Date. For the month
of substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for the related Due Period and
thereafter the Seller shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Master Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders and the
Certificate Insurer to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Replacement Mortgage Loan or Loans and the Master Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee.
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Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the Representing Party the Mortgage File relating to such Deleted Mortgage
Loan and held for the benefit of the Certificateholders and the Certificate
Insurer and shall execute and deliver at the Master Servicer's direction such
instruments of transfer or assignment as have been prepared by the Master
Servicer, in each case without recourse, as shall be necessary to vest in the
Seller, or its respective designee, title to the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of all such Deleted Mortgage
Loans. An amount equal to the aggregate of the deficiencies described in the
preceding sentence (such amount, the "Substitution Adjustment Amount") shall be
deposited into the Certificate Account by the Seller delivering such Replacement
Mortgage Loan on the Determination Date for the Distribution Date relating to
the Prepayment Period during which the related Mortgage Loan became required to
be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders and the Certificate Insurer to such Seller, and the Trustee
shall execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and the Certificate Insurer and transfer the Trustee's
interest to such Seller to any Mortgage Loan purchased pursuant to this Section
2.03. It is understood and agreed that the obligation under this Agreement of
the Seller to cure, repurchase or replace any Mortgage Loan as to which a breach
has occurred and is continuing shall constitute the sole remedy against the
Seller respecting such breach available to Certificateholders, the Depositor or
the Trustee.
(d) The representations and warranties set forth in Section 2.03 hereof
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders and the Certificate Insurer.
(e) With respect to any Mortgage Loan that the Representing Party is
required to repurchase pursuant to either Section 2.02 or Section 2.03 of this
Agreement that is or becomes a Liquidated Loan, in lieu of repurchasing such
Mortgage Loan, the Representing Party shall deposit in the Certificate Account
an amount equal to the amount of the Realized Loss, if any, incurred in
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connection with the liquidation of such Mortgage Loan within the same time
period in which the Representing Party would have otherwise been required to
repurchase such Mortgage Loan.
Section 2.04. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer,
the Certificate Insurer, and the Trustee as follows, as of the date hereof and
as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized, by
all necessary corporate action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject, as
to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Depositor and will not (A) result in a material
breach of any term or provision of the charter or by-laws of the Depositor
or (B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Depositor is a party or
by which it may be bound or (C) constitute a material violation of any
statute, order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Depositor's ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Depositor to perform its obligations under
this Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the
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transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee and the
Certificate Insurer with respect to each Mortgage Loan as of the Closing Date,
and following the transfer of the Mortgage Loans to it by the Seller, the
Depositor had good title to the Mortgage Loans and the Mortgage Notes were
subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in the two immediately preceding paragraphs shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee of
a breach of any of the foregoing representations and warranties set forth in the
immediately preceding paragraph (referred to herein as a "breach"), which breach
materially and adversely affects the value of any Mortgage Loan or the interest
of the Certificateholders or the Certificate Insurer, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
The Depositor hereby covenants with respect to the representations and
warranties made by it in this Section 2.04 that within 90 days of the earlier of
the discovery it or receipt of written notice by it from any party of a breach
of any representation or warranty set forth herein made that materially and
adversely affects the value of any Mortgage Loan or the interests of the
Certificateholders or the Certificate Insurer in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
shall repurchase or replace the affected Mortgage Loan or Loans in accordance
with the procedure set forth in Section 2.03(c).
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee and the Certificate Insurer an Opinion of
Counsel, addressed to the Trustee and the Certificate Insurer, to the effect
that such repurchase or substitution would not (i) result in the imposition of
the tax on "prohibited transactions" of the Trust Fund or contributions after
the Closing Date, as defined in sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii) cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default
or imminent default with respect to such loan and (b) receipt by the Trustee and
the Certificate Insurer of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
The Master Servicer and Seller, as the Representing Party, hereby
agrees to make reasonable efforts to cause the Opinion of Counsel contemplated
by this Section to be delivered to the Trustee and the Certificate Insurer prior
to the time it is required to repurchase a Mortgage Loan pursuant to this
Section. In the event the Master Servicer or the Seller fails to deliver such
Opinion of Counsel, any other party hereto or the Certificate Insurer may cause
such opinion to be delivered, at the cost of the Seller.
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(b) Upon discovery by the Depositor, the Seller, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 86OG(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties and the Certificate Insurer. In
connection therewith, the Trustee shall require the Seller, at the Seller's
option, to either (i) substitute, if the conditions in Section 2.03(b) with
respect to substitutions are satisfied, a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.
Section 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and the Certificate Insurer and to perform the duties set forth in
this Agreement to the best of its ability, to the end that the interests of the
Holders of the Certificates and the Certificate Insurer may be adequately and
effectively protected.
Section 2.07. Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor, the Trustee and
the Certificate Insurer as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements
of the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by the Master
Servicer pursuant to this Agreement will contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading.
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ARTICLE III.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders and the Certificate
Insurer, the Master Servicer shall service and administer the Mortgage Loans in
accordance with customary and usual standards of practice of prudent mortgage
loan lenders in the respective states in which the Mortgaged Properties are
located. In connection with such servicing and administration, the Master
Servicer shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.02 hereof, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders, the Certificate Insurer and the Trustee, customary
consents or waivers and other instruments and documents, (ii) to consent to
transfers of any Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages (but only in the manner provided in this Agreement), (iii) to
collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) subject
to Section 3.12(a), to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan; provided that
the Master Servicer shall take no action that is inconsistent with or prejudices
the interests of the Trust Fund, the Certificate Insurer or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Certificate Insuer or the Trustee under this Agreement. The
Master Servicer shall represent and protect the interest of the Trust Fund in
the same manner as it currently protects its own interest in mortgage loans in
its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan and shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause the Trust Fund to fail to qualify as
a REMIC or result in the imposition of any tax under Section 860(a) or 860(d) of
the Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or in the name
of the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Master Servicer believes it appropriate in
its reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders, or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders and the Certificate Insurer. The Master Servicer shall
prepare and deliver to the Depositor and/or the Trustee such documents requiring
execution and delivery by any or all of them as are necessary or appropriate to
enable the Master Servicer to service and administer the Mortgage Loans. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Master Servicer.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums
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shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balance under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to the
Trustee and the Certificate Insurer by the Closing Date.
Section 3.02. Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) With the consent of the Certificate Insurer, the Master Servicer
may arrange for the subservicing of any Mortgage Loan by a subservicer (each, a
"Subservicer") pursuant to a subservicing agreement (each, a "Subservicing
Agreement"); provided that such subservicing arrangement and the terms of the
related subservicing agreement must provide for the servicing of such Mortgage
Loans in a manner consistent with the servicing arrangements contemplated
hereunder. Notwithstanding the provisions of any subservicing agreement, any of
the provisions of this Agreement relating to agreements or arrangements between
the Master Servicer or a subservicer or reference to actions taken through a
Master Servicer or otherwise, the Master Servicer shall remain obligated and
liable to the Depositor, the Trustee, the Certificate Insurer and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. Every subservicing
agreement entered into by the Master Servicer shall contain a provision giving
the successor Master Servicer the option to terminate such agreement in the
event a successor Master Servicer is appointed. All actions of each subservicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Master Servicer with the same force and effect as if performed
directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
Section 3.03. Rights of the Depositor, the Trustee in Respect of the
Master Servicer.
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Master Servicer, and none of
them is obligated to supervise the performance of the Master Servicer hereunder
or otherwise except as provided herein.
Section 3.04. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default), the
Trustee or another successor Master Servicer designated by the Certificate
Insurer shall thereupon assume all of the rights and obligations of the Master
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Master Servicer pursuant to Section 3.10 hereof or any
acts or omissions of the predecessor Master Servicer hereunder, (ii) obligated
to effectuate repurchases or substitutions of
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Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iii) responsible for expenses of the Master Servicer pursuant to Section 2.03,
or (iv) deemed to have made any representations and warranties hereunder,
including pursuant to Section 2.03 or the first paragraph of Section 6.02
hereof. If the Master Servicer shall for any reason no longer be the Master
Servicer (including by reason of any Event of Default), the Trustee (or any
other successor servicer designated by the Certificate Insurer) may, at its
option, succeed to any rights and obligations of the Master Servicer under any
subservicing agreement in accordance with the terms thereof; provided that the
Trustee (or any other successor servicer designated by the Certificate Insurer)
shall not incur any liability or have any obligations in its capacity as
servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Master Servicer thereunder; and the Master Servicer shall not thereby be
relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05. Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account.
(a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or penalty interest (other than a Prepayment Charge) in connection with
the prepayment of a Mortgage Loan and (ii) extend the due dates for payments due
on a Mortgage Note for a period not greater than 120 days; provided that any
such modification, waiver or extension for any Mortgage Loan shall be permitted
only once per 12 month period, not to exceed three times in the aggregate,
unless otherwise agreed to by the Certificate Insurer. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan during the scheduled period in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangements,
and shall be entitled to reimbursement therefor in accordance with Section 4.01.
The Master Servicer shall not be required to institute or join in litigation
with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment is
required is prohibited by applicable law. In addition, if (x) the Mortgage Loan
is in default or default is imminent or (y) the Master Servicer delivers to the
Trustee and the Certificate Insurer a certification, based on the advice of
counsel or certified public accountants, in either case, that have a national
reputation with respect to taxation of REMICs, that a modification of a Mortgage
Loan will not result in the imposition of taxes on or disqualify, any REMIC
formed hereunder, the Master Servicer may, (A) amend any Mortgage Note to reduce
the Mortgage Rate applicable thereto, provided that, such reduced Mortgage Rate
shall always be greater than the weighted average Pass-Through Rate and Expense
Fee Rate for the related Classes of Certificates and (B) amend any
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Mortgage Note to extend to the maturity thereof, provided that, no maturity
shall be extended beyond the maturity date of the Mortgage Loan in the related
Loan Group with the latest maturity date and that no more than 5.0% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans shall be modified
or extended by the Master Servicer without the consent of the Certificate
Insurer; provided, further, that any reduction of a Mortgage Rate shall be
conditioned upon (i) the Master Servicer having first completed its customary
economic analysis with respect to the related Mortgage Note, which economic
analysis the Master Servicer shall deliver to the Certificate Insurer, upon
request of the Certificate Insurer and (ii) the related borrower having made six
consecutive payments at the modified rate prior to such rate reduction being
deemed effective.
