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CENDANT MORTGAGE CAPITAL LLC,
Depositor
CENDANT MORTGAGE CORPORATION,
Master Servicer
CITIBANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2003
CDMC Mortgage Pass-Through Certificates, Series 2003-1
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS.................................................................3
Section 1.01 Defined Terms............................................3
Section 1.02 Accounting..............................................40
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES..........................................41
Section 2.01 Conveyance of Mortgage Loans............................41
Section 2.02 Acceptance of Trust Fund by the Trustee.................45
Section 2.03 Repurchase or Substitution of Mortgage Loans by
the Sellers-Assignment of Interest in Additional
Collateral..............................................46
Section 2.04 Representations, Warranties and Covenants of the Master
Servicer................................................49
Section 2.05 Representations and Warranties of the Depositor.........51
Section 2.06 Purpose and Powers of the Trust.........................52
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND.............................54
Section 3.01 Master Servicer to Act as Master Servicer...............54
Section 3.02 Sub-Servicing Agreements Between the Master Servicer
and Sub-Servicers.......................................56
Section 3.03 Successor Sub-Servicers.................................57
Section 3.04 Liability of the Master Servicer........................58
Section 3.05 No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders...........................58
Section 3.06 Assumption or Termination of Sub-Servicing Agreements
by Trustee..............................................58
Section 3.07 Collection of Certain Mortgage Loan Payments............59
Section 3.08 Sub-Servicing Accounts..................................59
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts......................................60
Section 3.10 Collection Account and Distribution Account.............60
Section 3.11 Withdrawals from the Collection Account and
Distribution Account....................................63
Section 3.12 Investment of Funds in the Collection Account,
Servicing Accounts and the Distribution Account.........64
Section 3.13 Maintenance of the Primary Insurance Policies;
Collections Thereunder..................................65
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Section 3.14 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.........................66
Section 3.15 Enforcement of Due-On-Sale Clauses. Assumption Agreements
.......................................................68
Section 3.16 Realization Upon Defaulted Mortgage Loans...............69
Section 3.17 Trustee to Cooperate; Release of Mortgage Files.........71
Section 3.18 Servicing Compensation..................................72
Section 3.19 Reports to the Trustee; Collection Account Statements...73
Section 3.20 Statement as to Compliance..............................73
Section 3.21 Independent Public Accountants' Servicing Report........73
Section 3.22 Access to Certain Documentation.........................74
Section 3.23 Title, Management and Disposition of REO Property.......74
Section 3.24 Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls..........................77
Section 3.25 Administration of Buydown Funds.........................78
Section 3.26 Obligations of the Master Servicer in Respect of Loan
Rates and Monthly Payments..............................78
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS.............................................79
Section 4.01 Distribution Account; Distributions.....................79
Section 4.02 Statements to Certificateholders........................86
Section 4.03 Remittance Reports; Advances by the Master Servicer.....88
Section 4.04 Allocation of Realized Losses...........................90
Section 4.05 Information Reports to Be Filed by the Master Servicer..91
Section 4.06 Compliance with Withholding Requirements................91
Section 4.07 [Reserved]..............................................91
Section 4.08 Limited Purpose Surety Bond.............................91
ARTICLE V
THE CERTIFICATES...........................................................93
Section 5.01 The Certificates........................................93
Section 5.02 Registration of Transfer and Exchange of Certificates...93
Section 5.03 Mutilated. Destroyed. Lost or Stolen Certificates.......98
Section 5.04 Persons Deemed Owners...................................98
Section 5.05 Appointment of Paying Agent.............................99
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR.....................................100
Section 6.01 Liability of the Master Servicer and the Depositor.....100
Section 6.02 Merger or Consolidation of or Assumption of the
Obligations of the Master Servicer or the Depositor....100
Section 6.03 Limitation on Liability of the Master Servicer
and Others.............................................100
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Section 6.04 Master Servicer Not to Resign..........................101
Section 6.05 Delegation of Duties...................................101
ARTICLE VII
DEFAULT...................................................................102
Section 7.01 Master Servicer Events of Termination..................102
Section 7.02 Trustee to Act: Appointment of Successor...............104
Section 7.03 Waiver of Master Servicer Events of Termination........105
Section 7.04 Notification to Certificateholders.....................105
Section 7.05 Survivability of Master Servicer Liabilities...........106
ARTICLE VIII
THE TRUSTEE...............................................................107
Section 8.01 Duties of Trustee......................................107
Section 8.02 Certain Matters Affecting the Trustee..................109
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans..110
Section 8.04 Trustee May Own Certificates...........................111
Section 8.05 Master Servicer to Pay Trustee Expenses; Trustee Fees..111
Section 8.06 Eligibility Requirements for Trustee...................112
Section 8.07 Resignation or Removal of Trustee......................112
Section 8.08 Successor Trustee......................................113
Section 8.09 Merger or Consolidation of Trustee.....................113
Section 8.10 Appointment of Co-Trustee or Separate Trustee..........113
Section 8.11 Limitation of Liability................................115
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates...........................................115
Section 8.13 Suits for Enforcement..................................115
Section 8.14 Waiver of Bond Requirement.............................115
Section 8.15 Waiver of Inventory. Accounting and Appraisal
Requirement............................................116
Section 8.16 Right of Trustee in Capacity of Certificate Registrar
or Paying Agent........................................116
Section 8.17 Periodic Filings.......................................116
ARTICLE IX
REMIC ADMINISTRATION......................................................117
Section 9.01 REMIC Administration...................................117
Section 9.02 Prohibited Transactions and Activities.................119
Section 9.03 Master Servicer and Trustee Indemnification............120
ARTICLE X
TERMINATION...............................................................121
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Section 10.01 Termination............................................121
Section 10.02 Additional Termination Requirements....................122
ARTICLE XI
[RESERVED]................................................................124
ARTICLE XII
MISCELLANEOUS PROVISIONS..................................................125
Section 12.01 Amendment..............................................125
Section 12.02 Recordation of Agreement: Counterparts.................126
Section 12.03 Limitation on Rights of Certificateholders.............126
Section 12.04 Governing Law: Jurisdiction............................127
Section 12.05 Notices................................................127
Section 12.06 Severability of Provisions.............................128
Section 12.07 Article and Section References.........................128
Section 12.08 Notice to the Rating Agencies..........................128
Section 12.09 Further Assurances.....................................129
Section 12.10 Benefits of Agreement..................................129
Section 12.11 Acts of Certificateholders.............................129
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EXHIBITS:
Exhibit A Form of Class A, Class P and Class X Certificates
Exhibit B [reserved]
Exhibit C-1 Form of Class R Certificates
Exhibit C-2 Form of Class B Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Rule 144A Representation Letter
Exhibit F-2 Form of Transferor Certificate
Exhibit F-3 Form of Transferee Representation Letter
Exhibit F-4 Form of Transfer Affidavit and Agreement and Form of Transferor
Affidavit
Exhibit G Form of ERISA Representation Letter
Exhibit H Form of Lost Note Affidavit
Exhibit I-1 Form of Trustee's Initial Certification
Exhibit I-2 Form of Trustee's Final Certification
Exhibit J Mortgage Loan Purchase Agreement
Exhibit K Assignment, Assumption and Recognition Agreement (Additional
Collateral Servicing Agreement)
Exhibit L Planned Principal Balances
Exhibit M Form of Form 10-K Certificate
Exhibit N Form of Back-up Certification to Form 10-K Certificate
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This Pooling and Servicing Agreement is dated as of February 1, 2003 (the
"Agreement"), among CENDANT MORTGAGE CAPITAL LLC, as depositor (the
"Depositor"), CENDANT MORTGAGE CORPORATION, as master servicer (the "Master
Servicer") and CITIBANK, N.A., as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein). As provided herein, the Trustee will
make, in accordance with Section 9.01, an election to treat the entire
segregated pool of assets described in the definition of Trust Fund (as defined
herein), and subject to this Agreement (including the Mortgage Loans), as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Certificate Principal Balance or Original
Notional Amount, as the case may be, for each Class of Certificates comprising
the interests in the Trust Fund created hereunder:
Original Certificate Initial
Principal Balance or Pass-Through Assumed Final
Class Notional Amount Rate Maturity Dates
--------- ---------------------- ------------------ ------------------
A-1 $ 27,653,440.00 5.50% March 25, 2033
A-2 $ 33,184,129.00 5.50% March 25, 2033
A-3 $ 30,029,513.00 5.50% March 25, 2033
A-4 $ 25,024,594.00 5.50% March 25, 2033
A-5 $ 40,039,352.00 5.50% March 25, 2033
A-6 $ 25,024,594.00 5.50% March 25, 2033
A-7 $ 25,024,594.00 5.50% March 25, 2033
A-8 $ 7,229,327.00 5.50% March 25, 2033
A-9 $ 12,214,228.00 5.50% March 25, 2033
A-10 $ 33,032,464.00 5.50% March 25, 2033
P $ 184,029.43 0.00% March 25, 2033
X $ 0(1) Variable Rate(2) March 25, 2033
R $ 100.00 5.50% March 25, 2033
B-1 $ 12,381,720.00 5.50% March 25, 2033
B-2 $ 1,375,747.00 5.50% March 25, 2033
B-3 $ 1,238,172.00 5.50% March 25, 2033
B-4 $ 550,299.00 5.50% March 25, 2033
B-5 $ 412,724.00 5.50% March 25, 2033
B-6 $ 550,299.35 5.50% March 25, 2033
(1) Original Notional Amount of approximately $259,960,648. Interest will
accrue on a Notional Amount that varies as described herein. No
principal will be paid on the Class X Certificates.
(2) Original Notional Amount of approximately $259,960,648. Interest will
accrue on a Notional Amount that varies as described herein. No
principal will be paid on the Class X Certificates.
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest
will be calculated for all Certificates on the basis of a 360-day year
consisting of twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Any of the Collection Account and Distribution Account.
"Accretion Termination Date": With respect to the Class A-8 Certificates,
the Class A-8 Accretion Termination Date and with respect to the Class A-9
Certificates, the Class A-9 Accretion Termination Date.
"Accrual Distribution Amount": With respect to the Class A-8 Certificates,
the Class A-8 Accrual Distribution Amount and with respect to the Class A-9
Certificates, the Class A-9 Accrual Distribution Amount.
"Additional Collateral": (i) With respect to any Mortgage 100(sm) Loan, the
Securities Account and the financial assets held therein subject to a security
interest pursuant to the related Mortgage 100(sm) Pledge Agreement, or (ii) with
respect to any Parent Power(R) Mortgage Loan, the related Parent Power(R)
Agreement and collateral pledged pursuant thereto.
"Additional Collateral Agreements": Each Mortgage 100(sm) Pledge Agreement,
Parent Power(R)Guaranty and Security Agreement for Securities Account and
Control Agreement, as applicable, for each Additional Collateral Mortgage Loan.
"Additional Collateral Mortgage Loan": A Mortgage Loan that is supported by
Additional Collateral.
"Additional Collateral Servicer": MLCC.
"Additional Collateral Servicing Agreement": The Additional Collateral
Transfer and Servicing Agreement, dated as of November 1, 2001, between MLCC and
the Master Servicer.
"Advance": As to any Mortgage Loan or REO Property, any advance made by the
Master Servicer in respect of any Distribution Date pursuant to Section 4.03.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to
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direct the management and policies of a Person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise and
"controlling" and "controlled" shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments and
supplements hereto.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the date
set forth as such in the Preliminary Statement.
"Available Distribution Amount": With respect to any Distribution Date and
the Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the
aggregate of the related Monthly Payments received on or prior to the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments and other unscheduled recoveries of principal and interest in
respect of the Mortgage Loans during the related Prepayment Period, (c) the
aggregate of any amounts received in respect of a related REO Property withdrawn
from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any related
Advances made by the Master Servicer for such Distribution Date, over (ii) the
sum of (a) related amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case may
be, in error, (d) any Extraordinary Trust Fund Expenses and (e) the Trustee Fee
and any Lender-Paid PMI Premiums. The Available Distribution Amount shall also
be increased by any Required Surety Payment.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Amount": As of any date of determination prior to the first
anniversary of the Cut-off Date, an amount equal to the excess, if any, of (A)
$185,000 over (B) the aggregate amount of Bankruptcy Losses allocated solely to
one or more specific Classes of Certificates in accordance with Section 4.02. As
of any date of determination on or after the first anniversary of the Cut-off
Date, an amount equal to the excess, if any, of (1) the lesser of (a) the
Bankruptcy Amount calculated as of the close of business on the Business Day
immediately preceding the most recent anniversary of the Cut-off Date coinciding
with or preceding such date of determination (or, if such date of determination
is an anniversary of the Cut-off Date, the Business Day immediately preceding
such date of determination) (for purposes of this definition, the "Relevant
Anniversary") and (b) the greater of
(A) the greater of (i) 0.0006 times the aggregate principal balance of
all the Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary
having a Loan-to- Value Ratio at origination which exceeds 75% and (ii)
$185,000; and (B) the greater of (i) the product of (x) an amount equal to
the largest difference in the related Monthly Payment for any Non-Primary
Residence Loan remaining in the Mortgage Pool which had an original
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Loan-to-Value Ratio greater than 80% that would result if the Net Mortgage
Rate thereof was equal to the greater of (I) 5% or (II) the weighted
average (based on the principal balance of the Mortgage Loans as of the
Relevant Anniversary) of the Net Mortgage Rates of all Mortgage Loans as of
the Relevant Anniversary less 1.25% per annum, (y) a number equal to the
weighted average remaining term to maturity, in months, of all Mortgage
Loans with a Loan-to-Value Ratio of greater than 80% remaining in the
Mortgage Pool as of the Relevant Anniversary, and (z) one plus the quotient
of the number of all Non-Primary Residence Loans with a Loan-to-Value Ratio
of greater than 80% remaining in the Mortgage Pool divided by the total
number of outstanding Mortgage Loans in the Mortgage Pool as of the
Relevant Anniversary, and (ii) $185,000,
over (2) the aggregate amount of Bankruptcy Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.02 since the
Relevant Anniversary.
The Bankruptcy Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Bankruptcy Losses": Losses that are incurred as a result of Debt Service
Reductions and Deficient Valuations.
"Book-Entry Certificates": Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the
Certificates (other than the Class P, Class R, Class B-4, Class B-5 and Class
B-6 Certificates) shall be Book-Entry Certificates.
"Business Day": Any day other than (a) a Saturday or Sunday, (b) a legal
holiday in the State of New Jersey or the State of New York, or (c) a day on
which banking or savings and loan institutions in the State of New Jersey or the
State of New York are authorized or obligated by law or executive order to be
closed.
"Buydown Account": The custodial account or accounts created and maintained
pursuant to Section 3.25.
"Buydown Agreement": An agreement between the applicable originator and a
Mortgagor, or an agreement among such originator, a Mortgagor and an employer of
a relocated Mortgagor which, in each case, provides for the application of
Buydown Funds.
"Buydown Funds": In respect of any Buydown Mortgage Loan, any amount
contributed by the related originator or the employer of a relocated borrower in
order to enable the Mortgagor to reduce the payments required to be made from
the Mortgagor's funds during the Buydown Period.
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The Buydown Funds are not part of the Trust Fund prior to deposit into the
Collection Account or the Distribution Account.
"Buydown Mortgage Loan": Any Mortgage Loan in respect of which, pursuant to
a Buydown Agreement, (i) the Mortgagor pays less than the full monthly payment
specified in the Mortgage Note during the Buydown Period and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is paid from the related Buydown Funds.
"Buydown Period": The period during which Buydown Funds are required to be
applied to the related Buydown Mortgage Loans as provided in Section 3.25.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of which
were more than 2% or $2,000 in excess of the principal balance of any existing
first mortgage or seasoned subordinate mortgage on the related Mortgaged
Property and related closing costs.
"Cash Liquidation": As to any defaulted Mortgage Loan other than REO
Property which has been acquired by the Master Servicer on behalf of the Trustee
for the benefit of the Certificateholders, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Master Servicer reasonably or in
good faith expects to be finally recoverable with respect to such Mortgage Loan,
plus, with respect to a defaulted Mortgage Loan that is an Additional Collateral
Mortgage Loan, the amount realized on the related Additional Collateral with
respect to such Mortgage Loan in accordance with Section 3.16.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or non-U.S. Person shall not be a Holder of a Class R Certificate for any
purpose hereof.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Certificate (other
than any Interest Only Certificate) as of any date of determination, (x) the
Certificate Principal Balance of such Certificate on the Distribution Date
immediately prior to such date of determination, plus (y) (i) in the case of the
Class A-8 Certificates, an amount equal to the Monthly Interest Distributable
Amount added to the Certificate Principal Balance of the Class A-8 Certificates
on the Distribution Date immediately prior to such date of determination on or
prior to the Class A-8 Accretion Termination Date and (ii) in the case of the
Class A-9 Certificates, an amount equal to the Monthly Interest Distributable
Amount added to the Certificate Principal Balance of the Class A-9 Certificates
on the Distribution Date immediately prior to such date of determination on or
prior to the Class A-9 Accretion Termination Date, reduced by the aggregate of
(a) all distributions of principal made thereon on such immediately prior
Distribution Date and (b) without duplication of amounts described in clause (a)
above, reductions in the Certificate Principal Balance thereof in connection
with allocations thereto of Realized Losses on the Mortgage Loans and
Extraordinary Trust Fund Expenses on such immediately prior Distribution Date
(or, in the case of any date of determination up to and including
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the initial Distribution Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereon); provided, however, that the
Certificate Principal Balance of each Subordinate Certificate of the Class of
Subordinate Certificates outstanding with the highest numerical designation at
any given time shall be calculated to equal the Percentage Interest evidenced by
such Certificate multiplied by the excess, if any, of (A) the then aggregate
Stated Principal Balance of the Mortgage Loans over (B) the then aggregate
Certificate Principal Balances of all other Classes of Certificates then
outstanding. The Interest Only Certificates shall not have Certificate Principal
Balances and shall not be entitled to any distributions of principal.
"Certificate Register" and "Certificate Registrar": The register maintained
and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of payment
and bear the same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced thereby.
"Class A Certificate": Any of the Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 or Class A-10
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A, executed by the Trustee and authenticated and delivered by
the Trustee, representing the right to distributions as set forth herein and
therein.
"Class A Certificateholder": Any Holder of a Class A Certificate.
"Class A-8 Accretion Termination Date": The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A-6 Certificates and Class A-7 Certificates has been reduced to zero and
(ii) the Credit Support Depletion Date.
"Class A-8 Accrual Distribution Amount": With respect to each Distribution
Date prior to the Class A-8 Accretion Termination Date, an amount equal to the
aggregate amount of Monthly Interest Distributable Amount on the Class A-8
Certificates, for such date, to the extent added to the Certificate Principal
Balance thereof pursuant to Section 4.01(g); provided that, with respect to each
Distribution Date on or after the Class A-8 Accretion Termination Date, the
Monthly Interest Distributable Amount on the Class A-8 Certificates for such
date remaining after reduction of the Certificate Principal Balances of the
Class A-6 Certificates and Class A-7 Certificates to zero on the Class A-8
Accretion Termination Date will be payable to the Class A-8 Certificateholders
pursuant to Section 4.01(c)(i) hereof; and provided further, that if the Class
A-8 Accretion Termination Date is the Credit Support Depletion Date, the entire
amount of Monthly Interest Distributable Amount on the Class A-8 Certificates
for that date will be payable to the Class A-8 Certificateholders pursuant to
Section 4.01(c)(i) hereof.
"Class A-9 Accretion Termination Date": The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7 and
Class A-8 Certificates has been reduced to zero and (ii) the Credit Support
Depletion Date.
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"Class A-9 Accrual Distribution Amount": With respect to each Distribution
Date prior to the Class A-9 Accretion Termination Date, an amount equal to the
aggregate amount of Monthly Interest Distributable Amount on the Class A-9
Certificates, for such date, to the extent added to the Certificate Principal
Balance thereof pursuant to Section 4.01(h); provided that, with respect to each
Distribution Date on or after the Class A-9 Accretion Termination Date, the
Monthly Interest Distributable Amount on the Class A-9 Certificates for such
date remaining after reduction of the aggregate Certificate Principal Balance of
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7
and Class A-8 Certificates to zero on the Class A-9 Accretion Termination Date
will be payable to the Class A-9 Certificateholders pursuant to Section
4.01(c)(i) hereof; and provided further, that if the Class A-9 Accretion
Termination Date is the Credit Support Depletion Date, the entire amount of
Monthly Interest Distributable Amount on the Class A-9 Certificates for that
date will be payable to the Class A-9 Certificateholders pursuant to Section
4.01(c)(i) hereof.
"Class B Certificate": Any one of the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 or Class B-6 Certificates as designated on the face thereof
substantially in the form annexed hereto as Exhibit C-2, executed by the Trustee
and authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein.
"Class B Certificateholder": Any Holder of a Class B Certificate.
"Class B Percentage": The Class B-1 Percentage, Class B-2 Percentage, Class
B-3 Percentage, Class B-4 Percentage, Class B-5 Percentage or Class B-6
Percentage.
"Class B-1 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties), other than the Class P Fraction of the Class P Mortgage Loans,
immediately prior to such Distribution Date. The initial Class B-1 Percentage is
approximately 4.50%.
"Class B-2 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-2 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties), other than the Class P Fraction of the Class P Mortgage Loans,
immediately prior to such Distribution Date. The initial Class B-2 Percentage is
approximately 0.50%.
"Class B-3 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-3 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties), other than the Class P Fraction of the Class P Mortgage Loans,
immediately prior to such Distribution Date. The initial Class B-3 Percentage is
approximately 0.45%.
"Class B-4 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-4 Certificates
immediately prior to such Distribution Date and the
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denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties), other than the Class P Fraction of
the Class P Mortgage Loans, immediately prior to such Distribution Date. The
initial Class B-4 Percentage is approximately 0.20%.
"Class B-5 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-5 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties), other than the Class P Fraction of the Class P Mortgage Loans,
immediately prior to such Distribution Date. The initial Class B-5 Percentage is
approximately 0.15%.
"Class B-6 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-6 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties), other than the Class P Fraction of the Class P Mortgage Loans,
immediately prior to such Distribution Date. The initial Class B-6 Percentage is
approximately 0.20%.
"Class P Deferred Amount": With respect to each REO Disposition of a Class
P Mortgage Loan in connection with each Distribution Date or any prior
Distribution Date, the extent that the amount included under clause (iii) of the
definition of Class P Principal Distribution Amount for that Distribution Date
was less than the amount described in (x) under clause (iii) of the definition
of Class P Principal Distribution Amount.
"Class P Fraction": With respect to each Class P Mortgage Loan, a fraction,
expressed as a percentage, the numerator of which is 5.50% per annum minus the
Net Mortgage Rate for such Class P Mortgage Loan and the denominator of which is
5.50% per annum.
"Class P Mortgage Loan": Any Mortgage Loan with a Net Mortgage Rate less
than 5.50% per annum.
"Class P Principal Distribution Amount": With respect to any Distribution
Date, the balance of the Available Distribution Amount remaining after the
Senior Interest Distribution Amount (other than the Accrual Distribution
Amounts) has been distributed, equal to the aggregate of:
(i) the related Class P Fraction of the principal portion of each
Monthly Payment due during the related Due Period on each Class P Mortgage
Loan, whether or not received on or prior to the related Determination
Date, minus the Class P Fraction of the principal portion of the Debt
Service Reductions with respect to a Class P Mortgage Loan, which together
with other Bankruptcy Losses exceeds the Bankruptcy Amount;
(ii) the related Class P Fraction of the principal portion of all
other unscheduled collections on each Class P Mortgage Loan (other than
amounts received in connection with a Cash Liquidation or REO Disposition
of a Class P Mortgage Loan) including without limitation Principal
Prepayments in Full and Curtailments, Insurance Proceeds, Liquidation
Proceeds and REO Proceeds received during the related Prepayment Period to
the extent
8
applied by the Master Servicer as recoveries of principal of the related
Class P Mortgage Loan pursuant to Section 3.16;
(iii) with respect to a Class P Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related Prepayment
Period and did not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal
to the lesser of (x) the applicable Class P Fraction of the Stated
Principal Balance of such Class P Mortgage Loan and (y) the related
unscheduled collections to the extent applied by the Master Servicer as
recoveries of principal of the related Class P Mortgage Loan pursuant to
Section 3.16;
(iv) any amounts described in clauses (i), (ii) and (iii) as
determined for any previous Distribution Date, that remain undistributed;
and
(v) an amount equal to the aggregate of the Class P Deferred Amounts,
less any amounts paid under this clause on a prior Distribution Date, until
paid in full; provided that distributions under this clause (v) shall only
be made to the extent of Eligible Funds on such Distribution Date.
"Class R Certificates": The Class R Certificates executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit C-1 and evidencing the ownership of an
interest designated as the Residual Interest.
"Class Subordination Percentage": With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Certificate Principal Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Certificate Principal Balances of
all Classes of Certificates immediately prior to such Distribution Date.
"Closing Date": February 27, 2003..
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by the
Master Servicer pursuant to Section 3.10, which shall be entitled "Cendant
Mortgage Corporation, as Master Servicer for Citibank, N.A., as Trustee, in
trust for registered Holders of CDMC Mortgage Pass- Through Certificates, Series
2003-1", and which must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a taking
of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Control Agreement": With respect to each Mortgage 100(sm) Loan, the
Xxxxxxx Xxxxx Pledged Collateral Account Control Agreement between the guarantor
or mortgagor, as applicable, the
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Additional Collateral Servicer and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, pursuant to which the guarantor or mortgagor, as applicable, has
granted a security interest in a Securities Account.
"Cooperative": A corporation that has been formed for the purpose of
cooperative apartment ownership.
"Cooperative Assets": Shares issued by Cooperatives, the related
Cooperative Lease and any other collateral securing the Cooperative Loans.
"Cooperative Building": The building and other property owned by a
Cooperative.
"Cooperative Lease": With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.
"Cooperative Loan": The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.
"Cooperative Unit": A specific dwelling unit in a Cooperative Building as
to which exclusive occupancy rights have been granted pursuant to a Lease.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located, for Certificate transfer
purposes, at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
CDMC, Series 2003-1, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer.
"Credit Support Depletion Date": The first Distribution Date on which the
Senior Percentage equals 100%.
"Curtailment": Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
"Cut-off Date": February 1, 2003.
"Cut-off Date Aggregate Principal Balance": The aggregate of the Cut-off
Date Principal Balances of the Mortgage Loans. With respect to all Eligible
Substitute Mortgage Loans, their respective dates of substitution.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date (or as of the applicable
date of substitution with respect to a Eligible Substitute Mortgage Loan).
11
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Depositor": Cendant Mortgage Capital LLC, a Delaware limited liability
company, or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust Company,
whose nominee is Cede & Co., or any other organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry Certificates, the
agreement among the Depositor, the Trustee and the initial Depository, to be
dated on or about the Closing Date.
"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 calendar month in which such Distribution Date occurs or, if such 15th
day is not a Business Day, the Business Day immediately preceding such 15th day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust Fund other than
through an Independent Contractor, provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of
12
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the Xxxxxxx Mac or any
successor thereto, a majority of its board of directors is not selected by such
governmental unit), (ii) any foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code or (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel, which Opinion of Counsel shall not be an expense of the
Trustee, that the holding of an ownership interest in a Residual Certificate by
such Person may cause the Trust or any Person having an ownership interest in
the Residual Certificate (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in a Residual Certificate to such Person.
The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Citibank, N.A., as Trustee, in trust for the registered
Holders of the CDMC Mortgage Pass-Through Certificates, Series 2003-1" and which
must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such 25th
day is not a Business Day, the Business Day immediately following such 25th day,
commencing in March 2003.
"Due Date": With respect to each Mortgage Loan and any Distribution Date,
the first day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any days
of grace.
"Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month preceding the month in which such Distribution
Date (or with respect to the first Due Period, the day following the Cut-off
Date) occurs and ending on the first day of the month in which such Distribution
Date occurs.
"Effective Loan-to-Value Ratio": With respect to an Additional Collateral
Mortgage Loan, the ratio, expressed as a percentage, of (A) the principal amount
of the Mortgage Loan at origination less the value of any Additional Collateral
securing the Mortgage Loan, to (B) the lesser of (1) the appraised value
determined in an appraisal or other collateral assessment tool obtained at
origination of the Mortgage Loan and (2) the sales price for the related
Mortgaged Property.
"Eligible Account": Any of (i) an account or accounts maintained with a
depository institution the short-term debt obligations of which have been rated
by each Rating Agency in its highest rating available, (ii) in a depository
institution in which such accounts are fully insured to the limits established
by the FDIC, provided that any deposits not so insured shall, to the extent
acceptable to each Rating Agency, as evidenced in writing, be maintained such
that (as evidenced by an Opinion of Counsel delivered to the Trustee and each
Rating Agency) the registered Holders of Certificates have a claim with respect
to the funds in such account or a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
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that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity, (iv) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency that use of any such account will not reduce the rating assigned
to any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency) or (v) an account or accounts maintained
with a federal or state chartered depository institution or trust company that
meet the depository requirements of Xxxxxx Xxx or Xxxxxxx Mac. Eligible Accounts
may bear interest.
"Eligible Funds": With respect to each Distribution Date, the portion, if
any, of the Available Distribution Amount remaining after reduction by the sum
of the Senior Interest Distribution Amount, the Senior Principal Distribution
Amount, determined without regard to clause (D) of its definition, the Class P
Principal Distribution Amount, determined without regard to clause (v) of its
definition, and the aggregate amount of the Monthly Interest Distributable
Amount on the Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5
Certificates.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for a
Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the outstanding principal
balance of the Defective Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, the amount of any shortfall to be
deposited by the Master Servicer in the Collection Account in the month of
substitution, (ii) have a Loan Rate, not less than the Loan Rate of the
Defective Mortgage Loan and not more than 1% in excess of the Loan Rate of such
Defective Mortgage Loan, (iii) have a remaining term to maturity not greater
than (and not more than one year less than) that of the Defective Mortgage Loan,
(iv) be current as of the date of substitution, (v) have a Loan-to-Value Ratio
as of the date of substitution equal to or lower than the Loan-to-Value Ratio of
the Defective Mortgage Loan as of such date and (vi) conform to each
representation and warranty set forth in Section 2.04 hereof applicable to the
Defective Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Defective Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Loan Rates described in clause (ii) hereof shall be determined on
the basis of weighted average Loan Rates, the terms described in clause (iii)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Loan-to-Value Ratios described in clause (v) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (vi) hereof must be satisfied as to each Eligible Substitute Mortgage
Loan or in the aggregate, as the case may be. Any Mortgage Loan substituted for
a Mortgage Loan which has an arrearage due to the application of any related
forbearance plan with respect to such Mortgage Loan, will be treated as having
such an arrearage due to the application of any related forbearance plan with
respect to such Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA-Restricted Certificates": Any of the Class B-4, Class B-5, Class B-6
and Class R Certificates.
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"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Excess Losses": (i) Special Hazard Losses in excess of the Special Hazard
Amount, (ii) Bankruptcy Losses in excess of the Bankruptcy Amount, (iii) Fraud
Losses in excess of the Fraud Loss Amount and (iv) Extraordinary Losses.
"Excess Subordinate Principal Amount": With respect to any Distribution
Date on which the Certificate Principal Balance of the Class or Classes of
Certificates then outstanding with the Lowest Priority is to be reduced to zero
and on which Realized Losses are to be allocated to that Class or those Classes,
the amount, if any, by which (i) the amount of principal that would otherwise be
distributable on that Class or those Classes of Certificates on such
Distribution Date is greater than (ii) the excess, if any, of the aggregate
Certificate Principal Balance of that Class or those Classes of Certificates
immediately prior to such Distribution Date over the aggregate amount of
Realized Losses to be allocated to that Class or those Classes of Certificates
on such Distribution Date, as reduced by any amount calculated pursuant to
clause (v) of the definition of Class P Principal Distribution Amount.
"Exchange Act": The Securities and Exchange Act of 1934, as amended.
"Extraordinary Loss": Any Realized Loss or portion thereof caused by or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled and
whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by
the definition of the term "Special Hazard Loss";
(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending or
expected attack by any government or sovereign power, DE JURE or DE FACTO,
or by any authority maintaining or using military, naval or air forces, or
by military, naval or air forces, or by an agent of any such government,
power, authority or forces;
(iii) any weapon of war employing atomic fission or radioactive forces
whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority, or risks of contraband or illegal transactions or trade.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to Section 6.03, any amounts reimbursable to
the Trustee from the Trust Fund pursuant to this Agreement, including but not
limited to Section 8.05, and any other costs, expenses,
15
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Trustee, shall not, obtain reimbursement or indemnification from any other
Person.
"Xxxxxx Mae": Federal National Mortgage Association or any successor
thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section 3.14.
"Final Recovery Determination": With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by a
Seller or the Master Servicer pursuant to or as contemplated by Section 2.03 or
10.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination
made thereby.
"Fitch": Fitch, Inc., doing business as Fitch Ratings, and any successor
thereto or its successor in interest.
"Foreclosure Price": The amount reasonably expected to be received from the
sale of the related Mortgaged Property net of any expenses associated with
foreclosure proceedings.
"Fraud Loss Amount": As of any date of determination after the Cut-off
Date, (X) prior to the third anniversary of the Cut-off Date, an amount equal to
1.00% of the aggregate outstanding principal balance of all of the Mortgage
Loans as of the Cut-off Date minus the Fraud Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.02 since the
most recent anniversary of the Cut-off Date up to such date of determination and
(Y) from the third to the fifth anniversary of the Cut-off Date, an amount equal
to (1) the lesser of (a) the Fraud Loss Amount as of the most recent anniversary
of the Cut-off Date and (b) 0.50% of the aggregate outstanding principal balance
of all of the Mortgage Loans as of the Cut-off Date minus (2) the Fraud Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.02 since the most recent anniversary of the Cut-off Date up to
such date of determination. On and after the fifth anniversary of the Cut-off
Date, the Fraud Loss Amount shall be zero.
The Fraud Loss Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
conformation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written conformation to the Trustee.
"Fraud Losses": Losses sustained on a Liquidated Mortgage Loan by reason of
a default arising from fraud, dishonesty or misrepresentation.
16
"Xxxxxxx Mac": Federal Home Loan Mortgage Corporation or any successor
thereto.
"Highest Priority": As of any date of determination, the Class of
Subordinate Certificates then outstanding with the earliest priority for
payments pursuant to Section 4.01(c), in the following order: Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.
"HUD": The United States Department of Housing and Urban Development, or
any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; PROVIDED, HOWEVER, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
"Independent Contractor": Either (i) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were
a real estate investment trust (except that the ownership tests set forth in
that section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Master Servicer) if the Trustee has received an
Opinion of Counsel, which Opinion of Counsel shall be an expense of the Trust
Fund, to the effect that the taking of any action in respect of any REO Property
by such Person, subject to any conditions therein specified, that is otherwise
herein contemplated to be taken by an Independent Contractor will not cause such
REO Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as rents from real
property.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate, other than the Class X Certificates, the amount designated "Initial
Certificate Principal Balance" on the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan, to the extent such proceeds are not
to be applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
17
"Interest Accrual Period": With respect to any Distribution Date and any
Class of Certificates, the calendar month immediately preceding the month in
which such Distribution Date occurs.
"Interest Only Certificates": Any one of the Class X Certificates.
"Late Collections": With respect to any Mortgage Loan, all amounts received
subsequent to the Determination Date immediately following any related Due
Period, whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal and/or interest due (without regard to any acceleration of payments
under the related Mortgage and Mortgage Note) but delinquent on a contractual
basis for such Due Period and not previously recovered.
"Lender-Paid PMI Premium": The related monthly fee in connection with any
lender-paid Primary Insurance Policy.
"Limited Purpose Surety Bond": The Limited Purpose Surety Bond (Policy No.
AB0039BE), dated February 28, 1996 in respect to certain Additional Collateral
Mortgage Loans, issued by Ambac Assurance Corporation (f/k/a Ambac Indemnity
Corporation) for the benefit of certain beneficiaries, including the Trustee for
the benefit of the Certificateholders, but only to the extent that such Limited
Purpose Surety Bond covers any Additional Collateral Mortgage Loans.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan
in respect of which the Master Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Due Period,
that all Liquidation Proceeds and Insurance Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in respect
of the rental of any REO Property prior to REO Disposition) received by the
Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise (including, with respect to a defaulted Mortgage
Loan that is an Additional Collateral Mortgage Loan, the amount realized on the
related Additional Collateral with respect to such Mortgage Loan in accordance
with Section 3.16), or (iii) the repurchase, substitution or sale of a Mortgage
Loan or an REO Property pursuant to or as contemplated by Section 2.03, Section
3.16 or Section 10.01.
18
"Loan Balance": As of any date, the aggregate Stated Principal Balance of
all of the Mortgage Loans as of such date.
"Loan-to-Value Ratio": As of any date and Mortgage Loan (other than an
Additional Collateral Mortgage Loan), the fraction, expressed as a percentage,
the numerator of which is the Stated Principal Balance of the Mortgage Loan, and
the denominator of which is the Value of the related Mortgaged Property. As of
any date and any Additional Collateral Mortgage Loan, the related Effective
Loan-to-Value Ratio.
"Loan Rate": With respect to each Mortgage Loan, the annual rate at which
interest accrues on such Mortgage Loan from time to time in accordance with the
provisions of the related Mortgage Note, which rate shall remain constant at the
rate set forth in the Mortgage Loan Schedule as the Loan Rate in effect
immediately following the Cut-off Date. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
"Lockout Percentage": With respect to any Distribution Date, the
Certificate Principal Balance of the Class A-10 Certificates divided by the
aggregate Certificate Principal Balance of the Senior Certificates (other than
the Class P Certificates), in each case immediately prior to any allocations of
losses or distributions on that Distribution Date.
"Lockout Prepayment Percentage": With respect to any Distribution Date, the
product of (i) the Lockout Percentage and (ii) the Stepdown Percentage.
"Lockout Scheduled Percentage": With respect to any Distribution Date (i)
occurring prior to March 2008, 0% and (ii) occurring in or after March 2008, the
Lockout Percentage.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Depositor as applicable certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a
copy of the related Mortgage Note and indemnifying the Trust against any loss,
cost or liability resulting from the failure to deliver the original Mortgage
Note) in the form of Exhibit H hereto.
"Lower Priority": As of any date of determination and with respect to any
Class of Subordinate Certificates, any other Class of Subordinate Certificates
then outstanding with a later priority for payments pursuant to Section 4.01(c).
"Lowest Priority": As of any date of determination, the Class of
Subordinate Certificates then outstanding with the latest priority for payments
pursuant to Section 4.01(c), in the following order: Class B-6, Class B-5, Class
B-4, Class B-3, Class B-2 and Class B-1 Certificates.
"Majority Certificateholders": The Holders of Certificates evidencing at
least 51% of the Voting Rights.
19
"Master Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Master Servicer or which is 50% or more owned by
the Master Servicer and (ii) which is qualified to service residential mortgage
loans.
"Master Servicer Event of Termination": One or more of the events described
in Section 7.01.
"Master Servicer Remittance Date": With respect to any Distribution Date,
the Business Day prior to such Distribution Date.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
"MERS(R) System": The system of recording transfers of Mortgages
electronically maintained by MERS.
"MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R)System.
"MLCC": Xxxxxxx Xxxxx Credit Corporation and its successors in interest.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
"Monthly Interest Distributable Amount": An amount equal to the interest
accrued during the related Interest Accrual Period on the Certificate Principal
Balance or Notional Amount, as applicable of each Class of Certificates at the
then-applicable Pass-Through Rate. The Monthly Interest Distributable Amount on
any Class of Certificates will be reduced by the amount of (i) Prepayment
Interest Shortfalls (to the extent not offset by the Master Servicer with a
payment of Compensating Interest as provided in Section 3.24), (ii) the interest
portion (adjusted to the Net Mortgage Rate) of Realized Losses (including Excess
Losses) not allocated solely to one or more specific Classes of Certificates
pursuant to Section 4.02, (iii) the interest portion of Advances previously made
with respect to a Mortgage Loan or REO Property which remained unreimbursed
following the Cash Liquidation or REO Disposition of such Mortgage Loan or REO
Property that were made with respect to delinquencies that were ultimately
determined to be Excess Losses and (iv) any other interest shortfalls not
covered by the subordination provided by the Class B Certificates, including
Relief Act Shortfalls, with all such reductions allocated among all of the
Certificates in proportion to their respective amounts of Monthly Interest
Distributable Amount payable on such Distribution Date which would have resulted
absent such reductions.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
Master Servicer pursuant to
20
Section 3.01; and (c) on the assumption that all other amounts, if any, due
under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. and its successors in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage 100(sm) Loan": A Mortgage Loan secured by Additional Collateral
in the form of a security interest in the Securities Account and the financial
assets held therein and having a value, as of the date of origination of such
Mortgage Loan, of at least equal to the related Original Additional Collateral
Requirement.
"Mortgage 100(sm) Pledge Agreement": With respect to each Mortgage 100(sm)
Loan, the Pledge Agreement for Securities Account between the related mortgagor
and the Additional Collateral Servicer pursuant to which such mortgagor granted
a security interest in the related securities and other financial assets held
therein.
"Mortgage File": The mortgage documents listed in Section 2.01(A) and (B)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan (including the Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section
2.03(d) as from time to time held as a part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The mortgage loan purchase agreement,
dated as of February 1, 2003, among the Sellers and the Depositor, regarding the
transfer of the Mortgage Loans.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
identifying the Mortgage Loans transferred from the Sellers, and attached hereto
as Exhibit D. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:
(i) the Sellers' Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the original date of the mortgage;
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(viii) the Loan-to-Value Ratio or Effective Loan-to-Value Ratio, as
applicable, at origination;
(ix) the loan rate;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment as of the Cut-off Date;
(xiv) the next Due Date on which a Monthly Payment is due;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the unpaid principal balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvii) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(xviii) a code indicating the documentation style (i.e., full,
alternative or reduced);
(xix) a code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy;
(xx) the name of the Qualified Insurer and the certificate number
for any Primary Insurance Policy, if applicable;
(xxi) the depth of coverage of any Primary Insurance Policy, if
applicable;
(xxii) the Value of the Mortgaged Property;
(xxiii) the sale price of the Mortgaged Property, if applicable;
(xxiv) the Servicing Fee;
(xxv) whether the Mortgage Loan is a Buydown Mortgage Loan;
(xxvi) the Lender-Funded PMI Premium, if applicable; and
(xxvii) the amount of the Original Additional Collateral Requirement,
if any.
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The Mortgage Loan Schedule shall set forth the following information with
respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Loan Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement. With respect to any Eligible Substitute Mortgage
Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D from
time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property (including REO Property) the
related Liquidation Proceeds net of Advances, Servicing Advances, Servicing Fees
and any other accrued and unpaid Servicing Fees received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property
Rate.
"Net Mortgage Rate": With respect to any Mortgage Loan, (x) the Loan Rate
minus (y) the Servicing Fee Rate, the Trustee Fee Rate and the Lender-Paid PMI
Premium, if applicable.
"New Lease": Any lease of REO Property entered into on behalf of the Trust,
including any lease renewed or extended on behalf of the Trust if the Trust has
the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": As of any Distribution Date with respect to the Class X
Certificates, an amount equal to aggregate Stated Principal Balance of the
Premium Rate Mortgage Loans immediately prior to such Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a vice president (however
denominated), and by the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries of the Master Servicer or the Depositor, as
applicable.
23
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of the Trust Fund as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate the Trust Fund pursuant to Section 10.01.
"Original Additional Collateral Requirement': With respect to any
Additional Collateral Mortgage Loan, an amount equal to the Additional
Collateral required at the time of the origination of such Additional Collateral
Mortgage Loan in order to achieve an Effective Loan-to-Value Ratio for such
Additional Collateral Mortgage Loan, generally equal to seventy percent (70%);
for purposes of the Required Surety Payment, in no event shall the Original
Additional Collateral Requirement for an Additional Collateral Mortgage Loan
exceed thirty percent (30%) of its original principal balance.
"Original Notional Amount": With respect to the Class X Certificates,
approximately $259,960,648.
"Original Certificate Principal Balance": With respect to each Class of the
Certificates (other than the Interest Only Certificates), the Certificate
Principal Balance thereof on the Closing Date, as set forth opposite such Class
above in the Preliminary Statement.
"Original Subordinated Principal Balance": The aggregate of the Certificate
Principal Balances of the Subordinate Certificates as of the Cut-off Date.
"Other Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, other than the Primary
Insurance Policy, if any, to the extent such proceeds are not to be 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.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Parent Power(R)Agreement": With respect to each Parent Power(R)Mortgage
Loan, a Parent Power(R)Guaranty and Security Agreement for Securities Account.
"Parent Power(R) Guaranty and Security Agreement for Securities Account":
With respect to a Parent Power(R) Mortgage Loan, an agreement between the
Additional Collateral Servicer and a guarantor on behalf of the mortgagor under
such Parent Power(R) Mortgage Loan pursuant to which such guarantor guarantees
the payment of certain losses under such Parent Power(R) Mortgage Loan and has
granted a security interest to the Additional Collateral Servicer in certain
marketable securities to collateralize such guaranty. The required amount of
such collateral is at least equal to the Original Additional Collateral
Requirement for such Parent Power(R) Mortgage Loan.
24
"Parent Power(R) Mortgage Loan": A Mortgage Loan having at the time of
origination a Loan- to-Value Ratio generally in excess of the Master Servicer's
maximum acceptable Loan-to-Value Ratio for such Mortgage Loan as set forth in
the Underwriting Guide, which Mortgage Loan is supported by a Parent Power(R)
Agreement.
"Pass-Through Rate": With respect to the Certificates (other than the Class
P Certificates and Class X Certificates) and any Distribution Date, 5.50% per
annum. With respect to the Class P Certificates and any Distribution Date, 0.00%
per annum. With respect to the Class X Certificates and any Distribution Date,
the weighted average of the Stripped Interest Rates for the Premium Rate
Mortgage Loans immediately prior to such Distribution Date
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a Class
R Certificate), a fraction, expressed as a percentage, the numerator of which is
the Initial Certificate Principal Balance or Initial Notional Amount, as the
case may be, represented by such Certificate and the denominator of which is the
Original Certificate Principal Balance or Original Notional Amount, as the case
may be, of the related Class. With respect to any Class of Class R Certificates,
the portion of such Class evidenced thereby, expressed as a percentage, as
stated on the face of such Certificate; provided, however, that the sum of all
such percentages for each such Class totals 100%.
"Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued or managed by the Depositor, the Master Servicer, the Trustee or
any of their respective Affiliates or for which an Affiliate of the Trustee
serves as an advisor:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each Rating Agency in its highest
short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States
dollars of any U.S. depository institution or trust company incorporated
under the laws of the United States or any state thereof or of any domestic
branch of a foreign depository institution or trust company; provided that
the debt obligations of such depository institution or trust company (or,
if the only Rating Agency is S&P, in the case of the principal depository
institution in a depository institution holding company, debt obligations
of the depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in its highest short-term
rating available; and provided further that, if the only Rating Agency is
S&P and if the depository or trust company is a principal
25
subsidiary of a bank holding company and the debt obligations of such
subsidiary are not separately rated, the applicable rating shall be that of
the bank holding company; and, provided further that, if the original
maturity of such short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of S&P if
S&P is the Rating Agency;
(iv) commercial paper and demand notes (having original maturities of
not more than 365 days) of any corporation 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 its highest short-term rating
available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency, as evidenced in
writing;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Person other than a Disqualified Organization,
or an "electing large partnership" as defined in Section 775(a) of the Code or a
non-U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Planned Principal Balance": With respect to the Class A-1 Certificates and
each Distribution Date, the amount set forth for such Distribution Date on
Exhibit L hereto under the column entitled Planned Principal Balances.
"Premium Rate Mortgage Loan": Any Mortgage Loan other than a Class P
Mortgage Loan.
"Prepayment Distribution Trigger": With respect to any Distribution Date
and any Class of Subordinate Certificates (other than the Class B-1
Certificates), a test that shall be satisfied if the fraction (expressed as a
percentage) equal to the sum of the Certificate Principal Balances of such Class
and each Class of Subordinate Certificates with a Lower Priority than such Class
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties),
other than the Class P Fraction of the Class P Mortgage
26
Loans, immediately prior to such Distribution Date is greater than or equal to
the sum of the related initial Class B Percentages of such Classes of
Subordinate Certificates.
"Prepayment Interest Shortfall": As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
"Primary Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in effect with respect to any Mortgage
Loan, or any replacement policy therefor obtained by the Master Servicer
pursuant to Section 3.13.
"Principal Prepayment": Any payment of principal made by the Mortgagor on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"Principal Prepayment in Full": Any Principal Prepayment made by a
Mortgagor of the entire unpaid principal balance of the Mortgage Loan.
"Private Certificates": Any of the Class B-4, Class B-5 and Class B-6
Certificates.
"Property Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, to the extent such proceeds
are received by the Master Servicer and are not to be applied to the restoration
of the related Mortgaged Property or released to the Mortgagor in accordance
with the Master Servicer's servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated
Principal Balance at the applicable Loan Rate in effect from time to time from
the Due Date as to which interest was last covered by a payment by the Mortgagor
or an advance by the Master Servicer, which payment or advance had as of the
date of purchase been distributed pursuant to Section 4.01, through the end of
the calendar month in which the purchase is to be effected, and (y) an REO
Property, the sum of (1) accrued interest on such Stated Principal Balance at
the applicable Loan Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an
27
advance by the Master Servicer through the end of the calendar month immediately
preceding the calendar month in which such REO Property was acquired, plus (2)
REO Imputed Interest for such REO Property for each calendar month commencing
with the calendar month in which such REO Property was acquired and ending with
the calendar month in which such purchase is to be effected, net of the total of
all net rental income, Insurance Proceeds, Liquidation Proceeds and Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 4.07, (iii) any unreimbursed Servicing Advances and
Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the Collection Account in
respect of such Mortgage Loan or REO Property pursuant to Section 3.23, and (z)
in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the Master Servicer or
the Trustee in respect of the breach or defect giving rise to the purchase
obligation.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx or
Xxxxxxx Mac.
"Rate/Term Refinancing": A Refinanced Mortgage Loan which is not a Cash-Out
Refinancing.
"Rating Agency or Rating Agencies": S&P, Fitch or their successors. If such
agencies or their successors are no longer in existence, "Rating Agencies" shall
be such nationally recognized statistical rating agencies, or other comparable
Persons, designated by the Depositor, notice of which designation shall be given
to the Trustee and Master Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan.
"Record Date": With respect to all of the Certificates, the last Business
Day of the month immediately preceding the month in which the related
Distribution Date occurs.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were used
to satisfy an existing mortgage loan on the Mortgaged Property.
"Regular Certificate": Any of the Class A, Class P, Class X and Class B
Certificates.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date, for
any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended Due Period as a result
of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Stated Principal Balance of such Mortgage Loan at the
Loan Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
28
"REMIC": A "real estate mortgage investment conduit' 'within the meaning of
Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Report": A report prepared by the Master Servicer and delivered
to the Trustee pursuant to Section 4.03.
"Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Master Servicer in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23. hereto.
"Request for Release": A release signed by a Servicing Officer, in the form
of Exhibit E attached
"Required Surety Payment": With respect to any Additional Collateral
Mortgage Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion of the Realized Loss with
29
respect to such Mortgage Loan and (ii) the excess, if any, of (a) the Original
Additional Collateral Requirement with respect to such Mortgage Loan over (b)
the net proceeds realized by the Additional Collateral Servicer from the related
Additional Collateral as set forth in Section 3.16.
"Residential Dwelling": Any one of the following: (i) an attached or
detached one-family dwelling unit, (ii) two- to four-family dwelling unit, (iii)
condominium, (iv) townhouse, (v) row house, or (vi) individual unit in a planned
unit development.
"Residual Certificate": Any of the Class R Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any officer,
including any Vice President, Assistant Vice President, Trust Officer, 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 in each case having direct responsibility for the
administration of this Agreement.
"Restricted Classes": With respect to any Class of Certificates, any
Classes of Certificates with a lower priority of payment relative to such Class.
"S&P": Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and its successors.
"Securities Account": With respect to any Additional Collateral Mortgage
Loans, the account, together with the financial assets held therein, that is the
subject of the related Mortgage 100(sm) Pledge Agreement.
"Security Agreement": With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Assets.
"Seller": Either of (i) Cendant Mortgage Corporation, a New Jersey
corporation, or any successor in interest or (ii) Xxxxxx'x Gate Residential
Mortgage Trust, a Delaware business trust, or any successor in interest.
"Senior Certificates": The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class P,
Class X and Class R Certificates.
"Senior Interest Distribution Amount": With respect to each Distribution
Date, the aggregate amount of the Monthly Interest Distributable Amount to be
distributed to the Holders of the Senior Certificates for such Distribution
Date, including the Accrual Distribution Amount.
"Senior Percentage": As of any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class A Certificates and Class R
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans or
30
related REO Properties, other than the Class P Fraction of the Class P Mortgage
Loans, immediately prior to such Distribution Date.