(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited on
a daily basis within one Business Day of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-off Date) and the following amounts required
to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans net of
the related Servicing Fee permitted under Section 3.15, and the Initial
Certificate Account Deposit;
(iii) all Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Master Servicer pursuant
to Section 3.05(e) in connection with any losses on Permitted Investments;
(vi) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment Amount;
(viii) all Advances made by the Master Servicer pursuant to Section
4.01;
(ix) all Prepayment Charges collected by the Master Servicer; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer into
the Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Master Servicer. In the event that the Master Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the institution
maintaining the Certificate Account, to
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withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the institution maintaining the Certificate
Account, that describes the amounts deposited in error in the Certificate
Account. The Master Servicer shall maintain adequate records with respect to all
withdrawals made pursuant to this Section. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders and the
Certificate Insurer until withdrawn in accordance with Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders and the Certificate Insurer, the Distribution Account. On the
Closing Date, the Class P Deposit shall be deposited into the Distribution
Account. The Trustee shall, promptly upon receipt, deposit in the Distribution
Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer pursuant to
the second paragraph of Section 3.08(a); and
(ii) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments.
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In the
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering a written notice to the Trustee that
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trustee in trust for
the Certificateholders and the Certificate Insurer until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Distribution Account
at the direction of the Master Servicer.
(d) [Reserved.]
(e) Each institution that maintains the Certificate Account, the
Distribution Account or the Adjustable Rate Carryover Reserve Fund shall invest
the funds in each such account (other than the Class P Deposit), as directed by
the Master Servicer, in Permitted Investments, which shall mature not later than
(i) in the case of the Certificate Account, the second Business Day next
preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Certificate Account, then such Permitted Investment shall mature not later than
the Business Day next preceding such Distribution Account Deposit Date) and (ii)
in the case of the Distribution Account and the Adjustable Rate Carryover
Reserve Fund, the Business Day immediately preceding the first Distribution Date
that follows the date of such investment (except that if such Permitted
Investment is an obligation of the institution that maintains such Distribution
Account or Adjustable Rate Carryover Reserve Fund, then such Permitted
Investment shall mature not later than such Distribution Date) and, in each
case, shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders and the Certificate Insurer, except in connection with
Permitted Investments made with respect to funds in the Adjustable Rate
Carryover Reserve Fund which shall be made in the name of the Trustee, for the
benefit of the Class AV
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Certificateholders. In the case of the Certificate Account and the Distribution
Account, all income and gain net of any losses realized from any such investment
shall be for the benefit of the Master Servicer as servicing compensation and
shall be remitted to it monthly as provided herein. The amount of any losses
incurred in the Certificate Account or the Distribution Account in respect of
any such investments shall be deposited by the Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account, as applicable, out of the Master Servicer's own funds immediately as
realized. The Trustee shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Certificate
Account or the Distribution Account and made in accordance with this Section
3.05.
(f) The Master Servicer shall give at least 30 days advance notice to
the Trustee, the Seller, each Rating Agency, the Certificate Insurer, and the
Depositor of any proposed change of location of the Certificate Account prior to
any change thereof. The Trustee shall give at least 30 days advance notice to
the Master Servicer, the Seller, each Rating Agency, the Certificate Insurer and
the Depositor of any proposed change of the location of the Distribution Account
prior to any change thereof.
Section 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
Section 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor, the Certificate Insurer
and the Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance policies and other matters relating
to this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it.
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Section 3.08. Permitted Withdrawals from the Certificate Account and
Distribution Account.
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously paid to
or withheld by the Master Servicer), as servicing compensation in
accordance with Section 3.15, that portion of any payment of interest that
equals the Servicing Fee for the period with respect to which such interest
payment was made, and, as additional servicing compensation, those other
amounts set forth in Section 3.15;
(ii) to reimburse the Master Servicer for Advances made by it with
respect to the Mortgage Loans, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds) that represent
late recoveries of payments of principal and/or interest on such particular
Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse the Master Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(v) to pay the Master Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, the Master Servicer's
right to reimbursement of Servicing Advances pursuant to this subclause (v)
with respect to any Mortgage Loan being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant to
Section 3.01 or Section 3.06;
(vi) to pay to the Seller, the Depositor or the Master Servicer, as
applicable, with respect to each Mortgage Loan or property acquired in
respect thereof that has been purchased pursuant to Section 2.02, 2.03 or
3.12, all amounts received thereon and not taken into account in
determining the related Stated Principal Balance of such repurchased
Mortgage Loan;
(vii) to reimburse the Seller, the Master Servicer or the Depositor for
expenses incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 6.03 hereof provided that
such amount shall only be withdrawn following the withdrawal from the
Certificate Account for deposit into the Distribution Account pursuant to
the following paragraph;
(viii) to withdraw pursuant to Section 3.05 any amount deposited in the
Certificate Account and not required to be deposited therein; and
(ix) to clear and terminate the Certificate Account upon termination of
this Agreement pursuant to Section 9.01 hereof.
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In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the amount of Fixed Rate Interest Funds, Fixed
Rate Principal Funds, Adjustable Rate Interest Funds, Adjustable Rate Principal
Funds and the Prepayment Charges collected, to the extent on deposit, and the
Trustee shall deposit such amount in the Distribution Account.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (iv),
(v), (vi), (vii), (viii) and (ix) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distribution to the Certificateholders and the Certificate Insurer in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn, the
amount of any taxes that it is authorized to retain pursuant to the last
paragraph of Section 8.11). In addition, the Trustee may from time to time make
withdrawals from the Distribution Account for the following purposes:
(i) to pay itself the Trustee Fee for the related Distribution Date;
(ii) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in or
credited to the Distribution Account;
(iii) to withdraw pursuant to Section 3.05 any amount deposited in the
Distribution Account and not required to be deposited therein; and
(iv) to clear and terminate the Distribution Account upon termination
of the Agreement pursuant to Section 9.01 hereof.
Section 3.09. [Reserved.]
Section 3.10. Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance on buildings upon, or comprising part of, the Mortgaged
Property against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
with an insurer which is licensed to do business in the state where the
Mortgaged Property is located. Each such policy of standard hazard insurance
shall contain, or have an accompanying endorsement that contains, a standard
mortgagee clause. The Master Servicer shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any Mortgage Loan, to the extent described below. Pursuant to Section 3.05
hereof, any amounts collected by the Master Servicer under any such policies
(other than the amounts to be applied to the restoration or repair of the
related Mortgaged Property or property thus acquired or amounts released to the
Mortgagor in accordance with the Master Servicer's normal servicing procedures)
shall be deposited in the Certificate Account. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating monthly
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distributions to the Certificateholders or Certificate Insurer or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the Stated Principal Balance of the related Mortgage Loan, (ii)
minimum amount required to compensate for damage or loss on a replacement cost
basis, or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.
In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section 3.10, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Master Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section 3.10, and there shall
have been a loss that would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Such deposit shall constitute a Servicing
Advance. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders and the
Certificate Insurer, claims under any such blanket policy.
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note
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and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer enters such agreement) by the applicable
Required Insurance Policies. The Master Servicer, subject to Section 3.11(b), is
also authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with such
Person, pursuant to which the original Mortgagor is released from liability and
such Person is substituted as Mortgagor and becomes liable under the Mortgage
Note. Notwithstanding the foregoing, the Master Servicer shall not be deemed to
be in default under this Section 3.11(a) by reason of any transfer or assumption
that the Master Servicer reasonably believes it is restricted by law from
preventing.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Rate, the Minimum Rate, the Gross Margin, the Periodic Rate
Cap, the Adjustment Date and any other term affecting the amount or timing of
payment on the Mortgage Loan) may be changed. In addition, the substitute
Mortgagor and the Mortgaged Property must be acceptable to the Certificate
Insurer and to the Master Servicer in accordance with its servicing standards as
then in effect. The Master Servicer shall notify the Trustee and Certificate
Insurer that any such substitution or assumption agreement has been completed by
forwarding to the Trustee and the Certificate Insurer the original of such
substitution or assumption agreement, which in the case of the original shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Any fee collected by the Master
Servicer for entering into an assumption or substitution of liability agreement
will be retained by the Master Servicer as additional servicing compensation.
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of
Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the
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proceeds of liquidation of the Mortgage Loan after reimbursement to itself of
such expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Certificate Account pursuant to Section 3.08 hereof). If
the Master Servicer reasonably believes that Net Liquidation Proceeds with
respect to any such Mortgage Loan would not be increased as a result of such
foreclosure or other action, such Mortgage Loan will be charged-off and will
become a Liquidated Mortgage Loan. The Master Servicer will give notice of any
such charge-off to the Trustee. The Master Servicer shall be responsible for all
other costs and expenses incurred by it in any such proceedings; provided that
such costs and expenses shall be Servicing Advances and that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Master Servicer has knowledge that a Mortgaged Property that the Master Servicer
is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Master Servicer, the Master Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
and the Certificate Insurer (or the Trustee's nominee on behalf of the
Certificateholders and the Certificate Insurer). The Trustee's name shall be
placed on the title to such REO Property solely as the Trustee hereunder and not
in its individual capacity. The Master Servicer shall ensure that the title to
such REO Property references this Agreement and the Trustee's capacity
thereunder. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall either itself or through an agent selected by the Master Servicer
protect and conserve such REO Property in the same manner and to such extent as
is customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Certificateholders and the Certificate Insurer, rent the same, or any part
thereof, as the Master Servicer deems to be in the best interest of the Master
Servicer, the Certificateholders and the Certificate Insurer for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each REO Property that
has been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Certificate Account no later
than the close of business on each Determination Date. The Master Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property
prior to three years after its acquisition by the Trust Fund or, at the expense
of the Trust Fund, request more than 60 days prior to the day on which such
three-year period would otherwise expire, an extension of the three-year grace
period unless the Trustee shall have been supplied with an Opinion of Counsel
(such opinion not to be an expense of the Trustee) to the effect that the
holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as defined in section 860F of the Code or cause
the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding, in which case the Trust Fund may continue
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to hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust
Fund to the imposition of any federal, state or local income taxes on the income
earned from such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless the Master Servicer has agreed to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding, net of
reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee
paid or to be paid with respect to the management of such Mortgaged Property,
shall be applied to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Certificate Account. To
the extent the income received during a Prepayment Period is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Certificate Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Distribution Date, except that
any Excess Proceeds shall be retained by the Master Servicer as additional
servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the first day of the month in
which such amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan.
(b) On each Determination Date, the Master Servicer shall determine the
respective aggregate amounts of Excess Proceeds and Realized Losses, if any, for
the related Prepayment Period.
(c) The Master Servicer, in its sole discretion, shall have the right
to elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage
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Loan that is 91 days or more delinquent at a price equal to the Purchase Price.