"Senior Prepayment Percentage": With respect to any Distribution Date, the
percentage indicated below:
Distribution Date Senior Prepayment Percentage
----------------- ----------------------------
March 2003 through February 2008 100%
March 2008 through February 2009 Senior Percentage, plus 70% of the
Subordinate Percentage
March 2009 through February 2010 Senior Percentage, plus 60% of the
Subordinate Percentage
March 2010 through February 2011 Senior Percentage, plus 40% of the
Subordinate Percentage
March 2011 through February 2012 Senior Percentage, plus 20% of the
Subordinate Percentage
March 2012 and thereafter Senior Percentage
provided, however, (i) that any scheduled reduction to the Senior Prepayment
Percentage described above shall not occur as of any Distribution Date unless
either (a)(1)(x) the outstanding principal balance of Mortgage Loans delinquent
60 days or more (including Mortgage Loans in foreclosure and REO Property)
averaged over the last six months as a percentage of the aggregate outstanding
Certificate Principal Balance of the Class B Certificates as of such
Distribution Date, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including Mortgage Loans in
foreclosure and REO Property) averaged over the last six months, as a percentage
of the aggregate outstanding principal balance of all Mortgage Loans as of such
Distribution Date, does not exceed 2% and (2) Realized Losses on the Mortgage
Loans to date for such Distribution Date if occurring during the sixth, seventh,
eighth, ninth or tenth year (or any year thereafter) after the Closing Date are
less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial
Certificate Principal Balances of the Class B Certificates or (b) (1) the
aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days
or more (including Mortgage Loans in foreclosure and REO Property) averaged over
the last six months, as a percentage of the aggregate outstanding principal
balance of all Mortgage Loans as of such Distribution Date, does not exceed 4%
and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date
if occurring during the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of the sum of the Initial Certificate Principal Balances of the
Class B Certificates and (ii) that for any Distribution Date on which the Senior
Percentage is greater than the Original Senior Percentage, the Senior Prepayment
Percentage for such Distribution Date shall be 100%. Notwithstanding the
foregoing, upon the reduction of the aggregate Certificate Principal Balance of
the Class A Certificates to zero, the Senior Prepayment Percentage will equal
0%.
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"Senior Principal Distribution Amount": As to any Distribution Date, the
lesser of (a) the balance of the Available Distribution Amount remaining after
the distribution of all amounts required to be distributed pursuant to Section
4.01(c)(i) and (b) the sum of the following:
(A) the Senior Percentage for such Distribution Date times the sum of
the following:
(1) the principal portion of each Monthly Payment due during the
related Due Period on each Outstanding Mortgage Loan, other than the
related Class P Fraction of the principal portion of such Monthly
Payments with respect to each Class P Mortgage Loan, whether or not
received on or prior to the related Determination Date, minus the
principal portion of any Debt Service Reduction, other than the
related Class P Fraction of the principal portion of the Debt Service
Reductions with respect to a Class P Mortgage Loan, which together
with other Bankruptcy Losses exceeds the Bankruptcy Amount;
(2) the Stated Principal Balance of any Mortgage Loan, other than
the related Class P Fraction of the Stated Principal Balance of any
Class P Mortgage Loan, repurchased during the related Prepayment
Period pursuant to Section 2.02, 2.03, 3.15 or 3.16; and
(3) the principal portion of all other unscheduled collections
(other than Principal Prepayments in Full and Curtailments and amounts
received in connection with a Cash Liquidation or REO Disposition of a
Mortgage Loan, including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) received during the related
Prepayment Period to the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16, other than the related Class P Fraction of the principal
portion os such unscheduled collections, with respect to each Class P
Mortgage Loan;
(B) with respect to each Mortgage Loan for which a Cash Liquidation or
a REO Disposition occurred during the related Prepayment Period and did not
result in any Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses, an amount equal to the lesser of
(a) the Senior Percentage for such Distribution Date times the Stated
Principal Balance of such Mortgage Loan, other than the related Class P
Fraction of the Stated Principal Balance, with respect to a Class P
Mortgage Loan; and (b) the Senior Prepayment Percentage for such
Distribution Date times the related unscheduled collections (including
without limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to Section 3.16, in each
case other than the portion of the collections, with respect to a Class P
Mortgage Loan, included in clause (iii) of the definition of "Class P
Principal Distribution Amount";
(C) the Senior Prepayment Percentage for such Distribution Date times
the aggregate of all Principal Prepayments in Full and Curtailments
received in the related Prepayment Period with respect to the Mortgage
Loans, other than the related Class P
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Fraction of such Principal Prepayments in Full and Curtailments, with
respect to each Class P Mortgage Loan;
(D) any Excess Subordinate Principal Amount for such Distribution
Date; and
(E) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which remain
unpaid after application of amounts previously distributed pursuant to this
clause (E) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class B Certificates;
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicer Event of Termination": One or more of the events described in
Section 7.01.
"Servicing Advances": The reasonable "out-of-pocket" costs and expenses
incurred by the Master Servicer in connection with a default, delinquency or
other unanticipated event by the Master Servicer in the performance of its
servicing obligations, including, but not limited to, (a) reasonable attorneys'
fees and (b) the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Mortgage Loan, including any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered on the MERS System, (iii) the management (including reasonable
fees in connection therewith) and liquidation of any REO Property, and (iv) the
performance of its obligations under Section 3.01, Section 3.09, Section 3.13,
Section 3.14, Section 3.16 and Section 3.23. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers famished by the
Master Servicer to the Trustee and the Depositor on the Closing Date, as such
list may from time to time be amended.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month.
"Servicing Fee Rate": With respect to any Mortgage Loan, a rate equal to
0.25% per annum.
"Special Hazard Amount": As of any Distribution Date, an amount equal to
$2,871,239 minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.02 and (ii) the Adjustment Amount (as defined below) as most
recently calculated. For each anniversary of the Cut-off Date, the Adjustment
Amount shall be equal to the amount, if any, by which the amount calculated in
accordance with the
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preceding sentence (without giving effect to the deduction of the Adjustment
Amount for such anniversary) exceeds the greater of (A) the greatest of (i)
twice the outstanding principal balance of the Mortgage Loan in the Trust Fund
which has the largest outstanding principal balance on the Distribution Date
immediately preceding such anniversary, (ii) the product of 1.00% multiplied by
the outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate principal balance as of such
anniversary and (B) the greater of (i) the product of 0.50% multiplied by the
outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary multiplied by a fraction, the numerator
of which is equal to the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans secured by
Mortgaged Properties located in the State of California divided by the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans, expressed as a percentage, and the
denominator of which is equal to 25.81% (which percentage is equal to the
percentage of Mortgage Loans initially secured by Mortgaged Properties located
in the State of California) and (ii) the aggregate outstanding principal balance
(as of the immediately preceding Distribution Date) of the largest Mortgage Loan
secured by a Mortgaged Property located in the State of California.
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Special Hazard Losses": Realized Losses in respect of Special Hazard
Mortgage Loans.
"Special Hazard Mortgage Loan": A Liquidated Mortgage Loan as to which the
ability to recover the full amount due thereunder was substantially unpaired by
a hazard not insured against under a standard hazard insurance policy.
"Startup Day": As defined in Section 9.01 (b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
"Stayed Funds": If the Master Servicer is the subject of a proceeding under
the federal Bankruptcy Code and the mailing of a remittance by the Master
Servicer pursuant to this Agreement is prohibited by Section 362 of the federal
Bankruptcy Code, funds which are in the custody of the Master Servicer, a
trustee in bankruptcy or a federal bankruptcy court and should have been the
subject of such remittance absent such prohibition.
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"Stepdown Percentage": With respect to any Distribution Date, the
percentage indicated below:
Distribution Date Stepdown Percentage
----------------- -------------------
March 2003 through February 2008 0%
March 2008 through February 2009 30%
March 2009 through February 2010 40%
March 2010 through February 2011 60%
March 2011 through February 2012 80%
March 2012 and thereafter 100%
"Stripped Interest Rate": For each Premium Rate Mortgage Loan, the excess,
if any, of the Net Mortgage Rate over 5.50% per annum.
"Subordinate Certificates": The Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates.
"Subordinate Percentage": For any Distribution Date, the difference between
100% and the Senior Percentage for such date.
"Subordinate Prepayment Percentage": With respect to any Distribution Date
and each Class of Subordinate Certificates, under the applicable circumstances
set forth below, the respective percentages set forth below:
(i) For any Distribution Date prior to the Distribution Date in March
2008, 0%.
(ii) For any Distribution Date for which clause (i) does not apply,
and on which any Class of Subordinate Certificates are outstanding:
(a) in the case of the Class of Subordinate Certificates then
outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment Distribution
Trigger has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Certificate Principal Balance of such Class
immediately prior to such date and the denominator of which is the sum
of the Certificate Principal Balances immediately prior to such date
of (1) the Class of Subordinate Certificates then outstanding with the
Highest Priority and (2) all other Classes of Subordinate Certificates
for which the respective Prepayment Distribution Triggers have been
satisfied; and
(b) in the case of each other Class of Subordinate Certificates
for which the Prepayment Distribution Triggers have not been
satisfied, 0%; and
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(iii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.01(c) of this Agreement (determined without regard to the proviso to
the definition of "Subordinate Principal Distribution Amount") would
result in a distribution in respect of principal of any Class or
Classes of Subordinate Certificates in an amount greater than the
remaining Certificate Principal Balance thereof (any such class, a
"Maturing Class"), then: (a) the Subordinate Prepayment Percentage of
each Maturing Class shall be reduced to a level that, when applied as
described above, would exactly reduce the Certificate Principal
Balance of such Class to zero; (b) the Subordinate Prepayment
Percentage of each other Class of Subordinate Certificates (any such
Class, a "Non-Maturing Class") shall be recalculated in accordance
with the provisions in paragraph (ii) above, as if the Certificate
Principal Balance of each Maturing Class had been reduced to zero
(such percentage as recalculated, the "Recalculated Percentage"); (c)
the total amount of the reductions in the Subordinate Prepayment
Percentages of the Maturing Class or Classes pursuant to clause (a) of
this sentence, expressed as an aggregate percentage, shall be
allocated among the Non-Maturing Classes in proportion to their
respective Recalculated Percentages (the portion of such aggregate
reduction so allocated to any Non-Maturing Class, the "Adjustment
Percentage"); and (d) for purposes of such Distribution Date, the
Subordinate Prepayment Percentage of each Non-Maturing Class shall be
equal to the sum of (1) the Subordinate Prepayment Percentage thereof,
calculated in accordance with the provisions in paragraph (ii) above
as if the Certificate Principal Balance of each Maturing Class had not
been reduced to zero, plus (2) the related Adjustment Percentage.
"Subordinate Principal Distribution Amount": With respect to any
Distribution Date and each Class of Class B Certificates, the sum of the
following:
(i) the product of (x) the related Class B Percentage for such Class
and (y) the aggregate of the following amounts:
(1) the principal portion of each Monthly Payment due during the
related Due Period on each Outstanding Mortgage Loan, other than the
related Class P Fraction of the principal portion of such Monthly
Payments with respect to each Class P Mortgage Loan, whether or not
received on or prior to the related Determination Date, minus the
principal portion of any Debt Service Reduction, other than the
related Class P Fraction of the principal portion of the Debt Service
Reductions with respect to a Class P Mortgage Loan, which together
with other Bankruptcy Losses exceeds the Bankruptcy Amount;
(2) the Stated Principal Balance of any Mortgage Loan, other than
the related Class P Fraction of the Stated Principal Balance of any
Class P Mortgage Loan, repurchased during the related Prepayment
Period pursuant to Section 2.02, 2.03, 3.15 or 3.16; and
(3) the principal portion of all other unscheduled collections
(other than Principal Prepayments in Full and Curtailments and amounts
received in connection with a Cash Liquidation or REO Disposition of a
Mortgage Loan, including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) received during the related
Prepayment Period to the extent applied by the Master Servicer as
36
recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16, other than the related Class P Fraction of the principal
portion of such unscheduled collections, with respect to each Class P
Mortgage Loan;
(ii) such Class's pro rata share, based on the Certificate Principal
Balance of each Class of Class B Certificates then outstanding, of, with
respect to each Mortgage Loan, other than the related Class P Fraction of
the Stated Principal Balance, with respect to a Class P Mortgage Loan, for
which a Cash Liquidation or a REO Disposition occurred during the related
Prepayment Period and did not result in any Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an
amount equal to the related unscheduled collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to
the extent applied by the Master Servicer as recoveries of principal of the
related Mortgage Loan pursuant to Section 3.16, to the extent such
collections are not otherwise distributed to the Senior Certificates;
(iii) the product of (x) the related Subordinate Prepayment Percentage
for such Distribution Date and (y) the aggregate of all Principal
Prepayments in Full and Curtailments on the Mortgage Loans other than the
related Class P Fraction of such Principal Prepayments in Full and
Curtailments, with respect to each Class P Mortgage Loan, received in the
related Prepayment Period, to the extent not payable to the Senior
Certificates; and
(iv) if such Class is the Class of Class B Certificates then
outstanding with the Highest Priority, an amount equal to the Excess
Subordinate Principal Amount; and
(v) any amounts described in clauses (i), (ii) and (iii) as determined
for any previous Distribution Date, that remain undistributed to the extent
that such amounts are not attributable to Realized Losses which have been
allocated to a Class of Subordinate Certificates;
provided, however, that such amount shall in no event exceed the outstanding
Certificate Principal Balance of such Class of Certificates immediately prior to
such date.
"Sub-Servicer": Any Person with which the Master Servicer has entered into
a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account': An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master Servicer
and a Sub- Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02.
"Substitution Adjustment Amount": As defined in Section 2.03(d) hereof.
"Tax Matters Person": The tax matters person appointed pursuant to Section
9.01(c) hereof.
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"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be
filed on behalf of the Trust in its capacity as a REMIC under the REMIC
Provisions, together with any and all other information reports or returns that
may be required to be famished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 10.01 (a) hereof.
"Transition Cost: Any documented fees, expenses and allocated costs
reasonably incurred by a successor master servicer or the Trustee in connection
with a transfer of servicing from the Master Servicer to a successor master
servicer, including without limitation, any costs or expenses associated with
the complete transfer of all master servicing data and the completion,
correction or manipulation of such master servicing data as may be required by
the Trustee to correct any errors or insufficiencies in the master servicing
data or otherwise to enable the Trustee to master service the Mortgage Loans
properly and effectively.
"Trustee Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Trustee Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. Notwithstanding the foregoing, in no event shall the aggregate
Trustee Fee in a calendar year be less than $7,000.
"Trustee Fee Rate": With respect to any Mortgage Loan, a rate equal to
0.0075% per annum.
"Trust Fund": The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) each Mortgage Loan (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late
payment charges received on the Mortgage Loans), together with all documents
included in the related Mortgage File, subject to Section 2.01; (ii) such funds
or assets as from time to time are deposited in the Collection Account or the
Distribution Account and belonging to the Trust Fund; (iii) any REO Property;
(iv) the Primary Hazard Insurance Policies, if any, the Primary Insurance
Policies, if any, and all other Insurance Policies with respect to the Mortgage
Loans; (v) the Depositor's rights in respect of the Additional Collateral and
the Limited Purpose Surety Bond, including the assignment of the Depositor's
rights under the Additional Collateral Servicing Agreement; and (vi) the
Depositor's interest in respect of the representations and warranties made by
the Sellers in the Mortgage Loan Purchase Agreement as assigned to the Trustee
pursuant to Section 2.04 hereof. The Trust Fund shall not include the Buydown
Account.
"Underwriting Guide": The underwriting guide of the Master Servicer, as
revised from time to time.
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"Uninsured Cause" Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
"United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates, no
partnership or other entity treated as a partnership for United States federal
income tax purposes shall be treated as a United States Person unless all
persons that own an interest in such partnership either directly or through any
entity that is not a corporation for United States federal income tax purposes
are United States Persons, or an estate whose income is subject to United States
federal income tax regardless of its source, 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 such United States Persons have the authority to
control all substantial decisions of the trust. A trust which was in existence
on August 20, 1996, and was treated as a United States person, for federal
income tax purposes, on the previous day, and elected to continue to be so
treated.
"Value": With respect to any Mortgaged Property, the value thereof as
determined by an independent appraisal (or other collateral assessment,
permitted by the Underwriting Guide) made at the time of the origination of the
related Mortgage Loan; except that, with respect to any Mortgage Loan that is a
purchase money mortgage loan, the lesser of (i) the value thereof as determined
by an independent appraisal (or other collateral assessment, permitted by the
Underwriting Guide) made at the time of the origination of such Mortgage Loan,
if any, and (ii) the sales price of the related Mortgaged Property.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of such Certificates outstanding shall be the fraction, expressed
as a percentage, the numerator of which is the aggregate Certificate Principal
Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Certificates then outstanding (except with respect to the Class X Certificates).
98% of all Voting Rights will be allocated among all holders of the Certificates
(other than the Class X Certificates and Class R Certificates) in proportion to
their then outstanding Certificate Principal Balances, 1.00% of all Voting
Rights will be allocated among the holders of the Class X Certificates and 1.00%
of all Voting Rights will be allocated to the holders of the Class R
Certificates, in proportion to the Percentage Interests evidenced by their
respective Certificates; provided, however, that any Certificate registered in
the name of the Master Servicer, the Depositor or the Trustee or any of their
respective affiliates shall not be included in the calculation of Voting Rights.
"Written Order to Authenticate": A written order by which the Depositor
directs the Trustee to issue the Certificates.
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Section 1.02 ACCOUNTING.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
40
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee without
recourse for the benefit of the Certificateholders all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (except Section 3.2 thereof), the interest in the Limited
Purpose Surety Bond transferred to the Trustee pursuant to Section 2.03(e) and
all other assets included or to be included in the Trust Fund. Such assignment
includes all interest and principal received by the Depositor or the Master
Servicer on or with respect to the Mortgage Loans (but excluding any payments of
principal and interest due on or prior to the Cut-off Date). The Depositor
herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase
Agreement.
In connection with the transactions contemplated by this Agreement, Cendant
Mortgage Corporation and the Trustee shall enter into an Assignment, Assumption
and Recognition Agreement with MLCC, in the form of Exhibit K hereto, pursuant
to which Cendant Mortgage Corporation shall assign to the Trustee, for the
benefit of the Certificateholders, all of its right, title and interest in and
to the Additional Collateral Servicing Agreement with respect to the Additional
Collateral Mortgage Loans, and the Trustee shall assume all of Cendant Mortgage
Corporation's obligations under the Additional Collateral Servicing Agreement
with respect to the Additional Collateral Mortgage Loans from and after the date
hereof.
In connection with the transfer and assignment described herein, the Master
Servicer on behalf of the Depositor, shall deliver to, and deposit with, the
Trustee, the following documents or instruments:
(A) with respect to each Mortgage Loan, other than a Cooperative Loan:
(i) the original Mortgage Note endorsed "Pay to the order of Citibank,
N.A., as Trustee for the registered holders of the CDMC Mortgage
Pass-Through Certificates, Series 2003-1, without recourse", or endorsed
"Pay to the order of_____________________ without recourse," and signed in
the name of the last named endorsee by an authorized officer, together with
all prior and intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to the last
endorsee;
(ii) the original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording thereon
which have been recorded, with evidence of recording thereon or a copy of
the Mortgage certified by the public recording office in which such
Mortgage has been recorded;
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(iii) Unless the Mortgage Loan is registered on the MERS(R) System, an
original Assignment of the Mortgage (A) executed in the following form
"Citibank, N.A., as Trustee for the registered holders of the CDMC Mortgage
Pass-Through Certificates, Series 2003-1", or (B) in blank, which
assignment appears to be in form and substance acceptable for recording;
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) as
contemplated by the immediately preceding clause (iii), if applicable and
only to the extent available to the Depositor with evidence of recording
thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
(vi) a copy of any guarantee (other than Additional Collateral)
executed in connection with the Mortgage Note;
(vii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage;
(viii) the original power of attorney, if applicable; and
(ix) if such Mortgage Loan is a Buydown Mortgage Loan (as shown in the
Mortgage Loan Schedule), the original Buydown Agreement or a copy thereof;
and
(B) in addition, with respect to each Mortgage Loan that is an Additional
Collateral Mortgage Loan (as indicated on the Mortgage Loan Schedule):
(i) a copy of the related Mortgage 100(sm) Pledge Agreement or Parent
Power Agreement, as applicable; and
(ii) a copy of the related UCC-1, to the extent that MLCC was required
to deliver such UCC-1 to the Master Servicer, and an original form UCC-3,
if applicable, to the extent that MLCC was required to deliver such UCC-3
to the Master Servicer; or
(C) with respect to each Mortgage Loan that is a Cooperative Loan (as
indicated on the Mortgage Loan Schedule):
(i) the original Mortgage Note endorsed "Pay to the order of Citibank,
N.A., as Trustee for the registered holders of the CDMC Mortgage
Pass-Through Certificates, Series 2003-1, without recourse", or endorsed
"Pay to the order of _____________________ without recourse," and signed in
the name of the last named endorsee by an authorized officer, together with
all prior and intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to the last
endorsee;
42
(ii) the original duly executed assignment of Security Agreement to
the Trustee;
(iii) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
(iv) the acknowledgment copy of the original executed Form UCC-3 with
respect to the security agreement, indicating the Trustee as the assignee
of the secured party;
(v) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(vi) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(vii) a copy of the recognition agreement;
(viii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; and
(ix) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Mortgage, assignments to the Trustee or intervening assignments thereof
which have been delivered, are being delivered or will, upon receipt of
recording information relating to the Mortgage required to be included thereon,
be delivered to recording offices for recording and have not been returned to
the Depositor within 270 days of the Closing Date, the Depositor may deliver a
true copy thereof with an Officer's Certificate certifying that such Mortgage,
assignment to the Trustee or intervening assignment has been delivered to the
appropriate recording office for recording; and (y) in lieu of the Mortgage,
assignment to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Depositor or the Master Servicer, to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Trustee a certification to such effect
and shall deposit all amounts paid in respect of such Mortgage Loans in the
Distribution Account on the Closing Date. The Depositor shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the Trustee promptly after they are
received.
The Depositor may, in lieu of delivering the original of the documents set
forth in Section 2.01(A), (B) and (C) (other than Section 2.01(A)(i) and Section
2.01(C)(i)) (or copies thereof as
43
permitted by this Section 2.01) to the Trustee, deliver such documents to the
Master Servicer, and the Master Servicer shall hold such documents in trust for
the use and benefit of all present and future Certificateholders until such time
as is set forth in the next sentence. Within 60 days following the earlier of
(i) the receipt of the original of all of the documents or instruments set forth
in Section 2.01(A), (B) and (C) (other than Section 2.01(A)(i) and Section
2.01(C)(i)) (or copies thereof as permitted by such Section) for any Mortgage
Loan and (ii) a written request by the Trustee to deliver those documents with
respect to any or all of the Mortgage Loans then being held by the Master
Servicer, the Master Servicer shall deliver a complete set of such documents to
the Trustee.
The Depositor shall, at its expense, cause the Assignment of the Mortgage
to the Trustee to be recorded not later than 270 days after the Closing Date,
unless (a) such recordation is not required by the Rating Agencies or an Opinion
of Counsel has been provided as set forth below in this Section 2.01 or (b) MERS
is identified on the Mortgage or on a properly recorded assignment of the
Mortgage as the mortgagee of record. With respect to the Cooperative Loans, the
Depositor will, promptly after the Closing Date, cause the related financing
statements (if not yet filed) and an assignment thereof from the Depositor to
the Trustee to be filed in the appropriate offices. The Depositor need not cause
to be recorded any assignment in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Depositor to the Trustee and
the Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan; provided, however,
notwithstanding the delivery of any Opinion of Counsel, each assignment shall be
submitted for recording by the Depositor in the manner described above, at no
expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund, (ii) the
occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Depositor, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof and (v)
with respect to any one assignment, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Depositor fails to pay the cost of
recording the assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust Fund in accordance
with Section 8.05.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Depositor further agrees that it will cause, at the
Depositor's own expense, within 30 Business Days after the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
If any original Mortgage Note referred to in Section 2.01(A)(i) or
2.01(C)(i) above cannot be located, the obligations of the Depositor to deliver
such documents shall be deemed to be satisfied upon delivery to the Trustee of a
photocopy of such Mortgage Note, if available, with a Lost Note
44
Affidavit. If any of the original Mortgage Notes for which a Lost Note Affidavit
was delivered to the Trustee is subsequently located, such original Mortgage
Note shall be delivered to the Trustee within three Business Days.
Section 2.02 ACCEPTANCE OF TRUST FUND BY THE TRUSTEE.
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trustee
acknowledges receipt of the documents referred to in Section 2.01 above and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage File, and that it holds or will hold
all such assets and such other assets included in the definition of the "Trust
Fund" and the rights of the Sellers with respect to any Additional Collateral
and the Limited Purpose Surety Bond assigned to the Trustee pursuant to Section
2.03(e) in trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to review
each Mortgage File on or before the Closing Date and to certify on the Closing
Date in substantially the form attached hereto as Exhibit I-1 that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File required to be delivered to it
pursuant to this Agreement are in its possession, provided that with respect to
the documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix) to
the extent the Trustee has actual knowledge that such documents exist, (ii) such
documents have been reviewed by it and are not torn, mutilated, defaced or
otherwise altered (except if initialed by the obligor) and relate to such
Mortgage Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii) (except the ZIP Code), (ix) and (xv) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. Notwithstanding anything to the contrary in this Agreement, it is
herein acknowledged that, in conducting such review, the Trustee is under no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose or whether they have
actually been recorded or that they are other than what they purport to be on
their face, or to determine whether any Person executing any documents is
authorized to do so or whether any signature is genuine.
The Trustee agrees, for the benefit of the Certificateholders, to review
each Mortgage File within 60 days following the Closing Date and to certify in
substantially the form attached hereto as Exhibit I-2 that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in the exception report
annexed thereto as not being covered by such certification), (i) all documents
constituting part of such Mortgage File (other than such documents described in
Section 2.01(A)(v)) required to be delivered to it pursuant to this Agreement
are in its possession, provided that with respect to the documents described in
Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix) to the extent the Trustee has
actual knowledge that such documents exist, (ii) such documents have been
reviewed by it and are not xxx, mutilated, defaced or otherwise altered (except
if initialed by the obligor) and appear regular on their face and relate to such
Mortgage Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i)
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through (iii)(except the ZIP code), (ix) and (xv) of the definition of "Mortgage
Loan Schedule" accurately reflects information set forth in the Mortgage File.
It is herein acknowledged that, in conducting such review, the Trustee is under
no duty or obligation (i) to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose or whether they have
actually been recorded or that they are other than what they purport to be on
their face, or to determine whether any Person executing any documents is
authorized to do so or whether any signature is genuine.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver to the Depositor and the Master Servicer a final certification in the
form annexed hereto as Exhibit I-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon, except with respect to the
documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix), to
the extent the Trustee has actual knowledge that such documents exist.
If in the process of reviewing the Mortgage Files and making or preparing,
as the case may be, the certifications referred to above, the Trustee finds any
document or documents constituting a part of a Mortgage File to be missing or
defective in any material respect, at the conclusion of its review the Trustee
shall so notify the Depositor and the Master Servicer. In addition, upon the
discovery by the Depositor, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made by the Sellers in the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Master Servicer for servicing purposes.
Section 2.03 REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE SELLERS-
ASSIGNMENT OF INTEREST IN ADDITIONAL COLLATERAL.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of the
breach by a Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, by the Trustee, the Master Servicer or the
Depositor shall promptly notify such Seller and the Trustee, the Master Servicer
and the Depositor of such defect, missing document or breach and request that
such Seller deliver such missing document or cure such defect or breach within
90 days from the date such Seller was notified of such missing document, defect
or breach, and if such Seller does not deliver such missing document or cure
such defect or breach in all material respects during such period, the Master
Servicer (or, in accordance with Section 3.02(b), the Trustee) shall enforce the
obligations of such Seller under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from the Trust Fund at the Purchase Price within
90 days after the date on which such Seller was notified (subject to Section
2.03(d)) of such missing document, defect or breach, if and to the extent that
such Seller is obligated to do so under the Mortgage Loan Purchase Agreement. If
such defect or breach can ultimately be cured but is not reasonably expected to
be cured within the 90-day period, then the applicable Seller shall have such
46
additional time, if any, as is reasonable, to cure such defect or breach,
provided that the applicable Seller has commenced curing or correcting such
defect or breach and is diligently pursuing same. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection Account, within
three Business Days of expiration of the applicable time period referred to
above, and the Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release to the applicable Seller the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as such Seller shall furnish to it
and as shall be necessary to vest in such Seller any Mortgage Loan released
pursuant hereto, and the Trustee shall have no further responsibility with
regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as
provided above, if so provided in the related Mortgage Loan Purchase Agreement,
a Seller may cause such Mortgage Loan to be removed from the Trust Fund (in
which case it shall become a Defective Mortgage Loan) and substitute one or more
Eligible Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(d). In furtherance of the foregoing, if the Seller
that repurchases the Mortgage Loan is not a member of MERS and the Mortgage is
registered on the MERS(R) System, the Master Servicer, at its own expense and
without any right of reimbursement, shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from MERS
to such Seller and shall cause such Mortgage to be removed from registration on
the MERS(R) System in accordance with MERS' rules and regulations. It is
understood and agreed that the obligation of a Seller to cure or to repurchase
(or to substitute for) any Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Depositor, the Master Servicer or
the Trustee on behalf of the Certificateholders.
(b) Within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04 which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for Defective
Mortgage Loans made pursuant to Section 2.03(a), in the case of a Seller, must
be effected prior to the date which is two years after the Closing Date.
As to any Defective Mortgage Loan for which a Seller substitutes a Eligible
Substitute Mortgage Loan or Loans, such substitution shall be effected by such
Seller delivering to the Trustee, for such Eligible Substitute Mortgage Loan or
Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such
other documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers' Certificate providing that
each such Eligible Substitute Mortgage Loan satisfies the definition thereof and
specifying the Substitution Shortfall Amount (as described below), if any, in
connection with such substitution. The Trustee shall acknowledge receipt of the
original Mortgage Note for such Eligible Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, review such documents in the manner
specified in Section 2.02 and deliver to the Depositor and the Master Servicer,
with respect to such Eligible Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit I-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Depositor and the Master Servicer a certification
47
substantially in the form of Exhibit I-2 hereto with respect to such Eligible
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the
month of substitution are not part of the Trust Fund and will be retained by the
related Seller. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Defective
Mortgage Loan on or before the Due Date in the month of substitution, and the
related Seller shall thereafter be entitled to retain all amounts subsequently
received in respect of such Defective Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Defective Mortgage Loan from the terms of this Agreement and
the substitution of the Eligible Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Eligible Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and, in the case of a substitution effected by a Seller, the
Mortgage Loan Purchase Agreement, including, in the case of a substitution
effected by a Seller, all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement in each case as of the date of
substitution.
For any month in which a Seller substitutes one or more Eligible Substitute
Mortgage Loans for one or more Defective Mortgage Loans, the Master Servicer
will determine the amount (if any) by which the aggregate principal balance of
all such Eligible Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Defective Mortgage
Loans (in each case after application of the principal portion of the Monthly
Payments due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). The Master shall deposit the
amount of such shortfall into the Collection Account on the day of substitution,
without any reimbursement therefor.
For any month in which a Seller substitutes one or more Eligible Substitute
Mortgage Loans for one or more Defective Mortgage Loans, the Master Servicer
will determine the amount (the "Substitution Adjustment Amount"), if any, by
which the aggregate Purchase Price of all such Defective Mortgage Loans exceeds
the aggregate of, as to each such Eligible Substitute Mortgage Loan, the Stated
Principal Balance thereof as of the date of substitution, together with one
month's interest on such Stated Principal Balance at the applicable Net Mortgage
Rate. On the date of such substitution, the applicable Seller will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Adjustment Amount, if any, and the
Trustee, upon receipt of the related Eligible Substitute Mortgage Loan or Loans
and certification by the Master Servicer of such deposit, shall release to the
applicable Seller the related Mortgage File or Files and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as such Seller shall deliver to it and as shall be necessary to vest
therein any Defective Mortgage Loan released pursuant hereto.
In addition, the applicable Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) the REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding.
48
(d) Upon discovery by the Depositor, a Seller, the Master Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other parties.
In connection therewith, the related Seller shall repurchase or, subject to the
limitations set forth in Section 2.03(c), substitute one or more Eligible
Substitute Mortgage Loans for the affected Mortgage Loan within 60 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Such repurchase or substitution shall be made by the related
Seller, as the case may be, if the affected Mortgage Loan's status as a
non-qualified mortgage is or results from a breach of any representation,
warranty or covenant made by the related Seller under the Mortgage Loan Purchase
Agreement. Any such repurchase or substitution shall be made in the same manner
as set forth in Sections 2.03(a), if made by the related Seller. The Trustee
shall reconvey to the related 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.
(e) The Depositor hereby assigns to the Trustee its security interest in
and to any Additional Collateral, its right to receive amounts due or to become
due in respect of any Additional Collateral, all of its rights in each
Additional Collateral Agreement, and its rights as beneficiary under the Limited
Purpose Surety Bond in respect of any Additional Collateral Mortgage Loans. With
respect to any Additional Collateral Mortgage Loan, the Additional Collateral
Servicer shall cause to be filed in the appropriate recording office a Form
UCC-3 giving notice of the assignment of the related security interest to the
Trust Fund and shall thereafter cause the timely filing of all necessary
continuation statements with regard to such financing statements.
Section 2.04 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders, and
to the Depositor, that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey 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
and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(ii) The Master Servicer has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Agreement
and has duly authorized 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 thereof by the Depositor and the Trustee, constitutes a legal,
valid and binding obligation of the Master Servicer, enforceable against
the Master Servicer in accordance with its terms, except to the extent that
(a) the enforceability thereof may be limited by
49
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 the 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
hereunder, the consummation of any other of the transactions herein
contemplated, 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 breach of any term or provision of the charter or by-laws
of the Master Servicer or (B) conflict with, result in a breach, violation
or acceleration of, or result in a 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 any statute, order or regulation applicable to
the Master Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Master Servicer; and the
Master Servicer is not a party to, bound by, or in breach or violation of
any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects or, to the Master Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for Xxxxxx Xxx
or Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 of the National Housing Act;
(v) No litigation is pending 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 hereunder 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
by this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date; and
(vii) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered
with MERS.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests
50
therein of the Certificateholders, the party discovering such breach shall give
prompt written notice (but in no event later than two Business Days following
such discovery) to the Trustee. Subject to Section 7.01, the obligation of the
Master Servicer set forth in Section 2.03(c) to cure breaches shall constitute
the sole remedies against the Master Servicer available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders respecting a breach of the representations, warranties and
covenants contained in this Section 2.04.
Section 2.05 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had
good and marketable title to each Mortgage Loan (insofar as such title was
conveyed to it by a Seller, as set forth in the Mortgage Loan Purchase
Agreement) subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance or other
interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly formed and is validly existing as a
limited liability company in good standing under the laws of Delaware, with
full corporate power and authority to own its assets and conduct its
business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of formation
or limited liability company agreement or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material adverse
changes in the financial condition, earnings, affairs or business of the
Depositor or which might materially and adversely affect the properties or
assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by the
Depositor, and the consummation of the transactions contemplated thereby,
do not and will not result in a material breach or violation of any of the
terms or provisions of, or, to the knowledge
51
of the Depositor, constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Depositor is a party or by which the Depositor is bound or to which any of
the property or assets of the Depositor is subject, nor will such actions
result in any violation of the provisions of the certificate of formation
or limited liability company agreement of the Depositor or, to the best of
the Depositor's knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Depositor or any of its properties or assets
(except for such conflicts, breaches, violations and defaults as would not
have a material adverse effect on the ability of the Depositor to perform
its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement, as
the case may be; (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.06 PURPOSE AND POWERS OF THE TRUST.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(i) to issue the Certificates to or at the direction of the Depositor
in exchange for the Mortgage Loans;
(ii) to perform the activities of the trust that are expressly set
forth in this Agreement;
(iii) to engage in those activities that are reasonably necessary,
suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith; and
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(iv) subject to compliance with this Agreement, to engage in such
other activities as may be required in connection with conservation of the
Trust Fund and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing activities.
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ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer or any
Affiliate of the Master Servicer or any Sub-Servicer may have with the
related Mortgagor;
(ii) the ownership of any Certificate by the Master Servicer or any
Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under each Primary
Insurance Policy and any standard hazard insurance policy. Subject to Section
3.17, the Trustee shall execute, at the written request of the Master Servicer,
and furnish to the Master
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Servicer and any Sub-Servicer such documents as are necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder, and the Trustee hereby grants to the Master
Servicer a power of attorney to carry out such duties. The Trustee shall not be
liable for the actions of the Master Servicer or any Sub-Servicers under such
powers of attorney.
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 timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
The Master Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of the Sub-Servicer, when the Master Servicer or the Sub-Servicer, as the case
may be, believes it is appropriate in its best judgment to register any Mortgage
Loan on the MERS(R) System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions described in the preceding sentence shall be borne by the Master
Servicer in accordance with Section 3.18, with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS System, it becomes necessary to
remove any Mortgage Loan from registration on the MERS System and to arrange for
the assignment of the related Mortgages to the Trustee, then any related
expenses shall be reimbursable to the Master Servicer.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.06) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Loan Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause either the Trust Fund to fail to qualify as a REMIC under the Code
or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.
Notwithstanding any other provision of this Agreement or the Additional
Collateral Servicing Agreement to the contrary, except as provided below, the
Master Servicer shall have no duty or obligation to service and administer the
Additional Collateral and the Master Servicer shall not be
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deemed to be the Additional Collateral Servicer, unless and until MLCC's
obligations to administer the Additional Collateral under the Additional
Collateral Servicing Agreement have been terminated with respect to the
Additional Collateral Mortgage Loans, in which case, the Master Servicer shall
be bound to service and administer the Additional Collateral and the Limited
Purpose Surety Bond in accordance with the provisions of this Agreement and the
related Additional Collateral Agreements from the date of such termination. The
Trustee, as assignee of the Additional Collateral Servicing Agreement, shall
enforce the obligations of MLCC to service and administer the Additional
Collateral as provided in the Additional Collateral Servicing Agreement, and
shall take appropriate action thereunder if MLCC fails to substantially comply
with its obligations to administer the Additional Collateral. In the event the
Trustee receives an indemnification payment from MLCC under Section 3 of the
Additional Collateral Servicing Agreement that is attributable to losses
resulting from MLCC's failure to administer the Additional Collateral in
accordance with the terms of the Additional Collateral Servicing Agreement in
connection with Additional Collateral Mortgage Loans, the Trustee shall deposit
such amount in the Collection Account.
The Master Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release the Master Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND
SUB-SERVICERS.
(a) The Master Servicer may enter into Sub-Servicing Agreements (provided
that such agreements would not result in a withdrawal or a downgrading by any
Rating Agency of the rating on any Class of Certificates) with Sub-Servicers,
for the servicing and administration of the Mortgage Loans. Notwithstanding any
other provision of this Agreement, the Master Servicer shall not be precluded
from selling all or part of the Servicing Fee relating to any Mortgage Loans to
any Sub-Servicer, provided that with respect to any Mortgage Loan as to which
the Master Servicer sells all or a part of the related Servicing Fee, the Master
Servicer shall retain full responsibility under this Agreement for the servicing
activities relating to such Mortgage Loan.
Each Sub-Servicer shall be (i) authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts of which
are insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least
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66% of the Voting Rights from the provisions set forth in Section 3.08 relating
to insurance or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub-Servicing Accounts or the timing and amount of remittances by
the Sub-Servicers to the Master Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Master Servicer
shall deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement and of each
Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the obligations under the Mortgage Loan Purchase Agreement
against the Sellers shall be effected by the Master Servicer, in accordance with
the foregoing provisions of this paragraph.
Section 3.03 SUCCESSOR SUB-SERVICERS.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub- Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such agreement
may be immediately terminated by the Trustee without fee, in accordance with the
terms of this Agreement, in the event that the Master Servicer shall, for any
reason, no longer be the Master Servicer (including termination due to a Master
Servicer Event of Termination).
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Section 3.04 LIABILITY OF THE MASTER SERVICER.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND TRUSTEE
OR CERTIFICATEHOLDERS.
Any Sub-Servicing Agreement that may be entered into and any transactions
or services relating to the Mortgage Loans involving a Sub-Servicer in its
capacity as such shall be deemed to be between the Sub-Servicer and the Master
Servicer alone, and the Trustee and Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY
TRUSTEE.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Termination), the Trustee or its designee or the successor master
servicer as appointed pursuant to Section 7.02 herein, shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor master servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
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Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
The Master Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Primary Insurance Policy and any other applicable
insurance policies, follow such collection procedures as it would follow with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or, if applicable, penalty
interest, only upon determining that the coverage of such Mortgage Loan by the
related Primary Insurance Policy, if any, will not be affected, or (ii) extend
the due dates for Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided that any extension pursuant to clause (ii) above
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.06
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also,
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Loan Rate, forgive the payment of principal or interest or
extend the final maturity date of such Mortgage Loan), accept payment from the
related Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan (such payment, a "Short Pay-off") or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor.
Section 3.08 SUB-SERVICING ACCOUNTS.
In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant
to a Sub- Servicing Agreement, the Sub-Servicer will be required to establish
and maintain one or more accounts (collectively, the "Sub-Servicing Account").
The Sub-Servicing Account shall be an Eligible Account and shall comply with all
requirements of this Agreement relating to the Collection Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received by the Sub- Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Sub-Servicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Master Servicer
for deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Sub-Servicing Account. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.
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Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; SERVICING
ACCOUNTS.
The Master Servicer shall establish and maintain one or more accounts (the
"Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of ground rents, taxes,
assessments, fire and hazard insurance premiums, Primary Insurance Policy
premiums, water charges, sewer rents and comparable items for the account of the
Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
two Business Days after the deposit of such funds in the clearing account, for
the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) make Permitted Investments as provided in Section 3.12; (v)
pay interest, to the Master Servicer or to the Mortgagor if required and as
described below, on balances in the Servicing Account; (vi) clear and terminate
the Servicing Account at the termination of the Master Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vii) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments. The Master
Servicer shall be entitled to retain any interest paid on funds deposited in the
Servicing Account to effect Escrow Payments other than interest on escrowed
funds required by law to be paid to the Mortgagor.
Section 3.10 COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT.
(a) On behalf of the Trust Fund, the Master Servicer shall establish and
maintain one or more accounts (such account or accounts, the "Collection
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and
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when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related Servicing
Fee and Lender-Paid PMI Premium, if any) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and amounts
paid by the Master Servicer in connection with a purchase of Mortgage Loans
and REO Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section 3.12 in
connection with any losses realized on Permitted Investments with respect
to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Eligible Substitute Mortgage Loans
pursuant to Section 2.03;
(viii) any amounts required to be transferred from any Buydown Account
pursuant to Section 3.25; and
(ix) any (x) amounts realized by MLCC or (y) Required Surety Payments
received by the Trustee or the Master Servicer in respect of any Additional
Collateral.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Eligible Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection Accounts 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 need not be deposited by the Master Servicer in the Collection Account and
shall be retained by the Master Servicer as additional servicing compensation.
In the event the Master Servicer shall deposit in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding.
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(b) On behalf of the Trust Fund, the Trustee shall establish and maintain
one or more accounts (such account or accounts, the "Distribution Account"),
held in trust for the benefit of the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deliver to the Trustee in immediately available
funds for deposit in the Distribution Account on or before 5:00 p.m. New York
time on the Master Servicer Remittance Date, that portion of the Available
Distribution Amount for the related Distribution Date then on deposit in the
Collection Account.
(c) Funds in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.12. The Master Servicer shall give notice to the Trustee and the
Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Master Servicer and the Depositor of the location of the Distribution
Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered by
the Master Servicer to the Trustee for deposit in an account (which may be the
Distribution Account and must satisfy the standards for the Distribution Account
as set forth in the definition thereof) and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account; provided, however, that
the Trustee shall have the sole authority to withdraw any funds held pursuant to
this subsection (d). In the event the Master Servicer shall deliver to the
Trustee for deposit in the Distribution Account any amount not required to be
deposited therein, it may at any time request that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In addition, the Master
Servicer shall deliver to the Trustee from time to time for deposit, and upon
written notification from the Master Servicer, the Trustee shall so deposit, in
the Distribution Account:
(i) any Advances, as required pursuant to Section 4.06;
(ii) any amounts required to be deposited pursuant to Section 3.23(d)
or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in connection with
a purchase of Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to Section 3.24 in
connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal bankruptcy
court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the Master
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall deposit such funds in the Distribution Account.
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Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION
ACCOUNT.
(a) The Master Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
4.06:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.10(b) or
permitted to be so remitted pursuant to the first sentence of Section
3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer for
Advances;
(iii) subject to Section 3.16(d), to pay the Master Servicer or any
Sub-Servicer any unpaid Servicing Fees and reimburse any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Liquidation Proceeds, Insurance Proceeds or other amounts as
may be collected by the Master Servicer;
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing Fee) on the Master Servicer Remittance Date any
interest or investment income earned on funds deposited in the Collection
Account and any prepayment penalties or premiums relating to any Principal
Prepayments; provided, however, that no such amounts shall be payable as
servicing compensation to the extent they relate to a Mortgage Loan with
respect to which a default, breach, violation or event of acceleration
exists or would exist but for the lapse of time, the giving of notice, or
both;
(v) to pay to the Master Servicer, the Depositor or a Seller, as the
case may be, with respect to each Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance previously made
which the Master Servicer has determined to be a Nonrecoverable Advance in
accordance with the provisions of Section 4.06;
(vii) to reimburse the Master Servicer or the Depositor for expenses
incurred by or reimbursable to the Master Servicer or the Depositor, as the
case may be, pursuant to Section 6.03;
(viii) to reimburse the Master Servicer or the Trustee, as the case
may be, for expenses reasonably incurred in respect of the breach or defect
giving rise to the purchase obligation under Section 2.03 or Section 2.04
of this Agreement that were included in the Purchase Price of the Mortgage
Loan, including any expenses arising out of the enforcement of the purchase
obligation;
(ix) to pay, or to reimburse the Master Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan pursuant
to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to Section
10.01;
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(xi) to reimburse the Master Servicer for amounts deposited in error.
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 Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above.
The Master Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vii) above.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions to Certificateholders in accordance with
Section 4.01;
(ii) to pay to itself amounts to which it is entitled pursuant to
Section 8.05;
(iii) to pay itself any interest income earned on funds deposited in
the Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself pursuant to Section 7.02 and 7.01(b);
(v) to pay any amounts in respect of taxes pursuant to 10.01(g)(iii);
and
(vi) to clear and terminate the Distribution Account pursuant to
Section 10.01.
Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT, SERVICING
ACCOUNTS AND THE DISTRIBUTION ACCOUNT.
(a) The Master Servicer may direct any depository institution maintaining
the Collection Account or Servicing Accounts (for purposes of this Section 3.12,
an "Investment Account'), and the Trustee, in its individual capacity, may
direct any depository institution maintaining the Distribution Account (for
purposes of this Section 3.12, also an "Investment Account'), to invest the
funds in such Investment Account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee is the obligor thereon, and (ii) no later than the
date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if the Trustee is the obligor thereon. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee (in
its capacity as such) or in the name of a nominee of the Trustee. The Trustee
shall be entitled to sole possession (except with respect to investment
direction of funds held in the Collection Account or Servicing Accounts, as
applicable, and any income and gain realized thereon) over each such investment,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event
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amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount
equal to the lesser of (1) all amounts then payable thereunder
and (2) the amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such
Permitted Investment would not constitute a Permitted Investment
in respect of funds thereafter on deposit in the Investment
Account.
(b) All income and gain realized from the investment of funds deposited in
the Collection Account or Servicing Accounts, as applicable, held by or on
behalf of the Master Servicer, shall be for the benefit of the Master Servicer
and shall be subject to its withdrawal in accordance with Section 3.11. The
Master Servicer shall deposit in the Collection Account or Servicing Accounts,
as applicable, the amount of any loss of principal incurred in respect of any
such Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of funds deposited in
the Distribution Account held by or on behalf of the Trustee, shall be for the
benefit of the Trustee and shall be subject to its withdrawal at any time. The
Trustee shall deposit in the Distribution Account, the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
Section 3.13 MAINTENANCE OF THE PRIMARY INSURANCE POLICIES; COLLECTIONS
THEREUNDER.
The Master Servicer will maintain or cause the related Sub-Servicer, if
any, to maintain in full force and effect, if required under the Mortgage Loan
Purchase Agreement and to the extent available, a Primary Insurance Policy
conforming in all respects to the description set forth in Section 2(vii) of the
Mortgage Loan Purchase Agreement with respect to each Mortgage Loan so insured
as of the Closing Date (or, in the case of a Eligible Substitute Mortgage Loan,
on the date of substitution). Such coverage will be maintained with respect to
each such Mortgage Loan for so long as it is outstanding, subject to any
applicable laws or until the related Loan-to-Value Ratio is reduced to less than
or equal to 80% based on Mortgagor payments. The Master Servicer shall cause the
premium for each Primary Insurance Policy to be paid on a timely basis and shall
pay such premium out of its own funds if it is not otherwise paid. The Master
Servicer or the related Sub-Servicer, if
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any, will not cancel or refuse to renew any such Primary Insurance Policy in
effect on the Closing Date (or, in the case of a Eligible Substitute Mortgage
Loan, on the date of substitution) that is required to be kept in force under
this Agreement unless a replacement Primary Insurance Policy for such canceled
or non-renewed policy is obtained from and maintained with an insurer.
The Master Servicer shall not take, or permit any Sub-Servicer to take, any
action which would result in non-coverage under any applicable Primary Insurance
Policy of any loss which, but for the actions of the Master Servicer or
Sub-Servicer, would have been covered thereunder. The Master Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Primary Insurance Policy. In connection
with any assumption and modification agreement or substitution of liability
agreement entered into or to be entered into pursuant to Section 3.15, the
Master Servicer shall promptly notify the insurer under the related Primary
Insurance Policy, if any, of such assumption in accordance with the terms of
such policies and shall take all actions which may be required by such insurer
as a condition to the continuation of coverage under the Primary Insurance
Policy. If any such Primary Insurance Policy is terminated as a result of such
assumption, the Master Servicer or the related Sub-Servicer shall obtain a
replacement Primary Insurance Policy as provided above.
In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of
itself, the Trustee and the Certificateholders, claims to the insurer under any
Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Any amounts collected by the Master Servicer under any Primary
Insurance Policy shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11; and any amounts collected by the Master
Servicer under any Primary Insurance Policy in respect of any REO Property shall
be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.23. In those cases in which a Mortgage Loan is serviced by a
Sub-Servicer, the Sub-Servicer, on behalf of itself, the Trustee, and the
Certificateholders, will present claims to the insurer under any Primary
Insurance Policy and all collections thereunder shall be deposited initially in
the Sub- Servicing Account.
Section 3.14 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND
FIDELITY COVERAGE.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage on the related Mortgaged Property in an
amount which is at least equal to the least of (i) the current principal balance
of such Mortgage Loan, (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Loan Rate and
related Servicing Advances. The Master Servicer will comply in the
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performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, within two Business Days after
receipt thereof, subject to withdrawal pursuant to Section 3.11, if received in
respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake, windstorm or other additional insurance is to be required of any
Mortgagor other than pursuant to such applicable laws and regulations as shall
at any time be in force and as shall require such additional insurance. If the
Mortgaged Property or REO Property is at any time in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards, the Master Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid principal balance of the related Mortgage Loan and
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).
If the Master Servicer shall obtain and maintain a blanket fire insurance
policy with extended coverage insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of this Section 3.14, it
being understood and agreed that such policy may contain a deductible clause, in
which case the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property or REO Property a policy
complying with the first two sentences of this Section 3.14, and there shall
have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own Finds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Xxxxxx Mae or Xxxxxxx Mac, unless the Master Servicer has obtained a waiver
of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
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the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
Section 3.15 ENFORCEMENT OF DUE-ON-SALE CLAUSES. ASSUMPTION AGREEMENTS.
The Master Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Master Servicer shall not exercise any such rights if prohibited by law from
doing so or if the exercise of such rights would impair or threaten to impair
any recovery under the related Primary Insurance Policy or Limited Purpose
Surety Bond, if any. If the Master Servicer reasonably believes it is unable
under applicable law to enforce such "due-on-sale" clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply, the
Master Servicer will enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer and has a credit risk rating at least equal to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable Primary Insurance Policy or hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Master Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Loan Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is
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deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.16 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall, consistent with the servicing standard set
forth in Section 3.01, foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07. The Master Servicer
shall be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Master Servicer as contemplated in Section 3.11 and
Section 3.23. The foregoing is subject to the provision that, in any case in
which Mortgaged Property shall have suffered damage from an Uninsured Cause, the
Master Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or any
other provision of this Agreement, with respect to any Mortgage Loan as to which
the Master Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Master Servicer shall not, on behalf of the Trustee, either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Master Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the
Trust Fund to take such actions with respect to the affected Mortgaged
Property.
The cost of the environmental audit report contemplated by this Section
3.23 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being
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prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.