Any such purchases shall not exceed, in the aggregate, 3% per annum of the
Stated Principal Balance of the Mortgage Loans in the Mortgage Pool, unless
otherwise agreed to by the Certificate Insurer. Unless otherwise agreed to by
the Certificate Insurer, such Mortgage Loans purchased hereby, shall only be
purchased in the order of the most delinquent Mortgage Loan to the least
delinquent Mortgage Loan. The Purchase Price for any Mortgage Loan purchased
hereunder shall be delivered to the Trustee for deposit in the Certificate
Account and the Trustee, upon receipt of such deposit and a Request for Release
from the Master Servicer in the form of Exhibit N hereto, shall release or cause
to be released to the purchaser of such Mortgage Loan the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan, in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and
documents, free of any further obligation to the Trustee, the Certificateholders
or the Certificate Insurer with respect thereto. The Master Servicer shall
provide to the Certificate Insurer such information regarding the ultimate
disposition of any delinquent Mortgage Loan purchased by it pursuant to this
subsection as the Certificate Insurer may reasonably request.
(d) The Master Servicer has no intent to foreclose on any Mortgage Loan
based on the delinquency characteristics as of the Closing Date; provided, that
the foregoing does not prevent the Master Servicer from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Master Servicer's
discretion so warrant such action.
Section 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Trustee by delivering a Request for Release substantially in the form of Exhibit
N. Upon receipt of such request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer, and the Trustee shall at the Master
Servicer's direction execute and deliver to the Master Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by the
Master Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account, the Distribution Account, or the related subservicing account. From
time to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee shall,
upon delivery to the Trustee of a Request for Release in the form of Exhibit M
signed by a Servicing Officer, release the Mortgage File to the Master Servicer.
Subject to the further limitations set forth below, the Master Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
when the need therefor by the Master Servicer no longer exists,
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unless the Mortgage Loan is liquidated and the proceeds thereof are deposited in
the Certificate Account, in which case the Trustee shall deliver the Request for
Release to the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Trustee to be returned to the Trustee within 21 calendar days
after possession thereof shall have been released by the Trustee unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account, and the Master
Servicer shall have delivered to the Trustee a Request for Release in the form
of Exhibit N or (ii) the Mortgage File or document shall have been delivered to
an attorney or to a public trustee or other public official as required by law
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property and the Master Servicer shall have
delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.
Section 3.14. Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account or in any Escrow Account (as defined in Section 3.06), or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Master
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Master Servicer under this
Agreement.
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Section 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.
Section 3.16. Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Master Servicer designated by it.
Nothing in this Section shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.17. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee on
or before March 31 of each year commencing March 31, 2001, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of the
performance of the Master Servicer under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Subservicer has fulfilled all its obligations under
its Subservicing Agreement throughout such year, or, if there has been a default
in the fulfillment of any such obligation specifying each such default known to
such officer and the nature and status thereof. The Trustee shall forward a copy
of each such statement to each Rating Agency and the Certificate Insurer. Copies
of such statement shall be provided by the Trustee to any Certificateholder upon
request at the Master Servicer's expense, provided such statement is delivered
by the Master Servicer to the Trustee.
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Section 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 31 of each year, beginning with March 31, 2001, the
Master Servicer at its expense shall cause a nationally recognized firm of
independent public accountants (who may also render other services to the Master
Servicer, the Seller or any affiliate thereof) that is a member of the American
Institute of Certified Public Accountants to furnish a report to the Trustee,
Depositor and the Seller in compliance with the Uniform Single Attestation
Program for Mortgage Bankers. Copies of such report shall be provided by the
Trustee to the Certificate Insurer and any Certificateholder upon request at the
Master Servicer's expense, provided such report is delivered by the Master
Servicer to the Trustee.
Section 3.19. Payments on the Certificate Insurance Policy.
(a) The Trustee will establish and maintain the Policy Payments Account
as a separate special purpose trust account for the benefit of the Offered
Certificateholders and the Certificate Insurer. The Trustee shall deposit or
cause to be deposited any Insured Payments paid under the Certificate Insurance
Policy and received by the Trustee in the Policy Payments Account and distribute
such amounts only for the purpose of payment to the related Offered
Certificateholders of the related Insured Payments and such amounts may not be
used to satisfy any costs, expenses or liabilities of the Master Servicer, the
Trustee or the Trust Fund. Insured Payments deposited in the Policy Payments
Account shall not be invested in Permitted Investments or otherwise, and shall
be transferred to the Distribution Account on the related Distribution Date and
disbursed by the Trustee to the related Offered Certificateholders in accordance
with Section 4.04.
As soon as possible, and in no event later than 9:00 a.m. (Los Angeles
time) on the third Business Day immediately preceding the related Distribution
Date, the Trustee shall determine whether a Deficiency Amount is required to be
paid under the Certificate Insurance Policy with respect to such Distribution
Date and, if so, shall immediately notify the Master Servicer and the
Certificate Insurer by telephone, which notice shall be confirmed in writing by
facsimile transmission, of the Trustee's intention so to file the applicable
Notice of Claim. If by the close of business in Los Angeles on such date a
Deficiency Amount is still required to be paid under the Certificate Insurance
Policy with respect to such Distribution Date, the Trustee shall furnish the
Certificate Insurer (or an agent of the Certificate Insurer designated to the
Trustee in writing) with a completed Notice of Claim in respect of such
Deficiency Amount by 12:00 noon New York City time on the next succeeding
Business Day and shall provide a copy thereof to the Master Servicer at or prior
to the time such Notice of Claim is received by the Certificate Insurer. The
Notice of Claim shall constitute a claim therefor pursuant to the Certificate
Insurance Policy. In the event any funds are received by the Trustee from the
Master Servicer prior to the close of business in Los Angeles on the Business
Day following the transmission of a Notice of Claim to the Certificate Insurer
(or an agent of the Certificate Insurer designated to the Trustee in writing),
and such funds reduce the amount of the Deficiency Amount to which such Notice
of Claim relates, the Deficiency Amount to which such Notice of Claim relates
shall be reduced by a corresponding amount, and the Notice of Claim shall be
deemed to have been rescinded to the extent of the reduction of the Deficiency
Amount. Notification of any such reduction in the Insured Payment shall be given
to the Certificate Insurer (or an agent of the Certificate Insurer designated to
the Trustee in writing) by the Trustee by no later than 9:00 A.M., New York
time, on the related Distribution Date. The Certificate Insurer
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shall pay amounts due pursuant to the Certificate Insurance Policy in accordance
with the terms of the Certificate Insurance Policy.
(b) The Trustee shall, as necessary, make a claim on the Certificate
Insurance Policy in respect of Preference Amounts in accordance with the terms
of the Certificate Insurance Policy.
(c) The Trustee shall receive, as attorney-in-fact for each Offered
Certificateholder, any Insured Payment allocable to such Offered Certificates,
from the Certificate Insurer and disburse the same in accordance with the
provisions of Section 4.04. Any portion of the distributions made by the Trustee
in respect of any Insured Payment, from proceeds of the Certificate Insurance
Policy shall not be considered payment by the Trust, nor shall such payments
discharge the obligation of the Trust with respect to such Offered
Certificateholders, and the Certificate Insurer shall become the owner of such
unpaid amounts in respect of such Offered Certificates. The Certificate Insurer
shall, to the extent it makes any distribution with respect to the Offered
Certificates, become subrogated to the rights of the recipients of such payments
in accordance with the terms of the Certificate Insurance Policy. The Trust Fund
shall not be discharged from its obligations hereunder upon payment of principal
of an interest on the Offered Certificates by the Certificate Insurer under the
Certificate Insurance Policy.
(d) The Trustee shall be entitled to enforce on behalf of the Offered
Certificateholders the obligations of the Certificate Insurer under the
Certificate Insurance Policy. The Offered Certificateholders are not entitled to
institute proceedings directly against the Certificate Insurer. The Trustee
shall promptly notify Financial Security of any proceeding or the institution of
any action seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (a
"Preference Claim") of any distribution made with respect to the Offered
Certificates. Each Offered Certificateholder, by its purchase of Offered
Certificates, the Master Servicer and the Trustee hereby agree that so long as a
Certificate Insurer Default shall not have occurred and be continuing, the
Certificate Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to any Preference Claim and (ii) the posting of any surety,
supersedeas or performances bond pending any such appeal at the expense of the
Certificate Insurer but subject to reimbursement as provided in the Insurance
Agreement. In addition, and without limitation of the foregoing, as set forth
above in paragraph (c), the Certificate Insurer shall be subrogated to the
rights of the Master Servicer, the Trustee and each Offered Certificateholder,
and each Offered Certificateholder and the Trustee hereby delegate and assign,
to the fullest extent permitted by law, the rights of the Trustee and each
Offered Certificateholder in the conduct of any proceeding with respect to a
Preference Claim, including without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
(e) The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Offered Certificate from monies
received under the Certificate Insurance Policy. The Certificate Insurer shall
have the right to inspect such records at reasonable times during normal
business hours upon one Business Day's notice to the Trustee.
(f) Subject to and conditioned upon payment of any interest or
principal with respect to the Offered Certificates by or on behalf of the
Certificate Insurer, the Trustee shall assign
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to the Certificate Insurer all rights to the payment of interest or principal
with respect to the Offered Certificates which are then due for payment to the
extent of all payments made by the Certificate Insurer and the Certificate
Insurer may exercise any option, vote, right, power or the like with respect to
Certificates to the extent it has made payment pursuant to the Certificate
Insurance Policy. The Trustee agrees that the Certificate Insurer shall be
subrogated to all of the rights to payment of the Offered Certificateholders of
the Obligations or in relation thereto to the extent that any such payment was
made to such Offered Certificateholders with payments made under the Certificate
Insurance Policy by the Certificate Insurer.
Section 3.20. Rights of the Certificate Insurer to Exercise Rights of
Offered Certificateholders.
By accepting its Certificate, each Offered Certificateholder agrees
that unless a Certificate Insurer Default exists, the Certificate Insurer shall
have the right to exercise all rights of the Offered Certificateholders under
this Agreement without any further consent of the Offered Certificateholders,
including, without limitation:
(i) the right to direct foreclosures upon Mortgage Loans upon failure
of the Master Servicer to do so;
(ii) the right to require the Seller to repurchase or substitute for,
or to require the Master Servicer to purchase, Mortgage Loans pursuant to
Sections 2.05 and 2.09; and
(iii) the right to direct the actions of the Trustee during the
continuance of an Event of Default.
In addition, each Offered Certificateholder agrees that, unless a
Certificate Insurer Default exists, the rights specifically set forth above may
be exercised by the Offered Certificateholders only with the prior written
consent of the Certificate Insurer.
Section 3.21. Trust and Accounts Held for Benefit of the Certificate
Insurer.
The Trustee shall hold the Trust Fund and the Mortgage Files for the
benefit of the Certificateholders and the Certificate Insurer and all references
in this Agreement and in the Certificates to the benefit of Holders of the
Certificates shall be deemed to include the Certificate Insurer.
The Master Servicer hereby acknowledges and agrees that it shall
service and administer the Mortgage Loans and any REO Properties, and shall
maintain the Certificate Account for the benefit of the Certificateholders and
for the benefit of the Certificate Insurer, and all references in this Agreement
to the benefit of or actions on behalf of the Certificateholders shall be deemed
to include the Certificate Insurer.
All notices, statements, reports, certificates or opinions required by this
Agreement to be sent to any other party hereto or to the Certificateholders
shall also be sent to the Certificate Insurer.
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ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.
Subject to the conditions of this Article IV, the Master Servicer, as
required below, shall make an Advance and deposit such Advance in the
Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Master Servicer shall be obligated to make
any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Advance or a lesser portion of
such Advance would constitute a Nonrecoverable Advance, the Master Servicer
shall deliver (i) to the Trustee for the benefit of the Certificateholders and
the Certificate Insurer funds constituting the remaining portion of such
Advance, if applicable, and (ii) to the Depositor, each Rating Agency, the
Trustee and the Certificate Insurer an Officer's Certificate setting forth the
basis for such determination.
In lieu of making all or a portion of such Advance from its own funds,
the Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer from its own funds by
deposit in the Certificate Account no later than the close of business on the
Business Day immediately preceding the Distribution Date on which such funds are
required to be distributed pursuant to this Agreement. The Master Servicer shall
be entitled to be reimbursed from the Certificate Account for all Advances of
its own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.
Section 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall arising from a voluntary Principal Prepayment in full by the
Mortgagor, the Master Servicer shall to the extent of the aggregate Servicing
Fee for such Distribution Date in respect of all of the Mortgage Loans, deposit
into the Certificate Account, no later than the close of business on the third
Business Day immediately preceding such Distribution Date, an amount equal to
the Prepayment Interest Shortfall; provided, however, that the Master Servicer's
obligation to so deposit shall not exceed, in the aggregate for any Distribution
Date, the amount of the Servicing Fee for the related Due Period. If the
aggregate Prepayment Interest Shortfall from voluntary Principal Prepayments in
full of the Mortgage Loans in a Loan Group is less than the portion of the
Servicing Fee attributable to such Loan Group, any Excess Servicing Fee shall,
to the extent necessary, be applied to cover such
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Prepayment Interest Shortfalls in the other Loan Group. In case of any such
deposit, the Master Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Trustee, the Trust Fund, the Certificate
Insurer or the Certificateholders.
Section 4.03. [Reserved].
Section 4.04. Distributions.
(a) On each Distribution Date, the Trustee will withdraw the Interest
Funds and Principal Funds for each Loan Group plus the amount, if any, paid
under the Certificate Insurance Policy with respect to such Loan Group and apply
such amounts in the following order of priority, in each case, to the extent of
the funds remaining:
1. Concurrently, to the Trustee and the Certificate Insurer, the
Trustee Fee and the Certificate Insurer Premium for such Loan Group and
Distribution Date.
2. To the Offered Certificates in the related Certificate Group,
the related Current Interest and any Interest Carry Forward Amount for those
Certificates for such Distribution Date.
3. To the Offered Certificates in the related Certificate Group,
an amount up to the related Principal Remittance Amount in the following order
of priority:
A. Fixed Rate Loan Group:
The related Principal Remittance Amount to the Class AF
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero.
B. Adjustable Rate Loan Group:
The related Principal Remittance Amount to the Class AV
Certificates until the Certificate Principal Balance thereof has been reduced to
zero.
4. To the Certificate Insurer, any amounts owing under the
Insurance Agreement.
5. To the Offered Certificates in the other Certificate Group, the
amount of any applicable Available Funds Shortfall for such other Certificate
Group.
6. To the Offered Certificates in the related Certificate Group,
an amount up to the Extra Principal Distribution Amount for the related
Certificate Group for such Distribution Date, until the related Specified
Overcollateralization Amount is reached.
7. To the Offered Certificates in the other Certificate Group, any
Specified Overcollateralization Amount Deficiency for such other Certificate
Group remaining after the distribution pursuant to clause 6 above.
8. To the Class AV Certificateholders, a payment of any Adjustable
Rate Certificate Carryover.
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9. To the Class IO Certificates, the Class IO Remittance Amount
for such Distribution Date.
10. To the Class IO Certificates, until their principal balance is
reduced to zero.
11. To the Class R Certificates, the remainder (with the amounts
attributable to REMIC 1F being allocated to the Class R-1F Interest, the amounts
attributable to REMIC 1V being allocated to the Class R-1V Interest and the
amounts attributable to REMIC 2 being allocated to the Class R-2 Interest.
(b) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
On or before 5:00 p.m. Pacific time on the 18th day of each month or,
if such 18th day is not a Business Day, on the next preceding Business Day, the
Master Servicer shall deliver a report to the Trustee and the Certificate
Insurer in the form of a computer readable magnetic tape (or by such other means
as the Master Servicer, the Certificate Insurer and the Trustee may agree from
time to time) containing such data and information as agreed to by the Master
Servicer, the Certificate Insurer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee agrees that if shall make the calculations necessary to determine the
distributions on each Distribution Date based on the loan level information
provided to the Trustee. The Trustee shall, provide to the Master Servicer a
monthly Statement of the account activity in the Distribution Account by the
15th day of the month following the Distribution Date.
(c) Distribution of Insured Payments. With respect to any Distribution
Date, in the event of an Insured Payment, the Trustee shall make such payments
from the amount drawn under the Certificate Insurance Policy for such
Distribution Date pursuant to Section 4.04(a). Any Insured Payment not required
to make distributions pursuant to Section 4.04(a) shall be returned to the
Certificate Insurer. The Trustee shall allocate any Insured Payment first to any
Current Interest remaining unpaid after giving effect to all distributions
pursuant to Section 4.04(a) and second to the payment of each Class' applicable
Coverage Deficit.
Amounts to be paid to the Certificate Insurer by the Trustee under
this Agreement will be paid by wire transfer of same day funds.
(d) On each Distribution Date, the Trustee shall make distributions to
the Holders of the Class P Certificates of all Prepayment Charges on deposit in
the Distribution Account with respect to the Mortgage Loans in each Loan Group
during the related Prepayment Period. Such
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Prepayment Charges will not be available for distributions to the Holders of the
other Classes of Certificates and shall not reduce the Class P Certificate
Principal Balance. If at any time the Mortgage Pool balance is $15,000 or less,
the Trustee shall withdraw a portion of the Class P Deposit from the
Distribution Account and apply such amount to the Class P Certificate Principal
Balance such that the remaining Class P Deposit is always less than 0.66% of the
sum of the Mortgage Pool balance and the remaining Class P Deposit. After all of
the Certificates (other than the Class P Certificates) have been paid in full,
the Trustee shall withdraw the remaining Class P Deposit from the Distribution
Account and apply such amount to reduce the Class P Certificate Principal
Balance to zero.
Section 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Certificate Insurer and
the Depositor a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all
scheduled payments of principal included therein and (C) the Fixed Rate
Extra Principal Distribution Amount (if any) and the Adjustable Rate Extra
Principal Distribution Amount (if any);
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) the Class Certificate Principal Balance of each Class after giving
effect (i) to all distributions allocable to principal on such Distribution
Date and (ii) the allocation of any Applied Realized Loss Amounts for such
Distribution Date;
(iv) the aggregate of the Stated Principal Balance of the Mortgage
Loans for each Loan Group for the following Distribution Date;
(v) the related amount of the Servicing Fees paid to or retained by
the Master Servicer;
(vi) the Pass-Through Rate for each Class of Certificates with respect
to the current Accrual Period;
(vii) any Interest Carry Forward Amount for each such Class;
(viii) the amount, if any, of Insured Payments distributable to each
Class of Certificates on such Distribution Date, the Certificate Insurer
Premium paid on such Distribution Date, and the aggregate amount of Insured
Payments, interest thereon and previously unpaid Certificate Insurer
Premiums paid on such Distribution Date and remaining to be paid on such
Distribution Date or any future Distribution Date;
(ix) the amount of Advances for each Certificate Group included in the
distribution on such Distribution Date;
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(x) the cumulative amount of Applied Realized Loss Amounts for each
Certificate Group to date;
(xi) the number and aggregate principal amounts of Mortgage Loans in
each Loan Group (A) delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 30 to 59 days, (2) 60 to 89 days, (3) 90 or more days and (4) in
bankruptcy, and (B) in foreclosure and delinquent (1) 30 to 59 days, (2) 60
to 89 days, (3) 90 or more days and (4) in bankruptcy, in each case as of
the close of business on the last day of the calendar month preceding such
Distribution Date;
(xii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month in each Loan Group, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close of business
on the Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xiii) the total number and principal balance of any REO Properties in
each Loan Group as of the close of business on the Determination Date
preceding such Distribution Date;
(xiv) the Stated Principal Balance of all Liquidated Loans in each
Loan Group and the cumulative Realized Losses for each Loan Group through
the end of the preceding month;
(xv) with respect to any Liquidated Loan in each Loan Group, the loan
number and Stated Principal Balance relating thereto;
(xvi) with respect to each Loan Group, the related
Overcollateralization Amount and Specified Overcollateralization Amount;
and
(xvii) any Adjustable Rate Certificate Carryover paid and any
remaining Adjustable Rate Certificate Carryover remaining on each Class of
Adjustable Rate Certificates on such Distribution Date.
(b) The Trustee's responsibility for disbursing the above information
to the Certificateholders and Certificate Insurer is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer. The Trustee will send a copy of each statement provided pursuant to
this Section 4.05 to each Rating Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificates the Forms 1066 and each Form
1066Q and shall respond
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promptly to written requests made not more frequently than quarterly by any
Holder of Class R Certificates with respect to the following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of the REMIC with respect
to such regular interests or bad debt deductions claimed with respect to
the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the REMIC;
and
(vii) Any taxes (including penalties and interest) imposed on the
REMIC, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06. REMIC 1F, REMIC 1V and REMIC 2 Allocations.
(a) The initial principal balance of the Fixed Rate Marker shall equal
1% of the initial Certificate Principal Balance of the Class AF Certificates
(its "corresponding class"). The initial principal balance of the Class MF
Interest shall equal the Stated Principal Balance of the Fixed Rate Mortgage
Loans as of the Cut-off Date minus the initial principal balances of the Fixed
Rate Marker. On each Distribution Date, 100% of Fixed Rate OC Release Amounts
for the related Due Period shall be allocated to the Class MF Interest. Fixed
Rate Principal Funds shall be allocated to the Fixed Rate Marker in an amount
equal to 1% of the principal distributed on its corresponding class. Remaining
amounts of Fixed Rate Principal Funds for the related Due Period shall be
allocated to the Class MF Interest. Interest accruing on the Class MF Interest
in respect of each Distribution Date in an amount equal to 1% of the amounts
distributed to the Fixed Rate Certificates pursuant to Sections 4.04(a)(6) and
4.04(a)(7) (the "Fixed Rate Turbo") shall be deferred and added to the principal
balance of the Class MF Interest. The amount of interest accrued and deferred on
the Class MF Interest in accordance with the preceding sentence in respect of
each Distribution Date
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shall be distributed as principal on such date to the Fixed Rate Marker.