If the Master Servicer determines, as described above, that it is in the
best economic interest of the Trust Fund to take such actions as are necessary
to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from the Trust Fund any
Mortgage Loan that is 90 days or more delinquent, which the Master Servicer
determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the sum of the outstanding
Stated Principal Balance of such Mortgage Loan and accrued and unpaid interest
thereon at the Loan Rate through the end of the Due Period preceding the last
Distribution Date, less unreimbursed Servicing Advances, Advances and any unpaid
Servicing Fees allocable to such Mortgage Loan. The purchase price for any
Mortgage Loan purchased hereunder shall be deposited in the Collection Account,
and the Trustee, upon receipt of written certification from the Master Servicer
of such deposit, shall release or cause to be released to the Master Servicer
the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Master Servicer
shall furnish and as shall be necessary to vest in the Master Servicer title to
any Mortgage Loan released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan, will be
applied in the following order of priority: first, to reimburse the Master
Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances and
Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the Master Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
(e) In addition to the foregoing, the Trustee, as assignee of the
Additional Collateral Servicing Agreement, shall enforce the obligations of the
Additional Collateral Servicer to use its best reasonable efforts to realize
upon any Additional Collateral for such of the Additional Collateral Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements
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can be made for collection of delinquent payments pursuant to Section 3.11;
provided that pursuant to the Additional Collateral Servicing Agreement, the
Additional Collateral Servicer shall not, on behalf of the Trustee, obtain title
to any such Additional Collateral as a result of or in lieu of the disposition
thereof or otherwise; and provided further that (i) the Additional Collateral
Servicer, pursuant to the Additional Collateral Servicing Agreement, shall not
proceed with respect to such Additional Collateral in any manner that would
impair the ability to recover against the related Mortgaged Property, and (ii)
the Master Servicer shall proceed with any acquisition of REO Property in a
manner that preserves the ability to apply the proceeds of such Additional
Collateral against amounts owed under the defaulted Mortgage Loan. Any proceeds
realized from such Additional Collateral (other than amounts to be released to
the Mortgagor or the related guarantor in accordance with procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note
and to the terms and conditions of any security agreement, guarantee agreement,
mortgage or other agreement governing the disposition of the proceeds of such
Additional Collateral) shall be deposited in the Distribution Account, subject
to withdrawal pursuant to Section 3.11; provided, that such proceeds shall not
be so deposited if the Required Surety Payment in respect of such Additional
Collateral Mortgage Loan has been deposited in the Collection Account (except to
the extent of any such proceeds taken into account in calculating the amount of
the Required Surety Payment). Any other payment received by a Seller in respect
of such Additional Collateral shall be deposited in the Distribution Account
subject to withdrawal pursuant to Section 3.11.
Section 3.17 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by delivering a certification in duplicate (one of which will be
returned to the Master Servicer with the Mortgage File) in the form of Exhibit E
which shall be signed by a Servicing Officer or in a mutually agreeable
electronic format which will in lieu of a signature be deemed to originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy or any other insurance policy relating to the Mortgage Loans,
the Trustee shall, upon request of the Master Servicer and delivery to the
Trustee in duplicate (one of which will be returned to the Master Servicer with
the Mortgage File) of a Request for Release in the form of Exhibit E, which
shall be signed by a Servicing Officer or in a mutually agreeable electronic
format which will in lieu of a signature be deemed to originate from a Servicing
Officer release the related Mortgage File to the Master Servicer, and the
Trustee shall, at the direction of the Master Servicer, and in the form provided
by the Master Servicer execute such documents as shall be necessary to the
prosecution of any such proceedings. Such Request for Release shall obligate the
Master Servicer to return each and
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every document previously requested from the Mortgage File to the Trustee when
the need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, the Master Servicer shall no
longer be obligated to return the documents released by the Trustee pursuant to
the related Request for Release and a copy of the Request for Release shall be
released by the Trustee to the Master Servicer.
(c) Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or
inequity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.18 SERVICING COMPENSATION.
As compensation for the activities of the Master Servicer hereunder, the
Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest and Buydown Funds in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption fees, late
payment charges and other similar fees and charges shall be retained by the
Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including Lender-Funded PMI Premiums, if any, premiums for
the insurance
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required by Section 3.14, to the extent such premiums are not paid by the
related Mortgagors or by a Sub-Servicer, servicing compensation of each
Sub-Servicer, and to the extent provided herein in Section 8.05, the fees and
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.
Section 3.19 REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS.
Upon request from the Trustee, the Master Servicer shall forward to the
Trustee and the Depositor a statement prepared by the Master Servicer setting
forth the status of the Collection Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate amount of deposits into and withdrawals from the Collection Account of
each category of deposit specified in Section 3.10(a) and each category of
withdrawal specified in Section 3.11. Such statement may be in the form of the
then current Xxxxxx Mae Monthly Accounting Report for its Guaranteed Mortgage
Pass-Through Program with appropriate additions and changes, and shall also
include information as to the aggregate of the outstanding principal balances of
all of the Mortgage Loans as of the last day of the calendar month immediately
preceding such Distribution Date. Copies of such statement shall be provided by
the Trustee to any Certificateholder and to any Person identified to the Trustee
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.
Section 3.20 STATEMENT AS TO COMPLIANCE.
Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer will deliver to the Trustee and the Depositor an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
Section 3.21 INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to filed in accordance with
the Exchange Act
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and the rules and regulations of the Commission (or, in each case, if such day
is not a Business Day, the immediately preceding Business Day), the Master
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Trustee and each Rating
Agency.
Section 3.22 ACCESS TO CERTAIN DOCUMENTATION.
The Master Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by it at the expense of the Person requesting
such access.
Section 3.23 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
(a) The deed or certificate of sale of any REO Property shall be taken in
the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property within three years after the end of the calendar
year in which the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trustee and the Depositor
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by the Trust Fund of such REO Property subsequent to the
three-year grace period after its acquisition will not result in the imposition
on the Trust Fund of taxes on "prohibited transactions" thereof, as defined in
Section 860F of the Code, or cause the Trust Fund to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
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result in the receipt by the Trust Fund of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain with
respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with the manner
in which the Master Servicer manages and operates similar property owned by the
Master Servicer or any of its Affiliates, all on such terms and for such period
as the Master Servicer deems to be in the best interests of Certificateholders.
In connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor the Trustee
shall:
(i) authorize the Trust Fund to enter into, renew or extend any New
Lease with respect to any REO Property, if the New Lease by its terms will
give rise to any income that does not constitute Rents from Real Property;
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(ii) authorize any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(iii) authorize any construction on any REO Property, other than the
completion of a building or other improvement thereon, and then only if
more than ten percent of the construction of such building or other
improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the
Code; or
(iv) authorize any Person to Directly Operate any REO Property on any
date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net
of such costs and expenses) to the Master Servicer as soon as practicable,
but in no event later than thirty days following the receipt thereof by
such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Master Servicer of any of its duties and
obligations to the Trustee on behalf of the Certificateholders with respect
to the operation and management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.
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(d) In addition to the withdrawals permitted under Section 3.23(c), the
Master Servicer may from time to time make withdrawals from the REO Account for
any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.10(d)(ii), far distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), and
further subject to obtaining the approval of the insurer under any related
Primary Insurance Policy (if and to the extent that such approvals are necessary
to make claims under such policies in respect of the affected REO Property),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.
(f) The proceeds from the REO Disposition, net of any amount required by
law to be remitted to the Mortgagor under the related Mortgage Loan and net of
any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution Date
in accordance with Section 4.01. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).
(g) The Master Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 60507 and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 60507 and 6050P of the Code.
Section 3.24 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT
INTEREST SHORTFALLS.
The Master Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 5:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from Principal Prepayments in Full or Curtailments during the
related Prepayment Period and (ii) the portion of its aggregate Servicing Fee
which accrued at a Servicing Fee Rate for the most recently ended calendar month
("Compensating Interest").
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Section 3.25 ADMINISTRATION OF BUYDOWN FUNDS.
The Buydown Account established and maintained by the Master Servicer with
respect to each Buydown Mortgage Loan shall be an Eligible Account. Upon receipt
from the Mortgagor of the amount due on a Due Date for each Buydown Mortgage
Loan, the Master Servicer will withdraw from the related Buydown Account the
predetermined amount that, when added to the amount due on such date from the
Mortgagor, equals the Monthly Payment and will deposit that amount together with
the related payment made by the Mortgagor in the Collection Account. The Buydown
Account shall not be an asset of the REMIC and for federal income tax purposes
shall be owned by the Master Servicer.
If any Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan in
its entirety during the Buydown Period, when Buydown Funds are required to be
applied to such Buydown Mortgage Loan, the Master Servicer will withdraw from
the related Buydown Account and remit to such Mortgagor or any other Person in
accordance with the related Buydown Agreement any Buydown Funds remaining in the
Buydown Account. If a Principal Prepayment by a Mortgagor during the Buydown
Period, together with any Buydown Funds in the related Buydown Account, will
result in a Principal Prepayment in Full, the Master Servicer will withdraw from
the related Buydown Account for deposit in the Collection Account the Buydown
Funds, which together with such Principal Prepayment, will result in a Principal
Prepayment in Full. If a Mortgagor defaults during the Buydown Period with
respect to a Buydown Mortgage Loan and the Mortgaged Property is sold at
foreclosure or title thereto is acquired on behalf of the Certificateholders,
the Master Servicer will withdraw from the Buydown Account the Buydown Funds
(which shall thereupon constitute "Liquidation Proceeds" for purposes of this
Agreement) for deposit in the Collection Account.
Section 3.26 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF LOAN RATES
AND MONTHLY PAYMENTS.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to a calculation of
the principal balance of a Mortgage Loan that was made by the Master Servicer in
a manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Master Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Trustee for deposit in the Distribution Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor master
servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 DISTRIBUTION ACCOUNT; DISTRIBUTIONS.
(a) The Master Servicer shall remit to the Trustee for deposit into the
Distribution Account on or before 5:00 P.M. New York time on each Master
Servicer Remittance Date by wire transfer of immediately available funds an
amount equal to the sum of (i) any Advance for the immediately succeeding
Distribution Date, (ii) any amount required to be deposited in the Distribution
Account pursuant to Sections 3.10, 3.11, 3.14 or 3.24 and (iii) all other
amounts constituting the Available Distribution Amount for the immediately
succeeding Distribution Date.
(b) [reserved]
(c) On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 10.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least five
(5) Business Days prior to the related Record Date, or otherwise by check mailed
to such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the following amounts, in the following order of
priority:
(i) to the Senior Certificates (other than the Class P Certificates
and prior to the related Accretion Termination Date, the Accrual
Certificates, to the extent of the related Accrual Distribution Amount), on
a pro rata basis based on the Monthly Interest Distributable Amount payable
on such Certificates with respect to such Distribution Date, the Monthly
Interest Distributable Amount on such Classes of Certificates for such
Distribution Date, plus any Monthly Interest Distributable Amount thereon
remaining unpaid from any previous Distribution Date except as provided in
the last paragraph of this Section 4.01(c) (the "Senior Interest
Distribution Amount");
(ii) (X) to the Class P Certificates, the Class P Principal
Distribution Amount; and
(Y) to the Senior Certificates (other than the Class P
Certificates and Interest Only Certificates) in the priorities and
amounts set forth in Section 4.01(d)(ii) through (viii), the Senior
Principal Distribution Amount and Accrual Distribution Amounts
(applied to reduce the Certificate Principal Balances of such Senior
Certificates, as applicable);
(iii) if the Certificate Principal Balances of the Subordinate
Certificates have not been reduced to zero, to the Master Servicer, by
remitting for deposit to the Collection Account, to the extent of and in
reimbursement for any Advances previously made with respect to any Mortgage
Loan or REO Property which remain unreimbursed in whole or in
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part following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property, minus any such Advances that were made with respect
to delinquencies that ultimately constituted Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses;
(iv) to the Holders of the Class B-1 Certificates, the Monthly
Interest Distributable Amount thereon for such Distribution Date, plus any
Monthly Interest Distributable Amount thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(v) to the Holders of the Class B-1 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class
P Deferred Amounts for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant
to clause (x) of Sections 4.01(c)(vii), (ix), (xi), (xiii), (xiv) and (xv)
of this Agreement are insufficient therefor, applied in reduction of the
Certificate Principal Balance of the Class B-1 Certificates;
(vi) to the Holders of the Class B-2 Certificates, the Monthly
Interest Distributable Amount thereon for such Distribution Date, plus any
Monthly Interest Distributable Amount thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(vii) to the Holders of the Class B-2 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class
P Deferred Amounts for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant
to clause (x) of Sections 4.01(c)(ix), (xi), (xiii), (xiv) and (xv) of this
Agreement are insufficient therefor, applied in reduction of the
Certificate Principal Balance of the Class B-2 Certificates;
(viii) to the Holders of the Class B-3 Certificates, the Monthly
Interest Distributable Amount thereon for such Distribution Date, plus any
Monthly Interest Distributable Amount thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(ix) to the Holders of the Class B-3 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class
P Deferred Amounts for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant
to clause (x) of Sections 4.01(c)(xi), (xiii), (xiv) and (xv) of this
Agreement are insufficient therefor, applied in reduction of the
Certificate Principal Balance of the Class B-3 Certificates;
(x) to the Holders of the Class B-4 Certificates, the Monthly Interest
Distributable Amount thereon for such Distribution Date, plus any Monthly
Interest Distributable Amount thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the Class B-4 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such
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Distribution Date, minus (y) the amount of any Class P Deferred Amounts for
such Distribution Date or remaining unpaid for all previous Distribution
Dates, to the extent the amounts available pursuant to clause (x) of
Sections 4.01(c)(xiii), (xiv) and (xv) of this Agreement are insufficient
therefor, applied in reduction of the Certificate Principal Balance of the
Class B-4 Certificates;
(xii) to the Holders of the Class B-5 Certificates, the Monthly
Interest Distributable Amount thereon for such Distribution Date, plus any
Monthly Interest Distributable Amount thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-5 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class
P Deferred Amounts for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant
to clause (x) of Sections 4.01(c) (xiv) and (xv) of this Agreement are
insufficient therefor, applied in reduction of the Certificate Principal
Balance of the Class B-5 Certificates;
(xiv) to the Holders of the Class B-6 Certificates, an amount equal to
(x) the Monthly Interest Distributable Amount thereon for such Distribution
Date, plus any Monthly Interest Distributable Amount thereon remaining
unpaid from any previous Distribution Date, except as provided below, minus
(y) the amount of any Class P Deferred Amounts for such Distribution Date
or remaining unpaid for all previous Distribution Dates, to the extent the
amounts available pursuant to clause (x) of Section 4.01(c)(xv) of this
Agreement are insufficient therefor;
(xv) to the Holders of the Class B-6 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class P
Deferred Amounts for such Distribution Date or remaining unpaid for all
previous Distribution Dates applied in reduction of the Certificate
Principal Balance of the Class B-6 Certificates;
(xvi) to the Senior Certificates, in the priority set forth in Section
4.01(d) of this Agreement, the portion, if any, of the Available
Distribution Amount remaining after the foregoing distributions, applied to
reduce the Certificate Principal Balances of such Senior Certificates, but
in no event more than the aggregate of the outstanding Certificate
Principal Balances of each such Class of Senior Certificates, and
thereafter, to each Class of Subordinate Certificates then outstanding
beginning with such Class with the Highest Priority, any portion of the
Available Distribution Amount remaining after the Senior Certificates have
been retired, applied to reduce the Certificate Principal Balance of each
such Class of Subordinate Certificates, but in no event more than the
outstanding Certificate Principal Balance of each such Class of Subordinate
Certificates; and
(xvii) to the Class R Certificates, the balance, if any, of the
Available Distribution Amount.
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Notwithstanding the foregoing, on any Distribution Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the Subordinate Certificates are no longer
outstanding, the Senior Certificates, the Monthly Interest Distributable Amount
thereon remaining unpaid from any previous Distribution Date will be
distributable only to the extent that such unpaid Monthly Interest Distributable
Amount was attributable to interest shortfalls relating to the failure of the
Master Servicer to make any required Advance, or the determination by the Master
Servicer that any proposed Advance would be a Nonrecoverable Advance with
respect to the related Mortgage Loan where such Mortgage Loan has not yet been
the subject of a Cash Liquidation or REO Disposition or the related Liquidation
Proceeds, Insurance Proceeds and REO Proceeds have not yet been distributed to
the Certificateholders.
(d) The Class P Principal Distribution Amount, Senior Principal
Distribution Amount and Accrual Distribution Amount shall be distributed to the
Senior Certificates (other than the Interest Only Certificates) as follows:
(i) to the Class P Certificates, until the Certificate Principal
Balance thereof is reduced to zero, the Class P Principal Distribution
Amount;
(ii) an amount equal to the Class A-8 Accrual Distribution Amount
shall be distributed to the Class A-6 Certificates and Class A-7
Certificates, concurrently on a pro rata basis, until the Certificate
Principal Balances thereof have been reduced to zero;
(iii) an amount equal to the Class A-9 Accrual Distribution Amount
shall be distributed concurrently as follows, until the aggregate
Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7 and Class A-8 Certificates has been
reduced to zero:
(A) 28.5341679101109% of the Class A-9 Accrual Distribution
Amount distributable under clause (iii) shall be distributed in the
following manner and order of priority:
(1) FIRST, to the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to the
Planned Principal Balance for such Distribution Date;
(2) SECOND, to the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
(3) THIRD, to the Class A-1 Certificates, without regard to
its Planned Principal Balance for such Distribution Date, until
the Certificate Principal Balance thereof has been reduced to
zero;
(B) 44.6009393678969% of the Class A-9 Accrual Distribution
Amount distributable under clause (iii) shall be distributed to the
Class A-3, Class A-4 and Class A-5 Certificates, concurrently on a pro
rata basis, until the Certificate Principal Balances thereof have been
reduced to zero; and
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(C) 26.8648927219923% of the Class A-9 Accrual Distribution
Amount distributable under clause (iii) shall be distributed in the
following manner and order of priority:
(1) FIRST, to the Class A-6 Certificates and Class A-7
Certificates, concurrently on a pro rata basis, until the
Certificate Principal Balances thereof have been reduced to zero;
and
(2) SECOND, to the Class A-8 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(iv) the Senior Principal Distribution Amount shall be distributed to
the Class R Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
(v) the balance of the Senior Principal Distribution Amount remaining
after the distributions, if any, described in clause (iv) above shall be
distributed to the Class A-10 Certificates, in reduction of the Certificate
Principal Balance thereof, until the Certificate Principal Balance thereof
has been reduced to zero, in an amount equal to the sum of (a) the Lockout
Scheduled Percentage of the aggregate of the collections described in
clauses (A), (B) and (E) of the definition of Senior Principal Distribution
Amount and (b) the Lockout Prepayment Percentage of the aggregate of the
collections described in clause (C) of the definition of Senior Principal
Distribution Amount;
(vi) the balance of the Senior Principal Distribution Amount remaining
after the distribution, if any, described in clauses (iv) and (v) above
shall be distributed concurrently as follows:
(A) 28.5341679101109% of the Senior Principal Distribution Amount
distributable under clause (vi) shall be distributed in the following
manner and order of priority:
(1) FIRST, to the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to the
Planned Principal Balance for such Distribution Date;
(2) SECOND, to the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
(3) THIRD, to the Class A-1 Certificates, without regard to
its Planned Principal Balance for such Distribution Date, until
the Certificate Principal Balance thereof has been reduced to
zero;
(B) 44.6009393678969% of the Senior Principal Distribution Amount
distributable under clause (vi) shall be distributed to the Class A-3,
Class A-4 and Class A-5 Certificates, concurrently on a pro rata
basis, until the Certificate Principal Balances thereof have been
reduced to zero; and
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(C) 26.8648927219923% of the Senior Principal Distribution Amount
distributable under clause (vi) shall be distributed in the following
manner and order of priority:
(1) FIRST, to the Class A-6 Certificates and Class A-7
Certificates, concurrently on a pro rata basis, until the
Certificate Principal Balances thereof have been reduced to zero;
and
(2) SECOND, to the Class A-8 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(vii) the balance of the Senior Principal Distribution Amount
remaining after the distributions, if any, described in clauses (iv) through
(vi) above shall be distributed to the Class A-9 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(viii) the balance of the Senior Principal Distribution Amount
remaining after the distributions, if any, described in clauses (iv) through
(vii) above shall be distributed to the Class X- 00 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
(e) On or after the Credit Support Depletion Date, all priorities relating
to distributions as described in Section 4.01(d) above in respect of principal
among the various classes of Senior Certificates (other than the Class P
Certificates) will be disregarded, and (i) an amount equal to the Class P
Fraction of the principal portion of scheduled payments and unscheduled
collections received or advanced in respect of the Class P Mortgage Loans will
be distributed to the Class P Certificates, (ii) the Senior Principal
Distribution Amount will be distributed to the remaining Senior Certificates
(other than the Class P Certificates) pro rata in accordance with their
respective outstanding Certificate Principal Balances, and (iii) the Senior
Interest Distribution Amount will be distributed as set forth above in Section
4.01(c)(i).
(f) After the reduction of the Certificate Principal Balances of the Senior
Certificates (other than the Class P Certificates) to zero but prior to the
Credit Support Depletion Date, the Senior Certificates (other than the Class P
Certificates) will be entitled to no further distributions of principal thereon
and the Available Distribution Amount will be paid solely to the holders of the
Class P Certificates, Class X Certificates and Class B Certificates, in each
case as described herein.
(g) On each Distribution Date prior to the Class A-8 Accretion Termination
Date, an amount equal to the Monthly Interest Distributable Amount that would
otherwise be distributed on the Class A-8 Certificates shall be added to
Certificate Principal Balance of the Class A-8 Certificates. On or after the
Accretion Termination Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-8 Certificates for such Distribution Date shall be payable
to the Class A-8 Certificateholders pursuant to Section 4.01(c)(i) of this
Agreement to the extent not required to reduce the aggregate Certificate
Principal Balance of the Class A-6 Certificates and Class A-7 Certificates to
zero on such Class A-8 Accretion Termination Date; provided that if the Class
A-8 Accretion Termination Date is the Credit Support Depletion Date, the entire
amount of Monthly Interest Distributable Amount on the Class A-8 Certificates
for such Distribution Date will be paid to the Class A-8 Certificateholders. Any
such Monthly Interest Distributable Amount on the Class A-8 Certificates which
is required to be paid to the holders of the Class A-6 Certificates and Class
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A-7 Certificates on such Class A-8 Accretion Termination Date will be added to
the Certificate Principal Balance of the Class A-8 Certificates in the manner
described in the first sentence of this Section 4.01(g).
(h) On each Distribution Date prior to the Class A-9 Accretion Termination
Date, an amount equal to the Monthly Interest Distributable Amount that would
otherwise be distributed on the Class A-9 Certificates shall be added to
Certificate Principal Balance of the Class A-9 Certificates. On or after the
Accretion Termination Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-9 Certificates for such Distribution Date shall be payable
to the Class A-9 Certificateholders pursuant to Section 4.01(c)(i) of this
Agreement to the extent not required to reduce the aggregate Certificate
Principal Balance of the Class A-1, Class A-2, Class A- 3, Class A-4, Class A-5,
Class A-6, Class A-7 and Class A-8 Certificates to zero on such Class A-9
Accretion Termination Date; provided that if the Class A-9 Accretion Termination
Date is the Credit Support Depletion Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-9 Certificates for such Distribution Date
will be paid to the Class A-9 Certificateholders. Any such Monthly Interest
Distributable Amount on the Class A-9 Certificates which is required to be paid
to the holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7 and Class A-8 Certificates on such Class A-9 Accretion
Termination Date will be added to the Certificate Principal Balance of the Class
A-9 Certificates in the manner described in the first sentence of this Section
4.01(h).
(i) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(j) Except as otherwise provided in Section 10.01, if the Master Servicer
anticipates that a final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Master Servicer shall, no later
than the Determination Date in the month of such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business Days after such
Determination Date, mail on such date to each Holder of such Class of
Certificates a notice to the effect that: (i) the Trustee anticipates that the
final distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue on such Certificates from and after the end of the
prior calendar month.
Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non- tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
4.01(j) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering
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Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within six months after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall take reasonable steps as directed by the
Depositor, or appoint an agent to take reasonable steps, to contact the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the fiends in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the Trust Fund. If within nine months after the second notice any such
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(j).
Section 4.02 STATEMENTS TO CERTIFICATEHOLDERS.
On each Distribution Date the Trustee shall make available to each Holder
of a Certificate and to the Depositor, the Master Servicer and the Rating
Agencies, a statement based on information contained in the Remittance Report:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates, separately identified, allocable
to principal;
(ii) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to interest, separately
identified;
(iii) the aggregate amount of servicing compensation received by the
Master Servicer during the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
(iv) the aggregate amount of Advances for the related Due Period;
(v) the aggregate Stated Principal Balance of the Mortgage Loans at
the close of business at the end of the related Due Period;
(vi) the number, weighted average remaining term to maturity and
weighted average Loan Rate of the Mortgage Loans as of the related Due
Date;
(vii) the number and aggregate unpaid principal balance of Mortgage
Loans (a) one month, two months or three months delinquent on a contractual
basis, (b) as to which foreclosure proceedings have been commenced and (c)
in bankruptcy as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(viii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the unpaid principal balance and the
Stated Principal Balance of such Mortgage Loan as of the date it became an
REO Property;
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(ix) the book value of any REO Property as of the close of business on
the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal balance
of all REO Properties as of the close of business of the last day of the
preceding due period;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during the
related Due Period and the cumulative amount of Realized Losses;
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Collection Account for such Distribution Date;
(xiii) the Certificate Principal Balance or Notional Amount, as the
case maybe, of each Class of Certificates, after giving effect to the
distributions made on such Distribution Date;
(xiv) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest
Accrual Period and the respective portions thereof, if any, remaining
unpaid following the distributions made in respect of such Certificates on
such Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments of
Compensating Interest by the Master Servicer pursuant to Section 3.24;
(xvi) the Available Distribution Amount;
(xvii) the aggregate Stated Principal Balance of Mortgage Loans
purchased by the Master Servicer during the related Due Period and
indicating the Section of this Agreement requiring or allowing the purchase
of each such Mortgage Loan; and
(xviii) the Class A-8 Accrual Distribution Amount and Class A-9
Accrual Distribution Amount.
The Trustee will make the monthly statements described above (and, at its
option, any additional files containing the same information in an alternative
format) available on each Distribution Date to Certificateholders, and other
parties to the Pooling and Servicing Agreement via the Trustee's internet
website and its fax-on-demand service. The Trustee's internet website shall
initially be located at "xxx.xx.xxxxxxxxxx.xxx". Assistance in using the website
can be obtained by calling the Trustee's customer service desk at (212)
657-2186. Parties that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way monthly statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.
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On each Distribution Date, the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level information for each Class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.