(b) On each Distribution Date, Realized Losses with respect to the
Fixed Rate Mortgage Loans for such date shall be allocated so that the Fixed
Rate Marker is 1% of the principal balance of its corresponding class. The
remaining amount of such Realized Losses shall be allocated to the Class MV
Interest.
(c) The initial principal balance of the Adjustable Rate Marker shall
equal 1% of the initial Certificate Principal Balances of the Class AV
Certificates (its "corresponding classes"). The initial principal balance of the
Class MV Interest shall equal the Stated Principal Balance of the Adjustable
Rate Mortgage Loans as of the Cut-off Date minus the initial principal balance
of the Adjustable Rate Marker. On each Distribution Date 100% of Adjustable Rate
Amounts for the related Due Period shall be allocated to the Class MV Interest.
Adjustable Rate Principal Funds shall be allocated to the Adjustable Rate Marker
in an amount equal to 1% of the principal distributed on its corresponding
class. Remaining amounts of Adjustable Rate Principal Funds for the related Due
Period shall be allocated to the Class MV Interest. Interest accruing on the
Class MV Interest in respect of each Distribution Date in an amount equal to 1%
of the amounts distributed to the Adjustable Rate Certificate pursuant to
Sections 4.04(f) and 4.04(g) (the "Adjustable Rate Turbo") shall be deferred and
added to the principal balance of the Class MV Interest. The amount of interest
accrued and deferred on the Class MV Interest in accordance with the preceding
sentence in respect of each Distribution Date shall be distributed as principal
on such date to the Adjustable Rate Marker.
(d) On each Distribution Date, Realized Losses with respect to the
Adjustable Rate Mortgage Loans for such date shall be allocated so that the
Fixed Rate Marker is 1% of the principal balance of its corresponding class. The
remaining amount of such Realized Losses shall be allocated to the Class MV
Interest.
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ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:
Integral Original
Multiples Certificate
Minimum in Excess of Principal
Class Denomination Minimum Balance
--------- ------------ ------------ -----------
AF $25,000 $1,000 $192,936,000
AV $25,000 $1,000 $63,329,000
IO N/A N/A N/A
P 100% N/A $100
R 100% N/A N/A
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth in the Exhibits attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the
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Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Class P, Class IO or Class R Certificate shall be
made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective transferee
shall each certify to the Trustee in writing the facts surrounding the Transfer
in substantially the forms set forth in Exhibit J (the "Transferor Certificate")
and (x) deliver a letter in substantially the form of either Exhibit K (the
"Investment Letter") or Exhibit L (the "Rule 144A Letter") or (y) there shall be
delivered to the Trustee an Opinion of Counsel that such Transfer may be made
pursuant to an exemption from the Securities Act, which Opinion of Counsel shall
not be an expense of the Depositor, the Seller, the Master Servicer or the
Trustee. The Depositor shall provide to any Holder of a Class P, Class IO or
Class R Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for Transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Class P,
Class IO or Class R Certificate desiring to effect such Transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Seller, the
Certificate Insurer and the Master Servicer against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.
No Transfer of an ERISA Restricted Certificate shall be made unless
the Trustee shall have received either (i) a representation from the transferee
of such Certificate acceptable to
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and in form and substance satisfactory to the Trustee, to the effect that such
transferee is not 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 or using the assets of any such plan, (ii) except in the case of the
Class P, Class IO or Class R Certificates, if such purchaser is an insurance
company, a representation that the purchaser is an insurance company that is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
or (iii) in the case of any such ERISA Restricted Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a plan
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan, an Opinion of Counsel satisfactory to the Trustee and the
Master Servicer to the effect that the purchase or holding of such ERISA
Restricted Certificate 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 and the Code and will not subject the Trustee or the Master Servicer to
any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee or the Master
Servicer. For purposes of clause (i) of the preceding sentence, such
representation shall be deemed to have been made to the Trustee by the
transferee's acceptance of an ERISA Restricted Certificate (or the acceptance by
a Certificate Owner of the beneficial interest in any such Class of ERISA
Restricted Certificates) unless the Trustee shall have received from the
transferee an alternative representation acceptable in form and substance to the
Master Servicer and the Depositor. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA Restricted Certificate to or on
behalf of an employee benefit plan subject to Section 406 of 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 (iii) of the first sentence of this
paragraph. 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 5.02(b) 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.
(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate (which for the purposes of this Section 5.02 includes an
interest in Class R-1V, Class R-1F or Class 2), shall be deemed by the
acceptance or acquisition of such Ownership Interest to have agreed to be bound
by the following provisions, and the rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:
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(i) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall be a Permitted Transferee and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class R Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Class R Certificate unless, in addition to the
certificates required to be delivered to the Trustee under subparagraph (b)
above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class R Certificate, (B) to obtain a Transfer Affidavit from
any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Class R Certificate and (C) not to
Transfer its Ownership Interest in a Class R Certificate or to cause the
Transfer of an Ownership Interest in a Class R Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Class R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Class R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Class R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) 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
after receipt of the related Transfer Affidavit, Transferor Certificate and
either the Rule 144A Letter or the Investment Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Class R 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 Permitted
Transferee of such Certificate.
(v) The Master Servicer shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information necessary
to compute any tax imposed under Section 860E(e) of the Code as a result of
a Transfer of an Ownership Interest in a Class R Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not cause
the Trust Fund to fail to qualify as a
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REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any ownership Interest in a Class R Certificate
hereby consents to any amendment of this Agreement that, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer, the Certificate Insurer and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Trustee 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) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Trustee under
the terms of this Section 5.03 shall be canceled and destroyed by the Trustee in
accordance with its standard procedures without liability on its part.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee, the Certificate Insurer and any
agent of the Master Servicer, the Trustee or the Certificate Insurer may treat
the person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Master
Servicer, the Trustee, the Certificate Insurer nor any agent of the Master
Servicer, the Trustee or the Certificate Insurer shall be affected by any notice
to the contrary.
Section 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor, the Certificate Insurer or Master Servicer shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the
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Depositor, the Certificate Insurer, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 5.06. Book-Entry Certificates.
The Regular Certificates (other than the Class P and Class IO
Certificates), upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to the Depository by or on behalf of the Depositor. Such Certificates
shall initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of such Certificates will
receive a definitive certificate representing such Certificate Owner's interest
in such Certificates, except as provided in Section 5.08. Unless and until
definitive, fully registered Certificates ("Definitive Certificates") have been
issued to the Certificate Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Certificate Insurer, the Master Servicer and
the Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
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given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
Section 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Trustee and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Trustee shall notify all Certificate Owners of such Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall authenticate and deliver such Definitive Certificates. Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository 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 such Definitive
Certificates as Certificateholders hereunder.
Section 5.09. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its offices at Bankers Trust Company, Four Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series
2000-1, as offices for such purposes. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01. Respective Liabilities of the Depositor, the Master
Servicer and the Seller.
The Depositor, the Master Servicer and the Seller shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor, the Master
Servicer or the Seller.
The Depositor, the Master Servicer and the Seller will each keep in
full effect its existence, rights and franchises as a corporation under the laws
of the United States or under the laws of one of the States thereof and will
each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor, the Master Servicer or the Seller
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Master Servicer or the Seller shall be
a party, or any person succeeding to the business of the Depositor, the Master
Servicer or the Seller, shall be the successor of the Depositor, the Master
Servicer or the Seller, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided that the successor or
surviving Person to the Master Servicer shall be qualified to sell mortgage
loans to, and to service mortgage loans on behalf of, FNMA or FHLMC and must be
otherwise acceptable to the Certificate Insurer.
Section 6.03. Limitation on Liability of the Depositor, the Seller,
the Master Servicer and others.
None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Trust Fund, the Certificate
Insurer 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 that this provision shall not protect the Depositor, the
Seller, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Seller, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of its failure to perform its
obligations and duties hereunder. The Depositor, the Seller, the Master Servicer
and any director, officer, employee or agent of the Depositor, the Seller or 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 Depositor, the Seller, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Seller or the Master Servicer
shall be indemnified by the Trust Fund and held
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harmless against any loss, liability or expense incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of its failure to perform its
obligations and duties hereunder. None of the Depositor, the Seller or the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its respective duties hereunder and
that in its opinion may involve it in any expense or liability; provided that
any of the Depositor, the Seller or the Master Servicer may, in its discretion
undertake any such action that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and interests of
the Trustee and 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 Depositor, the
Seller and the Master Servicer shall be entitled to be reimbursed therefor out
of the Certificate Account as provided by Section 3.08 hereof.
Section 6.04. Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon (x) determination that its duties hereunder are
no longer permissible under applicable law or (y) compliance with the following
requirements: (i) the Master Servicer has proposed a successor to the Trustee
and the Certificate Insurer has consented thereto; and (ii) the successor is
qualified to sell mortgage loans to, and to service mortgage loans on behalf of,
FNMA or FHLMC. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee and the Certificate Insurer. No such resignation shall become
effective until the Trustee or a successor servicer to such appointment
designated by the Certificate Insurer shall have assumed the Master Servicer's
responsibilities, duties, liabilities and obligations hereunder.
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of FNMA or FHLMC for persons
performing servicing for mortgage loans purchased by FNMA or FHLMC. In the event
that any such policy or bond ceases to be in effect, the Master Servicer shall
use its reasonable best efforts to obtain a comparable replacement policy or
bond from an insurer or issuer, meeting the requirements set forth above as of
the date of such replacement.
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the Certificate
Account or the Distribution Account or remit to the Trustee any payment
required to be made under the terms of this Agreement, which failure shall
continue unremedied for one Business Day after the date on which written
notice of such failure shall have been given to the Master Servicer by the
Trustee, the Certificate Insurer or the Depositor, or to the Trustee and
the Master Servicer by the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates with the consent of
the Certificate Insurer; or
(ii) any failure by the Master Servicer or, so long as the Master
Servicer is also the Seller, the Seller 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 or any representation or
warranty shall prove to be untrue, which failure or breach shall continue
unremedied for a period of 60 days after the date on which written notice
of such failure shall have been given to the Master Servicer by the
Trustee, the Certificate Insurer or the Depositor, or to the Trustee and
the Master Servicer by the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates with the consent of
the Certificate Insurer; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a 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 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Master Servicer or all or substantially all of the property of the Master
Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations;
(vi) the payment by the Certificate Insurer of any Insured Payment; or
(vii) the occurrence of an event of default under the Insurance
Agreement.
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If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, and at the direction of the Certificate Insurer or, with the consent of the
Certificate Insurer, at the direction of the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the Certificates, the
Trustee shall by notice in writing to the Master Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee or another successor
Master Servicer designated by the Certificate Insurer. The Trustee or another
successor Master Servicer designated by the Certificate Insurer shall thereupon
make any Advance described in Section 4.01 hereof subject to Section 3.04
hereof. The Trustee or another successor Master Servicer designated by the
Certificate Insurer is hereby authorized and empowered to execute and deliver,
on behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article VIII. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Certificate Account, or thereafter be received with
respect to the Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies and the Certificate Insurer of the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master Servicer
hereunder, such Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof or the Certificate Insurer does not
deliver a Master Servicer Extension Notice by the end of any term as
contemplated in Section 7.04 hereof, the Trustee or another successor Master
Servicer designated by the Certificate Insurer shall, to the extent provided in
Section 3.04, be the successor to the Master Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof and applicable law including the obligation to make advances pursuant to
Section 4.01. As compensation therefor, the Trustee or another successor Master
Servicer designated by the Certificate Insurer shall be entitled to all fees,
costs and expenses relating to the Mortgage Loans that the Master Servicer would
have been entitled to if the Master Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Master Servicer in accordance with Section 7.01 hereof, and if the Trustee shall
be unwilling to so act, or if it is prohibited by applicable law from making
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Advances pursuant to Section 4.01 hereof or if it is otherwise unable to so act
and in each such case the Certificate Insurer fails to appoint another successor
Master Servicer, and if the Certificate Insurer fails to appoint a successor
servicer, the Trustee shall appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution and
is consented to in writing by the Certificate Insurer as the successor to the
Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder. Any
successor Master Servicer shall be an institution that is a FNMA and FHLMC
approved seller/servicer in good standing, that has a net worth of at least
$15,000,000, and that is willing to service the Mortgage Loans and executes and
delivers to the Depositor, the Certificate Insurer and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer (other than liabilities of the Master
Servicer under Section 6.03 hereof incurred prior to termination of the Master
Servicer under Section 7.01), with like effect as if originally named as a party
to this Agreement. No appointment of a successor to the Master Servicer
hereunder shall be effective until the Certificate Insurer shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder and the Certificate Insurer.
The Trustee or any other successor Master Servicer shall not resign as servicer
until a successor servicer has been appointed and has accepted such appointment.
Pending appointment of a successor to the Master Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.04 hereof, act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Certificate Insurer may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as the Certificate Insurer and such successor shall agree. Such
compensation may be in excess of that permitted the Master Servicer hereunder if
so agreed to by the Certificate Insurer. The Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
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
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Master
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice to
the Mortgagors of such change of servicer and shall, during the term of its
service as servicer maintain in force the policy or policies that the Master
Servicer is required to maintain pursuant to Section 6.05.
Section 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders, each Rating Agency and the Certificate Insurer.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the Certificate
Insurer notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.
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Section 7.04. Retention and Termination of Master Servicer.
The Master Servicer hereby covenants and agrees to act as such under
this Agreement for an initial term, commencing on January 27, 2000 and ending on
April 30, 2000, which term shall be extendable by the Certificate Insurer in its
sole discretion (provided that no Certificate Insurer Default has occurred and
is continuing) for successive terms of three calendar months each, until the
Certificates are paid in full. Each such notice (a "Servicing Extension Notice")
shall be delivered by the Certificate Insurer to the Trustee and the Master
Servicer. The Master Servicer hereby agrees that, as of the date hereof and upon
its receipt of any such Servicer Extension Notice, the Master Servicer shall
become bound, for the initial term beginning on January 27, 2000 and for the
duration of the term covered by such Servicer Extension Notice, to continue as
the Master Servicer subject to and in accordance with the other provisions of
this Agreement. Until such time as a Certificate Insurer Default shall have
occurred and be continuing, the Trustee agrees that if as of the fifteenth day
prior to the last day of any term of the Master Servicer the Trustee shall not
have received any Servicer Extension Notice from the Certificate Insurer, the
Trustee will, within five days after, give written notice of such non-receipt to
the Certificate Insurer and Master Servicer and the Master Servicer's term shall
not be extended unless a Servicer Extension Notice is received on or before the
last day of such term. Notwithstanding the foregoing, in the event a Certificate
Insurer Default has occurred and is continuing, the Servicer Extension Notice
shall be deemed to have been delivered as of last day of the current term of the
Master Servicer and extended until the next three month period.
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ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they conform
to the requirements of this Agreement. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the Trustee
shall take action as it deems appropriate to have the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable, individually
or as Trustee, except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement that it reasonably believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder;
(ii) the Trustee shall not be liable, individually or as Trustee, for
an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless the Trustee was grossly
negligent or acted in bad faith or with willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as Trustee,
with respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Certificate Insurer or
the Holders of each Class of Certificates evidencing not less than 25% of
the Voting Rights of such Class (subject to the Certificate Insurer's prior
written consent) relating to the time, method and place of conducting any
proceeding for any
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remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon 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, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as Trustee, for
any action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by the Certificate
Insurer or by the Holders of each Class of Certificates evidencing not less
than 25% of the Voting Rights of such Class (subject to the Certificate
Insurer's prior written consent);
(v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys;
(vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is not
assured to it;
(vii) the Trustee shall not be liable, individually or as Trustee, for
any loss on any investment of funds pursuant to this Agreement (other than
as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders or the Certificate Insurer,
pursuant to the provisions of this Agreement, unless such
Certificateholders or the Certificate
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Insurer shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or
thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor, the Seller or the Master Servicer, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document other than with respect to the Trustee's
execution and authentication of the Certificates. The Trustee shall not be
accountable for the use or application by the Depositor or the Master Servicer
of any funds paid to the Depositor or the Master Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Certificate Account by the
Depositor or the Master Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses.
The Trustee shall be entitled to the Trustee Fee as compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee. Except as
otherwise paid or reimbursed by the Trust Fund pursuant to Section 4.04(a), the
Master Servicer covenants and agrees to pay or reimburse the Trustee, upon its
request, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee on behalf of the Trust Fund in accordance with any of the
provisions of this Agreement (including, without limitation: (A) the reasonable
compensation and the expenses and disbursements of its counsel, but only for
representation of the Trustee acting in its capacity as Trustee hereunder and
(B) to the extent that the Trustee must engage persons not regularly in its
employ to perform acts or services on behalf of the Trust Fund, which acts or
services are not in the ordinary course of the duties of a trustee, paying agent
or certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct) other than any fees or expenses of
any Custodian appointed by the Trustee. The Master Servicer will be entitled to
reimbursement from the Trust Fund of the foregoing amounts paid to the Trustee.
The Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Master Servicer and held harmless against any loss, liability
or expense (i) incurred in connection with any legal action relating to this
Agreement or the Certificates, or in connection with the performance of any of
the Trustee's duties hereunder,
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other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Trustee's
duties hereunder or by reason of reckless disregard of the Trustee's obligations
and duties hereunder and (ii) resulting from any error in any tax or information
return prepared by the Master Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07 hereof.
The corporation or national banking association serving as Trustee may have
normal banking and trust relationships with the Depositor, the Seller and the
Master Servicer and their respective affiliates; provided that such corporation
cannot be an affiliate of the Master Servicer other than the Trustee in its role
as successor to the Master Servicer.
Section 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Certificate Insurer and the Master Servicer and by mailing notice of resignation
by first class mail, postage prepaid, to the Certificateholders at their
addresses appearing on the Certificate Register and each Rating Agency, not less
than 60 days before the date specified in such notice when, subject to Section
8.08, such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as 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, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Certificate Insurer (or
if the Certificate Insurer fails to do so promptly, the Depositor or the Master
Servicer) may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of
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which shall be delivered to the Master Servicer and one copy of which shall be
delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may, with the prior written consent of the Certificate Insurer,
at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor Trustee to the Master Servicer one complete set to
the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to each Rating Agency by the
Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Notwithstanding anything to the contrary contained herein, so long as
no Certificate Insurer Default exists, the Trustee may not be removed without
the prior written consent of the Certificate Insurer.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, to its predecessor
trustee, the Certificate Insurer and the Master Servicer an instrument accepting
such appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates and the Certificate Insurer. If
the Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Notwithstanding anything to the contrary contained herein, so long as
no Certificate Insurer Default exists, the appointment of any successor Trustee
pursuant to any provision of this Agreement will be subject to the prior written
consent of the Certificate Insurer.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate
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trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.06 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly, with the
consent of the Certificate Insurer, shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Certificate Insurer to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Certificate Insurer, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations, rights
and trusts as the Master Servicer and the Trustee may consider necessary or
desirable. The Trustee shall be ultimately liable for the actions of any
co-trustee. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request to do so, or in the case an
Event of Default shall have occurred and be continuing, the Trustee alone, with
the consent of the Certificate Insurer, shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Master Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without
the Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Trustee, with the consent of the Certificate Insurer, may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
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Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer, the Certificate Insurer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state and local tax authorities income tax or information
returns for each taxable year with respect to each such REMIC containing such
information and at the times and in the manner as may be required by the Code or
state or local tax laws, regulations, or rules, and furnish or cause to be
furnished to Certificateholders the schedules, statements or information at such
times and in such manner as may be required thereby; (b) within thirty days of
the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code for the
Trust Fund; (c) make or cause to be made elections, on behalf of each REMIC
formed hereunder to be treated as a REMIC on the federal tax return of such
REMIC for its first taxable year (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Class R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the
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record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of the Trust Fund at
all times that any Certificates are outstanding so as to maintain the status of
each REMIC formed hereunder as a REMIC under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any REMIC formed hereunder; (h)
pay, from the sources specified in the last paragraph of this Section 8.11, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC formed hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
and local income tax or information returns; (j) maintain records relating to
each REMIC formed hereunder including but not limited to the income, expenses,
assets and liabilities of each such REMIC and the fair market value and adjusted
basis of the Trust Fund property determined at such intervals as may be required
by the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC formed hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of each REMIC formed hereunder in relation to any tax matter
involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to Sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be
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paid first with amounts otherwise to be distributed to the Class R
Certificateholders and the Class B-IO Certificateholders (pro rata), and second
with amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: to the Class AF Certificates and the Class AV
Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificates, the
Trustee is hereby authorized to retain on any Distribution Date, from the
Holders of the Class R Certificates (and, if necessary, second, from the Holders
of the all other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Trustee agrees to promptly notify in writing the party
liable for any such tax of the amount thereof and the due date for the payment
thereof.
Section 8.12. Periodic Filings.