In addition, the Trustee will make available, as a convenience for
interested parties (and not in furtherance of the distribution of any related
prospectus or prospectus supplement under the securities laws), this Agreement,
the related prospectus and prospectus supplement via the Trustee's internet
website.
The Trustee will make no representations or warranties as to the accuracy
of completeness of such documents and will assume no responsibility therefor.
In connection with providing access to the Trustee's website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee shall
not be liable for the dissemination of information in accordance with this
Agreement which is not due to an error on the part of the Trustee with respect
to such information.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts shall also be expressed as a dollar amount per Single
Certificate.
The Trustee shall provide to each Certificateholder any written reports or
other information required by the Code and regulations thereunder as from time
to time are in force. In addition, upon written request, within a reasonable
period of time after the end of each calendar year, the Trustee shall prepare
and forward, to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set forth in
subclauses (i) - (iii) above, aggregated for such calendar year or applicable
portion thereof during which such person was a Certificateholder.
Section 4.03 REMITTANCE REPORTS; ADVANCES BY THE MASTER SERVICER.
(a) On the second Business Day following each Determination Date but in no
event less than five Business Days prior to the related Distribution Date, the
Master Servicer shall deliver to the Trustee by telecopy (or by such other means
as the Master Servicer and the Trustee may agree from time to time) a Remittance
Report, and other data mutually agreed upon, with respect to the related
Distribution Date. On the same date, the Master Servicer shall forward to the
Trustee by overnight mail a computer readable magnetic tape or diskette or in
such other medium as may be agreed between the Master Servicer and the Trustee
containing the information set forth in such Remittance Report with respect to
the related Distribution Date. The Master Servicer shall deliver or cause to be
delivered to the Trustee in addition to the information provided on the
Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and 4.06 and to prepare the statements to Certificateholders contemplated
by Section 4.02. The Master Servicer shall make a good faith effort to deliver
any such additional information to the Trustee within two Business Days of any
such request, provided that in no event shall the Master Servicer be required to
provide any such additional information to the Trustee to the extent the Trustee
makes such request prior to five Business Days prior to the Master
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Servicer Remittance Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal the sum of (i) the aggregate amount of Monthly
Payments (net of the related Servicing Fee), due during the related Due Period
in respect of the Mortgage Loans, which Monthly Payments were delinquent on a
contractual basis as of the close of business on the related Determination Date
and (ii) with respect to each REO Property, which REO Property was acquired
during or prior to the related Due Period and as to which REO Property an REO
Disposition did not occur during the related Due Period, an amount equal to the
excess, if any, of the REO Imputed Interest on such REO Property for the most
recently ended calendar month, over the net income from such REO Property
transferred to the Distribution Account pursuant to Section 4.01 for
distribution on such Distribution Date, less amounts held for future
distributions..
Before the close of business New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution and so used shall be appropriately
reflected in the Master Servicer's records and replaced by the Master Servicer
by deposit in the Collection Account on or before any future Master Servicer
Remittance Date to the extent that the Available Distribution Amount for the
related Distribution Date (determined without regard to Advances to be made on
the Master Servicer Remittance Date) shall be less than the total amount that
would be distributed to the Classes of Certificateholders pursuant to Section
4.01 on such Distribution Date if such amounts held for future distributions had
not been so used to make Advances. The Trustee will provide notice to the Master
Servicer by telecopy on any Master Servicer Remittance Date or within one
Business Day in the event that the amount remitted by the Master Servicer to the
Trustee on such date is less than the Advances required to be made by the Master
Servicer for the related Distribution Date, less amounts held for future
distributions, as set forth in the related Remittance Report.
(c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon; provided, however, that such obligation will cease if title to the
Mortgaged Property is acquired by the Trust Fund in foreclosure or by deed in
lieu of foreclosure.
(d) Notwithstanding anything herein to the contrary, no Advance shall be
required to be made hereunder by the Master Servicer if such Advance would, if
made, constitute a Nonrecoverable Advance. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Depositor and the
Trustee.
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Section 4.04 ALLOCATION OF REALIZED LOSSES.
Prior to each Distribution Date, the Master Servicer shall determine the
total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition that
occurred during the related Prepayment Period. The amount of each Realized Loss
shall be evidenced by an Officers' Certificate. All Realized Losses, other than
Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or
Excess Fraud Losses, shall be allocated as follows: first, to the Class B-6
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; second, to the Class B-5 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B-4 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class B-2 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; sixth, to the
Class B-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; and thereafter, if any such Realized Losses are on a Class P
Mortgage Loan, to the Class P Certificates in an amount equal to the Class P
Fraction of the principal portion thereof, and the remainder of such Realized
Losses on the Class P Mortgage Loans and the entire amount of such Realized
Losses on Premium Rate Mortgage Loans will be allocated among all the Senior
Certificates (other than the Class P Certificates) on a pro rata basis, as
described below. Any Excess Special Hazard Losses, Excess Bankruptcy Losses,
Excess Fraud Losses, Extraordinary Losses on Premium Rate Mortgage Loans will be
allocated among the Senior Certificates (other than the Class P Certificates)
and Subordinate Certificates, on a pro rata basis, as described below. The
principal portion of such Realized Losses on the Class P Mortgage Loans will be
allocated to the Class P Certificates in an amount equal to the Class P Fraction
thereof and the remainder of such Realized Losses on the Class P Mortgage Loans
and the entire amount of such Realized Losses on Premium Rate Mortgage Loans
will be allocated among the Senior Certificates (other than the Class P
Certificates) and Subordinate Certificates, on a pro rata basis, as described
below.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Monthly Interest Distributable Amount thereon payable on such Distribution Date
(without regard to any Compensating Interest for such Distribution Date) in the
case of an interest portion of a Realized Loss; provided that in determining the
Certificate Principal Balance of the Class A-8 Certificates or Class A-9
Certificates, for the purpose of allocating any portion of a Realized Loss to
those Certificates, the Certificate Principal Balance of the Class A-8
Certificates or Class A-9 Certificates, as applicable, shall be deemed to be the
lesser of (i) the original Certificate Principal Balance of the Class A-8
Certificates or Class A-9 Certificates, as applicable and (ii) the Certificate
Principal Balance of the Class A-8 Certificates or Class A-9 Certificates, as
applicable prior to giving effect to distributions to be made on that
Distribution Date. Any allocation of the principal portion of Realized Losses
(other than Debt Service Reductions) to the Class B Certificates then
outstanding with the highest numerical designation shall be made by operation of
the definition of "Certificate Principal Balance" and by operation of the
provisions of Section 4.01. Allocations of the interest portions of Realized
Losses shall be made by operation of the definition of "Monthly Interest
Distributable Amount" and by
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operation of the provisions of Section 4.01. Allocations of the principal
portion of Debt Service Reductions shall be made by operation of the provisions
of Section 4.01. All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
Section 4.05 INFORMATION REPORTS TO BE FILED BY THE MASTER SERVICER.
The Master Servicer or the Sub-Servicers shall file information reports
with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section 4.06 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the Trustee shall
comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.03 hereof, indicate such amount
withheld.
Section 4.07 [RESERVED].
Section 4.08 LIMITED PURPOSE SURETY BOND.
If a Required Surety Payment is payable pursuant to the Limited Purpose
Surety Bond with respect to any Additional Collateral Mortgage Loans, as
determined by the Master Servicer and the Additional Collateral Servicer, the
Master Servicer shall so notify the Trustee as soon as reasonably practicable
and the Trustee shall promptly complete the notice in the form of Attachment 1
to the Limited Purpose Surety Bond and shall promptly submit such notice to the
surety as a claim for a Required Surety Payment. The Master Servicer shall upon
request assist the Trustee in completing such notice and shall provide any
information requested by the Trustee in connection therewith.
Upon receipt of a Required Surety Payment from the surety on behalf of the
Certificateholders, the Trustee shall deposit such Required Surety Payment in
the Distribution Account and shall distribute such Required Surety Payment, or
the proceeds thereof, in accordance with the provisions of Section 4.01.
The Trustee shall (i) receive as attorney-in-fact of each Holder of a
Certificate any Required Surety Payment from the surety and (ii) disburse the
same to the Holders of such Certificates as set forth in Section 4.01.
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ARTICLE V
THE CERTIFICATES
Section 5.01 THE CERTIFICATES.
Each of the Class A, Class P, Class X, Class B and Class R Certificates
shall be substantially in the forms annexed hereto as exhibits, and shall, on
original issue, be executed, authenticated and delivered by the Trustee to or
upon the receipt of a Written Order to Authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. Each
Class of the Certificates (other than the Class R Certificates) shall be
initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $25,000 and integral dollar
multiples of $1 in excess thereof. The Residual Certificates will be issued in
registered, certificated form in minimum denominations of a 20% Percentage
Interest except in the case of one Class R Certificate. Provided however, that
one Certificate of each such Class of Certificates may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Certificate Principal Balance or
Class Certificate Notional Amount of such Class on the Closing Date.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Certificates, other
than the Class P Certificates and Class R Certificates, shall be Book-Entry
Certificates.
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall cause to be kept at the Corporate Trust
Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.
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At the option of the Certificateholders, Certificates may be exchanged for
other Certificates in authorized denominations and the same aggregate Percentage
Interests, upon surrender of the Certificates to be exchanged at any such office
or agency. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute on behalf of the Trust and authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Trustee or the Certificate Registrar)
be duly endorsed by, or be accompanied by a written instrument of transfer
satisfactory to the Trustee and the Certificate Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Master Servicer Event
of Termination, the Certificate Owners of each Class of Book-Entry Certificates
representing Percentage Interests of such Classes aggregating not less than 51 %
advises the Trustee and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully
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registered certificates (the "Definitive Certificates") to Certificate Owners is
no longer in the best interests of the Certificate Owners. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall, at the Depositor's expense, in the case of (ii) above, or the
related Seller's expense, in the case of (i) and (iii) above, execute on behalf
of the Trust and authenticate the Definitive Certificates. Neither the Depositor
nor the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Certificate Registrar, the Master Servicer, any Paying Agent and the Depositor
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d) Except with respect to the initial transfer of the Private Certificates
by the Depositor, no transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, (i) if such transfer
is made in reliance upon Rule 144A under the 1933 Act, the Trustee shall require
the transferee to execute an investment letter in substantially the form
attached hereto as Exhibit F-1, or (ii) (A) the Trustee shall require the
transferor to execute a transferor certificate (in substantially the form
attached hereto as Exhibit F-2) and the transferee to execute an investment
letter (in substantially the form attached hereto as Exhibit F-3) acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Trustee or the
Depositor and (B) the Trustee and the Depositor shall require a written Opinion
of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Trustee and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or
the Depositor. The Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
(e) No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received (i) a representation from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the Trustee
and the Depositor, (such requirement is satisfied only by the Trustee's receipt
of a representation letter from the transferee (in the case of a Class B-4,
Class B-5 or Class B-6 Certificate) substantially in the form of Exhibit G
hereto or receipt of a representation from the transferee (in the case of a
Class R Certificate) substantially in the form of paragraph (xvii) or Exhibit
F-4, as appropriate), to the effect that either (a) such transferee is not an
employee benefit plan or arrangement subject to Section 406 of ERISA or a plan
subject to Section 4975 of the Code, nor a person acting on behalf of any such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such transfer (each, a "Plan Investor") or (b) in the case of a Class
B-4, Class B-5 or Class B-6 Certificate, the purchase of such Certificate by or
on behalf of such Plan is permissible under applicable law, will not constitute
or result in a non-exempt prohibited transaction under ERISA or Section 4975 of
the Code, will not subject the Depositor, the Trustee or the Master Servicer to
any obligation in addition to those undertaken in the Agreement and the
following conditions are satisfied: (I) the transferee is an insurance company,
(II) the source
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of funds used to purchase such Certificates is an "insurance company general
account" (as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60) and (III) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied or (ii) 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 or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel addressed to
the Depositor, the Trustee and the Master Servicer, satisfactory to such
entities, which Opinion of Counsel shall not be an expense of such entities, to
the effect that the purchase or holding of such ERISA-Restricted Certificate is
permissible under applicable law, will not result in a non- exempt prohibited
transaction provisions of ERISA or Section 4975 of the Code and will not subject
the Trustee, the Master Servicer or the Depositor to any obligation or liability
in addition to those expressly undertaken in this Agreement. 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 ERISA or to the Code without the delivery to the Trustee of either a
representation in the form of Exhibit G (in the case of a Class B-4, Class B-5
or Class B-6 Certificate) or paragraph (xvii) of Exhibit F-4 (in the case of a
Class R Certificate) hereto or an Opinion of Counsel as described above shall be
void and of no effect.
If any Book-Entry Certificate (or any interest therein) is acquired or held
in violation of the provisions of Section 5.02(e) above, then the last preceding
Transferee that either (i) is not a Plan Investor or (ii) is not in compliance
with (b) of the immediately preceding paragraph shall be restored, to the extent
permitted by law, to all rights and obligations as Certificate Owner thereof
retroactive to the date of such Transfer of such Certificate. The Trustee shall
be under no liability to any Person for making any payments due on such
Certificate to such preceding Transferee.
Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in this Section 5.02(e)(II) shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer and the Trust Fund from and against
any and all liabilities, claims, costs or expenses incurred by such parties as a
result of such acquisition or holding.
(f) 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 to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in 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 Person shall acquire an Ownership Interest in a Class R
Certificate unless such Ownership Interest is a pro rata undivided
interest.
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(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall as a condition to
registration of the transfer, require delivery to it, in form and substance
satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit F-4 hereto from the
proposed transferee to the effect that such transferee is a Permitted
Transferee and that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed transfer as a
nominee, trustee or agent for any Person who is not a Permitted
Transferee; and
B. covenant of the proposed transferee to the effect that
the proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to the Class R Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest in
a Class R Certificate in violation of the provisions of this Section shall
be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the
provisions of this Section, become a Holder of a Class R Certificate, then
the prior Holder of such Class R Certificate that is a Permitted Transferee
shall, upon discovery that the registration of transfer of such Class R
Certificate was not in fact permitted by this Section, be restored to all
rights as Holder thereof retroactive to the date of registration of
transfer of 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 this Section or for malting
any distributions due on such Class R Certificate to the Holder thereof or
tatting any other action with respect to such Holder under the provisions
of this Agreement so long as the Trustee received the documents specified
in clause (iii). The Trustee shall be entitled to recover from any Holder
of a Class R Certificate that was in fact not a Permitted Transferee at the
time such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class
R Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right but not
the obligation, without notice to the Holder of such Class R Certificate or
any other Person having an Ownership Interest therein, to notify the
Depositor to arrange for the sale of such Class R Certificate. The proceeds
of such sale, net of commissions (which may include commissions payable to
the Depositor or its affiliates in connection with such sale), expenses and
taxes due, if any, will be remitted by the Trustee to the previous Holder
of such Class R Certificate that is a Permitted Transferee, except that in
the event that the Trustee determines that the Holder of such Class R
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (v) shall be determined
in the sole discretion of the Trustee and it shall not be liable to any
Person having an Ownership Interest in a Class R Certificate as a result of
its exercise of such discretion.
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(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of reasonable
compensation will provide to the Internal Revenue Service, and to the
persons specified in Sections 860E(e)(3) and (6) of the Code, information
needed to compute the tax imposed under Section 860E(e)(5) of the Code on
transfers of residual interests to disqualified organizations.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause the REMIC hereunder to fail to qualify
as a REMIC.
(g) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange shall
be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
Section 5.03 MUTILATED. DESTROYED. LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 PERSONS DEEMED OWNERS.
The Master Servicer, the Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Master Servicer, the Depositor, the
Certificate Registrar, any Paying Agent or the Trustee may treat the Person,
including a Depository, in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and none of the Master
Servicer, the Trust, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
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To the extent the Trustee, Certificate Registrar or any Paying Agent is
required pursuant to this Agreement to determine the identity of the beneficial
owner of a Book-Entry Certificate, any costs assessed by the Depository in
making such determination shall be an expense of the party making such request,
but in no event shall such cost be an expense of the Trust Fund.
Section 5.05 APPOINTMENT OF PAYING AGENT.
(a) The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and shall report the amounts
of such distributions to the Trustee. The duties of the Paying Agent may include
the obligation (i) to withdraw funds from the Distribution Account pursuant to
Sections 3.10 and 3.11 and for the purpose of making the distributions referred
to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the Rating Agencies.
(b) The Trustee shall cause the Paying Agent (if other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent shall hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree that it shall comply with all requirements of
the Code regarding the withholding of payments in respect of Federal income
taxes due from Certificate Owners and otherwise comply with the provisions of
this Agreement applicable to it.
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ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Master
Servicer, as the case may be, herein. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor.
Section 6.02 MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE OBLIGATIONS OF
THE MASTER SERVICER OR THE DEPOSITOR.
Any entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor master servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor master servicer.
Section 6.03 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; provided, further, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Master Servicer may undertake any such
action which it may deem necessary or desirable in respect of this Agreement,
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder.
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In such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust and the Master Servicer shall be entitled to be reimbursed therefor only
pursuant to Section 3.11. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Master Servicer pursuant to Section 6.04 or 7.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination). This paragraph shall apply to the Master Servicer solely in its
capacity as Master Servicer hereunder and in no other capacities.
Section 6.04 MASTER SERVICER NOT TO RESIGN.
Subject to the provisions of Section 7.01 and Section 6.02, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii)
upon satisfaction of the following conditions: (a) the Master Servicer has
proposed a successor master servicer to the Trustee in writing and such proposed
successor master servicer is reasonably acceptable to the Trustee; and (b) each
Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor master servicer stating that the proposed
appointment of such successor master servicer as Master Servicer hereunder will
not result in the reduction or withdrawal of the then current rating of the
Regular Certificates or the ratings that are in effect; provide , however, that
no such resignation by the Master Servicer shall become effective until such
successor master servicer or, in the case of (i) above, the Trustee shall have
assumed the Master Servicer's responsibilities and obligations hereunder or the
Trustee shall have designated a successor master servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Master Servicer.
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.
Section 6.05 DELEGATION OF DUTIES.
In the ordinary course of business, the Master Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01, including entering into Sub-
Servicing Agreements with Sub-Servicers, for the servicing and administration of
the Mortgage Loans, in accordance with the provisions of Section 3.02. Such
delegation shall not relieve the Master Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04. The Master Servicer shall
provide the Trustee and the Rating Agencies with 60 days prior written notice
prior to the delegation of any of its duties to any Person other than any of the
Master Servicer's Affiliates or their respective successors and assigns.
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ARTICLE VII
DEFAULT
Section 7.01 MASTER SERVICER EVENTS OF TERMINATION.
(a) If any one of the following events ("Master Servicer Events of
Termination' ) shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any Advance (other
than a Nonrecoverable Advance); or (B) any other failure by the Master
Servicer to deposit in the Collection Account or Distribution Account any
deposit required to be made under the terms of this Agreement which
continues unremedied for a period of (i) one Business Day in the case of
any such Advance that was required to be remitted to the Trustee or (ii)
five Business Days in the case of any such deposit that was required to be
remitted to the Trustee, provided, that, if the Master Servicer cures such
failure within the applicable grace period, the amounts remitted shall
include interest calculated at the applicable federal funds rate; or
(ii) The failure by the Master Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 30 days, after the date (A) on which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Master Servicer by the Trustee or by any Holder of a Regular
Certificate evidencing at least 25% of the Voting Rights or (B) actual
knowledge of such failure by a Servicing Officer of the Master Servicer; or
(iii) The entry against the Master Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 days; or
(iv) The Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property; or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and 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, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
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(b) then, and in each and every such case, so long as a Master Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following the
Master Servicer Remittance Date, the Trustee shall terminate all of the rights
and obligations of the Master Servicer under this Agreement and the Trustee, or
a successor master servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to the terms of Section 7.02,
the duties of a successor master servicer and (y) in the case of (i)(B), (ii),
(iii) and (iv) above, the Trustee shall, at the direction of the Holders of each
Class of Regular Certificates evidencing Percentage Interests aggregating not
less than 51%, by notice then given in writing to the Master Servicer (and to
the Trustee if given by Holders of Certificates), terminate all of the rights
and obligations of the Master Servicer as servicer under this Agreement, to the
extent permitted by law, and in and to the Mortgage Loans and the proceeds
thereof. Any such notice to the Master Servicer shall also be given to each
Rating Agency and the Depositor. On or after the receipt by the Master Servicer
(and by the Trustee if such notice is given by the Holders) of such written
notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Certificates or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee or duly appointed successor master
servicer pursuant to and under this Section; and, without limitation, the
Trustee or duly appointed successor master servicer 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 of each Mortgage Loan and Related Documents or otherwise. The Master
Servicer agrees to cooperate with the Trustee (or the applicable successor
master servicer) in effecting the termination of the responsibilities and rights
of the Master Servicer hereunder, including, without limitation, the delivery to
the Trustee of all documents and records requested by it to enable it to assume
the Master Servicer's functions under this Agreement within ten Business Days
subsequent to such notice, the transfer within one Business Day subsequent to
such notice to the Trustee (or the applicable successor master servicer) for the
administration by it of all cash amounts that shall at the time be held by the
Master Servicer and to be deposited by it in the Collection Account, the
Distribution Account, any REO Account or any Servicing Account or that have been
deposited by the Master Servicer in such accounts or thereafter received by the
Master Servicer with respect to the Mortgage Loans or any REO Property received
by the Master Servicer. All Transition Costs incurred in connection with
transferring the Mortgage Files to the successor master servicer and amending
this Agreement to reflect such succession as Master Servicer pursuant to this
Section shall be paid by the predecessor Master Servicer (or if the predecessor
Master Servicer is the Trustee, the initial Master Servicer) or by the Trust
pursuant to Section 3.11(b)(iv) herein if the Master Servicer does not fulfill
its obligations hereunder within 45 days of presentation of reasonable
documentation of such costs and expenses. For purposes of this Section 7.01, the
Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Termination unless a Responsible Officer of the Trustee assigned to and working
in the Trustee's Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such a Master Servicer Event of
Termination is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.
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Section 7.02 TRUSTEE TO ACT: APPOINTMENT OF SUCCESSOR.
(a) Within 90 days of the time the Master Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor master servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects 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 arising on and after its
succession; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.06; and provided further, it is understood and acknowledged that by
the parties hereto that there will be a period of transition (not to exceed 90
days) before the transfer of servicing obligations is fully effected and that
the Trustee (i) shall be under no obligation to purchase any Mortgage Loan, and
(ii) shall have no obligation whatsoever with respect to any liability (other
than advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time of termination As compensation therefor, the
Trustee (or such other successor master servicer) shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if the
Trustee is unwilling to act as successor master servicer or (ii) if the Trustee
is legally unable so to act, or if the Holders of Certificates entitled to at
least 51% of the Voting Rights so request in writing to the Trustee, the Trustee
shall appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $50,000,000 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,
provided, that the appointment of any such successor master servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to
the Certificates or the ratings that are in effect by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Master Servicer hereunder, unless the Trustee
is prohibited by law from so acting, the Trustee shall act in such capacity as
herein above provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation as
the Trustee and such successor shall agree, not to exceed the Servicing Fee).
The appointment of a successor master servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement prior
to its termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.13 or to indemnify the Trustee pursuant to Section
8.05, nor shall any successor master servicer be liable for any acts or
omissions of the predecessor Master Servicer or for any breach by such Master
Servicer of any of its representations or warranties contained herein or in any
related document or agreement. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) Any successor, including the Trustee, to the Master Servicer as
servicer shall during the term of its service as master servicer continue to
master service and administer the Mortgage Loans for the benefit of
Certificateholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and
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a Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section 3.14.
(c) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (c). The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee promptly upon receipt of the original with evidence of recording thereon
or a copy certified by the public recording office in which such assignment was
recorded.
Section 7.03 WAIVER OF MASTER SERVICER EVENTS OF TERMINATION.
The Majority Certificateholders may, on behalf of all Certificateholders,
waive any events permuting removal of the Master Servicer as servicer pursuant
to this Article VII, provided, however, that the Majority Certificateholders may
not waive such events or a Master Servicer Event of Termination in making a
required distribution on a Certificate without the consent of the Holder of such
Certificate. Upon any waiver of a past default, such default shall cease to
exist and any Master Servicer Event of Termination arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto except to the extent expressly so waived. Notice of any such waiver
shall be given by the Trustee to the Rating Agencies.
Section 7.04 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination or appointment of a successor the Master Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Master Servicer Event of Termination the Trustee shall be deemed to have actual
knowledge of such Master Servicer Event of Termination five Business Days after
a Responsible Officer of the Trustee becomes aware of the occurrence of such an
event and the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence
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unless such default or Master Servicer Event of Termination shall have been
waived or cured. Such notice shall be given to the Rating Agencies promptly
after any such occurrence.
Section 7.05 SURVIVABILITY OF MASTER SERVICER LIABILITIES.
Notwithstanding anything herein to the contrary, upon termination of the
Master Servicer hereunder, any liabilities of the Master Servicer which accrued
prior to such termination shall survive such termination.
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ARTICLE VIII
THE TRUSTEE
Section 8.01 DUTIES OF TRUSTEE.
The Trustee, prior to the occurrence of a Master Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Master Servicer Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Master Servicer Event of
Termination has occurred (which has not been cured) of which a Responsible
Officer has actual knowledge, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
As provided in Section 4.02 hereof, on each Distribution Date, the Trustee
shall provide Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level
information for each Class of Certificates as of such Distribution Date, using a
format and media mutually acceptable to the Trustee and Bloomberg.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, the Additional Collateral Servicer or the
Depositor hereunder. If any such instrument is found not to conform in any
material respect to the requirements of this Agreement, the Trustee shall notify
the Certificateholders of such instrument in the event that the Trustee, after
so requesting, does not receive a satisfactorily corrected instrument.
The Trustee shall prepare and file or cause to be filed on behalf of the
Trust Fund any tax return that is required with respect to the Trust Fund
pursuant to applicable federal, state or local tax laws.
The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of the Trust Fund as a REMIC
under the REMIC Provisions and to prevent the imposition of any federal, state
or local income, prohibited transaction, contribution or other tax on the Trust
Fund to the extent that maintaining such status and avoiding such taxes are
within the control of the Trustee and are within the commercially reasonable
scope of specific responsibilities under this Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct; provided, however, that:
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(i) prior to the occurrence of a Master Servicer Event of Termination,
and after the curing of all such Master Servicer Events of Termination
which may have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee, unless
it shall be proved by a court of competent jurisdiction that the Trustee
was negligent in ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Majority Certificateholders relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising or omitting to exercise any trust
or power conferred upon the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure by
the Master Servicer to comply with the obligations of the Master Servicer
referred to in clauses (i) and (ii) of Section 7.01 or any Master Servicer
Event of Termination unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Master Servicer or
the Majority Certificateholders. In the absence of such receipt of such
notice, the Trustee may conclusively assume that there is no Master
Servicer Event of Termination.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer or Additional Collateral Servicer
under this Agreement, except during such time, if any, as the Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of this Agreement.