Pursuant to written instructions from the Depositor, the Trustee shall
prepare, execute and file all Form 8-Ks with exhibits (other than the Form 8-K
with which this Agreement is filed) and Form 10-Ks with exhibits required under
the Securities Exchange Act of 1934 in connection with this Agreement (other
than any such reports due as a result of the original issuance of the
Certificates). In addition, the Trustee shall prepare, execute and file no later
than January 31, 2001 a Form 15 to terminate the Trust Fund's reporting
obligations. In connection with the preparation and filing of such periodic
reports, the Depositor and the Master Servicer shall timely provide to the
Trustee all material information available to them which is required to be
included in such reports and not known to them to be in the possession of the
Trustee and such other information as the Trustee reasonably may request from
either of them and otherwise reasonably shall cooperate with the Trustee. The
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence or willful misconduct.
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ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Seller and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by the Master Servicer of all of the Mortgage Loans (and REO Properties) at the
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Net Mortgage Rate, (iii) the appraised value of any
REO Property (up to the Stated Principal Balance of the related Mortgage Loan),
such appraisal to be conducted by an appraiser mutually agreed upon by the
Master Servicer and the Trustee, (iv) any unreimbursed Servicing Advances, and
the principal portion of any unreimbursed Advances, made on the Mortgage Loans
prior to the exercise of such repurchase and (v) all amounts due to the
Certificate Insurer under this Agreement and the Insurance Agreement and (b) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property, (ii) the distribution to Certificateholders of
all amounts required to be distributed to them pursuant to this Agreement, as
applicable, and (iii) the payment of all amounts due and payable to the
Certificate Insurer. In no event shall the trusts created hereby continue beyond
the earlier of (i) the expiration of 21 years from the death of the last
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. Xxxxx, living on the date hereof and (ii) the
Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties pursuant
to clause (a) above shall be conditioned upon (i) the Stated Principal Balance
of the Mortgage Loans, at the time of any such repurchase, aggregating ten
percent or less of the aggregate Cut-off Date Principal Balance of the Mortgage
Loans and (ii) if there shall have been a draw on the Certificate Insurance
Policy, the consent of the Certificate Insurer.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
Certificateholder or (ii) the Trustee determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Trustee shall
notify the Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the Corporate Trust Office of the Trustee. If the Master Servicer elects to
terminate the Trust Fund pursuant to Section 9.01, at least 20 days prior to the
date notice is to be mailed to the affected Certificateholders, the Master
Servicer shall notify the Depositor, the Trustee and the Certificate Insurer of
the date the Master Servicer intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
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Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders and the Certificate Insurer
mailed not earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made, and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Master
Servicer will give such notice to each Rating Agency at the time such notice is
given to Certificateholders and the Certificate Insurer.
In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Master Servicer the Mortgage Files for the Mortgage
Loans.
On the final Distribution Date, the Trustee will withdraw from the
Distribution Account and remit to the Certificate Insurer the lesser of (x) the
amount available for distribution on such final Distribution Date, net of any
portion thereof necessary to pay Certificateholders pursuant to Sections 4.04(a)
and (y) the unpaid amounts due and owing to the Certificate Insurer pursuant to
Section 4.04(a). Upon presentation and surrender of the Certificates, the
Trustee and the Certificate Insurer shall cause to be distributed to
Certificateholders of each Class the amounts allocable to such Certificates held
in the Distribution Account in the order and priority set forth in Section 4.04
hereof on the final Distribution Date and in proportion to their respective
Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date 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
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option on
both of the Fixed Rate Mortgage Loans and the Adjustable Rate Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless
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the Trustee and the Certificate Insurer has been supplied with an Opinion of
Counsel, at the expense of the Master Servicer, to the effect that the failure
of the Trust Fund to comply with the requirements of this Section 9.03 will not
(i) result in the imposition of taxes on "prohibited transactions" of a REMIC,
or (ii) cause a REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day liquidation period
and notify the Trustee thereof, which shall in turn specify the first day of
such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer shall
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Master Servicer;
(2) During such 90-day liquidation period, and at or prior to the time
of making the final payment on the Certificates, the Master Servicer as agent of
the Trustee shall sell all of the assets of the Trust Fund for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class R Certificateholders all cash on hand (other than cash
retained to meet claims), and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Trustee as agent for the REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer, and the receipt of the Opinion of Counsel referred to in Section
9.03(a)(1) and to take such other action in connection therewith as may be
reasonably requested by the Master Servicer.
-100-
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Seller, without the consent of any of the
Certificateholders, but only with the consent of the Certificate Insurer, to
cure any ambiguity, to correct or supplement any provisions herein (including to
give effect to the expectations of investors), or to make such other provisions
with respect to matters or questions arising under this Agreement as shall not
be inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Certificate Insurer
and the Seller may at any time and from time to time amend this Agreement to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or appropriate to maintain the qualification of the Trust Fund as a
REMIC under the Code or to avoid or minimize the risk of the imposition of any
tax on the Trust Fund pursuant to the Code that would be a claim against the
Trust Fund at any time prior to the final redemption of the Certificates,
provided that the Trustee have been provided an Opinion of Counsel, which
opinion shall be an expense of the party requesting such opinion but in any case
shall not be an expense of the Trustee, to the effect that such action is
necessary or appropriate to maintain such qualification or to avoid or minimize
the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Holders of each Class of
Certificates affected thereby evidencing not less than 51% of the Voting Rights
of such Class, but only with the consent of the Certificate Insurer, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66%
or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee, to the effect that such amendment will not cause the imposition of
any tax on the Trust Fund or the Certificateholders or cause the Trust Fund's
REMIC elections to fail to qualify at any time that any Certificates are
outstanding.
-101-
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel, satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required to
be reached pursuant to this Section 10.01. Upon receipt of such opinion, the
Trustee shall execute such amendment; provided however that the Trustee shall
not be obligated to execute an amendment if, in the Trustee's opinion, such
amendment materially and adversely affects the rights, duties or immunities of
the Trustee.
Section 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the
-102-
Mortgage Loans by the Seller to the Depositor, and by the Depositor to the
Trustee be, and be construed as, an absolute sale thereof to the Depositor or
the Trustee, as applicable. It is, further, not the intention of the parties
that such conveyance be deemed a pledge thereof by the Seller to the Depositor,
or by the Depositor to the Trustee. However, in the event that, notwithstanding
the intent of the parties, such assets are held to be the property of the Seller
or the Depositor, as applicable, or if for any other reason this Agreement is
held or deemed to create a security interest in such assets, then (i) this
Agreement shall be deemed to be a security agreement within the meaning of the
Uniform Commercial Code of the State of New York and (ii) each conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Seller or the Depositor, as applicable , for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders and
the Certificate Insurer shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the assets of the Trust Fund, 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 the Agreement. The Depositor shall arrange for filing any Uniform Commercial
Code continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders and the
Certificate Insurer.
Section 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(i) Each report to Certificateholders described in Section
4.04;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
-103-
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (i) in the
case of the Depositor, Bear Xxxxxxx Asset Backed Securities, Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel; (ii) in the case of
the Seller and Master Servicer, EMC Mortgage Corporation, 000 Xxxxxx Xxxxx
Xxxxx, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx Xxxxx or such other address as may
be hereafter furnished to the Depositor and the Trustee by the Master Servicer
in writing; (iv) in the case of the Trustee, at the Corporate Trust Office or
such other address as the Trustee may hereafter furnish to the Depositor or the
Master Servicer; (v) in the case of the Rating Agencies, (x) Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS
Monitoring Group and (y) in the case of S&P, Standard & Poor's, 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Mortgage Surveillance Group and (vi)
in the case of the Certificate Insurer, Financial Security Assurance Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Surveillance Department Re: Bear
Xxxxxxx Asset Backed Securities, Inc., EMC Mortgage Corporation, Series 2000-1.
Notices to Certificateholders shall be deemed given when mailed, first class
postage prepaid, to their respective addresses appearing in the Certificate
Register.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be assigned
by the Master Servicer without the prior written consent of the Certificate
Insurer.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
-104-
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have obtained written consent of
the Certificate Insurer and shall have given to the Trustee a written notice of
an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee and the Certificate Insurer, that no one or
more Holders of Certificates shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Agreement, except in the
manner herein provided and for the common benefit of all Certificateholders. For
the protection and enforcement of the provisions of this Section 10.08, each and
every Certificateholder and the Certificate Insurer and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice,
it will permit any representative of the Depositor, the Certificate Insurer or
the Trustee during the Master Servicer's normal business hours, to examine all
the books of account, records, reports and other papers of the Master Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor, the Certificate Insurer or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes such accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor, the Certificate Insurer or the Trustee of any right
under this Section 10.09 shall be borne by the party requesting such inspection;
all other such expenses shall be borne by the Master Servicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
Section 10.11 Third Party Beneficiary; Rating.
The Certificate Insurer is an intended third-party beneficiary
of this Agreement. This Agreement shall be binding upon and inure to the benefit
of the Certificate Insurer; provided that,
-105-
notwithstanding the foregoing, for so long as a Certificate Insurer Default is
continuing under its obligations under the Certificate Insurance Policy, the
Offered Certificateholders shall succeed to the Certificate Insurer's rights
hereunder; provided, further, that even if a Certificate Insurer Default is
continuing this Agreement may not be amended except upon delivery to the
Certificate Insurer of an Opinion of Counsel acceptable to the Certificate
Insurer to the effect that such amendment shall not adversely affect in any
material respect the interests of the Certificate Insurer. Without limiting the
generality of the foregoing, all covenants and agreements in this Agreement that
expressly confer rights upon the Certificate Insurer shall be for the benefit of
and run directly to the Certificate Insurer, and the Certificate Insurer shall
be entitled to rely on and enforce such covenants to the same extent as if it
were a party to this Agreement.