The Trustee shall not complete foreclosure proceedings, or accept a deed in
lieu of foreclosure, with respect to any Mortgage Loan, unless the Trustee has
been supplied with an Opinion of Counsel to the effect that if the related
Mortgaged Property is acquired by the Trust, such Mortgaged Property from such
Mortgage will qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code. In the event that the Trustee acquires possession of any
Mortgaged Property in spite of the foregoing, the Trustee shall dispose of the
acquired Mortgaged Property as expeditiously as possible.
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The Trustee shall have no duty (A) to see any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other than
from funds available in the Distribution Account to confirm or verify the
contents of any reports or certificates of the Master Servicer or the Additional
Collateral Servicer delivered to the Trustee pursuant to this Agreement believed
by the Trustee to be genuine and to have been signed or presented by the proper
party or parties.
Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon, and shall be
fully 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 reasonably believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of the Certificateholders pursuant to the provisions of
this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Trustee to perform any discretionary act enumerated in this Agreement shall
not be construed as a duty, and the Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance of any
such act;
(iv) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(v) prior to the occurrence of a Master Servicer Event of Termination
and after the curing of all Master Servicer Events of Termination which may
have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholder; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of
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such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to such proceeding. The reasonable
expense of every such examination shall be paid by the Master Servicer or,
if paid by the Trustee, shall be reimbursed by the Master Servicer upon
demand. Nothing in this clause (v) shall derogate from the obligation of
the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no liability and
makes no representation as to any acts or omissions hereunder of the Master
Servicer until such time as the Trustee may be required to act as Master
Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed by the Trustee with due care; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Master Servicer, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document, or of MERS or the MERS(R) System. The Trustee
shall not be accountable for the use or application by the Master Servicer, or
for the use or application of any funds paid to the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer. The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust or its ability to generate the payments
to be distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the validity of the assignment of any Mortgage Loan to the Trustee or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the
compliance by the Depositor or the Master Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any noncompliance therewith or any breach
thereof, any investment of monies by or at the direction of the Master Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions
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of any of the Master Servicer (other than if the Trustee shall assume the duties
of the Master Servicer pursuant to Section 7.02), any Sub-Servicer or any
Mortgagor, any action of the Master Servicer (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02), or any
Sub-Servicer taken in the name of the Trustee; the failure of the Master
Servicer or any Sub- Servicer to act or perform any duties required of it as
agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); provided, however, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
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
Trustee and may transact any banking and trust business with the Master
Servicer, the Depositor or their Affiliates.
Section 8.05 MASTER SERVICER TO PAY TRUSTEE EXPENSES; TRUSTEE FEES.
On each Distribution Date, the Trustee shall be entitled to withdraw from
the Distribution Account as compensation hereunder the Trustee Fees. The Master
Servicer will pay or reimburse the Trustee (or, if the Master Servicer does not
fulfill its obligations hereunder, the Trust Fund will reimburse pursuant to
Section 3.11(b)(ii) herein) within 30 days upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith or which is the
responsibility of the Trustee hereunder. In addition, the Master Servicer
covenants and agrees to indemnify the Trustee (or, if the Master Servicer does
not fulfill its obligations hereunder within 30 days upon the Trustee's request,
the Trust Fund will indemnify pursuant to Section 3.11(b)(ii) herein) and its
officers, directors, employees and agents from, and hold it harmless against,
any and all losses, liabilities, damages, claims or expenses incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence of the Trustee in the performance of its
duties hereunder or by reason of the Trustee's reckless disregard of obligations
and duties hereunder. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified, by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee,
including the compensation and the expenses and disbursements of its agents and
its counsel, in the ordinary course of the Trustee's performance of its regular
duties in accordance with the provisions of this Agreement) incurred by the
Trustee or such party arising out of or in connection with the acceptance or
administration of its duties under this Agreement, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance by the Trustee of its
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duties under this Agreement or by reason of the reckless disregard of the
Trustee's obligations and duties under this Agreement. This section shall
survive termination of this Agreement or the resignation or removal of any
Trustee hereunder.
Section 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall be a corporation or a national banking
association, and duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of Baa3 by Fitch and a
short-term rating of at least A-1 by S&P, and subject to supervision or
examination by federal or state authority. If such entity publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
Section 8.07 RESIGNATION OR REMOVAL OF TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Master Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 60 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor may remove
the Trustee. If the Depositor or the Master Servicer removes the Trustee under
the authority of the immediately preceding sentence, the Depositor shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee.
The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Master Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor Trustee in accordance with this Section.
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Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08.
Section 8.08 SUCCESSOR TRUSTEE.
Any successor Trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the Rating Agencies, the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective, and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee. The Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in this Section
8.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 8.08, the successor Trustee shall mail notice of the appointment of a
successor Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency.
Section 8.09 MERGER OR CONSOLIDATION OF TRUSTEE.
Any entity into which the Trustee may be merged or converted or with which
it may be consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such entity shall be eligible under the provisions of Section 8.06 and
8.08, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at anytime, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property may at the time be located, the Depositor
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Master Servicer. If the Master Servicer shall not have
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joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case a Master Servicer Event of Termination shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 8.06, and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08. The Master Servicer shall be
responsible for the fees of any co-trustee or separate trustee appointed
hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee
except that following the occurrence of a Master Servicer Event of
Termination, the Trustee acting alone may accept the resignation or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Rating Agencies and the Master Servicer.
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.
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Section 8.11 LIMITATION OF LIABILITY.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.
Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Master Servicer and each
Certificateholder upon reasonable notice during normal business hours, access to
all records maintained by the Trustee in respect of its duties hereunder and
access to officers of the Trustee responsible for performing such duties. The
Trustee shall cooperate fully with the Master Servicer, the Depositor and such
Certificateholder and shall make available to the Master Servicer, the Depositor
and such Certificateholder for review and copying at the expense of the party
requesting such copies, such books, documents or records as may be requested
with respect to the Trustee's duties hereunder. The Depositor, the Master
Servicer and the Certificateholders shall not have any responsibility or
liability for any action or failure to act by the Trustee and are not obligated
to supervise the performance of the Trustee under this Agreement or otherwise.
Section 8.13 SUITS FOR ENFORCEMENT.
In case a Master Servicer Event of Termination or other default by the
Master Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
Section 8.14 WAIVER OF BOND REQUIREMENT.
The Trustee shall be relieved of, and each Certificateholder hereby waives,
any requirement of any jurisdiction in which the Trust, or any part thereof, may
be located that the Trustee post a bond or other surety with any court, agency
or body whatsoever.
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Section 8.15 WAIVER OF INVENTORY. ACCOUNTING AND APPRAISAL REQUIREMENT.
The Trustee shall be relieved of, and each Certificateholder hereby waives,
any requirement of any jurisdiction in which the Trust, or any part thereof, may
be located that the Trustee file any inventory, accounting or appraisal of the
Trust with any court, agency or body at any time or in any manner whatsoever.
Section 8.16 RIGHT OF TRUSTEE IN CAPACITY OF CERTIFICATE REGISTRAR OR
PAYING AGENT.
In the event that the Trustee is also acting in the capacity of Paying
Agent or Certificate Registrar hereunder, the rights, protections, indemnities
and immunities afforded to the Trustee pursuant to this Article VIII shall also
be afforded to the Trustee in its capacity as Paying Agent or Certificate
Registrar.
Section 8.17 PERIODIC FILINGS.
The Trustee shall, on behalf of the Trust Fund, prepare, sign (as trustee
for the Trust Fund) and cause to be filed with the Commission on a timely basis
any periodic reports required to be filed under the provisions of the Exchange
Act, and the rules and regulations of the Commission thereunder; provided,
however, that any annual report of the Depositor on Form 10-K shall be signed by
the Chief Executive Officer of the Master Servicer on behalf of the Depositor
and in respect of the Trust Fund. The Trustee shall provide copies of all such
reports to the Depositor for approval prior to filing. 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. Prior to January 30 of
the first year in which the Trustee is able to do so under applicable law, the
Trustee shall file a Form 15 Suspension Notification with respect to the Trust
Fund. Any Form 10-K filed with the Commission in connection with this Section
8.17 shall include a certification, signed by the Chief Executive Officer of the
Master Servicer, in the form attached as Exhibit M hereto or such other form as
may be required or permitted by the Commission (the "Form 10-K Certification"),
in compliance with Rule 13a-14 and 15d-14 under the Exchange Act and any
additional directives of the Commission. In connection with the Form 10-K
Certification, the Trustee shall provide the Master Servicer with a back-up
certification substantially in the form attached hereto as Exhibit N.
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ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC ADMINISTRATION.
(a) The Trustee shall make an election to treat the Trust Fund as a REMIC
under the Code and, if necessary, under applicable state law. Such election will
be made on Form 1066 or other appropriate federal tax or information return or
any appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. For the purposes of the
REMIC election in respect of the Trust Fund, the Regular Certificates shall be
designated as the "regular interest" and the Class R Certificates shall be
designated as the sole class of "residual interest" in the REMIC. The Master
Servicer and the Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860G of the Code) in the REMIC other than the
Regular Certificates and the Class R Certificates. Within 30 days after the
Closing Date, the Trustee shall prepare and file with the Internal Revenue
Service Form 8811, "Information Return for Real Estate Mortgage Investment
Conduits (REMIC) and Issuers of Collateralized Debt Obligations" for the REMIC.
The Trustee will apply for an Employee Identification Number from the IRS
via form SS-4 or any other acceptable method for all tax entities.
(b) The Closing Date is hereby designated as the "Startup Day" of the Trust
Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
other than the expense of obtaining any tax related Opinion of Counsel except as
specified herein and except that the Trustee shall be entitled to be reimbursed
from the Collection Account for any professional fees and expenses related to
any non-routine audits or any administrative or judicial proceedings that do not
result from any breach of its tax duties under this Section 9.01. The Trustee,
as agent for the Trust Fund's Tax Matters Person, shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving the Trust Fund
and (ii) represent the Trust Fund in any administrative or judicial proceeding
relating to an examination or audit by any governmental taxing authority with
respect thereto. By their acceptance thereof, the holder of the largest
Percentage Interest of the Residual Certificates of the REMIC shall be
designated as the Tax Matters Person (as defined in the REMIC Provisions) hereby
agrees to irrevocably appoint the Trustee or an Affiliate as its agent to
perform all of the duties of the Tax Matters Person for the REMIC.
(d) The Trustee shall prepare, sign and file all of the Tax Returns in
respect of the REMIC created hereunder. The expenses of preparing and filing
such returns shall be home by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the Trust Fund as is
in its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article IX.
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(e) The Trustee shall perform on behalf of the Trust Fund all reporting and
other tax compliance duties that are the responsibility of the Trust Fund under
the Code, the REMIC Provisions or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, as required by the Code, the REMIC Provisions or other such compliance
guidance, the Trustee shall provide (i) to any Transferor of a Residual
Certificate, at such Transferor's expense, such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium and (iii) to the Internal Revenue Service the name, title,
address and telephone number of the person who will serve as the representative
of the Trust Fund. The Master Servicer shall provide on a timely basis to the
Trustee such information with respect to the assets of the Trust Fund,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Depositor shall provide or cause to be
provided to the Trustee, within ten (10) days after the Closing Date, all
information or data that the Trustee reasonably determines to be relevant for
tax purposes as to the valuations and issue prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flow of the Certificates.
(f) To the extent that the affairs of the Trust Fund are within its control
and the scope of its specific responsibilities under this Agreement, the Trustee
shall take such action and shall cause the Trust Fund created hereunder to take
such action as shall be necessary to create or maintain the status thereof as a
REMIC under the REMIC Provisions (and the Master Servicer shall assist it, to
the extent reasonably requested by it). The Trustee shall not knowingly take any
action, cause the Trust Fund to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of the Trust Fund as a
REMIC or (ii) result in the imposition of a tax upon the Trust Fund (including
but not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee has received an Opinion of Counsel, addressed to the Trustee
(at the expense of the party seeking to take such action but in no event at the
expense of the Trustee) to the effect that the contemplated action will not,
with respect to the Trust Fund created hereunder, endanger such status or result
in the imposition of such a tax, nor shall the Master Servicer take or fail to
take any action (whether or not authorized hereunder) as to which the Trustee
has advised it in writing that it has received an Opinion of Counsel to the
effect that an Adverse REMIC Event could occur with respect to such action. In
addition, prior to taking any action with respect to the Trust Fund or the
assets of the Trust Fund, or causing the Trust Fund to take any action, which is
not contemplated under the terms of this Agreement, the Master Servicer will
consult with counsel with respect to whether such action could cause an Adverse
REMIC Event to occur with respect to the Trust Fund, and the Master Servicer
shall not take any such action or cause the Trust Fund to take any such action
as to which counsel has advised it in writing that an Adverse REMIC Event could
occur. The Trustee may consult with counsel to make such written advice, and the
cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee.
(g) In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund created hereunder as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure
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property" of the REMIC as defined in Section 860G(c) of the Code, on any
contributions to the Trust Fund after the Startup Day therefor pursuant to
Section 860G(d) of the Code, or any other tax is imposed by the Code or any
applicable provisions of state or local tax laws, such tax shall be charged (i)
to the Trustee pursuant to Section 9.03 hereof, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article IX, (ii) to the Master Servicer pursuant to Section 9.03 hereof, if such
tax arises out of or results from a breach by the Master Servicer of any of its
obligations under Article III or this Article IX, or otherwise, (iii) to the
Master Servicer as provided in Section 3.05 and (iv) against amounts on deposit
in the Distribution Account and shall be paid by withdrawal therefrom to the
extent not required to be paid by the Master Servicer or the Trustee pursuant to
another provision of this Agreement.
(h) On or before April 15 of each calendar year, commencing April 15, 2004,
the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating (without regard to
any action taken by any party other than the Trustee) the Trustee's compliance
with this Article IX.
(i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to the Trust Fund on a calendar year and on an accrual
basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the Trust Fund other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel (which shall be at the
expense of the party requesting to make such contribution and not at the expense
of the Trustee) to the effect that the inclusion of such assets in the Trust
Fund will not cause the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject the Trust Fund to any tax under
the REMIC Provisions or other applicable provisions of federal, state and local
law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the Trust Fund will receive a fee or other compensation for
services nor knowingly permit the Trust Fund to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
Section 9.02 PROHIBITED TRANSACTIONS AND ACTIVITIES.
None of the Depositor, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of the
Trust Fund pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for the Trust Fund
(other than REO Property acquired in respect of a defaulted Mortgage Loan), nor
sell or dispose of any investments in the Custodial Account or the Distribution
Account for gain, nor accept any contributions to the Trust Fund after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale,
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disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of the Trust Fund as a REMIC or (b) cause the Trust Fund to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions.
Section 9.03 MASTER SERVICER AND TRUSTEE INDEMNIFICATION.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor, and the
Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, as a result of a breach of the Trustee's
covenants set forth in this Article IX, subject, however, to the provision of
Sections 8.01 and 8.02 of this Agreement.
(b) The Master Servicer agrees to indemnify the Trust Fund, the Depositor
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of a breach of the Master Servicer's
covenants set forth in Article III or this Article IX.
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ARTICLE X
TERMINATION
Section 10.01 TERMINATION.
(a) The respective obligations and responsibilities of the Master Servicer,
the Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Master Servicer to send certain
notices as hereinafter set forth) shall terminate upon notice to the Trustee
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balance of each Class of Certificates has been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
and (iii) the optional purchase by the Master Servicer of the Mortgage Loans as
described below. Notwithstanding the foregoing, in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of
the United States to the Court of St. James's, living on the date hereof.
The Master Servicer may, at its option, terminate this Agreement on any
date on which the Loan Balance is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date or by purchasing, on the
next succeeding Distribution Date, all of the outstanding Mortgage Loans and REO
Properties at a price equal to the sum of the outstanding Stated Principal
Balance of the Mortgage Loans (or the fair market value of the related
underlying Mortgaged Property with respect to any REO Properties, if such fair
market value is less than such outstanding Stated Principal Balance) and accrued
and unpaid interest thereon at the weighted average of the Loan Rates through
the end of the Due Period preceding the final Distribution Date plus
unreimbursed Servicing Advances, Advances and any unpaid Servicing Fees
allocable to such Mortgage Loans and REO Properties (the "Termination Price").
In connection with any such purchase pursuant to the preceding paragraph,
the Master Servicer shall deposit in the Distribution Account all amounts then
on deposit in the Collection Account (less amounts permitted to be withdrawn by
the Master Servicer pursuant to Section 3.10), which deposit shall be deemed to
have occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the Distribution
Account on the Determination Date before such Distribution Date of the
Termination Price and the delivery of an opinion of counsel that such
termination is a "qualified liquidation" under Section 860F of the Code.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Master Servicer,
by letter to the Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution specifying (1) the Distribution Date upon which final distribution
of the Certificates will be made upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein designated, (2) the
amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not
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applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Holder of the Certificates on the Distribution
Date for such final distribution, in proportion to the Percentage Interests of
their respective Class and to the extent that funds are available for such
purpose, an amount equal to the amount required to be distributed to such
Holders in accordance with the provisions of Section 4.01 for such Distribution
Date.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate servicing account for
the benefit of such Certificateholders, and the Master Servicer (if the Master
Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee
(in any other case) shall give a second written notice to the remaining
Certificateholders, to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within nine months after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto, and the Trustee upon
transfer of such funds shall be discharged of any responsibility for such funds,
and the Certificateholders shall look to the Class R Certificateholders for
payment.
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event that the Master Servicer exercises its purchase option as
provided in Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the Trust
to comply with the requirements of this Section will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust as defined in
Section 860F of the Code or (ii) cause the Trust Fund constituting part of the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) Within 90 days prior to the final Distribution Date, the Trustee
shall adopt and sign a plan of complete liquidation of the Trust Fund
meeting the requirements of a "qualified liquidation" under Section 860F of
the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Master Servicer for cash
pursuant to the terms of the plan of complete liquidation; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited (A) to the Holders of each of the Class A, Class P
and Class B Certificates, an amount equal to the sum of the related
Certificate Principal Balance and one month's interest thereon at the
applicable Pass- Through Rate (B) to the Holders of the Class X
Certificates one month's interest on the related Notional Amount thereof at
the applicable Pass-Through Rate, and (C) to the Class
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R Certificateholders, all cash on hand after such payment to the Class A,
Class P, Class X and Class B Certificateholders (other than cash retained
to meet claims) and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holder thereof hereby agree to
appoint the Trustee as their attorney in fact to: (i) adopt such a plan of
complete liquidation (and the Certificateholders hereby appoint the Trustee as
their attorney in fact to sign such plan) as appropriate and (ii) to take such
other action in connection therewith as may be reasonably required to carry out
such plan of complete liquidation all in accordance with the terms hereof.
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ARTICLE XI
[RESERVED]
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 AMENDMENT.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) to make any other provisions with respect to matters
or questions arising under this Agreement, which shall not be inconsistent with
the provisions of this Agreement; provided, however, that any such action listed
in clause (i) through (iii) above shall not adversely affect in any respect the
interests of any Certificateholder, as evidenced by (i) notice in writing to the
Depositor, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
or (ii) an Opinion of Counsel delivered to the Master Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Majority
Certificateholders 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,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates which are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66% Percentage Interest in such Class, or (z) reduce
the percentage of Voting Rights required by clause (y) above without the consent
of the Holders of all Certificates of such Class then outstanding. Upon approval
of an amendment, a copy of such amendment shall be sent to the Rating Agencies.
Prior to the execution of any amendment to this Agreement, the Trustee shall be
entitled to receive and rely upon an Opinion of Counsel (at the expense of the
Person seeking such amendment) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a federal tax on the Trust Fund pursuant to the
REMIC Provisions or cause the Trust Fund constituting part of the Trust to fail
to qualify as a REMIC at any time that any Certificates are outstanding and that
the amendment is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and
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the Opinion of Counsel referred to in the immediately preceding paragraph to the
Master Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment; instead
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any amendment
pursuant to this 11.01 Section that affects its rights, duties and immunities
under this Agreement or otherwise.
Section 12.02 RECORDATION OF AGREEMENT: COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
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 the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall together constitute but one and the
same instrument.
Section 12.03 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not (i) operate to
terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or hens to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered
126
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee for
15 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding. It
is understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.04 GOVERNING LAW: JURISDICTION.
This Agreement shall be construed in accordance with the laws of the State
of New York, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws. With respect to any claim
arising out of this Agreement, each party irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in The City of New York, and
each party irrevocably waives any objection which it may have at any time to the
laying of venue of any suit, action or proceeding arising out of or relating
hereto brought in any such courts, irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the light to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 12.05 NOTICES.
All directions, demands and notices hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service, to (a) in the case
of the Sellers: (i) Cendant Mortgage Corporation, 0000 Xxxxxxxxxx Xxxx, Xx.
Xxxxxx, Xxx Xxxxxx 00000 or (ii) Xxxxxx'x Gate Residential Mortgage Trust, c/o
Cendant Mortgage Corporation, 0000 Xxxxxxxxxx Xxxx, Xx. Xxxxxx, Xxx Xxxxxx
00000, or such other address or telecopy number as may be furnished to the
Master Servicer and the Trustee in writing by either Seller; (b) in the case of
the Trustee: Citibank, N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: CDMC Series 2003-1, or such other address as may hereafter be
furnished to the Depositor, the Sellers and the Master Servicer in writing by
the Trustee; (c) in the case of the Depositor: Cendant Mortgage Capital LLC,
3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, New Jersey 08054, Attention:
General Counsel, or such other address or telecopy number as may be furnished to
the Sellers, the Master Servicer and the Trustee in writing by the Depositor;
(d) in the case of the Master Servicer: Cendant Mortgage Corporation, 0000
Xxxxxxxxxx Xxxx, Mail Stop LGL, Mt. Laurel, New Jersey 08054, or such other
address as maybe furnished to the Sellers, the Depositor and the Trustee in
writing by the Master Servicer; and (e) in the case of the Rating Agencies: with
respect to Fitch, Fitch Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and with respect to S&P, Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000. Any
notice required
127
or permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Notice of any Master Servicer Default shall be given by telecopy and
by certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 12.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 ARTICLE AND SECTION REFERENCES.
All article and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section 12.08 NOTICE TO THE RATING AGENCIES.
(a) Each of the Trustee and the Master Servicer shall be obligated to use
its best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of the
Trustee or Master Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of Termination that
has not been cured or waived;
(iii) the resignation or termination of the Master Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor master servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
(b) In addition, (i) the Trustee shall promptly furnish to each Rating
Agency copies of each Statement to Certificateholders described in Section 4.06
hereof; and
(i) the Master Servicer shall promptly furnish to each Rating Agency
copies of the following:
128
(A) each annual statement as to compliance described in
Section 3.19 hereof;
(B) each annual independent public accountants'
servicing report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01 (a)
hereof which relates to the fact that the Master Servicer
has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Standard &
Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group; and Fitch Ratings,
Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Section 12.09 FURTHER ASSURANCES.
Notwithstanding any other provision of this Agreement, neither the Regular
Certificateholders nor the Trustee shall have any obligation to consent to any
amendment or modification of this Agreement unless they have been provided
reasonable security or indemnity against their out-of-pocket expenses (including
reasonable attorneys' fees) to be incurred in connection therewith.
Section 12.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 12.11 ACTS OF CERTIFICATEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Master
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 12.11.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Whenever such
129
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by any Certificateholder shall bind every future Holder of such
Certificate and the Holder of every Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Trust in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
130
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
CENDANT MORTGAGE CAPITAL LLC, as
Depositor
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
CENDANT MORTGAGE CORPORATION,
as Master Servicer
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
CITIBANK, N.A., as Trustee
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Assistant Vice President
STATE OF NEW JERSEY )
) ss.:
COUNTY OF BURLINGTON )
On the 27th day of February, 2003 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxx known to me to be a Senior Vice
President of Cendant Mortgage Capital LLC, a Delaware limited liability company
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited liability company, and acknowledged to me
that such limited liability company 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
________________________________
000
XXXXX XX XXX XXXXXX )
)ss.:
COUNTY OF BURLINGTON )
On the 27th day of February, 2003 before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxxxxx known to me to be a Vice
President of Cendant Mortgage Corporation, a New Jersey corporation, that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited liability company, and acknowledged to me
that such limited liability company 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
________________________________
133
STATE OF )
)ss.:
COUNTY OF )
On the 27th day of February, 2003 before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxxxx known to me to be a Assistant
Vice President of Citibank, N.A., a national banking association, that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said limited liability company, and acknowledged to me that such
limited liability company 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
________________________________
134
EXHIBIT A
FORM OF CLASS A, CLASS P AND CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
A-1
CDMC Mortgage Pass-Through Certificates, Aggregate [Certificate Principal
Series 2003-1, Class [A-__] [Class X] [Class Balance] [Notional Amount] of
P] [Class A-__] [Class X] [Class P] Certificates
as of the Issue Date: $______________
Pass-Through Rate: [_____% per annum]
[Variable]
[Denomination] [Notional Amount]:
Date of Agreement and Cut-off Date: $______________
February 1, 2003
Master Servicer:
Cendant Mortgage Corporation
First Distribution Date: March 25, 2003 Trustee: Citibank, N.A.
Issue Date: February 27, 2003
No. _ CUSIP: ___________
[DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.]
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of a pool of conventional, one- to four-family,
fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by
CENDANT MORTGAGE CAPITAL LLC
CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________ is the registered owner of a Percentage
Interest (obtained by dividing the [denomination] [Notional Amount] of this
Certificate by the aggregate
A-2
[Certificate Principal Balance] [Notional Amount] of the [Class A-__] [Class X]
[Class P] Certificates as of the Issue Date) in that certain beneficial
ownership interest evidenced by all the [Class A-__] [Class X] [Class P]
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Cendant Mortgage
Capital LLC (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of [Class A-__] [Class X] [Class P] Certificates on
such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of [Class A-__] [Class X] [Class
P] Certificates, the aggregate initial [Certificate Principal Balance] [Notional
Amount] of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial [Certificate Principal Balance] [Notional Amount] of
the [Class A-__] [Class X] [Class P] Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on theCertificate Register. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass- Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
[Certificate Principal Balance] [Notional Amount] of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Holders of the Certificates, such
purposes including reimbursement of advances made, or certain expenses incurred,
with respect to the Mortgage Loans.
A-3
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations set
forth therein, Certificates are exchangeable for new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment (or provision for payment) to the Holders of the
Certificates of all amounts held by or on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the
Distribution Date on which the Certificate Principal Balance of each Class of
Certificates has been reduced to zero, (ii) the final payment (or any advance
with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party
A-4
designated in the Agreement to purchase from The Trust Fund all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan remaining
therein at a price determined as provided in the Agreement. The exercise of such
right will effect early retirement of the Certificates; however, such right to
purchase is subject to the aggregate Loan Balance of the Mortgage Loans at the
time of purchase being less than 5% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: February __, 2003
CITIBANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the [Class A-__] [Class X] [Class P] Certificates
referred to in the within-mentioned Agreement.
CITIBANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties ---------------
(Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts
of survivorship and not as to Minors Act
tenants in common _________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: _____________________________________
_______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of __________________________________, account number
____________, or, if mailed by check, to _____________________________________.
Applicable statements should be mailed to
_________________________________________.
This information is provided by __________________________________________,
the assignee named above, or __________________________________, as its agent.
EXHIBIT B
(RESERVED)
B-1
EXHIBIT C-1
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(E) OF
THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO
THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO
AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION,
C-1-1
SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(F) OF THE AGREEMENT REFERRED TO HEREIN.
ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
C-1-2
Certificate No. ___
CDMC Mortgage Pass-Through Certificates, Percentage Interest: [___]%
Series 2003-1, Class R-___
Pass-Through Rate: _____% per annum Master Servicer:
Cendant Mortgage Corporation
Date of Agreement and Cut-off Date:
February 1, 2003 Trustee: Citibank, N.A.
First Distribution Date: March 25, 2003 Issue Date: February 27, 2003
No. _ CUSIP: ______________
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of a pool of conventional, one- to four-family,
fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by
CENDANT MORTGAGE CAPITAL LLC
CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ___________________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in The Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Cendant
Mortgage Capital LLC (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
C-1-3
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
C-1-4
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(e) of the Agreement.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from The
Trust Fund all the Mortgage Loans and all
C-1-5
property acquired in respect of any Mortgage Loan remaining therein at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Loan Balance of the Mortgage Loans at the time of purchase
being less than 5% of the aggregate principal balance of the Mortgage Loans as
of the Cut-off Date.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-1-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: February __, 2003
CITBANK, N.A.,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-_ Certificates referred to in the
within-mentioned Agreement.
CITIBANK, N.A.,
as Certificate Registrar
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties -------------
(Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts
of survivorship and not as to Minors Act
tenants in common ___________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
_______________________________________________________________ (Please print or
typewrite name, address including postal zip code, and Taxpayer Identification
Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: ____________________________________
______________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _____________________________________, the
assignee named above, or ________________________________________, as its agent.
EXHIBIT C-2
FORM OF CLASS B CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT",
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE
RESIDUAL CERTIFICATES, [THE CLASS B-1 CERTIFICATES] [ THE CLASS B-2
CERTIFICATES] [THE CLASS B-3 CERTIFICATES] [THE CLASS B-4
CERTIFICATES] [AND THE CLASS B-5 CERTIFICATES] TO THE EXTENT
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED, BY VIRTUE OF ITS
PURCHASE OR HOLDING OF THIS CERTIFICATES, TO HAVE MADE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(E)(I) OF THE AGREEMENT.]
[NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(E) OF
THE AGREEMENT.]
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02(D) OF THE AGREEMENT.]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
C-2-1
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.]
C-2-2
CDMC Mortgage Pass-Through Certificates, Aggregate Certificate Principal
Series 2003-1, Class B-__ Balance of Class B-__
Certificates as of the Issue Date:
$__________
Pass-Through Rate: _____% per annum Denomination: $__________
Date of Agreement and Cut-off Date: Master Servicer:
February 1, 2003 Cendant Mortgage Corporation
First Distribution Date: March 25, 2003
Trustee: Citibank, N.A.
No. 1 Issue Date: October 30 2002
CUSIP: ____________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
CENDANT MORTGAGE CAPITAL LLC
CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-__ Certificates as
of the Issue Date) in that certain beneficial ownership
C-2-3
interest evidenced by all the Class B-__ Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Cendant Mortgage Capital LLC (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-__ Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-__ Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B-__ Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of
C-2-4
Certificates entitled to at least 66%, in some cases 100%, of the Voting Rights.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
[No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, (i) if such transfer is made in reliance upon
Rule 144A under the 1933 Act, the Trustee shall require the transferee to
execute an investment letter in substantially the form attached to the Agreement
as Exhibit F-1 or (ii) (A) the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement as
Exhibit F-2) and the transferee to execute an investment letter (in
substantially the form attached to the Agreement as Exhibit F-3) acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Trustee or the
Depositor and (B) the Trustee and the Depositor shall require a written Opinion
of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Trustee and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or
the Depositor. None of the Depositor, the Certificate Registrar or the Trustee
is obligated to register or qualify the Class of Certificates specified on the
face hereof under the 1933 Act or any other securities law or to take any action
not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar 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.]
C-2-5
[Any transferee of this Certificate will be deemed, by virtue of its
purchase or holding of this Certificates, to have made the representations set
forth in Section 5.02(e)(I) of the Agreement.]
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(e) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from The
Trust Fund all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining therein at a price determined as provided in the
Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the Mortgage Loans at the time of purchase being less than 5% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: February __, 2003
CITIBANK, N.A.,
as Trustee
By:______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
CITIBANK, N.A.,
as Certificate Registrar
By:______________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties --------------
(Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts
of survivorship and not as to Minors Act
tenants in common ___________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: _________________________
______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of _____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by __________________________________________,
the assignee named above, or ___________________________________, as its agent.
EXHIBIT D
MORTGAGE LOAN SCHEDULE
(Filed Manually)
D-1
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Citibank, N.A.
Attn: Inventory Control
Re: Pooling and Servicing Agreement dated as of February 1, 2003,
among Cendant Mortgage Capital LLC, as Depositor, Cendant Mortgage
Corporation, as Master Servicer and Citibank, N.A., as Trustee
In connection with the administration of the Mortgage Loans held by you as
Trustee for the Owner pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Trustee's Mortgage File for the Mortgage Loan described below, for the reason
indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (check one):
______ 1. Mortgage Paid in Full
______ 2. Foreclosure
______ 3. Substitution
______ 4. Other Liquidation (Repurchases, etc.)
______ 5. Nonliquidation Reason: ________________________
Address to which Trustee should
Deliver the Trustee's Mortgage File: ________________________
________________________
________________________
By:____________________________
(authorized signer)
Issuer: _____________________
Address: _____________________
_____________________
Date: _______________________
E-1
EXHIBIT F-1
FORM OF RULE 144A REPRESENTATION LETTER
______ __, 2003
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx / Xxxx 3
Xxx Xxxx, Xxx Xxxx 00000
[Certificate Registrar]
________________________
________________________
Re: Cendant Mortgage Capital LLC
CDMC Mortgage Pass-Through Certificates, Series 2003-1,
Class ___, Representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
the sale to it is being made in reliance on Rule 144A. The Transferee is
acquiring the Certificates for its own account or for the account of a
qualified institutional buyer, and understands that such Certificate 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 1933 Act.
2. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism
associated with the Certificates, that it has requested.
F-1-1
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of February 1, 2003, among Cendant Mortgage Capital LLC as Depositor,
Cendant Mortgage Corporation as Master Servicer and Citibank, N.A. as Trustee,
pursuant to which the Certificates were issued.
[TRANSFEREE]
By:________________________
Name:______________________
Title:_____________________
F-1-2
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Citibank, N.A., as Trustee and Certificate Registrar,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee 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 Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.
___ CORPORATION, ETC. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986.
___ BANK. The Transferee (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 Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar
------------------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
F-1-3
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 Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee 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 Transferee 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 Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) 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 Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.
F-1-4
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor 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 Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee 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 Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.
Dated:
______________________________
Print Name of Transferee
By:___________________________
Name:_________________________
Title:________________________
F-1-5
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
----------------------------------------------------------
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Citibank, N.A., as Trustee and Certificate Registrar,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee'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
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with
Rule 144A).
____ The Transferee 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 Transferee'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).
F-1-6
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (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.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
____________________________________
Print Name of Transferee or Advisor
By:__________________________
Name:________________________
Title:_______________________________
IF AN ADVISER:
_____________________________________
Print Name of Transferee
F-1-7
The undersigned hereby certifies on behalf of the purchaser named
below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as defined in Rule
144A, ("Rule 144A") under the Securities Act of 1933, as amended.
3. As of the date specified below (which is not earlier than the last day
of the Purchaser's most recent fiscal year), the amount of "securities",
computed for purposes of Rule 144A, owned and invested on a discretionary basis
by the Purchaser was in excess of $100,000,000.
Name of Purchaser _____________________________________________________________
By: (Signature)____________________________________________________________
Name of Signatory ______________________________________________________________
Title __________________________________________________________________________
Date of this certificate _______________________________________________________
Date of information provided in paragraph 3 ____________________________________
F-1-8
EXHIBIT F-2
FORM OF TRANSFEROR CERTIFICATE
_____ __, 2003
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx / Xxxx 3
Xxx Xxxx, Xxx Xxxx 00000
[Certificate Registrar]
________________________
________________________
Re: Cendant Mortgage Capital LLC,
CDMC Mortgage Pass-Through Certificates, Series 2003-1,
Class ___, Representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
February 1, 2003, among Cendant Mortgage Capital LLC as Depositor, Cendant
Mortgage Corporation as Master Servicer and Citibank, N.A. as Trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.
Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.
F-2-1
Very truly yours,
[Transferor]
By:________________________
Name:______________________
Title:_____________________
F-2-2
EXHIBIT F-3
FORM OF TRANSFEREE REPRESENTATION LETTER
______ __, 2003
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx / Xxxx 3
Xxx Xxxx, Xxx Xxxx 00000
[Certificate Registrar]
________________________
________________________
Re: Cendant Mortgage Capital LLC,
CDMC Mortgage Pass-Through Certificates, Series 2003-1,
Class ___, Representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferee hereby certifies as follows:
1. The Transferee understands that (a) the Certificates have not been and
will not be registered or qualified under the Securities Act of 1933 (the "1933
Act") or any state securities law, (b) the Depositor is not required to so
register or qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or any state
securities law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains restrictions
regarding the transfer of the Certificates and (e) the Certificates will bear a
legend to the foregoing effect.
2. The Transferee is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the 1933 Act or any
applicable state securities laws.
3. The Transferee is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the 1933 Act.
4. The Transferee has been furnished with all information regarding (a) the
Certificates and distributions thereon, (b) the nature, performance and
servicing of the Mortgage Loans, (c) the
F-3-1
Pooling and Servicing Agreement referred to below, and (d) any credit
enhancement mechanism associated with the Certificates, that it has requested.
5. The Transferee has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, (e) take any other action, that (in the case of each of subclauses (a)
through (e) above) would constitute a distribution of the Certificates under the
1933 Act, or would render the disposition of any Certificate a violation of
Section 5 of the 1933 Act or any state securities law or would require
registration or qualification pursuant thereto. The Transferee will not sell or
otherwise transfer any of the Certificates, except in compliance with the
provisions of that certain Pooling and Servicing Agreement, dated as of February
1, 2003, among Cendant Mortgage Capital LLC as Depositor, Cendant Mortgage
Corporation as Master Servicer and Citibank, N.A. as Trustee (the "Pooling and
Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.
Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferee]
By:________________________
Name:______________________
Title:_____________________
F-3-2
EXHIBIT F-4
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF ________ )
: ss.:
COUNTY OF ________ )
________________________ , being duly sworn, deposes, represents and
warrants as follows:
(i) I am a ______________________ of ____________________________ (the
"Owner") a corporation duly organized and existing under the laws of
______________, the record owner of or ______% Percentage Interest in the
Cendant Mortgage Capital LLC, CDMC Mortgage Pass- Through Certificates, Series
2003-1, Class R Certificates (the "Class R Certificates"), on behalf of whom I
make this affidavit and agreement. Capitalized terms used but not defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement pursuant to which the Class R Certificates were issued.
(ii) The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 200___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
(iii) The Owner is aware (i) of the tax that would be imposed on transfers
of the Class R Certificates to disqualified organizations under the Internal
Revenue Code of 1986 that applies to all transfers of the Class R Certificates
after May 31, 1988; (ii) that such tax would be on the transferor or, if such
transfer is through an agent (which person includes a broker, nominee or
middleman) for a non-Permitted Transferee, on the agent; (iii) that the person
otherwise liable for the tax shall be relieved of liability for the tax if the
transferee furnishes to such person an affidavit that thetransferee is a
Permitted Transferee and, at the time of transfer, such person does not have
actual knowledge that the affidavit is false; and (iv) that each of the Class R
Certificates may be a "noneconomic residual interest" within the meaning of
proposed Treasury regulations promulgated under 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 is to impede the assessment or collection of tax.
F-4-1
(iv) The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (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.)
(v) The Owner is aware that the Trustee will not register the transfer of
any Class R Certificate unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
(vi) The Owner consents to any additional restrictions or arrangements that
shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.
(vii) The Owner's taxpayer identification number is _________________.
(viii) The Owner has reviewed the restrictions set forth on the face of the
Class R Certificates and the provisions of Section 5.02(f) of the Pooling and
Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(f)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
(ix) The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.
(x) The Owner anticipates that it will, so long as it holds the Class R
Certificates, have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, and hereby represents to and for the benefit of the person
from whom it acquired the Class R Certificates that the Owner intends to pay
taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.
(xi) The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.
(xii) The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
(xiii) The Owner is not acquiring the Class R Certificates with the intent
to transfer the Class R Certificates to any person or entity that will not have
sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
F-4-2
(xiv) The Owner will, in connection with any transfer that it makes of the
Class R Certificates, obtain from its transferee the representations required by
Section 5.02(f) of the Pooling and Servicing Agreement under which the Class R
Certificate were issued and will not consummate any such transfer if it knows,
or knows facts that should lead it to believe, that any such representations are
false.
(xv) The Owner will, in connection with any transfer that it makes of the
Class R Certificates, deliver to the Trustee an affidavit, which represents and
warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted Transferee".
(xvi) The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included 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.
(xvii) (a) The Owner is not an employee benefit plan or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or an investment manager, named
fiduciary or a trustee of any such plan, or any other Person acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
such plan; or
(b) The Owner will provide the Trustee, the Company and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to such entities to the effect that the purchase of Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Depositor or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.
In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee and the Master Servicer that the
Owner will not transfer such Certificates to any Plan or person unless either
such Plan or person meets the requirements set forth in either (a) or (b) above.
F-4-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200___.
[OWNER]
By:___________________________
Name:_________________________
Title: [Vice] President
ATTEST:
By:__________________________
Name:________________________
Title: [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 a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of __________, 200___.
________________________________
Notary Public
County of ______________________
State of _______________________
My Commission expires:
F-4-4
FORM OF TRANSFEROR AFFIDAVIT
STATE OF ________ )
: ss. :
COUNTY OF ________ )
________________________, being duly sworn, deposes, represents and
warrants as follows:
1. I am a ____________________ of _____________________________ (the
"Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit F-4. The Owner does not know or believe that
any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement
F-4-5
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200___.
[OWNER]
By: ___________________________
Name:__________________________
Title: [Vice] President
ATTEST:
By:__________________________
Name:________________________
Title: [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 a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of __________, 200___.
______________________________
Notary Public
County of ____________________
State of _____________________
My Commission expires:
F-4-6
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
______ __, 2003
Cendant Mortgage Capital LLC
0000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx / Xxxx 3
Xxx Xxxx, Xxx Xxxx 00000
Cendant Mortgage Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Re: Cendant Mortgage Capital LLC
CDMC Mortgage Pass-Through Certificates, Series 2003-1,
Class [B-4][B-5][B-6]
-------------------------------------------------------
Ladies and Gentlemen:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Cendant Mortgage Capital LLC, CDMC Mortgage
Pass-Through Certificates, Series 2003-1, Class ___ (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of February 1, 2003 among Cendant Mortgage Capital LLC as
depositor (the "Depositor"), Cendant Mortgage Corporation as master servicer
(the "Master Servicer") and Citibank, N.A. as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Master Servicer that the following statements in either (1) or
(2) are accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Xxxxx plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101; or
G-1
_____ (2) The purchase of Certificates is permissible under applicable law, will
not constitute or result in any prohibited transaction under ERISA or Section
4975 of the Code, will not subject the Depositor, the Trustee or the Master
Servicer to any obligation in addition to those undertaken in the Pooling and
Servicing Agreement and (i) the Transferee is an insurance company, (ii) the
source of funds used to purchase such Certificates is an "insurance company
general account" (as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60) and (iii) the conditions set forth in Sections I and
III of PTCE 95-60 have been satisfied.
Very truly yours,
___________________________________
By: _______________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
[Name of Seller], a ______________ corporation (the "Mortgage Loan
Seller"), by its undersigned authorized representative, hereby certifies:
Pursuant to the Mortgage Loan Purchase Agreement, dated
_______________, between the Seller [Cendant Mortgage Corporation] [Xxxxxx'x
Gate Residential Mortgage Trust] and Cendant Mortgage Capital LLC (the
"Depositor"), the Seller is granting all of its right, title and interest in and
to the Mortgage Loan identified below to the Depositor. Terms used but not
defined herein have the respective meanings assigned to them in the Mortgage
Loan Purchase Agreement.
Mortgage Loan Number:
Maker:
Original Principal Amount:
Original Mortgage Note Date:
Maturity Date:
The Seller is the current owner and holder of the indebtedness
evidenced by the original Mortgage Note.
After diligent search, the Seller has been unable to locate the
original Mortgage Note and believes it to be lost or misplaced.
A true, complete and correct photocopy of the original Mortgage Note
is attached hereto.
If at any time the Seller locates the original Mortgage Note, the
Mortgage Loan Seller shall endorse such original Mortgage Note in the following
form: "Pay to the order of [Name of Trustee], as Trustee for the registered
holders of Cendant Mortgage Capital LLC, Mortgage Pass- Through Certificates,
CDMC Series 2003-1, without recourse," and shall promptly deliver to the Trustee
the original Mortgage Note so endorsed, with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to the
Seller.
The Seller hereby indemnifies the Depositor, the Trustee and the
Certificateholders from and against any and all losses, liabilities, damages,
claims or expenses of whatever kind (including without limitation attorneys'
fees and disbursements) arising from or in connection with the Seller's failure
to have delivered the original Mortgage Note (as required under the Mortgage
Loan Purchase Agreement) to the Trustee as designee of the Depositor, including
without limitation any such losses, liabilities, damages, claims or expenses
arising from or in connection with any claim by any third party who is the
holder of such indebtedness by virtue of its possession of such original
Mortgage Note.
H-1
This Lost Note Affidavit shall inure to the benefit of the Depositor,
the Trustee and the Certificateholders and their respective successors and
permitted assigns.
Dated:
[Seller]
By:______________________________
Name:____________________________
Title:___________________________
H-2
EXHIBIT I-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
_________ __, 2003
Cendant Mortgage Capital LLC
0000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Cendant Mortgage Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of February 1, 2003, among
Cendant Mortgage Capital LLC, as depositor, Cendant Mortgage
Corporation as master servicer and Citibank, N.A., as Trustee, CDMC
Mortgage Pass-Through Certificates, Series 2003-1
-------------------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
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 the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in Section 2.01 of the
Pooling and Servicing Agreement.
CITIBANK,N.A.
By:_____________________________
Name:
Title:
I-1
EXHIBIT I-2
FORM OF TRUSTEE FINAL CERTIFICATION
February __, 2003
Cendant Mortgage Capital LLC
0000 Xxxxxxxxxx Xxxx
Xxxxx. Xxxxxx, Xxx Xxxxxx 00000
Cendant Mortgage Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of February 1, 2003, among
Cendant Mortgage Capital LLC, as depositor, Cendant Mortgage
Corporation, as master servicer and Citibank, N.A., as Trustee, CDMC
Mortgage Pass-Through Certificates, Series 2003-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.
The undersigned 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 undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
I-2-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
CITIBANK, N.A., as Trustee
By:______________________________
Name:
Title:
I-2-2
EXHIBIT J
MORTGAGE LOAN PURCHASE AGREEMENT
(Available upon request)
J-1
EXHIBIT K
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
(Additional Collateral Servicing Agreement)
(Available Upon Request)
K-1
EXHIBIT L
PLANNED PRINCIPAL BALANCES
PLANNED PRINCIPAL
BALANCES FOR CLASS A-1
DISTRIBUTION DATE CERTIFICATES
---------------------------- ----------------------------
Initial Balance............. $27,653,440.00
March 25, 2003.............. 27,653,440.00
April 25, 2003.............. 27,653,440.00
May 25, 2003................ 27,653,440.00
June 25, 2003............... 27,653,440.00
July 25, 2003............... 27,653,440.00
August 25, 2003............. 27,653,440.00
September 25, 2003.......... 27,653,440.00
October 25, 2003............ 27,653,440.00
November 25, 2003........... 27,653,440.00
December 25, 2003........... 27,653,440.00
January 25, 2004............ 27,653,440.00
February 25, 2004........... 27,653,440.00
March 25, 2004.............. 27,653,440.00
April 25, 2004.............. 27,653,440.00
May 25, 2004................ 27,653,440.00
June 25, 2004............... 27,653,440.00
July 25, 2004............... 27,653,440.00
August 25, 2004............. 27,347,674.20
September 25, 2004.......... 26,996,160.15
October 25, 2004............ 26,632,815.32
November 25, 2004........... 26,257,816.87
December 25, 2004........... 25,871,373.77
January 25, 2005............ 25,473,661.16
February 25, 2005........... 25,064,845.98
March 25, 2005.............. 24,645,100.73
April 25, 2005.............. 24,214,664.16
May 25, 2005................ 23,773,800.01
June 25, 2005............... 23,323,000.07
July 25, 2005............... 22,864,176.96
August 25, 2005............. 22,402,431.28
September 25, 2005.......... 21,942,945.85
October 25, 2005............ 21,485,708.54
November 25, 2005........... 21,030,707.26
December 25, 2005........... 20,577,930.00
January 25, 2006............ 20,127,364.80
February 25, 2006........... 19,678,999.76
March 25, 2006.............. 19,232,823.04
April 25, 2006.............. 18,788,822.86
L-1
PLANNED PRINCIPAL
BALANCES FOR CLASS A-1
DISTRIBUTION DATE CERTIFICATES
---------------------------- ----------------------------
May 25, 2006................ 18,346,987.50
June 25, 2006............... $17,907,305.28
July 25, 2006............... 17,469,764.61
August 25, 2006............. 17,034,353.93
September 25, 2006.......... 16,601,061.75
October 25, 2006............ 16,169,876.64
November 25, 2006........... 15,740,787.22
December 25, 2006........... 15,313,782.15
January 25, 2007............ 14,888,850.19
February 25, 2007........... 14,465,980.10
March 25, 2007.............. 14,045,160.74
April 25, 2007.............. 13,626,381.01
May 25, 2007................ 13,209,629.86
June 25, 2007............... 12,794,896.30
July 25, 2007............... 12,382,169.39
August 25, 2007............. 11,971,438.24
September 25, 2007.......... 11,562,692.03
October 25, 2007............ 11,155,919.98
November 25, 2007........... 10,751,111.37
December 25, 2007........... 10,348,255.52
January 25, 2008............ 9,947,341.81
February 25, 2008........... 9,548,359.69
March 25, 2008.............. 9,188,008.69
April 25, 2008.............. 8,829,542.26
May 25, 2008................ 8,472,950.04
June 25, 2008............... 8,118,221.74
July 25, 2008............... 7,765,347.09
August 25, 2008............. 7,414,315.92
September 25, 2008.......... 7,065,118.06
October 25, 2008............ 6,717,743.42
November 25, 2008........... 6,372,181.94
December 25, 2008........... 6,028,423.62
January 25, 2009............ 5,686,458.51
February 25, 2009........... 5,346,276.71
March 25, 2009.............. 5,014,800.80
April 25, 2009.............. 4,685,039.11
May 25, 2009................ 4,356,981.89
June 25, 2009............... 4,030,619.44
July 25, 2009............... 3,705,942.10
August 25, 2009............. 3,382,940.28
September 25, 2009.......... 3,061,604.42
October 25, 2009............ 2,741,925.01
November 25, 2009........... 2,428,479.84
December 25, 2009........... 2,122,414.13
L-2
PLANNED PRINCIPAL
BALANCES FOR CLASS A-1
DISTRIBUTION DATE CERTIFICATES
---------------------------- ----------------------------
January 25, 2010............ 1,823,563.87
February 25, 2010........... 1,531,768.42
March 25, 2010.............. 1,289,865.93
April 25, 2010.............. 1,053,601.73
May 25, 2010................ 822,842.24
June 25, 2010............... 597,456.74
July 25, 2010............... $377,317.33
August 25, 2010............. 162,298.85
September 25, 2010
and thereafter.............. 0.00
L-3
EXHIBIT M
FORM OF FORM 10-K CERTIFICATE
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing distribution or servicing reports filed in respect of periods
included in the year covered by this annual report, of the trust (the "Trust")
created pursuant to the Pooling and Servicing Agreement dated February 1, 2003
(the "Agreement") among Cendant Mortgage Capital LLC (the "Depositor"), Cendant
Mortgage Corporation (the "Master Servicer") and Citibank, N.A. (the "Trustee");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be provided
to the Trustee by the Master Servicer under the Agreement for inclusion in these
reports is included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Agreement and based upon my knowledge and the annual
compliance review required under the Agreement, and except as disclosed in the
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers as
set forth in the Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: the Trustee.
Date:____________
_________________________________*
[Signature]
Name:
Title:
* - to be signed by the Chief Executive Officer of the Master Servicer
M-1
EXHIBIT N
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
Cendant Mortgage Corporation
0000 Xxxxxxxxxx Xxxx
Xx. Xxxxxx, Xxx Xxxxxx 00000
Re: CDMC Mortgage Pass-Through Certificates, Series 2003-1
Reference is made to the Pooling and Servicing Agreement, dated as of
February 1, 2003 (the "Trust Agreement"), by and among Citibank, N.A. (the
"Trustee"), Cendant Mortgage Corporation, as master servicer (the "Master
Servicer"), and Cendant Mortgage Capital LLC, as depositor (the "Depositor").
The Trustee, hereby certifies to the Master Servicer, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
(i) The Trustee has reviewed the annual report on Form 10-K for the
fiscal year [_____], and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the
year covered by that annual report, relating to the above-referenced
trust;
(ii) Based on my knowledge, the information set forth in the reports on
Form 10-K and Form 8-K referenced in (i) above (including the
distribution reports) does not contain any untrue statement of
material fact subject to the accuracy of the information provided to
us by the Master Servicer and includes all information required to
be stated therein; and
(iii) Based on my knowledge, all distribution information required to be
provided by the Trustee under the Pooling and Servicing Agreement is
included in these reports.
Date:
Citibank, N.A., as Trustee
By: ________________________
Name: ________________________
Title: ________________________
N-1