Section 10.12 Counterparts.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
* * *
-106-
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Seller and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
BEAR XXXXXXX ASSET BACKED SECURITIES,
INC.,
as Depositor
By: /s/ Xxxxxxxx X. Xxxxx
______________________________________
Name: Xxxxxxxx X. Xxxxx
Title: Senior Managing Director
EMC MORTGAGE CORPORATION,
as Seller and Master Servicer
By: /s/ Xxxxxx Xxxxx
______________________________________
Name: Xxxxxx Xxxxx
Title: President
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.,
not in its individual capacity,
but solely as Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx
______________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
-107-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of January, 2000, before me, a notary public
in and for said State, appeared Xxxxxxxx X. Xxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Bear
Xxxxxxx Asset Backed Securities, Inc., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such corporation and acknowledged to me that such corporation executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________________________
Notary Public
[Notarial Seal]
-108-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of January, 2000, before me, a notary public
in and for said State, appeared Xxxxxx X. Xxxxxxxxx, personally known to me on
the basis of satisfactory evidence to be a Vice President of Bankers Trust
Company of California, N.A. that executed the within instrument, and also known
to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________________________
Notary Public
[Notarial Seal]
-109-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of January, 2000, before me, a notary public
in and for said State, appeared Xxxxxx Xxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative of EMC
Mortgage Corporation, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________________________
Notary Public
[Notarial Seal]
-110-
Exhibit A-1
through A-4
[Exhibits A-1 through A-4 are
photocopies of the Class AF, Class AV, Class IO and Class P Certificates
delivered at closing]
A-1
Exhibit B
[Exhibit B is a photocopy
of the Class R Certificates delivered at closing]
B-1
Exhibit C
[Reserved]
C-1
Exhibit D
[Exhibit D is a photocopy
of the Certificate Insurance Policy delivered at closing]
D-1
Exhibit E
[Exhibit E is a photocopy
of the Insurance Agreement delivered at closing]
E-1
Exhibit F-1
[Exhibit F-1 is a list of the Mortgage Loans]
F-1-1
Exhibit F-2
[Reserved]
F-2-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Certificate Insurer]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of January
1, 2000 among Bear Xxxxxxx Asset Backed Securities,
Inc., as Depositor, EMC Mortgage Corporation as
Seller and Master Servicer and Bankers Trust Company
of California, N.A. as
Trustee, Asset-Backed Certificates, Series 0000-0
Xxxxxxxxx:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as 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 in the attached list of exceptions) it has
received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of ____________________, without recourse" or "Pay to the order of
Bankers Trust Company of California, N.A., a national banking association, as
Trustee for the benefit of the Certificateholders of Bear Xxxxxxx Asset Backed
Securities, Inc. Asset-Backed Certificates, Series 2000-1"; and
(ii) a duly executed assignment of the Mortgage in the form
permitted by Section 2.01 of the Pooling and Servicing Agreement referred to
above.
Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and related to
such Mortgage Loan.
G-1-1
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
Bankers Trust Company of California, N.A.,
as Trustee
By:
_______________________________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[date]
[Certificate Insurer]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of January
1, 2000 among Bear Xxxxxxx Asset Backed Securities,
Inc., as Depositor, EMC Mortgage Corporation as
Seller and Master Servicer and Bankers Trust Company
of California, N.A. as Trustee, Asset-Backed
Certificates, Series 0000-0
Xxxxxxxxx:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _______________ without recourse" or "Pay to the order of
Bankers Trust Company of California, N.A., a national banking association, as
Trustee for the benefit of the Certificateholders of Bear Xxxxxxx Asset Backed
Securities, Inc. Asset-Backed Certificates, Series 2000-1", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above;
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage;
(v) [Reserved]; and
(vi) the original or duplicate original lender's title policy or, in
the event such original title policy has not been received from the insurer, any
one of an original title binder, an original preliminary title report or an
original title commitment, or a copy thereof certified by the title
G-2-1
company, with the original policy of title insurance to be delivered within
one year of the Closing Date.
If the Trustee has not received the original recorded Mortgage or an
original recorded assignment of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) above, as applicable, the Trustee has received, in
lieu thereof, a true and complete copy of such Mortgage and/or such assignment
or assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi)
and (viii) of the definition of the "Mortgage Loan Schedule" in Section 1.01 of
the Pooling and Servicing Agreement accurately reflects information set forth in
the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
G-2-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
Bankers Trust Company of California, N.A.
as Trustee
By:
_____________________________________
Name:
Title:
G-2-3
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Certificate Insurer]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement dated as of January 1, 2000 among Bear
Xxxxxxx Asset Backed Securities, Inc., as Depositor, EMC Mortgage
Corporation as Seller and Master Servicer and Bankers Trust Company of
California, N.A., as Trustee, Asset-Backed Certificates, Series 0000-0
Xxxxxxxxx:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) it has
received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse" or "Pay to the order of
Bankers Trust Company of California, N.A., a national banking association, as
Trustee for the benefit of the Certificateholders of Bear Xxxxxxx Asset Backed
Securities, Inc. Asset-Backed Certificates, Series 2000-1", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above;
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage;
(v) [Reserved]; and
(vi) the original or duplicate original lender's title policy or any
one of an original title binder, an original preliminary title report or an
original title commitment, or a copy thereof certified by the title company.
H-1
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi)
and (viii) of the definition of the "Mortgage Loan Schedule" in Section 1.01 of
the Pooling and Servicing Agreement accurately reflects information set forth in
the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
Bankers Trust Company of California, N.A.,
as Trustee
By:
______________________________________
Name:
Title:
H-2
EXHIBIT I
TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the "Certificate")
issued pursuant to the Pooling and Servicing Agreement, dated as of January 1,
2000 (the "Agreement"), by and among Bear Xxxxxxx Asset Backed Securities, Inc.,
as depositor (the "Depositor"), EMC Mortgage Corporation as seller and master
servicer ( in its capacity as seller, the "Seller" and its capacity as the
master servicer, the "Master Servicer") and Bankers Trust Company of California,
N.A., as trustee (the "Trustee"). Capitalized terms used, but not defined herein
or in Exhibit 1 hereto, shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
I-1
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class R
Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(3O).
10. The Transferee is aware that the Class R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _____________, ____.
[NAME OF TRANSFEREE]
By:
----------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
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 Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, ____.
------------------------------
-------------------------------
NOTARY PUBLIC
My Commission expires the ___ day
of _______________, ____.
I-3
EXHIBIT 1 TO EXHIBIT I
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class R Certificate, (iv) rural electric and telephone cooperatives described in
section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
4224, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that certain Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-4
EXHIBIT 2 TO EXHIBIT I
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) 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 after receipt of
the related Transfer Affidavit, Transferor Certificate and either the
Rule 144A Letter or the Investment Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Class R 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 Permitted Transferee of such Certificate.
I-5
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not cause
the Trust Fund to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Class R Certificate hereby consents to any amendment of
this Agreement that, based on an Opinion of Counsel furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
I-6
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS R CERTIFICATES
Date:
Bear Xxxxxxx Asset Backed Securities, Inc.,
as Depositor
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Bankers Trust Company of California, N.A.
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities, Inc. Asset-Backed
Certificates, Series 2000-1
---------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class R
Certificates, we certify that (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner that
would be deemed, or taken any other action that would result in, a violation of
Section 5 of the Act and (c) we have no knowledge the Transferee is not a
Permitted Transferee. All capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement
dated as of January 1, 2000, among Bear Xxxxxxx Asset Backed Securities, Inc.,
as Depositor, EMC Mortgage Corporation as Seller and Master Servicer and Bankers
Trust Company of California, N.A., as Trustee.
Very truly yours,
----------------------------------
Name of Transferor
By: ______________________________
Name:
Title:
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER [NON-RULE 144A] FOR
CLASS R CERTIFICATES
Date: _______________
Bear Xxxxxxx Asset Backed Securities, Inc.,
as Depositor
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bankers Trust Company of California, N.A.,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities, Inc. Asset-Backed
Certificates, Series 2000-1
---------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the Class R Certificates
in the Denomination of (the "Certificates"), we certify that (a) we understand
that the Certificates are not being registered under the Securities Act of 1933,
as amended (the "Act"), or any state securities laws and are being transferred
to us in a transaction that is exempt from the registration requirements of the
Act and any such laws, (b) we are an "accredited investor," as defined in
Regulation D under the Act, and have such knowledge and experience in financial
and business matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of
the Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) we are not an
employee benefit plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, nor a plan subject to Section 4975 of the Internal
Revenue Code of 1986 (each of the foregoing, a "Plan"), nor are we acting on
behalf of any Plan or (e) we are acquiring the Certificates for investment for
our own account and not with a view to any distribution of the Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section 5
of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of the Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has
K-1
otherwise complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement dated as of January 1, 2000 (the "Agreement"), among Bear
Xxxxxxx Asset Backed Securities, Inc., as Depositor, EMC Mortgage Corporation as
Seller and Master Servicer and Bankers Trust Company of California, N.A., as
Trustee. All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Agreement.
Very truly yours,
------------------------------------
Name of Transferee
By: ________________________________
Name:
Title:
K-2
EXHIBIT L
FORM OF RULE 144A LETTER FOR
CLASS R CERTIFICATES
Date: _______________
Bear Xxxxxxx Asset Backed Securities, Inc.,
as Depositor
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bankers Trust Company of California, N.A.
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities, Inc. Asset-Backed
Certificates, Series 2000-1
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of the Class R
Certificates (the "Certificates") we certify that (a) we understand that the
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of
the Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) we are not an
employee benefit plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, nor a plan subject to Section 4975 of the Internal
Revenue Code of 1986 (each of the foregoing, a "Plan"), nor are we acting on
behalf of any Plan or (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect
L-1
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that the
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act. All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of January 1, 2000, among Bear Xxxxxxx Asset Backed Securities, Inc., as
Depositor, EMC Mortgage Corporation as Seller and Master Servicer and Bankers
Trust Company of California, N.A., as Trustee.
------------------------------------
Name of Buyer
By: ________________________________
Name:
Title:
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $__________1 in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which
is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
--------------------------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
L-3
___ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940.
___ Small Business Investment Company. The Buyer is a
small business investment company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee
is a bank or trust company and whose participants are
exclusively State or Local Plans or ERISA Plans as
defined above, and no participant of the Buyer is an
individual retirement account or an H.R. 10 (Xxxxx)
plan.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
L-4
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
-----------------------------------
Name of Buyer
By: _______________________________
Name:
Title:
Date: _____________________________
L-5
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $____________ in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule
144A).
___ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $__________ in
securities (other than the excluded securities
referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
L-6
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
------------------------------------
Name of Buyer or Adviser
By: ________________________________
Name:
Title:
IF AN ADVISER:
------------------------------------
Name of Buyer
Date: _______________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
Loan Information
----------------
Name of Mortgagor: ____________________________________
Master Servicer
Loan No.: ____________________________________
Trustee
-------
Name: ____________________________________
Address: ____________________________________
Trustee
Mortgage File No.: ____________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2000-1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement dated as of January 1, 2000 (the "Pooling and Servicing
Agreement") among Bear Xxxxxxx Asset Backed Securities, Inc., as Depositor, EMC
Mortgage Corporation as Seller and Master Servicer and Bankers Trust Company of
California, N.A., and the Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal
sum of $________, made by __________________, payable to, or endorsed to the
order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.________ in
the County Recorder's Office of the County of ________________, State of
_______________ in book/reel/docket _______________ of official records at
page/image ________________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket _______________
of official records at page/image _____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's Office
of the County of __________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
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( ) Other documents, including any amendments, assignments or
other assumptions of the Mortgage Note or Mortgage.
( ) ----------------------------------------------
( ) ----------------------------------------------
( ) ----------------------------------------------
( ) ----------------------------------------------
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Trustee when the need therefor no longer
exists, unless the Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Certificate Account and
except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be earmarked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
[Master Servicer]
By ________________________________
Its ________________________________
Date: _________________, ____
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EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2000-1
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE Master Servicer, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________ _____________________ DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
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Exhibit O
[Exhibit O is a photocopy
of the Depository Agreement
as delivered.]
[DTC Letter of Representations]
O-1
